Business RadioX ®

Decision Vision Episode 31: Should I Start a Family Office? – An Interview with Chris Demetree, Demetree Brothers

by

Decision Vision
Decision Vision
Decision Vision Episode 31: Should I Start a Family Office? – An Interview with Chris Demetree, Demetree Brothers
Loading
/

Decision Vision Episode 31:  Should I Start a Family Office? – An Interview with Chris Demetree, Demetree Brothers

What issues should be considered in starting a family office? What makes a family office successful? The answers to these questions and more come out of “Decision Vision” host Michael Blake’s interview with Chris Demetree, Demetree Brothers. “Decision Vision” is presented by Brady Ware & Company.

Chris Demetree, Demetree Brothers

Chris Demetree

Chris Demetree is one of the co-founders of Demetree Brothers, Inc. and currently serves as Vice President. Chris has served as the Managing Partner for Alico Estates Development Associates and as Vice President of Demetree Pasco Properties, Inc. His past developments include over 2,000 single family lots, a golf course country club community, and numerous commercial office/retail centers. Chris has served on the Board of Directors of several private and public companies.

Chris possesses a strong record of entrepreneurial success, with over 25 years of experience building successful technology businesses. He is currently the CEO of Lazlo, a digital platform that enables new channels for monetizing digitally stored value. Lazlo evolves traditional gift cards, coupons, lottery tickets into dynamic digital assets that can be used as a vehicle for advertising, data collection, and branding, while adding security to digitally stored value.

Prior to Lazlo, Chris was a founder and partner in V-P Ventures (VPV), a private investment firm focused on early stage and private equity transactions. Before VPV, he held C-level roles with successful startups including Recordant, STC Corp., Intelligenxia and Urban Media. He has a B.S. in Industrial Management from Georgia Institute of Technology.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn:  https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript

Intro: [00:00:02] Welcome to Decision Vision, a podcast series focusing on critical business decisions, brought to you by Brady Ware & Company. Brady Ware is a regional, full-service, accounting and advisory firm that helps businesses and entrepreneurs make vision a reality.

Mike Blake: [00:00:20] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different business topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts about how they would recommend thinking about that decision.

Mike Blake: [00:00:39] My name is Mike Blake, and I’m your host for today’s podcast. I’m a Director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia, which is where we are recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe on your favorite podcast aggregator. And please also consider leaving a review of the podcast as well.

Mike Blake: [00:01:03] Our topic today is family offices. And family offices are probably one of the better kept secrets in the American economy. For the most part, family offices do not seek rock star status. They’re very different from, kind of, your Silicon Valley, fast company, red herring, sort of, I don’t say want to say attention-seeking, that’s not fair, but very high profile organization. The fact of the matter is you may work next to a family office, you may live in the same neighborhood as somebody who’s in or works in a family office or has a family office, and you wouldn’t even know it. We don’t have Yellow Pages anymore, but if we did, there probably would not be an entry for family offices. And I think we can all kind of appreciate that as to why that is. But the fact of the matter is that they are increasingly popular as a tool and an infrastructure for managing wealth.

Mike Blake: [00:02:15] And a lot of us on the radio, myself included, would love to have the problem where we have so much wealth that it becomes a different kind of responsibility to manage it. But the fact of the matter is it is a responsibility to manage it, especially if you’re in a position where you are sharing it with family, and there are not just family relationships, but fiduciary relationships involved. And it’s important, also, because I think a lot of people who are creating wealth, particularly those who are creating it this generation, they’re building it, and then either exiting it, or transitioning their core enterprise, they’re starting to realize that something called a shirtsleeves-to-shirtsleeves phenomenon.

Mike Blake: [00:03:00] There are all kinds of studies out there – I don’t have to cite one in particular, you can Google it – that say that for the most part, if a family makes, or generates, or produces an amount of wealth, let’s call it $20 million just to pick a number out there, statistically speaking, in three generations or by generation three, only 10% of that wealth is going to remain. And by the fourth generation, 3% of that wealth remains. And a great case in point is the Vanderbilt family. They built their wealth in the early 19th Century, and basically doing ferries around Manhattan and Pennsylvania. But the name is much stronger than the wealth. In fact, Anderson Cooper of CNN, who is actually a 6th generation Vanderbilt, has gone on record saying there ain’t no trust fund waiting for him. And perhaps if they’d had a family office or a structure like that, maybe that scenario would be different.

Mike Blake: [00:04:06] So, the goal of this podcast is to shed a little bit of light. If you’re thinking of whether a family office or something like that structure is useful for you, or maybe you’re advising somebody who’s thinking about a family office, the goal of this podcast is to provide some insight into that. And to help us with that we’re talking with Chris Demetree. And Chris is a very successful entrepreneur in his own right. He has more than 25 years of experience building successful technology businesses. He has extensive experience with family offices and is also an active player in the Atlanta startup community. He is currently the CEO of Lazlo, a digital platform that enables new channels for monetizing digitally stored value. Lazlo—I’m sorry. Lazlo evolves traditional gift cards, coupons, lottery tickets into dynamic digital assets that can be used as a vehicle for advertising, data collection, and branding, while adding security to digitally stored value.

Mike Blake: [00:05:06] Prior to Lazlo, Chris was a founder and partner of VP Ventures, a private investment firm focused on early stage and private equity transactions. Before VPVChris held C-level roles with successful startups including Recordant, STC Corp, Intelligentsia, and Urban Media. He also has a Bachelor’s Degree in Industrial Management from the Georgia Institute of Technology. Chris Demetree, welcome and thank you so much for coming on the program.

Chris Demetree: [00:05:33] Michael, thanks for having me. I appreciate the opportunity. Looking forward to today’s conversation.

Mike Blake: [00:05:41] So, Chris, before we begin, I want to give you a little bit of an opportunity for a soapbox here because I know this is a venture that’s very near and dear to your heart. Tell us a little bit more about Lazlo. What does a listener listening to this program need to know about Lazlo, if anything?

Chris Demetree: [00:05:56] Well, no, I appreciate the opportunity. I love talking about investments. As a—unfortunately or fortunately, I’m a serial entrepreneur at heart.

Mike Blake: [00:06:05] We haven’t been able to cure you yet.

Chris Demetree: [00:06:08] Say that again.

Mike Blake: [00:06:09] We have not been able to cure you yet.

Chris Demetree: [00:06:11] Yeah, no kidding. No kidding. I told somebody, it’s literally like a drug. When you get involved with early-stage companies, especially if the first one goes well, it’s hard to kick that habit, but no. So, well, with regards to Lazlo, our core technology and our core platform is focused around changing the way physical instruments today, physical value instruments today are converted into the digital world. And so, we’re creating a new digital platform to share, to purchase, and to disseminate stored value being gift cards, coupons, event tickets, that type of stored value. So, we’ve been working on it for a little while, and we’re very excited about our future. We think there’s a real big opportunity here. So, thank you.

Mike Blake: [00:07:09] We’ll be looking to hear more about it as time goes on. So, let’s dive into the-

Chris Demetree: [00:07:15] Well, Michael, Michael, I want to go back and point one thing out. As Anderson Cooper said, there’s no big trust fund there for him. That’s only because he didn’t want it.

Mike Blake: [00:07:25] And so, you can tell.

Chris Demetree: [00:07:26] When his mother passed away, there was almost a quarter of a billion-dollar fortune in place.

Mike Blake: [00:07:31] Oh, is that right? I didn’t know that.

Chris Demetree: [00:07:33] She died with estimated $200 million net worth.

Mike Blake: [00:07:42] Okay.

Chris Demetree: [00:07:42] But yeah, that’s—he was—that’s self-promotion on Anderson’s part, but, no, there was still a significant amount of wealth in her name. And she’s what? As you said, I can’t remember what generation, but she’s quite ways down the line.

Mike Blake: [00:08:00] Yes. She’s 5th. So, Anderson’s 6th. So, again, it’s the first learning point of the day. We know a little bit more about the Vanderbilts.

Chris Demetree: [00:08:10] Yeah, there we go.

Mike Blake: [00:08:10] So, we’ve talked a little bit about this offline. And I understand that you’re not necessarily involved in a family office, but I know you’re involved in some things that are family office-like or have some family office features. So, I think that there’s a lot that we can talk about and educate the listeners. But let’s start with the basic vocabulary starting point. To your mind, when somebody says family office to you, what does that mean?

Chris Demetree: [00:08:38] Well, a true family office, in my mind, is a—it is a family network that operates very similar to a venture capital fund or a family office that operates very similar to a private equity fund. The main difference is—and again, it goes back to what you were saying with regards to how high a profile these family offices typically try to keep, they don’t need to keep a high profile. The reason they don’t is because the LPs are the family; whereas, for private equity and venture, they do have to tout themselves and their successes to the marketplace because they’ve always got to go create that next fund to sustain their long-term viability. And that means attracting new LPs, in addition to the existing LP network that you had in your first or second fund for each one thereafter. So, that’s a big part of the difference. But when you think of family offices, again, I think of a family office working very much like venture or private equity. How it is structured is completely different, but the LP network is what I think separates it the most. Meaning, all family versus outside capital.

Mike Blake: [00:10:01] Okay. And so, to that end, yeah, let’s then kind of operate with that working definition that is a captive investment fund that just happens to belong to a group of people all with the same last name or, at least, DNA traits.

Chris Demetree: [00:10:17] Sure.

Mike Blake: [00:10:17] Does that mean then that the family office also then faces similar challenges in terms of deal flow and decision making, in terms of good deals versus bad deals, governance, things of that nature?

Chris Demetree: [00:10:32] Number of questions there. So, deal flow, I will tell you that the investment community around a family office. So, let’s take for instance here in Atlanta, if there are family offices here in Atlanta, typically, the investment community, whether that’d be private equity, venture capital, the accounting world, from a deal flow standpoint, will have a good sense of what that family office likes to look at. As far as types of deals, what their appetite may be for size of deals, whether they want to own a majority stake in the company, or they want to follow behind an investment group. So, deal flow, to me, is not quite the same as a private equity group, who’s out there looking at everything. They can be—the family offices have the tendency to see less deals but more targeted deals, if that makes sense.

Mike Blake: [00:11:36] It does. That gets back to the thing you mentioned, your definition then, the network is really a key defining trait of the family office, isn’t it?

Chris Demetree: [00:11:46] It is. It is as far as pre-screening deals. Unlike, I will call it a true venture group or venture capital group who wants to look at most every deal, because, again, that’s kind of their charter is to find, to look at everything, and know the marketplace, know everything going on in the marketplace, especially within its sectors. The family offices don’t have to do that because they’re typically invited in or invited to participate in deals, or they’re looking at something that may be a core expertise that they want to own the whole deal or a majority of the deal.

Mike Blake: [00:12:32] Okay, So, I sidetracked. So, so I won’t get back because I think-

Chris Demetree: [00:12:35] Oh, that’s right.

Mike Blake: [00:12:36] …you had mentioned another part, which is about governance. Do family offices and private equity funds face similar governance issues, or they wind up being very different?

Chris Demetree: [00:12:46] Again, it—and this is one man’s opinion, but I believe it’s just how they are structured. You can have some family offices that are operated literally by a majority of outside advisors and investment advisors, or you can have family offices that are run more by family members that are making investment decisions. I think a lot of that comes down to the capabilities of the individuals. And as I’ve said to you before, I think a lot of that comes down to what the generation that’s setting up the family office believes they have done to prepare the next generation to be able to do that themselves. They very much face similar types of issues when it comes up with regards to—I’m sorry, the success and failures of deals.

Mike Blake: [00:13:48] Okay.

Chris Demetree: [00:13:48] Depending on the profile or the mix of the investment strategy of a family office, whether it’d be outside investors or the family-managed investments. If they are looking at higher risk investments, then, again, at the end of the day, they’re going to have a very similar track record to that of a venture capital firm looking at early to growth capital type of investments. If the family office takes a more conservative role, and they’re only looking at what I call it [indiscernible] businesses, then I would expect to see a higher success rate. I can’t tell you whether or not it’s going to be higher rates of returns or not. That’s just—only time tells you that with your investments. But they’re subject to the same exact issues that a venture capital firm is doing.

Mike Blake: [00:14:47] Okay. So, I think you’re starting to answer this question already, but I want to hit it directly because, again, I think it’s an important question. So, I think when outsiders look at family offices, I think we tend to have an image of our mind of the playboy, the constant gallivanting around the world, the golfing, et cetera, et cetera. But you’re kind of painting a picture that’s much more of a business entity where you’re out there, and you’re actively doing—you’re working, you’re doing deals. The job is different, but it’s certainly a job, and one that has to be taken seriously. Is that a fair characterization?

Chris Demetree: [00:15:29] It’s absolutely. I mean, it is—yes. And that it is a job that has to be taken seriously. You are managing LPs money. It doesn’t matter if you’re managing your own money or if you’ve got advisors that are managing that capital for you. So, I mean, for true family offices, it is a business. And they hold themselves—and again, as I said to you, I mean, every one of them can be set up differently, but I know of a few family offices, and they hold themselves to very strict standards with regards to looking at all of their investments, looking at what their IRR is. Does it make sense to stay in this vertical? I mean, again, no different than how a business would be run. That is slightly different than how you preface the conversation by saying or the question by saying, “Some people think of a family office as a trust fund baby.”

Mike Blake: [00:16:35] Right.

Chris Demetree: [00:16:37] They’re out there. Absolutely, they are. It’s getting harder and harder to generate that type of wealth, although the dot com industry would tell you maybe not, or the Silicon Valley, but it’s getting tougher and tougher. But it’s the same—how do I say this? There may not be as many of those type of flamboyant playboys out there anymore. They don’t need to be. It seems to me that the entertainment industry is more than sufficient at providing us enough icons to follow that are gallivanting around and throwing money away.

Chris Demetree: [00:17:21] I think the family offices now—and again, this is just an opinion, but I think the participants try to keep a lower profile because you were exposed to so much more today with cell phone cameras and everything else going on in social media that the lower profile you can keep, the less you are going to be subjected to risks. And those risks comes in the form of lawsuits and that type of stuff. It’s just different. But it all goes back to what the founder or the creator of that family office thinks of the next generation or the next generation after that.

Mike Blake: [00:18:12] Now, most family offices, I think, are ultimately founded by the success of one core business. And even today, the Rockefeller zone, a stake in Exxon Mobile, and the Fords on a stake, and Ford Motor Company, although there’s a weird story behind that, they should own more, but they don’t.

Chris Demetree: [00:18:32] Right.

Mike Blake: [00:18:32] Mark Zuckerberg has his own family office now, and that still owns a big chunk of Facebook, even though it’s public. Is it your impression that most family offices, once the wealth gets organized in that way, do they tend to then start to branch out into other businesses?

Chris Demetree: [00:18:53] The diversification, absolutely. I mean, take, for instance, Mark Zuckerberg. Zuckerberg has no idea what the next generation is going to look like. And with—though, just an his age, I mean, he’s, what, 20 years younger than I am probably, and I’m not old yet, but he has no idea what it’s looking like. So, I think part of it is going to be transferring wealth generationally. That’s part of why you set up the family offices. Diversification is not only for his future generations, but for him. The old adage, “You never want all of your eggs in one basket,” even though you control that basket.” So, you may even drop it, but yeah. So, if you can diversify—and that is a way to do it and keep it in a structure that is not subject to the transfer taxes later. And again, as you said, he got a—he set up the foundation or the family office most with stock. Well, that affords him the ability to grow the value of that family office as he grows his core business. And that just allows him the chance to move more money into that tax-free.

Mike Blake: [00:20:28] Now, there are kind of different flavors of family offices out there. There’s the classic, sort of, single family office where everything is, sort of, captive. There’s the multi-family office where it’s kind of like a co-op or a fractional ownership of a jet. And then, they’re kind of even virtual family offices where there’s some certain family office characteristics, but it’s not necessarily formally organized that way. Are you aware of those distinctions? And are you in a position to maybe talk about maybe some of the pros and cons of those kind of flavors?

Chris Demetree: [00:21:10] Well, I mean, again, I can give you my opinion for whatever it worth. Every man has one, or every person has one nowadays. I apologize. I didn’t mean to sound that way. So, I am—when I think of a multi-family office, I think of a similar DNA that travels throughout that family office. The names of the players may be changed with regards to marriage and that type of stuff, but there is an inherent DNA that runs through all of them that traces back to the origin of the family office, I could be wrong. Again, I don’t call them family offices per se to know that many of them.

Chris Demetree: [00:22:04] I think of a true functioning family office as being one family. And then, I think there’s two flavors. And again, it goes back to something you taught me, which is that shirtsleeves-to-shirtsleeves. That’s not something I heard before. I do understand it. I didn’t know they put that name to that phenomenon of losing your wealth after two or three generations. I believe—and I hope I’m not rambling too much for you, but I believe that it goes back to what I said before, when you set up that family office or the originator, the titular head of the family sets it up, he or she has kind of made a decision in their own mind, I believe, of what they have done to prepare the next generation. And you have some that look at it and don’t believe they prepared them very well. And they structure that family office where it’s got to be managed by an outsider. The next generation needs adult supervision because they’re not capable of doing it themselves. Well, I will tell you that, for a different myriad of reasons, that goes back to—more times than not, it falls back to the person that’s setting that fund up.

Chris Demetree: [00:23:34] But as I’ve said to you before, we do not operate a formal family office, but I was also forced to work. We didn’t come from that kind of wealth. And my father’s attitude was even if he does create it, we were going to know—his kids were going to know how to work, all of us. The boys were stuck on construction sites, and the girls were typically stuck in the office. That was 30, 40, and in some cases, 50 years ago with my older siblings. So, that was just how they did it. That was his way of doing it, but he did prepare us. He taught us to work. And we were very fortunate as a family that we worked together. I worked with my brothers, and my sisters, and my dad on a daily basis, whether it was running our family development business or whether we were analyzing things to invest in.

Mike Blake: [00:24:41] Now, you said something I want to zero in on because I hadn’t thought of that, and I think that’s so insightful, which is the DNA. And as I interpret it, I know that there’s a biological DNA, but I think there’s also a philosophical DNA.

Chris Demetree: [00:24:55] Correct.

Mike Blake: [00:24:56] And getting into multi-family offices, and I hadn’t—frankly, I had not thought of this issue before. There are plenty of folks out there that offer multi-family office services, all the big wealth management firms, whether it’s Merrill Lynch, or UBS, or whoever, they offer that. And it’s like you want a family office, but maybe your wealth isn’t at that point where you can justify taking on all the overhead yourself, so you get that fractional approach. But then, it occurred to me that, what if the other people kind of in your—that they’re going to be invited into your condo, or in your campsite, don’t share the same values, don’t have the same needs, and short and long-term goals, that can probably very quickly become an awkward fit and hurt the success, really, of everybody involved.

Chris Demetree: [00:25:56] So, Michael, what I hear you describe in the way you’re asking that question or the way you’re kind of describing that scenario, what I hear or think of in my head is an LP network. So, when you talk about a Merrill Lynch that’s managing multiple family offices, I would look at those multiple family offices as limited partners that Merrill Lynch is providing the partner—the management piece of. But, again, each one of those family offices is going to have a—in this term a DNA, it’s going to be an investment strategy, and a theory, and a philosophy of what do they want from that investment. Is this high growth? Is it—do they want something that’s income producing? As I call it, mailbox money, where it’s slightly lower growth, but it’s 8% or 6%, whatever, they can count every year coming in that mail. You’re not going to cross-pollinate if you are the manager. And then, again, we’ll stick with your reference to Merrill Lynch. If Merrill Lynch is the one managing those multiple portfolios of family offices, Merrill Lynch is not going to cross-pollinate a growth family office with an income-oriented family office.

Mike Blake: [00:27:29] Right, or, at least, they shouldn’t.

Chris Demetree: [00:27:31] Or they won’t be managing the money long if they do.

Mike Blake: [00:27:34] Yeah, I would imagine that’s true. So, you touched on something I want to touch on. And I needed to ask this question delicately, and you’ll probably want to answer it very delicately, but it’s important. In terms of the management, the operative word in family office is family. And you mentioned that, sometimes, there are circumstances where it’s not appropriate for a family member to manage the family office. Maybe the people are just too young. Maybe they’re not cut out for it. Not everybody—even if you’re in a wealthy family, that doesn’t necessarily mean you’re good at business, you have any kind of aptitude for it. So, in your experience and what you’ve observed, how does that get kind of worked out? Do families kind of default to the eldest working-age person, or do you find that they go out and hire kind of professional management, or is it some mix of the two? Is it all over the board?

