Why do some companies grow by leaps and bounds while others only inch forward? Simple. They embrace Deal-Driven Growth in addition to organic growth! DealQuest is where you learn how to strategize, prepare for, find, and complete deals to grow your company faster.Listen in as host Corey Kupfer takes you behind the scenes with some of the world’s most fascinating deal-savvy business leaders. This is the one place where they can share openly the secret to deals they have done (or failed to do) and the issues, opportunities, benefits, pitfalls and lessons learned.Here you learn first-hand all about:Powerful deals that require little capital Mergers, acquisitions, and tuck-insJoint ventures, partnerships, and strategic alliancesLicensing, raising capital and onboarding key employeesNegotiating, structuring, finding, valuing, closing and integrating dealsDon’t be the one at the table who doesn’t grasp the power of Deal-Driven Growth! See acast.com/privacy for privacy and opt-out information.
Episode 206: Should Uncertainties In The Market Impact Your Deal-Making? with Corey Kupfer
There are undoubtedly many uncertainties and changes happening in the economy right now. Many businesspeople are feeling those uncertainties currently due to the stock market correction, increasing interest rates, inflation, world events and more. I want to talk about those changes with you in this solocast of the DealQuest Podcast, and determine whether they should impact your deal-making, and if so, how?
CHANGES IN THE ECONOMY
Over the years, I’ve discussed many ways to initiate growth, especially during positive economic times. I have also preached about not becoming a self-fulfilling prophecy by focusing too heavily on recessions and market downswings. The temperature in a lot of spaces all over the world is that of uncertainty and unease, and many people have a lot of questions.
How should these uncertain times affect my deal-making?
Does it affect my timing?
Does it affect the types of deals I’m making?
Does it affect valuations?
THE FUNDAMENTAL PRINCIPLE
Regardless of where the economy is, no matter what’s going on in the world, the underlying principle is this: There are still deals that need to be done. Naturally, the context and mechanics of deals in new or uncertain circumstances may change, but that doesn’t eliminate the fact that there will always be deals that need to be made and opportunities that come about even in challenging economic times.
Which leads me to my next point: These deals in uncertain or adverse circumstances does not mean they are automatically less attractive. In fact, if you are smart, you can turn challenging times into great opportunities. As a smart dealmaker, you should be looking for deal-driven growth consistently, and adverse circumstances are no exception to that.
THE CONCERNING FACTORS
Establishing that a dealmaker shouldn’t lose sight of deal-driven growth is only the first step. Just because deals will always need to be made and opportunities will always be available doesn’t exclude one’s concerns during a shaky economy or impactful world event. What are some of those concerns?
CONCERN: INTEREST RATES
Especially in the U.S., interest rates continue to rise. In November 2022, several economists forecasted the Fed to raise its benchmark rate even higher leaving borrowers with 4.75-5% range by March of 2023. This increase of interest rates has and will continue to cause the cost of capital to increase.
About a year ago ago, I did a solocast in which I discussed some research I did that showed there was no correlation between interest rates and volume of deals. That tells us that deals are being made regardless.
Let’s look at an easy example most will understand: Real Estate. In rising interest rate environments sales prices for properties tend to decrease. With the cost of capital increasing, that makes sense. And, although there is often a period of disconnect when sellers are looking for yesterday’s prices and buyers want to buy at today’s lower prices, over time seller’s get realistic and deal flow picks up again. The same is true in the business deal market.
In episode 197, I discussed this topic with John Warrillow (the blog post can be found here). We discussed at length how sometimes buying low and selling low can potentially be better than buying high and selling high. Check out that episode for that interesting discussion.
The effects are being felt globally of inflation in a post-lockdown world that’s still enduring the Russian-Ukrainian War. U.S. inflation rates are the highest they’ve been in recent times, with November 2022 seeing a 7.75% inflation rate. Inflation is something to take into consideration, but like interest rates, its not something that should impede your ability to make smart, successful deals and in some cases can help facilitate deals getting done.
A smaller company that is experiencing difficulty raising priced but is experiencing higher costs d
Episode 205: M&A Talk with Leading RIA Aggregators and Integrators: Allworth Financial with Pat McClain
Pat McClain, Senior Partner and Co-Founder of Allworth Financial is much more than his company. He is distinguished in the RIA industry, co-hosting for more than two decades Allworth Financial’s Money Matters, one of the nation’s longest-running financial topic radio shows and podcasts. He has also served as a keynote speaker for a multitude of financial conferences around the nation. Pat was named one of the 10 “Icons and Innovators” by InvestmentNews in 2021. Pat’s expertise has contributed to Allworth Financial being ranked 23rd on Barron’s 2021 Top 100 Independent Advisors list. While under his and his partner Scott Hanson’s leadership, Allworth Financial has grown to over $15 billion in assets.
