Drew Meyers on Private Equity Value Creation: Seaport’s Three-Part Strategy

[00:00:00] Sean Mooney: Welcome to the Karma School of Business, a podcast about the private equity industry, business best practices, and real time trends. I'm Sean Mooney, BluWave's Founder and CEO. In this episode, we have a fantastic conversation with Drew Meyers, partner with Seaport Capital. Enjoy.

[00:00:33] I am super excited to be here today with Drew Meyers with Seaport Capital. Drew, great to be here with you.

[00:00:39] Drew Meyers: Yeah, Sean, really appreciate you guys inviting me to be on. Thank you.

[00:00:43] Sean Mooney: I've been looking forward to this for a while here, so let's jump in as we always do, and the way I love to start these discussions and conversations we have here is like.

[00:00:53] Let's get a little more of the story of you. So can you tell us a little bit, kind of how you came up, your first jobs path into pe, all that good stuff?

[00:01:01] Drew Meyers: Yeah, I'm happy to to share that background 'cause frankly, my path to PE was definitely the road less traveled. I would have to say there was a lot of luck favoring the prepared.

[00:01:12] I was really fortunate to have some great mentors along the way that helped nudge me in the right direction and helped prep me for what was to come. I went to University of Dayton and despite having a pretty good business school, they did not place people on Wall Street back then. So there really wasn't any preparation for, Hey, this is what you do in investment.

[00:01:33] Here's what analyst programs look like, here's modeling, any of that kind of thing. I really had no exposure to that part of this world. Wasn't even something I was concerned about and frankly, I was coming out in 91, which was a horrible job market 'cause of the Gulf War and some other things that were going on at the time.

[00:01:51] So really I was just kind of thinking I, I want anything I can find and unfortunately it really was just anything. I was a bartender. I bounced at bars, I sold industrial insulation for a period of time. I was even one of those people who takes bets at an off track betting facility. And in that period of time, I moved from Dayton back to Toledo where I was born and raised, and I knew I didn't wanna stay there.

[00:02:19] But that's where I really had to kinda get things going. And finally I just picked up and moved to Chicago where a lot of my friends from undergrad had moved post-graduation and it was in Chicago. That things started to fall into place for me a little bit. I didn't know about investment banking. I really didn't know about private equity and, and I got my first taste of what m and a was and what it was all about through what I would consider my second real job.

[00:02:44] It was a company called MFS Communications. They were very much a pioneer in what was becoming the deregulated telecom industry, and they were really acquisitive. I was in the finance and accounting team. I didn't really get into the deal side of things. I was really more part of the integration work.

[00:03:00] But the gentleman who did do a lot of the corporate development and did lead a lot of the m and a, he had an office on our floor and I would stop in and talk to him. And so I had a little bit of understanding from him in terms of some of the things that were going on from a deal front perspective. I still didn't really understand it.

[00:03:17] And he said, look, if you're interested in this and this is something you wanna do, you wanna get on the deal side, you gotta go back and get your MBA. I said, okay. Well, being in Chicago is pretty fortunate 'cause obviously you have some great programs there. And I was fortunate enough to get into Kellogg and Kellogg actually offers its full-time program at night.

[00:03:35] They had gotten a lot of pressure from Motorola and some of the other bigger corporations to do that. So I decided to take advantage of that in part because I had some options that were still vesting with MFS and for other reasons didn't want to stop being employed. What I didn't really give thought to or really know was being a career switcher into investment banking was really hard, and if you're going to do that, if you're in your MBA program, you probably should go do an internship at an investment bank.

[00:04:03] So you could check the box for them that, Hey, this guy gets it. He knows that there's gonna be all-nighters. Yeah, I get you work hard, but you don't understand the grind that investment banking comes with. They wanna see that box checked, right? They want to know, you either came out of an analyst program or you did an internship and you have some sense of what investment banking is all about.

[00:04:23] Where I was unfortunate in terms of the timing for my undergrad graduation, I was very fortunate coming out of the MBA program because it was a time period where Wall Street was really trying to higher up, and so they were making exceptions to that rule left and right. And I benefited from that. I ended up landing a job with Bankers Trust, whose financial sponsors group was loading up, and their sponsor team back then was both leverage finance and sponsor coverage.

