Insights from Investment Banking: Steve Hunter’s Advice for Private Equity and Business Owners

[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 an awesome conversation with Steve Hunter, Managing Director with TM Capital. Enjoy.

[00:00:32] I am super excited to be here with my friend, Steve Hunter. Steve, thanks for joining us.

[00:00:39] Steve Hunter: Thank you for having me. I've been waiting a long time for this. I was beginning to think I had done something to make you angry. I hadn't gotten an invite yet.

[00:00:45] Sean Mooney: As most people know me, like, the world revolves around me and I really don't ever know what's going on.

[00:00:50] Every once in a while I pick up my head and I go, oh my god, I gotta talk to my buddy Steve. And so I've been really excited about this. This'll be fun. So, If our listeners notice some familiarity, Steve and I probably have lots of mutually assured destruction on each other going back years and years. And so we'll keep it fun and collegial and not share some of the moments that normally we'll just talk about after a beer.

[00:01:12] Let's jump into it. So Steve, one of the things I love to kick off these conversations with is just getting to know more of the story of you. So can you tell us a little bit about kind of how you came up, how you got into investment banking, all the good stuff.

[00:01:26] Steve Hunter: Yeah, definitely. It's a long and winding tale.

[00:01:29] So I grew up in Western Pennsylvania in a really rural area, a little town that had maybe 500 people and no traffic light. I went to Bucknell University and after graduating, I took a job with Anderson Consulting, now Accenture in DC. And I didn't know anything about sort of investment banking or the financial world.

[00:01:50] I was at Anderson for probably six months and quickly realized that all I was going to get to do was to do. Programming and COBOL for the rest of my life and really had no interest in it and was really starting to just poke around and one of my roommates from Bucknell, his older brother had just rolled out of an analyst program in New York, and he said, Hey, you want to talk to this guy?

[00:02:13] There's a investment bank in Baltimore called Alex Brown and sons. One thing led to another. I kind of got in on the tail end of their recruiting process because I had grown up around a trucking business. Alex Brown had a really good transportation practice. They love the fact that I knew about trucking and had driven trucks in the summertime.

[00:02:30] And so I was able to start off cycle. They needed somebody desperately. And so in a group of analysts that were all from the Ivy league schools, I kind of snuck in the side door and was an analyst there for two and a half years. Interesting. And that person that connected me with the analyst program as a guy that I'll get to later, but.

[00:02:50] I just ran into him recently and we hadn't seen each other in probably 25 or 30 years. And we actually now are working for the same company, which was kind of a funny full circle moment. So I was an analyst for two and a half years. It was right when trucking was deregulating. It was a crazy period. The person that had been there before me worked on nothing but pitches for two and a half years.

[00:03:08] And the minute I got there, things broke loose and we worked on like 25 deals in like two and a half years. I was spent, I was ready to go do something else. I went back to HBS and after HBS, I'd spent a summer in consulting and realized I did not like consulting at all. So I wanted to get back into banking, the short attention span, transactional nature of it.

[00:03:30] So I took a job in Atlanta with Robinson Humphrey, one of the old regional full service brokerage firms. And so I was there for a number of years. And that's really when I sort of started to get into the private equity world. I was there from 96 through 2000. It was really when private equity was kind of getting started.

[00:03:46] So there were these guys out roaming around like Jay Jester from Audax and Stuart Cole from Riverside and Mark Jones from River Associates who were like, would come through the office trying to get people's attention and I would agree to meet with them. And so. Over time, I kind of build all these relationships just because I happened to be there when it got started.

[00:04:06] So I was at Robinson Humphrey for a while, took a job with a West coast technology boutique, Robertson Stevens for a couple of years until the NASDAQ melted down and they shut the entire firm down, went from there to Morgan Keegan, which was another Southeastern regional brokerage firm was there for a number of years until it got bought by Raymond James.

[00:04:25] And then really that's sort of when I got into pure sell side M& A, I had joined a group that was based out of Minneapolis called Green Holcomb Fisher. That was a bunch of guys that had all left Piper Jaffray and they had an offices in Minneapolis, Seattle and Phoenix. And so I opened an office for them here in Atlanta and was trying to help them sort of build their sponsor coverage effort to try to do more business with sponsors.

[00:04:50] We had a great run there from sort of 2012 through like 2017 until the firm got sold to BMO. I stuck around there for six to nine months. I described working for a large Canadian bank a bit like working for the U. S. Postal Service. There were meetings about the meetings, and I was there for probably six to nine months, and I just said, I can't do this anymore.

[00:05:12] I was actually in New York right before New Year's. Their offices overlook Times Square, and I was looking out at the ball that drops, and the guys were out there shining it, looking at it, and I was just staring at it all day during this meeting that was just going on and on, and I was thinking like, I'm not sure why I'm here, but I need to go do something else, and so.

[00:05:28] Connected to the guys here at TM. They were in a similar spot to where GHF had been, which was, they were kind of doing 15 to 20 deals a year and needed somebody to kind of herd the cats on the private equity front I joined. And it's just been a tremendous run. So we've grown every year. We've had some really big years coming out of COVID.

[00:05:48] And at the end of last year, we sold the firm to Jannie Montgomery Scott, which has been great. In the middle of last summer, Jannie ended up getting sold to KKR. So I'm now working at a KKR portfolio company.

[00:06:00] Sean Mooney: What a great story in a number of kind of foundational firms and kind of middle market and lower middle market private equity.

[00:06:08] And you've got to see this kind of whole run and then be I love growing up in Western PA. It resonates a lot with me and then I grew up in Texas a little bit different. Our trees were a lot smaller, but it's the same thing. I grew up working in the back of manufacturing plants. And the reason I ended up in investment banking out of college is because all my roommates were from Northern New Jersey.

[00:06:29] Yeah. And I asked, what are you going to do? And they're like, we're going to investment banking. And I go, what's investment banking? And I go, okay, I'll do that. And I think one of the reasons I got a job and one of my friends went to BT Alex Brown, I think it was just Alex Brown first. And then it became BT Alex Brown.

[00:06:43] And one of the reasons I think I got the job was because I actually like had normal jobs versus kids that kind of all grew up.

[00:06:52] Steve Hunter: Yeah,

[00:06:53] Sean Mooney: exactly. And I was like, no, I actually could walk a plant. They're like, well, we do a lot of industrial. This will be good kid. I love that though. It's, I mean, it's a really good background.

[00:07:02] You grow up in kind of like God's country, if you will, where it's just good people work hard. Sounds like you did things as kids that always I found serves you well as you grow older. And then you've been with really a lot of foundational firms. I'm trying to date when we first met, it was probably either end of Morgan Keegan or beginning of Greenholcum Fisher.

