Selling Without Regrets Requires Alignment with the Right Transaction Advisor

Speaker1: Hey, are you a business owner, entrepreneur or professional? If so, we want you to apply to be a featured guest on our show. My name is Adam Torres and I host the Mission Matters series, a podcast. I recorded over three thousand episodes and we are just getting started. How do you know if you'd be a good guest to be on the show? Well, only one way to find out, and that's to apply. But I'm going to let you in on a little secret. We want guests to have a story to tell guests with a brand or product or service that can benefit my audience. Listen, if this sounds like you go to Mission Matters.com and click on our guest to apply. I'd love to talk to you need to know more about your story again, head on over to Mission Matters.com. Click on our guest to apply. All right. Now let's get into the show.

Speaker2: Hey, I like to welcome you to another episode of Mission Matters Money, your source for all things money. My name is Adam Torres. You can follow me on Instagram at at Adam tried to keep up with my book releases, book tour schedule signings, all that other good stuff. I always love to connect with you there. And as always, if you'd like to apply to become a co-author of one of my upcoming books, just head on over the website Mission Matters.com and click on Coming Off to Apply. All right. So that I have Matt Gilbert on the line and he's co-founder and principal over at Gilbert and Pardue Transaction Advisors, also known as Gap. Matt, welcome to the show.

Speaker3: Hey, how are you doing? Thanks for having me.

Speaker2: And Matt, so this is we got we got quite a topic on our hands today. So selling without regrets requires alignment with the right transaction adviser. I'm really interested to get your take on what exactly the right transaction adviser looks like, because we hear a lot of different things out there. Some people, you know, it's one hundred percent focused on, like, what's the fee, what's the setup there? And then other people are like, there's other ways to look at this. So your vantage point day in and day out and doing this work, I'm really interested to bring that to my to my audience. And maybe, though, just to get us, I guess, kicked off for context just a little bit more about Gap and the company overall.

Speaker3: Yeah. So I have a partner, Brett Pardue and I have been business owners for four twenty nine years. We've founded and built several businesses that grew quite large, hundreds of employees, each one of those we made some acquisitions to grow and in the end we ended up selling two of them to public companies, one to a private equity firm, one to a competitor. And so, you know, we've been at every seat at the table as far as a buyer seller, a financier having her own network on the line. And and a few years ago, we started getting a lot of attention from other business owners saying, hey, help me do this. You guys have done a lot, you know, walk me through this. And we realized there was there was a missing element there in any M&A advisory space where most advisors had never operated a business before. Most advisors come out of banking or straight out of school or out of insurance. And so, you know, we felt like that we had a really unique perspective on this because we had been business owners and operators our entire lives. And this is really kind of a second career for us. So if you look at the at the lower middle market, we're where we transact most that business with revenue up to about seventy five million. The national statistics are just hideous for successfully selling a company to a third party buyer. And when I say hideous, less than 20 percent success rate nationally. And so we felt like, you know, we could come in here with a different perspective. We actually put together a process that looks different than everybody else in the space. And we fast forward to today and the success our company has to have had. We have about a ninety four percent success rate, so we're crushing it and we're proud of it.

Speaker2: Wow, that's it's an amazing success rate and I guess just to just to piggyback on that. So what do you think is going to be like one of the big concerns with are some of the big concerns that somebody should really consider before they maybe are thinking about like exiting? Like one of those main things that I know that I know for every business it's going to be different and depending on where at the panel size it is, depending on what they're doing. But what are some of those major concerns that you think somebody should be thinking about?

Speaker3: Yeah, you know, the truth is I deal with business owners every day who want to who want to talk about what's the process, what should I be interested in? How should I look at this? And they have a very hard time putting themselves in the shoes. Right. So if you can if you can turn the scales a little bit and look at your business from a black perspective, where are the risks? Where are the bottlenecks? You know, if you've got inventory held as fast as it turned, how many dollars are tied up there? If you've got HRR, lots of employees are going to come if you have issues. And so really the things that most business owners have gotten comfortable with and they don't see the flaws in their business or the weaknesses in their business or the risk in their business, a buyer and their lender are just going to highlight those things. And so business owners have a really difficult time. They'll justify results. They'll give you reasons why some people call them excuses, why things are a certain way and buyers just don't buy into that narrative. Everything has to be proven. And and so if a business owner can turn and look at each component of their business from a buyer's perspective, what I come in and write the check that I want to receive for this is probably not OK. How do we fix it and make it to where? I would write that check for this. Well, if you would write that check and somebody else will to.

Speaker2: Oh, man, that's a great way to look at it, to put you in their shoes like what I write a check for. I love the way you said that. So let's let's talk about, like, fee schedules. And, you know what somebody should think about when and I don't I'm not saying give your exact schedule of this, but just for people that are out there and thinking about, like what they should be focusing most about when they're thinking about a transaction adviser and like what matters most, I mean, what are your thoughts on that?