[00:04:54] And really there was where my kind of understanding of the landscape fell into place. We were financing sponsor led deals, so I got to see a lot of the diligence product that was coming to 'em. Both from consultants and their own work product, started to understand how they thought about businesses and the investment considerations, all those kinds of things, and I really started to fall in love with what they did.

[00:05:20] It was from there that I kind of made the decision that I think I want to try to do that. So it was pretty circuitous in the way I got to where I am, and I feel very fortunate to have the seat, but it was a little. Trying to figure it out and ultimately get there.

[00:05:37] Sean Mooney: Yeah. I'd love so much about your story and there's, there's a lot of themes here that kind of resonate with me.

[00:05:41] And one is, you know, one of the, I think, prevailing traits of successful private equity investors is that there's this kind of off the chart level of like tenacity and grit and resilience and overcoming obstacles. And just to hear your first story is like you didn't really have the easy path. You found a way and you, you had all these other kind of interesting jobs to start off.

[00:06:07] Interesting is the right word. The stories you could probably tell from the off track betting, you know, alone, right? Yes. You kind of found the serendipitous path and then you ended up in an m and a aggregator. Acquirer, which I think particularly in like the integration side, which is, has to be a phenomenal training ground actually for being a private equity investor.

[00:06:28] 'cause you get to. View it through the lens of not just being an acquirer and investor in companies, but also the operational mechanisms that are related to it. So you get kind of the operating perspective and the m and a all at once. What was that

[00:06:41] Drew Meyers: like? It's a great point, Sean and I do believe that having lived through some of that integration work certainly has helped me be more empathetic about what actually goes on, how people get worried and concerned.

[00:06:55] Things that you need to put in place to make sure those integrations go smoothly. It's a process like anything else. And if done right, it can be super successful, obviously, but if done wrong or poorly, you can end up with something you didn't plan on as you were thinking about the add-on acquisition in the first place.

[00:07:16] Sean Mooney: I think that's a, like you said, you like, you get to, actually, you're coming into PE when you get there and you already view it through the lens of an operator. And then the last stop before PE that I also really appreciated is within sponsor coverage. You got to spend time in, in leveraged finance. And some of the very, very best private equity investors I know came up through that track because they appreciate this word called cash flow.

[00:07:43] EBITDA does not equal cash flow. It's the the CapEx part people forget about too.

[00:07:48] Drew Meyers: When I made the reference to mentors, it was absolutely at Banker's Trust. I mean, there were so many people that having the opportunity to sit in credit committees and, and listening to them tear apart a business in five minutes that they had no exposure to, but they could just very quickly say, this has to be a watch out.

[00:08:07] I'd just be blown away. It was literally like being in the best MBA class I'd ever been in my life. And I agree with you. I think having that leveraged finance background. Is very foundational, at least for me. And I've found it incredibly useful as I continue to think about businesses and what the watch outs are.

[00:08:26] And you know, it's that balance that you have to strike between looking at the downsides, what are the risks, what are the ways out, and that the things that credit people are thinking about. But then you have to put on the growth lens and the growth story and get your head around all the things that can happen on the upside.

[00:08:42] I think having both those perspectives though, are really important.

[00:08:47] Sean Mooney: Hey, as a quick interlude, this is Sean here. Wanted to address one quick question that we regularly get. We often get people who show up at our website, call our account executives that say, Hey, I'm not private equity. Can I still use BluWave to get connected with resources?

[00:09:01] 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. So absolutely you can use this as well.

[00:09:19] 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@BluWave.net. Thanks. Back to the episode.

[00:09:35] In some ways, you went through this kind of serendipitous, amazing training program that sets you up for later in life, right? You get to be an operator, an acquirer. You get to learn about cash flow and the risks, but then you also have this growth mindset. Then you knew, you learned how to make some bets real early on at the off track betting.

[00:09:54] So Carlos. Yeah, exactly. So you, all of that together kind of came together in this really nice serendipitous journey that you're on. As we kind of pull back the layers of of you a little bit further, I love to ask this question about people in terms of what would be something we'd know you even better if we knew this about you.

