The Private Equity Playbook for Add-On Strategy, Data Discipline & Value Creation | Brooke Ablon, Fort Point Capital

[00:00:00] Sean Mooney: Welcome to the Karma School of Business, a podcast about the private equity industry, business best practices, and realtime trends. I'm Sean Mooney, BluWave's founder, and CEO. In this episode, we have a fantastic conversation with Brooke Ablon, co-founder and partner with Fort Point Capital. Enjoy.

[00:00:34] I am super excited to be here today with Brooke Ablon. Brooke, thanks for joining us. Well, thanks for having me, Sean. I've been looking forward to this one for a long time. It's something that I think we're gonna get a lot out of this conversation. Certainly interesting stories and strong perspectives. And maybe before we, we jump into some of the meat of our conversation here, Brooke, I always like to start these with getting more of kind of the story of you and your path to private equity ultimately.

[00:01:01] So can you share a bit, a little bit about kind of how you grew up, where you're from college, how you got into kind of PE after that?

[00:01:09] Brook Ablon: Sure. It's not gonna be a traditional path at all, but grew up outside of Boston. I moved around a little as a kid, but all my formative years were here and grew up in a family of doctors, so it really wasn't a business environment at all.

[00:01:25] Sort of my one family member that was in the business world was my grandfather and did have a big influence on me, but.

[00:01:35] But his background was originally worked at a company that was one of the original conglomerate, so a company called Ogden Enterprises. He laughed, he would tell these stories about how they'd sort of buy 'em now, sort 'em later, was the way to describe it. And it was really sort of the original roll up strategy where sort of the valuation of whatever took on the.

[00:02:04] Through high school, school and then going to college. I was, I went to a small liberal arts college in Western Massachusetts, and I think it was great being a psych and history major because it taught me how to think critically. It taught me how to convince people of arguments or positions I think.

[00:02:33] I went through a sort of nontraditional recruiting process. I probably had the worst Bankers trust interview in the history of bankers trust, not knowing what I was doing, but ultimately ended up out of that going into banking. So I steered my way into the business world and really in part came from my summers over my college where it important.

[00:03:02] Ground level in a company, and they owned a business outside of Boston that did management services for office building owners. So I was the night quality assurance guy. I was literally going through people's offices and making sure that they were clean for the next day. That didn't turn me off, but it did teach me that I didn't wanna do that job for the banking and at the England recess.

[00:03:32] So what everybody was focusing on was distressed assets. That's sort of my first job coming outta college was in that world. And I did that for three or four years and sort of looked at it and said that there was sort of more value proposition on the buy side than the sell side. And we were doing a lot of sell side work.

[00:03:51] So I left with one of my colleagues from the bank and sort of started up our first enterprise. Right now we'd probably call an opportunity fund, but we raised some money from high net worth individuals and we raised money actually from Lehman Brothers at the time, and went out and bought distressed debt and invested in underperforming companies.

[00:04:11] That was sort of the early to mid nineties, and from there, I mean obviously debt and performance.

[00:04:23] For the next cycle, because the cycle did change in mid to late nineties, you saw sort of the resurgence and the risk reward profiles change pretty dramatically. So I looked at the skillset that I had developed and what I wanted to do, and for whatever reason, decided that private equity was a potentially good spot.

[00:04:42] So I went out and some networking and

[00:04:48] recruit. So I said, Hey, this is what I've done and this is my background and what do you think? And the recruiter said, honestly, if you're not a Baker Scholar from Harvard Business School, you're never getting into private equity. And thankfully I didn't agree with that and I didn't take his advice. So said, thanks.

[00:05:08] Obviously you're not gonna be great for me to work with, but ultimately firm in and. I went there and that was sort of my, I guess my opportunity fund was private equity adjacent, but that was sort of my true first job in leverage buyout, and then worked there for about a decade, then started a, a fund that was funded by Fidelity Investments here, and then ultimately, you know, decided Fidelity obviously great firm, but.

[00:05:42] I was there during the oh eight downturn and they decided they wanted to sort of press pause on private equity investing and you can't time markets per se. It's really a long-term asset and it really didn't fit in terms of, I thought initially the brand name of Fidelity and, and a private equity offering would make a tremendous amount sense.

[00:06:08] I left there and started Fort Point and have been here for now about 10 years, investing in lower middle market buyouts.

