Latest / The Accounting Podcast / From Compliance to Consulting: A CPA's Journey into M&A and Business Valuation
Transcript
- Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding! Blake Oliver: [00:00:10] Welcome back to the accounting podcast I'm Blake Oliver. Today I'm joined by Anthony Venette, director of business valuation and advisory services at DeJoy & Co. anthony is a certified Public Accountant accredited in business valuation. He brings over a decade of experience advising private business owners on succession planning, estate and gift tax [00:00:30] strategies, M&A transactions and complex valuation issues. His passion is partnering with entrepreneurs and family businesses to help them achieve their long term financial goals. Before joining the Dejoie team, Anthony honed his tax skills at PwC and led financial planning and analysis at IT Inc., a large multinational manufacturer. Anthony, welcome to the show. Anthony Venette: [00:00:52] Thanks for having me on today, Blake. Happy to be here. Blake Oliver: [00:00:55] Anthony, you have had such a wide range of experience. Fpna. [00:01:00] You started out in tax at the big four, and now you specialize in M&A and business valuation for privately held companies. That's that's basically as broad as it gets. I think the only thing you don't have in there is like forensic accounting. Um, so I guess, uh, you're the perfect person to have on the show because we know that we have a lot of students, young CPAs who listen. And I want to highlight more, perhaps nontraditional or less known CPA career opportunities [00:01:30] or paths. So I'd love to hear how you ended up in business valuation. Like, why did you choose that as your, uh. Well, I don't know if this is your terminal point if you're going to stick in this forever, but yeah. Curious to know what drew you to valuation and M&A. Yeah. Anthony Venette: [00:01:47] Well, I don't know if this is my terminal point either. So I guess we're both figuring it out. But uh, uh, I really first off happy to be on and happy to be part of these conversations. I think they're important especially for younger folks listening to like get some [00:02:00] of these insights and hopefully you can you can see my my, uh, strange path I took to get here. Maybe they can take a straighter line off of what they learn from my mistakes, but, um, uh, happy to be on happy that you're here doing these things. Like talking about these topics in a way that makes this profession accessible. I think it's one thing that's really held the profession back as we've been inaccessible for so long. So I focus in a lot of my communication of like, I want to speak in plain English, I want to talk to people. I don't want to be some weirdo in some off room that you see once a year and you hate, you know, talking [00:02:30] to. Right? I want to be a real, tangible person. So happy that I can be on and express this here today. So let me talk a little bit about my route and how I got here, and I'll go way back. So I came to college an accounting major with a straight idea I so I went to college in 2009, New York State. So I was on track for 150 credit hours from the start. Coming here, I'm doing my four plus one. Anthony Venette: [00:02:50] I'm not dodging off that path. So as I was there in an accounting program, there was two jobs we talked about. You could go be an auditor at a public accounting firm. You can go work in tax or public accounting firm. [00:03:00] And some professors would whisper that you could go work in private. That was it, right? Which for me, I mean, that was I didn't have anything else to gauge the world off of. You know, I didn't have, you know, parents or family who were in this field. So I was just going off of what they told me. So after I graduated my senior year with the plan going back to the same school for the fall to do my my MBA, I had an internship in audit at a, at a local firm, um, in an office here in town. It was just a total square peg in a round hole. I just did not [00:03:30] mesh at all. Probably culturally. It was probably part of the issue with the folks I was around. It's funny, I look back now and I didn't understand what was going on with them. But now as being someone who's been in those jobs or seen people in those jobs where you could tell that they just did not want to get out of bed and come here in the morning, that I look around all those faces. When I look back on it, I was like, wow, that's what it was like. That's what was seemed so odd about them. Anthony Venette: [00:03:51] Um, so that just didn't work for me. So I went back, I'm doing my MBA and I'm starting that, and I don't have a job lined up. All the people I'm going to school with, for the most part, have [00:04:00] their jobs lined up. You know, they've had three internships here. They've they were at Deloitte when they were a freshman at, you know, do doing some program. They've done something with them every year since. And now I'm sitting here going like, well, boy, I have no idea