[00:10:15] Drew Meyers: I'd have to say, I said it earlier, I grew up in Toledo, Ohio. Where I was born and raised, I'm not assuming everybody is familiar with Ohio's geography, but Toledo is right on the border of Michigan, and in fact, the two states fought over the area at one point in time and Ohio prevailed as it should. But the interesting thing about Toledo is you're 45 minutes from Ann Arbor.

[00:10:37] So literally the city is split between Michigan fans and Ohio State fans, which means nothing to the rest of the country. But there it's, it's war. It's contentious,

[00:10:46] Sean Mooney: have to say

[00:10:46] Drew Meyers: the least. Yeah, for sure. I had parents who grew up in Columbus, Ohio, both went to Ohio State. I think you can figure out which side of the fence I fall on in that respect, but I'm kind of unusual in that I actually root for all the Detroit professional sports teams.

[00:11:02] So I'm kind of Ohio State and the Motor City. From my perspective, it's the best, both worlds, but probably more importantly in terms of some of the things you were saying about formative impressions and opportunities I had. The seventies and eighties in Toledo were not great. We were either losing industry at that point in time or already had lost industry.

[00:11:24] We were very tied to the auto industry, specifically if Detroit sneezed. We caught the flu kind of relationship, and so there was a lot of families that were going through some tough sledding in those decades. My parents fortunately, were not tied to the auto industry. My dad, however, was tied to a very cyclical industry.

[00:11:44] He was trying to get an architectural firm up and off the ground, and there was a lot of times that he would have to drag me with him to go into the office on the weekend. And I got to see firsthand the blood, sweat, and tears that go into founding a business and trying to get it up and off the ground and having to think about paying as employees and all those kinds of things.

[00:12:05] And a lot of that is, I think, why I like the lower middle market so much. Seaport has always been lower, middle market focused. We've never really tried to make our fund sizes bigger and move up that size deal chain. And I think that's really interesting to me still because all the businesses that we're coming into are founder led or family led.

[00:12:27] There's only been a few examples where they've had private equity before us, and even in those examples, the founders were still running the businesses. So I think I certainly have an empathy in, in the ability to call it connect with the founder mindset and some of the things that they have trepidations around when we're talking about scaling up and doing certain things.

[00:12:49] So I think it's provided a unique perspective to kind of bring to the table to relate to 'em. I love that background as

[00:12:55] Sean Mooney: well. And what's so fun about these conversations, I think. The private equity industry at times gets this perception that everyone grew up on Park Avenue. Right? Right. And it, it couldn't be further from the truth.

[00:13:07] You get people who come from all walks, you know, one of the common threads is someone who grows up in a family that had an entrepreneur in the family. I did the same thing. Both my parents were, were from Cleveland, so I understand the misfortunes of the sports fandom of certain cities in that area. So unfortunately, my dad bestowed the Cleveland teams on me.

[00:13:29] I didn't get the pistons to at least get me through the tough times. Totally.

[00:13:34] Drew Meyers: We've had our moments for sure, between the Pistons, the Red Wings, and the tigers, but not the lions. Yeah. Yeah.

[00:13:39] Sean Mooney: Unfortunately you get that. You had, you have to watch Barry Sanders. That is prime though, so that's good. That's true.

[00:13:44] But the same thing. I would go to go to work on many weekends with my dad and I'd end up working in the back of the manufacturing plant on summers and those type of things. And you kind of feel, and I think you can still see some like safety yellow paint under my nails.

[00:13:59] It is such a great kind of primer for kind of where you ultimately ended up. No doubt. It's equipped you to be really good at your job. Maybe. With that in mind, let's dig into after all of this kind of. Training and tutelage and upbringing, how that kind of informs how you look at potential investments.

[00:14:19] So can you tell me maybe some of the things that you look for in a business when you're considering an investment and kind of by design for our listeners here, this is, you know, if this is important to Drew and Seaport, this is probably something you should think about your own businesses as well.

[00:14:35] Drew Meyers: It kind of gets to the criteria that Seaport likes to employ.

[00:14:39] As we are looking at businesses and, and how we think about what is gonna make an attractive investment. Seaport Capital is a technology, media, telecom, business services firm. We've always invested in those sectors. One of the criteria that we really like are recurring revenue businesses and businesses with highly reoccurring revenue.

