Latest / The Inspired Stories Podcast / The Human Side of Private Equity: Rob Carskadden's Approach to Small Business Acquisitions

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The Human Side of Private Equity: Rob Carskadden's Approach to Small Business Acquisitions · The Inspired Stories Podcast

0:04
Welcome to another edition of the Inspired Stories podcast,
0:08
where leaders share their experiences so we can learn from
0:11
their successes and be inspired by how they've overcome
0:14
adversity. My name is Anthony Kotaspodi,
0:17
and today's guest is Rob Karskad, partner at Three Rivers
0:21
Capital. They were founded in 2005 and
0:24
they're based in Pittsburgh. They focus on buying and
0:28
recapitalizing small private companies.
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Their mission is to remove barriers to growth for family
0:34
and entrepreneur owned businesses, helping them reach
0:37
the next level. Rob Co founded Three Rivers
0:40
Capital and has LED numerous initiatives to transform these
0:43
companies using his 12 years of operational finance experience.
0:48
Before launching the company, he was a partner at Standish
0:51
Consulting and held finance roles at Ford Motor Company,
0:55
refining his skills in process analysis and strategic decision
0:58
making. Under his leadership, Three
1:01
Rivers Capital has gained a solid reputation for its hands
1:04
on approach and long term growth mindset.
1:08
Rob's dedication to helping entrepreneurs thrive has made
1:10
him a respected figure in the private equity space.
1:14
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1:47
All right, back to our guest today, Co founder managing
1:49
partner of Three Rivers Capital. Rob, I appreciate you making the
1:53
time to Share your story today. Well.
1:54
Thanks for having me, I appreciate it.
1:57
OK. So before you found your way to
1:59
Three Rivers Capital, you worked in finance at some pretty large
2:03
companies including Ford and Thermo Scientific.
2:07
Specifically, what kind of work were you doing, and how did it
2:11
lay the foundation for the work that you're doing now?
2:14
Well, it's interesting because, you know, I graduated from
2:16
Columbia Business School and and that role, you know, my thought
2:21
process was, was I going back to Wall Street 'cause I was on Wall
2:24
Street prior to going to Business School?
2:26
And I really thought to myself, you know, I didn't really want
2:29
to go that path. I really wanted to get my hands
2:31
dirty in industry and really learn about industry.
2:34
And I also want to get out of New York.
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So I was at Columbia Business School.
2:37
So I said, hey, it's time. I want to have a family and get
2:40
out of New York. And so Ford had this program,
2:42
it's called the Career Foundation Development.
2:45
And what I really liked about it was a rotational program.
2:48
It wasn't primarily finance, it was finance driven, but it was
2:52
really kind of getting these, getting an opportunity for
2:56
people like me to get, you know, get the experience on the floor
3:00
material handling, you know, production, You know, one of my
3:04
roles at Ford Motor Company is I was a production, you know, line
3:07
guy for the launch of it was the new launch of it was 1994, the
3:13
new launch of the Mustang. And I was on a Fender line and
3:16
the and the whole, you know, steel, it was a steel plant.
3:21
So it was a stamping plant for the the Fender program.
3:24
So I had eight guys on the line and I was college you.
3:28
Were working on the factory floor.
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I was working on the factory floor and we were in basically
3:32
job. It was job one.
3:34
It was the first year. So as you can imagine, on job
3:36
one at Ford Motor Company, you know, we had new Kooka robots,
3:41
we had new, new, new, you know, equipment.
3:44
And so you're basically, you know, as everyone says, buying
3:46
that first year car is really maybe not a, you know, the first
3:49
model of your car is very difficult, right?
3:52
Well, you know, we had eight guys on the line and I had to
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hit about 400 units a day. And I never forget this.
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It was the hardest job ever had. We were working 12 hour days.
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I was on my feet, but I really kind of learned a lot about kind
4:07
of what it meant for these people to work.
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Quite frankly. I understand how difficult.
4:12
I mean, there are people that work 30 years doing that kind of
4:14
job and I was never ever so tired in my life, but hard.
4:18
Physical labor. It was hard physical labor.
4:20
You're on your feet. And again, we were doing
4:22
overtime. It was, you know, trying to get
4:24
everything to work properly. But but it taught me a little
4:28
bit about kind of the difference between, you know, real labor
4:31
and kind of where I was going with my career, right.
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So, you know, I started in that regard.
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I worked in the controller's office.
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I worked in product development. So fortunately in that era, it
4:44
was the rotational program. But I got to see a lot of the
4:46
different elements of manufacturing and what goes into
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it. You know, when you think about I
4:52
worked on the program, it was called the FN program, It was
4:54
the small market transmission program, and it was free job
4:59
one. We were working with Mazda.
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Mazda was at the time, I think Ford owned 30% of Mazda at the
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time. So it was a joint development.
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So they would come from Japan and we would work through the
5:09
engineering and then I would be working on the costing.
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So long and short of it was, you know, very interesting job, you
5:16
know, had multiple roles at that time and learned a lot about
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really what it what it means to make a product.
5:23
Yeah. So you had a lot of hands on
5:25
experience. You were right there on the
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floor. You were seeing things up close.
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I'm curious, I mean, kind of Fast forward let's because I
5:33
really want to talk most of our time here about what you're
5:35
doing at Three Rivers Capital. You Co founded this firm.
5:40
Tell me about how you met your partner and what was the
5:42
inspiration behind starting this.
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Yeah, it was interesting. So I was consulting at the time.
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So I'd had. I was doing an activity based
5:51
costing implementation for the Robert Bosch Corporation at the
5:56
time here. And what?
5:57
What does that mean? It's kind of like a buzzword,
6:00
but you know, at the time, but it really is trying it.
6:03
It's it's a form of cost accounting where you're trying
6:06
to determine the real cost of delivering something or a
6:10
service or a product. And so you know, those products,
6:14
the cost that goes into those products, they're activities
6:16
that go into that. And those activities basically
6:19
are allocated, you know, to that particular product or service.
6:24
And those activities themselves have drivers to those
6:27
activities. And therefore, you know, there's
6:30
a cost to that activity. So you can allocate that cost of
6:33
that activity to get it, you know, to the final delivery of
6:37
that product or service. And so there's a lot of like
6:39
analysis and mapping time studies, things like that, that
6:42
you do and so that you can say, all right, I mean, it can, it
6:46
really is helpful, obviously in some services.
6:48
So, you know, you may, you know, have an engineer that has to do
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XY and Z. And so I have to spend time
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doing this. I spend time doing this.
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How do I allocate my time to this particular product?
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What am I doing? You know, it's, it's, it's
7:03
basically a fancy way of talking about a more, I'd say detailed
7:08
cost accounting. OK.
7:10
So that's what you were doing at the time and then the idea and
7:13
the the meeting up with your partner, how did that come
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about? Well, you know, it was a mutual
7:19
friend I met Dale Buck Walter, who by the way, everything I'm
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talking about today, about my, my firm and all that, you know,
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all kudos to him because everything I'm talking about, he
7:29
had a big major role in all of this.
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But that being said, we met in, you know, I think it was around
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2003, 2004 time frame and mutual friend and he was in a
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transition as well. He was looking at, you know, I
7:43
had the freedom because I was doing my own thing, you know,
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enjoying, you know, for the first time in my life, actually
7:48
making money based on what I was delivering, you know, So it was
7:52
really my, it was interesting foray into understanding what
7:56
entrepreneurship's about because, you know, I'm getting
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paid for the value and service I'm doing.
