Private Equity Spotlight: The Evolution of Business Development with Jay Jester

[00:00:00] Sean Mooney: Welcome to the Karma School of Business, a podcast about the private equity industry, business best practices, and real time trends. I'm Sean Mooney, BluWave's founder and CEO. In this episode, we have a wonderful conversation with Jay Jester, partner with Plexus Capital. Enjoy.
I'm very excited to be here with Jay Jester. Jay, great to see ya.

[00:00:38] Jay Jester: Likewise. Thanks for having me.

[00:00:40] Sean Mooney: 100%. I've been looking forward to this, and so those of you who don't know Jay, he's a Jay is one of the founders of probably the most common important roles in private equity right now. And he was one of the, dare I say, OGs who kind of created the business development role in a professionalized way in ways that it didn't exist before.
And then certainly many people I knew kind of mentored them in terms of how to be a true professional as a private equity investor, and also someone that can kind of be that forward facing integrator and Definitely kind of maneuver the arts of humanity and private equity. So it really is a pleasure to be here with Jay.

[00:01:18] Jay Jester: Well, thanks. That's high praise. I stand on the shoulder of giants. There's no doubt about that. It's been fun to get the wave, the OG flag a little bit, particularly here recently

[00:01:27] Sean Mooney: with all the intrigue that I've set up here, Jay, it'd be great to hear a little bit more of your backstory. How did you get into this industry?
What attracted you to the private equity world?

[00:01:37] Jay Jester: A couple of things. The beginning is just a foundation and family business. My grandfather came back from World War II in the Pacific as a tank commander, and he started this family business. He was selling class rings. And actually, very early in his career, he was literally hitchhiking up and down the East Coast to his different accounts.
And he had some great old stories about some scary incidents that happened along the way. But he built that into a nice, awesome, small family business in Greensboro, North Carolina. And my earliest memories of it are. And my grandparents basement, my grandmother kept the books. My grandfather was involved in the business.
My mother, my father, aunt and uncle, my sister. And I worked there in the summertime. They had one EA and her daughter worked there. It was just a classic small family business. And most of all, I remember they had one big French supplier that really came after them in a nasty way. And we fought back and to be on the side of the small business fighting against this massive international conglomerate.
And we actually won. It was so cool to do that with multiple generations of the family and the small law firm in my hometown of Greensboro, North Carolina, that was a game changer. To just learn that foundation of. These small businesses is the engine that I think distinguishes and drives the U S economy.
And I had a moment, lots of moments where I thought I would go into the family business and after finishing up and get my college degree. Thought I would go try something else and wouldn't work for a small investment bank in Charlotte, North Carolina for a guy named Erskine Bowles. And the firm was called Bowles Hollowell Connor right at the beginning of the middle market.
And Bowles Hollowell, their early clients were selling off small divisions for Forsman Little and some of the early pioneers of private equity. And there were a whole bunch of firms in Atlanta and on the West coast. But it was one of the first mid market investment banks and to get to do a couple of years and begin to see the birth of this private equity industry in 1990, 91 and 92, that's really where I got introduced to the middle market and never left, and it's just been an amazing 30 years.
I'm doing this. It's been a lot of fun.

[00:03:58] Sean Mooney: I love your backstory and it resonates for a whole host of reasons. I grew up in a family business started by a grandfather and then my dad and uncles were involved and then we would work in the back of the plant wearing hard helmets and steel toe boots and people doing anything they could.
I'm pretty sure there's a plant level bonus for whomever messed with me the most.
I don't know if it was all like, OSHA, legit either, but I mean, it's a great foundational upbringing and the whole idea of like getting to go kind of side by side and seeing kind of a bit of a David and Goliath story as well. What was kind of the nature of that? How are you all kind of being impacted?

[00:04:42] Jay Jester: It is a long story, but they set up distribution for this large French company. It's And then once the distribution was set up, very unfairly pulled that away in sort of a drastic way. And today dollars, it was a, call it a small dollar settlement, but a huge emotional win and just a victory for this little business and these eight to 10 employees and allowed us to go in a different direction.
And the most important part was the underdog, the little North Carolina underdog against the big French conglomerate was what made that so special.

[00:05:19] Sean Mooney: It teaches you to fight for what's right. And I think it's so easy to kind of be a, and almost like just a passenger in life. And like, we're just, well, it happened to us, but to see that at such a young age where, no, we're going to stand our ground and we're going to do what's right.
We're going to take on Goliath and we're going to do it really cleverly. Cause you're like, it's not often that David wins. And so. What a great kind of foundational life lesson.

[00:05:44] Jay Jester: And the other, I got to use, I think it was an Apple IIc, which was one of the very first Apple devices, and I can't remember what the spreadsheet program was called, but creating some exhibits, and the law firm hadn't seen it before.
But it was fun as, I guess it was in high school at the time. To see the lawyers like, Oh, this is pretty cool. And I'm sure my dad was just the greatest dude ever. So I'm sure there are lots of things that I did that he blew out of proportion to inflate my ego, make me probably feel a lot more valuable than I was, but I remember I'll never forget it.
And it was just so much fun to be on the team with my dad. It was the coolest part of that. And

[00:06:23] Sean Mooney: I love that. You can tell the entrepreneurial kind of spirit is in you here. And then you go to What is one of the kind of foundational trees in the middle market that kind of spurred the middle market investment banking industry, which then spurred middle market private equity in Bowles Hollowell.
And for those of you who don't know, every industry very often has these kind of like little seeds that plant and then there's trees and branches that come off them. And so for instance, Nashville, it's HCA that started this whole healthcare ecosystem. Bowles Hollowell did that for. Arguably the entirety of middle market M& A, they were one of these storied firms.
And I remember when I entered into investment banking, not that long after you, but everyone had a Bowles Hollowell story.