[00:06:18] Sean Mooney: That's a really kind of fascinating background, Brooke, and as I, as I think there are certainly some of the parallels I directly kind of empathize with having gone through some similar paths.

[00:06:28] The doctor thing is interesting. There's like a surprising amount of people I know who has parents who are doctors. I was thinking about you sharing that it, it kind of makes sense. It's like private equity people are people who are curious, who like to fix things and improve things. In some ways, that's kind of at the core of being a doctor.

[00:06:46] Were you kind of like ever encouraged to go into the quote unquote family business or,

[00:06:51] Brook Ablon: yeah, so my brother did, and actually to put a little finer point on it. And people make fun of me for it to a degree. So my father's a psychiatrist and my mother's a psychologist.

[00:07:05] Sean Mooney: Oh, wow.

[00:07:05] Brook Ablon: And one of my colleagues later on said, so you think about the psyche of sellers, and I was a psych major too in college.

[00:07:13] I almost went down that path, but then took a turn to the right or left. I think I.

[00:07:25] What makes people tick and how you can get things done and how you can influence people in probably, hopefully subtle ways at times. So I, yeah, without a doubt, it was helpful. I didn't necessarily think at the time there was gonna be a business application to it, but ultimately there was.

[00:07:43] Sean Mooney: I think it's amazing.

[00:07:43] And then I certainly appreciate right outta college, the job that was purposely given to you. That was probably the worst job in the place. I too, I was given a job in my summers. Soon as I was like legally old enough, I would work in the back of these manufacturing plants and, and people would purposefully mess with me, just throwing me into dumpsters to make more room and all this kind of stuff.

[00:08:06] Brook Ablon: I mean, I remember walking through the, the offices and literally like running my finger Ablong the.

[00:08:19] See the business at its just sort of fundamental basis, which I thought was interesting. But he also like was teaching me not only what I might wanna do, but also what I wouldn't want to do, which I think was really important. Pay attention early on because if you have a career path, you do wanna do something that you enjoy and

[00:08:44] fulfilling. And.

[00:08:48] I liked business, but I didn't like making sure offices were clean.

[00:08:52] Sean Mooney: I had the same experience. I think there was a direct correlation between that job and my grades. I immediately started studying a lot harder, and at the same point, I really appreciated the people who did that job. And so it was kind of a dual benefit

[00:09:08] Brook Ablon: without a.

[00:09:14] They're all human capital intensive businesses, but those are the folks that are making the things happen at level. So, you know, really, really important jobs. Just ultimately something that wanted. Not do personally.

[00:09:33] Sean Mooney: Hey, as a quick interlude, this is Sean here. Wanted to address one quick question that we regularly get.

[00:09:39] We often get people who show up at our website, call our account executives that say, Hey, I'm not private equity. Can I still use Blue Wave to get connected with resources? And the short answer is yes. Even though we're mostly and largely used by hundreds of private equity firms, thousands of their portfolio company leaders, every day we get calls from everyday top proactive business leaders at public companies, independent companies, family companies.

[00:10:03] So absolutely you can use this as well. If you want to use the exact same resources that are trusted in being deployed and perfectly calibrated for your business needs, give us a call. Visit our website@bluewave.net. Thanks. Back to the episode,

[00:10:22] and maybe the last thing I'll just touch base on, on your background is I really love the distressed background. My first job outta college was Houlahan Loki's Financial Restructuring group. I. And so it was like seeing companies in duress at their worst and the great power of leverage, both positive and negative and its amplifying effects both ways.

[00:10:43] And when I first started interviewing for private equity jobs, right out of that, and I dunno if you got the same feedback, but they're like, kid, we like you because you actually appreciate this thing called cash flow. EBITDA does not equal cash flow. And you're one of the few ones who get it like, and don't just say lever, put as much debt on as possible.

[00:11:02] Brook Ablon: I think there a few things came out of that for me. One was I did understand the credit piece of it very well. There was also sort of the whole legal documentation piece that you got really good at because you had to. And then I think what attracted them to my background and, and what really helped me on that was being able to identify intrinsic value in the assets that you investing in.

[00:11:29] You could very easily look at that and say, this company or, or this asset is, doesn't have value or has something wrong with it, or is just an easy check the box. No. And I think when you peel back the onion, you understand at its core what the value of it, what. Equity firms need to do. And I think that's true on the distress side.

[00:11:56] I think that's true in companies that are great companies and growing because you're gonna be ultimately making a decision on can I place the right value on this asset? And that's really what I learned. Although I was on the distress side and I didn't love it because I mean, the one my, one of my takeaways from.