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And I was kind of really learning a lot about that aspect
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of it. But in the process, I met Dale.
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Dale was also looking to, I think his his job, he was going
8:10
to have to move to Tampa. His kids were in Pittsburgh.
8:12
He didn't want to move. We had talked about, you know,
8:15
this idea of a private equity firm.
8:17
And then, you know, really what happened was, you know, we felt
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like, you know, as we talked, we felt like there was this need in
8:24
the market. Now, this is back in 2004, and I
8:27
think the world's changed since then.
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But you know, there are all of these companies that are owned
8:33
by people who are over 55 years of age throughout the entire
8:36
Rust Belt area. And that's where we looked at in
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the beginning. And I think we did some analysis
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that east of the Mississippi, 350,000 companies under 50
8:45
million of revenue that were owned by owners that were 55
8:49
years and older. So what were they going to do
8:51
with their businesses, right? I mean, most of these
8:53
individuals, you know, their most of their net worth was kind
8:57
of locked up say in these companies and they didn't have
9:00
transition plans some. Literally have family members
9:04
that wanted to come and take over the business.
9:06
Yeah. And if you think about the time
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frame, right, this is right past the late 90s and the.com boom
9:11
and everything else. And I think a lot of the, you
9:13
know, the, the, you know, children and, and people coming
9:17
up in that era were like, do I want to work in my dad's or my
9:20
mom's or my family's factory? You know, I want to go work for,
9:24
you know, Google or I want to work for eBay or whatever
9:27
factory. Jobs weren't sexy.
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I'm going to go get a high pay and white collar job.
9:30
Yep. And I think that transition, so,
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you know, a lot of the, I'd say the boomer era of, of owning
9:35
businesses. So, you know, we saw this huge
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opportunity set on the other side of the coin.
9:40
There really weren't any real private equity or institutional
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money working in this environment.
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That seems crazy today. That is amazing.
9:48
Yeah, yeah. Now everybody's doing it right.
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Everyone's doing it, but at that time there weren't.
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So what does that mean? High demand?
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High demand would meaning, you know, I would say, I'd just say
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high demand from people who want to sell their business.
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But let's just flip that for a moment and say a supply of all
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these companies that are out there that need, you know, that
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someone out there that can help them, you know, transition their
10:13
businesses, but really not a lot of private equity involved right
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at all. And so you know.
10:20
What was PE focused on at the time?
10:22
Was it still? It was tech, right?
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Well, it was tech and it's, it was larger, you know, again.
10:27
Got it. This was too small for most
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people's radar. Yeah.
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Think about a high margin. It's kind of like a higher
10:31
margin business, the higher up you go, right, Bigger these
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bigger, you know, put more money to work.
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The other side of the coin is in these kind of businesses, and we
10:39
can talk about this a little bit later, but these kind of
10:41
businesses really private equity kind of came in to say, you
10:45
know, they're, they're buying these companies and they're
10:47
moving these companies forward in a way that maybe is a little
10:52
bit easier as you're at the, at the, at the larger scale than
10:55
you are at the smaller scale, right?
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The smaller scale businesses, they're usually not really
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prepared for, for, for the way the private equity industry was
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at the time. They weren't scalable.
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There are a lot of these issues that they had, whether it was IT
11:09
infrastructure, you know, management science alike.
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So, you know, the, the idea was, is that these were hard deals to
11:16
do. And they're hard deals not only
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just to, to, to actually get done.
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They were actually, these were deals that you had to roll up
11:23
your sleeves and really get involved with.
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You weren't just buying a company and saying, all right, I
11:28
got this platform. Now I'm going to go out and
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find, you know, 5 or 6 other companies to roll into this and
11:34
to, you know, to drive this into a larger market, you know, which
11:37
is a lot of what private equity did and still does today.
11:40
They're still they, they still do today.
11:43
This was more of like, all right, you have to come in and
11:45
really transform a business from the ground up, basically
11:49
foundational. OK.
11:53
Say more about the team that you've got there at Three Rivers
11:55
Capital. Is it, is it, you know,
11:58
primarily just you, you're like super small shop or you have
12:01
some folks that are helping? Yeah, No, we do.
12:02
We, you know, we've changed over the years, right In the
12:05
beginning it was just myself deal and we had another partner,
12:07
Bob McGuire at the time and and an assistant and we did all of
12:12
that work. You know, we did everything
12:14
ourselves. We sourced, we modeled, we did
12:17
did all of it, you know, over the years.
12:20
Now we have, you know, we have 22 deal people.
12:24
We have, we have another partner who's just got promoted partner
12:26
Michael Zong, who who, who drives our transaction group.
12:30
We have, we have a, a significant back office I would
12:33
say. And that really had to morph
12:35
because of, you know, just the fact that today we have 8
12:38
companies in our portfolio. So you know, we have basically a
12:41
controller. We have two deal people, I have
12:44
an OPS manager and then we also have we have a whole group of
12:49
people operating partners that work for us that we have, you
12:54
know located with our companies. So you know, we're about a seven
12:58
person shot today. Again, what we do is, you know,
13:02
primarily we're quarterbacks. That's that's what we do
13:06
generally speaking. We have a lot of vendors and a
13:08
lot of partners, you know, that we've developed over 20 years
13:12
that support us in all different aspects of it.
13:14
But our team is really focused on, you know, portfolio
13:17
management, which is really where we built our Firma
13:20
transaction side of it. We're you know, we've been doing
13:22
it for 20 years. It's we can crank out
13:24
transactions left and right. Pretty good at that.
13:28
So help me understand, when you guys go into an opportunity, are
13:32
you buying 100% of the company? Are you taking majority stake?
13:35
Are you taking over operational control?
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We do controlling interest, meaning we have over a 51%
13:41
ownership in most cases. We have, you know, the vast
13:44
majority ownership, you know, and you know, more often than
13:49
not, a lot of times our owners will roll over and join us in
13:52
the journey. You know, we always call it the
13:55
second buy of the Apple. They get a payday when we buy
13:57
the business and they have an opportunity to to run with us to
14:01
get that second buy and. So they stay on board and
14:03
they're helping from an operational aspect as well.
14:06
Yeah. And, and sometimes they stay on
14:08
for the duration, sometimes they'll stay on for six months,
14:11
sometimes they'll invest, you know, a significant amount,
14:14
sometimes a little and then there are sometimes they don't.
14:17
But for the most part, you know, what we do is we go in, we take
14:21
a controlling interest. We also give, you know, at least
14:26
10 to 15% of the company we we set aside for our, our employees
14:30
and our, our management team. So they have what we call
14:33
profits interest. So you know, we're never 100% at
14:37
the very least you know the employees and or you know the,
14:40
the, the operating team you know has has some equity in the
14:43
business. And so a lot of times it's part
14:46
of the transition. You're finding your own operator
14:48
to kind of put in place there or maybe promoting from within if
14:51
it makes sense. Both, yeah.
14:53
And, and and that's part of the diligence, right.