As the RIA space grows, the options for buyers and sellers can get a little clouded. As an industry leader, Pat understands just how make-it-or-break-it the market is today. Growing up in a socioeconomically modest, large Irish family, he jokes that what he wanted to grow up to be was “not picked on,” but his serious desire was to go into business of some sort, like his father.
Pat recollects his first commissioned job as a child through his father. They would go to hotels being remodeled and acquire all the pictures and paintings that were being replaced, then go to swaps and flea markets to re-sell them for $2-3 a piece. His commission was generous, he says, at 25¢ each picture. A good deal for a child who was not even 10-years-old!
That dealmaker mindset ran steadfast as Pat grew up. In junior high, he ran a cactus stand for a man at the same swaps and flea markets he would attend with his father. After 6 months, the cactus-stand owner went on vacation and never returned, so Pat was positioned to buy out the man’s entire inventory, and took on the business for himself. This adolescent cactus stand became Pat’s first business ever.
ALLWORTH AND A MODEST START
Before Allworth Financial, Pat and fellow now-Co-Founder Scott Hanson worked at a different firm in neighboring cubicles. Three decades ago, Pat and Scott decided to leave that business and establish their own firm, Hanson McClain Advisors. Pat rolled out his $10k IRA for 60 days to fund the initial capital for the business, and he and Scott were able to lease office space from an accountant and began buying the bare necessities to get started. A modest start, but a start flush with potential nevertheless.
In their company’s infancy, they began with a salaried advisor model and market and make the appointments for the advisors.
HITTING A RISK TOLERANCE WALL
As Pat and Scott grew their firm, they realized they had something special. As time passed, more and more interest began coming towards the pair, and they were beginning to have to turn away offers due to hitting a risk tolerance wall. For Pat, he says that at that point more money was clearly possible, but more money wouldn’t necessarily make his life better, however less money would have.
Which is not often something many people think of when they’re riding the wave of financial growth. Many people think the goal is to just accumulate as much money as possible, however, a good businessperson understands the risks involved with consistently trying to accumulate more money than what you need or can handle, not just personally but within your business, too.
By taking personal inventory of his risk tolerance, Pat was able to balance his work and life to something he – and his family – are happy with. His business seems to be happy with his choices, as well. In his words, “he quit running his business for cashflow, and started running it for value and for long-term capital appreciation.”
GROWING UP ALLWORTH FINANCIAL ORGANICALLY AND INORGANICALLY
In 2017, Allworth Financial sold a controlling stake to Parthenon Capital, a “private equity firm that partners with and invests in management teams and their companies,” per thei
Episode 204: Breaking Away and Strategic Growth with Phil Fiore
Having more than 25 years of experience, Procyon Partners’ Co-Founder, Phil Fiore, has extensive experience and expertise in the investment advisory space. In addition to being a co-founder of Procyon in 2017, Phil formerly held the positions of Senior Vice President of Wealth Management at UBS, Senior Institutional Consultant, Senior Retirement Plan Consultant, and member of the Institutional Consulting Group and its Advisory Council. 401KWire twice named Phil one of the Nation’s 300 Most Influential Advisors in the Defined Contributions Arena, The Financial Times recognized him as one of their Top 400 Advisors in 2014, and Barron’s named him one of their Top 1,200 Financial Advisors in 2015.
Given all these accomplishments and experiences, Phil is equipped to speak with authority in the wealth management space, but, when Phil was younger, the term “wealth management” wasn’t even in his lexicon. Coming from a first generation immigrant Italian family, Phil spent most of his early life believing that soccer would be what his future held. His father, a traditional Italian man, created the PAL Soccer League in his hometown in Connecticut. While his father instilled within him a go-and-get-it-yourself attitude as opposed to handing him money (a rudimentary business skill), soccer was indeed what his heart was set on.
Nevertheless, professional soccer only existed in Europe at the time Phil graduated college, so he had to figure out a new path. At first, his intended path was law school, but sometimes life chooses for you what you’re meant to do. In his late 20s, he was presented with an opportunity to join a business he couldn’t refuse which led tohim became the highly regarded leader and dealmaker he is today.