[00:07:25] Steve Hunter: Yeah, I think that's right. Morgan Keegan, it was a real sort of when I made the pivot to start doing more with private equity, more on the sponsored side of things. Because this was probably in like 2012, 2014, and private equity was really starting to be a much bigger force in the market. And Morgan Keegan just didn't have a coherent strategy to deal with it.

[00:07:45] They had a couple of guys that were sort of dabbling in it, but there was no concerted effort. So a colleague and I, someone you probably know, Jim Apple, who's at the Sterling group now, of course, he and I, and another guy who's still around, I think he works for BFA now, Ezra Lightman, the three of us kind of had this idea.

[00:08:03] We went to. The guy that was running investment banking and we said, listen, we think there's a real opportunity here if we focus on it. And so we kind of laid out how we would approach having a sponsor coverage effort as it was in New York. So that made sense. And Jim was in Memphis and he had a lot of relationships in the sort of Midwest and I was in Atlanta.

[00:08:21] So we did a little divide and conquer and we were actually making a fair amount of headway. And then when Raymond James bought Morgan Keegan, They already had three or four people doing sponsor coverage and it was clear they weren't going to need six or seven people doing it. So that's when I had actually already found my job with GHF through a private equity contact who's a good friend to this day that had kind of said, Hey, you ought to talk to these guys.

[00:08:44] They're trying to find someone like you to help them grow their business. So you just mentioned obviously yourself and

[00:08:51] Sean Mooney: Ezra and Jim and. All the folks in kind of your cohort are kind of the OGs of the private equity industry maturing and realizing there's an M& A industry tied to it.

[00:09:01] Steve Hunter: I feel like I'm one level below the old guys.

[00:09:04] Like I'm not quite the old guys. No, the

[00:09:06] Sean Mooney: OGs 50s.

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[00:09:33] Sean Mooney: As we explore the younger OG kind of status you have, one of the questions I love to ask is, What's one of these things that we know you better if we knew this about you kind of a fact toy that maybe doesn't jump Off the resume. Oh

[00:09:45] Steve Hunter: goodness. It probably relates back to what I was saying earlier Like the town that I grew up in my wife grew up in Atlanta and like hardly ever left the city limits of Atlanta and like she just can't get her head around that I grew up in this small Town that had like 500 people in it.

[00:09:59] It did not have a traffic light I moved in ninth grade because my parents they knew that to get a better education I needed to kind of be in a slightly bigger school system. So the school was really small you And I think probably that and when I moved, I went from that to this school district in north of Pittsburgh that had 700 people in my graduating class.

[00:10:18] So I went from the smallest around to like the biggest around, but I think just that because growing up around a truck business, I had a motorcycle, I had a snowmobile, I had a three wheeler. So I'm actually very handy at working on things like I love to like just fix things monkey with stuff around the house.

[00:10:35] So. When things break or something's not working around the office, like I love to open up, start taking it apart and try to fix it. And people are like, what are you doing? And I was like, well, we can figure this out. You see, to take it apart and put it back together. So that's probably it. Just that I had a fairly unusual environment that I grew up around.

[00:10:51] I mean, it's a great

[00:10:53] Sean Mooney: existence. And I grew up in Austin, which was when I was a little kid, it was much different than it is today, but it was booming quickly, but we grew up in the woods now there's like, it's all. bougie houses, but then it was just where they send the people like far away. It was like Ben Crenshaw's parents taught all of us how to ride horses because that was where they had horse trails back there, and how to water ski.

[00:11:16] All the neighborhood kids, we all had four wheel ATVs, and we would just spend all day. We were never allowed inside even as 100 degrees, but it's this great way where you just go on, you just drive ATVs and you build forts in the wood and you do anything you could.

[00:11:29] Steve Hunter: It's a miracle that I didn't get hurt doing some of the stuff that I did, and I can't even think about letting my own kids do that stuff today, but I think kids would be healthier today if they did some of that stuff, but you'd probably get thrown in jail for letting them do it.

[00:11:40] Sean Mooney: So maybe as we transition our conversation here, there's all sorts of things that I wished I could have asked you. when I was in PE, but was always too like shy and demure to like ask all the things I really want to know. So one of the things that I'd love to get your perspective on is kind of some of these things that you wish sellers of businesses knew when they came to you.

[00:12:04] And I think it's a really good proxy for our listeners who are building companies and they're thinking about how do they build value that's going to be valued when they call you, Steve. As you think about, if you're talking to a future seller of a company, what are some of the key elements of value that buyers are looking for?

[00:12:22] And by kind of extension, they should think about building into their companies today.

[00:12:26] Steve Hunter: Thanks. A great question. And I think a lot of times it's easy to just assume everybody looks at things the same way, you know, and I think when you really are meeting with business owners, I think it's always enlightening for them to hear how private equity investors in particular look at buying businesses.

[00:12:45] It's like. Business owners, I think, are down in the trenches day to day, just kind of battling things out, and they're not focused on recurring revenue or having some kind of moat or things. They're just kind of doing what they're doing. And so I think it is a really good question from the buyer side. I think it all comes down to like risk and reward.

[00:13:02] And on the risk side, we have a slide that we like to show people of their sort of project oriented revenue, there's reoccurring revenue, there's recurring revenue, there's contractual revenue. So there's a spectrum of things. A lot of times business owners just don't understand why the buyers of businesses are averse to things that have a big project element to them.

[00:13:22] They don't understand how important it is for a financial investor who may be using leverage to buy business to have some degree of certainty around the revenue stream or even the profit stream or the cash flow stream. And so I think that risk reward thing of, okay, how much risk is there to my revenue?

[00:13:39] Was it all tied up in one project? Is it a thousand projects? Is it one customer, a thousand customers, those kinds of things. So I think. One is trying to do everything you can do as a business owner to really make it not necessarily automate it, but make it so that you have as much recurring or reoccurring revenue as you can.

[00:13:56] And we spend a lot of time with our clients slicing and dicing invoice level data, line item data to try to show that maybe if it's not a contractual relationship, that maybe it's once a customer buys something, they buy X amount of follow on parts and service, or they buy X amount of replacement parts, those kind of things.

[00:14:15] Thank you very much. That's one piece of it. And I think that's because this whole risk reward kind of thing like growth has gotten so hard to come by for most companies. If you're a big strategic, once you get bigger, it's harder to find growth. I just think with all the supply chain issues we've been through, all the inflation pressures that have gone through just finding organic growth opportunities, it's gotten really hard for companies.