14:56
You know, we talked about when you do deals in this space, I
14:59
think the one thing that 20 years of experience has taught
15:02
us is, you know, when you're buying these companies, again,
15:05
they're either family owned businesses or entrepreneur LED,
15:08
you know, owner LED. It's a very emotional decision
15:12
for them. And I and I think sometimes, you
15:16
know, and I think this is kind of the issue sometimes with a
15:19
lot more, you know, we have a lot more players coming into our
15:21
space now, right? And we have over the 20 years,
15:24
primarily because people are seeing the opportunity.
15:27
But you know, when you come into the space, you have to really
15:30
understand there's some nuances to this that are different than
15:33
what I would say at the, at the, at the next level up in private
15:36
equity. And that is understanding that,
15:38
that emotional impact. There's, there's a human element
15:41
to this is a little bit more delicate.
15:43
And, and, and so, you know, when we go in, we have to, you know,
15:47
navigate that and, and, and, and that really kind of plays into
15:52
how we think about transitioning the businesses too, right?
15:56
Because, you know, these are good businesses, right?
15:59
We go and we're buying good businesses.
16:01
They have to have tailwinds. They have to be in markets that
16:03
we're interested in all the, the basic underwriting that you
16:06
would expect. But yet, you know, there are
16:09
clearly some low hanging fruit and things that they aren't
16:12
doing right that we see that. What can we do to help make them
16:16
scale? You know what's holding them
16:18
back? And in many ways, you know, most
16:21
owners, no one's going to know. We always tell this to the
16:23
owners too. No one's going to know your
16:25
business better than you do, including us.
16:28
We're going to come in. We can do all the work in the
16:29
world. You know, I know a lot of people
16:32
in our industry think they're really smart and I'm sure they
16:34
are, but no one really understands their business the
16:37
way that entrepreneur who built that business stuff.
16:39
So that partnership is critical, but really where that
16:42
partnership works and where you have to understand this, you
16:44
can't change what made the magic to begin with.
16:47
You have to. Understand you don't want to
16:49
upset the apple cart, you got a good thing going.
16:52
But what what are the actually? Can you give a specific example
16:55
of low hanging fruit? You went into Company X and they
17:00
were doing this one way or they weren't doing it at all and and
17:03
you guys were able to put something in place that really
17:06
helped to accelerate that growth.
17:08
I mean there's a whole multitude of things.
17:11
You know, most companies at this level something's pretty basic
17:14
like the the biggest value creator of all in these
17:19
companies is organic growth, right?
17:23
So if you think about us, we buy businesses from three to 10
17:26
million of EBITDA in that space. And so literally, you know, I
17:33
would say take sales processes. Many of these companies, you
17:38
know, if you think about it, right, if they're especially
17:40
entrepreneur LED or owner LED, right, they are primarily the
17:45
salesperson for these companies. They're the ones that started,
17:48
they're the ones that had the vision, they're the ones that
17:50
knew it. They're the ones that went out
17:52
and really pumped it to build that business.
17:55
And what we often find is find is that that piece of it is
17:59
always lacking, you know, the importance of building a good
18:03
tight sales process because it never really needed he, you
18:06
know, the individual was able to drive and grow that business.
18:10
Oftentimes that business is started by that Keystone account
18:13
that really gets in the business, right?
18:15
Find that one major account that gets you launched, right?
18:18
And then therefore, it's in many cases in our businesses, there's
18:21
some customer concentration for that reason, right?
18:24
Which is risk. Which is risk.
18:26
So that sales process is critical to de risk it right,
18:29
and also to really accelerate the growth.
18:31
And that's that's often low hanging fruit.
18:33
I'd say secondly, we'll find that like, you know, strategic
18:38
planning based some basic management science, I call it
18:42
right. You know, it's it's IT
18:44
infrastructure. How do you scale right?
18:46
I mean, the fact of the matter is, you know, in today's world,
18:50
you have to have a fairly, you know, sophisticated tech stack
18:54
to really, really, you know, drive value.
18:58
You know, they have their their tech stack, they may have
19:01
something they built. And sorry Rob, when you talk
19:03
about tech stack, what like? An ERP, Yeah, like an ERP
19:07
system, say, Or maybe you know, you know, just, you know, your
19:13
basic CRM, you know, you know which.
19:15
Goes into the sales processes that you were talking about that
19:18
you need to put in place. Exactly.
19:20
And many times they may have, you know, holes in their
19:23
organizational structure. And what's really interesting is
19:27
I, again, I call this stuff foundational in a way.
19:30
What's interesting about some of these things is that's what's
19:32
great about these businesses. The impact you can have, you
19:37
know, by doing these really basic foundational things on the
19:41
growth of these companies can be fairly substantial.
19:44
Things that you guys have done over and over again.
19:46
So you've kind of got the playbook for it may not be you
19:49
know, common knowledge to the businesses that you're
19:53
acquiring. And that's why it's such a good
19:56
sort of relationship there is you guys have that expertise to
19:59
bring in, put that foundational stuff in place that you've seen
20:02
work again and again and again. And you can you can see some
20:06
results from it pretty quickly. Well, think about it this way.
20:09
If I started a business and let's say I was in my late 20s
20:13
and I started my business, start building it now I'm in my 30s,
20:17
forties, 50s, you start getting in the into that realm.
20:21
You spent your whole career in that business.
20:24
Your aperture is fairly probably you know your business really
20:28
well, but you haven't really experienced a lot of other
20:31
things outside of your business. I think what's really
20:33
interesting about this is where the partnership comes in, right?
20:37
You have the, you know, you have the expertise and the domain
20:41
expertise and knowledge of that entrepreneur or that owner or
20:44
that family who's been there for years and years and years.
20:46
They, you open up that aperture of thought that maybe they
20:50
haven't seen before, right? Whereas, you know, we've owned
20:54
dozens of companies, we've been through multiple cycles.
20:58
We've been through the Great Recession, you know, COVID, all
21:01
the above, right? We've seen supply chain issues,
21:03
we've seen inflation, we've seen all this.
21:05
We've, we've had to navigate companies through some of this
21:10
and they've had to navigate themselves and they, they
21:12
figured it out as well, right? If they've been around for that
21:14
long. But the point is, is that, you
21:16
know, you know, over the years, what we do is we bring different
21:20
perspectives, we bring opportunity, we bring different
21:25
thinking and also different, you know, I, I would say a whole
21:29
laundry list, I would say of, of relationships and service
21:33
providers that can really be helpful.
21:35
So, you know, it's really that partnership, you know, when it
21:39
works, that partnership can really can keep the magic of the
21:42
company and open it up, you know, to to greater just let's
21:46
go back to the moment for like strategic planning and one of
21:49
the real basic things. I think a lot of companies at
21:51
this level don't do think about the map of your, your your
21:56
market and service, right. And you say, all right, I'm in a
21:59
I'm in a company that provides, you know, we have a company now
22:01
and wound care, right? And you say to yourself, all
22:06
right, what are we servicing the market?
22:09
Are we, does our service map really cover the whole range of
22:13
mark, you know, of opportunities that we see?
22:15
What are those opportunities? What are some of the
22:17
technologies coming down the path that we should be thinking
22:19
about? Should we be getting into some
22:21
of those? Right.
22:23
So there, you know, I think there's some level of strategic
22:25
thinking and thought that brings into play.