what I'm going to do. So I was sitting there googling, what could I do with my accounting degree other than accounting? Right. That's the point I was getting at. Uh, so I went back into fall recruiting that year, and I was fortunate that I walked out with a job at PwC in their tax group, which was which was definitely beneficial for me at that point. So and another thing, there's students on here. I preach this like [00:04:30] crazy. I did my exams during my MBA. I did knocked out all four parts. I started in October. I finished in May a couple days before graduation. Do them in school. When you're in a study mindset, as someone who's done that that way and seen people do it the other way, I can tell you you're really going to enjoy it. It was 12 hours a day, seven days a week in the library, but I got done with it and I never had to worry about an exam again. Blake Oliver: [00:04:52] Uh, I agree with you. I did it while building my firm, and, uh, it took me five years. [00:05:00] Something that could have taken me a year, you know? Yeah. So. Yeah. Yeah, but so. But so. So I just want to be. I just want to make sure I understand. You started an audit. You didn't. Yeah. Anthony Venette: [00:05:10] I spent six weeks in audit. Blake Oliver: [00:05:11] Yeah. Okay. And then you realized very quickly you didn't want to do that. And so then you went back for your MBA and then you went to tax at, uh, PwC. Anthony Venette: [00:05:18] Okay. Correct. Yeah. So I did that for two years and I was in that same point. I was after that audit internship, I looked ahead at where my managers were and thought, well, if I do everything right [00:05:30] and 4 or 5 years, I could be there. And I dreaded that job. So I was again at the point where I sat down. I worked so hard for this license. I worked so hard for my MBA. I did all these things, I did all the right stuff. And I was sitting here and I was like, well, boy, I just crossed off the two professions I was told I could do with this degree. And now I'm like, boy, what do I do? I was fortunate to run a recruiter that I met an alumni event and had coffee with her and said, hey, what? What could I do? I don't think I want to [00:06:00] do this. I don't want to do tax work. You know, I was in a tax group running the whole gamut. We were doing C Corp. S Corp all Passthroughs ten 40s. We were doing, uh, provision work on audits and we were running the gamut there. And I didn't find a single part I really enjoyed. We did some consulting work that I enjoyed on gift and estate tax, which now I've graduated, uh, you know, gradually fell back into. But, um, there really wasn't a lot there that clicked for me. So she had mentioned a couple roles and she said, hey, have you ever thought about working in valuation? And I was like, oh. I didn't know that was an option. Anthony Venette: [00:06:28] Right? I had done a valuation course in college [00:06:30] and I really enjoyed it, really clicked for me, was great, and I got done with that and thought, well, that was cool. Glad I learned that. I'll never use that again. I thought maybe, maybe I'll do a transaction someday down the road and I'll be able to tap into this knowledge and press somebody. But but at this point in time, I'm not gonna be able to use that again, because I didn't want to go be an equity analyst. And I thought that was really all I could do is I could go, you know, work at Citibank or something and do coverage of stocks. Yeah. And I didn't want to do that. So I was like, well, I guess there's no opportunities here. So then when I started figuring out the opportunities [00:07:00] that exist in valuation, right on the private company side more than anything is what I deal with. I was kind of blown away and said, wow, why did no one ever tell me about this? Right. These opportunities here. So I think it's important to have these conversations open up and say, hey, here's a broader scope of what you can do. And I'm not telling you one, you got to come right out of school and you got to do that. Um, right. The tough part about those roles and the advisory roles is that people don't want you fresh out of school. You know, it's important to go get a couple of years experience in something else, right, where we can learn some of these things. But the things that make you successful in advisory roles and valuation [00:07:30] roles are the same skills that would make you successful in any role, a tax role, right? It's all the soft skills surrounding it, right? So I always tell kids, focus on the soft skills, right. Anthony Venette: [00:07:40] Get your written verbal communication up right. Time management I mean that's a huge thing right there that I think a lot of people don't look at. Um, project and process management. Right. Get those in line, get those skills dialed in. And then all you're focusing on is technical issues. So when I left PwC and I joined a national valuation consulting firm, and I [00:08:00] had such a leg up on some of the people that I was working with, not