[00:14:59] And if it's the latter, typically there's some contract or criticality to the service involved that makes it almost like that recurring revenue model. For us, it's just fundamental to the business models we like. We won't invest in a business where we can't break down the unit economics of, of how this business model makes money.

[00:15:20] And it's not necessarily that the management team thinks in those terms as we're coming into the investment, but we need to be able to kind of dissect the business in a way to be able to say, okay, here's where the profitability pools lie, and here is the way that we can help them. Continue to grow the business and access the operating leverage that's inherent in the business model without obviously having to layer on costs every time you're trying to do something.

[00:15:48] That's really important and probably to the point you were making for people listening to this would be think about that within your own business. What are truly the unit economics? What are the things that are moving my business? And ultimately will translate into potentially the levers you can pull.

[00:16:04] To enhance the profitability and the growth of the business. And finally, this is less specific to any given business and probably seems obvious, but we like growing sectors, especially with lower middle market businesses. You're inherently starting at a smaller scale. Growing sectors can help smooth over a lot of mistakes made along the way.

[00:16:25] And obviously there's opportunity that is just inherent that you're able to go after, and we think that's a really important factor for starting with smaller businesses.

[00:16:35] Sean Mooney: Yeah. Drew, I, I think you did a, like an MBA class in a, in a extremely concise, elegant way there. And so as I was thinking about what you were sharing here, it, it all makes sense, right?

[00:16:45] The market always matters and always wins ultimately, right? So you get the market right and then you, you have to be in a business that hopefully. If you're getting revenue that's predictable, that helps you make more confident and strong kind of bets, if you will, in your future, where you're gonna invest your own cash flows and growth.

[00:17:06] And then ultimately, you gotta be able to fundamentally understand where you make money and why you make it. So you can then pull those levers as kind of strongly as possible without taking on too much risk. And so if you get those three things together, you can make some magic happen.

[00:17:22] Drew Meyers: It's absolutely the flywheel that you want to get to spin.

[00:17:26] Sean Mooney: Hi, this is Sean. Wanted to take a quick moment to tell you a little bit why BluWave exists. It's based on this whole notion that assessing opportunities and building businesses is really hard. We all know third party expert service providers can dramatically help, but at the same time, it's hard to know who's good, usually leaving you like I would do and call friends and ask.

[00:17:50] Do you know someone who does this? Or just go the square peg, round hole route. So after nearly 20 years in PE, I decided to solve my own problem and create a BluWave. Today many hundreds of PE firms, thousands of Portco's leading public companies, private companies, all call BluWave to instantly get connected with the exact third party service provider they want.

[00:18:11] That's pre credentialed by BluWave imperfectly calibrated for their need. Really good. You too can give us a call or visit our website@BluWave.net. We're free to use and you can benefit the same way other top P firms do act the show. So as you think about you find a business that fits your criteria, you've got a seaport type deal, if you will, how does Seaport then kind of come in and and work with the companies that you've partnered with and invested in?

[00:18:42] Drew Meyers: Yeah, it's a great question. It's one where there are nuances for every private equity firm. I think we all run very similar playbooks, but I do think there's nuances to each, whether that's culturally, et cetera. But for us, with lower middle market firm companies in particular, we're kinda looking at three basic areas.

[00:19:03] It's strategy and org structure that needs to be in place to be able to go after that strategy. It's sales and marketing, and then it's the financial and KPI reporting. To our PE listeners that's like, yeah, no kidding, but coming into a lower middle market business that is founder led. A lot of this foundational stuff still needs to really be put in place and enhanced and invested behind.

[00:19:26] But those are the areas that we focus on coming into the investment. We are definitely going to be aligned with the founders on what the strategy is, go forward. And with that, we kinda like to talk about what the org structure will ultimately need to look like. And that doesn't mean it changes overnight or out of the gates, but more often than not, especially with lower middle market companies, it's gonna entail some investment in the team.

[00:19:49] You typically have a founder who's been wearing more hats than they should, and probably some areas that are underoptimized. And you just kind of wanna understand and get on the same page that, hey. We are gonna hire A CFO. We are gonna do some of these things that you haven't thought were important in the past necessarily, or maybe haven't made the leap forward on in terms of putting your own money towards it.