22:27
There's frameworks, right? You know, I always say some of
22:30
them I think are kind of silly. You know, some people think, oh,
22:32
it's just another Business School framework, you know,
22:35
whatever. But I do think some of these
22:37
frameworks are important because they're communication tools, and
22:40
communication is always probably the critical.
22:42
I always say, you know, business in many ways is just an amalgam
22:46
of conversations, right? I want to go back to something
22:50
you said a little bit ago about sort of the human element of the
22:54
transition because I think this is really important and and you
22:58
were saying as much, but I want to explore it a little bit more.
23:01
Something I've gone through in exiting businesses, something
23:03
I've seen a lot of my peers, my friends go through as well is an
23:08
exit is seems very exciting when you're on this side of it.
23:12
As you get closer to it and sort of the realization of this big
23:17
life transition settles in, question marks start to come up
23:22
as you get on the other side of it and the day-to-day of your
23:27
life has now significantly changed, then it becomes really
23:32
destabilizing. Like part of your identity has
23:34
kind of been yanked from you. This is been a big part of the
23:38
reason I got out of bed every morning for years and years and
23:41
years. I go in, I meet with my team, I
23:44
make decisions, I put out fires, I meet clients.
23:48
Now what do I do with myself? Now?
23:50
Where do I fit in? I'm guessing you have seen this
23:53
up close and personal multiple times.
23:56
How have you either been able to help folks through that or seen
24:00
people kind of manage that process on their own to kind of
24:03
find that? New way of life.
24:05
That is a an excellent, excellent observation and good
24:09
question. And and I would say that is
24:11
definitely true. I mean, you'll even have there,
24:14
there are people who are in their 80s that may go to the
24:17
office. They, they're the owners.
24:18
They may not even be that involved in the business
24:21
anymore, but they go in for four hours a day to say hi to
24:23
everybody, have their coffee. And it's part of their life,
24:27
right? You know, it's a different, it's
24:31
a difficult thing because there really is probably no real good
24:34
answer for that from our perspective on how someone
24:38
transitions that because you, you know, at some point, you
24:41
know, either they're there or they're not.
24:43
And if they're not, there's not much, you know, we can do about
24:46
it. But I would say that it's
24:48
important that they understand that their company is in good
24:51
hands, right? I mean, the, the best you can
24:55
do, you know, in that regard is, is let them know that, hey, we,
25:00
we, we have you covered. We're going to take good care of
25:02
your, of what we would consider your baby.
25:06
And, you know, and, and that really happens through the
25:10
process before we sell or before we buy this.
25:14
That's right. And so the communication and the
25:17
alignment is important. And I always tell people when
25:19
they're trying to sell their business, you know, you know,
25:22
our industry is full, you know, it's, it's, it's a bell curve.
25:25
I mean, there's, there's going to be some great firms and not
25:28
so good firms. And in the middle, right, who
25:31
you choose as your partner is critical and that evaluation of
25:34
your partner upfront in terms of who they are, what their
25:38
approach is. And one of that, one of the, I
25:40
think benefits we get from being around so long as we have, you
25:44
know, we have a lot of references, right, for what we
25:46
do, but you know, it, it's that communication up front and that
25:50
alignment of like our vision for what we want to do with the
25:53
company and, and making sure that that alignment is is there
25:58
with them and us. Now, you know, we may not see
26:01
eye to eye on everything, right? Some of the things that we want
26:04
to do they haven't done. They haven't maybe thought about
26:08
it or you know, but for the most part, you know, it, it's more
26:12
what are you going to shut down my business and consolidate it
26:14
somewhere else? Well, I don't want to sell it,
26:16
right? Are you going to fire half of my
26:18
employees and do this XY and Z? Well, I may not want to sell to
26:21
you, right? Because let's think about it.
26:23
Most of these companies, those employees are like family do
26:26
that, right? They may be going to the club
26:29
with some of them, you know, playing golf and I know they're
26:31
kids. And you know, a lot of these
26:33
companies are in smaller towns where people, everyone knows
26:35
each other, right? So, you know, that communication
26:39
up front and that alignment of vision is really, I think, you
26:43
know, the best you can do. And then when it comes to the
26:46
other side, you know, sometimes, actually more often than not
26:51
from what I just said earlier, these people do have a lot of
26:54
domain expertise. One of the things that you'll
26:57
find happen is they'll sit on the board.
27:00
You still have a board seat, you still have access, you still
27:03
can, you know can be involved in some they.
27:05
Still have their feet wet in the business?
27:07
Yeah, that means a lot to them. Yeah.
27:09
And that's one of that's one of the things that I think probably
27:12
happens more often than not. And and it's and we welcome it
27:15
because they have that expertise and knowledge.
27:17
We don't want that to lead. So I want to hear a little bit
27:21
more about what specifically you look for in a business.
27:24
I mean, you've already mentioned kind of the EBITDA range 3
27:26
million to 10 million annually. What kind of markets do you guys
27:31
like in terms of industries? What kind of geographies are
27:35
best for you? How do you think about that?
27:37
Yeah. I mean, it's changed over the
27:39
years, right? I mean, again, after two
27:41
decades, things kind of move. But one of the things that we
27:43
really focus on is 1 is size, as you mentioned.
27:47
I think the other side is, you know, we've done, I think 19
27:52
white papers we started in 2015 and honing in on thematics, but
27:58
we like to stay a little bit flexible because we believe
28:02
right, you know, and we've seen it every day as the world
28:05
changes fairly dramatically. So getting 2 honed in in one
28:10
area or another, especially over 20 years doesn't make any sense.
28:13
I mean, we were in oil and gas in the mid, you know, like 2013
28:17
fourteen and 15. You know, we're, we, we're not
28:20
doing that today, but our thematics about, you know, 2015,
28:25
we, we, we looked at it from the perspective of what are the
28:28
great factors of influence that we see that we think are going
28:31
to be relevant for at least a decade.
28:34
And it's kind of funny because it, it remains to be true.
28:38
We had, you know, escalating global conflict, Go figure,
28:42
right? We had the transformation of
28:46
our, you know, basically our energy situation and grid.
28:50
We also talked about demographics, right, and the
28:54
demographic change that were happening.
28:55
So the big, big picture. And then when, you know, finally
28:59
we we we talked about basically, you know why we consider it's,
29:06
it's essentially the transformation and digitization
29:10
of the industries going forward. So if you think about that from
29:13
the perspective of industrial automation or you know Internet
29:18
of Things, we see it, we those are the trends that we looked
29:22
at. And then from there we drill, we
29:24
drill down to manifestations and from MANA and we wrote about
29:27
those and then we drill down into what we would consider sub
29:30
vertical markets that we thought think are are attractive.
29:34
Those sub verticals may change year over year.
29:37
What do they look like now for you?
29:40
Well, right now, you know, you know, we, we've been kind of
29:43
moving and we have for an A few years into the healthcare
29:47
services side of the coin. We have quite a few of those.
29:52
And I would say industrial automation, those are the two
29:55
that really are very interesting to us.
29:58
And I'll give you, you know, so if you think about, you start,
30:01
like I said earlier about the, you know, demographics, right?
30:04
Can you roll down and you have the change with millennials now
30:07
you have the change with Gen. Z and now you have, you know,
30:10
the retirement obviously of the baby boomers and maybe even some
30:14
Gen. Xers now, right?