[00:07:11] Jay Jester: It was cool what they did. That was Erskine Bowles. He grew up in Greensboro, North Carolina also. And he came back to North Carolina to work on, I believe it was his father's gubernatorial bid.
And stayed. And said, The small deals need a non Wall Street champion and he had built great relationships. I believe he worked at Morgan Stanley before founding Bowles Hallowell and just brought some New York talent to Charlotte, built that firm into just a powerhouse. You're right. And there's similar stories, Robinson Humphrey in Atlanta, Greif in Los Angeles, and you can find Goldsmith Agio in Minneapolis, for example, Bunch in Chicago.
And you saw this emergence of these boutiques that have evolved into the middle market leaders that have created this entire ecosystem at the same time as those private equity firms were growing up and selling off small divisions and starting to do middle market buyouts.

[00:08:08] Sean Mooney: So you get this kind of formative career going.
Under kind of one of these now kind of legendary figures who people still talk about. How did you then make that jump into private equity?

[00:08:21] Jay Jester: It was another one of those moments at the end of that two year analyst program of you're going to go back to business school, am I going to go back into the family business now with this experience set or do something else?
And I remember not exactly having a plan and one of my fellow analysts, he had gone down and interviewed with. One of these emerging small private equity firms, it was called Florida capital partners based in Tampa. And really was the small deal affiliate of chemical venture partners, which is another one of the early buyout funds.
And they had set up a Tampa office to chase, call it two to five of EBITDA. And this buddy of mine, he ended up going to HBS and another mid market firm after that. But he came back and he said, Jay said, they're looking for you, which was a super kind way of saying not the world's best quant guy, like they're looking for someone outward facing, customer facing, go do some selling and find the deals.
And I didn't even know that was a thing. I'll never disagree with this statement, but Glenn Oken is the real OG of this role. There were three Virginia guys, Glenn Oken, John Kirtley, and Jeff Leck, that formed this Florida Capital Partners in Tampa. And I got to work with Glenn. And to this day, if there's somebody that doesn't like Glenn, I haven't met him.
He was just a legend in creating the role. And I got to work with Glenn for eight years. And Tampa run around after all kinds of small deals. We were a little bit ahead of the curve of the creation of all these boutique investment banks. We spent most of our time with small business brokers and intermediaries investing four or five lower mid market funds.

[00:10:06] Sean Mooney: And it's such an important development as an industry becomes an industry. I started in PE the very late nineties and then it was the deals find us. You know, we're just going to take it, they line up and we're going to pick our best ones ever and keep your head down and don't dare go looking for them.
But there were early firms that realized if you actually went out and you treated the business of P like a business, you could increase the odds and the outcome so much better. And now it is a thousand percent industry standard and virtually every private equity firm. But when you are getting going and some of your mentors were get going, it seems like it.
Of course, right now, but back then, it was really kind of visionary. And so, what you all created, I always looked up to. That makes a lot of sense.

[00:10:57] Jay Jester: You're nice to say that. I feel like treating our channel partners like channel partners is what we did. And you're a hundred percent right. Like in the world of private equity, the default posture was these investment bankers stand between me and a proprietary deal.
And I just remember people saying like, Oh, if you could just find the deal before the investment banker finds it. Then you got a shot at a great return, which is basically that lets me make money on the buy. And there was a time, and it was actually a little bit before my time, where just because you had the equity and you could offer an alternative, that's like reading red notice, the deals that could be done because you were the only buyer were in really wave one of modern private equity.
And it was this fight against the intermediaries for the proprietary deal. And I think quickly, as we went from a dozen private equity firms, whether they're 3000 today or something, you start to realize, no. We need each other, the investment banks need us because they want to sell the companies three to five years in, and we sure as hell need them.
And it took the industry a long time to realize this, but in a lot of cases, a really good banker who prepares a company for sale, prepares the company for the fact that it's going to take nine to 11 months to run a really good M& A process. You need that expert. And in a lot of cases, It's not a bad thing to have some competition and to create that momentum and that catalyst for a deal to happen.
I'm really proud of how we carried it through to Audax. I feel like it's one of the few innovations that started in the small deal market, the lower middle market, and it's kind of infected its way up into the big deal market. And the partnerships that we built at Audax with a core mid market investment banks, where we had to continually do what we said we were going to do as those banks did of the banks over polish something or over burnish something that should hurt them.
The next time we go to buy from them, if we are retrading on LOIs and treating management teams poorly, that should hurt us as the ecosystem matured. It forced everybody. To show their true colors. And you had to think about your reputation. You had to think about being good actors. It's like every other industry, you develop this ecosystem.
I don't care if it's book publishers and authors, artists and art galleries, wherever it is, that ecosystem develops as the industry matures. And I think it's a good thing.