[00:20:13] But together, this is where we're gonna get to. And as the business expands, these are the places and people that we're gonna need to invest in. So that's an important kind of foundational thing to get out there in front of folks. And then sales and marketing again. If there is any investment in marketing, it's typically needs to be refreshed and rethought a little bit.

[00:20:34] Sales oftentimes has been founder led, which obviously isn't scalable, and so there's a lot of time and energy that needs to go behind making sure that that is professionalized in a way that's going to accelerate growth the way we need it to over the course of our ownership. You need that organic growth engine really firing on all cylinders for our ultimate exit.

[00:20:58] So that's another area where typically we need to be proactive around. That's an investment. Those are the kind of dollars that when you're putting 'em in, you're not seeing results overnight. And sometimes that can lead to a little bit of nail biting on either the founder's parts or even our parts. At times when things don't really start to fire on all cylinders right away.

[00:21:19] You gotta be patient, you have to trust the process and you just have to push forward with it. And ultimately. You kind of start to put the rigor around the sales process that you need. It's probably no surprise as first institutional investor into a business. Finance and accounting is not an area they've typically spent a ton of time around.

[00:21:38] And so it's always fun for me to to watch management teams start to drink the Kool-Aid as we are helping them think about and analyze and put basic KPIs in place and start to get better financial reporting in their hands. It's not as if they were running their businesses blind. They were good managers and there's a reason we're willing to make the investment.

[00:21:59] But man, it never ceases to surprise me how much more they can get out of the business and how much better they can get from a decision making process when we start putting better data into their hands. So that's another area that we spend a ton of time around to help them better understand what it is we're all trying to accomplish together.

[00:22:19] Sean Mooney: What I like about what you shared there is a few things. One, it really aligns nicely with what you talked about earlier in terms like what does your kind of personal scorecard look like? So you said what you're looking for is you have a business that's in a good market. You're looking for a business that has recurring revenue.

[00:22:37] You're looking for business that has understandable metrics where they make their money, and then what you shared about what you're doing with your companies that you partner with is. You're working on strategy out of the gates, tying resources to that, which often ties into market and revenue and those type of things.

[00:22:54] Then you're highly focusing on sales and marketing. How do you get the recurring revenue going even faster? And then you work on the finance team and the metrics. So you bring these insights that you're figuring out, probably in diligence about where they're actually making the money and then putting the KPIs right along there.

[00:23:10] Drew Meyers: Exactly.

[00:23:11] Sean Mooney: There's clearly a lot of thought and a lot of alignment that's gone into your process.

[00:23:16] Drew Meyers: That's exactly right. And these businesses are not super flexible when we're first coming in, as you can imagine, right? They've done things a certain way, they've grown up that way, and despite being smaller businesses, there's not as much plasticity as you may think that there is.

[00:23:32] There's a lot of massaging and handholding that goes into this entire process, for sure. It doesn't happen sometimes as quickly as we would like, but ultimately we do get there and ultimately our folks at the end of it are kinda like, wow. Wish we would've gotten there sooner. In the cases where it's taken longer than it should have, it's a process.

[00:23:51] We're in our sixth fund in over 25 years of working with lower middle market businesses.

[00:23:56] Sean Mooney: As

[00:23:56] Drew Meyers: you

[00:23:57] Sean Mooney: think about bringing these insights to businesses that were often probably intuitively run and run well, but probably suboptimally, it was my experience when I was investing in lower and middle market companies.

[00:24:08] They were kind of like successful in spite of themselves and, and when you saw one of those, you get so excited because like, oh, there's some great things that we can do and bring to this team to make 'em be even better. The thing that we would usually see, I experienced this here as well, is you start exposing the data to people and they start believing in it.

[00:24:27] And then you have all these KPIs, but then you go through a process of like tons of KPIs. Tableau is called Tableau because it's like a tableau of like a hundred different measures and things like that. And so how do you work with them to kind of like help them focus on the fewer things that matter?

[00:24:43] And do you see that often happening with business builders as well, where they kind of, they start buying in, but then they have so many measures they don't really know which ones matter?