30:15
And so, you know, we, we saw like everybody else, obviously
30:19
healthcare and healthcare services consumption was going
30:21
up. But the question was where do
30:22
you want to play? So when we talk about the sub
30:24
vertical, right, we looked at, we want to play in an, in, you
30:28
know, in, in a segment of the market that basically reduces
30:33
the cost curve, right, in the industry itself, right?
30:37
And we want to, and, and it has measurement of, of, of improving
30:41
outcomes, right? And, and also that you can
30:44
actually service, meaning, you know, who are the, who are the,
30:49
who are the employees that you're going to need to hire to
30:52
service this industry? Those are all critical factors.
30:55
And I'll give you an example. So we did, you know, about 15
30:58
years ago, we, we launched into, it wasn't 15, maybe a little bit
31:02
less, but we went into physical therapy.
31:05
And where, where did that make sense at the time?
31:07
Well, that made sense because physical therapy was a cheaper
31:10
alternative, right, to going straight to orthopedic and
31:14
getting surgery. We felt like, you know, there
31:17
were good outcomes in physical therapy.
31:19
People were getting getting healed, right?
31:21
And you know, there were plenty of physical therapists to hire
31:25
and there are people out there right now.
31:28
You know, we moved into pediatric home, home healthcare.
31:32
That was another industry we got into.
31:34
And what did that mean? Well.
31:36
These are, sorry, specifically pediatric home health care.
31:40
Pediatric home health care. So it's private duty nursing.
31:42
So in that example, right, you have children who need 24/7
31:47
care, They're catastrophic situations they're in, they're
31:49
basically in Children's Hospital.
31:52
So what happens is I'd, you know, the, the, the, the cost
31:55
differential of being in Children's Hospital versus being
31:58
home is, is significant. So you're bending that cost
32:01
curve down. You're bringing those children
32:03
home to their families and that personal care that they get
32:07
because these nurses that work in this industry are just Saints
32:11
and they have that really good, you know, relationship with
32:13
those children and that family. So the level of service is
32:16
better. It's more personal.
32:19
And so that was an area which we, you know, that's another
32:22
example of of of kind of going down to that sub vertical and,
32:26
and why we chose that. Apologies if you already
32:30
mentioned this, but what's the what's the term of your fund?
32:33
Are you guys kind of 7 to 8 year, 10 year hold or or is this
32:37
like a like a buy and build and like just you guys depends.
32:41
I mean we. We're not much different in
32:43
terms of our we would, you know, we've had it.
32:46
We've had I think 3 exits that we've owned the company with it
32:49
for three years, OK. I think we have some right now.
32:53
We've owned for six or seven, you know, and all in between.
32:57
I mean, we're, we're not under the gun necessarily to, you
33:01
know. We we feel like it's.
33:04
A little bit of a longer cycle, I think in what we do because of
33:06
what I said earlier about the foundational, you know,
33:10
investments you need to make to start the scale.
33:13
I'd say the first year, year and a half you're really trying to
33:16
put all those foundational elements together.
33:19
You are growing the business, you're doing the best you can.
33:21
But for example, in that pediatric home health care
33:23
business, we grew top line by 35%, but EBITDA was flat.
33:28
And the reason that was the case was because we had to, we, we
33:30
probably spent a million and a half dollars in year 1
33:35
compliance, right? How do we upgrade compliance?
33:38
What are we doing in our recruiting structure?
33:40
How we, you know, so as you put that SG and A to build that
33:44
scale, you know, what kind of system do we need to put into
33:47
place? You know, so you have, you know,
33:49
your healthcare systems and your ARP and all that, all those
33:52
foundational investments that take time and effort.
33:55
You know, you're just not coming out of the gates right away and
33:58
doing it at the same speed. And, and quite frankly, we're
34:02
not even thinking about say, add on acquisitions or anything else
34:05
until those foundational elements are handled.
34:09
Rob, I'd be curious to hear a. Specific specific example like
34:13
an actual case study. If you can mention the company's
34:15
name, even better. Where your finance experience in
34:20
particular directly influence the direction of the success of
34:25
one of your companies. You know, I would say it's.
34:29
Interesting. Finance is a broad.
34:32
Term I would say are, you know when we think about it, I would
34:36
say the impact finance is not real difficult.
34:39
The the rural area where finance helps them would be obviously
34:43
the capital structure that we put into place to give them the
34:45
liquidity they need to do what they need to do.
34:48
I would also say on the evaluation side of projects,
34:52
things like that, there's some rigor that we put into place,
34:55
but it's really on the add on acquisitions is where our
34:57
finance comes in. I think the real impact is on
35:00
the operational stuff that I talked about earlier.
35:02
That's really where that comes into play.
35:04
And it's interesting because we're a business that people
35:06
think is just finance driven and I think in some levels it's
35:09
important and it is. But yeah, of course we help, you
35:13
know, when it comes to accounting, it comes to KPIs, it
35:15
comes to all those elements, right?
35:18
We put all those in place and those are lightly considered
35:21
finance per SE. And we'd put some finance,
35:24
finance rigor. We have, you know, financial
35:27
reporting that we do, you know, monthly, we have quarterly.
35:30
We put all that discipline in place.
35:33
But really and truly I would say probably more than any an
35:37
example, you know, maybe in, in, in terms of, you know, I would
35:43
say like one of our companies in Salt Lake PCG, you know, where
35:48
we owned a ton of equipment, right?
35:51
And some equipment, we were like, look, this company in many
35:54
ways, it was really kind of fascinating because the prior
35:57
owner collected a lot of, you know, equipment, but a lot of
36:01
equipment wasn't put to use, right.
36:03
So there is a valuation there that we do and it's like, OK, as
36:06
part of our plan, does this fit in, not fit in, How do we
36:10
evaluate it? What do we need to in terms of
36:13
restructuring the balance sheet? We sold some of that equipment.
36:17
We sold a lot of it, right, help pay down debt and do that.
36:20
So those those are things that we do.
36:22
I think that we come in and bring a different perspective
36:24
and an analysis and an approach that helps that company make
36:28
those decisions. But in reality, it's like those
36:31
are the decisions that they weren't thinking, why, why are
36:33
you just hanging on to all these assets?
36:35
They're not creating any value for you right now.
36:38
And so there's a make buy, right?
36:40
Do we, you know, is this in the plan?
36:41
Do we want to keep this? You know, we have a whole second
36:44
line, you know, in one company, a beverage line, right?
36:48
What do we need this for? We're not using it, right?
36:50
What do we need to do? Let's let's unlock some of that,
36:52
you know, value that's sitting there and recycle that into
36:55
something that's more I kind of want to touch on some.
36:58
We touched on this a little bit earlier.
36:59
I want to come back to it, you know, when you're structuring A
37:02
controlled buyout and you, you want to keep everybody happy,
37:06
right? You guys obviously need to hit
37:07
your numbers. You want the folks that are, you
37:11
know, exiting eventually or now to, you know, to be happy and
37:15
for the employees to be happy. What are what are some key
37:17
strategies that you employ to make sure that both the seller
37:21
and the business itself are going to thrive after that
37:25
transition? Yeah.
37:28
That's, that's, that's the critical piece I alluded to
37:31
earlier about the communication and the alignment, right.