[00:13:31] Sean Mooney: I love those points there. And so often, particularly in kind of financial industries, at least those that start there. It's easy to get this transactional mindset and this kind of zero sum game mindset that someone wins, someone loses, there's a buy, there's a sell.
And I think a lot of people get caught in that kind of limited and capped mindset. But what you're describing here is kind of like lessons from macroeconomics. If you create this symbiotic nature, you create this ecosystem, suddenly the surplus gets bigger for everyone. And everyone in the entire ecosystem benefits, but it takes a mind shift and it takes an industry in some ways to get enough scale and maturity to be an industry.
But you think about having that mindset early on and then not only what that led to things that like Florida capital partners, but then you and your partners building one of the true juggernauts and PE and Audax. So that kind of growth mindset I think can create huge dividends for a lot of people. So long as you look at the world through that lens,

[00:14:28] Jay Jester: One of our founders at Audax.
And I'll talk about him later in the podcast, if so, I said, I'm greedy, but I'm long term greedy. And I remember thinking about that phrase is really grown on me. And in terms of how you treat your employees and that long term mindset by retaining really good people over really long periods of time, that's a long term greedy mindset.
And I'm sure there are more graceful and politically correct ways to say that today, but it's just a naked truth. And I think the same thing works in. Yeah, this is the way we keep score and just about every business is dollars and cents. It's like a basketball game. Like we count points and that's how the points are and that's how you figure out if you get to be funded again and if you get to keep playing the game.
But thinking about the whole season, not just that one game or that one quarter playing a long season. And it's also, it's just a more fun way to roll. Some of my very best friends in the world are coverage guys from these mid market banks And competitors, the competitors out there that end up selling us businesses or buying businesses from us, or just being able to call them up and saying, Hey, you own this two buyers ago.
Like talk to me, what do I need to know about this space? And I wasn't calling the guys that I was beating. I was calling the guys that I was losing to. The iron sharpens iron mentality of the blessing of really good, really smart competitors made us better as an asset class, made us better as a firm. I think it makes it better as a person to get to play the game at a high level against high level opponents is pretty cool.

[00:16:07] Sean Mooney: Once again, I think there's so much wisdom in what you shared. And this long term greedy concept is, in some ways, it gels with the reason even why we call it this podcast Karma School Business. Like, if you're focused on doing really good things with and for really good people, and realizing you're in a long game, and you don't take shortcuts, you do it the right way, then But you can still enjoy playing the game.
Good things almost inevitably have to happen. So what you said, I think, makes a ton of sense.

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[00:16:56] Sean Mooney: And maybe, Jay, to turn the page here, one of the other standard questions I love to ask is, we'd know you better if we knew this about you. And it's generally kind of the story behind the story or tidbits of trivia, kind of like the rest of the story, if you remember the Sunday morning TV, gentlemen.
And so what would be one of the things, Jay, that you would talk about and share that we would know you better if we knew this about you?

[00:17:21] Jay Jester: If you knew I was an English major, And that one of my deepest fears is that I'm not going to live long enough to read all the books that I want to read.

[00:17:32] Sean Mooney: I love it.

[00:17:33] Jay Jester: I've got list after list of the books that I want to get to, to see learnings and not just business books and all kinds of books, and maybe that's the gift or the curse of being the English major is the applications of, The different stories and how they've impacted my career and also entertained me for endless hours on airplanes.
And I also, I don't know if emerging questions here, but you would know me better if you read a prayer for Owen Meany by John Irving, what I love about John Irving is he was so ahead of his time in using the power of story to really gracefully and thoughtfully address the issues that were ripping the country apart and continue to rip the country apart.
They talk about his big three. Cider House Rules was about abortion, basically. World According to Garp was way ahead of its time, basically about sexual violence. And when I think about the Me Too movement and things that have come more into center stage in the last five or six years, he was in the 70s addressing that.
And then my favorite of Prayer for Owen Meany is, I think it's about everything. He just finds a way to talk about religion, purpose, meaning of life, destiny, creativity, marriage, like all in this one great story. And it's probably the one book that I've read at this point six or seven times. Paul

[00:18:59] Sean Mooney: I mean, those are obviously incredibly meaningful topics that he's writing about.
I have not read A Prayer for Owen Meany yet, but it sounds like I 1000 percent need to immediately. It's easy to lose perspective that So many of the world's biggest challenges have been biggest challenges for a long time and it's this journey, not a destination. Looking through the lens of history, I only hope that we're making some progress, but I have a feeling progress is measured in a much longer period than any of us would hope.
I'm looking forward to reading that and seeing the lens into the future. Time when he wrote that

[00:19:38] Jay Jester: everybody talks about polarization and I'll go back to cider house rules He tells a story and he tells both sides of the story without preaching and he begins a conversation Whatever your position is, you can't read that story And not feel differently.
And we've gone the other way where you take a divisive issue and either we don't talk about it or we scream about it and neither of those solutions works. That's why I admire the guy.

[00:20:01] Sean Mooney: But it's one of the things that I think we've lost over time is the ability to have an open and honest and thorough discussion about both sides of an issue.
And not being captured in one bubble or the other. That often kind of pervades a geography or an ideology, and we've lost that ability to have that civil discourse back in between. As I was recently talking with an educator, friend of ours, about a high school, and saying, The challenge is, it seems like most of these schools today get caught in one of the fringes of the bubbles of the other, and they haven't been able to bring the two together.
And the school that's able to capture that, where they can have an open discussion on both sides, is gonna kind of be the Shangri La. Shangri La. So hopefully we get there, and I know hope isn't a strategy, it's at least an intentional and earnest one that I hold out there.

[00:20:50] Jay Jester: Yeah, I'm with you.