[00:24:51] Drew Meyers: Yeah, you do. And one of the things that you want to see out of a founder that you're partnering with is a lot of passion and a lot of excitement around what the opportunities can be.

[00:25:01] But as you can understand it, you can't execute on everything at once, and sometimes less is more, and there's always some calibration that's going on back and forth, and you never wanna say, ah, we don't need to look at that. There's probably some reason to look at some of those things, but to your point, you can't focus on everything and you can't address everything.

[00:25:22] So it's very important. There's the long term view and then there's the annual budgeting process in what you're doing for the near term. And you wanna make sure that these folks aren't keeping the long term in mind, but they're not trying to do too much on any given year. Right. I mean, it, it's, let's really move these few things forward and make sure we're doing it well.

[00:25:43] There's definitely time when you wanna let the horse run, and there's some times where you have to rein it in a little bit. It's just a delicate balance. Sometimes you, you really do have to run fast because whether it's an add-on opportunity that somebody else will get to, if you don't get to it. Maybe the base business isn't really at that point where they should be taken on an acquisition, but it's opportunistic and you just gotta go do it, and then you gotta go figure it out.

[00:26:07] So there is some of those elements that you, you just gotta take in stride and figure out how to, to your point, stay focused on the few things that matter. Let's make sure we get these things right and if we can do that foundational stuff, we're gonna be successful.

[00:26:21] Sean Mooney: As you're going through with your companies, how do you also think about kind of governance and board and those type of things with your businesses?

[00:26:28] Drew Meyers: From a governance perspective, we're control investors, so we're not operators, but we're very hands-on in terms of helping our management teams. What I like for our junior folks is they got a lot of exposure working with the management teams directly, helping them with some of the key value creation projects and things that we're identifying early on.

[00:26:50] MA is obviously that's a no brainer. That's what we do. That's our day job. So helping out and doing the diligence and driving the financing and all the things that go into getting those done and, and ultimately even making sure that we're integrating the right way and thinking about that. 'cause oftentimes the reason we're, we're coming in because they do see m and a as a path to growth and they just don't know how to do it.

[00:27:13] So we're kind of core to that. So I would say first and foremost, some of the resources we're bringing to bear is our team and the ability to roll up our sleeves and work constructively alongside of management Telecom, for instance, we've been longtime investors and we're gonna bring relationships to bear that either are industry specific or we're bringing expertise, whether that's sales and marketing, et cetera, functional expertise that can be really useful to the management teams.

[00:27:42] So we try to employ that where we can. It's not always a perfect fit, and so you don't want to force that. But it is a very effective tool when done the right way. And then, as you know, 'cause we've used BluWave in a number of these instances, we're not afraid to spend money to bring in expertise that can help management put things in place more quickly.

[00:28:04] Whether that's on the sales and marketing front, whether that's in the financial reporting side of things. Moving them from QuickBooks to a more robust system, if it's called for or getting more out of QuickBooks and making sure it's set up the right way to produce the type of information that we all wanna look at.

[00:28:20] Ultimately, you name it, we will bring those third party resources to bear to accelerate what the management team can actually accomplish.

[00:28:30] Sean Mooney: I like that focused approach as well. In terms of a, you've got a business model focus that's created an ecosystem, which is then. Tremendously kind of upskilled and multiplied the capabilities of your internal team that you're able to bring in as subject matter experts for your, your portfolio companies.

[00:28:47] You're bringing in people from your network as well to give external support from the board level or advisory levels, and then you're bringing in third parties that help them accelerate their learning, their growth, their development. And I think all of those are just great lessons for any business builder out there to think about that it's don't just live in your own little kind of ecosystem.

[00:29:08] Bring the best to bear and I thought so highly of like using these third parties like you all do so well as we get the chance to see how you all operate is that it really helps you accelerate what you're doing and you don't have to learn every lesson and skin your knee 10 times each time

[00:29:24] Drew Meyers: completely.

[00:29:25] I do think our industry is sometimes the victim of we can do it all. We're smart enough to figure it out. I don't doubt that there's plenty of smart people in private equity, but is it worth your time? And to your point, why stub your toe five times figuring it out when somebody else has done it 30 times and you know, is going to avoid all those pitfalls.