THE NEW WAVE OF BREAKAWAY
Procyon Partners is a prime example of a new wave of breakaway RIA firms. Traditionally, RIA breakaways were wealth management practices run by advisors establishing their own businesses for their own reasons - mainly escaping big firm bureaucracy and limitations or the desire to be self-employed. On the other hand, a new wave of breakaways was ushered in, with Procyon being one of those to breakaway with new additional motivation: Authentic, strategic growth from the start. This is growth with intention, not growth for the sake of growth, but growth with the purpose to build a stronger organization that can service clients more fully and comprehensively.
Though Phil and his fellow founding partners started out in wirehouse firms (a full-service broker-dealer), they realized that their specialty expertise in retirement consulting and other key service offerings excelled well beyond the wirehouse’s “full-service” paradigm. As a result, they made the decision to leave the wirehouses.
“An exciting journey, for sure,” says Phil, but certainly not without its challenges. One of the biggest hurdles faced by Phil and his new company was actually the freedom they had to operate as they pleased. They had to take a step back and evaluate their circumstances, and not act on impulse, but rather conduct their business in a manner that was best for their clients and for their business.
Another decision made in 2017 by the Procyon founding partners, was to collaborate with Dynasty Financial Partners. Due to Dynasty’s well-established standing, they were able to offer analytics, experienced transition, and operational support to Procyon in ways that would otherwise be inaccessible to them at their founding. This decision gives Procyon the ability to focus on transitioning their clients and providing personalized service at a high level for high-net-worth individuals, families, and business owners. In 2022, this partnership is still in place, and Procyon’s founders continue to benefit from and deeply appreciate the exceptionality, support and partnership that Dynasty offers.
A STRATEGIC GROWTH-DRIVEN MINDSET
Procyon Partners’ authentic,
Episode 203: M&A Talk Series: Holiday Schedule with Corey Kupfer
Episode 202: From Sports Star to High-Powered Real Estate Investment with Logan Freeman
Co-Founder, Chief Development Officer, and Principal of FTW Investments, Logan Freeman, is uniquely talented in investments while remaining compassionate. Alongside his fellow co-founders, Cory Tuck and Parker Webb, he co-hosts their FTW Investments’ podcast Invest for The Win. Logan is particularly committed to equitable access to affordable housing, collaborating closely with numerous groups to help eliminate home inequality and houselessness in Kansas City. Logan’s personal motto, “Do well by doing good,” has helped lead him with authenticity in his business endeavors.
Logan’s specialty is focusing on off-market properties, with off-market properties accounting for more than half of his completed transactions. Having completed over 125 transactions, totaling more than $150 million, Logan’s unique talents allow him to effectively guide individuals and organizations throughout their entire investment journey.
Nevertheless, Logan’s first dream wasn’t in investment, nor was it his first talent. Logan spent his formative years focusing on basketball and football, becoming a standout All-American collegiate football player at the University of Central Missouri, where he was spotted and picked up as an underdraft free agent player by the Oakland Raiders. He also spent his youth working in a hay field, offering him a background and upbringing focused on a sense of hard work and being unafraid to get his hands dirty to get the job done.
Prior to going into real estate, Logan would flip cars and motorcycles. The concept is the same as flipping homes: Investing in updating run-down objects and then selling them for a profit. Vehicle flipping afforded Logan a firm grasp of real estate, which fits with his approach to the industry: Just because something is broken down, doesn’t mean it isn’t salvageable. Combining his willingness to “get his hands dirty”, do the work, and look at otherwise dismissed properties, Logan sets himself apart in the real estate industry.
COMMUNICATION IS HOW SELLING HAPPENS
Confidence in a deal doesn’t end with how effectively the deal is structured on paper, and dealmaking involves more than merely coming to agreeable negotiations. When it comes to dealmaking, Logan emphasizes the necessity of communication. “Selling is just the transference of feeling from one individual to the next,” he opines. You accomplish this by:
* How does your impact affect others and their feelings?
By working on your communication skills, and becoming adaptable to others’ communication styles, your ability to create a successful deal is going to greatly increase because you’re building authentic confidence in the buyer for not just the proposed deal, but confidence in you.
STARTING IN SYNDICATION
Syndication -- syndicated deals or syndicated loans -- is simply just one way of raising money from other people in order to gain financial support for your own investments. Usually, syndication involves using two or more lenders to fund one loan for a single borrower. A lot of time this occurs when a loan request is too large for one investor or firm, or falls outside of their risk tolerance, so multiple lenders come together to share the risk, and fund the proposed deal. There are two forms of syndication:
Approaching lenders with a specific deal, package, property, etc., and only acquiring lending for that specific goal.