Chris Demetree: [00:28:42] I would—again, not speaking specifically for anything that I know. Again, just an opinion, but I believe it’s all over the board. There are a couple of key things that I have often thought I think are important in a family office. And when I talk about a family office, I think of it as a family that’s investing together, whether that’s formally or informally. When you speak of a true family office, that setup, that dynamic is a formal instrument that drives an organization, whether it’s an LLC, or LLP, or MLP, whatever it may be.

Chris Demetree: [00:29:33] But there are some things that, with an informal arrangement, there are some key things that have to be in place. Otherwise, an informal process doesn’t work. And then, one of the key ingredients is there’s got to be an inherent respect between the players that are sitting at the table, whether those players are all related through their biological DNA, or whether or not they are related both to DNA in operating agreement that says they need to be there. So, if there’s an advisor at the table, the family members need to respect that advisor.

Chris Demetree: [00:30:21] Secondarily, I think, for an informal office to work well, you have to understand that among the family members, there is a hierarchy. You do have older and younger siblings, And there’s a respect that should run regardless of—and, again, it’s just how I was raised. There’s a respect that runs through the family for your older and younger siblings. You look to the older one in a quick diversion, but I can—in my particular instance, I’m the youngest of five kids, and I remember it wasn’t long ago that I lost my dad. And, I was talking with my father before he passed away, and I looked at him, and I’ll never forget it.

Chris Demetree: [00:31:14] We were sitting outside talking. This was probably within a month of when he passed. We knew it was coming. And I said to him, “I’m not ready for you to go yet.” And he goes, “No, you’re going to be fine.” And he goes, “You’ve got your mom here. You’ve got your brothers.” I said, “No, but I’m not ready to be that next generation.” I said, “I’m used to having you.” And my point is we have that older generation to look for. When my father passed, yes, my mother is still part of that generation that is still there, who I still respect and looked to, but a lot of it reverts to my older brothers, my older sisters. I look to them. That is kind of our hierarchy. I’m comfortable of that. Some people might think I was crazy.

Chris Demetree: [00:32:08] And then the last piece, Michael, that I will touch on is in order for an informal office or family to work as a family office, you got to like being around each other, you got to like working together. It’s not just about making money, it’s about being together, and doing things together. When one succeeds, you all succeed, regardless of the degree of success. Everybody kind of does it together. So, that’s more of an informal process. A formal process, it’s all scripted out on paper. Here’s who’s going to make the decisions, here’s how they make the decisions, and that’s got to be decided by the creator of that family office.

Mike Blake: [00:32:59] I think that’s a great way to—I think it’s a great way to kind of finish it. I really appreciate you sharing that story. You can, sort of, hear a pin drop in the studio as we were listening to that. That’s powerful stuff. And I want to go back to something you and I had in a private conversation that I don’t think you’ll mind that I express is that you told me that if the first motivation is about the money, it’s never going to work.

Chris Demetree: [00:33:27] It will never work.

Mike Blake: [00:33:28] It’s got to be the relationships first.

Chris Demetree: [00:33:30] It will never-

Mike Blake: [00:33:30] The money is there but-

Chris Demetree: [00:33:31] Now, Michael, that’s not a family office. That’s life. That’s life. If your only motivation in life is money, you’ve got a long, long road ahead of you and a very sad life ahead of you. It’s not about that. It’s about your family and it’s about your faith. And you follow those two things—that was the core value my parents taught me. You follow those two things down life, and you will have not only a good life but a very successful life. The rest of it will fall into place, but you follow your family and your faith.

Mike Blake: [00:34:09] I can’t think of a better ending. So, I’m going to quit while we’re ahead.

Chris Demetree: [00:34:14] Yeah, because you never know what I could say after that.

Mike Blake: [00:34:16] Or me. I’m not going to add anything to that. So, that’s going to wrap it up for today’s program. I’d like to thank Chris Demetree so much for joining us and sharing his expertise with us. And do check out Lazlo as well. It’s a cool company, I think, we’ll be hearing more of in the future. We’ll be exploring a new topic each week. So, please tune in, so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy this podcast, please consider leaving a review with your favorite podcast aggregator. That helps people find us, so that we can help them. Once again, this is Mike Blake. Our sponsor’s Brady Ware & Company. And this has been the Decision Vision Podcast.

Inspiring Women, Episode 13: Building Up the Women Around You

by

Inspiring Women PodCast with Betty Collins
Inspiring Women PodCast with Betty Collins
Inspiring Women, Episode 13: Building Up the Women Around You
Loading
/

Building Up the Women Around You

On this edition of “Inspiring Women,” host Betty Collins addresses the imperative all women should take on to build up, encourage, and mentor other women around them. “Inspiring Women” is presented by Brady Ware & Company.

Betty Collins, CPA, Brady Ware & Company and Host of the “Inspiring Women” Podcast

Betty Collins, Brady Ware & Company

Betty Collins is the Office Lead for Brady Ware’s Columbus office and a Shareholder in the firm. Betty joined Brady Ware & Company in 2012 through a merger with Nipps, Brown, Collins & Associates. She started her career in public accounting in 1988. Betty is co-leader of the Long Term Care service team, which helps providers of services to Individuals with Intellectual and Developmental Disabilities and nursing centers establish effective operational models that also maximize available funding. She consults with other small businesses, helping them prosper with advice on general operations management, cash flow optimization, and tax minimization strategies.

In addition, Betty serves on the Board of Directors for Brady Ware and Company. She leads Brady Ware’s Women’s Initiative, a program designed to empower female employees, allowing them to tap into unique resources and unleash their full potential.  Betty helps her colleagues create a work/life balance while inspiring them to set and reach personal and professional goals. The Women’s Initiative promotes women-to-women business relationships for clients and holds an annual conference that supports women business owners, women leaders, and other women who want to succeed. Betty actively participates in women-oriented conferences through speaking engagements and board activity.

Betty is a member of the National Association of Women Business Owners (NAWBO) and she is the President-elect for the Columbus Chapter. Brady Ware also partners with the Women’s Small Business Accelerator (WSBA), an organization designed to help female business owners develop and implement a strong business strategy through education and mentorship, and Betty participates in their mentor match program. She is passionate about WSBA because she believes in their acceleration program and matching women with the right advisors to help them achieve their business ownership goals. Betty supports the WSBA and NAWBO because these organizations deliver resources that help other women-owned and managed businesses thrive.

Betty is a graduate of Mount Vernon Nazarene College, a member of the American Institute of Certified Public Accountants, and a member of the Ohio Society of Certified Public Accountants. Betty is also the Board Chairwoman for the Gahanna Area Chamber of Commerce, and she serves on the Board of the Community Improvement Corporation of Gahanna as Treasurer.

“Inspiring Women” Podcast Series

“Inspiring Women” is THE podcast that advances women toward economic, social and political achievement. The show is hosted by Betty Collins, CPA, and presented by Brady Ware and Company. Brady Ware is committed to empowering women to go their distance in the workplace and at home. Past episodes of “Inspiring Women” can be found here.

Show Transcript

[00:00:00] Well, this is an inspiring women’s podcast, so I would expect that the title today, building up the women around you would be a given, but it really is not always that case. I want to talk about that today. You know, building up and supporting the women in your life sounds easy. It sounds good. We all think that we do that. I don’t think anyone’s going to go. You know, I really don’t want to support women today. I don’t want to build women up. But unfortunately, it’s not the case when you look at the data that’s out there and the issues that are out there surrounding this topic of just lack of building up, in fact, tearing down can be fairly OK. Right. But it’s a huge barrier to the professional advancement, your professional career, you know, in your personal life when you don’t build up women around you and you don’t you don’t have that camaraderie. So, you know, sometimes we just think, well, women are more catty. Right. Men are not. Men blow it off. Their ego doesn’t allow them to do this. My emotions just get the best to me. And that’s just who I am. It’s probably still not OK. And this is always, you know, have you experienced that exodus of the Mean Girls Club? You know, I can honestly say I’ve never been a victim of I mean, Girls Club, but that’s not fun. And it’s not just in junior high, right? It’s it’s more than that.

[00:01:29] I just think we need to do better at building each other up if we really want to see us advancing, go forward. You know, we focus more on the men. You know, they’re not nice or they’re the with the white, a middle aged male. But in reality, they beat us on this one. And I think sometimes it’s why they rule the world. So I want to talk about that today. There’s a Facebook post. I see it a lot. I always save it. And it shows a woman with a crooked crown and it shows a woman straining the crown. And then it shows one of them ripping off her head. The sad reality, there’s a huge deficit that exists in the number of women who really are intentional or make it a goal to elevate other women. So, you know, it’s a choice and you hear the term we’re stronger together. Sure. Maybe corny, but you know, it really is true. It’s true for any type of community setting. It’s out there. Collectively, we have more impact. So isn’t that the goal anyways in the movement for women or inspiring those women around you? It is to have impact. If you really want to see the advancement and the empowerment of women, build them up. The them could be your family. It could be your girls. Your daughters. It could be your neighbors. You probably work with women that you need to do that.

[00:02:57] It could be your peers. I mean, you’re surrounded by other women, I’m sure. But men do a better job. I’m not going to focus on them today. The question is, why is this true? Why? Let’s start there. We’ve all been taught to be competitive. Competitive, good. You know, competitive is what is why we have a very successful marketplace in the United States. Competition can be good and healthy. It can make you better at what you do. But sometimes you get to look at there’s just as much strength and there’s miss just as much success in collaboration. Competition is fine. You just can’t take it too far. Collaboration is a good thing and you needed to probably shift a little bit your mindset with that. You know, we tend to have a defense mechanism. Women are really good about defense mechanisms and those kick in. And we have you know, it’s kind of a culture that we’ve created a lot of times. You know, we’re responding to something and we respond really negatively. And then we we go into a defense mechanism that that just keeps the the the tearing down and the lack of building. It just keeps it going. So I think the defense the defense mechanism is something you have to really check yourself on beyond defense mechanisms. And we’ve kind of had that competitive edge or attitude. We also have a queen bee mentality.

[00:04:29] The queen bee that’s everywhere. It’s really was was probably more in the back 70s and 80s with women, because that was when people. That was when women were really rising up in companies. And if you know anything about bees, the queen bee in the colony is the one who dominates. She is the one who takes control because that’s I guess what you have to do is bees. I don’t know, but there’s not a lot of room for anyone else but the queen bee. And unfortunately, a lot of times, especially in the years before us and 70s, 80s and 90s, if a woman was able to advance, say, in her career, she she was very protective of that territory because she was lucky to have it. And so that queen bee domination, maybe not taking other women with her, not having the elevator door open so they could come up. It just wasn’t there. I think it’s there a lot more probably today because there’s a lot more women at the top of the elevator. So but that usually the queen bee and undermine her, they push women out of the way. And unfortunately, that still exist. And then just negative thinking, you know, I think this is why we end up, you know, being a little little catty. We had to be the mean girls club. But the negative thinking. I mean, you heard this because it made the news over and over again.

[00:05:51] And Madeleine Albright with Hillary Clinton when she was at a campaign rally. It was. It was funny. I mean, there was no definite. But she gave her speech and she at the end said there’s just a special place in hell for women who do not vote for Hillary Clinton or support women. And it was funny. It made the news over and over again. So but but I don’t think she was wanting anyone in hell. But we don’t always have that positive. There’s a special place for women who support women in heaven, which is completely the opposite. Right. So between negative attitudes in those defense mechanism, the queen bee stuff. I just think we don’t build each other up like we could because of those habits, because of those cultures that get created. So where do you start? Where do you make this change? You have to look at at who you are in those areas. And do you have those characteristics? Are those things that you’re going. Yeah, I can relate to that because I probably am that. So that’s where you have to start. But you really have to take the high road and lead by example. You know, you just have to if you’re going to build up other women, you know, obviously the mentoring being very open and honest and consistent mentoring is not just, oh, it this is all really cool.

[00:07:03] You know, I’m going to mentor you and make you into something. Mentoring is helping you get along through your journey because it’s yours. It’s not someone else’s. And so when you have a good mentor, chances are they’re gonna be pretty open and honest with you about what they see. That’s not being catty. I think that’s helping you. I always feel sorry for the person in the office or maybe that family member, because we all have one. Right, that everyone just knows this is who they are. And so they kind of just let the behavior or let the situation be what it is. Nobody confronts it. Nobody talks to them. Instead, there be literally men and making fun of them. So a good mentor is gonna be that open, honest. They’re going to be constructive, yet have some compassion when they have to have those things. And I will tell you, this is a very simple thing, but it really it really had an impact on me. Oh, probably Billy in the early 2000s, maybe two between, you know, up to 2005, somewhere in that timeframe. I always wore the big 80s hair. I had just always worn the big hair. Not that hair is life and death. Right. But that’s what I did. And I liked it. It was easy. It was simple. My hairdresser was the same person all the time. So I got this new client who owned a salon.

[00:08:22] And I thought, you know, I should go to her salon, see what she has.

[00:08:26] And I think I had a massage and she said, you know, you really do you want us to cut your hair? And I said, Oh, no, I have a great hairdresser. She just said, you know. I must say, this is nice.

[00:08:37] Cambridge, you’re to live it in the 80s with your hair still and this is like the 2000s and there’s a thing called a straightener and you know, all these different things that you could do with your hair. And and I was a little taken back. I just, you know. But I was really kind of glad it stuck with me. She was somebody she said it very nicely. She wasn’t making fun of me. She wasn’t talking about coming back on was she’s not out of the 80s yet. Instead, she just said, hey, I’m a salon.

[00:09:03] I’m a hairdresser. We could do something really cool with your hair. And that’s a simple thing. But that’s what a good mentor does. So how else do you lead by example? You got to be tenacious when you’re tenacious.

[00:09:17] Other women around you, you don’t have to say it. Preach it. Have meetings, journal it. All these things they’re watching you. And by doing that, it’s giving them confidence and you don’t even know it. They’re seen you work through something. They’re seeing you not giving up. You’re busting through that roadblock and you’re showing them it can be done.

[00:09:36] Never underestimate the influence you will have by being tenacious. So that really helps build up the women around you because they they tend to watch it and then they hopefully follow it if it’s done well. You know, I think we can probably more some supportive, especially when someone’s wants to take a risk. So what does that mean? Well, I’m going to quit my really good job in the middle of pay. My kids are in college with tuition and I’m going to start a bracelet business. OK, now, is that a risk that you would just sit and go? Cool. I love your jewelry. Or would you say, Manolis? Let’s really talk about that before you do it. Great idea. But there’s a path probably you need to take. That’s a way you build up women so that a year from now, when they’re now borrowing money to go to school or they can’t keep their kid in school, they’re going, why did I ever do this? And there just might be a different time to make jewelry. So I think being supportive, especially when they won’t take risk, we need to help them navigate through it. And another thing you have to do, and I’m not very good at this because I don’t ever want to see people to see me with any kind of wrong emotion.

[00:10:54] I mean, I should call it wrong emotion. But, you know, I’m not a person who’s going to cry a lot in front of people. I’m not. You know, I don’t really want to go on a rampage and melt down in front of it. But sometimes you need a safe space to go. You need a place to go and just be who you can be, be who you are. Let those things down and then, you know, open the door and smile and walk out. I think women could do that more often instead of you blow up at the wrong time, in the wrong place. And then the tearing down and their ripping of the crown off the off the head comes along. The other thing you really need to do in a great way, but you better be ready to do it. You’ve got to pass on the lessons you’ve learned from bad treatment so that it doesn’t happen to other women and they can maybe be more aware of it. And lastly, be empathetic. You know, chances are other women are going through what you’re going through and come together, learn from it. But most certainly anyone around you that you see needs some advocacy for them.

[00:11:59] Go advocate for them. Stand for them. Be with them. You know, kind of defend them, do those things. Those are ways, certainly that you take the high road and you kind of get away from the wise. It happens that we act this way. These are ways that you can change the course of that circle, whether it’s your family or your community or somewhere you volunteer at your work, all that kind of stuff. When women come together, though, and build each other up and they can get that alliance that’s healthy. That alliance that’s positive. You’re going to experience power. There is power in the pact, right? There’s power in more. There’s power in numbers sometimes. It’s a good kind of power. Don’t abuse it. But that’s a result of leading the way in your circles of influences. You think on experiences you’ve had where other women have built you up? I could go on and on about this, but we have to continue to move on in the podcast. But you know who’s coming to your mind right now and you think that woman was a champion for me? That woman advocated for me. That woman really stepped up when I took a risk and she stayed with me.

[00:13:10] What woman straighten the crown for you versus ripped it off? You know, sometimes we just watched from a distance. The crowds, Kirk, and we don’t do anything about it. Right. But. I think you should look at those folks first and you thank them, you know. Think about that. Thank them. But also say me and I could also be that to other people, to other women, all the opportunities in the world are ours for the taking and ours to be shared in when building women up isn’t so much about your voice.

[00:13:41] It’s how you use your stage, it’s how you use your venue to encourage and support them so that they can find their voice.

[00:13:50] Brady, where’s my venue? And I have a responsibility to use that wisely, I try to do that through our women’s initiative, through supporting organizations like Navajo and the WNBA, using that venue wisely.

[00:14:05] How can you rise to the challenge? You keep it simple, don’t sit and think you had to have this big organizational thing and I’m going to, you know, help everyone and solve the world’s problems. Keep it simple, but take the opportunities and challenges those risk without even questioning your worth or ability or places a woman. And then don’t be afraid to be a little unruly. OK, I read a great article from Glamour magazine by Olivia Perez and she talks about being unruly. It’s OK. But listen. Just picture Thanksgiving dinner with this family. So she said I was genetically bred to be an unruly woman. I was raised in Los Angeles by a Jewish, French, Moroccan father and a Serbian mother, kind of in a Brady Bunch family, strong female figures, four sisters, two stepmothers, three godmothers and a mom, the mom who dedicate her life to bringing us all up as independent daughters. Just picture that things cute tender. These were all women I aspire to become. They they were ones who coexisted despite marriages, divorce, different backgrounds. They supported one another unconditionally. And they taught me that being soft spoken was maybe not always an option. Not at our dinner table anyways, for sure. But unruly can be good. Just say for building up other women, you know, really, that’s a whole nother podcast. But sometimes you need to be a little unruly and shake the pot, and that is a way to support women. I just found that and I just thought that was just a great way to describe her family and the people around her. And she probably uses it in a good way. But being a little unruly is OK. You know, other things you can do, though. You just show up every day for women and envision the change together with them. You know, see it together and work towards it. Certainly creating environments for women to take up space. All right. So what does that mean? Panels and conferences, events, interviews, girls night out. You know, really, it’s about thriving in their environment. What space is that that the women in your life would would really thrive in?

[00:16:20] I will say that my daughter, she gets some, you know, a little tired of hearing about my podcast because I wonder, listen. She gets kind of little tired about hearing about women’s initiative things. I mean, I’m always trying to get her to join in. But she did come to my conference in back in June, the Women’s Leadership Conference, which we had about 350 women. We had panels, we had national speakers, Navajo and WBA. We all just came together, put this conference ago and she came. And she was just it wasn’t even so much that I bribed her with new clothes to be there and said she could have a great time together. Night feeder. Well. Right.

[00:16:57] But she loved that she saw me thriving in an environment that I loved. And she she wrote on Facebook that night. I get it now. I saw it today. And that was just that was the whole. That was the best part of that conference for me. It was because it inspired her in a different way. But she was like, Mom, that’s where you belong.

[00:17:20] And that’s what I’m talking about. We’re creating space. What are environments for the women around you and your lives that would make them thrive or where you see them thrive and you’re like supporting them. And so it was a cool story. You know, other ways besides being alone, really, which I kind of like that whole phrase, be transparent and open. Do you understand that secrecy breeds jealousy? I want you to think about that again. Secrecy breeds jealousy. And that then leads to what I now call head trash. I got that from a conference that I was just. You know, those voices that head trash man being a little more open, being a little more transparent. Women tend to take it and run in secrecy, just turns into jealousy and then those voices in your head. So think about that. When you see when you see a women who are tearing each other down, chances are that could be a real way it all started.