because I was more technically proficient, they were all more technically proficient than me. They all come from, you know, backgrounds in banking or as credit analysts or something, right, where they had to step up on the technical. But I was just so used to handling such a volume of work when I was at PwC that I had no problem just managing my technical learning curve on top of doing all the work itself. So that really helped set me apart. And that's one thing that sets I think CPAs apart is not the technical skills, [00:08:30] it's all the surroundings that are part of that. I don't know what your thought is on that kind of breakdown, but I really think this job is less than 20% technical work, and some people might be disagreeing with me that are listening to this, which I would contest, say, maybe you're not doing the whole job. Blake Oliver: [00:08:45] No, I, I think I agree with you that, uh, the, the metric for success that I find when I talk to CPAs is the most successful. Cpas have incredible communication skills. [00:09:00] They can talk to normal business owners and communicate complex information in a way that they understand. And I never learned how to do that in school. That's not that's not something that is taught to us. Unfortunately, in accounting programs, you just have to pick that up on the job and and hopefully you have a good manager partner that, you know, brings you into those meetings so you can see how they do it. Anthony Venette: [00:09:22] Yeah, I mean, that's really the only way you can get it to. And I don't see a lot of formal training programs that are geared towards that. But like you just said, having the conversation is such [00:09:30] a key part of it and just something that's hard to learn, right? Some of it, you're just not going to know what a client needs until you start working with clients. And I have luck selling work across the spectrum just from, you know, I'm I'm working on a valuation for someone and I'm looking at their books and they don't look too good. Right. And then I start asking prodding questions, say, oh, you know, who does your bookkeeping for you? And oh, you know, I'm actually not happy with them. And they're always late on things. They're not doing things right. Or I look at a tax return and it's a mess. Or I mean, [00:10:00] even with my minor tax, uh, background, I could sit here and call out, I mean, if I catch a client. So I'm in New York State, so if they don't have a pass through, um, the state, if they're not doing that right there, it's just an easy seller to say, hey, why aren't you doing this? And then they they start telling me about how they don't like, work in their current CPA, unfortunately. And, uh, and that's an opportunity right there. But you only get that knowledge, I think, from working in this space long enough to see it all. It's not just a matter of being present, it's a matter of having your eyes open, which is the other factor. Blake Oliver: [00:10:30] So [00:10:30] what is your job like as Director of Business Evaluation and Advisory Services? What is your day to day? Is there something you're working on now that is really exciting? Tell us about it. Anthony Venette: [00:10:44] Yeah, I wish I had a day to day. There's days where I wake up and I wish I had some standard cut and dry one. Um, right now I'm actually pretty busy, so I don't get pulled too much into tax season or audit season, although a lot of my work goes into those two things, so sometimes I get a bit busier this time of year. [00:11:00] I have a couple projects on the board right now. Um, uh, a couple, uh, purchase price allocation if you're familiar with those. Right. So part of a transaction, they, uh, you need to assign the value, the consideration of that across the opening balance sheet. Right. So we're working on part of that project right now, which is interesting. Um, same as 718 work. And that's for, um, if, uh, we have some management issued, you know, like incentive units, right, or stock options. Um, we need to call those out as a, uh, on the equity line. [00:11:30] Um, so assigning a value to those, uh, I do some tax work. I do a lot of tax work. So, so primarily trust in estate work. So if you're familiar with the gifts and state tax, right. We know that we're taxed based on the fair market value of our gifts and our state when we die. So a big part of that is we're working with private business owners to say, okay, you know, you made a gift. That's wonderful. Now we got to put a number to that. Um, and that exercise then becomes more important, certainly as we're dealing with more material numbers. Right. High net worth, ultra high net worth and then also doing the planning strategy involving [00:12:00] that too. So that's a lot of my work is there saying before we do anything right, let's think through this whole process. Let's draw out a timeline and let's start mapping towards that. Blake Oliver: [00:12:09] Um, and so you're working with business owners. They've got this asset they've