[00:12:17] It was like a constant fight every day.

[00:12:21] Sean Mooney: Yeah.

[00:12:22] Brook Ablon: And so it was a tremendous amount of conflict because you weren't working hand in glove with a management team to make the company better. You're fighting with other creditors, you're fighting with owners, you're fighting with managers around the asset value.

[00:12:36] I did feel like that's crept into my life in many different ways. I.

[00:12:47] That wasn't gonna be a great ultimate job for me because it did feel like you'd get too jaded

[00:12:53] Sean Mooney: eventually. I think that's one of the very same reasons why I pulled the ejection seat is like at just same point I was telling about, I was like, I just fight with people every day.

[00:13:00] Brook Ablon: Every day

[00:13:02] Sean Mooney: I want. I want some happy moments,

[00:13:05] Brook Ablon: and not that private equity is happy moments all the time.

[00:13:08] But it's not every day, every hour, every minute, which was really how I felt.

[00:13:12] Sean Mooney: You get the full spectrum of emotion,

[00:13:14] Brook Ablon: right? You can be happy. Yeah.

[00:13:17] Sean Mooney: And maybe before we kind of jump into more of these traits, because I wanna come back to that, I want to maybe peel back the story of you a little bit. I'm curious if there was something that we'd know you better if in addition to what you shared, if we knew this about you, what might be one of those things, kind of on a more personal level that's not on your cv.

[00:13:37] Brook Ablon: Well, growing up in Boston, it's a huge sports town and I would be remiss if I didn't say, I hope Jason Tatum will be okay.

[00:13:45] Sean Mooney: Oh geez.

[00:13:46] Brook Ablon: Sports were important to me as a kid growing up. Not, I mean, obviously an avid sports fan, but also a active participant. And the one thing I'd say that I learned the parallel to private equity, I think is interesting.

[00:14:01] I, I imagine a bunch of people would say this and mine specific. I was a football player through high school and then I went to college and I wasn't gonna play. I knew I was gonna play basketball later in the year. I was looking for something to do, and I did feel like the team aspect of it was really important.

[00:14:17] So I was introduced to rugby actually my freshman year of college, and I ended up playing there for four years.

[00:14:33] For what we do in private equity and probably business generally, I'd say private equity, we, we talk about it here. It's a team sport and the team aspect of it, it's not just the competitive nature of it and people wanting to win as a group, which I think is inherent in what we do, but it's also thinking about, in the case of rugby team, you have 15 in my 15 with.

[00:15:03] Just like building a football team or something like that. And you need to put them all in a position to be successful collectively. And you need people that are skilled. You need people that are fierce. You sort of need all the different attributes. And if you think about private equity, it's the same thing.

[00:15:18] You're building the team. You want to win collectively. I think that's really important.

[00:15:30] For me, which I think was really, I was working in banking at the time when I was outta college playing, and the team itself was made up of all different folks, all different walks of life, and being able to play and spend time with, and create friendships with. The breadth of people you were dealing with.

[00:15:50] So it was the plumber or the brick layer, or the lawyer and the lawyer I'm used to, because that's what the universe I was in on a day-to-day basis. But it was really, you know, that I think was really helpful for me later because those are the businesses we're investing in. So I do feel like the rugby piece was really important in defining how I thought about my job, my firm.

[00:16:16] The success we have, the people we have here.

[00:16:18] Sean Mooney: I love that tidbit of kind of history of you, but also the metaphor. I was thinking about it and you're bringing it to life in my mind here it is really similar, right? You've got speed, you've got strength, you've got agility. There's kind of pure kind of mass meets mass points, but then it's also kind of agility.

[00:16:37] And you're moving directions and then, but you have moments of pause where you kind of like reset things and then you take off again, and then ultimately you all win together or you all lose together and the match is not gonna be won by one person.

[00:16:51] Brook Ablon: Never is. It's not a individual sport at all. It's a team sport.

[00:16:55] And I do feel like when I think about my work here or my work at.

[00:17:03] Different skill that people bring. But you have the team that has the senior person, the mid-level person, the associate, the analyst. You have business development, you have operations, you have the internal operations of the firm. All those people pulling together to have an outcome that each play their part in different ways.

[00:17:22] Just like any team you, I do feel it.