[00:18:16] Here’s one. This is the challenge of the day. You’ll probably go right by this one. But zero gossip policy. Try that one. It’s hard sometimes if you just test right down every time you’re gossiping or take a little, you know, checkmark. There we go. You’d be surprised. I did it once because I was in a class on negativity. And that was one of the things we had to do. Every time you have mental negative thought, you had a checkmark. Every time you gossip or put someone down your check mark. You would be surprised. And it did kind of make me go, oh, it’s kind of like tracking your steps on fit, but you’re like, I’m not walking today. Right. It just just a suggestion. I know it’s not easy. You got to go beyond. You look really pretty, right?

[00:18:54] Women are so much more than their physical attributes. And we have a whole society built on that. But I would tell you to encourage women to to take care of themselves and do self care. The emotional part of your life is huge. And I kind of did that post divorce. I said these are the things I’m going to do for Betty Collins. And I sat down with The New York Times. I only ordered like three months of it because it was I don’t know why I needed to read The New York Times, but I did. I just did that for an hour on Sundays with no interruption. And once I was kind of done, I moved on. But it was something that I I it was my time. It was my place. So I think that’s something you have to look at and do. I know I just spent this last year really involved with physical activity and and weight loss. It was not because I wanted to be a size 2. I just knew that I have pretty good health for a 56 year old. And yet I’m not treating the gift like I need to because it’s a gift. I have a lot of people around me and my age who we’ve had people pass away. We’ve had people with cancer. We’ve had people who, you know, just can’t control certain addictions. I don’t have any of that. I don’t even take any of her blood pressure, heart medicine, nothing.

[00:20:07] Why would I not take care of the gift that I’ve been given into her? What’s been weird is not the size, too. It’s just I’m I’m feeling better. And it’s kind of my time. I’m not rushing out the door every morning because I’m I’m doing some workout stuff that’s not crazy. I’m not putting my toe over my head and, you know, wrapping myself up like a pretzel. I would tell you, self care go beyond that. You look pretty stuff being a vehicle that turns a young woman with big dreams into what she was destined to be. You know, you see people with potential and you don’t do anything about it. But I would tell you, never underestimate tapping into that woman’s potential that she can’t see. But you do even this podcast. I question myself, should I keep doing this podcast? And the people that help me record this always say you have no idea what the potential this has. You need to keep going. You need to keep doing. Again, women building up women. Sounds easy, sounds good. It is my hope that you can step back, observe and dive in by speaking life into a woman around you. Doing life together stronger, together with some fun along the way in my life. I have an amazing mom, a big family, 41 to be exact as my immediate family, lots of women. I have a daughter and a daughter law.

[00:21:23] I work for a company where I direct a women’s initiative where 49 percent of the workforce are women. I’m part of several groups. I mentioned Navajo and the WNBA. So women in teh team building are a pretty daily part of my life. Really, it’s a responsibility and it’s a deep passion. I’ve seen both sides building and tearing. We are better together. Ladies, take to heart this podcast. Do some soul searching on your part of building up other women. Go forth and straighten or pick it off the floor. The ground she is wearing. Don’t stand in the background and watch it. I’m Betty Collins and I’m glad you joined me today.

Decision Vision Episode 30: Should I Implement a Sustainability Program in My Business? – An Interview with Troy von Otnott, Massive Technologies

by

Decision Vision
Decision Vision
Decision Vision Episode 30: Should I Implement a Sustainability Program in My Business? – An Interview with Troy von Otnott, Massive Technologies
Loading
/

Mike Blake and Troy von Otnott

Decision Vision Episode 30:  Should I Implement a Sustainability Program in My Business? – An Interview with Troy von Otnott, Massive Technologies

How do I start a corporate sustainability program at my company? What do the insurance markets reveal about the necessity of a sustainability program for my business? The answers to these questions and more are covered by Troy von Otnott, Massive Technologies, in this important discussion with host Mike Blake. “Decision Vision” is presented by Brady Ware & Company.

Troy von Otnott, Massive Technologies

Troy von Otnott

Troy von Otnott is the CEO of Massive Technologies, a clean technology and sustainability consulting company in Atlanta, Georgia. Massive is currently pursuing business opportunities in commercial/industrial solar asset financing and deployment in Puerto Rico, development of graphene-enhanced ballistic products for the U.S. and Canadian militaries, and is currently consulting with a major Chinese investment bank on a strategic plan to significantly reduce China’s carbon emissions and pollution by helping to transition some of  their electric generation assets from coal to cleaner burning natural gas.

For more information, you can email Troy directly.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn:  https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript

Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions, brought to you by Brady Ware & Company. Brady Ware is a regional full-service accounting advisory board that helps businesses and entrepreneurs make vision a reality.

Mike Blake: [00:00:20] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts about how they would recommend thinking about that decision.

Mike Blake: [00:00:37] My name is Mike Blake, and I’m your host for today’s program. I’m a Director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia, which is where we are recording today. Brady Ware is sponsoring this podcast? If you like this podcast, please subscribe on your favorite podcast aggregator. And please also consider leaving a review of the podcast as well.

Mike Blake: [00:01:01] So, our topic today is sustainability programs. And whether the issue or the conversation has revolved specifically around global climate change, whether it has been around local pollution, whether it’s been about economic sustainability and recycling materials, whether it’s been about land conservation, some elements of the environmental movement and, by extension, sustainability, I think, is in everybody’s corporat⁠e⁠—everybody’s consciousness.

Mike Blake: [00:01:35] And maybe it’s considered polarizing, maybe it’s not, but it’s not something that nobody has an opinion on. And there’s a sense that companies have⁠⁠—at a minimum, all companies have an opportunity to be constructive in terms of environmental sustainability, and how they impact the environment, and what their footprint looks like, and are they reinvesting back what they’re taking out of the environment to conduct their commerce?

Mike Blake: [00:02:03] And then, I think where there’s a disconnect is, what is the obligation of the corporation to, somehow, either ameliorate the impact that they themselves have on the environment, or even to be a net positive contributor to the environment, even beyond whatever impact that they have? And I don’t think it’s fair to say there’s a right or wrong answer to the question. But if you’re a business leader, you’re faced with the question of, should we be doing something to be promoting the environmental, ecological sustainability of our business? Should we be doing more than we’re already doing? Or in some cases, are we doing too much? Should we be scaling it back? Because there can be a cost to this, at least, in the short term.

Mike Blake: [00:02:50] And that’s particularly noteworthy in the public markets where the public markets reward investors. Frankly, they reward managers based on short-term metrics and short-term gains much more than they do long-term metrics and long-term gains. And so, to some extent, there actually can be a fundamental financial and economic disconnect that maybe, otherwise, prevents some behavior that managers, in fact, would like to do but, somehow, feel constrained.

Mike Blake: [00:03:23] And so, the decision really that’s, then, put before us as business leaders is, should we be thinking about the environment more? Should we be thinking about the environment around us, not just as a publicity exercise, but is this something that we can and should be building into our business plan? And most importantly, we’re often told that there’s a palpable cost, there’s a tradeoff that, well, you can plant some trees, you can save a polar bear, you can help rising sea levels, but this is going to cost you something to do that. And maybe we’re going to challenge a little bit of that perception today or maybe we’re going to confirm it. And that’s about as much as I know. So, I’m going to stop talking about that myself and bring on our guest.

Mike Blake: [00:04:12] I’m very pleased to introduce Troy von Otnott. Troy is the CEO of Massive Technologies, a clean technology and sustainability consulting company here in Atlanta, Georgia. Massive Technologies serves as a consultant to renewable energy and sustainability-focused companies. The company also facilitates sustainable mineral and fuel commodity transactions on behalf of a large Chinese investment bank, helping to mitigate their pollution and climate change challenges, which we know are myriad. And we probably don’t know the full story because they’re not exactly the most transparent country in the world when it comes to their own issues. Troy is also the ambassador for Cleantech Open, a national nonprofit program that encourages entrepreneurs to develop technologies to address environmental sustainability challenges. Troy, welcome to the program. Thanks so much for coming on.

Troy von Otnott: [00:05:02] It’s great to see you, Mike.

Mike Blake: [00:05:04] So, we almost missed the podcast because we are talking so much before the podcast. You got so many interesting things to talk about. And I’m going to dive right into what was a fascinating backstory that I did not know. How did you become engaged as you have been with the sustainability? This is not something you necessarily grew up from as a kid thing thinking, “I’ve got a—this is my thing,” right?

Troy von Otnott: [00:05:27] No, not at all. In fact, I’m from New Orleans. And as you know, Louisiana is one of the largest oil and gas production states in America and a petrochemical production center as well. And so, being an environmentalist in Louisiana is kind of weird, and you’re thought of as a bit of an outlier.

Mike Blake: [00:05:50] Small club, right?

Troy von Otnott: [00:05:51] Yeah. And so, it’s not something that I ever thought about being involved in. In most of my adult life, as I was mentioning before the podcast began, I spent most my life doing event production. New Orleans produces a lot of events, and I was enjoying that career. But in 2005, my world and all my fellow citizens in New Orleans worlds changed due to the impacts of Hurricane Katrina. And we lost a lot. We lost over 2000 lives, billions of dollars of property value. And I, personally, lost an entire career.

Troy von Otnott: [00:06:34] And so, it was at that moment that it made me start to reflect and think about why was this particular storm more damaging, more impactful than others. And after doing a substantial amount of research, I started to understand a little bit more about global climate change and felt like I needed to direct my talents and my skills to try to play a small role and do something to have an impact and try to rebuild the city in a more sustainable way.

Mike Blake: [00:07:09] And I mean, it really was a much more impactful storm because let’s face it, New Orleans gets hurricanes, right? I imagine—I don’t know, I grew up in Boston, we got one hurricane every 20 years, and it’s a category one. I imagine, New Orleans, wake me when it’s a Category IV, and then I’ll start to get excited.

Troy von Otnott: [00:07:26] Absolutely. The complacency for Hurricane Katrina was staggering. In fact, on a personal basis, my sister, and my niece, and nephew were very complacent. And as much as I had a bad feeling about this one and begged them to leave with me, they decided to stay. And for about two weeks after the storm landed, they were lost, lost in the system. And I thought they were dead because the ranch home that they were living in, in a suburb of New Orleans, had about three feet of water over its roofline. And fortunately, they were able to swim to the only two story home on their street and were rescued by helicopters. You probably remember those images from television.

Troy von Otnott: [00:08:08] So, it was, personally, a devastating experience and literally made me just want to completely change gears, switched direction, and try to see if I can add value to figuring out solutions, and become a part of the solution, instead a part of the problem.

Mike Blake: [00:08:26] So, I’ll interject. They said that humor is tragedy plus timing. We’re talking about this before. And I thought I was in Connecticut when this happened. I was not. We, actually, just moved to Atlanta. And when Katrina happened, it occurred at the same time as Dragon Con happened. And I remember being at Dragon Con. For those of you not in Atlanta, that’s basically our Comic Con. So, if you’re into dressing up as a Wookie, Dragon Con is for you, right, Labor Day weekend. And I was actually in a bar. I was not in costume. I don’t do that. But there are actually a couple of folks that had fled the city. And I was sitting next to this guy and he was—we’re watching on TV as they’re doing—just as you said, they’re pulling people out.

Mike Blake: [00:09:10] And here’s a guy whose life is completely uprooted. He’s watching it being uprooted in real time. And in the background behind him, there are storm troopers. There are people in Star Trek uniforms, Battlestar Galactica, Japanese Anime, everything you can possibly imagine. I’m thinking, “Boy, this poor guy next to me must think he cannot catch a break in any—” Either that or he thinks he actually fell asleep somewhere on the road, and he’s still dreaming. It’s a very odd juxtaposition. So, you-

Troy von Otnott: [00:09:44] By the way, not quite as odd as you being an esteemed accountant by day, father of dragons by night, so.

Mike Blake: [00:09:48] There you go, there you go. So, you had the shift, It made a huge impact on you. And was your family okay by the way? I didn’t ask you about that.

Troy von Otnott: [00:10:01] Yeah. Everyone survived. And lost property, but property can be replaced. In fact, that’s exactly what the first thing I did is I started working with the local city planning commission to work on building code improvements because we needed to build structures that we’re going to be able to sustain a Category IV or Category V storm. We don’t have a lot of those structures in New Orleans. We’ve got 150-year-old structures that, actually, did survive the wind loads from the storm but didn’t survive being submerged in 12 feet of water for two to three weeks.

Troy von Otnott: [00:10:34] So, I started building sustainable housing. We created a modular home company and was very successful. And ironically, I wanted to try to build a highly efficient and energy-efficient home. And we accomplished that after a couple of iterations working with our manufacturer. But I got to a point where I couldn’t make the home any more energy-efficient without adding some form of renewable energy. And so, I started doing some research and looking for a solar energy company. And lo and behold, there was not one in the entire state.

Troy von Otnott: [00:11:12] So, I started researching why that was the case. Why is California, why is New York and Northeast leading in the early stages of solar energy development, but we weren’t? I mean, we’re an energy production state, but we’re producing fossil fuels, not clean energy, and that didn’t make any sense to me. So, I worked with a group of of caring and passionate environmentalists, and we actually drafted a bill, which was a Louisiana renewable energy tax credit bill. And when I say we had no idea what we were doing, we really didn’t know what we were doing. But we were bull in China cabinets, and we were just committed to getting it done. And at the end of the day, at the next legislative session, we wound up passing a clean energy bill that in recent memory, none of the politicians could remember when a bill actually passed unanimously in the state legislature. They thought it was like a unicorn, it didn’t exist.

Troy von Otnott: [00:12:10] And so, I remember getting a call from the governor’s office after the bill passed, and they said, “Well, look, you’re the lead guy working on this bill. You need to come to the State Treasurer and meet with him.” And I said, “What did I do?” And he’s like, “Well, you need to tell the government how much money this tax bill is going to cost our state treasury.” And I literally said, “I have no idea.” And they’re like, “Well, you better figure it out because you did this bill.”

Troy von Otnott: [00:12:34] So, I go to the State Treasurer’s office two days later and they said, “Okay, how many individuals, or homeowners are likely to put solar panels on their house?” And I just kind of came up with a number and literally out of the air. And the guy was writing on a notepad, and he’s like, “Okay, so, that is equivalent to about $500,000. Does that sound right?” I said, “It sounds great to me.” And so, he’s like boom, stamp, “It’s good. Governor will sign it tomorrow.” I’m like, “Does this really happen?” And he’s like, “Yeah, it’s happening.”

Troy von Otnott: [00:13:06] And so, two days later, after the governor signed it, I get a phone call. It was from a 303 area code, and it was a guy named Shane. And he’s like, “Hey, are you the guy that did the renewable energy tax credit bill?” And I was like, “Yeah.” And I was like, “Did I do something wrong?” He’s like, “No, you did something extraordinary.” I was like, “What do you mean?” He goes, “Do you know you passed the most aggressive state tax credit in the United States for renewable energy?” I said, “I did?” He’s like, “Yeah. California has about a 10% tax credit. You have a 50% tax credit. How did you do that?” I was like, “I don’t know.” He said, “What business are you in?” I’m like, “I build energy-efficient houses.” He’s like, “You’re not in that business anymore.” I said, “I’m not?” He said, “No.” I’m like, “What business am I in.” He says, “You’re in the solar business now. I’m coming to see you tomorrow.” And I was like, “Okay.”

Troy von Otnott: [00:14:00] Guy gets on a plane, comes and meet me at the local hotel on Canal Street. And after about six hours, he said, “Hey, I’m with a company called SunPower. We’re one of the biggest brands of solar panels in the world. And you’re now our partner in Louisiana.” And literally, within a week, we formed a company called South Coast Solar. And within about six months, it went from me, my old friend, Tucker Crawford, and a solar expert named Scott Oman, and a part time accountant operating in my friend’s second bedroom to a downtown office with about 10 employees and about $3 to $4 million in sales.

Troy von Otnott: [00:14:36] And within two years, we became the largest clean energy company in the southeast. And it was a really interesting and wild ride. And we got indoctrinated into the national scene because people were just so excited to see someone outside of California or the Northeast actually develop a sustainable clean energy business industry. And so, we’re really proud of what we did with South Coast Solar.

Mike Blake: [00:15:00] So, that segues perfectly to the next question, and that is that especially here in the southeast, red state haven, there’s a perception and, really, I think, kind of a knee jerk reaction about when you say sustainability, you’re kind of bracing yourself for pushback, argument, lots of questions. I mean, as it turns out, I drive electric. And I still I remember one of the first times I drove outside of Atlanta, I went to a hotel. That’s where there’s a place to to plug in my car. They said no, but they said no in a way that their eyes said comrade at the end, right. Go back to Russia basically.

Troy von Otnott: [00:15:45] Right.

Mike Blake: [00:15:45] And I think we still—I still think we face a lot of that in certain sectors. And I got to imagine you face some of that in Louisiana, right? Especially a fossil fuel state. Talk about entrenched interests.

Troy von Otnott: [00:15:56] You know, it’s funny. I had a very close friend who was actually the CEO of of Entergy, which is the dominant energy company in New Orleans. And this is a friend that used to sit on my sofa and play Madden football with me. And so, now he’s running the biggest utility company in the south at that time. And he said, “Hey, I’m supportive of what you’re doing. I want you to know that.” He goes, “But you guys have got to get your cost in line because solar is way too expensive, and we can’t buy any of it.”

Troy von Otnott: [00:16:27] Well, flash forward 13 years later, and they’re still singing that same tune, right? So, it’s—and ironically, what’s happened in Georgia, regarding Georgia Power and Southern Company, is when I first moved here in 2010, they were not very supportive of the solar energy industry. In fact, it almost felt like they were running disinformation campaigns to suggest that clean energy doesn’t even work in Georgia. But at the end of the day, what all these utilities come to the realization is they have an obligation to their ratepayers to buy the cheapest form of energy that offers the most stability and that their ratepayers desire, right? Those are the three things. But number one is cost, right?

Troy von Otnott: [00:17:16] So, in 2018, solar is, by far, the cheapest energy outside of coal, natural gas, nuclear. It blows them all away. The only thing that’s cheaper than that is wind, but we don’t have a lot of onshore wind in this part of the country. So, now, even though Georgia is not a renewable portfolio state, there’s no mandate by the government to do this, Georgia Power, with the help of the Public Utility Commission, winds up buying a substantial amount of solar. We have a problem, it’s a problem, but it’s also a blessing that Atlanta is called a city in the forest because there’s so much tree cover that it’s almost impossible to find a home that’s not surrounded by 40 or 50-foot pine trees, right?

Mike Blake: [00:17:59] Right.

Troy von Otnott: [00:18:00] And so, you can’t get a direct line to the sun. So, you have massive shading issues everywhere. So, while there is very little residential solar in the market, in fact, I think in the entire state, only 40 homes last year put solar on their houses-

Mike Blake: [00:18:14] Okay.

Troy von Otnott: [00:18:14] … but utility scale solar has taken off. In fact, I helped Georgia Power put together a construction team to build 17 solar farms just last year. So, the fact is that they are now moving towards greening their own grid. And they’re doing it, not because it’s green, not because it’s sustainable, because it’s the lowest form of stable energy that they can offer the ratepayers.

Mike Blake: [00:18:43] And I’m curious, have they crossed the 1 gigawatt of capacity yet, solar?

Troy von Otnott: [00:18:48] They have.

Mike Blake: [00:18:48] Okay.

Troy von Otnott: [00:18:49] Yeah. In fact, the PUC just put out a new directive for them to buy, I think, another 1.6 gigawatts-

Mike Blake: [00:18:56] Okay.

Troy von Otnott: [00:18:56] … over the next few years. So, while that’s a decent amount of clean energy, I mean, it pales in comparison to what’s happening in California, pales what’s happening up in the Northeast. But it’s so much better than what it was five, six, seven years ago, right? So, at the end of the day, if you pull the ratepayers and ask them, “What form of energy do you want coming into your home or your business?” 80% of them will say, “Give me the clean stuff, right. I don’t want the coal because I don’t want my kid suffering from asthma.”.

Mike Blake: [00:19:31] Right.

Troy von Otnott: [00:19:32] Natural gas, that’s better. It’s a transition. It’s a bridge fuel. Let’s do that because we don’t want to have coal. The nuclear is just so expensive. It’s almost impossible to get a plant up and operating. And then, talk about annual maintenance and then decommissioning, which never gets into the economic model, which is kind of crazy to me.