[00:14:37] So they're all looking for how can I grow this business? Another thing is, And again, we spend a lot of time working with companies on this is trying to lay out. Okay, what are all the different ways you could grow this business? We understand that you're constrained. It's your capital. You're only one person.

[00:14:52] But for us to get the best possible valuation and deal for you, we need to lay out a menu of options for the buyer where they can kind of go through and say, Oh, okay, we really like this. We really like this one. Let's focus on those. Because a lot of times what we see with business owners, it's not that they don't have a Opportunities to take advantage of in a lot of cases, they have too many and they haven't focused on what are the one or two that they can really use to kind of move the needle.

[00:15:16] I think the other couple of things from a business owner standpoint are kind of what's that protective moat that you've got? We do a lot of work in the dealership world where you either have a manufacturer in a certain territory or you don't. And if you have it, nobody else can come in and sell that product.

[00:15:32] So you have exclusive territories. But. Okay. Things like, do you have an exclusive territory or do you have exclusive rights to some product that a supplier is selling you? Are there certain things where you have the only product that'll work for a situation or your product is instrumental to something that someone's doing and happens to not be a real high cost item.

[00:15:49] So you have some pricing power. The other big thing that we see people really seeking is, can I use this as a platform to go do acquisitions? I think in some sectors, it seems to be getting a little overcooked in terms of people doing these buy and build opportunities, but. We always sort of try to position it as like, if a good business trades at this, if it's a platform and you can go do acquisitions with it, you're going to get a whole nother level of valuation on top of what you might otherwise get.

[00:16:14] So I think those are the things like trying to lay all those out for a potential buyer or what get people excited. And so we tried to talk to the business owner about how do you tell the story and position things the right way to communicate that. I think you just gave

[00:16:27] Sean Mooney: a masterclass not to uncomfortably flatter you, but I think you just laid out that's an HBS class there, right?

[00:16:33] It's like. What are the elements of value at SQL? One risk in return in multiple are directly correlated, right? And so the more things that you have that are risky, the lower multiple you're going to get. It's that simple. Right. And if you're as an entrepreneur, maybe you're like, yeah, I'm going to go for like these big chunky, like moonshot projects and I'll get it once one year.

[00:16:54] And once the other year, and I make a ton of money and like the other year, maybe not as much. And that's great as an entrepreneur, if you're kind of making enough, but as a That projects something where particularly someone speaking about leverage that they're like, I can't get comfortable, I won't be able to project and so the more recurring revenue, the more diversification of your customers, the more predictability of your business and stability, even though you don't get those moon shots, like get the singles, doubles, triples in a basket, you're better off.

[00:17:21] I love that point. I think the growth one is really great. We would always sit down with the owners. To your point, like a lot of times, It's not that they don't know what to do or what can't do, it's like they're constrained. They have their entire net worth on their shoulders. And they're like, it's either they're doing too many things or they're saying, I can't do enough and I could do this, but I just don't have the fuel.

[00:17:44] And so first thing we would do, really the week one, when we were talking about, here's the plan that we're going to do together, it's like, if you were to take all the constraints off, what would you do? If you could do it whatever the way you wish you wanted to do it, And just live in an unconstrained world, what would you do?

[00:18:01] And then you'd get these amazing kind of ideas. And then the idea, to your point, I think that you also said, we're not gonna do all of them. We're gonna do the best one. And probably rule three it, like, we're gonna do three things. And whatever the best three is in an unconstrained world, releases tremendous value.

[00:18:15] Steve Hunter: I think that's why we try to kind of lay out a sort of a menu of options, like a list, because I think a lot of times the owner may have his sort of pet projects that he thinks are the best ones. But being able to, maybe you have a list of five or six or seven. If you go through and you have a series of management meetings and all of a sudden, one investor may hone in on these ones, another one may hone in on these, and you sort of want to lay it out for them to sort of say, oh, we've done this at another business.

[00:18:38] If you could do this, we think that's a tremendous way to grow it. I think the other thing I didn't mention was probably the team aspect of it. I mean, I think that a lot of people, especially private business owners, a lot of times they've kind of skimped on the team. They either have. Some people that are maybe not up to the challenge in certain roles, or they have jobs that aren't filled, or they need a CFO, but they've resisted because the CFO is expensive and things like that.

[00:19:02] And so I think it's not often that we get to start working with a company maybe two, three, four years before they're doing something. But when we do, it's always like, okay, if you're thinking of hiring someone, go ahead and do it. And I have a client here in Atlanta that I've known and worked with for a long time.

[00:19:15] And when he first sold his business, it was actually, did a deal with lineage, the firm in Boston. And They kind of forced him to upgrade a couple of people on his team. And like, he was so struck by what a difference those people made, how much stronger they were and how much more they were able to get done once he upgraded them, that he was like, I would have made a lot more money when I sold the business, if I had done this myself three, four years ago.

[00:19:40] So.

[00:19:40] Sean Mooney: I think it's another great point. And we would always look in management meetings. Is it just the CEO talking or do they have other people answering questions in an insightful way? And to your earlier point. And in our mind, we were kind of calibrating like, okay, we have an A here, B plus here, C, C, C, D, that's risk.

[00:20:02] We'd love to have the team built and then we'll pay more for it because there's less risk. And part of it is like, why wait till tomorrow for the next person to do it when you can do it today as you think about the business owners listening to this right now, like you can do this stuff because every box you check equals a higher multiple on that risk portfolio in a perfect world.

[00:20:21] Right? The last one I'll just double tap on is this idea of, I think a lot of people aren't prepared for, hey, you're going to ask like, who can we acquire? And so the part of private equity industry today, they're like, let's start doing acquisitions as well. Let's turbocharge where we're going to build a bigger, safer, stronger boat by bringing in some of your competitors or adjacent players that can add to it.

[00:20:42] So at the very least be frenemies with some of your competitors. So you have a dialogue and a relationship there.

[00:20:47] Steve Hunter: Yeah. A lot of times that's a hard. Mental shift for these owners to make, cause they're so private. They don't want people to know what they're up to. They almost kind of think it's unseemly to like be talking to competitors about things like that.

[00:21:01] Sean Mooney: Hey, as a quick interlude, this is Sean here. Wanted to address one quick question that we regularly get. We often get people who show up at our website, call our account executives and say, Hey, I'm not private equity. Can I still use BluWave to get connected with resources? And the short answer is yes.

[00:21:17] Even though we're mostly and largely used by hundreds of private equity firms, thousands of their portfolio company leaders, every day we get calls from every day top proactive business leaders at public companies, independent companies, family companies. So absolutely, you can use this as well. If you want to use the exact same resources that are trusted and being deployed and perfectly calibrated for your business needs, give us a call, visit our website at BluWave.