[00:29:45] So, and I would encourage businesses that even before you were thinking about a private equity investment, look at some of those things. Have some outside parties come in and say, yeah, you might want to do some of this differently. It could lead to a turn or two because you're already professionalized in certain areas in a way that otherwise we know we're spending money.

[00:30:05] To go invest in and and make happen. So it can be a value creator for you before you're even thinking about private equity getting involved.

[00:30:14] Sean Mooney: It's great advice. I was talking with someone the other day and they're asking, how did we do what we did? We built this thing very capital efficiently. It grows pretty strongly each year.

[00:30:24] We've done this in kind of these clever ways. One of the things I shared, and at the risk of exposing some of our secret sauce here is, is like I just do what you all do. We drink our own Kool-Aid. I use BluWave on BluWave, and so like anytime we're starting something new, we will bring in an expert from our ecosystem.

[00:30:42] We will learn it exactly what they're doing rapidly, and then we bring it where it's appropriate internally and onboard these skills and then own those skill sets. And what you articulated there for other business builders is like do as as, as Seaport does and do as Drew does because it'll benefit you

[00:31:03] Drew Meyers: for sure.

[00:31:04] You can convince yourself of a lot of things when you're just sitting in your four walls by yourself, and those things may not be even close to reality. So kinda exposing yourself and being a little bit vulnerable with your business, which isn't easy. I mean, it's hard to have people look at something and say, yeah, that's not the prettiest thing I've ever seen.

[00:31:22] It's like, yeah, but I built it like, well, okay, but we can help you make it better. And if you're willing to take that feedback and get those experts working for you can go a long way.

[00:31:33] Sean Mooney: And I think what a lot of people don't realize is there's an entire ecosystem out there that's truly excellent, but also affordable for a lower middle market firm if they dare to use it

[00:31:42] Drew Meyers: completely.

[00:31:43] There's the tried and true that everybody kind of knows in the private equity world, the brand names in a lot of these different categories, but that is something we have always appreciated about BluWave is being able to help us find resources that are more cost compatible with the size of our businesses.

[00:32:01] We're starting with $3 million of EBITDA in certain examples, right? I mean, that just, we don't have a lot of room to spend hundreds of thousands of dollars. Yes, we're willing to invest and spend money, but you gotta be prudent. And to your point, not surprisingly, there are a lot of great resources out there that understand this end of the market and know how to price things effectively and and work efficiently in a way that makes sense for everybody.

[00:32:26] Sean Mooney: I think it's once again, another foundational piece of great advice that you're sharing here, drew, for anyone that's business building and certainly it's something that we get to see you have do it so successfully with companies that end up starting as a valuable business and becoming even much more so after you've partnered with them.

[00:32:43] As we think about into the future here, as we've been talking about and what's going on and how you build value. Now, let's take it back in time a little, and so one of the things that I love to do is try to Frankenstein myself. Using the wisdom and the hard-earned lessons learned of other people. And then I try to like do my best to be successful in spite of myself.

[00:33:04] And so, so if you could go back to your 22-year-old self and give young Drew a piece of advice, what might one of those piece of advice be?

[00:33:16] Drew Meyers: My advice, because this is ultimately gonna happen for everybody. At some point, you are gonna make the decision to leave an employer and go someplace else for whatever reason.

[00:33:25] My advice to people would be be very thoughtful around that. Not just, oh, is this next opportunity the right reason, but what's the right way to leave my current situation? How do I do this in a way that leaves everybody feeling good about what it is I've decided to go do? I've made my fair share of moves over the course of my career, and I think looking back on those decisions in hindsight, you know, in hindsight 2020, I think I've made them for the right reasons.

[00:33:54] It's probably only really one of those decisions that I look back on with any regrets, but I can truly say I never left an employer with a bad taste in their mouth. In part that's because I poured my heart and soul into what I was doing when I was there for them. And I think anybody who owns a business or is growing a business is gonna appreciate that.

[00:34:15] But I think I've also though just did things with a lot of transparency, with a lot of humility, with a lot of appreciation for. What I had learned and what I had gotten out of the situation I had been in and always provided them with ample runway in terms of being able to think about whether it's backfilling or or, or whatever the case may be, making sure that they're left in the right way and they don't feel like they've been left in the lurch.