[00:20:51] Sean Mooney: Maybe thinking of tough things to overcome, and maybe not as kind of heavy as some of the topics we've touched base on, and that's for another discussion.
But one of the things that I always appreciated when I was in private equity, Jay, was this idea that you're comfortable being uncomfortable, you're constantly looking through the lens of opportunity, and you're taking on challenges with the idea that there's not a choice. You're going to go above, below, around, over, across, kind of these obstacles that are in your way.
And some quite big and some not as, but the commonality is this mindset of like just addressing challenges. And I think PE kind of have this like overcome and fix things kind of strategy or land on your feet and then bounce back and get up. And I'm curious, Jay, what are maybe some of your experiences that you've had that are in this kind of like, here's a challenge.
Let's kind of go around it above it or below it, or get used to being uncomfortable as you're taking one step at a time.

[00:21:53] Jay Jester: Yeah. There's a few. That I've sort of thought about and the most real one to me was just leaving Audax and it's so interesting to look back on that decision. And also like, as I'm mentoring young people or talking to my kids and stuff, I feel like almost always there's this tension of should I keep doing what I'm doing now?
Or should I go do something entrepreneurial and something new? I mean, I feel like I've had three jobs in my whole life, so I'm not the typical millennial who's, what do they say? They're going to have on average, like nine jobs or something like that. I'm going to get another OG label on. Being the old corporate gray man, but to think through, and my wife always uses this phrase, she says, especially to our kids, she's like, bloom where you're planted, wherever you are, you're there for a reason.
And first and foremost, do your job and be really valuable to whoever's signing your paycheck, like that's really important. And then. On the flip side of that is you get one lap around the track and to go out and like you said, to do new stuff and to try something different, it's just human. And it's frightening.
And unbelievably challenging and rewarding. It's been interesting to have that journey myself. And you know, I was at, Audax for 20 years, most important and formative two decades of my life, full stop and wouldn't trade a minute of that. And then the last five years of trying to do something really new as an old guy, that is, you've been so much fun, push my brain in different directions and try a different seat.
I had the label. As you said of the business development guy and to be in a position where I'm getting to lead a private equity fund at Plexus, there's this awesome credit led business. That's the foundation of Plexus and is an unbelievably successful thing to build off of. But there are some nuances and some differences in playing the private equity, the control buyout game also to get those two businesses to operate together, to think about the brand and how they operate together.
That the two are helping one another instead of harming one another is incredibly nuanced and challenging both the human side of stepping away from a familiar place that you love to try something different and a new geography and the other one that Janice and I have joked about, and I feel like the first time in recently in my life.
To go somewhere where you didn't have your kids as a social anchor to connect. And we talked about this. It's like when, if our wives are friends and our daughters are friends and you're an ax murderer. You and I are going to be friends.
It's like, what kind of acts do you like? You more of a fiberglass guy or, you know, as a couple and, you know, my youngest is out of college and in New York and we're just this new 50 year old couple moving to a giant, when we've never lived in Raleigh, it's been so much fun and so interesting and such a team event for me and Janice to be intentional about making friends.
It was an unexpected. And fun season of life. That's been a lot of fun. Those are the big ones I would list. And I don't know if that's a category of things you were talking about, but those sort of human challenges have been what's made the last five years interesting and challenging and keep me energized.

[00:25:20] Sean Mooney: But I love that because it's this whole idea of like, I love your line. You only go around the track once. And it's so easy to kind of just do what you've done, particularly when it's comfortable. It resonates so innately in me because I did kind of a similar thing, but you at least did the same thing and kind of stayed in the industry.
I was in PE for almost 20 years. I'd worked my whole life to become a partner in a PE firm. And I get it. And then I have this business idea. Like, I was like, tell my wife, share with my wife, like, Hey, how'd you like to do a startup? And she's like, That's insane. What? It's like, no, no, no. Look at my deck.
She's like, get your deck out of my face. We're not going to talk about startup. And so, but we did. And similarly, we moved from Darien, Connecticut to where my wife was from Fairfield, Connecticut. And then we moved to Nashville because of my deck, which had a market study. My wife's like, buddy, this is the craziest thing I've ever seen.
But, uh, I'm sure what she was thinking was like, hey buddy, why don't we just get a Porsche and a DiVorce o like everyone else in our town? And, uh, like, you're going nuts. Like, no, no, honey, you're coming with. So, but that idea of like, dare to take that leap. And it's terrifying and exhilarating all at once.
And then the friend thing is something that continues to confound me as I try to even modestly navigate the complexities of humanity. But uh, so if you figure that one out, let me know.

[00:26:49] Jay Jester: I'll share one other one. I thought it was fascinating and I'm a single issue voter. I am small business. Make life easier for small business, whatever your politics are, I believe that owning and leading a small business can move the needle on your agenda.
So that's my issue. I'm Southern guy and I would say I'm fiscally conservative and socially liberal is where I would identify. But I went from being one of the more conservative people in my friend group in Massachusetts to being One of the most liberal people in my friend group in North Carolina. And none of my beliefs changed.
I literally, I changed my zip code and that's it in one day. It is fascinating to live in a different part of the country. That was just interesting and challenging stuff that in a small geography. What becomes normal just because you've been there for a long time is not the way everybody experiences the planet, and it's just a great reminder of that.
It's been really fun dealing with that aspect of life as well, and just as an old guy trying to fit in is fun and challenging.