[00:21:43] net. Thanks. Back to the episode.

[00:21:50] What are some of the things, Steve, that if you think about, like, some of the things that you wish sellers knew about, they've called you, you've got TM Capital, you're engaged, and they're saying, okay, we're going to get going. What are some of the things you wish they knew before they called you about the M& A process itself?

[00:22:06] Steve Hunter: The two obvious ones are, one, it always takes longer than you think, just no matter what. We closed the deal yesterday. I think it was a year and four days from kind of the day we kicked it off. In this environment, for whatever reason, things just take longer. People do more diligence, lenders take longer, like everything takes longer.

[00:22:23] So that's one, when you run into people, a lot of times that are trying to time something very specifically, like they're like, okay, if I want to have a deal done by this date, I need to hire someone on this date, which means that, and so, and they try to architect it to a very exact thing. And you're like, it just doesn't work that way.

[00:22:37] You know, like as soon as you get started, something's going to happen. You're gonna have to wait a month. So one, it just takes way longer than you'd expect. It maybe could take six to nine months, but budget. A year plus just because I think the second one is, I think people always underestimate how much data is going to be involved.

[00:22:55] And I think most companies, they have their audit, they have their internal financial statements, maybe they have a board package, but it's now gotten to the point where, in addition to sometimes having a Q of E provider and maybe a market study provider, you'll have somebody whose whole job will just be to extract data out of the company and create the data cube, they call it, where they're taking invoice level data and product level data and dropping it into a.

[00:23:18] To a database, we actually invested a couple of years ago in Tableau, which is kind of like a turbo charged Excel when we trained a bunch of our analysts and associates on it. So we'll take that data. We'll take like a just a data file, like an unstructured data file and our analysts will upload it and we'll take a bunch of different cuts on it.

[00:23:37] And you can really get some really insightful things out of it if you know how to use it. And so I think People always underestimate how much data is going to be involved. They're like, why would somebody ever want to see this? And it's like, trust us, they're going to want to see it. And so I think that, and I guess maybe along with that, trying to make sure that all your books and records are in order, it probably ties to a bigger point, which is we try to encourage people to treat us a bit like they would treat their doctor.

[00:23:59] Like when you go to your doctor, you want them to know everything that's going on because if they don't, yeah, you may miss something. And so it's the same kind of thing with working with your advisor. Like don't not tell them something because you think like they might not like it. You can manage around things if you know about them, but it's a really uncomfortable situation when you're halfway through a process and all of a sudden some lawsuit comes up that they didn't tell you about, or there's just something that's happened that they should have told you about that they didn't.

[00:24:27] So I think kind of being transparent, and I think the other thing is just we mentioned earlier the internal team, but I think getting your external team together, trying to make sure that when you hire your M& A advisor, you've got a good legal counsel. Not the guy that's done your real estate law, not the guy that did your divorce or your prenup or your real estate deals, but like an actual transaction attorney.

[00:24:48] And so a lot of times we'll help the client hire someone there. And then on the financial side, if you're going to get a quality of earnings done, making sure that you've got a good provider there, because I think when all your external team is working together, it's kind of when it works the best. We've had deals even this year where the company had an outside law firm that was just not up to the challenge.

[00:25:06] And it just. Made everything take longer. He probably didn't get as good of a deal as he could have gotten because the council he was using just didn't know what they were doing, but yet they were friends with them. So he didn't want to fire them. I think that's probably the big thing just to try to be prepared and have all your ducks in a row before you head into it.

[00:25:22] Sean Mooney: It's great advice. When I was in PE, we would spend as much time preparing and selling the business as we did buying the business. Once again, like more risk, lower return. And if you can address those risk elements, the better off you're going to be. And to double tap on one thing, like the amount of data requests that you as a business owner are going to get in a sale process is almost unfathomable for a normal family held business.

[00:25:48] It was a point where even we prepared our companies to be sold from day one. We own them. And they were as a PE back business, were overwhelmed. They just couldn't keep up. They're not geared to deal with the the amount of volumes, particularly if you have many parties or multiple parties, they're all going to ask for the same question, just slightly differently.

[00:26:07] And so one of the life hacks I did when I was in P is I would insist that we would bring on at least like a super controller level, like interim, but ideally even like another CFO level person. So one could focus on closing the books and keeping the engine of the office of the CFO going. And the other one could just do info requests.

[00:26:26] And it was by far the highest ROI thing we did. Of the hundreds of thousands of dollars we spent on everything else, millions of dollars we spent on everything else. That was the highest one because also the thing that I'm sure you agree with is the second you hit stop to figure something out, buyers start seeing ghosts and getting nervous.

[00:26:46] Steve Hunter: Yeah, there's nothing that kills a deal like losing momentum. Like you said, putting things on pause because everybody's busy and if they put the file off to the side of their desk, you've got to call and be like, all right, take the file back out of the pile. We want to talk to you about this. So yeah, that's a good point.

[00:27:01] Sean Mooney: One of the top use cases we get today is from the PE firms. Everything that PE firms do, by the way, they should look at as your private seller, because there's an ROI to it. They call us in droves saying, we just need someone who's going to do the sale process as an interim. And then you get them in, get them out, get an ad back, but keep the train moving.

[00:27:21] And to your point also, like sell side Q of E, every single seller should do that. There's a reason why PE firms hire them every single time. It's because of. If your numbers are questionable, someone's going to retrain.

[00:27:33] Steve Hunter: Yeah. I think the thing that business owners don't appreciate, and we've seen it in some of the better ones really do this, where if you hire a good firm to do the Q of E for you, I mean, they really become your advocate in those discussions, like around working capital and things like that, where, I mean, there's one guy that we use because he's so good at getting on calls, negotiating like working capital calls with private equity, where they'll bring up all these points to try to whittle some purchase price and this guy just eviscerates them and.

[00:28:01] Sends them whimpering back home and we would steer every one we could to them if we could, if our clients could afford them, but it's money well spent for sure.

[00:28:08] Sean Mooney: Most people think an audit is sufficient and there's a term called GAP, generally accepted accounting practices. The first two words are generally accepted.

[00:28:18] And so there's a range. You need someone to advocate on your side to keep it the range towards the practical middle versus like one of the extremes. So I think that's great advice. What about Steve on the flip side? What are some of the things that you wish that buyers knew when they come to this process that they don't always exhibit kind of wisdom or knowledge on?

[00:28:39] Steve Hunter: I thought about this question when we talked about it earlier. And in my mind, I think it's a lot of the softer skills that I think is where people are really able to differentiate themselves. I mean, obviously valuation. We recently went to the annual partner meeting for a private equity firm that was really frustrated because they kept losing out on deals.