37:35
So, you know, when it comes down to what we do presently is we
37:40
have we develop during our diligence process what we call a
37:43
value creation plan. And that plan, you know, is
37:48
driven primarily by we start with an investment thesis that
37:51
we have, we delve into our diligence and within the
37:54
diligence comes a lot of things that that we find and come up
37:57
and out of that usually comes many opportunities.
37:59
So we build that value creation plan and that value creation
38:03
plan is not only built by us. So we try to work hand in hand
38:07
with the sellers pre closing with that, right.
38:11
So in that regard, right, we're trying to get not only the
38:15
sellers and to the extent that the sellers bring in, sometimes
38:18
they don't, sometimes they do bring in some members of their
38:21
team. In many cases they do.
38:24
And so therefore, we're already engaging with the team and we're
38:27
already agreeing on kind of what we need to do going forward and
38:31
getting their buy in. And again, back to what I said
38:34
earlier, and I think this is, this sometimes is the hubris of
38:38
some people in our industry is there's so much untapped talent
38:43
in these small companies that people just don't understand,
38:45
right? And there's so many different
38:47
employees. I mean, you may have an AP clerk
38:49
down there that knows more about where everything's hidden than
38:51
anybody else in the company. And you just sometimes you don't
38:53
know that till you own the company.
38:55
But there's a lot of information and things that are locked up in
38:58
these companies. So the idea of bringing them
39:01
into the mix, obviously it's ownership, obviously it gives
39:05
them empowerment because they're part of it.
39:08
It's engagement. It's all those like kind of
39:10
buzzwords that they talk about. But it's, it really is true.
39:13
Bringing them into that process is, I think, critical to what
39:17
happens post close because everyone's on the same page.
39:19
We know what we're doing and we go forward.
39:21
It doesn't mean that things don't happen along the way that
39:23
we have to adjust. But the point is, is that
39:25
everyone feels very good about what they're doing.
39:27
Everyone in, in that circle at least.
39:30
And we we try to bring the critical people that we need in
39:33
that circle to begin with is an agreement, an understanding
39:37
about what needs to get done. So we hit the ground running and
39:39
everyone's on should should be on the same page.
39:43
I'm. Sure, that some of these.
39:45
Companies that you eventually acquire, you were probably in a
39:48
competitive bid process. There were, I'm sure, other
39:52
firms that they were considering, the ones that
39:54
choose you over your competitors.
39:57
What do you think's the biggest reason they do that?
40:01
I think. Over the years, you know we.
40:03
Used to say, I don't know if it's as true today as it used to
40:06
be, let me just say that, but it was really the I think we're
40:11
from Pittsburgh. There's a little element.
40:14
Of we're kind of not the Wall Street guys coming in more often
40:19
than not, I'm not wearing this. You know, we go see these guys.
40:21
We're on the plant floor. I learned early in the game.
40:24
I remember back in the, you know, 2005, we were looking at
40:27
some foundry and I was wearing really nice clothes and it
40:30
looked like Terminator, you know, scene from Terminator in
40:33
there and all the, all the ash and all the stuff going on.
40:36
And I came out of there going, I don't know what I was doing
40:39
here, but this was silly, right? I learned my lesson.
40:41
But, you know, we go in, you know, and, and I think it, you
40:46
know, I, I feel authenticity and trust is critical, right?
40:51
So how do we win? You have to build that trust and
40:54
that authenticity over time. That's become, you know, over
40:58
over a period of time that became easier for us because we
41:00
had a track record and people could they could do our
41:03
background on us. They could talk to former CEOs
41:06
to say, are these guys for real or not?
41:08
But I always try to do, you know, over the time, try to
41:12
build, look for elements where we can build trust.
41:15
And that means there are times at which there's a point in time
41:19
in every discussion or conversation or relationship
41:21
where you have to have to actually exhibit something that
41:25
garners that trust, right? And I didn't do that.
41:29
And, and so where do you, you know, so there may be an
41:31
instance where, you know, we had had a discussion 3 weeks ago and
41:35
something had changed. He said, well, you said this and
41:37
you promised this. And I'm like, you know what,
41:39
you're right, let's move on. You know, I'm not going to go
41:42
back on, you know, this is what we talked about before.
41:44
This is what we agreed to. Boom.
41:46
Let's just move forward with it, right?
41:47
Or whatever. I mean, that's a silly small
41:51
example, but it's like, how do you exhibit ways to say I can be
41:54
trustworthy? So along the way, it's, it's
41:56
like, how do you win? We used to say it's who you
41:59
partner with. It's all those things.
42:02
It's emotional decision. Do they trust you?
42:04
Do they trust what you're going to do?
42:05
And I would say that we built, you know, that's one of probably
42:08
our superpowers, probably a, a, a big term, but as a firm, it's
42:15
because we've, we're lucky because we've been around for 20
42:17
years and we built that reputation.
42:19
That reputation is very helpful. So when we're in a bid and it's,
42:23
you know, pretty much on par where they're going to go,
42:26
right. And we've won in a few instances
42:29
over the years, we've not, I think more often than not
42:31
historically that hasn't been the case recently.
42:34
But more often than not, historically, we've not been the
42:36
highest, OK and. We've got they're choosing you.
42:39
Because they feel. More comfortable with you in the
42:40
direction you're going to take the company and they trust you.
42:42
They like you. Yeah, again, it's an emotional
42:44
decision. It's their baby I.
42:47
Think you know it's always about the.
42:48
Money, right? No matter what they say, at some
42:50
level it's about the money. But if on balance who you want
42:55
to partner with, particularly if they're going to stick around
42:59
and play for that second by the other you you gave.
43:03
Sort of what you called that silly small example of, you
43:06
know, a few weeks later they're like, oh, hey, wait, you said
43:08
this and you're like, OK, yeah, let's go with it.
43:11
You know, this doesn't need to be a an argument here, but I I
43:14
wonder if there are ways this is the wrong word to use.
43:19
But I can't think of a better one in the moment where you can
43:22
sort of manufacture those opportunities to demonstrate
43:26
trust. Rather than sort of like.
43:29
Waiting for something like to kind of happen, yeah.
43:34
No, and there. Is and, and, and, and I look for
43:37
some of those too. Where can I show, you know, what
43:41
is it that we're doing? How are we doing it?
43:44
We're negotiating and there's some things where we're like,
43:46
look, all right. I get what you're saying.
43:50
I mean, there are times when it's clear that you know, we
43:52
know and they know you get towards the end of a deal.
43:56
Everyone's. Burnout.
43:58
Everyone's tired of getting close to, to, to, to getting it
44:00
closed. The poor seller has been through
44:03
hell and back through a, a, a financial and operational audit.
44:08
They never, no matter what you tell them, they never understand
44:10
that you'd go through it, how difficult of a process that
44:13
really is, particularly for companies that don't have that
44:15
infrastructure I talked about. So all the diligence is a lot of
44:18
work for them, right? And so everyone's fatigued.
44:21
And so at the end, there are ways to, you know, all right,
44:25
we're good with this, we're good with that.
44:27
I'm not going to fight over this.
44:28
I'm not going to fight over that.
44:29
You know, and even though we know that we may be in a
44:32
position of strength towards the end of getting it done, I mean,
44:35
they're, they're three days from saying I'm going to get the
44:37
biggest payday of my life. And we're like, well, we're
44:40
going to walk away from this deal because this, this is
44:42
doesn't make sense. We can't agree to XY and Z, and
44:45
you'll find it sometimes it'll be those events too that we're
44:47
like, you know what, again, we're in a business.