Troy von Otnott: [00:19:50] But at the end of the day, cities and states are taking lead in the clean energy transformation. And there’s over 125 cities in the United States now that have mandated 100% clean energy sometime between 2035 and 2050. So, it’s coming, and it’s coming a lot faster than most people ever thought it would. ***

Mike Blake: [00:20:12] So, you bring up an interesting point. And I think, if I had asked this question five years ago, the answer would have been very different. What percentage of the sustainability program question now is being driven purely by economics, where it’s a more manifestly positive business case as opposed to, for whatever reason, we feel it’s the right thing to do case?

Troy von Otnott: [00:20:37] I would say 100% of it is, because at the end of the day, the definition of sustainability is having a business that will be around, right?

Mike Blake: [00:20:47] Yeah.

Troy von Otnott: [00:20:47] And so, what sustainability, ultimately, means is driving down cost of your operation, right? And so, when you talk about greening your supply chain, or you’re talking about more efficient lighting, or you’re talking about clean energy, all of those things have a return on investment, right?

Troy von Otnott: [00:21:05] So, at the end of the day, in order to be sustainable it means, you have to be able to turn a profit. And the only way you can turn a profit is to manage your operational cost. And everything that happens, whether you’re recycling, reusing, using smarter forms of energy, more efficient forms of energy, dealing with your waste issues in a more sustainable way, it’s all about saving money. And almost every single sustainability officer at any smaller, or midsize, or even large corporations here in Atlanta will tell you, this is not about politics. This is not about green versus red. This is about being green to make green. And so, if you think about it from that standpoint, everyone should be doing it because if you don’t manage to be profitable, you’re not going to be around to even have this discussion later on down the road.

Mike Blake: [00:22:01] So, I want to go to the flip side now. As I mentioned, we’re in a red state, there are a lot of red states around us. And you and I are roughly the same age. I was not a voting age when Jimmy Carter was president, but I do remember the whole sweater thing, turn the thermostat down, the 55-mile-an-hour speed limits and so forth. But that is because we just couldn’t buy the oil we wanted, right?

Troy von Otnott: [00:22:26] Sure.

Mike Blake: [00:22:26] It was scarcely there. And everybody mocked the solar panels on top of the White House. The first thing Ronald Reagan did was take it down-

Troy von Otnott: [00:22:32] Take it down.

Mike Blake: [00:22:33] … supposedly.

Troy von Otnott: [00:22:36] Yeah.

Mike Blake: [00:22:36] In a conservative environment, has the risk of stigmatizing yourself by being seen as too green, and hippie, and whatnot, is that no longer a concern? Is that sort of an old stereotype that’s gone by the wayside, or is that something that somebody needs to really kind of think about depending on what business they’re in and where they do it?

Troy von Otnott: [00:22:55] So, that question is interesting. And I think you get different answers from different people, right. If you talk to people in our age range, they probably are not as educated about these issues. But if you think in terms of the current generation of workers coming into the workforce, the millennials, the millennials care about this more than anything. They care about the environment more than anything because they are the ones that are going to be living in a completely different environment as they age, right.

Troy von Otnott: [00:23:29] I mean, you can have a political discussion, I guess, to some extent, about whether climate changes are anthropogenic or manmade, right? You can have that conversation if you want to. But at the end of the day, you cannot refute that the climate is changing and that it’s affecting agriculture, it’s affecting refugees, right. It’s affecting access to clean water. It’s affecting transportation systems. It’s affecting our entire global ecosystem, right. So-

Mike Blake: [00:24:01] And public health.

Troy von Otnott: [00:24:01] And public health. Public health is a really big issue that really people should be focusing on, but they don’t. I was just reading an article yesterday that I don’t know how many people died in Japan last week because of the heat wave, but it’s almost unsustainable. And so, if you think about—if you’re developing a workforce, and let’s just say you’re Coca-Cola, and you’re hiring millennials, they care about your environmental and social governance more than any other generation because they’re the ones that are going to have to deal with the ramifications of a changing climate.

Troy von Otnott: [00:24:38] So, if you don’t speak that language, and you don’t address their issues, the next company will. And so, it’s a recruiting issue more than anything. You’re not going to get the best of the best unless you are being environmentally and socially responsible, not just from a greenwashing standpoint, but this is a core tenet of who we are and what we are as a company.

Mike Blake: [00:24:59] And greenwashing is what?

Troy von Otnott: [00:25:00] I mean, greenwashing is a company saying that we’re doing all these amazing, wonderful, green things. But at the end of the day, it’s more of a PR campaign than it is an actual programmatic impact that the corporation is having to the bottom line, right. So, you can—Coca-Cola, actually, got pinged on this in the last few years, where they were making assertions in the global media that they were addressing water shortage issues or water quality issues all over the world. And when it came down to a lot of third-party independent organizations that are charged with understanding water scarcity issues, they realized that those issues haven’t been affected at all, and they haven’t changed their policies and their procedures to really ensure that there’s not an overuse of water in their respective markets where they’re operating their bottling facility.

Troy von Otnott: [00:26:00] So, they took that very seriously and said, “We cannot be looked upon in the world as a company that says what they’re doing and not do what they’re doing,” right? So, that’s what really greenwashing is. It’s just sort of a PR campaign to say we’re green just because it makes everybody feel good, but you can’t sit down and put your your corporate sustainability report out and have confirmed metrics by a reputable third-party organization.

Mike Blake: [00:26:28] Now, you touched on something that harkens back to a conversation we had before we hit the record button that I want to come back to, which is it’s not just about millennials anymore either. The capital markets are now paying a lot of attention to this. I read an article recently where I think something like 78% of Wall Street analysts now are factoring in the impact of climate change-

Troy von Otnott: [00:26:49] Absolutely.

Mike Blake: [00:26:51] … in their valuation models.

Troy von Otnott: [00:26:52] But you know why?

Mike Blake: [00:26:55] I may or may not. Tell me.

Troy von Otnott: [00:26:56] Because of the global insurance market, right? I mean, insurance drives everything, right? And if you can’t insure a business, there is no business. And so, the insurance markets are basically saying, “Hey, this climate change thing is real. It’s now. It’s not something that’s coming 10, 20, 30 years from now. We’re experiencing impacts of it right now. And if we don’t start addressing this issue, we’re not going to be able to insure businesses. And if we can’t insure a business, they cannot operate.”

Troy von Otnott: [00:27:26] But you mentioned financial aspects of this whole industry. And we talked briefly about this part of this—part at the start of the podcast. But, you take an organization like BlackRock, right? I think they’re the largest financial management company in the world. They have several trillion dollars under management. Their CEO last year, Larry Fink, put out a directive to all of their associates globally and said, “You guys better start taking environmental social governance seriously. And if you don’t, and you don’t have verifiable third-party validation of what you’re doing regarding ESG, you’re highly likely not going to get capital from us again.”

Troy von Otnott: [00:28:05] And it’s weird because BlackRock still funds coal plants, and they still fund natural gas, and they still fund oil and gas. And so, you can’t just turn on a dime, right? This is a battleship. It takes a very slow curve to change direction. But when it comes top down from the CEO saying, “You guys better take this seriously, or you’re not going to get capital,” I don’t care how big of a company you are. Apple has probably more cash than anybody in the world and are constantly borrowing money because debt is cheap. They don’t want to use their own capital when they can get 2% money from the bond market.

Mike Blake: [00:28:38] Sure.

Troy von Otnott: [00:28:38] Well, you’re not going to get that bond market money if you don’t have a serious commitment, a verifiable commitment to environmental and social governance all throughout your organization.

Mike Blake: [00:28:49] And part of that goes back to the insurability. You’re not going to get 2% money-

Troy von Otnott: [00:28:55] No way.

Mike Blake: [00:28:55] … if you’re not insured.

Troy von Otnott: [00:28:56] No way.

Mike Blake: [00:28:56] Right? You suddenly go from a-

Troy von Otnott: [00:28:59] Well, you can’t even operate.

Mike Blake: [00:28:59] Right.

Troy von Otnott: [00:28:59] You cannot operate. I mean, I was working on a new business model just last year trying to help Native American tribes do some interesting things that their laws, their sovereignty allows them to do. And unfortunately, we could not get the tribe insured. And we dealt with the top 17 global insurance. I mean, all the big names in the world. And every single one of them, over the course of a year, said, “No, we cannot give you a policy.” And therefore, there was no business. So, I have firsthand experience knowing that if you cannot get insurance, you cannot operate a business.

Mike Blake: [00:29:39] So, let’s say we want to think about setting up a sustainability program for our company for the first time. We often hear that some companies—that companies have a chief sustainability officer or one individual that, at least, ostensibly answers for all these sustainability initiatives. Is that a requisite? Is it such a distinct skill set that even if I’m a small company I, kind of, just going to bite the bullet and hire that? Or are there companies that have successfully rolled that portfolio into other responsibilities that already exist?

Troy von Otnott: [00:30:08] I mean, I think it depends on the size of the company, right. So, if you’re planning on putting out a corporate sustainability report, you’re going to need a CSO. But if you’re just a small to mid-sized business, there are really simple things that every business can do. I mean, really simple things like, reduce your energy load, right. I mean, the cheapest and easiest thing to do is to address your lighting in your building, right. And the technologies are so far advanced now and the short payback period is ridiculously low. I mean, any kind of a major LED lighting conversion in a small office like this or a manufacturing facility, two-year ROI max. A lot of them are coming in at one year. And so, if you can’t fund something on a one-year ROI basis, you’re in the wrong business.

Mike Blake: [00:30:56] Right, right.

Troy von Otnott: [00:30:57] So, there are things you can do to address your supply chain. There’s things you can do to address your waste material resources. There are things you can do to to address more sustainable transportation. I mean, there are many simple things that can be done. You don’t have to have a very complex program. But what I’ve learned in talking to companies and students all over the south over the last couple of years about this issue is, they want to be involved, and they want to be engaged, right.

Troy von Otnott: [00:31:26] So, it’s kind of a—I relate this, not on a really appropriate couple basis, but if you think about XPRIZE, right. XPRIZE does these really interesting challenges, whether they’re medical, whether they’re lunar landings, whether they’re clean energy or clean water, but they create competitions, right? And people like to compete. It’s the very nature of who we are. We always compete with each other.

Troy von Otnott: [00:31:52] And so, smart companies create these little, sort of, sustainability competitions, and they create real incentives and real rewards. So, whoever wins, I’m the most sustainable employee in my group for the first quarter, guess what? I get a trip, and I get to go to Cancun, and lay on the beach for three days with pay time off. So, I mean, I think the more you can engage a, sort of, employee plan that allows them to feel like they’re taking some responsibility and doing something that has impact, and it’s not just truly a top-down directive, it’s literally a bottom up, it becomes fun. You can even gamify it and really create teams. And people care about the stuff, and they want to feel like they’re having impact. That’s the biggest struggle.

Troy von Otnott: [00:32:39] Climate change, the biggest problem with climate change is the enormity of the scope. Every time I talk to someone who’s ill-informed about climate change, I might as well be watching a slow motion train wreck, right, because at the end of the day, their brain just melts down. They just like, “What can I do about carbon emissions in the atmosphere? I can’t go up there and grab those molecules.” And it’s just like if the problem’s too big, people don’t know how to deal with it.

Mike Blake: [00:33:08] Right. So, The good news, I think, is that sustainability is a trend that is accelerating now for various reasons, and some of it we’ve spoken about today. Is there a company or organization out there you think is in a particularly good job that has some lessons to teach other companies to follow?

Troy von Otnott: [00:33:26] Yeah. So, I didn’t even know about this until a few years ago when I heard a chief sustainability officer for Cox Enterprises give a presentation at Georgia Tech. I was speaking on clean energy, and they came in and talked about corporate sustainability. And I was literally blown away at how much impact one of Cox Communications divisions has on sustainability. So, they’ve got a good internal group called Cox Conserves. And this is a really dynamic division of that communications company. Well, they’re more than a communications company now. They’re pretty diversified.

Troy von Otnott: [00:34:03] But this organization does some extraordinary things, not the least of which they actually have their own budgets. So, they’ve created their own entrepreneurial co-working ecosystem within that organization. And they, basically, instead of just saying, “Hey, guys, we’re going to have a competition to see who drives the fewest amount of miles or who recycles the most cans,” I mean, they literally say, “Hey, Bob, do you have a really cool idea about how to save the planet? If so, why don’t you write a little executive summary and submit it to us? And if we like it, we will fund you. We will use our own internal capital resources to turn our employee into a sustainability entrepreneur.”

Troy von Otnott: [00:34:49] Like, that kind of forward thinking is really what’s going to be needed in order to make this transition. Because this problem is so big, it needs a lot of people working on it. And people don’t understand that little things actually add up to big things, right. I mean, to change one bulb, recycle one can, drive one mile less than you did yesterday. I mean, a lot of little things can add up to a big thing. And so, when people say, “I can’t do anything, this problem is too big,” that’s not accurate.

Mike Blake: [00:35:20] You mentioned about gamification, and I think you’re really onto something. So, I drive a Volt, and which is a serial hybrid. First, it’s rated for the first 38 miles on electric. After that, it’a nine gallon gas tank. And there’s a very active Volt community on Facebook, Volt owners basically. And there’s a competition to see how much mileage you actually can get out of that car on battery, right. And so, people are doing all kinds of things. Probably, it may or may not be the safest things in the world, but they’re over inflating their tires, right, like, 48 PSIs. So, you go over a bean bag, and you are jolted, right?

Mike Blake: [00:36:04] Right, right, right.

Troy von Otnott: [00:36:04] Or, how much can you coast, and maybe you don’t turn the air conditioner on. And the most I’ve ever gotten out of was 46 miles an hour, and I was miserable. I’ll never try that again. But it does work, right?

Troy von Otnott: [00:36:17] Absolutely.

Mike Blake: [00:36:18] And I think the Volt’s dashboard is set up for that feedback because it shows in real time how much distance you have left, right? And I’ll tell from my own perspective, because I grew up in a fossil fuel internal combustion engine world-

Troy von Otnott: [00:36:33] Sure, we all do.

Mike Blake: [00:36:33] … because I could put gas into my car but don’t really want to, every day that I—especially, every day that was, sort of, at the outside of my range, I don’t put gas on my car. I don’t feel like I’ve saved a polar bear. I just feel like I stole something for free.

Troy von Otnott: [00:36:49] Sure.

Mike Blake: [00:36:49] Right. And the gamification really works.

Troy von Otnott: [00:36:52] It really does. In fact, the old adage, everything old is new again. You’re probably old enough to have driven the original Model T, right?

Mike Blake: [00:37:01] Almost.

Troy von Otnott: [00:37:01] Exactly. So, the original Model T was electric.

Mike Blake: [00:37:05] I did not know that.

Troy von Otnott: [00:37:06] There you go, boom. Dropping knowledge, baby.

Mike Blake: [00:37:08] No, I did know that. I mean, there-

Troy von Otnott: [00:37:09] There were two versions of the Model T, by the way. One was electric. One was-

Mike Blake: [00:37:13] I do know that, at the time, that internal combustion started to catch on. There was a competing industry than battery. And we know the history—the rest of the history.

Troy von Otnott: [00:37:24] Right.

Mike Blake: [00:37:26] And we flirted for battery for such a long time. Now, it looks like we’re rapidly approaching battery ICE parody.

Troy von Otnott: [00:37:33] We are. I mean, two or three years ago, I think people were saying that internal combustion engine parody level was going to be sometime around 2030.

Mike Blake: [00:37:46] Right.

Troy von Otnott: [00:37:48] Now, it’s 2025. And then, I read a report the other day where it’s like 2023. Like it keeps getting shorter. And it’s because R&D in battery technology is one of the bright shining spots of clean tech. A lot of money is flowing into battery storage. And the amazing work that Tesla is doing, and Panasonic is doing, and others is really the north star. It’s where all the major successes are going to happen.

Troy von Otnott: [00:38:17] And so, the utility companies actually didn’t see this coming, right. And so, now, they’ve got to kind of change their whole mindset and say, “Hey, you know how we were going to build this natural gas combustion system, and we’re going to generate 500 megawatts power?” well, they’re not really economical now that we’ve got battery storage. So, instead of building picker plants, these coal firing plants are now in demand, right? And so, at the end of the day, battery storage gets dramatically cheaper every year. And in a couple of years, none of these plants outside of solar, wind, and storage are going to be able to compete.

Mike Blake: [00:39:00] And oddly enough, I think the⁠—this is off topic, but I’ll throw it out there anyway. The VW diesel scandal, I think actually moved that.

Troy von Otnott: [00:39:10] Dieselgate.

Mike Blake: [00:39:11] Yeah, exactly. I think that moved the needle significantly.

Troy von Otnott: [00:39:16] Absolutely.

Mike Blake: [00:39:17] They went from ICE to electric, really, in a period of two and a half years.

Troy von Otnott: [00:39:23] And by 2025, every model that they make will have an electric version.

Mike Blake: [00:39:27] Yeah, right. And Volvo is following through.

Troy von Otnott: [00:39:29] But that fine they got was painful. It wasn’t a light fine. I mean, they got punched in the mouth.

Mike Blake: [00:39:37] And I think⁠—I mean, I don’t think it hurt him as much in America, but I think in terms of-

Troy von Otnott: [00:39:40] Publishing.

Mike Blake: [00:39:41] … public relation and branding-

Troy von Otnott: [00:39:42] Yeah.

Mike Blake: [00:39:42] … killed them in Europe, right?

Troy von Otnott: [00:39:42] Right. It hurt them bad in Europe.

Mike Blake: [00:39:45] I think they thought⁠—and it costs the CEO’s job.

Troy von Otnott: [00:39:47] People⁠—but not only that, but people felt betrayed.

Mike Blake: [00:39:50] Right.

Troy von Otnott: [00:39:50] I mean, I’ve got a good friend of mine who lives here in Atlanta who is a lifelong Volvo and VW enthusiast. And he literally felt btrayed. He felt like he was completely lied to. And he, not only sold his car, he never bought another car.

Mike Blake: [00:40:08] Wow!

Troy von Otnott: [00:40:09] Like he literally got an electric bike, and does public transportation, he does Uber, and was just so incensed by being lied to by that corporation that it changed his whole relationship with the brand. It ended it.

Mike Blake: [00:40:22] That’s basically breaking up with your boyfriend and keying his car on the way out.

Troy von Otnott: [00:40:24] Absolutely, absolutely. See you.

Mike Blake: [00:40:31] So, I’ve read a literature. You probably have too. There are studies now coming out that companies that have a strong sustainability posture tend to outperform others, kind of, in areas that aren’t directly involved with sustainability also. Have you seen that? Is there credibility or are we getting ahead of ourselves?

Troy von Otnott: [00:40:50] No. So, there’s a study done last year, well, in 2018 that said companies that have embedded ESG programs have a valuation basis somewhere between 175 and 250 basis points better than those that don’t. And I mean, I know that’s financial speak.

Mike Blake: [00:41:11] Right.

Troy von Otnott: [00:41:11] But that’s real money when you talk about-

Mike Blake: [00:41:13] Loss 2% profit margin,.

Troy von Otnott: [00:41:14] … 2% profit margin. It’s really⁠—it’s a big number when you talk about a lot of companies are in single digit profit margin.

Mike Blake: [00:41:23] Yeah. If you improve Coca-Cola’s profit margin by-

Troy von Otnott: [00:41:25] 1%.

Mike Blake: [00:41:25] … 2.5%.

Troy von Otnott: [00:41:26] It’s a Big deal.

Mike Blake: [00:41:27] That’s a lot more electric-powered private jets are getting.

Troy von Otnott: [00:41:31] When I first came to Atlanta in 2010, Coca-Cola was the first company that I met with. And we were working with them on some different recycling technology. And they literally said, “If you move our profit margin by 0.5%, we will do it. That’s all you had to do.” I mean, that’s how big of a scale global operation they had that that’s a tremendous amount of revenue to their bottom line. And so, now, Coca-Cola is, obviously, one of the global leaders in sustainability. I mean, they are almost single-handedly focused on water efficiency because, look, we’ve got problems with the changing climate. It’s not just that it’s getting hotter, it’s not just that seas are rising, but it’s affecting global agriculture. It’s affecting our ability to get potable water. It’s affecting health services. It’s affecting disease. We’re destroying species at a rate that’s never happened in the history of mankind.