Create a fund that is not specific to a deal, package, property, etc., and instead is dependent upon the borrower, and discretion to invest that funding is left up to the borrower, be it a single person, partners, or a group.
MISHAPS IN SYNDICATION
Logan chose the joint venture route at the start of his real estate investment career, however, he soon learned that going it alone wasn’t the ideal option because he quickly ran out of knowledge, experience, and most of all, capital. He sought advice from his mentor, who advised h
Episode 201: M&A Talk with Leading RIA Aggregators and Integrators: Matthew Cooper of Beacon Pointe Advisors
There are many impressive things about Matthew Cooper. In addition to being featured in Forbes Magazine, he was named a finalist for “Individual Thought Leader of the Year” for the 2019 WealthManagement.com Wealthies Industry Awards, and he was the winner of “M&A Leader of the Year” for the 2022 WealthManagement.com Wealthies Industry Awards. But, most meaningful to Matthew is the business that he is a Founding Partner and President of, Beacon Pointe Advisors, one of the U.S.’s most successful RIA firms with locations spanning all over the country.
The RIA industry wasn’t Matt’s first business calling. As a matter of fact, after graduating from college, he entered the life insurance industry. Nevertheless, life has its turns, and that life insurance firm branched out into the RIA arena and, as Matt says, “Here we are.” Since he was the one to work out deals when a client’s loved one passed away, he had an early start at dealmaking. Through this early education in dealmaking, Matt took that knowledge and built Beacon Pointe into what it is today, a remarkable RIA powerhouse firm and acquirer.
375+ on staff nationwide
220+ Designations and Certifications including CFA, CFP®,JD, MST
Since March 2020 -- after bringing in Beacon Pointe’s first capital partner -- completed 24 successful transactions
BRINGING IN A CAPITAL PARTNER
For nearly 20 years, Beacon Pointe had no capital partner. That changed when they took on two underlying RIAs – one expressly for the inorganic growth side of the business – and discovered they weren’t as aligned as they had believed. Not only did the M&A RIA start to grow larger than the other RIA, but several veteran shareholders were looking to exit and cash out. This misalignment paired with the timing of shareholders wanting to exit, caused Matt to see the natural need to bring in outside capital and merge the two RIAs together.
Alignment is extremely critical in M&A; if one facet is out of sync, the entire thing might come crumbling down like a house of cards in a downpour. Matt took on the challenge, recognized the opportunity, and decided to bring in a capital partner to help the firm evolve.
Choosing the right capital partner can:
Help you strategically
Offer your business more value
Lessen potential risks
For Matt and Beacon Pointe, the right partner was KKR & Co.
IT’S NOT A HOBBY
As a dealmaker, Matt has been doing a lot of heavy lifting through Beacon Point. To make even one successful deal – let alone the volume and caliber of deals Matt makes – it takes a great deal of knowledge, tenacity, and dedication. Matt emphasizes the importance of dealmaking as a conscious exercise; “It’s not a hobby,” he adds. Nothing could be truer.
For Matt to make such effective deals at the volume he does, he has a process that he sticks by:
Keeping his mindset sharp on the deal, remembering “it’s not a hobby”.
Having teams built and in place: one team to source the potential deals, do due diligence, and then build the LOI.
Following the LOI, an integration team performs further due diligence and remains on-task post-close until the firms are fully integrated.
Having all the department heads at Beacon Pointe be a part of the whole process
Knowing when to push, and when to ease up in the deal-making process
FULLY INTEGRATED MODEL TO SERVE CLIENTS
As previously discussed in episode 199 of The DealQuest Podcast, there’s debate within the M&A RIA space about aggregators versus integrators. Beacon Pointe is squarely on the fully integrated model side. This means:
One tech stack
One company culture
The goal, whether you’re an aggregator or an integrator, is to reduce confusion of potential targets when there are so many options and choices available these days in the RIA space. To help mitigate confusion, Matt constructed a consistent story in the marketplace regarding Beacon
Great episodes for M&A education!
John Warrillow Making Your Business Attractive to Buyers episode is my favorite. Loving his take on multiples and obsessing over your profit. Really helps me understand the M&A world. Love this podcast.
Great Content but Lacking Speech
If I had every penny for every time I heard “You know”, I’d be rich! Almost half of the podcast is filled with “You know”