44:51
The interesting thing about attorneys and about, you know,
44:54
structuring deals are, you know, their job is to structure every
44:58
scenario possible, to protect every scenario.
45:00
And what I tell people is that that's impossible.
45:04
We could, we could iterate all day long at some point, right?
45:07
We're in the business of equity. At some point we have to take
45:10
some leap. That says, all right there,
45:12
there may be a gap here here, but we're not going to be able
45:14
to do this. And I can't spend $5,000,000
45:17
trying to legal a deal at that level, which I think has a .005%
45:23
chance of ever occurring. You know, so you know, you get
45:26
down to that point often times. But you know, we're, we're
45:29
pretty rigorous. We know what the market is.
45:31
We, we understand what the terms are that we need to get and
45:35
what's really important and not important sellers.
45:38
One of the issues sellers don't really understand that they
45:41
haven't had AS. Much of that experience as you
45:43
Exactly. This is their first time riding
45:46
that rodeo. Yeah.
45:47
Rob, what's for you? Whether personal or
45:51
professional, what's a a serious challenge that you've overcome?
45:54
How'd you get through it? What did you learn?
45:58
Yeah, I'd say, you know. Probably 1 of the biggest ones
46:01
was I. When I was at Fisher Scientific,
46:04
I had started up. It was one of these.
46:07
This is where I started really getting my love of
46:08
entrepreneurship. I started this this it was
46:12
basically an eBay for scientific equipment and supplies.
46:15
At the time I was like AI was the finance manager for the
46:19
distribution logistics group for the company.
46:22
So I think right at the time we had like 63 distribution centers
46:24
throughout the world and we were having a huge problem.
46:28
You know, we sold active about 200,000 SKUs and we had a ton of
46:33
inactive SKUs, right? It was a big, big company covers
46:36
a lot of bases and huge amount of what I would consider excess
46:41
and obsolete inventory in the system.
46:43
And I was like, how are we going to solve this?
46:45
And so you know the. I came up with this idea this.
46:50
Is no joke. I sat, I was, I was at pit Con,
46:53
which is a conference and it's called pit con, but it was a
46:56
conference for medical supplies and equipment down in New
46:59
Orleans. And I don't know why they
47:01
invite, you know, they invite the, the finance guy.
47:03
Why am I doing at one of these conferences, right?
47:05
It's all about sales and the like.
47:08
I literally hold myself up. In the hotel room when I was.
47:12
Down there and I wrote a business plan for what I
47:15
eventually called Einstein's Garage.
47:17
And in that process, we developed what I considered, you
47:22
know, a way to leverage what, you know, Fisher Scientific had
47:27
the assets, distribution assets, the, you know, the, the
47:31
transaction ability and, and, and the like.
47:35
And what I ended up doing was saying, look, we can turn what I
47:38
guess you would call now is more of a reverse logistics type of
47:40
situation, But it was an auction business.
47:43
So create a new website from scratch.
47:46
Did all this did the brand new or was this I just want to frame
47:50
it. It was like 2000. 1999 time
47:53
frame, early days. OK, go ahead.
47:55
So. It seems a little cliche maybe
47:58
now, but at the time I had to, I, we had to hire a firm out of,
48:01
you know, San Francisco to build my auction engine.
48:04
You know, I mean, that's how long ago this was.
48:07
And so, you know, we built that and it started to, to move and
48:12
it was interesting. And I started thinking outside
48:16
of just Fisher with this. So I went and talked to Astra
48:19
Zeneca, some of the other major companies and said, look, we can
48:22
do this for you too, right? Basically, we set up a system
48:27
not only to sell the product through the secondary market,
48:32
but a way, you know, we, we built a warehouse down in, in
48:34
North Carolina. And I said, you know, we can
48:36
take your excess out of your system and, and that, that stuff
48:40
that you'd actually written off at 100%, we can do, we can do,
48:44
we can do some profit recovery for you, right.
48:47
And so I felt like this was a, and then, oh, by the way, we can
48:50
also manage your fixed assets. So if you're AstraZeneca and you
48:54
have four or five locations, R&D locations or labs where you have
48:59
a Beckman centrifuge. That should be listed that.
49:03
Should be on an intranet on a system that everyone in your
49:07
organization should be able to access where it is and is it in
49:10
use or not. And therefore, you may have a
49:12
lab over here that may need one and wants to buy a new one, but
49:15
you have one that's idle over here.
49:17
So why don't we do a holistic asset management program for
49:20
you? And oh, by the way, if you want
49:21
to unload it, it's on the system.
49:23
You let us know, we'll take it down to North Carolina, we'll
49:25
sell it, we'll get you some. Sounds like a pretty clever
49:27
idea. Especially for the time frame
49:29
you're talking about. Loved it and then.
49:30
Soonasthe.com era ended, you know, the company at Fisher was
49:34
like we don't want to do this anymore.
49:36
It's a distraction. You know, they're a multi
49:38
billion dollar company. Everything felt.
49:39
Everything Internet related felt toxic at that time.
49:42
And that and the whole strategy, the company changed.
49:44
And so I actually went to them, said, well, can I buy it from
49:47
you, you know, because I really believed in it.
49:49
And they're like, we can't do that.
49:50
And I get it. Now that I'm older, I understand
49:53
we can't just let an employee buy one of our businesses and go
49:56
off, right? It's not a good look.
49:57
But, and so at that point I was like, all right, and, and my, my
50:02
options as I'm going back to being, you know, a, you know,
50:06
finance person for a division or moving my way back that way.
50:10
But I had that taste of entrepreneurship that.
50:13
I was like, I can't. Go back, I don't just want to do
50:16
that anymore. And that's when I ventured off
50:18
into Standish Consulting and where I was starting to do that
50:21
activity based costing system. And I said, look, I want to
50:24
start something on my own and I want to make money.
50:27
You know, it's like it kind of demystified things for me.
50:29
It was very difficult. And by the way, it's a lot
50:32
easier to do this stuff when you have a big company that's
50:34
allowing you to do it. So don't get me wrong, I I did
50:36
not go down that route, right? There are a lot of people that
50:38
you still got the steady paycheck.
50:40
They were paying for everything. Exactly.
50:43
But a nice way to kind of wet. Your beak and it was really, I'm
50:46
sure hard and like heartbreaking that this thing that you had
50:49
built and, you know, we're close to really making work now.
50:54
You get the rug pulled out from under.
50:55
You got the rug, you know, by the way.
50:56
We had some issues. It was so funny.
50:58
We did have some issues with Einstein's.
51:02
I think they're we, we had a little issue with our branding.
51:05
They were like, hey, you guys are, you know, you can't use
51:07
Einstein's. And we, it was Einstein's garage
51:09
and we had a lab rat. It was, that was our, our icon,
51:12
you know, it was our, our icon. You know, we used it.
51:14
We had little Beanie Babies with a lab rat and everything else.
51:17
But they weren't real thrilled with us using his name in that
51:20
way. But it was the family.
51:22
Foundation or something? Yeah, yeah, OK.
51:24
And it was interesting, but. Yeah.