[00:28:58] They'd see a deal they really liked. And so we put together a whole presentation of like, okay, this specific deal that you lost out on here is what the buyer did to win it. And here are the things that you would have needed to do if you wanted to win it. And so obviously valuation is important, but in this market, it's so competitive, especially for really good businesses that I think a lot of it comes down to, to sort of people and processes.

[00:29:20] And so I think on the people side of it, it's just a lot of common sense, like To just kind of not be a jerk when you're coming in for a management meeting or a presentation with a client. I have like two or three examples that I point people to throughout my career where like a buyer was trying to buy a business from the business owner and was just so abrasive and so like condescending and just a complete jerk.

[00:29:46] I was like, why are you even here? If this is how you're going to treat our guy, he already hates you. Like he wouldn't sell his business to you, even if you were the high bidder. And so. I think to just kind of be a good person. I think the second one is to really be prepared. I mean, we're still amazed even at this point, like we've had it happen even this year where we'll have a firm in for a management presentation, maybe not everybody, but there are people in that meeting from that firm where it's clear they didn't read the book.

[00:30:13] They've put in an indication, we've given them a meeting, they're in the meeting, and they're asking questions where, like, if they had really read the book, they wouldn't be asking that question. It looks bad on us because it looks like, well, wait, why did you bring these guys in if they don't know what they're doing?

[00:30:25] And it also makes them look bad because the guy's like, well. I had someone in here yesterday was asking really good questions, and this person clearly hasn't done their homework. So I think do your work ahead of time and try to be as prepared as possible. I mean, you're really trying to impress the business owner.

[00:30:38] I think the third thing, and this has gotten a little better, but I think the whole operating partner piece of things, like we've seen that really backfire on people sometimes. I mean, a lot of firms have operating partners where they'd function as a board member, post deal or. But then there's other firms where they have a guy and he's on their payroll and they want him really involved in the business post close.

[00:30:58] And I think a lot of times we've seen that really rub the business owner the wrong way. Like, well, wait, I'm going to stay, but is this guy going to be sitting at a desk next to mine every day? Like looking over my shoulder, you know, waiting for me to make a mistake so you can replace me with him. So that whole operating partner thing, I think a lot of people, Especially when it started to become more popular.

[00:31:18] I think people positioned it as like a real positive, but we saw examples of it where people were like, okay, if that's going to be their guy and I'm going to be dealing with him every day, I don't think I want them as my partner. And so be careful with that. And I think the last couple of things are one to be really transparent.

[00:31:33] I think a lot of times. Especially when you get a little further along in the transaction process, if something comes up or the buyer finds out about something or the buyer has questions or concerns about things like bring him up on the front end. Don't wait until they become bigger issues. And then everything blows up because I think a lot of times we'll have that happen.

[00:31:50] And people say, well, if you had told us about this a couple of weeks ago, we could have addressed it. Now we're at a point where it's a major problem. And then I think the last one is just be responsive. And I think people are pretty good about that because this market is so competitive that if you're not going to be responsive, you're just going to get sort of out hustled by somebody.

[00:32:06] There's nothing I can think of in terms of like technology or anything creative. I mean, obviously in terms of winning deals, back to the risk point, people being willing to take risk and say, you know what, we've done 90 percent of our work, but we feel good enough that we're willing to close and not worry about these couple of issues.

[00:32:24] That's, I think, where people are really able to differentiate themselves, as opposed to we have our list of 25 things and we've got to work the whole way from top to bottom, get through all these things crossed off before we're willing to close, because I think, especially for really high quality assets, there's people that are willing to, as one of my colleagues like to say, do unnatural acts to get the deal.

[00:32:42] Sean Mooney: All that's kind of great, timeless advice, particularly as you think about our listeners who are up and coming and emerging PE professionals. And if I were to kind of personalize my own journey, when I was coming up, you feel like you had to know everything.

[00:32:56] Steve Hunter: Yeah.

[00:32:57] Sean Mooney: And what did I know? I had like a few years of experience before I got in it, right?

[00:33:00] And then I felt like I had to like show everyone how smart I was. But deep down, I'm like, I'm not that smart. And so I was like, okay. And then so you try to ask these really great questions. And then particularly as you're younger, and you don't really realize this, you're asking questions to tell people how smart you are.

[00:33:18] Versus get to the real question, you know, that's what I would do. And then when I realized it was like, no, you're asking these questions in such a way that it's not fair to the person you're asking. It was like, are you still like kicking your neighbor's car? And I was like, well, I never kicked my neighbor's car.

[00:33:35] It was like these gotcha questions. And then luckily I got some good tutorship pretty early. We're like, no, listen, kid, you got to ask these things. A in a respectful and a mindful way, put yourself in the shoes of that person that's getting this question. It's about getting to the truth, so be Socratic, like, get to the answer, don't prove that you're smart.

[00:33:55] You're here for a reason, so chill out, kid. I kind of got to that, but it took me a lot of time, and so that was something we spent a lot of time with our associates on later as they were coming up. It's like, first management meeting you're in, we don't want you asking any questions. It's just like, just see how people are doing these things, because it matters.

[00:34:13] And then the other thing, Steve, that I really appreciated, that I kind of distilled from our conversation here is I think a lot of buyers fail to realize that at some point they have to sell themselves because there's a lot of choice in who the buyer can be. It's almost like hiring candidates today, right?

[00:34:31] You're assessing and scrutinizing and trying to make a decision, but at some point you start selling the person you want to work with you to join you. I think a lot of P firms that I've seen from our vantage, they might not get that like, no, you got to sell them on you. There's gotta be a mind shift there where.

[00:34:48] They're also kind of going through like, this is what we're going to bring to the table in addition to a check.

[00:34:53] Steve Hunter: Yeah, back to your thing about asking questions. I had a really funny story like, a long time ago where a young partner from like, it was a really big private equity firm and he came down and we were having a meeting and this guy was like, out of private equity central casting, like tall blonde haired guy, JD MBA from Harvard.

[00:35:12] Probably went to Princeton undergrad and he would start off every question saying, well, I mean, I know I'm not the smartest person in the room, but we would ask this question and after like the fourth or fifth time, we started joking. We're like, no, you probably are the smartest person in the room. So please stop saying that.

[00:35:25] Sean Mooney: False modesty is also figured out at some point.

[00:35:27] Yeah.

[00:35:27] Steve Hunter: Who else here has a JD MBA from Harvard? Like, okay, that's just you. So why don't you just stop saying that?

[00:35:33] Sean Mooney: Just ask the question. Yeah. Let's get past this. It's a hundred percent right. So I think that's great. a great mindset for really anyone, but also I think for sellers of companies to realize it's not always intentional, but you should be looking for people who can be good partners at the same time.