Troy von Otnott: [00:42:35] And so, you got to kind of steer the conversation away. “Oh, well, I could just turn my air conditioner up a little bit more. Who cares if it gets a little warmer?” Look, we’ve got a problem with our oceans, right? We’ve got a major problem with plastic in our oceans. But if you think about the biggest global carbon sink that we have is our oceans. And the more acidified those oceans become, the more it destroys aquatic ecosystems. And I promise you, if you haven’t thought about this, a dead ocean equals a dead planet.

Mike Blake: [00:43:05] Yeah.

Troy von Otnott: [00:43:06] Right? And so, at the end of the day, it doesn’t matter how much money you think you’re going to make, or how much money you need to make, you will make no money on a dead planet. And so, we’re all not going to Mars. I mean, God bless Elon, but that atmosphere is not very inviting. I’m not going to Mars.

Mike Blake: [00:43:21] No.

Troy von Otnott: [00:43:21] So, we’ve got to fix this planet. And we owe it to the future generations. I mean, look, at the end of the day, we’re all going to be here. God bless if we were healthy call it 80 to 100 years, right? But that’s just a⁠—it’s a blink of an eye on a geologic timescale scale, right? And it means nothing, but we’ve done more damage in the last hundred years to our global ecosystem that’s ever been done in the history of the world. And so, there’s this old Indian proverb. It’s like, “We don’t inherit the earth from our ancestors. We borrow it from our children.” That’s the⁠—like people, like the minds of men altogether.

Mike Blake: [00:43:58] Yeah, right.

Troy von Otnott: [00:43:58] Think about that for a second. So, even though I don’t have children – you do – I care about your children just as much as I care about a child in Ethiopia, or a child in India, or a child in Europe. It’s like we owe it to them to leave this planet better off than when we found it, or if not, just the same as, not worse. We have a responsibility for people that come after us. If we don’t, when it’s our time to leave this planet, we’re not going to do it in great graces. I promise you that.

Mike Blake: [00:44:31] So, a couple more questions before we wrap up here. Let’s say that I’m a listener, and, now, I’m convinced, we really got to put in some kind of sustainability program. What are the first steps to think about?

Troy von Otnott: [00:44:44] Well, there’s this amazing new invention called the interwebs, and you can-

Mike Blake: [00:44:49] I’ve heard of it.

Troy von Otnott: [00:44:49] Yeah. You can get on the internet. I mean, there’s so much public available information. The good news is that if you Google or search corporate sustainability reports, a lot of the reports are in the public domain. And so, you can get a report from Apple, which has a phenomenal program. You can get a report from Cox. You can get a report from Coca-Cola, from Alliance, from, major insurance companies, anyone. I mean, there’s tons of public available data out there. You don’t have to reinvent the wheel. There’s a lot of great case studies about things that work, being proven, easy to verify, not hard to implement.

Troy von Otnott: [00:45:30] And, the one thing at the end of the day, beyond, sort of, “trying to save the planet” is the the morale impact that you will have on your employees is palpable. I mean, when they feel like they are actually contributing to something good, and social impact is really kind of a broad umbrella, but when they feel like they’re actually adding value, and they can go back and look at their parents, and go back and look at their kids and say, “I did something. Even though it’s small, I did something,” right.

Mike Blake: [00:46:03] Everybody, especially millennials, we  Gen-Xers are okay with slogging for the paycheck, millennials aren’t quite so much into that, right?

Troy von Otnott: [00:46:12] Not at all.

Mike Blake: [00:46:14] And maybe they’re smarter than are we, but-

Troy von Otnott: [00:46:16] They’re not smarter, they’re just more woke, right? I mean, at the end of the day, they know they’re going to be the ones living in a different environment. It’s not us. I mean, yeah, to an extent, if you’re 50 years old, in the next 30 years, by 2050, you’re going to see some pretty bad stuff. But 2060, 2070, 2080, I mean, you’re going to see a real huge problem.

Troy von Otnott: [00:46:41] And, to your point earlier, when we’re talking, it doesn’t matter how many solar panels, or how many wind turbines we put up, or how many efficient lights, we put it on, or how many electric cars we drive, there’s so much legacy carbon in our atmosphere that, a few years ago, geoengineering was a hot topic in the scientific community about should we? It’s no longer about should we? It’s we’re going to have to. We have to remove legacy CO2, or else. And so, when you’re given an “or else,” you better do something because it’s not going anywhere. I mean, like you said, it’s in the atmosphere for a hundred years.

Mike Blake: [00:47:20] Whenever⁠—even as a kid, whenever my parents said, “or else,” I never thought, “You know what, or else is probably the way I want to go.”

Troy von Otnott: [00:47:27] Exactly.

Mike Blake: [00:47:27] Never works out that way.

Troy von Otnott: [00:47:29] Give us some of that or else.

Mike Blake: [00:47:30] Give me a thing. I’ll have a second helping with the or else.

Troy von Otnott: [00:47:33] Exactly.

Mike Blake: [00:47:34] Troy, this has been great. Thank you so much for doing this. If somebody wants to contact you to learn more about this, maybe get some advice about maybe launching a program or tweaking the one they already have, can they do that?

Troy von Otnott: [00:47:44] Sure, yeah. You can contact me in my email. It’s troy@massive-tech.com.

Mike Blake: [00:47:51] All right. Well, that’s going to wrap it up for today’s program. And I would like to thank Troy von Otnott so much for joining us and sharing his expertise with us today. We explore a new topic each week. So, please turn in, so that when you are faced with your next business decision, you have clear vision when making it. If you enjoy this podcast, please consider leaving a review with your favorite podcast aggregator. It helps people find us, so that we can help them. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision Podcast.

Decision Vision Episode 29: Should I Cooperate with a Competitor? – An Interview with Tom Brooks, Windham Brannon

by

Decision Vision
Decision Vision
Decision Vision Episode 29: Should I Cooperate with a Competitor? – An Interview with Tom Brooks, Windham Brannon
Loading
/
Mike Blake and Tom Brooks

Should I Cooperate with a Competitor?

Why would you collaborate with a competitor? How do you establish and maintain trust with a competitor you cooperate with?  Host Mike Blake, Head of the Valuation Practice at Brady Ware, discusses these questions and more with Tom Brooks, Director of the Valuation Practice at Windham Brannon. “Decision Vision” is presented by Brady Ware & Company.

Tom Brooks, Windham Brannon

Tom Brooks, Windham Brannon

Tom Brooks is a Principal and Director of the Valuation Practice at Windham Brannon. Tom has over 20 years of experience handling valuation and litigation support matters. He specializes in guiding clients with the valuation of their businesses, business interests, and intangible assets for mergers and acquisitions, gift and estate planning, financial and tax reporting, charitable giving, strategic planning, shareholder disputes, commercial litigation, and marital dissolution. Tom has worked with businesses of all sizes, including start-up companies to larger companies with over $1 billion in revenues. He is effective at communicating complex valuation issues and collaborating with his clients in building successful relationships.

Prior to joining Windham Brannon, he was a Senior Manager in the Valuation practice of a leading tax and advisory firm. As a licensed CPA in Georgia, Accredited in Business Valuation (ABV) and as an Accredited Senior Appraiser (ASA), Tom often speaks for organizations such as the Atlanta National Association of Certified Valuation Analysts (NACVA) chapter, the Georgia Society of Certified Public Accountants and Atlanta Alumni of Retired Revenue Agents. He has also presented for Georgia Tech and LaGrange College accounting students and at Merrill Lynch seminars.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn:  https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript

Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions, brought to you by Brady Ware & Company. Brady Ware is a regional, full-service, accounting and advisory firm that helps businesses and entrepreneurs make vision a reality.

Michael Blake: [00:00:20] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts about how they would recommend thinking about that decision.

Michael Blake: [00:00:37] My name is Mike Blake, and I’m your host for today’s program. I’m a Director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia, which is where we are recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe on your favorite podcast aggregator. And please also consider leaving a review of the podcast as well.

Michael Blake: [00:01:01] So, our topic today is cooperating with competitors. And this is a a ticklish topic. We think of competitors in the marketplace, regardless of our industry, it could be public accounting, it could be advisory, it could be manufacturing cars, it could be airlines. Very few businesses are not in a competitive scenario in some case. And by the way, if you are in a business that isn’t in one, please write me. I’d like to know what that is, so I can then compete with you because that sounds great.

Michael Blake: [00:01:38] And what I’ve learned over the last 15 years or so that I’ve been in business is that some industries just can’t get along. Like years and years ago, I did a project for Coca-Cola Enterprises. And I was a contractor there doing some financial analysis. And at the time, you walk into their office, and everything is Coca-Cola red. They got polar bears all over the place, and bottles of Coke, and everything else. And it’s definitely rah-rah, sort of, company branding is at the forefront. And if—I did not do this, but somebody else I knew did, went off premises, and then came back with a bag full of Taco Bell, which at the time was owned by Pepsi Co. Now, Yum! Brands, I don’t know if Pepsi is owned by them or not, but that was a big no-no. Like even having food from the competing beverage was not a fireable offense, but boy, you’ve got the Coca-Cola stink eye, and then some when you did that.

Michael Blake: [00:02:39] I imagine there was a time when you had that kind of rivalry at Microsoft and Apple. I don’t think that’s the case today. And we think of of competition as something that, frankly, we have to destroy, that they are enemies, that they are opposing us, that they are taking food out of our mouths, and that they are something to be feared and disliked. But I think in modern business, that’s not necessarily always the case. And you see industries where, in certain cases, competitors do band together. The auto industry, as competitive as they are, they do band together in order to promote safety in their industry. They band together to make sure that regulations aren’t too constraining.

Michael Blake: [00:03:27] In the airline industry, I think the same thing. I think the same thing is true. You see partnerships all over the place where maybe companies are cross-selling each other’s services. And maybe, I’ll go back to airlines, they’re actually a really good example too because of your quote sharing. So, my family and I are going to take a trip to Scandinavia later this year, and our plane ticket says Delta. But at some point, we’re probably going to be put on an SAS plane, or a Norwegian airplane, or something. We don’t know that, but because those are competitors that are cooperating, right, that’s the kind of customer experience that we’re going to have. And because they cooperate, we don’t have to get out at Paris, and then walk the rest of the way to Copenhagen, which would be a real pain in the neck.

Michael Blake: [00:04:12] And so, I wanted to explore this because in my particular practice—and I don’t know if I’m exceptional in either direction or right about the average, but I can tell you in my practice in business valuation, about somewhere between 20% and 30% of my business actually comes from competing firms. And I don’t necessarily know that I’m exceptional, but on the off chance that is exceptional some way, that means that there’s a lesson to learn. I want to talk about what if your competitors aren’t your mortal enemies? What if you’re not just always locked in a life-and-death struggle with your competitors? And not in a way where you’re forming a cartel. I mean, our firm is not a big enough firm. I’m not going to cartel anything. But there’s a long—there’s a big gap between cartel and cutthroat, winner-take-all competition.

Michael Blake: [00:05:10] And so, that’s what I want to talk about today because if you’re not thinking about competitors in terms of if there’s a potential partnership and a potential cooperation and opportunity, you may be leaving money on the table. You may be leaving business value on the table. And maybe, also, you’re living a more stressful life than you have to. And so, I’ve brought in a guest today that, I think, this will be a little bit of a different conversation because I’m going to be more of an active participant rather than an interviewer.

Michael Blake: [00:05:38] But I brought in my friend Tom Brooks today, who is a competitor with whom that I cooperate quite a bit. Tom is a Director in the Valuation of Litigation Services Group of Windham Brannon PC, a midsized certified public accounting firm in Atlanta. I think about the same size as Brady Ware. I haven’t measured it, but I get the sense we’re about roughly the same size. Tom has over 20 years of experience handling valuation and litigation support matters. He specializes in guiding clients at the valuation of their businesses, business interests, and intangible assets for mergers and acquisitions, gift and estate planning, financial and tax reporting, charitable giving, strategic planning, shareholder disputes, commercial litigation, and marital dissolution. Tom has worked with businesses of all sizes, including startup companies to larger companies with over $1 billion in revenues. He is effective at communicating complex valuation issues, and collaborating with his clients, and building successful relationships.

Michael Blake: [00:06:35] Prior to joining Windham Brannon, he was a Senior Manager in the Valuation Practice of a leading tax advisory firm. As a licensed CPA in Georgia, accredited in business valuation, and as an accredited senior appraiser, Tom often speaks for organizations such as the Atlanta National Association for Certified Valuation Analysts or NACVA – that has got to be the weirdest, most awkward acronym in the history of mankind. And I’m a NACVA member, so I can speak to that internally – the Georgia Society of Certified Public Accountants and Atlanta Alumni of Retired Revenue Agents. He has also presented for Georgia Tech, and LaGrange College Accounting Students, and at Merrill Lynch seminars. And Tom and I used to work together. And he won’t admit this, but I actually worked for him technically, at least, 15 years ago. And we have tracked each other’s careers and have been good friends ever since. And it’s a terrific pleasure to have Tom Brooks in the program. Tom, thanks for coming on.

Tom Brooks: [00:07:32] It’s great to be on. Mike, I appreciate it. That’s quite an intro, and I think it makes me sound a little better than I really am. And yeah, you really didn’t work for me, Mike. That wasn’t really the case.

Michael Blake: [00:07:43] So, you see. I mean, he’s only saying that, so that if I do something bad, he doesn’t want the blame for it. So, talk to us a little bit about your practice in Windham Brannon. How big is that practice, generally speaking? I’m not looking for a number of terms or anything. And what do you focus on within that practice?

Tom Brooks: [00:08:01] Yeah. Our practice highlights a lot of what you highlighted in my bio, which is a mouthful, but traditional business valuation of privately held entities. A number of reasons that clients may perform those. You’ve probably talked about those a lot on your program and on the podcast here. But we do a lot of work around exit planning for our clients, management planning, which can be very broad, to keeping a scorecard.

Tom Brooks: [00:08:28] What’s my business worth? Why am I—the investments that I’m making, the growth that I’m achieving, why is that happening and how does it impact value? We do a lot of work as a firm in Windham Brannon. We’ve got a large high-net worth practice. So, we do a lot of work with our high-net worth clients that have their businesses. And they may be looking at transition planning. How do we transition the business to the next generation? If there’s no next generation, what’s the next—how do we exit? And then, financial reporting. And for accounting purposes, valuation for purchase price allocations, goodwill impairment, stock compensation. And then, finally, probably the last piece to our puzzle in terms of our jigsaw puzzle of our practice would be litigation support in terms of commercial litigation cases and where valuation comes into play in those.

Tom Brooks: [00:09:20] Our practice has been in existence now for 18 months. And we have within—we practice as a litigation and valuation group together. We’ve got two partners and a senior manager in that group. So, I will say that I’ve been announced as a new principal in the firm, Mike, so-

Michael Blake: [00:09:42] Oh, Congratulations! We heard it here first.

Tom Brooks: [00:09:46] So, it’s a great—it’s been a good—we’ve had a good, very successful start in the 18 months that I’ve been in Windham Brannon.

Michael Blake: [00:09:51] That is great. That is great to hear. I know that was kind of the plan when you joined, but I know you never take anything for granted. And that road to principle can be a bumpy one too. So, we’ll amend that bio. You’re a principal now at Windham Brannon. Your Excellency.

Tom Brooks: [00:10:08] Don’t go there, Mike.

Michael Blake: [00:10:12] So, you have chosen, I think, in your career, really, to be pretty open about cooperating with competing firm, not just ours, but others. We don’t need to be exclusive, so. But why is that? Why do you have that outlook and that philosophy?

Tom Brooks: [00:10:30] I think it all comes back to—and this may hit—this may be a recurring theme this afternoon. It comes back to trust. I mean, it’s not—I’m not an open book that no matter who I sit down with in terms of my competitors, but I’m not afraid to ask questions when you develop that level of trust with somebody to say, “Am I handling this client situation right?” And it’s not like we’re sitting here sharing our Rolodex or client names and revealing that. It’s talking more about issues that we may face as practitioners. And again, I’m sure these are topics that you’ve talked about. If we were to talk about technical topics and valuation, you and I could have two—there could be two very different approaches. And they may not be or they could be similar.

Tom Brooks: [00:11:13] So, so much of our—and in the career field of valuation, frequently, it said that it may be more science or more art than science, rather. And so, why wouldn’t you—in my case, I think it’s just kind of how I’m wired as well. Why wouldn’t you open yourself up and be trustworthy of some other folks potentially? Again, it’s not everybody but those, that over time, you developed a relationship like that with. You’ve just got to develop that high level of trust before you can get to where you’re going to kind of be a friendly, friendly competitor.

Michael Blake: [00:11:49] And I’ll interject to that. I think another ingredient to that is ego. I think in the valuation profession, more than most other areas of accounting, ego is more prominent and more pronounced, right? And we both know practitioners that what other faults they have, healthy self-esteem is not one of them.

Tom Brooks: [00:12:09] Right.

Michael Blake: [00:12:09] Right? And I do think that our profession, sometimes, encourages or discourages that. I think our profession, sometimes, a little bit more water coolery. Nobody is either sort of is good or maybe good in a certain area. But what we tend to put people in the bucket. They’re either a genius or an idiot, right? Not learning, not trending, whatever, right?

Tom Brooks: [00:12:35] Right.

Michael Blake: [00:12:36] And I think part of the willingness to cooperate is a willingness to be vulnerable, right?

Tom Brooks: [00:12:43] Right.

Michael Blake: [00:12:43] And say, “Look, I don’t know everything about this. I don’t.” We do some estate and gift tax work, but you do 10 times more work there. And that’s okay, I’m willing to say, “Look, I don’t think I need to necessarily give up the engagement, but I do need to sort of phone a friend,” right?

Tom Brooks: [00:13:02] And like you, I’ve got other—and you and I probably just talked about issues like that. And there have been issues that I’ve raised around technology that I’ve phoned you about. And I have other former co-workers and, now, competitors that, again, have very good relationships with. The same thing, you referenced the gift and estate. They’ll call and say, “Hey, I’m dealing with this issue. I don’t deal with it that often. Can you…”  Usually, most of the time even, you or somebody else are going to call and say, “Here’s the way I’m thinking about it.” They’re not asking you to solve their problem. They’re asking you to help them. And you may take them in a completely different direction. But that does speak yet of that vulnerability to be willing to listen, and ask somebody, and say, “Okay, there’s a better way to do it than the way I’m thinking about it. And I want to go find the right way,” because that’s the best answer for your client.

Michael Blake: [00:13:48] Yeah. And you’ll learn something, right?

Tom Brooks: [00:13:49] Right.

Michael Blake: [00:13:49] And one question you have to ask later. And you mentioned something I didn’t thought of. I think it’s a really important point. My father was in this industry too, but he had two jobs over the course of his career. I think I’m on number eight now, and I’ve got, at least, 17 or 18 years of work left in me, give or take health. So, will this be my last job? I don’t know. I think we all hope it is. That’s why I’m a director. But we’re, now, building networks of people that we worked with in our generation and subsequent generations much more rapidly than I think generations before us, aren’t we? And that probably contributes to this, doesn’t it?

Tom Brooks: [00:14:29] I think that’s the case. And again, this is not—there’s no, I guess, poll data to back it up. But I think you’re right. I think especially—and I can’t speak to any other platform other than accounting firms. That’s where I’ve spent most of my career. But you do, at times, get that hesitancy and sense. And maybe it is from some of the older partners or the generation before us. And it’s not to say all of them are that way, but there can be a very strong hesitancy. “Well, Tom, you want to refer our client that we can’t do work for to another accounting firm?” And that is one reason I would say our success has been great at Windham Brannon because my partners aren’t thinking that way. It’s just—but I’ve seen it throughout life in terms of my career, and I’ve seen it. Other practitioners will tell me the same thing that they experience some of those same roadblocks when you do want to have this healthy, friendly, competitive nature to your relationship.

Michael Blake: [00:15:32] Well, and we’ve had—you and I have had that because the firm I used to work for before Brady Ware was of that mind was that just referring stuff to another CPA firm, that was just not on the table.

Tom Brooks: [00:15:44] Right.