built up over years building this small. I think it's mostly small, medium sized, privately held companies. Anthony Venette: [00:12:20] Yeah. Primarily. Yeah. Blake Oliver: [00:12:22] And so they come to you like how early do they come to you before this whole, you know, I mean, I imagine, [00:12:30] like, you never know when you're going to die, right? So the estate planning probably happens earlier hopefully rather than later hopefully. Yeah. And the and the M&A stuff, you know like like how long do your engagements last with a client I guess is my question. You're not just doing like a tax return every year for them. You're you're you're starting a journey right. Anthony Venette: [00:12:51] Yeah I think that's probably one part that's hard to adapt for CPAs to getting into valuation, is that the project structure is so much different. Right. [00:13:00] I have. Probably almost no annuities, right? Most of my clients are one off. Meaning you think about most people needing evaluation. I'll probably never, never need one done right. I mean, most people on the street out there behind me don't need one done right. Then we focus on business owners. Maybe they need 1 or 2 done in the course of their whole life. Right. So that's the audience you're trying to target, right? Whereas my tax return I know you need to file every year. Right. I can tell you that. Right? I could I could tell you that all day long. But it's certainly a different model in that way. So my engagements [00:13:30] with them. So it depends on when they come to me. Right. That's the other big factor is, is do you come to me when it's too late? We're just filing something for compliance or we do some actual planning. Right. Obviously I prefer to get earlier and earlier, and that's why I try and talk about and preach about. If you've ever talked to a trust and estate lawyer, they'll tell you everyone wants to drag their feet on this A because it's morbid. They don't want to talk about estate planning, right? So clients typically don't want to get in that conversation. Anthony Venette: [00:13:52] But but B it's complicated and they're not really interested in learning this kind of new dynamic. Um, so a lot of my discussions focused on [00:14:00] a making that accessible, demystifying it. Right, and focusing on, hey, what are the opportunities, the benefits. Using the idea of transition planning maybe is a better one, rather than talking about estate planning, right, saying, hey, you know, we're at this point in this great wealth transfer, you're 65 years old, you own 100% of your business. How can we focus on transfer this to the next generation? Right. And that happens in line with, you know, transferring management tasks, etc. down the road. But um, but focusing on helping them identify their transition plan overall and then creating a reward [00:14:30] for it, right, that if I'm targeting to an exit plan, right, I'm going to sell out to P, I'm going to sell out to my competitor down the road. Right. Whatever. There's a pot of gold right there. Or if we're talking about I'm just going to gift it off to the next generation. Well, okay. What's the estate tax situation look like? How much money can we save you with just a little proactive planning? Those are the things I try to focus on. Blake Oliver: [00:14:49] So it's it's like you said, it's not an annuity because most business owners do this once or twice in their life. And you say so there's more peaks [00:15:00] and valleys, I take it in your work. Yeah, that. And when a deal is happening, are you, you know, is it all hands on deck? Are you what's your what's your busy season? I suppose if you don't have a tax or audit season, do you have a busy season? Anthony Venette: [00:15:13] No, not at all. I mean, I can have busy times, right? So it's just a matter of what coordinates with each other. So right now I've got those couple jobs listed out. I have a few different transactions. I think five transactions probably going right now in various stages. Right. So some of them get really hot, some of them kind of cool off. Um, in terms [00:15:30] of my involvement, you know, that's what really drives me overall is really how do those so I have all those peaks and valleys. Right. Which we map those out. We can see okay. Right. Each project peaks at this time. If I have five projects peak in the same week, then it's going to get pretty brutal. Um, and vice versa if I don't have any projects going on. Right, which can happen and might happen to me in the next, I don't know, 6 to 8 weeks I might have. That point was it's like, and that's a freak out too, you know? And that's sometimes when you have a penal responsibility, an even bigger freak out than having too much to do is having nothing to do. [00:16:00] Um, and that's a tough part to adapt to. Blake Oliver: [00:16:02] What kind of hours do you work? Anthony Venette: [00:16:04] Probably 40 to 45. Most of the time if I peak, you know, I get up in the 5055. Um, now that could all happen in one day, right? It