[00:35:50] Steve Hunter: I think the other thing is too, and I think we see a lot of this because we obviously have an office in New York, but we have an office here and in Boston. And so many of the deals we do are kind of like in the Midwest or in the South. It's helpful to be able to kind of relate to business owners, to be able to speak their language and, If you're calling on a business center in the Southeast and you're not up on what's going on with sec football.

[00:36:12] Oh, what was you? And it was the same way. Like when I was working with GHF, like you couldn't go to a meeting and not know what was going on in the NHL, like the night before, because all anyone wanted to talk about was hockey. And so, I mean, you do have to kind of educate yourself and be a bit of a chameleon to be able to kind of get along with the business owner and kind of meet them at their level.

[00:36:31] It's not helpful to talk about what new boutiques are opening up on fifth Avenue when you're meeting with a business owner outside of Chattanooga, Tennessee.

[00:36:38] Sean Mooney: Yeah. And particularly in the middle market, that's so true. And I think that was probably one of the advantages I had is when I got into the business was I grew up working in manufacturing plants, I didn't have any kind of errors and I was like probably purposely kind of humbled as a kid.

[00:36:53] So that's a great observation and advice that I think everyone should listen to. And so maybe Steve turn in the page here. And so we've talked about what sellers should really be thinking about, what buyers should be thinking about. What about for TM? How are you all kind of approaching this kind of current market?

[00:37:12] How are you helping them succeed and be successful? And really for most sellers, one of the biggest moments, at least monetarily in their lives.

[00:37:22] Steve Hunter: We're excited when we get into pitch situations, because we feel like we're really well suited, especially for private business owners. I mean, we're obviously trying to competing day in day out to get hired, to sell private equity portfolio companies.

[00:37:34] And that's where my bread is buttered. But. What we try to pitch is we're sort of in this Goldilocks world where we're big enough that we can kind of offer anything that a business owner might need, but we're small enough where every deal really matters to us. We'll generally do sort of between 20 and 30 deals a year.

[00:37:50] And we describe ourselves as a little bit like we're kind of a custom manufacturing operation where we have a lot of competitors who are very good competitors that might do 10 times the number of deals we do in a year. They might do 100, 200 deals a year, good brand names, but we're not. One of my partners likes to say we're really good at deals that require a little more time and attention and might need a lot of work with the positioning and getting the story right in some ways.

[00:38:16] Those are almost like a custom order. And if you take that custom order and you drop it into a assembly line, it gums up the whole process. And what happens is the deal doesn't get done. It gets kicked down to junior people. And so we tend to do really well with stories that they need someone to really articulate What the company's value proposition is and to work on the positioning and to work with the owner to kind of craft it.

[00:38:37] Because a lot of times these businesses, the owner has never sat down to think about what his reason for existing is, how does he compete and what his growth strategy is. And so how we try to sort of position ourselves is we always promise to have two senior managing directors on the deal. I think we have 16 MDs right now.

[00:38:55] So we put two MDs on every deal. We've been around since 1989. Some of our MDs are very seasoned. I would like to say they've been around for a long time. They still like to roll up their sleeves and write the books. We'll commit to kind of a full team of five or six people, depending on what the situation is.

[00:39:12] So they're going to get more time and attention than they might get. If they went to a smaller boutique where it might be one senior guy and one mid level guy and one junior guy. But at the same time, their deal is extremely important to us. I mean, We're still kind of in that partner mentality where we can't afford to take on every deal and then figure out which ones are going to close and hope that the law of large numbers works out.

[00:39:32] I mean, if we're going to take on a deal, it means we're going to see it through to the very end and get it done because our CEO kind of pushes everybody really hard. I mean, we're in a client service business and we need to make sure that we're doing the best job for our clients. So that full team piece.

[00:39:46] And then I think the other thing is probably something that's really become a lot bigger deal last couple of years is what I was mentioning earlier about the data analytics. We've kind of brought some of that in house and obviously for bigger deals, we'll still use an outsourced provider, but having the ability for the CEO or the CFO to just send us a big data file and let us go chew on it for a couple weeks and come back to them with here's some insights about your business that you may not have known.

[00:40:12] We had one really interesting example of that a couple years ago, and it was actually for a sponsor owned business, and it was a business that sold direct to the consumer online. It was in the building products world. They sold direct to the consumer and then they also sold kind of direct to the pro. So they would sell to contractors that were going and doing work at people's homes.

[00:40:30] And so when we started filtering through all this data, we figured out that like their average pro customer was buying like five times as much product. As the direct to consumer and the shipping costs were lower and they were repeat buyers and the margins were better. And so it was like a real revelation to them.

[00:40:45] They'd always just focused on each side of the business evenly. And so they shifted a lot of their marketing effort over kind of the six to 12 months before we went to market to that direct to pro channel, it had a dramatic impact on the business. And so things like that, that you can pull out of that data.

[00:40:59] That's part of the reason we've kind of invested in that because we feel like The tools that are out there now, you can get insights out of data that you would never able to get before because there was just too much there for a human to get their arms around.

[00:41:11] Sean Mooney: I really liked that approach. And what resonated is this kind of Goldilocks approach.

[00:41:15] You're being very purposeful about who you are, who you're not, how you want to play, but also attaching resources that are going to help you not only bring a custom approach to every business is a snowflake in many ways, right? And they should be treated that way, but also bringing the data acumen where you can kind of expose the truth.

[00:41:34] And then monetize it. If you're not able to tell the story, someone might be able to figure it out, but they're not going to have to pay for it then.

[00:41:40] Steve Hunter: Yeah, exactly.

[00:41:41] Sean Mooney: Why not have your clients get paid for it? And so maybe turning the page here, Steve, one of the big questions is like every year, when we're recording this, we're coming into 2025.

[00:41:52] And so, as you look into this, I've been telling everyone I feel like I've lived in a washing machine. It's like, goodness, bad news, goodness, bad news. And it seems like now there's like two good news is for everyone, bad news. And it seems like things are getting better, but it's hard to know. Right. And so I think one of the great advantages that you have is you get to see like what's coming into the pipeline and you get to see lots of companies, not only at time, but over time.

[00:42:20] And so what's your perspective right now on the M& A markets? Heading into 2025,

[00:42:27] Steve Hunter: I'm very optimistic, and I think our firm is pretty optimistic. And I think the market seems pretty optimistic just in talking with peers and private equity firms and things. I do feel like we're in a little bit of this like Groundhog Day world where it's like the economy is doing okay.