Michael Blake: [00:15:44] And it killed me that I had to basically tell you that because I didn’t want you to refer stuff thinking of those stuff coming back because it was not, and it did not. So, that was a very liberating thing about sort of planting my flag. And I think now, that other firm has sort of started to loosen up a little bit in terms of sharing. But that can be a real issue. And I’ll admit, maybe 10 years ago, I might have had—10-12 years ago, I might have had that same mindset. You’ve just got to hold on to every client like they’re the last life vest on the Titanic.

Tom Brooks: [00:16:15] Right.

Michael Blake: [00:16:17] Right? But then, with us, especially, we can get into something, what I call a valuation Vietnam, where you think you’re getting into something that’s going to turn out fine. And then, you get in, and you’re not, and it’s not. And maybe—and you look back, you think, “Boy, I’m not sure I should have taken that on.” But halfway through, you’re, kind of, committed. You just got to figure it out. And you learn that I don’t know that I even did myself a favor by taking every seat. If Tom were here doing this, he would have been done three weeks ago. And here I am, here I am tearing my hair out at 2:00 a.m. trying to figure out this problem. And I think there’s a maturity element to that.

Tom Brooks: [00:16:56] No, time teaches you a lot in any form no matter what your career choice is. I believe that especially when you listen to business owners and entrepreneurs. We’ve all failed probably in some capacity somewhere, and it’s how do you learn from that. And, again, it’s taking the ego out of it, and being willing to learn, and being open. It’s not—I think it’s along the same lines that when we’re told no, or we don’t win an assignment, probably when I first started, that would hurt me a lot more than it does now. You have to lose some engagements to figure some things out and to learn a little bit more about how people view you in the marketplace.

Tom Brooks: [00:17:38] And so, I think it just goes to some humility along the way too that you learn, and you make some mistakes, and being willing to learn from those. And so, again, as you age and mature in your business career, hopefully, you become more open to these types of concepts.

Michael Blake: [00:17:57] And I think it helps to have definition in terms of what you just know. You just know in your heart of hearts, you’re not very good at doing. I’ve been very open with you and anybody who’ll listen, I don’t do litigation. I’m not very good at it, and I’m not willing or interested to make the investment required to become even mediocre at it. So, being a mediocre expert witness, that’s a bad day, being deposed when you know you’re not that great.

Michael Blake: [00:18:29] And that is maturity, but I think it’s also liberating. And I think in a certain way to it, it actually helps your brand, right? I don’t get a lot of litigation referrals anymore, either now, because the market has known like, “Blake, he’s just not going to do it.” But I think that tends to lead to more projects that you are good at being sent your way. And I think the market respects you more when you’ll turn them down, right?

Tom Brooks: [00:18:58] I agree. I mean, what you and I do is professional services. This isn’t just about being a CPA. And for listeners out there, especially in professional services arena, this is really what it gets back to. It’s your firm’s reputation. And some people may have their own firm. So, the name may go—your individual name may go with the firm name. But at the end of the day, as a practicing valuation specialist at Windham Brannon, it’s both my reputation and the firm’s reputation every day that are on the line. And that’s a risk that I have to manage as a practice leader. And with firm leadership, when you have questions about engagements that you may or may not want to take on.

Tom Brooks: [00:19:36] But like you said, it’s kind of one of those, “Maybe I would have been better off.” But thinking ahead and as you encounter something that’s going to be considered maybe outside your comfort zone, it doesn’t mean that we don’t take all assignments outside our comfort zone because, sometimes, it relates to something we’ve done before, and you just got to stretch yourself and learn, like you said earlier in the podcast. And that’s what we—many times, that’s the way we take new tasks on or responsibilities is we learn. And some of it for us is on the job. And we don’t have all the answers, as you said, but, sometimes, it’s almost like phone a friend, right?

Michael Blake: [00:20:13] Yeah.

Tom Brooks: [00:20:13] I mean that’s what you just talked about. And sometimes, those things will help you kind of navigate those challenging situations. But, again, having those open relationships that you can do that, to use your word, it’s liberating to be able to know that in the event that I’m struggling with something, I’ve got a lifeline out there to help me make sure that I’m doing the right thing for my client.

Michael Blake: [00:20:36] So, I’d like to revisit the trust discussion because I think so much of that, ultimately, comes down to that. And there are two areas I want to explore. One is, what are some of those dimensions of trust? It’s obvious, part of it is going to be just, are you competent, right? I’ll give you the fine China, don’t drop it, please. But there are kind of other elements of trust that belong there too, right? So, talk a little bit about what those trust features look like.

Tom Brooks: [00:21:05] Yeah, I think that’s one of the things in thinking about what we’re going to talk about today as I went through in my head. It’s kind of, like you said, the opposite, potentially, of trust. Like you, you get to see a lot of work product come across your desk of your competitors, whether it’d be just one of your partners is asking you to review something because they had a valuation done by an outside firm, or maybe it’s the on the accounting side that our audit team needs something reviewed, and I’m looking at it. So, the first element is kind of that competency. It’s just kind of that, does the expert that we may send this out to, do they have the competency, and will they be taken care of? The way I think of it as well is, will my client or the firm’s client be taken care of as well as they would have been taken care of by me?

Tom Brooks: [00:22:03] So, it really does come down to that trust. Some of it is just years and years. In my case, it’s years. I mean we, I think, have trusted each other a lot longer probably than just the 10-15 years, and we departed the firm that we worked with together, but it’s also developed over time. And so, I think it’s time. So, there’s a time element to it because you got to get to know the person.

Tom Brooks: [00:22:25] I think you have to also understand – and I think maybe this is an element of trust is – are they motivated to do the right thing? Again, I think that’s something that you’ve got to gage. There’s a high level—in doing this, there’s nothing that we can grab at and grasp. There’s nothing tangible. All this is intangible, and there’s risk associated with that when you do that, when you’re putting yourself out there, and potentially handing another name off. So, I think it’s that, again, at the end of the day, these are all elements of trust. But really, that is the key element, at the end of the day, the kind of that you got to come back to.

Michael Blake: [00:23:05] And in the second point I want to ask about trust is, trust between the two direct participants, such as between you and me is great, but it’s not enough, right? We also have to have organizational trust. And unless you have another announcement to make, you’re not the managing partner of your firm.

Tom Brooks: [00:23:26] No.

Michael Blake: [00:23:26] And I’m not the managing partner of my firm. And there is no danger of that announcement ever being made. I can promise you that.

Tom Brooks: [00:23:32] This side as well.

Michael Blake: [00:23:32] So, in our case, in the case of many people, we also had to help build organizational trust, right?

Tom Brooks: [00:23:43] Absolutely. That was—when you and I first landed between Brady Ware and Windham Brannon, it was one of the first things that we did because our moves kind of coincided with each other.

Michael Blake: [00:23:51] We’re a month apart.

Tom Brooks: [00:23:52] Yeah. It was we got together for breakfast with our managing partners and some of our other key senior partners. And you just did begin to develop that rapport, and that openness, and, again, those lines of communication. Maybe this is the word I was looking for in the prior answer but transparency. And, again, it doesn’t mean that we’re coming with a client roster list and go, “And here’s ours. Where’s yours? Here’s yours.” And we’re just exchanging names like that.

Michael Blake: [00:24:17] Like lineup cards.

Tom Brooks: [00:24:18] Right. Client confidentiality still trumps all these and precedes all of these. So, that’s the utmost important thing that we have is to maintain. And again, in that confidence, that’s where your trust comes in. But it does take, in our case, where you’re with a larger firm organizationally, you’ve got to have that confidence because many times for you and I, it’s not just something that comes across my desk that comes through, say, a referral to me from one of my outside sources outside the firm. It’s something inside the firm. So, my partners have to trust that again and have that confidence that Mike Blake and Brady Ware are going to take care of them. And so, you’re right, organizational trust on top of the individual relational trust that exists is really critical as well.

Michael Blake: [00:25:05] And take care of them and not try to exploit the opportunity too, right?

Tom Brooks: [00:25:11] Yeah, right. That becomes an underlying element. And I think that goes back to when we talked about some of the distrust that occurs within many firms and across probably every professional service line there is that you would have in terms of thinking about sending a potential client out to a competitor is right. Are they going to poach them completely? Are they going to be looking to market other service lines in there? And you’ve got to have those conversations, and they’re just really open and direct. Those who are not, I would share when we had ours, those were not difficult conversations. It was just, “Well, here’s how we conduct ourselves.” And I guess it’s kind of like dating. I mean, it’s kind of like we were just figuring each other out, so to speak. And in our case, it’s worked really well that, again, between us and the relationship we already had and our partners, it’s just gone. We’re able to do that.

Michael Blake: [00:26:10] So, sometimes there can be speed bumps in a partnership, right? And these are—by definition, they’re sensitive relationships. No matter how long the trust is, there’s always going to be a speed bump. And to my mind, I’m always kind of worried that, “Oh, boy.”

Tom Brooks: [00:26:28] What did Tom do now?

Michael Blake: [00:26:29] Well, anybody, right?

Tom Brooks: [00:26:31] Right. No.

Michael Blake: [00:26:31] And I’ll tell you that I kind of tell our people, “This is a Windham Brannon referral. This has got to be red as red carpets on this one, because I don’t want to go back and tell—I don’t want to face him if it’s not great.” But there can be speed bumps. And how do you—what do you think is the best way to kind of handle those speed bumps, so that they don’t jeopardize the broader relationship?

Tom Brooks: [00:27:01] I think it goes back to what we kind of just articulated and spoke about in our last answer was that it’s got to be open lines of communication and transparency. You’re right. I mean, even if I had never handed that client off and, I could have done the work for whatever reason, clients are complex in terms of the issues that we face, and the demands that we face, the time, whether it’d be—the demands are just numerous. And it’s what we signed up for. We love serving our clients, but that hiccup could have occurred with anybody.

Tom Brooks: [00:27:39] So, I think it’s just important to know that, again, take the ego out of it. None of us are perfect. None of us has—again, these are intangible issues that we’re dealing with typically with clients. The technical issues, yes, but relational, this is all soft skills. These aren’t hard, tangible skills. So, I think, it’s, again, having that open line of communication and transparency.

Tom Brooks: [00:28:04] And if there was a hiccup, I think, first, come up with an action plan to solve the problem if you’re the firm that received kind of the referral. And then, obviously, if there was something that was significant enough, you need to reach back out across the aisle to the firm that referred the work to you, and say, “Hey, here’s what happened. Here’s what we did.” And if there is anything, potentially, they can help you with to get over that hump, then that’s it. I mean, the client has to come first, and their interests have to come first, and serving them, and making sure you get to the finish line. So, I think it’s just what has to happen to do that.

Michael Blake: [00:28:42] Now, one area that is most common that leads to competitor cooperation in our industry is a conflict, right?

Tom Brooks: [00:28:51] Right.

Michael Blake: [00:28:51] We can just get conflict. I tried to send you a piece of work, you got conflicted out of it. I know that was very painful, but you have to do the right thing for an existing client, right? But talk to our audience, what does a conflict look like? Is a conflict always black and white or the sort of shades of gray we have to make a judgment call? What is that conflict thought process look like?

Tom Brooks: [00:29:17] Yeah, I think there can be shades of gray. I mean, some are very obvious.  Let’s just—to use an example, litigation that if we were working for the plaintiff in some capacity, obviously, we’re probably hired by their legal counsel, and we’ve got an underlying client. But if we had been on—and then you look at the defendant, and go, “Oh, they’re an audit client of Windham Brannon. We’re not going to take that on. I mean, that’s just a conflict for us. It’s not something that where we would want to go. And I think there’s a direct conflict anyways.”

Tom Brooks: [00:29:50] Some of them can be a little more gray. I mean, this is more of an independence issue that we face as well. It’s not gray, but I’ll highlight it. So, for our auditors, our audit clients that have financial reporting issues that have valuation embedded in them, Windham Brannon can’t do that valuation work. So, we call it independence, but it’s really a conflict. We can’t produce a valuation, then, that one of my audit or that our audit teams goes and audits and signs off on it because we’re all under the same house of Windham Brannon. So, those are obvious.

Tom Brooks: [00:30:22] I think, sometimes, it can be—maybe it’s going back to the litigation scenario to paint just kind of a grey issue is you may not have a direct or a perceived direct conflict, but it may be that, in this case, again, let’s just say we were potentially representing the plaintiff. The defendant, somehow, isn’t a client of Windham Brannon, but they’re close to Windham Brannon. They have maybe referred some work to Windham Brannon. That’s just not a position. Potentially, again, it’s not that we couldn’t take the assignment, but you also may not take it because you’d say, “Well, that’s just not a position we want to put ourselves in with that defendant that the spigot may turn off or it may create, as you described before, one of those speed bumps. We really don’t want to have to navigate that speed bump.”

Michael Blake: [00:31:13] There are no speed bumps by accident. You don’t want to go making them on your own, right?

Tom Brooks: [00:31:16] Right, exactly. Well said, yeah.

Michael Blake: [00:31:17] So, another conflict I run to on occasion, which is not strictly one, but I get very uncomfortable with and, usually, we’ll try to try to sidestep it is maybe it’s not a litigation but a partner buyout, right? So, the client will come to us and say, “I want to buy out my partner,” or their service partner will come to me and say, “We have a client that want to buy the partner. Can we do an appraisal?” I said, “Well, we could do an appraisal.” And strictly speaking, there’s no conflict there, right? But let me ask you this question, if we come up with an answer that the client doesn’t like, right, is it going to make them mad at you?” They said yes. So, I don’t think we want to do this then, right?

Tom Brooks: [00:32:00] Right.

Michael Blake: [00:32:01] That’s not a conflict with a capital C.

Tom Brooks: [00:32:03] Right.

Michael Blake: [00:32:03] But it’s a conflict with a small C with a lot of underlines underneath it.

Tom Brooks: [00:32:07] Yeah. It’s kind of managing your firm risk at the end of the day. It comes back to, just like I said, just assessing, is that a place or a client relationship that we want to be in and take on? Sometimes, I laugh at it. You turn something away, or what you perceive is to do the right thing in some capacity, or you lose an engagement for whatever reason. Well, probably within, it may not be 24 hours, but within a week, there’s a better opportunity that turns around that you like better than the last one that had some hair on it, so.

Michael Blake: [00:32:43] Yeah, that’s called maturity. I like to think that in exchange for my gray hair and two arthritic ankles, I get some benefit out of that. In fact, to that point, I can think of a few assignments that I wish I had not taken. I can’t think of a single one that I turned down, and I wished I’d hung on to.

Tom Brooks: [00:33:04] Right.

Michael Blake: [00:33:04] Not a single one. Oh man, it never happened.

Tom Brooks: [00:33:06] Right.

Michael Blake: [00:33:08] So, talk about the sort of cooperation. In your mind, do you think you need to have sort of a written agreement? Does everything have to be kind of a papered over joint venture, or can these relationships be sustained on an informal basis?

Tom Brooks: [00:33:26] I think they can. I think it’s situational-dependent. So, we’ll go with it depends, which is always a good answer, right?

Michael Blake: [00:33:36] Jim would not like that one, right?

Tom Brooks: [00:33:38] That’s right, exactly. So, I think there’s—I can think back to 20 years ago at a prior firm where I had gone to work with. And I was a manager at that time, but was brought on to help kind of manage the valuation practice day to day that it wasn’t all the way up to a day-to-day practice. And before I got there, there were two tax partners. They had a retainer agreement with one of the more nationally known valuation experts. Then, it was the same thing like we talked about earlier, “Hey, I got this question,” or “Can you review this for us?” And that was padded with an agreement and a retainer that the experts, so to speak, just stayed out in front of.

Tom Brooks: [00:34:24] And I’ve had it as well where it’s not necessarily padded. You just, “Hey, I need another set of eyes to see this,” almost like a QC capacity, helping me review a project, and there’s no agreement in place, but a bill comes, and we pay it, and that is what it is. And then, there’s a larger—then, you may have a larger project maybe where it’s more of a subcontracting nature. Maybe you’re in a spot that you can’t produce all the volume of work, but at the same time, you certainly can manage it if you’re able to subcontract that. And that probably gets memorialized with an agreement with rates, and everything else, and protective language, “Yes, we’re not going to solicit your client,” those types of things.

Tom Brooks: [00:35:17] So, it may be a little bit of a long answer, but it depends. On each three of those scenarios or two of the three, you had an agreement. The other one, you don’t, I think some of it, then, comes back to that trust level as well. Again, we’ll keep harping on that as to the nature of that relationship that you have, whether you need to have it written or not. And then, it’s really up to both firms or individuals to figure out, how do we cement that?

Michael Blake: [00:35:47] So, one area that some of our listeners are probably thinking about is – boy, I’m not sure I like this one – when competitors start to cooperate, that sounds like they’re forming some kind of cartel, right. This is how it got started or whatnot. But in most cases, that really isn’t what happens. When we do this, we’re not price fixing or anything like that, are we?

Tom Brooks: [00:36:11] No, not at all. It’s, “Hey, here’s an opportunity.” Again, there’s no expected, “I’m going to get this back in return,” or no price fixing. It’s what’s best for our client. So, there’s just no, I’d say, illicit concepts in the background, lurking in the background that’s in either of our minds and what we’ve done. And I would never associate myself with somebody that would have that. To me, the world is too big, and there’s too many valuation assignments out there that even though, sometimes, you’re going, “Oh, man. I wish I had another one,” or whatever, but there’s plenty of opportunities for all of us to be efficient in the same pond. The pond is actually really big. And I actually think it’s really deep.

Tom Brooks: [00:36:57] So, many times, for the people even that I know and meet with as competitors, I can say that I’m very friendly with. It’s frequent that I don’t come up against them even in—whether it’s through RFP or there’s an opportunity, and somebody is reaching out to two or three valuation firms. Now, I don’t come across them. So, it’s just the concept, I think, of – again, I’ll repeat it – doing the right thing for your client, and who is that most trusted source, then, that you need to send him to for the situation you have?

Tom Brooks: [00:37:31] And I wouldn’t expect you to send me every assignment. You may say, “This isn’t right for Tom and Windham Brannon. It’s not something that—it doesn’t fit Tom’s bailiwick on what he does.” And I know that you’ve got other folks that you work with or that you spend time with in terms of opportunity. So, that’s not offensive to me.

Michael Blake: [00:37:50] Right. We’re seeing other people.

Tom Brooks: [00:37:51] Right. Yes.

Michael Blake: [00:37:52] And we know that. We don’t have each other’s varsity jacket, or a letter ring, or anything like that, right?

Tom Brooks: [00:37:57] You don’t have my class ring?

Michael Blake: [00:37:57] So, I want to draw this out. We’ve talked a lot about the valuation world, but I want to draw this out a little bit sort of higher level. So, one thing I’ve observed, and I’m curious about your experience, is that one way where competitors may cooperate is on an exit, right? If you’re a company that you’re getting to that point where you’re looking for a sale or for a strategic expansion either way, right, one of the most logical targets is going to be a competitor because they understand your business. They probably understand you.

Tom Brooks: [00:38:33] Right.

Michael Blake: [00:38:33] You may have some relationship with them. And down the road, that may be a very important value-building relationship. Have you seen something similar?

Tom Brooks: [00:38:45] I can’t say that I’ve necessarily seen it, but what I hear from the business owners I talk to, and I think you talked about it as well, and I’m not going to say that it’s generational, but I am amazed that when you do talk to clients and, again, business owners, entrepreneurs, how much they do know and how much time they do spend frequently with their competitors. And I don’t think it’s always just at a conference, like an industry conference. And maybe that is where a lot of these conversations occur, but I do get the impression that, again, it’s not sharing everything about whether it’d be their cost structure, if they’re a manufacturing client. “Well, we’ve got this technology now in place and this is setting us apart.” You’re not going to share that, but very much, many, I find, of my clients do know a lot about their competitors, or if they are looking at an exit, why certain competitors, they would prefer them to be a potential buyer versus others.

Michael Blake: [00:39:46] So, I want to be respectful of your time here. We’re going to wrap things up, but I do have a couple of other questions. If we can kind of sum up here ingredients that go into a good cooperative competitive relationship. We’ve talked about trust. That’s clearly one. Are there one or two other ingredients you can think of that help make relationships like that be mutually lucrative and sustainable?

