My guest for this episode is Kaustubh Deo. Kaustubh recently acquired a tree service business in Seattle through a self-funded search after working in private equity in New York. I’ve had the pleasure of getting to know Kaustubh over the last two years and have found him to be one of the most insightful thinkers in the search space.
A good portion of our conversation focuses on concepts like risk-reward and making transitions, topics he has given a lot of thought. Throughout our discussion, we talk about the differences operating in large private equity compared to in small companies, loosening his deal-breaker list, effectively investing his time learning the new business, and YouTube strategy for the tree service industry.
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Links:
SingleOps & the Green Industry Perspectives Podcast
Topics:
(4:24) – Would you ever get on YouTube?
(5:43) – Why don’t tree-climbers gravitate toward W2’s?
(8:21) – What’s your main recruiting base?
(10:49) – Are you seeing any tree service content creation outside of YouTube and Instagram?
(11:48) – How did you end up in the world of tree services?
(14:02) – How did you decide to focus on the Seattle market?
(17:31) – What was your deal process like?
(19:13) – Thoughts on Deal-breakers in search
(22:40) – The deal experience in private equity vs. small business acquisitions
(26:15) – What are some ways you tried to learn about the company’s culture without interacting with the employees?
(31:12) – What are some ways you are looking to improve communication with customers?
(37:34) – What’s your transition been like actually running the business?
(41:15) – How helpful has it been seeing customer interactions first-hand?
(43:10) – The differences in operations for private equity acquisitions vs. small businesses
(46:40) – Do you have any advice for people in Search?
(48:42) – What were your personal preferences when you started your search and how did those change over time?
(52:30) – What growth goals do you have for the next 10 years?
(54:58) – What college class would you teach if it could be about anything?
(57:08) – How do you determine the risk vs. reward balance in a decision?
(58:59) – What’s a strongly held belief you’ve changed your mind on?
(1:01:51) – 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].