[00:34:43] And I think as an example of that, there's a couple examples in my career where I've come back and worked at the same place again. So there's never a good reason to burn a bridge ever. And so I would just say me 22 years old, you're not gonna be in one job forever. You likely are going to make moves and just do things the right way.

[00:35:04] That is,

[00:35:04] Sean Mooney: is such great advice. In some ways, it's kind of what the name of this podcast is, like the Karma School of Business, and it's like this philosophy I gained over time. It's like just do good things with and for good people and give more than you take. And the flywheel of life just has become so much easier and it moves faster and it's better.

[00:35:23] And as you were sharing your advice there, it just had me thinking about all the people that I've either I've kind of transitioned or they've transitioned in different parts of your business life and life in general. And the ones who do it as you expressed in the right way, they don't burn the bridge.

[00:35:42] They're supportive on the way out. They cross the finish line. They're gonna do everything they can. To help these, the transition. You remember those forever. And if they ever call back for a favor, it's heck yes. And you know, you said like, come back home, like we'd love to have you. Those type of things you're like, you still get Christmas cards from 'em.

[00:36:00] And on the flip side, you absolutely remember the ones who go out in a blaze of glory and do it the wrong way and you'll in the same ways. Remember that forever. And I think so many people forget that. You're building a lifetime of reputation, not a career chapter of reputation.

[00:36:20] Drew Meyers: Oh, completely. And, and you know, it's interesting, especially from the private equity perspective, right?

[00:36:25] 'cause we see this all the time. We have executives who leave or need to find executives, and you can find people and you're always gonna make those reference calls. And you can tell people who are like super excited to have a call with you to tell you about how great this person is. They don't have to tell you it 'cause they can't lawfully, but you can certainly tell to your point when someone's been burned and how they feel about that.

[00:36:49] And, and so I didn't have that advantage of having been through a bunch of those cycles before when thinking about my own transitions and so forth. But yeah, to your point, someone scorned is gonna be remembered. And the enthusiasm you get from somebody who's had great experience and felt like that person handled things the right way, it's unbridled.

[00:37:11] And I think you gotta know which one you want on your reference calls, right?

[00:37:15] Sean Mooney: Of all the advice I get on the show that I, I haven't had that form of advice yet, but I'm glad that you shared it because it truly is something that is foundational to a career. I too think I very much the same approach now that I have, you know, a head of gray hair and I look back, I go, oh, that was the right thing.

[00:37:33] But it wasn't like an intentional plan

[00:37:34] Drew Meyers: either. That is something that I think everybody should kind of understand coming out of undergrad and getting into the work world. And especially, you know, in those early days, you're gonna be bouncing around to try to find the right fit and the right thing and you never know where people are gonna end up or how they can potentially influence you later or have an impact on you.

[00:37:53] And just like you said, there's no reason to not treat people well. There's never a good reason for it.

[00:38:00] Sean Mooney: I think you shared some of the most cornerstone advice at any. Not only young person, any even old guys like me, you know, can reinforce and learn. So thank you so much for sharing that and thanks for this conversation.

[00:38:13] Drew, you're generous with your time 'cause I know you're extremely busy and you taught me all sorts of things that I wish I knew before and that's a tremendous gift. So I wanna just let you know how appreciative of you for taking the time to kind of pull back the curtain and share some insights into some of the things that you've learned over your career.

[00:38:30] Drew Meyers: Thanks for having me on here and again, you and your team have done a tremendous service to the Seaport team over the years, and we really appreciate the partnership. It's a unique thing that you've built there, and congrats on where it's gotten to.

[00:38:54] Sean Mooney: That's all we have for today. Special thanks to Drew for joining. If you'd like to learn more about Drew Meyers and Seaport 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.

[00:39:09] If you like what you hear, please follow 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 wanna be connected with the world's best in class private equity grade. Professional service providers, independent consultants, interim executives that are deployed, entrusted by the best business builders in the world, including many hundreds of top PE firms and thousands of their portfolio companies.

[00:39:33] And you can do the same whether or not you're in the PE world. Give us a call or visit our website at BluWave.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 user positions of any other person's or entities, including those referenced herein.

[00:39:52] 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.