Tom Brooks: [00:40:10] I think, I’ve used—the other word that I used is transparency and communication. It will probably be the other two words that I think if you summed it up. Again, transparency, to repeat, it isn’t just, “I’m going to tell you everything about my practice.” It’s, “Here’s a little bit about my practice. Here’s about our clients.” And obviously, when it comes to a specific referral, yes, you’re going to probably have a name at that point. But even when you’re meeting with people, whether it’d be over launch, or coffee, or a meeting at somebody’s office as a competitor, again, you’ve got to—if you want to, I’ll say, kind of be on the receiving end, probably, then you need to be, again, talking openly about your own business. So, that’s transparency.

Tom Brooks: [00:40:52] And then, that open line of communication is just be willing to—the other word, I guess, we’d say for it as vulnerable, as you talked about. And so, that’s just kind of just as a—I think you’ve got to get comfortable with that. And if you’re not, then you may struggle getting to that point. And the folks that you’re trying to be more friendly with may pick up on that.

Tom Brooks: [00:41:17] But the other thing that I’ve said frequently is that I’m willing to be the first one to extend the olive branch in a case because you don’t know how it’s going to go. Many times, probably—I don’t know if anybody else’s lunches are like mine, but sometimes it just becomes more of a social lunch. You have a great lunch, but you kind of go, “Well, that was great. And I really got to know somebody. And I think we could work together,” but does the phone ever ring for the work?

Michael Blake: [00:41:45] Right.

Tom Brooks: [00:41:45] So, I think that happens to all of us. But, now, now it becomes, how do you become more purposeful? And then, translating that to a relationship. So, it’s kind of that same thing. Be willing to be vulnerable and extend that olive branch to be the first one because, sometimes, it’s, “Well, are they in the boat with me or out? I have one foot in. Are we all in the boat?” So, that comfort level of knowing that I could extend it one time, and I may not ever get anything that comes back to me or an opportunity that I see come my way.

Michael Blake: [00:42:21] And alongside that notion of vulnerability, I think it’s also differentiation and defining yourself, right? I think if you’re in a business where you truly feel or think that it’s important that you handle every opportunity that comes through, no matter what, it’s much harder to find grounds for cooperating with a competitor.

Tom Brooks: [00:42:48] Right.

Michael Blake: [00:42:48] Right? And maybe that’s right, maybe that’s wrong for your practice. For mine, it’s not right. But on the other hand, if you tend towards more specialization, as I certainly believe. I’m a big fan of Rod Burkhardt. In this regard, he is a strong advocate of specialization and differentiating yourself that way. Then, the opportunities for cooperation, I think, become much more obvious-

Tom Brooks: [00:43:13] Right.

Michael Blake: [00:43:14] … and they become much more natural.

Tom Brooks: [00:43:16] Agree.

Michael Blake: [00:43:16] Right? This is in the wrong box. I know Tom’s got this box. So, we’re just going to do this. It really just sort of becomes a system.

Tom Brooks: [00:43:23] Right.

Michael Blake: [00:43:24] I don’t have to think about it.

Tom Brooks: [00:43:25] Right. No, absolutely. You got to know your own strengths and weaknesses. And again, maybe we’ll call that maturity. It does take some time to figure that out and as you’re building a practice. What do you want to be when you grow up? And we’re always refining that. But it just is that time teaches you a lot, and I still have a lot to learn.

Michael Blake: [00:43:50] And I will say this, a way that I benefit from cooperating with competitors is one of my marketing points that I use with prospects is that we get about 25% of our referrals from our competitors, right?

Tom Brooks: [00:44:08] That’s a good point. I mean, we’ve touched on it. I think it suggests that you know what you’re doing, and that you are qualified because in our world, Mike, as you know, and, again, maybe some of your listeners know in your podcast is that, you don’t have to have any credentials to sign a valuation report.

Michael Blake: [00:44:25] No.

Tom Brooks: [00:44:26] There’s nothing that you have to do. I mean, you could just hang a shingle and you could be mister, “Hey, I can appraise your business.” And it’s not all about the credentials behind your name. That’s part of it. So, that’s the first thing you potentially want to look at or consider when you’re thinking about looking at a friendly competitor, but then it becomes that reputation, and do they have the ability to do it? And so, yeah, if you can sit there and tell your prospect, “Yeah, 25%-30% of my work comes from my competitors,” that shines a pretty bright light on you. I think, it sets the bar pretty high for you as that specialist in that space.

Michael Blake: [00:44:59] I found that, I mean, especially since I don’t do litigation, they don’t even care about the letters after my name, right? I mean, they don’t know what they are.

Tom Brooks: [00:45:07] Right.

Michael Blake: [00:45:07] Sometimes, they ask and get bored about halfway through. But that part, because when your competitors are validating you, because ostensibly you know how to evaluate me much better than the prospect, well, that carries a lot of weight.

Tom Brooks: [00:45:21] Well, that’s right. And I’ve kind of figured out some math. And I don’t know if this is right, but I’ve probably reviewed several hundred appraisals of other firms, and I get to see their work. So, again, you begin to get to see-

Michael Blake: [00:45:35] That’s a lot.

Tom Brooks: [00:45:35] You get to see what your competitors and what their work product looks like. And so, you can begin to, in your mind, go, “Okay. Just even from a technical perspective, I can trust them,” or “I can’t trust them,” or they’re doing some things technically that you go, “I couldn’t agree with or sign off on. I don’t want our client to have to potentially get to a wrong answer because their provider is not doing the right thing technically for them.”

Michael Blake: [00:46:05] Right. So, we’re coming up to the end of our time here, but can people contact you if they have a question about a coopetition or cooperating with a competitor?

Tom Brooks: [00:46:15] Sure. Always be glad to chat with folks or email correspondence. Email is tbrooks@windhambrannon.com. And direct dial 678-510-2748 at the office.

Michael Blake: [00:46:40] All right. And there you have it. That’s going to wrap it up for today’s program on Cooperating with Competitors. I’d like to thank my pal, Tom Brooks, very much for joining us and sharing his expertise with us today. We’ll be exploring a new topic each week. So, please tune in, so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy this podcast, please consider leaving a review with your favorite podcast aggregator. It helps people find us, so that we can help them. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision Podcast.

Decision Vision Episode 28: Should I Raise Angel Capital? – An Interview with Charlie Paparelli, Paparelli Ventures

by

Decision Vision
Decision Vision
Decision Vision Episode 28: Should I Raise Angel Capital? – An Interview with Charlie Paparelli, Paparelli Ventures
Loading
/
Mike Blake and Charlie Paparelli

Should I Raise Angel Capital?

What are the steps involved in raising angel capital? What traits are angel investors looking for in the founder of a startup? Noted angel investor and startup mentor Charlie Paparelli answers these questions and more in a wide-ranging interview with host Mike Blake. “Decision Vision” is presented by Brady Ware & Company.

Charlie Paparelli, Paparelli Ventures

Charlie Paparelli, Paparelli Ventures

Charlie Paparelli is a twenty-five year professional angel investor focused on helping entrepreneurs achieving their dream of starting and growing their own company. Five years ago, he began sharing his experiences in a twice-weekly blog to entrepreneurs and angel investors at paparelli.com. In addition to his writing, he is a speaker and a coach helping founders and their new teams build enormously valuable companies.

He invested in over 35 entrepreneurs over the last 25 years. He is the Angel in Residence at Georgia Tech’s Atlanta Technology Development Center. He is also a mentor at the Atlanta Tech Village. He is Chairman of the Atlanta High Tech Prayer Breakfast. The Breakfast is in its 28th year. It is the largest networking event in Atlanta technology, and it is an evangelical outreach. He has held many community leadership roles during his 40 year career in Atlanta technology.

Charlie is married to Kathy for 42 years. They have four children and three grandchildren with another on the way. They are members of Church of the Apostles in Atlanta. Charlie is an avid motorcyclist whose current ride is a 2019 BMW R1250RT.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn:  https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript

Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions, brought to you by Brady Ware & Company. Brady Ware is a regional, full-service, accounting and advisory board that helps businesses and entrepreneurs make vision a reality.

Michael Blake: [00:00:20] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts about how they would recommend thinking about that decision.

Michael Blake: [00:00:37] My name is Mike Blake, and I’m your host for today’s program. I’m a Director at Brady Ware &Company, a full service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia, which is where we are recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe on your favorite podcast aggregator, and please also consider leaving a review of this podcast as well.

Michael Blake: [00:01:01] Our topic today is seeking angel capital. And for those of you who don’t know me, most of you don’t because you’re out somewhere on the internet, I’ve been a cheerleader and advocate in the angel capital world for really as long as I can remember. My first job out of school actually was helping entrepreneurs in the former Soviet Union and in Russia. And at that time, there wasn’t even a term for angel capital. It’s kind of fascinating because the whole business vocabulary was evolving at that time.

Michael Blake: [00:01:34] And  when I moved to Atlanta about 15 years or so ago, I got a taste of the early stage capital scene here. And the one theme that was recurring was you can’t get a deal done here, there’s no angel capital, et cetera, et cetera, et cetera. If you live in Atlanta, it’s tedious. If you don’t, this is news to you. And the thing I, sort of, thought was, well, I saw people making investments in Minsk. And I can’t imagine that investing in Atlanta is harder than investing in Minsk. Maybe I’m wrong, but I can’t imagine it’s that big a difference. There’s got to be something kind of going on here. And as it kind of got more into the community, I was very fortunate, the community embraced me very quickly. I started to learn about the gears and cogs about this.

Michael Blake: [00:02:21] And as I start to learn more about angel capital and early stage investing, in general, and with the travels I’ve had abroad, I came to a conclusion that for all the things that we, as Americans, think make us unique, I’m not sure anything makes us more unique than the angel and venture capital sectors. I’m not sure anything makes us more unique than the way that we support startups. And if you look at at the word “entrepreneurship” in other languages, if you directly translate them, they almost have a sense of doing something semi-devious. If you’re enterprising, that’s not necessarily a good thing. But in the United States, we have a unique cultural facet where the entrepreneur is folk hero. And I can’t think of any other place in the world where we elevate the entrepreneur to that status.

Michael Blake: [00:03:13] And one of the things that makes the entrepreneurial sector go is angel capital. You can’t bootstrap a new car company. You can’t bootstrap a new airplane company, right. And many of the largest companies, the most important inventions in the world that we think of today, at some point, were funded by angel capital. Columbus’s expedition to the new world was funded by Angel Capital called The Royal Family of Spain. Thomas Edison-

Charlie Paparelli: [00:03:53] Queen Isabella.

Michael Blake: [00:03:53] King Ferdinand, who’s with Queen Isabella, right?

Charlie Paparelli: [00:03:56] Yeah.

Michael Blake: [00:03:56] I was going to say King Ferdinand. I knew that was not right, so I choke. It’s Queen Isabella. Thank you. Thomas Edison was funded for the light bulb and for General Electric by a guy named JP Morgan. And so, angel capital pervades almost everything that we think about in terms of the American economic story. And I think if you don’t understand angel capital, you don’t understand a big part about how American business works.

Michael Blake: [00:04:24] And so, here to talk about that is somebody that I’ve known, and, for a long time, I’ve come to respect. He doesn’t even know this, but he’s a spiritual mentor to me. If you don’t ― if you haven’t listened to his or read his emails, get on his email list. There’s how many? I think three times a week. They’re just phenomenal. Not good – great. Required reading. And his name is Charlie Paparelli.

Michael Blake: [00:04:47] Charlie is a 25-year professional angel investor focused on helping entrepreneurs in achieving their dream of starting and growing their own company. Five years ago, he began sharing his experience at a twice-weekly blog – so, it’s twice weekly, just assuming – to entrepreneurs and angel investors at paparelli.com. In addition to his writing, he is a speaker and a coach helping founders and their new teams build enormously valuable companies. He invested in over 35 entrepreneurs over the last 25 years. And we’re going to come back to that.

Michael Blake: [00:05:16] He is the Angel-in-Residence at Georgia Tech’s Atlanta Technology Development Center. He is also a mentor at the Atlanta Tech Village. He is chairman of the Atlanta High Tech Prayer Breakfast, which is the largest pre-6:00 a.m. start event on the Atlanta calendar. Now, that may be a small list, but it is a big deal. That breakfast is in its 28th year. It is the largest networking event in Atlanta technology, and it is an evangelical outreach. And as an aside, whenever I remember, I’ve been to about three or four of those, and one of them was an executive from Apple. Charlie will remind his name. But he’s an executive from Apple who had to come on and talk, I think, a day or two after Steve Jobs passed away, as I recall. And that was some powerful stuff. That was as raw as it gets.

Michael Blake: [00:06:11] Charlie has helped many community leadership roles during his 40-year career in Atlanta technology including Angel Lounge, which is an offshoot of Startup Lounge that serves to educate current and aspiring angel investors in the Atlanta community. Charlie is married to Kathy for 42 years. They have four children and three grandchildren, with another on the way. They are members of Church of the Apostles in Atlanta. And Charlie is an avid motorcyclist whose current ride is a 2019 BMW R125. Nope, that’s wrong. R1250 RT. Got it. That’s a lot of letters and numbers.

Charlie Paparelli: [00:06:46] That’s what it is, yeah.

Michael Blake: [00:06:48] Charlie, thank you so much for coming on the program. I’ve been looking forward to this since we started talking about it several weeks ago.

Charlie Paparelli: [00:06:53] Same here, Mike. I always love the work that you were doing. We started Angel Lounge as an offshoot, as you said, a startup lounge. I wanted to be a part of what you were doing. You’re saying we’re missing this piece. And that’s where we came up with the idea of Angel Lounge.

Michael Blake: [00:07:06] And I think due to that, I think there’s more capital available in Atlanta than there has been because I think you’re making people feel safer and more confident about making those commitments.

Charlie Paparelli: [00:07:17] Yeah. Angel Lounge, we focused Angel Lounge instead of trying to march more companies in front of people, it took us a while to get to the right formula. But the formula that we’re using is, really, our mission is to just help angel investors or those who are interested in becoming angel investors to help make them better investors by sharing each other’s stories and experience with them.

Michael Blake: [00:07:39] So, I’d like to start this podcast with the basic vocabulary question, because I think not everybody knows what angel investing is. They may think it’s venture capital, but angel investing and venture capital are related, but they’re not quite the same, are they?

Charlie Paparelli: [00:07:53] No, they’re very different. If you think about when we ― venture capital, basically, is mutual funds for high-risk investments, all right. So, if you know how mutual funds work, I mean, you have a mutual fund manager, and he has partners, and they raise money to, then, invest that money for other people in mostly public stocks. Public stocks, things that you can get in and out of pretty quickly. So, they might put in 1% to 5% of their own money into that big mutual fund. So, venture capitalists, the difference between them is they’re investing in companies that are privately held companies. And as privately held companies, you can’t get in and out of them quickly. Once you’re in, you’re in forever, okay.

Michael Blake: [00:08:47] Right. That door makes a loud slamming noise.

Charlie Paparelli: [00:08:48] It does, yeah. It’s all ― so, we’re all excited to get in. And then, next thing we’re doing is looking for exits, and we’re driving along the highway, and there are none. You’re just on there, and you hope you don’t run out of gas till you get to that last exit. So, venture capitalists, hopefully, people put money in venture capitalists, and big pension funds put money there simply because it’s a high-risk, high-reward alternative. So, you’ll find some of these big pension funds who will put in maybe up to 3% to 5% of their total fund into high-risk alternatives, of which venture is one of those.

Charlie Paparelli: [00:09:23] Angel investing, on the other hand, that’s like your own money. So, it’s like running your ― it’s like taking whatever money that you thought you wanted to put into higher risk ventures, whether it be $100,000, or $250,000, or some cases, it could be multiple millions of dollars, and you say, “No, I want to be an angel investor. I want to be on the ground. I want to invest in these early-stage startups. I want to work with these entrepreneurs. And I’m willing to risk my personal fortune on this one segment.” So, you have a lot less people, a lot less company — fewer companies that you’ll be spreading that risk across. And so, that makes the risk even higher as an angel investor versus venture capital.

Michael Blake: [00:10:08] Now, I want to clarify one thing just because you happen to be the guest, it only happens to be called an angel investor because that’s a term of art. It has nothing to do with a religious affiliation. Even though you happen to be very open about your faith, there are plenty of people who aren’t that way that are angel investors, right? There’s not a a Christian element to it, necessarily.

Charlie Paparelli: [00:10:28] There’s no Christian element to it. In fact, the term angel investor goes back to people in New York on Broadway who actually wanted to get their shows funded, their new ideas for Broadway shows. And people would come in, and they would ― very wealthy people would liked the idea, and they would fund the show. And those people were called by the producers of those shows angel investors. And that’s where the term ― that’s the genesis of the term angel investor.

Michael Blake: [00:11:00] I had no idea. I did not know that. And the producers, the people who funded Springtime for Hitler were actually angel investors.

Charlie Paparelli: [00:11:07] Oh, you would bring up that example, but, yes, that’s true. Yeah.

Michael Blake: [00:11:10] Well, my wife is Jewish. She’s a big Mel Brooks fan. And I will say, as an aside, by the way, the funniest six minutes in cinema is Springtime for Hitler. Only Mel Brooks can make the Nazis funny. So, we often hear about friends and family as investors. Do they qualify as angels too, or are they sort of a different animal?

Charlie Paparelli: [00:11:29] No, I would call — friends and family, there’s a term called the 3Fs, okay? Family, friends, and fools, okay, are those very, very early stage investors. And when you’re — when an entrepreneur is raising money, the first thing that he’s raising money around or on, as a foundation, is his credibility. Well, the first people that find the person, the entrepreneur, to be credible, especially if it’s his first time being an entrepreneur, is his family. If his family doesn’t think that he or she could do it, then why should anybody else think they should — they’d be able to do it?

Charlie Paparelli: [00:12:11] So, I think that the first round is always friends and family, because they’re other people that say, “Oh, my God. If Mike Blake is starting this company, and Mike is so smart, and I think he’s going to be able to build something great. I have no idea what his idea is. I don’t know what the market is. I don’t know anything. But I know Mike, and I’ll put money behind Mike.” So, I think they are angels. They’re the — they’ve been called fools, but I think what they’re doing — I know what they’re doing. They’re betting on the individual because they have a very deep and long personal relationship with them.

Michael Blake: [00:12:44] So, you bring something up that I want to make sure that we cover because there’s a timeline of maturity here, right? And that friends and family round, if you will, that investment is really banking on the credibility, which means there isn’t a business yet, right. There’s there’s a hope, an idea, right? A story, I guess-

Charlie Paparelli: [00:13:05] Yeah. Just somebody-

Michael Blake: [00:13:05] … in most cases?

Charlie Paparelli: [00:13:06] Most of the time, somebody will come to you and say, “Yeah, this is something that I’ve been doing. I’ve been working for such and such a company for a while.” These are the kind of people that I’ve gotten — I’m attracted to. “I’ve been working in this industry for a while, working for this company for a while. I’m 35 years old. I’ve been through… ” — either “I developed an expertise as a programmer” or “I developed an expertise as a salesperson,” or whatever. “But I know this industry, and I have this idea, and I brought it to my bosses, and no one’s interested in it. And I just can’t let loose of it. And I really want to start a company around it, but I have no idea how to do that. But I think a lot of people will buy whatever I’m going to build or sell.” And that’s kind of how it gets started.

Charlie Paparelli: [00:13:56] And then, the first place they have to go is they have to go to somebody. So, that’s all they have. They have this story. There’s interest and that they — it’s this passion. It’s, sort of, like a God-given idea they can’t let loose of, but they need to be able to feed — they’re 35. They need to be able to feed their family, and they need to start putting money away for college, and all this for the kids, and everything that we all do. They have houses, cars. They’ve got it all. How do they survive? Well, that’s where the angel comes in and says, “We can help you meet your personal expenses at the beginning while you develop — while you unhook from the corporation and your salary,” which is step one. And then, you start building out this idea.

Michael Blake: [00:14:38] You brought something up. I’m going to deviate from a script here because I think that’s — I think it’s important. That 35-year-old, the most — the iconic entrepreneur is somebody who’s in their 20s. To us, they’re basically kids, right. But they actually don’t start most companies, do they?

Charlie Paparelli: [00:14:57] No. You say iconic. What do you mean the iconic?

Michael Blake: [00:14:59] An iconic. Iconic, like the Mark Zuckerbergs, the Bill Gates of the world, Steve Jobs.

Charlie Paparelli: [00:15:05] Oh, I see what you’re saying, yeah.