[00:27:59] Sean Mooney: That's well said, and everything is relative. Not only by geography often, but time as we've kind of talked about. So there's some really interesting recurring themes in our conversation here.
And one of the things that I think we all agree on is probably the most important thing in business and certainly life. is people. And this whole idea that it really matters. I've shared this before on this podcast, the more and more I read about chat GPT, the more calls for executive recruiters and interim executives and organizational effectiveness groups we get from other PE firms.
They get it. The industry knows you can't transform and create value without people, but it's still really hard. And I kind of go back to like the mantra of like the late, late nineties, early two thousands, when PE was this very linear, logical kind of arbitrage. Business. And the mantra was, business would be easy if it weren't for the people.
And you're kind of like, what? And they're like, oh yeah, just, we can only do this from our Bloomberg machine. And today the industry is all about the peoples we've talked about. It's the challenges that now it's this symphony of interconnected motion between the private equity firms, the operating teams, the portfolio companies, their executives, their teams.
All of this is moving at the speed of light because there's just no time. And And so, I'm curious, Jay, how do you think about gaining alignment and giving all this motion at play and getting people to work more effectively together?

[00:29:26] Jay Jester: There's a lot of big thoughts in there, and I like the way that you talked about it.
It's like, there are all these new tools. We had a conversation inside Plexus of what are our durable, differentiated, competitive advantages. And before I got here, Mike Becker, my partner, he built one of the great brands in the lower middle market. I can't find anybody who doesn't know Becker and the work that we do with independent sponsors.
It's awesome. And that was one of the things that we identified was the brand of good people, all the stuff that we talked about earlier. Like, Being a good partner in the ecosystem, playing the long game, that was a competitive advantage. And we've got a great tech stack, but everybody's got a tech stack.
We've got a big team of really smart people, but There are lots of firms. In fact, just about every private equity firm you can imagine has a big team of really smart people. And then as we kept rooting around, it's like the culture that we've built and how these people work together, we think is durable and differentiated.
And the way that we interface with operating partners, I think a lot of private equity firms have this mindset that it's all about the deal engineers. And I think we have this mindset at Plexus that everybody's a specialist. We have execution specialists. We have operating specialists. We have sourcing specialists.
There's a massive team of specialists, and I don't even like the phrase the back office, but that are not facing the deal market, the team that we have there, that's building the systems and doing the reporting and pulling all that stuff and interfacing with our investors is world class, and I think that that mindset of everybody's a specialist would be like where we think we've differentiated ourselves relative to some other firms.
Yeah. And to the question of how do you get them to work together, and I think about like if you think about just your deal team, like the BD team or the sourcing team, the deal team and the operating executives, for me, that means radical transparency and inclusivity in the sense of let's bring everybody into the conversation.
And I love both read and enjoyed the movie, The Boys in the Boat, and my daughter was actually a coxswain in high school and a four. And different, and I'll really date myself here, but the coxswains used to be in the back of the boat when I was coming along. And now they're in the front, low to the water, so the person who's steering and sensing what the engine room is doing is not actually looking at them.
They have to be feeling who's working, which I need to know that the three seat is really lagging or has got a lot of energy. And to keep them going together. And to me, that's sort of like the business development person who's out in front of this deal engine room and has to lead that and they have to be really connected.
And the idea of like, we hired a BD person, get on the road, come back. If you find an awesome deal at a great price, that never works. They have to know. And lead that team, the engine room to the right result and steer them very carefully. And that connectedness between the sourcing team and the execution team and the operators is one of the most critical parts of getting the model right.

[00:32:38] Sean Mooney: And so you've got this interconnect us. You have all this motion. You can't have everyone doing disconnected things. How do you kind of bring them all together? Whether it's through meetings or otherwise like this kind of like huddle concept, how do you do that?

[00:32:53] Jay Jester: Yeah. And this is where, like, you shouldn't have me on here.
Cause my answer, I have a feeling like a thousand people are going to click off right now, because let's talk about meetings. You have all these different software tools and methodology and make meetings shorter and stand up for the meetings and do it on Slack or Microsoft teams. And I hear everyone says they hate meetings, but I feel like that's like someone who's, I'm a big foodie, but I hate tables.
We've agreed that this is where we're going to do the food thing is at the table. And I think that's sort of like, this is where the leadership thing happens in the meeting. I think it's super important and making it relatable here. I have started thinking of meetings, particularly a weekly repetitive meeting.
It's kind of like a podcast. You got to build in some variety. You got to create some engagement. You got to change the topics. We change, we have one particular meeting called the racetrack meeting for the equity team. And we changed the order. We have guest speakers. We get market updates. We've relabeled a bunch of sections in terms of the concept of momentum creation as we're building deals.
And we'll talk about that phase of the process. And it has been interesting to sort of think about it in the context of like, this is my podcast. And if this is not a high quality podcast week after week after week, why in the hell would these super smart, highly compensated, highly motivated With tons of stuff going on in their world.
Why would they burn an hour to talk about this if it wasn't worth their time? It's been interesting to orient that way. And we do surveys of, Hey, for the pipeline meeting, what do you find valuable? What was a waste of time? What could have been shorter? But it also creates a lot of neurosis. I feel like on Friday night, I'll be like, Oh, I hope people show up next week.
I'm like, wait a minute. They have to, but you still. The sort of think about it in that mindset. I think it's created a more engaging meeting and I look at what we've done with equity fund one. Way ahead of schedule. I credit some of that to a team that's bringing that energy to the boring meeting.

[00:35:03] Sean Mooney: It's such a good point.
I never really thought of it that way. I love your reference to create it like a podcast. It's got to be different. There's got to be energy. It can't just be the same show over and over again.

[00:35:13] Jay Jester: Says the guy with the podcast.