[00:17:29] Life to a degree, degree. Although I guess in life you can be a individual contributor

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[00:18:36] When you need it, give us a call or visit our website@bluewave.net and we can give you excellence in Alpha with ease back to the show. As we kind of turn the page here, I wanna come back to where you were going earlier, and one of the things that I always, I really appreciate after getting laps and laps and laps of PE is just looking at literally hundreds of companies a year.

[00:18:59] You start getting a mindset on almost like a scorecard of like, here's are the elements of value in a company that either show you that it is a really good company. Or has the basis to become a really good company and in PE they're kind of almost one and the same today. So I'm interested to hear what are some of those traits that you look for when you see kind of a company come in that you're assessing as a potential investment and partnership opportunity?

[00:19:27] Brook Ablon: That's a really good question. I'd say probably the most important one for us is value proposition and.

[00:19:40] Ecosystem. So all of the different constituents that a company has, because I do think if your value proposition is strong, you see the attributes and traits of the business that you find attractive in ones that you want to invest behind. Value proposition perspective would.

[00:20:06] From a profitability perspective would say that you have high margins and you're very profitable. From a human capital retention perspective, it would say that your retention is extremely high opposite the competitive set sort of. That's really important to us, and I think as you said, we see thousands of deals a year actually, because middle.

[00:20:33] You can very quickly, you get really good at reading through something and saying, all right, does this company have that proposition that's gonna drive really good outcomes? That's probably the biggest one. The second I'd call it is management excellence. As a firm, we're very active with our portfolio companies, but we would be as management run business.

[00:21:02] And I think a lot of people will say it, and I think it's absolutely true. Great management can make okay. Companies good and good companies great. And the corollary is true, right? You can, they can really bad management can ruin great companies. And if you're driving the outcomes that we look to accomplish, those are the on the street that are getting it done on a day basis value, but executing.

[00:21:32] And then the last one, which is really important for us as a firm is can we add value? Like we think a lot about the partnership with the owners because we're typically first institutional capital with the management team, with the company, with the employees, and we really do wanna walk in and say.

[00:22:01] Will bring value to the business because private equity's gotten more competitive regardless of where you play in the ecosystem. We argue that the lower middle market is less competitive than the other markets, but still competitive. So you really do need to figure out how you're going to drive value in the business to successful.

[00:22:21] You can't just buy it, lever it, and then call up five years later and say, I.

[00:22:30] So that doesn't work anymore. And you need to stretch on value generally to make the deals work. And in order to do that, you really do need to feel very confident that you can do something with the asset, you can do something with the team. So that's really important to us when we look at opportunities.

[00:22:47] Sean Mooney: So for our listeners who are maybe entering or newer to private equity and, and even for like entrepreneurs who are building companies. Put a pin and bookmark what Brooke just said here because it is kind of like a very elegantly, succinct synopsis of what matters if you're kind of an up and coming investor.

[00:23:08] This whole idea of understanding value and what, Brooke, I really appreciate what you did there is also point out the signals. If it's a good company, you probably have strong customer retention who come back and back again. They're willing to pay you a lot more than it costs you to make. Then you've got really good people who wanna stay.

[00:23:26] And so that's the harder part I think, for people who are looking for these things. Those are your signals that at least give you some hints that this is a really good company. Not only do they have the traits, but here are the measures. And as you pointed out, also as many calls that we get within Blueway from other PE firms for like AI and technology, we get three or four times for people.

[00:23:48] And so like getting the right people in the right seats is critically important and like they can make the company, but to your point, they can also break it. And then what I really liked also is this point, I was like, can you be uniquely additive and create alpha for these companies? I. I think it's really important also for the CEOs, the family owned businesses that are, think about partnering for pe.

[00:24:10] Look for that in your PE firm that you're considering partner, like what are they bringing in addition to the capital and is there that kind of alignment that goes on? 'cause you're kind of getting into marriages. So Brooke, you gave like a really kind of nice MBA class all in like a few minutes.

[00:24:27] Brook Ablon: Well

[00:24:30] Sean Mooney: this talk. Can you all add value and be a good partner? I'm curious, can we maybe go back a little deeper on that and talk a little bit about how do you and and your firm at Four Point Capital approach value creation?

[00:24:48] Brook Ablon: Sure. Obviously, it's critically important as you said.

[00:24:58] For the private equity firm and our underlying LPs and the outcomes that we drive. So it's really something we think about constantly. And for us, I'd say top of the list is we're a growth focused firm. If you unpack our returns, vast majority is driven by growth, and then after that you get multiple expansions.