could be. Okay. This is one 16 hour day to get through this stuff. Um, or that could be more spread out, but I try to manage my schedule better just from a mental health standpoint that if I burn myself out. Right. And the other thing, too, is that, you know, when you're working with tangible deadlines, right? So if we're talking tax filings or I got to get my books done [00:16:30] by 430 so I can get them over to my bank, whatever, my timelines tend to be a little more open ended, right? I mean, obviously, if I have a gift timeline or a state tax return timeline, that could drive it, but it's really pushing back. The clients say, I know you want it now. When do you need it though? Right? So so having that dialog overall I think is important. Important for the professional overall, but especially important for me. Blake Oliver: [00:16:51] How much vacation do you take? Anthony Venette: [00:16:53] Not all of it. Blake Oliver: [00:16:55] Well, most most Americans don't take all their vacations. So you're in good company. Anthony Venette: [00:16:58] Yeah, yeah. Um, in [00:17:00] the course of a year, I probably do 3 or 4 weeks, probably. I do a pretty good job of that. Right. So that might be one week in the summer to go on vacation physically one week, you know, around, you know, between Christmas and New Year's, if I'm lucky. And then outside of that, just scattered days off. Some of those vacation days are me backfilling for a nanny. So it's not necessarily a real vacation days or more. It's just a plain daddy day care. But I do try and do a good job managing that flexibility. Technology is helpful there. Um, [00:17:30] mindset is helpful too. I think that really alleviates a lot of it. A lot of the pressures we make for ourselves are internal rather than external. So managing those I think is important. Blake Oliver: [00:17:39] Now, when you're on vacation, are you able to disconnect or are you taking calls? Anthony Venette: [00:17:43] I try to disconnect. I try to do a no call rule. If I can do that, um, I try and do the email once a day, right? So it's whatever. It's warm. Have my coffee in the morning. I'm gonna go clear out my emails. Um, now, hopefully I've coordinated things well enough internally leading into it that I've, you [00:18:00] know, I'll rush deliverables. Get them done early, right? So you do twice as much work before you go on vacation and twice as much when you get back. But on that front, I try and do a good job of not. I don't bring my laptop on vacation if I'm going somewhere, I'm not bringing the laptop, so then I'm just limited to what I can do on my phone, which is send emails, texts, calls. Blake Oliver: [00:18:17] Yeah, that's your that's your deliberate bottleneck. There is. Don't bring the laptop. Anthony Venette: [00:18:22] Agreed. Yeah. Blake Oliver: [00:18:23] I'm with you on the emails. I prefer some people prefer to disconnect completely and I don't I don't like not knowing what's going on. So I like to [00:18:30] have my coffee and I'll spend 30 minutes to an hour just triaging and sending stuff off to my team that needs to get dealt with. So it's not sitting around when I get back, like 200 emails or whatever. Anthony Venette: [00:18:40] Yeah, that that to me, more than anything, more than even keeping up in my mind because I'm, I'm okay mentally saying it is what it is. It's happening. If I don't see it, it doesn't bother me. Right? The real like draw mentality. But for me, um. It's the idea of going back and opening that inbox of 250 emails and being like, well, I'm literally never going to get through this right. When we're, [00:19:00] you know, 9% of those emails could be non action items, right? Something I don't need to do, something I basically need to write read or some of it is just, you know, garbage. Right. And I've done a good job setting up email rule lists on my, my email to say anything that comes from some advertisement or something I'm getting. Just know that you're going to mark this as read right, and I'm not going to then see it right. Those are the types of things I leave my email in my computer plugged in at home. So it's running all these rules so it helps clean out my inbox. So I'm not dealing with a mountain. Um, but it's more of [00:19:30] the stress of coming back to it. That's rough for me. Blake Oliver: [00:19:33] What is. Your favorite part about your job? Anthony Venette: [00:19:38] So I it's tough for me because now I feel like I'm in two roles. Like some days I'm a CPA and some days I'm the valuation guy or the advisor. And I think that's a funny thing I've seen in the industry. And we've done it here. Right? I have my my advisors and CPAs right here. Right. A lot of us at any, you know, firm. I feel like that's more than ten people is throwing the word advisors in their name now. But I don't know if people really embrace [00:20:00] what that means. So for me, a CPA is a truth teller. It's just a professional truth teller. That's all it is now, he says, skews more to the audit