[00:35:14] Sean Mooney: Yeah. Well, I'm thinking about, oh, I got to change your Monday morning meeting. But you really had me thinking here.
For those of our listeners outside of Private Equity, Most private equity firms have a quite similar sequence in that Monday morning, they get the various teams together. They talk about in some predictable pattern of. Deals that they're assessing through various phases of the funnel, all the way through conversion into a new deal, and then some sort of touch base on the portfolio.
And that's kind of the 80 20 that most PE firms do. And our company here is not a whole lot different. We go through a very predictable kind of cadence in some ways because it gives everyone in the company a sense for that pulse you've been talking about here, the coxin. You understand how the entire engine is performing.
And if people dare to lean in, they get a sense for how the entire business is working. Now, at the same time, you got to make it a little bit interesting, and you got to mix it up. And that's actually something I just, I took to heart right here during our conversation because we do it and I think it gives people tremendous insights.
But if you don't mix it up, it becomes kind of just like the same song and it fades out into the background. So. It's for those of our team members listening this, there's gonna be some changes coming.

[00:36:28] Jay Jester: Yeah.

[00:36:29] Sean Mooney: Yeah. Watch out. They're like, Oh no, more changes.

[00:36:33] Jay Jester: Like a couple of things that we think about in the meeting to engage people is a book was called Trillion Dollar Coach.
And one of the things I really took away from that book was this mindset of if you're in the meeting, I expect to hear your voice. And so how do you, other than saying, I expect to hear your voice. How do you convey that? And one of the things that this guy did is he would ask a question at the beginning of the meeting.
And we've adopted this at Plexus and we call it like the check in question. It could be like, what's your favorite book? So we had our annual meeting last week and this one of my favorite questions, our managing partner asked, What was your favorite moment of the annual meeting? And we had this one panel of right in the heart of it that a lot of people touched on, but there were a thousand little moments that people shared after that one was taken about interactions with.
LPs or watching a CEO tell the story of this deal to this LP or people that met one another and talked about just funny little things that happened. And you can see everybody engaging in the meeting, which is like, I can count seven people from now I got to answer. When I first came to Plexus, I remember being like, guys, let's do the math.
There's 35 of us. It takes three minutes each. Like this is money. We are letting my next

[00:37:53] Sean Mooney: question. How do you do the round robin?

[00:37:57] Jay Jester: And I have come full circle on, this is the most valuable for our Monday check in. It probably takes us 45 minutes and it achieves everything else that we have all these systems to try to do.
I know my teammates better. I know what's important to them. I know how they're doing. And as you do it more and more, people will share some vulnerable stuff. And it's not like you're eavesdropping on somebody. They're invited to share it with the room is how are they showing up for that meeting? And that's then carried over.
You talk about an investment committee. If I know that you got in a massive wreck on the way to work this morning, or that You got to school and your kid broke their ankle stepping out of the car and you had to go here, here, here, you know, to get here. That is so valuable to know that before we lean into a hard conversation about a controversial deal.
That check in concept has sort of been step one of the meetings. The other one that we try to pull out is, is another great book. It's called The Power of Moments. I think it's Chip and Dan Heath, Finding Ways. In that meeting to highlight for the team, the really powerful moments. And there are so many moments that happen in the life cycle of a deal.
And it can be like, This person got equity for the first time, or the investment banker that shepherded us through this whole exit process made managing director on the back of our deal, on the success of our deal, like to share those moments along the way with the team, which everybody talks about this, like, how are you bringing purpose to work, particularly for young people, particularly in today's environment, and to open your eyes to the really powerful moments that are happening along the way.
in the deal sequence. One, it's made a lot of fun. And two, it achieves that sort of secondary goal of infusing this high functioning organization with the purpose that leaders are trying to do.

[00:39:54] Sean Mooney: I really like that as well. So for our listeners, if you have a very keen ear, you will hear me typing because there are two books I'm going to be hitting order on right now.
Hopefully they get before this trip I'm coming because it'd be a great airplane fodder. That moments thing is something that I've completely been working on. Because, and Jay, you get this from like the worlds that both of us came from, it's so easy to just look to the next hill to climb, the next obstacle achieved.
And with Candor, and I've shared this, I have a hard, hard time to even know when those moments are, because I'm already looking to the next one. And that's something I've been really trying to be more mindful of and better at. And Candor is something I still struggle with.

[00:40:38] Jay Jester: I remember Gosh, in my last year at Audax, I think we did 20 platforms and over 100 add on acquisitions in that last year.
So we're talking multiple deals a week. And it was really powerful to remind myself that on the other side of that is a person that is doing maybe a once in a generation deal, even for a small add on acquisition in a lot of cases. And it creates this imbalance of I'm doing Tuesday's deal. And this is the only deal that that family might ever do.
And that's, I think that's why I was talking about that. And somebody referred me to this power of moments book. And the other one that jumped out at me is he described, said, think about your employees. And I project myself into that. So in Massachusetts, like kids start learning about private equity in kindergarten, there might even be in a class at my kids kindergarten.
And they're thinking about it, and they're talking about it, and they're working on it, and they get the internship, and they get through high school, and they take the right class, they go to the right college, they get the operating internship after their sophomore year, and they build to it, and then they show up for their first day of work, and the guy describes it in the book.
They'd probably go see somebody who's like, Oh, you guys are starting this week. I thought it was next week. Sit over there. They go to a bear, like stripped down cubicle. Somebody throws them an old laptop that they have to figure out how to log into. And they fill out HR forms for the rest of the day. And he was making the point that like, that is the most wasted moment there is.
Like this kid has literally spent his entire life getting ready for this moment. Like that's when you should have the CEO. That comes in and tells the story about the awesome product and the way that this firm's capital, let him grow the business and you're missing an unbelievable moment there. And it has been so much fun.
We had a small equity grant for a valued employee that sort of happened outside of the deal. And we rounded up the whole firm and we're in the conference room and we had a, and we'll talk about this in a second, but I call it a small trophy. But a representation of this day for that employee and the tears that were shed in that room, seeing how meaningful that was, and it should be, this is somebody who had become an owner and to let our young people step in and see that in the round of applause that happened, that's why we do this.
And yeah, sure. Like a lot of it happens and you've got to move on to the next deal. And there is still efficiency is still a thing, but to figure out how to stop and celebrate that moment in a way worthy of that moment. Again, I think it, to your question of how do you create that connection and tie people, tie the teams together, the moments is a big part of it.