[00:42:41] And there's a lot of old private equity portfolio companies that need to get sold. And so next year should be a really good year. But it finally feels like we're sort of almost there. I think having the election behind us. I think the outcome of the election has sort of freed up some animal spirits in the market.

[00:42:57] I think people are actually excited about the outlook for the first time in a long time. It feels like people are kind of coming out of their shell a little bit. I think people were very worried about the election and uncertainty around it and whether there was going to be some armed insurrection. And so I think having it behind us and the idea that it's, I think, somewhat, hopefully slightly more pro business is got people pretty fired up to the point about On the private equity side of things, I mean, the data is just crazy.

[00:43:25] I think there's 11, 567 portfolio companies as of the end of the third quarter. And 30. 5 percent of them are more than seven years old. So there's just all these companies out there. And you've seen tons of stories about it. And now you're starting to see stories about, okay, well, not only are the companies old, but the funds are old.

[00:43:44] It gets even harder when the funds start to have to approach their real life. So I think that's another reason that We're pretty optimistic about the next couple of years. I think it's part of the reason Jannie was excited and buying us because they wanted to do more private equity business. And we had shown that we had the ability to get hired by private equity to do those.

[00:44:01] We're very optimistic going into next year. I think this year is going to be kind of an okay year for us. Our pitch activity was down quite a bit at the end of last year, and which obviously spills forward into this year or so. But I think the two things we're most excited about are, I was looking at the data in advance for this, and if you look at all the pitches that we had in the second half of this year, that number compared to the second half of last year was up 65%.

[00:44:27] Sean Mooney: Whoa. I

[00:44:28] Steve Hunter: mean, so our pitches are up dramatically year over year. And it really started, I would say maybe like in the March, April timeframe, but it kept accelerating. I mean, December, I mean, we had two pitches this week. It's kind of an odd week to have pitches for, I guess it's sort of the week before Christmas, but we had two this week, December is going to be a huge pitch month for us if we just win our fair share of those that translates into what should be a great year.

[00:44:53] If I looked at our pipeline of engaged business. I mean, it's up 27 percent year over year. So just of things, if you look at where we are right now versus this time last year, as we head into next year, the engaged pipeline of revenue is up to over 25%. So we're pretty optimistic. The thing that's helpful for us is when the market gets busy, the bigger firms move further up market.

[00:45:15] It lets us move up market. The deals are bigger, the fees are bigger, so we can operate at kind of a low level of activity, but it. It feels like we've been bumping along here for a couple years, and I think we're hopeful that next year could be our best year ever, except for maybe 2021. Coming out of COVID, that was sort of everybody's rockstar year.

[00:45:35] 2021 was a year that was almost like 3x a normal year for us. I don't think we're going to get back to that, but it wouldn't surprise me if we had our second best year ever next year.

[00:45:44] Sean Mooney: I think that's A, that's encouraging, and B, it's consistent with what we see. And so we see it kind of through the lifespan of P.

[00:45:52] E. And what we've been seeing is like, we've been in like, almost like the stop and go traffic, where it gets going, stops. But we're seeing like the lanes open up and everyone's kind of picking up speed. As we looked at our data, it was interesting in 2024, there was so much activity, not on cost, but on growth.

[00:46:11] And so part of it was PE saying like, we're not waiting for the market to come back. We're going to grow these companies, you got to grow yourself out. So they're willing these companies to kind of get to the minimums they have. But then you add on the normal catalyzing pressures and influences and incentives of LPs need money if they're going to re up into the next fund.

[00:46:32] Private equity firms need to raise the next fund. Portfolio companies are getting older. Every LP, the first thing they say are these three letters, DPI, DPI, DPI, so distribution ratio to paid in capital. And so there's just so much weight, so much gravity, so much physics that this industry, the deal machine has to get going again.

[00:46:53] It's just the laws of physics. And so I think it will, but I'd also think the preconditions are exactly said that the economy's in pretty good shape. Inflation's not as low as the Fed wants it, but it's pretty good. Unemployment's pretty good. You've got the country growing and then you're going to have a wave of deregulation and all sorts of other things.

[00:47:11] I too think 25 is going to be a good M& A year.

[00:47:13] Steve Hunter: We had two other anecdotes We were talking to a client yesterday about the noise that was in their numbers over the last couple of years with some supply chain things, and we were sort of saying to them that, in a lot of ways, what people are sort of looking at now is they're looking at 2019 numbers, which was pre COVID, the last sort of pre COVID year, and then they're looking at 2024, because it was a relatively normal year.

[00:47:36] And all the other years in between you had COVID, you had supply chain, you had inflation. And so you were sort of saying like, people look at 2019, they look at 2024. And as long as there's like a good relationship between those two and the stuff in between, people were sort of sick of talking about and looking at.

[00:47:51] So,

[00:47:52] Sean Mooney: yeah, these are the first two real years, 19 and 20. That's a good way to think about it.

[00:47:56] Steve Hunter: Well, and the other thing that we were saying is, is that to your point about the market getting restarted, there was a period where it seemed like every time you'd start to get started, there'd be another blow up.

[00:48:07] When Israel got invaded or there was the election or there was a supply chain thing or Russia invading the Ukraine, like all these different things. And I was telling somebody at one point I felt like what we really needed was like two or three just really boring quarters where like nothing happened.

[00:48:22] Just there was no major geopolitical event, no major economic blow up, no major scandal of some kind. And now that we've got the election behind us, it kind of feels like maybe we're heading into that territory now.

[00:48:33] Sean Mooney: We've seen a decided uptick on the diligence requests. starting two weeks after the election.

[00:48:38] But I think everyone just want to pause. I think you're spot on. So as we wrap up our conversation here, Steve, I'd love to get your perspective on a couple things in the more kind of human front. One of the things that I love to do as listeners here know is kind of Frankenstein myself. And like, if it were up to me to figure out how the world works, it would have been a really hard journey and adventure as I try to Perceive the complexity of humanity, so I try to read as much as I can.

[00:49:08] I'm curious, as you think through kind of how you've kind of come up, have there any kind of books that you've read that have kind of made a difference and had some takeaways from them?

[00:49:19] Steve Hunter: I think one that I know one of your earlier podcast guests talked about was the Die With Zero book. I'd heard a couple of podcasts that that guy was on.

[00:49:28] And so I went and bought the book and read it. And it's a really interesting book and it's really hitting home for me, because I think if you talk to anybody that has aging parents, What people have always historically worried about is running out of money when they get older and what his whole thing is is like, you're probably not gonna run out of money.

[00:49:43] You can make sure you don't run out of money. What you're going to run out of is either health or time and kind of reorienting things to sort of say, okay, you're probably not going to go hike the Matterhorn when you're 80, plan your life so that you can do the stuff you want to do. And don't worry about running out of money as much worry about running out of time to do the stuff you really want to do.