Speaker3: Yeah, if it's a hot topic in our in our space, you know, we're just like every other industry. There's discount brokers, there's the Internet brokers in there. You can you can get a Rolls Royce or you can get a go cart when you go looking for a broker and talking about fees. And honestly, in most business owners situations, this is going to be the largest transaction of their lives. This is going to be the last great transaction of their life. This is certainly the culmination of years and years worth of work. And so, you know, I challenged the wisdom of approaching a monumental event like that. From a fee standpoint, I just don't I don't see it. I don't get a lot of a lot of business owners get in the way of themselves because that's what their starting point. And I think the real starting point for the people that I think are most happy with their transaction that are successful in the end of the transaction, are the people that that know go out seeking for alignment with their transaction adviser? Do they can they find an adviser who understands their business, who can take the goals that they have for the business on as the teams goals? And then who has a track record of keeping that? They have the team in place to have the tools in place. A lot of times data rooms and valuations and things like that come into play. And so really stick in alignment with your with your team. There's an attorney, there's a CPA, there's a transaction advisor. All of these people exist to help you achieve your goal. And if you approach every one of them from how cheap can I get you? Well, you're not going to get the best result. And that's just common sense. But I can't I can't tell you that probably 70 percent of the business owners that we talked to approach the narrative from that standpoint.

Speaker2: Oh, wow. That I mean, it makes a lot of sense. So if you're so if you are looking at different firms and different things like that, OK, that that's the staff part. What should they be looking at that when it comes to just the firm overall like transactions? And what about where I'm going with that? Because like is like it and this is for me, just for my knowledge, like, is there is it like based off the industry? Is it based on the size of company the firm does transaction with? Like, give me a little bit like behind that end. Is there or is there generalists like how does that part of it work?

Speaker3: Yeah, absolutely. There's something for everybody. And you can you can certainly find an industry specialist. You know, that's not necessarily the greatest not a lot of times they have a very narrow view. And if you find a generalist who really gets you get your company and finds passion behind your project, a lot of times you'll get somebody who fits in a better effort for you. And so, you know, looking for a firm, though, I do have some strong opinions, I don't think you should, quote unquote, list your business if you want confidentiality, if you don't want your employees or your vendors or your customers or people around town finding out that you're trying to sell your company, if that would be detrimental to you, if they found out that you were thinking about that, then you probably want to play your cards really close to your vest. You're you're dealing with somebody. You know, a lot of M&A firms will talk about your deal openly. And in most business owners, I found just that. So somebody who's going to start with a confidentiality agreement, somebody who's going to listen to what you want and then articulate a plan that we can help you achieve your goals. If we work together to do this, what you'll find is most most brokers in this space will come in and they'll listen to you and then they'll tell you how your exit needs to fit in their box. Right. And how is good for them. And you can pick up on those clues and in there in the pronouns and the way they position things, certainly their paperwork and the questionnaire.

Speaker3: But it's it's striking to me how many business owners really don't shop around to find. Somebody that they can align very well with and our firm, for instance, we have a CPA and a financial staff. We have a marketing team. We have research analysts. We have deal team leaders who have actually built and sold the businesses and gone through the process that we're looking to take our client through. And we surround a business owner with a team of people. We don't just assign them the individual that sign them up. And so that makes a huge difference in the qualifications and the experience of the team. And then the other thing I would say is volume. You know, I'm in the Houston market today and some of the brokers here have a 40 clients to one broker ratio. So think about that. How can one broker really know 40 people in their goals and their business intimately and just as a numbers game to them? And to flip that over, we're a boutique firm. We have 11 people and seven clients, and we're going to eat just fine this year. But we take those seven clients all the way to the finish line. We achieve their goals. And so none of them are expendable. And so, you know, there's a there's a transaction adviser out there for every appetite. And I would say just shop around, interview the team, look at resumes, talk about transaction interviews and clients. And you would think naturally that people who have done very well in business would do that research, but they just don't. And it baffles me.

Speaker2: I got it and I like it and I love you say there's somebody out there for everybody and I know that there's some people listening right now. They're like, man, I like man, I want to talk to him. I talked to his team. And that's one of the reasons why you on the show, because we like you. So that being said, that if somebody is listening to this right now and they want to learn more about GAP and they want to talk to you and your team, I mean, what's the best way for them to reach out and get some questions answered?

Speaker3: Yeah, we have a pretty good website www. gap-advisers.com. I'm sure that'll be on your show notes. They can certainly reach out to me directly if you want to put my email and even my cell their show notes, you know, we're here to help. Our  whole platform is about educating business owners on how to do this well, how to do it without regrets, what their options are, even if even if you have a buyer of your business to go to, the deal structure may not be right. And so there's just a myriad of things to talk about it. We've built our entire business on educating business owners and we think a well educated business owner will make a good choice for themselves. And very often that choice is us. And so our whole platform is blogs and podcasts and white papers and things like that to help people just understand how this works.

Speaker2: And I love it. Great stuff, Matt. Well, I just want to say really appreciate you coming on the show and sharing more about your background and all the great work that you're doing over Gap. And to the audience, as always, thank you for tuning in. Hope you got a lot of value out of this. Hope you learned a lot if you did. Don't forget to don't forget to subscribe button. We definitely want you to come back and be a return listener and visitor. And I'm Matt. Thanks again for coming on the show. It has been a pleasure, my man.

Speaker3: Thank you all. Have a great day.

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