[00:43:25] Sean Mooney: I love it. So, and with sincerity, I'm ordering that book right after this because I think it's really good. With sincerity, I have to go to talk to a couple of our interns that just started today. And so, like, we're going to go and like, hey, we do things, but not with as much intentionality as you've described.

[00:43:42] Jay Jester: And listen, we've got a lot of work to do on this. It has been fun as an old guy to sort of open my eyes and say, instead of just like, I remember my first day, like the old jackass, here's what I wish happened on my first day. And to try to make that day. For somebody else, it's been a hell of fun.

[00:43:59] Sean Mooney: Yeah, we do a couple of things that I'm really proud of.
And so for instance, when people have a birthday here and their gift from the company is they get to make a donation to a charity of their choice. And when new people start, we have every employee present to the whole company. What we call a passion project, where it's something that's passionate about them and they just take 20 minutes and everyone comes in, we'll bring in lunch for the whole company, and then they talk about something that they're really interested in, and it's.
Probably one of the favorite things we do here, because I get to learn not only about what really, really excites our team members here, but I just learn things as well because they're teaching people about interesting things. So I can tell you all sorts of stuff about sourdough bread that I never knew was so impactful, but now sourdough bread's amazing.
The last thing that I think is impactful that we'll do. Is to your point, I get the opportunity to sit down with people and kind of tell the story of the company. We still do it with every single person that starts, but that initial kickoff point, I don't know that we've been intentional enough as we should be.
And so I'm going to take that to heart right here and kind of like, think about how do you from that minute one, have people feel excited. We get to there, but a little bit later in the process.

[00:45:13] Jay Jester: What you just described on that passion project thing is tying together, like, and the thing I love about this book is the principles are really simple and straightforward of like, how do you infuse meaning into those moments?
And to have somebody present it and research it, you automatically make it worthy. There's a monetary value of the donation that's being made that imbues meaning into that moment. And then. Letting somebody share that you're getting to know the person and it's got a memorable name. All of that stuff is exactly what the authors are talking about.
So it sounds like you have a pretty good foundation there to build on.

[00:45:51] Sean Mooney: Yeah, but it's one of those things we can always get a little bit better. And I think you brought out some things that I think anyone can and should do in their organizations that will make a difference. And at the end of the day, that's why we're all here is to make a difference in our lives and other people's lives, not just business, but beyond that.
And so. Jay, one thing I'd love, maybe kind of turning the page here, is, as we're getting introspective here. I always like to think back, and I think in a healthy way of like, Oh, if I could go back, here's some things I would have benefited from with full awareness that 22 year old myself probably wouldn't listen to 49 year old myself.
And so Jay, if you could go back to your way back machine self and give a piece of advice, what would one of those that you would share with yourself?

[00:46:39] Jay Jester: I've been thinking about this one a lot. In every job, there's a Hardo. And I spent an embarrassing amount of my career, I probably could have go through the different busters, going back at least one at every job.
And it is really weird to get to this point in my life with nothing but mad respect for those guys. And it is such a contrarian thought for me. Like, we live in the Brene Brown world today, and she's awesome. If you haven't seen her on Netflix, or read her books. It's like stand up comedy that you get to learn from fantastic speaker and about caring for people and seeing them where they are and getting down in the well with somebody but The epiphany for me, we'll all agree that the Brené Brown mindset is really valuable.
And what I've realized is, as I look back over the journey and the arc of my story, the people that were willing to stand and guard the wall and be the standard bearers of excellence were making this amazing sacrifice that allowed me to be the nice guy. And I'm not going to name names, but as we were building the juggernaut of Audax, and anyone who's ever worked at Audax will know the person that I'm talking about.
We had a Very senior person who was a stickler about being on time for meetings, the superfluous use of modifiers, weather excuses, you know, you know, stuff like that in investment committee or in portfolio reporting. And he made us better and he held the standard for the whole company, for hundreds of people.
He made us more efficient and we got more done in a day because he was willing to hold that line. And he was consistent. Every day, I never saw him falter of the 20 years and whether this was checking the math, finding typos in documents, and they're just creating efficient documents. But in addition to holding that standard, he created this gracious leadership opportunity for me to be the nice guy and to go in, there could be a deal team that spent all weekend or multiple weekends getting something ready.
And they could get dressed down for the typos and the errors and the omission of something. They still did a ton of work and somebody had to hold that standard. And then somebody, the gift, I got to be the guy in there, like patting them on the back, like, look, awesome. 95 percent work, but we got to get that last 5 percent done and we got to do it to the standard that we're expecting.
It's been interesting as the old guy to look back and say, it is so easy. The whole organization will be with you to judge that person. And to talk about how they care about this little petty detail instead of the big picture. Like one of my old man learnings is that may be the person that cared the most about the organization because they were willing to sacrifice the easy friendships.
It is so easy to be the friendly, old, cheerful partner that buys a lunch and takes everybody else out for drinks and gives everybody an attaboy and it's really frigging hard to be the standard bearer. And so. Any young person listening to this, there's that hardo in your office, and you're just judging them, and you go home hating them, and you crack jokes about them, and the lesson would be cut them some slack.
That might be the person, there are some sociopaths that do that, but that might be the person that cares the most about your organization, and they might be intentionally making a really massive sacrifice that lets you pretend to be the good guy.