[00:50:02] So I think it's a cool book. I almost feel like it's one of those books where you have to like read it. And think about it and reread it and think about it some more like each increment of your life. It's a really interesting way to look at things. So I like that book quite a bit. That's probably the one I would point to recently that I read.

[00:50:18] Sean Mooney: I have that book on my side table and it's like one of the awesome things, but challenging things of this podcast. I get all these good book recommendations. So I have this hilarious bedside table where it's like stacked and I've read like two chapters in each. And I was like, can you just like focus on one and like complete it?

[00:50:34] Steve Hunter: Maybe you need to jump to one of his podcasts instead. I'll send you a link to one of the podcasts he was on and it's like getting the cliff notes of the book. I love that. I'll do the short course. You can jump straight to the worksheets in the back. Bye.

[00:50:46] Sean Mooney: Yeah, I'm gonna move that book up the stack.

[00:50:47] 'cause it really does seem like an interesting one that probably I wish I had read even much earlier, , in terms of like adding life to your years instead of year to your life kind of a thing. And so as you think about this kind of introspection, are there any other kind of like words of wisdom that you've been thinking about lately that kind of made a difference?

[00:51:06] Steve Hunter: I mentioned earlier, I kind of grew up in a pretty rural area, and I had two great parents, a really good family, but it was always raised to be kind of humble and not braggadocious or prideful or arrogant or things like that. And I think that's generally really positive, but I think it can also sometimes put yourself at a disadvantage if you aren't aware of it.

[00:51:24] And so I think there were two things that I've sort of picked up over the course of my career. But I've tried to talk to my kids about some, especially now that my kids are like going out into the working world and thing. And so the first one is like that you don't always get what you deserve. You kind of get what you ask for or you get what you negotiate for.

[00:51:40] Sometimes people are afraid to kind of be that person that raises their hand and says, what about me or what about this? But I think a lot of times by not doing that, you really disadvantage yourself. And I had an example. I don't know, probably five years ago professionally where I had a client that I'd worked with before and we were getting ready to sell their business again and I was going to quote them a certain fee.

[00:52:00] And one of my senior partners said, why would you quote him that? Like that seems a little low. You ought to ask for this. And I thought, well, I said, well, that seems sort of piggish. I'm worried he's going to think I'm trying to take advantage of him and yell at me. So I went with his higher number and I was really stressed about it.

[00:52:14] I was like, we're convinced the guy was going to tell me he didn't want to work with me and fire me before he ever hired me. I put the higher number in the engagement letter and the guy just signed it. He never even asked. It was a major difference in fee on this transaction. So that was kind of like a wake up to me of just something I've learned from some of these guys that I've been working with that are a little older and a little wiser of someone's not just going to give you something because you deserve it.

[00:52:37] You have to ask for it. So that's something I've been trying to talk to my kids about and just I think it's a good life lesson. And then the other thing is that I saw a quote from Steve Jobs recently, where he was talking about how there's sort of like this interesting revelation at some point in your life where you realize that kind of all the stuff out there in the world was basically built by people just like us.

[00:52:57] It wasn't a whole army of Elon Musks out there building everything that's out there that it was generally everything was out there was built by people that are no smarter than you or me, they just happened to have a good idea and kind of ran with it. So to kind of not be afraid to go carve your spot out in the world.

[00:53:11] And if you have a good idea to try to run with it and try to make it happen, that it's one of the beautiful things about the society and the country we live in is you can really kind of try to make your dreams come true if you can figure out what they are and are willing to go for them.

[00:53:24] Sean Mooney: I love both of those piece of advice.

[00:53:26] It resonates for a whole host of reasons, but similarly kind of grew up in a way where it's like discretion is the better part of valor. Keep your head down, work hard and good things happen. And similarly, I had some mentors earlier. Where probably grew up in the bigger cities where they're probably more used to kind of having to growing up in kind of a more competitive world and he had always say this line.

[00:53:49] Hey, Sean, no ascii, no getti.

[00:53:55] It's a good point. Yeah. It's like, if you don't ask her something, you're not going to get it. Like people can't read your minds. Yeah. And if you do the work and you build trust and you have a relationship. Odds are, most people are going to accommodate or get you a lot closer to where you think is fair.

[00:54:09] And so long as you're not being overly transactional in life and overly piggish and you're being fair, then good things happen. And then the second piece of advice there, where you say, like, you can't wait for the world to go and come to you. If you see something, just go do it. It's kind of like going back to your original conversation about the business sellers, like You don't have to wait for someone else to do this stuff.

[00:54:32] You can go do it. So just go do it.

[00:54:34] Steve Hunter: Yeah. That's one of the crazy things. But I know my partners and I, we always talk about, it's like the one of the things that's very fun about like where we sit in the world is just seeing all the crazy ways that people have figured out to make money doing stuff. Like ideas for businesses that you didn't even know existed out there.

[00:54:52] It's always fun to see those.

[00:54:54] Sean Mooney: All right. Well, Steve, this has been a ton of fun. I really appreciate. A, the opportunity to catch up, but B, I learned all sorts of things about you that I wish I knew, but also just about business that I wish I knew before, and it's incredibly gracious of you to share and take your time to kind of put those cards on the table for all of us.

[00:55:12] Steve Hunter: No, this has been great. I mean, kudos to you for the move that you made and the business that you've built. I feel like I was in on the ground floor of it, and it's been really fun to see how it's grown and evolved and become the juggernaut that it is.

[00:55:26] Sean Mooney: It's kind of you to say, and I think I was probably looking to you when I was doing this at ground one to talk me out of it, but unfortunately you gave me the green light.

[00:55:33] So, well, unfortunately now, I guess. But thank you. And that's kind of you. And I similarly appreciate the partnership and friendship we've had over the years.

[00:55:51] That's all we have for today. Special thanks to Steve for joining. If you'd like to learn more about Steve Hunter and TM Capital, please see the episode notes from links. Please continue to look for the Karma School of Business podcast anywhere you find your favorite podcasts. We truly appreciate your support.

[00:56:07] If you like what you hear, please follow 5 Star Rate, review and share. This is a free way to support the show and it really helps us when you do this. So thank you in advance. In the meantime, if you want to be connected with the world's best in class, private equity grade, professional service providers, independent consultants, interim executives that are deployed and trusted by the best business builders in the world, including many hundreds of private equity firms and thousands of their portfolio company leaders, and you can do the same, give us a call or visit our website at BluWave.net. That's B L U W A V E and we'll support your success. Onward.

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.