My guest on this episode is Alex Mears. Alex started his career in investment banking and consulting before leaving for the Navy and eventually returning to private equity at the Carlyle Group. Two years ago, Alex launched a non-profit called Search and Acquire to support veterans pursuing search. And he just recently announced a search investment firm he’s co-founded called the Brydon Group to invest in searchers from all backgrounds.
I’ve really enjoyed getting to know Alex over the last few years. I always appreciate his ability to take concepts from the military and large-cap private equity and apply them to our own lives and careers. He’s a wealth of knowledge, and I’ve been excited to record an episode with him for a while. Alex and I kick things off by talking about the causes of failure in search, why you should always invert due diligence, best practices from large-cap private equity, and how to run software and government services businesses.
Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn.
Links:
Topics:
(4:32) – What are some major causes of failure in Search?
(10:17) – What are some interesting strategies you’ve seen used to maintain a healthy pipeline while in a live deal?
(11:52) – Phase 2 failures & the period of greatest risk in a search transaction
(15:56) – Alex’s background and career
(18:11) – Why did you join the military?
(20:12) – What were some of your learnings and best practices from working in Large Cap Private Equity?
(24:56) – Why are you investing in government services businesses?
(27:13) – How do you pair government services with your search model that emphasizes customer diversification?
(30:09) – What are some KPIs in government that Government Services Business CEOs need to pay attention to?
(31:58) – How do you find out if there are tailwinds and what the government will be spending more money on?
(32:56) – What is inverting in due diligence?
(34:50) – What are some of the best and worst traits in veterans as business leaders?
(36:19) – Are there certain business models veterans outperform in?
(37:23) – How can Brydon be a better supporter of Searchers?
(41:29) – What has been the investor appetite for Search over the past 5 years?
(43:15) – What were the values you spent a lot of time working on?
(45:03) – Brydon’s Entrepreneur & Residence Program
(53:23) – What college class would you teach if it could be about anything?
(55:22) – What’s a strongly held belief you’ve changed your mind on?
(56:55) – What’s the best business you’ve ever seen?
Think Like an Owner Sponsors:
Live Oak Bank — Live Oak Bank is a seasoned SMB lender providing SBA and conventional financing for search funds, independent sponsors, private equity firms, and individuals looking to acquire lower middle-market companies. Live Oak has closed billions of dollars in SBA financing and is actively looking to help more small company investors across the country. If you are in the process of acquiring a company or thinking about starting a search, contact Lisa Forrest or Heather Endresen directly to start a conversation or go to www.liveoakbank.com/think.
Hood & Strong, LLP — Hood & Strong is a CPA firm with a long history of working with search funds and private equity firms on diligence, assurance, tax services, and more. Hood & Strong is highly skilled in working with search funds, providing quality of earnings and due diligence services during the search, along with assurance and tax services post-acquisition. They offer a unique way to approach acquisition diligence and manage costs effectively. To learn more about how Hood & Strong can help your search, acquisition, and beyond, please email one of their partners Jerry Zhou at [email protected]
Oberle Risk Strategies– Oberle is the leading specialty insurance brokerage catering to search funds and the broader ETA community, providing complimentary due diligence assessments of the target company’s commercial insurance and employee benefits programs. Over the past decade, August Felker and his team have engaged with hundreds of searchers to provide due diligence and ultimately place the most competitive insurance program at closing. Given August’s experience as a searcher himself, he and his team understand all that goes into buying a business and pride themselves on making the insurance portion of closing seamless and hassle-free.
If you are under LOI, please reach out to August to learn more about how Oberle can help with insurance due diligence at oberle-risk.com. Or reach out to August directly at [email protected].