[00:25:20] So selling for a multiple.

[00:25:26] Leverage isn't a big part of it. We really do want to see companies that are growing and companies that we can help accelerate that growth. And then as we describe it, drive fundamental change in the business. And part of that change is growth related. So the quantitative side of it, really taking a small but very nice business because we're in the lower middle market.

[00:25:51] Growing it, both growing organically and through acquisition, and that's part of the value add that we have. And ideally doubling or tripling or more of the size of the business. So taking it from a small business and the lower middle market into the core middle market. And then the other part of the fundamental changes, qualitative.

[00:26:08] These are very nice businesses, but typically owned businesses and don't have the generally of professional.

[00:26:21] And so if we can grow it and professionalize it, that business inherently has more value when we sell it. And I'd say the on the growth side, where we can be extremely helpful is on add-on acquisitions. So we can be the outsource business development arm of the company, identifying and executing on add-ons, which we do again, hand in glove with.

[00:26:51] And the management team to run the combined entity. So we feel it's really important for them to play a very significant role during the process, but we can lead the identification and diligence process. They have to take it over once we acquire the business. So that I think is for us, really important.

[00:27:09] And then from an add-on perspective, taking a strategic lens to the add-on. So I joked about it when I talked about my grandfather. The conglomerate, buy 'em now, sort 'em later. We don't take that approach. We look at it and say, does the add-on make the business stronger? Are they adding customers? Are they adding geography?

[00:27:32] Are they adding services to the mix that are more valuable collectively than a part? We play a very active role.

[00:27:42] We'll bring expertise from a governance perspective. We have operating advisors, we have outside directors, sort of the hygiene of the business and having more smart people sitting around the table, helping identify opportunity, identify risk, and make the right decisions. I think that's really important.

[00:28:01] And then all of our businesses from a governance perspective go through.

[00:28:10] It's for point. It's the outside directors, it's the management team all coming up with a strategic plan that is not just a strategy, it's strategy, it's tactics, it's number set. And we think it's really important at the outside of an investment because all of the constituents are agreeing on what we're gonna do, hopping in the boat and rowing in the update.

[00:28:39] Businesses don't always perform the way you would want. Markets don't always do what you think they're gonna do. Customers don't always stay with you, so we always feel like it's a living, breathing document that needs to be updated. I'd say the other piece that we drive into our companies is analytics, I think is really important in terms of there's a.

[00:29:09] Help the company make decisions and we'll bring in folks to figure out what data they have, put together KPIs and dashboards and aggregation tools, and use power analytics to help probably shine a light on the different opportunities of the business so that you can help.

[00:29:38] I'd say on the data analytics side, we invest all in service businesses, so thinking about how you're using the resources that you have, utilization is really important. It's not something that I think a lot of business owners think about. I think they know in their gut what it is, but really sort of doing the work around it and understanding are you using the assets that the business has in the most efficient, most useful manner is critically important.

[00:30:07] Sean Mooney: I really like the approach that you articulated there. In many ways, you're using the word and versus, or it's not, we're gonna do this or that. You're thinking about your value creation strategically. The business of P is a business, and so it's. Are our interests aligned? Are we positioned for growth? Do we have a plan that not only says where we want to be, but what resources are we gonna use to get there?

[00:30:30] And what tactics are we gonna do, but not so rigid that you're just gonna keep on like breaking your pick. If you go into a like a hard stop, like we're gonna be able to go around it or above it or below it, and each year, and then bringing in an outside support as well, and then helping strategically bring in add-ons.

[00:30:46] And then in the meantime, measure what matters, like and use it to inform progress, but also tactics and tactical tilt. So I thought that was a great explanation of how you're doing the business of private equity really well.

[00:30:58] Brook Ablon: Yeah. Well, thank you. And we tell our managers this all the time. They know their businesses better than we do or we ever will, but we come at it with a certain viewpoint and lens that can be extremely helpful and additive to.

[00:31:14] Back to that partnership question. They bring the operating expertise. We can bring this private equity lens and the data piece and the strategy piece. If you put it together, you can create something really interesting. And I do feel, you know, when we think about that strategic plan and what we're trying to create over that, we usually do it over a three or four year period.

[00:31:38] Sometimes it takes so.