51:26
So all that was, you know, disappointing because I really
51:30
put a lot into it and I really felt, which is interesting, I
51:35
think maybe a little bit ahead of our time.
51:37
And that I think that whole industry of reverse logistics
51:40
and some of the things that happened over the, over the
51:43
ensuing years became real industries, right?
51:45
That, you know, those are real, real and powerful industries.
51:48
And we were just a little piece of it and it was an idea, but
51:53
unfortunately I, I didn't get to see it to, to fruition.
51:57
Well, and that happens. You know is you've now learned
52:00
having been in the venture space and been involved with lots of
52:02
businesses. I mean that happens in business,
52:05
right? You've got these ideas, you're
52:07
so excited about them. It seems like this has to work
52:09
and you chase it down and sometimes it doesn't come to
52:11
fruition and it's a lot of lost time, sometimes a lot of lost
52:15
revenue and other resources. So yeah, yeah, without.
52:18
That I would not done today. So I mean, the bottom line is
52:22
all this precursor is just, you know, I always say life is a
52:26
little bit like, you know, that ball that drops on that
52:29
pegboard, you know, it's like the peg and you don't know where
52:31
it's going to end up at the end. And little ball, I don't know
52:34
what they call that little thing, but it it's like, these
52:37
are like, yes, no decisions or points in your life.
52:40
And so there's all these permutations at the end where
52:43
you get that ball can end up. And it all depends on where you
52:46
tack when you hit that peg. Are you going this way?
52:48
You're going this way. And you know, that was one of
52:50
those pegs that pushed me this way, right?
52:52
That forward me on to where I was, you know, got today.
52:56
So what's your personal? Superpower, Rob.
53:00
I don't know if I have a real. Superpower, I mean, I would say,
53:03
you know, I would say the thing that I feel like has propelled
53:07
me is I well, one luckiest man in the world added to, you know,
53:13
my, my father's since passed away.
53:15
But mother and father that were excellent parents and they
53:19
didn't go to college, you know, but they, you know, they
53:22
instilled in me, you know, I, I think a lot of the attributes
53:26
that I think have propelled me, you know, and, and I would say
53:31
one of those that's really propelled me is, is just
53:34
curiosity. I think I, you know, if you
53:37
think about I, you know, people always laugh at me.
53:40
It's like, God, you, you want to talk about physics or you want
53:42
to talk about, you know, you want to talk about health or you
53:45
want to talk about this and you delve so deeply and it has
53:47
nothing, you know, nothing to do with.
53:49
I'm, I'm just, I'm very, very curious about things.
53:52
And I think that curiosity, you know, and that willingness to
53:56
say yes at critical times has been really critical.
54:00
I've had young people that come to me all the time, like, how
54:02
did you get there? How did you do this?
54:04
You know, and, and I look at them like I'm the last guy you
54:07
want to talk to because this, this was not a planned career
54:11
path for me, right? This was taken a step at a time,
54:14
one step. At a time.
54:15
It was opportunistic and, and, and the willingness to take the
54:18
risk and say, yes, when we started this business, Three
54:21
Rivers Cap, I was, I had four children under the age of seven.
54:27
My wife went back to work and I would say I'm the luckiest man
54:30
in the world because an amazing, amazing wife that put up with
54:33
all of this and allowed me to do this.
54:35
And I'm sure I'm not alone. And many people that would say
54:37
their spouses were critical, but but you know, it was, you know,
54:42
I went two years without making any money getting this started.
54:46
And, you know, she went back to work and we had the kids and
54:49
there was it was just chaos. And man, I mean, without that
54:53
support, it wouldn't have happened.
54:54
So it's also the second piece of the curiosity.
54:57
And I would say that determination.
55:00
I was AI was a wrestler as a kid, ever since I was 6.
55:03
And, and I always felt like, you know.
55:08
You learn a lot from that. Right.
55:09
It was a very difficult sport. It was very, you know, and I
55:12
remember it was just like it. It just developed that
55:16
determination, that fire in your belly.
55:19
And I think, you know, I don't give up And and you know, and I
55:23
think that, you know, if you're an entrepreneur, I don't care
55:26
what anyone says. I'm sure there's that anecdote
55:28
that someone, you know, overnight did this, that and the
55:30
other. But no one gets hardly anyone
55:32
does that right? I mean, you have to go through
55:35
hell and back to make the stuff happen.
55:37
You really do. And you have to have that
55:39
determination and you have to have that perseverance.
55:42
And, you know, it's a vision and the belief in yourself and that
55:46
vision and that perseverance is really what drives it.
55:49
And I think more than anything, I would say that those, you
55:53
know, the curiosity to be willing to learn is critical in
55:57
our business. It's critical to understand all
55:59
different aspects of things. You never know, like, you know,
56:02
I think, you know, you never know when some element of
56:06
knowledge or whatever could come be helpful to you.
56:08
But and then that that willingness not to give up, I
56:11
mean that's one of the really I think superpowers of our, our,
56:14
our business and three RC and our and the culture that we have
56:17
here is we don't give up. We're very, very, very.
56:21
Determined. That's great stuff.
56:24
Rob, I've just got one more question for you.
56:25
But before I ask it, I want to do 2 things.
56:27
I'm going to invite all of our listeners to hit the follow
56:29
button on their favorite podcast app.
56:32
I've had a great conversation here today with Rob from Three
56:35
Rivers Capital. I want you guys to continue to
56:37
get more great content like this in your feed.
56:40
Rob. I also want to let people know
56:41
the best way to get in touch with you or continue to follow
56:45
your story. What would that be?
56:47
I I think our website. And LinkedIn are the easiest
56:49
ways we're out there. And you know, I, I would just
56:55
say that, you know, my name is very unique.
56:57
Not many of us have Carr Skadden or I don't know if you Anthony
57:01
know anyone named Carr Skadden, but I'm out there in Three
57:05
Rivers capitals. So our website three RC cap, you
57:09
know 3 Three Rivers threeriverscap.com the number 3,
57:14
the number to our website, it won't include links in the.
57:17
The show notes for everybody to both your website and your
57:19
LinkedIn profile. So last question.
57:22
For. You rob year from now, you and I
57:24
reconnect and you're excited and you're celebrating something.
57:29
What's that thing you're celebrating?
57:32
Well, my first. Grandchild is going to be a year
57:35
old. I'll be celebrating that.
57:37
It's an excellent thing to be celebrating.
57:39
And I'm a new grandparent, so I'm very excited about that.
57:43
I would say business wise, you know, I'm looking to probably
57:47
have a couple exits a year from now.
57:50
I think we'd be celebrating that.
57:51
A couple of them we've had a long time.
57:52
Some of them we've really had to drive hit some, some some speed
57:56
bumps during COVID. So you know, the ability to kind
58:00
of, you know, the back to what I was saying before about that
58:02
determination and working through it and and seeing to the
58:06
other side and really making something happen.
58:08
I think we may be able to see that next year.
58:11
Love it. I love that the family.
58:13
Was the first answer. Rob, I want to be the. 1st to
58:17
thank you for sharing both your time and your story with us here
58:20
on the Inspired Stories podcast. I really appreciate it.
58:22
Hey thanks for having me. Really appreciate meeting you,
58:25
Anthony. Folks, that's a wrap.
58:27
On another episode of the Inspired Stories podcast.
58:29
Thanks for learning with us today.