[00:50:18] Sean Mooney: It's such great advice, and Uncommon advice in an amazing way in that what you're describing like being that hard oh that takes courage and that takes energy because as your point it's so much easier to be the easy person.
It's so much easier not to hold that standard because holding that thing in the air takes a lot of energy and we've all felt that it's exhausting and I think most people in life Who have to do that, they prefer not to have to do it, but someone has to. And it's kind of like the Bill Belichick, do your job.
You see Bill Belichick on some of the shows now. You see this guy is actually has a personality now that he's not having to carry that standard. He's laughing. I don't think I've ever seen a smile on Bill Belichick's face, but apparently those who know him say in real life, outside of the work, he's a pretty good person.
Someone has to be, I think the way you said it so eloquently is like the keeper of that standard. He's And it requires your own sacrifice. I appreciate you bringing that up because every company needs to have that. Most of them don't enjoy it, but someone has to do it. In ways there's an element of grace allowing others to do the softer backpedaling.
And as I reflect on my career, every place I can see that person now in ways that I don't know that I ever even saw until you've kind of said it like that. Other than one, who was probably a sociopath. The others now have a newfound appreciation in ways I didn't have before you kind of just shared this.

[00:51:50] Jay Jester: And to the concept of like stepping outside of your own industry, you and I talked about this before. I'm going to go to Normandy for the first time this summer, and it's been so much fun to go read the Stephen Ambrose books and to think about that metaphor of the early company commander or the drill sergeant.
Whipping the troops into shape because he wants them to live. Obviously that's a different stage, but as we talked about this incredibly competitive industry. And I liked the Mark Andreessen comment. The way you do anything is the way you do everything. And somebody saying, this is how we're going to show up and this is our brand.
And this is how we're going to be known. It's a gift and you need both. You need the inspirational characters and you need the guys to lead the charge. And to pick people up after a loss, they're all in there. But I do feel like sometimes in the world we live in today, we've gotten a little soft and we forget that you need both sides of that sword for complete leadership.
That's like a lot of things. Sort of the inspiration versus the standards, the leadership versus the friendship, leading versus training, all those things, nurture versus accountability. It's fun to look back and realize there's a bunch of different spectrums. And finding that balance point that's right for the organization.
That's what I think makes private equity, just the coolest business in the world. Cause we'll find a company where the leadership is just all spirit motivation. And one of the important strategies is back them up with a really good COO and a really good CFO. And then there'll be super engineering focused creators, but they hadn't figured out how to inspire the troops, so to speak, and to find that balance in the chemistry.
It's what the engineers call a wicked problem, and that as soon as you think you've solved it, the problem finds a way to change and morph, and you got to keep changing it. And I think it's what has made this life I've been lucky enough to live so fascinating is it is literally different every day.

[00:53:49] Sean Mooney: It's a never ending puzzle, and so if you like puzzles and games and things, the one that you've chosen is, it's fascinating because it's three dimensional and it's constantly in motion.
If you ever feel like you've figured it out, you've probably lost. Yeah. Yeah. Yeah. Yeah. You've shared, Jay, really some very, very thoughtful insights, many of which are going to cause Amazon boxes to show up at my door tomorrow, so sorry to my wife, Kate. That's one of the problems I have is these broadcasts cause me to hit buy instantly.
But it is really a tremendous amount of things that I hadn't really thought about before. So Jay, thank you, thank you for spending some time with us today, sharing these perspectives and kind of hard earned wisdom earned. Because I learned truly a lot of things that I wish I knew before, so for that I'm grateful.

[00:54:38] Jay Jester: It's nice of you to say that. I've also learned that about the nicest thing you can do for a person is to listen to them. And you've done that for way too long. But I enjoyed the conversation. And thanks for having me on. I really appreciate it.

[00:54:51] Sean Mooney: Yeah, it was truly an enjoyable one. I've learned all sorts of stuff.
So thanks again, Jay, and I'll see you soon.

[00:54:56] Jay Jester: Good stuff. Take care.

[00:55:06] Sean Mooney: That's all we have for today. Special thanks to Jay for joining. If you'd like to learn more about Jay Jester and Plexus Capital, please see the episode notes for links. Please continue to look for the Karma School of Business podcast anywhere you find your favorite podcast. We truly appreciate your support.
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Private equity insights for and with top business builders, including investors, operators, executives and industry thought leaders. The Karma School of Business Podcast goes behind the scenes of PE, talking about business best practices and real-time industry trends. You'll learn from leading professionals and visionary business executives who will help you take action and enhance your life, whether you’re at a PE firm, a portco or a private or public company.

BluWave Founder & CEO Sean Mooney hosts the Private Equity Karma School of Business Podcast. BluWave is the business builders’ network for private equity grade due diligence and value creation needs.