profession. But but that's the goal there, right. And that tends to be very rear view mirror focused. Right. We're telling you what happened. As a valuation professional I'm just a story teller. Right. Which is its own different thing. Right? Where I'm just writing a narrative of a company in a report. I'm doing that in words. I'm doing it in dollar signs. Right? And I'm communicating that idea through. But then in his advisor, I mean, I'm helping [00:20:30] the client write the story of their future, right? Which to me is its own unique and important role, but not something that's necessarily analogous or easy to translate when you're working as a CPA, when you're always focused in hindsight. So that, to me is the biggest mental shift is that I walk in these meetings and I go, okay, which hat am I putting on today? Right. What role am I playing? What am I helping on, and how do I best get myself in the mindset to do that? Blake Oliver: [00:20:56] We talk a lot about technology on this show, how it's transforming the profession. [00:21:00] We've seen that with the growth of outsourced accounting services. I was a part of that. How is, uh, tech changing what you do? Valuation and advisory and M&A? Anthony Venette: [00:21:10] I think it's- In my mind behind where it should be. Um, I just don't see the same technological evolutions that we happen. And part of that could be the gray area that we play in. Right? What I do is so subjective, right? I mean, obviously there's some subjectivity in in any CPAs daily life, but what I do is just completely subjective. And, [00:21:30] um, I like to think of it like there's no there's no right or wrong valuations. There's just better arguments for them. Right. So I haven't seen that much infiltrate the space. I mean, we use the same standard stuff, right. Um, you know good templates in Excel, you know, good templates and words to me. That's where I drive a lot of my efficiencies. And I try and leverage other technology where possible. And we have some decent, you know, we kind of get a tally off the back of, um, of those equity traders I was talking about. Right. There's a lot of tools built that integrate [00:22:00] really well, um, for market pricing data that I can pull in really easily. So I spend the money on those things. I also try and just do a good job of, um, using like, just basic free tools. Like, ChatGPT is just my assistant through the day, right? So that could be everything from just simply giving me ideas for something, right? Simple, easy tasks. Right? Coding tasks like running a lot of macros and those types of things. And they can save me 20 minutes if I can take 20 minutes and do it in one minute, or [00:22:30] I can take an hour and do it in five minutes. To me, those are the beneficial things. So, um, I try to target low stakes tasks for that, right? So if there's something low stakes in my report that I could move out to that or certainly marketing materials. Right. Using that as a starting point, if that's an outline or something, kind of just an unpaid intern that I don't need to be nice to. That's how I think of it. Um, that's my first way of treating it. Blake Oliver: [00:22:52] Last question for young professionals who are interested in getting into valuation and advisory and ending up where [00:23:00] you did, do you have any advice for them? Anthony Venette: [00:23:04] Yeah. Um, find the right opportunity to start into it. Um, I think that's probably the hardest part is making that first initial jump. There's a lot of CPAs who dabble in it on the side. I don't always think that's the best approach. Right. If you're 90% tax work and your 10% valuation, I don't know if you can always make that switch. So I encourage people to jump right in if they can, right. Find an opportunity with a full valuation roll where you're just going to be focused on that. Credentials are huge, too. [00:23:30] Um, so we haven't talked about that at all. But obviously as CPAs we have the CPA credential. There we go for valuation. It's much more complicated. So I'm accredited in business valuation by the AICPA. We also have the CPA Certified Valuation Analyst which comes from NCBa. Um, and then we have the ASA, which is a accredited senior appraiser, I believe, um, and that's issued by, um, by the same organization, the ASA, find a credential that you think matches your skill set or matches the folks you're around and focus [00:24:00] on that. Now, there's not a very strict rule in here. And that's what's kind of been difficult with it, is that everyone has a different designation. Those designations share some things, but not everything. So find one that fits you and focus on that. And that can be a really good way to set yourself ahead of where you could be otherwise. Blake Oliver: [00:24:18] Anthony, thanks so much for taking the time to chat with us today and share your experience. Uh, I appreciate it, and I'm sure our listeners do as well. Anthony Venette: [00:24:25] Awesome. Thanks for having me on. Really appreciate it.