[00:31:43] But if you really do think about creating that company that has scarcity value at the end, back to again, that high value proposition, sticky customer relationships, but then the broader business that's bigger, that is professionalized, that then looks like something that either.

[00:32:10] That's where you have the great outcomes. And I do feel like if we get it all right, it can be really powerful in what ultimately we're able to create.

[00:32:18] Sean Mooney: And Brooke, well, maybe with that in mind, and just kind of the overall tenor of this last question that we discussed, what are some of the pieces of advice that you're giving to your management teams today in terms of how to navigate not only the now but the future and finding that kind of best outcome?

[00:32:34] Brook Ablon: Yeah. What I would say is proactive management versus reactive management. I think a lot of what we just talked about applies to this, and I'd say the approach, as you just said, which I completely agree with, it will pay dividends in difficult times and in good times, and obviously in good times. The rising tide raises all boats.

[00:32:59] The opposite happens in bad times, and I do feel like the best management teams do the work to understand their business at a granular level, take that understanding, and then use it to create the action plans and decision points. That will make their business successful. And great teams who do that in difficult times are gonna take market share.

[00:33:24] I mean, you may not grow as quickly as you want. You may decline, but you're taking market share, but you're also gonna be better positioned when the markets improve, again, to outperform your competitive set. I think that's really important, and it's really around defining the process and procedures that.

[00:33:46] Using the data that you have and making sure that you can harness it to then inform the decisions you're making. And I'd say it runs all the way through a business operation. So on the front end, very few of our companies have a CRM system. When we invest in them, all of them have a CRM system when we're done.

[00:34:06] But there it's.

[00:34:15] Of what your revenue performance is gonna be to truly understand what's gonna happen for that business on a go forward basis based in the information that you have. And then it's taking, then the operations piece and breaking it down into different pieces and understanding how they all work. I talked about utilization before, but.

[00:34:39] On customers or running p and ls on business units. Don't look at as a whole look at it on a more piece by piece granular level because you can understand, I worked with a company that was a distributor and they would tell you that they had these great customers and they'd point to the big name customers.

[00:34:58] So we've this Fortune 500 customer, this one, and we said, alright, well like you help us understand what the profitability of that is. And they go, well, we don't really know a big. These smaller ones are much smaller revenue numbers and they're not as important. We said, alright, well that may be true, may not be true.

[00:35:16] Can we do the work to figure it out? So when we broke it down and ran the ps, it turned out that the big customers, because they demanded a lot more in terms of pricing and discounts and services and activity level within the company, dramatically less profitable than.

[00:35:39] Resources in the right areas to drive the best outcome for the business. So I think things like that are, are critically important. And then the utilization piece is really, really critical. It's capacity not only to do the work that you currently have, but also to grow the business to drive profitability.

[00:35:57] I think it.

[00:36:06] And then using those understandings and and information to drive outcomes is probably the best way to do it.

[00:36:12] Sean Mooney: I love that feedback and it made me think, so prior to bluewave, I was a partner at a P firm that had a similar perspective. Yours like data is so important and forms what happened, why happened, what will happen?

[00:36:25] And then when you have a perspective on what will happen, you can kind of bend space and time, right? So when we started Bluewave just over eight years ago, the idea is like, we're gonna skunkwork this thing from all the stuff. That I wish happened from the beginning of these companies. And the data piece was so foundational for the exact reasons that you articulated, and it's probably one of the secrets to our success was 'cause from day one, we used these measures to kind of inform what happened, why it happened, what will happen, then how do we change the future.

[00:36:56] And then what was striking to me though, I did the move that a lot of lower middle market portos do is we did the ERP upgrade and the counting system upgrade. And I would always kind of judge people like, oh, how hard could that be? I can tell you it's really hard. So it's really hard.

[00:37:12] Brook Ablon: It doesn't always add a tremendous amount of value, but yet,

[00:37:14] Sean Mooney: no.

[00:37:15] But I was like, well, we need a name brand, private equity, ERP system that everyone gets. But the one thing that it did to us for a period of time, we went blind for the first time ever. And the amount of anxiety that that caused was. As strong as we had like the first 12 months of our business. So once you get used to it and having it, it makes such a difference in your ability to kind of understand what's happening and be agile on the battlefield of business.

[00:37:47] Brook Ablon: Yeah. For the audience, what's helpful in a bunch of different ways, I talk about it in context

[00:37:58] expectations. What they're gonna wanna see, which I, not day one. I mean, in bigger businesses they'll think day one's really important, but over time, making informed decisions based on information is critical. I would also say for anybody's thinking about selling a business, it is really important because if you can back up the claims that you making about your business with data that supports those claims.

[00:38:26] The value inherent in the eyes of the buyer is just gonna be multiplied dramatically. And I think it's really important because you can be absolutely right in saying, our customers are going to buy more because I've run this business for 25 years. I know. And. It's something to say that and then to say, and here's the last three years of data and how we're selling 'em these different services and these different geographies, and this is where we're going next and this is why it's gonna work.

[00:39:00] It's just a different conversation, which I think is really helpful for people stepping into a business that don't, again, understand it.

[00:39:16] Because we're all as private equity professionals, when we invest in the business, we're paying you for what you've done in the past. We're making our money on what's happening in the future, so we need to figure out what is gonna happen in the future as best we can. It's the more information to gain more around those likely outcomes drives value.

[00:39:44] Sean Mooney: Once again, spot on. It's just not only have the data, but use the data. Know your data like, and have it available and be ready for it. 'cause it's gonna do nothing but add value for you. Why don't we bring our conversation full circle. You've talked about giving advice to maybe some of your portfolio companies.

[00:40:02] One of the things that I'm a huge collector and connoisseur of is other people's personal advice, is I try to Frankenstein myself into a better person over time because. If life were up to me, I'd be in a lot of trouble. So, Brooke, if you were to go back to 22-year-old Brooke and give yourself a piece of advice that you wish you knew, then what might one of those pieces of advice be?

[00:40:24] Brook Ablon: Yeah, so that's, I like the way you put that, one of those pieces of advice. I probably would have lots of pieces of advice for my 22 year

[00:40:36] on. Not a sprint. I mean, sort of intertwined in those two. I look back on my career, I was probably as a young professional, fairly impatient. There's a benefit to that without a doubt, because you're pushing to do more, to be better to progress in your career. But what I would say is that there's a.

[00:41:08] About things happening around me that were informed to a degree, but not that informed and sort of thinking about the activity in the moment and not really thinking about it as sort of a longer game and not everything's up into the right and that you need to remind yourself of that.

[00:41:34] Making sure you're gonna get to where you wanna be, but not paying so much attention to the rolling waves in the moment because there will be some. That's why I'd probably say, and this is always true, I think we all make decisions that address and as human nature address issues in the short term that may longer term not be that.

[00:41:58] You're underwriting a deal and around the edges, you're like, well, does it matter that much? And you say, no, not really. And it's really the short term that's probably true in the long term, it might matter, and you're sort of, you're glossing over it a bit. So that would be one example, or one that I think is always true is the hiring and fing of people because.

[00:42:29] Of not thinking about the marathon versus a sprint and saying, all right, I'll do something now because it's easiest for me in the immediate term, but in the long term it isn't. And sometimes it could be inaction or action, right? You could look at somebody and say, yeah, you know this, this CEO's so.

[00:42:57] The long term nature of what we do and how we have to think about not only the investments we make, but our careers and ultimately the successes we'll have over what is not a month or a year, but for lots of us decades.

[00:43:16] Sean Mooney: I think that's really, really great advice and I can feel our listeners kind of nodding.

[00:43:22] Particularly those that aren't maybe our vintage a little bit more so where they're kind of just like, yep. And it reminds me there's a story when I was younger in my career. Similar thing, like hard charging, I gotta take on the world. Like I'm already behind. I've gotta, I think a lot of people who listen to this will not to themselves on this.

[00:43:40] And, and it's not that it's all bad, but it can be so much better. And there was a story where we were actually. Looking at a business in Asia to invest in. And there was a senior government official there and he started calling me Young Bull because, because I was just like, you whirling dervish, you know, I'm running around, I gotta do this.

[00:43:58] You're like, young bull. Young bull is like patting me on my head. And he is like, you know, settle down buddy. And like, the unfortunate thing for me is then the people I worked with that way came back, started calling me Young Bull. And so, so, but I, you know, from that I kind of learned like, you can run around, you can go fast, but if you're just like.

[00:44:15] Fashion into things and not looking ahead and not thinking like there's splits in life in terms of like if you, you use like the marathon example. You can still run really fast, but don't kind of exhaust yourself in the first two miles of the race.

[00:44:30] Brook Ablon: Yeah, without a doubt. You're never gonna get to the end.

[00:44:32] But I also think it's that at the beginning of your career, think about me as a 20 thought. I knew everything I knew. That had done this for longer and, and I absolutely did. But I also at times would look at 'em and say like, I think I know better than you about this point. And then I think that's absolutely true as you sit in different seats throughout your career, right?

[00:44:59] Because it's different when you're in the using more sports analog in the first.

[00:45:11] Stepping back and sort of taking that perspective at times and, and understanding it because everybody fundamentally brings value to the table and you need to be cognizant of that. And the hard charging me would say I'm the most important at the time, and that probably wasn't true.

[00:45:31] Sean Mooney: Yeah. We, we used to call them managing associates.

[00:45:34] Yes. And so, and that probably was given to me at some point too, I'm sure when I didn't know it. It's that whole point. It's like there's value and wisdom that's hard earned and sometimes you gotta earn it and just have that perspective and don't, don't think you know who the world without being around the track a couple times.

[00:45:51] It doesn't mean you can't do a tremendous amount of really great things on that journey

[00:45:55] Brook Ablon: without a doubt. And it's like, and it's back to, I think a lot of the themes we've talked about are interrelated. Everybody on the team brings perspective, brings skillset, and brings value. And you need to be cognizant of that.

[00:46:14] And honestly, I know, and I'm sure you feel this way too, like the associates we have here do lots of things that like honestly, well, I definitely wouldn't want do anymore.

[00:46:31] Excel didn't exist when I started working. Right. So, and I've gotten okay at it. I'm proficient, but like I don't do the same things that our associates do. And so they bring value in that. And then, yeah, I've done a few more deals than they have, and I may have different perspectives than they do, and I, I can bring that to the table.

[00:46:49] But everybody brings, again, that team of what trying to build and how do you build the success.

[00:46:56] Sean Mooney: That's the perfect metaphor to kind of bring this full circle is. Our rugby team, you do need the young fast people who can kind of hit the corners, right? But then you need the, you need some of the older, wiser people to kind of like get in the middle and

[00:47:08] Brook Ablon: the old plotters.

[00:47:09] Yeah. Most those folks,

[00:47:10] Sean Mooney: they play a role too. You know, it's like, and Lord knows, if you talk to anyone here at Blue Wave, they'll tell you like, I pretty much only get to do the things no one else wants to do today. Every once in a while I'm able to hit the jump shot, but, uh, more often than not, that's the value of these kind of younger, amazing folks.

[00:47:29] And eventually they'll be in our seats, and then we'll be kind of sipping rum on the dock. There you go. I'm looking forward to that. So Brooke, this has been an amazing conversation. I learned all sorts of things that I wish I knew before, and so I'm incredibly appreciative that you took some time with us to kind of share some of your wisdom and lessons hard learned over time to kind of help out everyone else who's on this similar path.

[00:47:55] Brook Ablon: Well Sean, thank you very much for having me. Enjoy the conversation and I'm glad you thought it was time well spent.

[00:48:01] Sean Mooney: It was absolutely time well spent, so thanks so much and we will talk again soon.

[00:48:16] That's all we have for today. Special thanks to Brooke for joining. If you'd like to learn more about Brooke Ablon and Fort Point Capital, please see the episode notes for links. Please continue to look for the Karma School of Business podcast anywhere you find your favorite podcast. We truly appreciate your support.

[00:48:31] If you'd like what you hear, please subscribe. Five star rate, review and share. This is a free way to support the show and it really helps us when you do this. So thank you in advance. In the meantime. If you want to be connected with the world's best in class private equity grade professional service providers, independent consultants, interim executives that are deployed and entrusted by the best business builders in the world, including many hundreds of top PE firms and thousands of portfolio companies, and you can do the same whether or not you're in the PE world.

[00:48:59] Give us a call or visit our website@bluewave.net. That's www. BLUW ave e.net and we'll support your success onward. The views and opinions expressed in this program are those of the individuals presenting and do not necessarily reflect the views or positions of any other persons or entities, including those referenced here. In no representations, warranties, financial, legal, tax, or other advice are made herein. Consult your advisors regarding any topics discussed during this episode.

Private equity insights for and with top business builders, including investors, operators, executives and industry thought leaders. The Karma School of Business Podcast goes behind the scenes of PE, talking about business best practices and real-time industry trends. You'll learn from leading professionals and visionary business executives who will help you take action and enhance your life, whether you’re at a PE firm, a portco or a private or public company.

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