Michael Blake: [00:15:05] In some case, they actually drop out of school, so they can start whatever it is they’re going to start. But actually, most entrepreneurs look like that 35-year-old, don’t they?

Charlie Paparelli: [00:15:14] Yeah, I think the statistics proved out that it’s somewhere between 35 and 38. And my statistics actually prove out this companies that were successful for me that I invested in, that’s exactly how old people were. So, they have enough. Really, like when I got out of college, I grew up, my father was a middle — he was a train man on the Jersey Central Railroad for 38 years. When I sat around the dinner table, we didn’t talk about business. In fact, I remember I was the first one in my family, first male in my family to actually get a degree from college. And I was getting an accounting degree, and they told us we need to read The Wall Street Journal. I’m reading The Wall Street Journal, and I didn’t even know what I was reading. It didn’t make any sense to me because I had no context or understanding of basic business.

Charlie Paparelli: [00:16:01] So, it’s really, when you come out of school, what do you know about business? What do you know about building a company? What do you know about the disciplines of building a product, the disciplines of launching a product? How to gain — how to hire people? How to do business reviews or reviews for people? Okay. How to properly give a presentation? You don’t know any of this stuff. You have to learn it. And so, that’s why I think those 15 to 18 years out of college, that’s the foundation where you have to prove out your functional expertise, as well as your management expertise.

Michael Blake: [00:16:38] I think the only thing I knew about business was what I remembered from watching that Michael J. Fox movie, The Secret of My Success. That was pretty much it.

Charlie Paparelli: [00:16:46] I don’t remember that.

Michael Blake: [00:16:47] Yeah, nor does anybody else. That’s-

Charlie Paparelli: [00:16:49] Okay.

Michael Blake: [00:16:49] Yeah. So, let’s, sort of, then, now get into the seat of that person that thinks they’ve got that idea, right, and they’re convinced that idea’s got legs, and the company they’re working for is not going to buy it. They sit down, they take you out to lunch, or they sit down for your own office hours at the ATDC. What do you tell them in terms of they’re if going to embark on a venture — I’m sorry, angel capital raising process, what should that entrepreneur be prepared to do?

Charlie Paparelli: [00:17:21] In order to?

Michael Blake: [00:17:24] To raise capital? I’ve got an idea. I need somebody to write me a bigger check than I can write myself. What is that process going to look like?

Charlie Paparelli: [00:17:34] All right. So, I’m going to speak beyond the friends and family.

Michael Blake: [00:17:37] Yeah.

Charlie Paparelli: [00:17:37] So, friends and family is going to provide that bridge to get you from a weekly payroll or weekly salary, if you will, to being an entrepreneur or starting your own business, in effect, okay. So, now, your future and your family’s future is dependent upon you making money. So, tell me again, what are you looking for in this?

Michael Blake: [00:18:03] I’m just looking for the process of raising angel capital, right. I’ve decided I’m going to raise angel capital. What do those steps look like to get from want to raise angel capital to having a check in the bank?

Charlie Paparelli: [00:18:18] All right. Part of this myth, I mean, you talked about entrepreneurs as folk heroes. And there’s a myth around the folk hero that soon as I come up with an idea, the next step is to actually raise capital, okay? Really, the next step is to start building a business. Capital is attracted to businesses. Capital isn’t just attracted to purely ideas, all right. I look back at Facebook, for example. So, when Zuckerberg — what happened with Zuckerberg, he started Facebook, basically, as a freshman at Harvard, I believe was Harvard.

Michael Blake: [00:18:58] I think so, yeah.

Charlie Paparelli: [00:18:59] Yeah. And, sort of, a nerdy guy, wanted to meet people, introvert. He didn’t want to meet people. He want to meet girls. So, what he did is he put together this little site to have people meet each other over this internet. And it was only open to the freshman class at Harvard. And he started to gain traction because there’s a lot of nerds, I guess, that go to Harvard.

Michael Blake: [00:19:30] I think that’s fair.

Charlie Paparelli: [00:19:31] Yeah. And they don’t-

Michael Blake: [00:19:32] I only drove by Harvard when I lived up in Boston, but I think that’s correct.

Charlie Paparelli: [00:19:35] Yeah, all right. Well, they needed to meet each other. So, they didn’t know how to do it. So, they started doing it over the web, this new medium, if you will. And then from there, it started to kind of take off. So, he met people. He became, sort of, a little bit of a rock star in his freshman class and other people in the college. And Harvard said, “Well, what about us as sophomores, and juniors, and seniors, and all that?” And, of course, we always know that seniors always like to pick up freshmen girls, right? That’s kind of how that works. And so, he opened it up, and it just became for Harvard. And then from Harvard, other people started to contact him, and said, “Hey, we’re at MIT. We want to do the same thing. Can you open it up?” So, he started to open up these silos where they couldn’t talk to each other. You can only talk within your educational institution. And from there, it’s sort of just expanded.

Charlie Paparelli: [00:20:27] At some point, people said — he said, “I need to — this thing is so popular now. I need to kind of get some money here, so I can live on and continue to build it out.” And that’s when he got his first venture capital. And by then, he had exposed — he had expanded to high schools, again, siloed. And when he first got some capital in there, it was probably angel money to start with, is they said to him, “Look, why are you doing this siloed approach? Why don’t you just kind of open it up horizontally to anybody who wants to be part of this?” And that was the beginning of Facebook.

Charlie Paparelli: [00:21:00] And that so — he started to build out the attractiveness of the idea and the business model, and that’s what it was. And he had no idea what the business model was going to be when he started. But later, it came about that it was going to be advertising-based because he had captured all of our data, and he was able to sell it to all of the advertisers.

Michael Blake: [00:21:18] Yeah.

Charlie Paparelli: [00:21:19] It worked out really well for him. But the first step, really, is for these — is to think, “I have to build a business.” Don’t think, “I have to raise capital. I have to build a business.” If you build something that looks like it’s going to be a business, that, actually, there’s some buyers out there for whatever service or product that you’re selling, then an angel investor like myself can come in and say, “It looks like this can turn into a big business,” or “This can turn into a $500,000 business, max,” or “Maybe it’s going to be a $5 million business,” then we can size what type of investment it would require. And then, we could figure out what kind of returns that we might possibly get based on the investment we put in.

Michael Blake: [00:22:00] And you and I, I think, both know and have met entrepreneurs that, I think, I’ve gotten that backwards where their business seems to be raising capital.

Charlie Paparelli: [00:22:09] Yeah.

Michael Blake: [00:22:11] That doesn’t work very well, does it?

Charlie Paparelli: [00:22:12] Yeah. One of the things I worry about in our community and other communities is we don’t celebrate. We don’t seem to celebrate the progress that a company makes in their marketplace. But what the news covers is how much money they raised on the last round. Money doesn’t build companies, people build companies.

Michael Blake: [00:22:34] Yeah.

Charlie Paparelli: [00:22:34] So, we should be celebrating, “Oh, my gosh, they did a deal with AT&T.” That should be the news, not that they raised $50 dollars in the last round at a $200 million valuation.

Michael Blake: [00:22:48] Yeah, I agree with that.

Charlie Paparelli: [00:22:50] Yeah, you’re right. So, the end point, what we celebrate is some milestone in the process as opposed to the business successes themselves.

Michael Blake: [00:23:03] So, to  raise money for a small business, angel capital is not necessarily the only game in town. It’s not necessarily the best route to go, right? You could — for example, you might be able to obtain a small business loan, right, or you may be to finance things through credit cards. Can you talk a little bit about what differentiates one opportunity that makes it appropriate for angel capital and what maybe makes another opportunity more appropriate for a small business loan kind of scenario?

Charlie Paparelli: [00:23:34] Yeah. Small business loans and credit cards, they all kind of fall in the same bucket. They’re probably 25% interest type loans.

Michael Blake: [00:23:43] Yeah.

Charlie Paparelli: [00:23:43] So, you’ve got to think of them more like working capital loans. So, I need some — I’m invoicing my — I’m doing a service company, so I’m invoicing my customers. I’ve got a 45 to 60-day, sort of, window before that money comes back in. So. maybe I can use credit cards, and I can use these business loans, if you will, to kind of finance that. But for longtime financing, 25% interest is gonna be quite a burden as you go forward. So, I see those as working capital loans.

Charlie Paparelli: [00:24:17] The angel, the other side is banking. Can I go to a bank and get a loan? Well, if you’ve got enough assets, enough collateral, and enough money in the bank, they’re willing to give you a loan. But most of these people don’t have the credit worthiness to get any meaningful sized loan that’s going to kind of move the needle for the business. So, it forces you into selling stock in your company as opposed to just accumulating debt to kind of go forward. So, with stock, you don’t have debt. You have — you’ve sold off a piece. But, now, you have a partner. And that’s what an angel investor is. They’re a financial partner in the company. So you’ve sold off 30%, or 50%, or whatever the number might be depending upon how early stage you are of your company to this investor who’s now going to be hanging out with you for a very long time.

Michael Blake: [00:25:12] And the timing issue, I think, is so important that an angel investor, if they’re experienced – and not all of them are – understands that doors are slammed shut, and you’re on a highway for a while, right? The bank, maybe they understand the door’s slammed shut, but if you’re going to be on that highway for a long time, that meter runs really quickly, right, as that interest kind of piles up. And it takes cash out of the business. But if you can pay that back fairly quickly, maybe that does make sense. If you have enough cash flow initially to kind of — as you said, as you sell through your inventory or whatnot, maybe it makes sense to do that.

Charlie Paparelli: [00:25:54] Yeah. It depends upon — I guess there’s a couple of things to consider is, what kind of business am I building? If I have to spend a lot of time in order to build out a product, a bank loan is probably not gonna be a good way to go. But if I’m doing a services company, or if I’m a reseller of some type of other products, so I’m really looking to just buy product, and then resell product, bank loans make a heck of a lot of sense because you can keep moving them. You can pay them back, you can take them down, you can do it that way. But if I have this long-term investment that I have to make in order to get set up to build my company, well, bank loans, like you said, accrued interest kind of grows very, very rapidly. And then, you’re kind of under water.

Charlie Paparelli: [00:26:44] The other thing to consider is that, do you know enough about what you’re doing to build a company? So, this is where angels come in too. They’re just not people who come with money, but they come with expertise and network. So, if you could find those kind of what I’ll call smart money angels, then they could bring a lot of value to the business to increase your chances of success and mitigate your risk.

Michael Blake: [00:27:11] I want to drill down on that because I know in your model, I think, your smart money is involved. I think you are involved with a greater degree because you do fewer deals, right? I think, in the intro, I think it said you did 30 deals over 25 years, something of that nature, right?

Charlie Paparelli: [00:27:28] Right.

Michael Blake: [00:27:28] So, you are not — you, yourself, you’re not spreading thin. You are going deep into one or two deals at any given point in time. And correct me if I’m wrong, but I think that’s, sort of, on the deeper end of the spectrum. Not all angels are as involved on a day-to-day basis as an intimate partner as are you. Is that fair?

Charlie Paparelli: [00:27:50] That’s very fair.

Michael Blake: [00:27:52] And then, there’s a spectrum. And then, on the other side — and I’ll just share with the listeners some insider baseball. We often call those doctor and dentist deals, right? Nothing against doctors or dentists, but there’s a stereotype that they have money but not the experience of being angel investors. Often, they’ll make an investment but not be involved, right.

Charlie Paparelli: [00:28:16] But the other side of the reason that doctors and dentists get involved too is there’s a jealousy that the business guys are making all the money.

Michael Blake: [00:28:26] Okay.

Charlie Paparelli: [00:28:26] So, they want to become a business guy and that becomes an easy, sort of, on-ramp angel investing, but it’s a quick way to kind of lose some of their hard-earned, sort of, cash flow too.

Michael Blake: [00:28:37] Yeah. Yeah. Oh, sure. That’s a great way to lose money, right?

Charlie Paparelli: [00:28:40] Yeah.

Michael Blake: [00:28:40] But as somebody who’s seeking angel capital, right, on the one hand, what you’re offering, you’re offering experience, you’re offering expertise, you’re offering support. The other edge of that sword is I got to share the steering wheel, right? There’s built-in, day-to-day, in-your-face accountability with which not everybody in the world is necessarily comfortable, right? And some capital seekers will say, “You know what? You’re telling me this dumb money is just going to write me $100,000 check, and then not bother me? Great. Where do I sign?” What does that funding seeker not getting right? What are they overlooking or what are — yeah. What are they failing to see because they see that “free money?”

Charlie Paparelli: [00:29:29] Yeah. I have people — I had a call just the other day, in fact, somebody who was saying to me this is their third time, actually, starting a company. And, actually, the first two companies, they had exits. So, they figured they had the formula down, they’re just going to be successful. So, this is a guy that has total exits that were equal to $37 million in exit. So, this is a pretty successful guy in health care, in the health care vertical. And he’s saying to me, “You know and understand. You understand how to price these deals out. I don’t have revenue yet in this one. I do have a lot of experience. I’ve got good track record. I think that people should pay a much higher amount of money as angel investors for the stock than I’m going to sell in this company at this stage.”

Charlie Paparelli: [00:30:16] And I said, “Well, you’ve got a choice. If you want people who are going to come in, who are going to add to the credibility of your new company, your idea, and also lock arms with you for any future, sort of — be of value add for any future funding that you’re going to do,” I said, “you’re going to have to — you’re selling to professional angel investors who are going to be asking for — they’re looking for good returns, and they understand how hard it is to build companies. So, you’re going to be pricing your company lower than you would with inexperienced – the doctors and dentists.” You go to doctors and dentists, and they say, “Oh, well, I’m pricing this brand new company, never raised money before, has no revenue, hasn’t built the product yet. We’re going to price it at $10 million.” Okay. And from the outside, you might say, “Wow, that’s a really good deal, $10 millions because I look at the stock market and all those companies have billion dollar valuations. So, this is a great deal.”

Charlie Paparelli: [00:31:14] Whereas an angel investor would probably say, “What did you raise money on your last deal for that first round?” He said, “Well, they got an outsized return because I priced it at $2 billion pre-money.” And I said, “Well, that’s what it was worth. And they didn’t get a ridiculously high sign.” I said, “What was the returns they got?” He said, “They got a 10-time return on their money.” I said, “So, what? So, what? Why does that bother you? You were a success. You made millions of dollars because of these people that put this money in.” He said, “Well, I think that I could make even more.” I said, “Well, how much more money do you want to make?” And he said, “Well, it’s not about the money. It’s about fairness.” And I said, “Oh, so it’s about greed, but it’s not about the money.” You know what I mean? It’s like a ridiculous conversation. So, I would say-

Michael Blake: [00:32:00] This is why I don’t argue with you, by the way.

Charlie Paparelli: [00:32:02] So, what do you like? Yeah. So, what you’re missing out on if you get what we’ll call as inexperienced money as opposed to using the pejorative term, is you’re missing out on the experience. I mean, I’ve been an entrepreneur in my earliest days. We built companies from scratch. We did exits. I worked for corporations. I know what it is to to build leaders. I know how to hire people. I know to help. I have a network of people I can bring to the company. I can make introductions to executives. That’s very valuable. Well, if you’ve got a doctor, and he’s not going to do any of that, he’s going to call you up and say, “So, what happened last week?”

Michael Blake: [00:32:44] Right.

Charlie Paparelli: [00:32:44] You know.

Michael Blake: [00:32:44] Unless somebody faints at the board meeting, that’s great. But otherwise, he’s not going to bring that much to the table, right?

Charlie Paparelli: [00:32:49] Exactly.

Michael Blake: [00:32:49] So-

Charlie Paparelli: [00:32:49] So, that’s what you miss out.

Michael Blake: [00:32:51] And you said something that  I want to touch on because I think this is really important. That 10x return, I don’t think that’s really an outsized return when you consider the risk that’s being taken, right? So, I just posted two days ago on my chart of the day, when you look at venture returns, which is more mature than angel, right, 65% of those deals don’t make their money back, right?

Charlie Paparelli: [00:33:14] Right.

Michael Blake: [00:33:14] So, it’s up to a 1.0x return, which means that’s cash and cash. Best scenario, you get your money back, which means that two-thirds of deals lose money, right?

Charlie Paparelli: [00:33:27] Right.

Michael Blake: [00:33:27] Two-thirds of deals in the S&P 500 do not lose money if you’re just sort of in a broad index, right?

Charlie Paparelli: [00:33:32] Right.

Michael Blake: [00:33:32] So, it’s kind of like drilling for oil that the deals that are successful also kind of got to pay for the deals that weren’t, right? The well that strikes oil also has to pay for the drills you put in that didn’t strike oil.

Charlie Paparelli: [00:33:46] Right.

Michael Blake: [00:33:47] And so, if you’re successful, perhaps you’re thinking, “Boy, you know, 10x returns seems rather greedy.” But from the investor’s standpoint, you got to have that, or you’ve got to have that aspirationally. You have to hit it once in a while or the economics, given the risk and the failure rate, just don’t work out, right?

Charlie Paparelli: [00:34:06] Yes. So, what you wind up with, I think that the average angel that has been doing it for some — let’s say, a 10-year period, I think their returns are somewhere — somebody — this is somebody that presented at Angel Lounge. I think those returns were somewhere around 3% to 6% as an internal rate of return.

Michael Blake: [00:34:26] Oh, my gosh.

Charlie Paparelli: [00:34:26] Well, that’s an awful lot of risk and an awful lot of work, okay, to get those kind of returns. And what happens is when you’re speaking with entrepreneurs, every entrepreneur know his company is going to be a great success, and it’s going to be worth a lot of money. What he doesn’t have is any kind of context to say, “As an angel investor, I’m looking at 20 people that look like you, okay, and I’m seeing — I really understand where the risk is because I’ve talked to people at all different levels. You seem to be the most attractive, but there’s no guarantee that you’re going to be successful.”.

Charlie Paparelli: [00:35:05] That guy I talked about in health care, I said, “You’ve got millions of dollars.” He says — I said, “Why don’t you put your money into this thing if it’s such a good deal?” And he said, “Well, I’ve already put $200,000 in.” And I said, “Well, $200,000 to you is nothing based on the exits that you had. So, you’ve got to be worth more than $15 million.” He goes, “Well, I’m not going to tell you what I’m worth, but you’re not far off.”

Charlie Paparelli: [00:35:28] And then I said, “Well, if this is such a great deal, if it’s so low risk that you’re going to be a success, why would you want to share it with anybody?” And he said, “Well, there’s always a chance that it’s going to fail.” I said, “Well, you didn’t say that in the first 20 minutes of our conversation, you know.” But you see, this is the reality of it. So, I want to take no risk, and I want all the risk to be put on the investors. And I don’t think they should get more than a three-time return if it works.” And I said to him, “Would you invest in that deal?” And he didn’t answer me. But you see, it’s crazy the way these deals get positioned.

Michael Blake: [00:36:06] Well, you know, I think in fairness, it’s sort of in a symmetry of kind of how you look at it. From the entrepreneur’s deal, they have one deal, and that’s it, right? But I want to build on something that you said. Even the deals you invest in, let’s say — I know you don’t do this, but let’s say you’re an angel that’s got money in six deals, right?

Charlie Paparelli: [00:36:26] Yeah.

Michael Blake: [00:36:28] When you put money in those six deals, you didn’t think any of them were going to fail individually. You wouldn’t have put your money in, right? You think that all of them are going to be successful when you put your money in, but you know that four of them are not, or five of them are not, or maybe all six of them are going to lose. You just don’t know which ones.

Charlie Paparelli: [00:36:45] You know, it’s funny that you say that, the four of the six will not be okay. There is such a deep sense of denial. Even me who has been through this that I still think I’ll be six for six. Okay? That’s why we do these deals. You know, I mean, you can’t be an angel investor, and not be idealistic, outsized, idealistic, and outsized hopeful. Otherwise, you wouldn’t do these things.

Michael Blake: [00:37:10] Right.

Charlie Paparelli: [00:37:11] So, that’s what happens.

Michael Blake: [00:37:11] Nobody would ever enlist for the army if they thought they’re the one that’s going to get shot.

Charlie Paparelli: [00:37:15] That’s right. That’s right.

Michael Blake: [00:37:16] You got to have that going in. It just doesn’t make any sense, right? So, how much lead time? I mean, how long do you think — how long does it normally take? Let’s say there’s a successful angel funding process that takes place. As an entrepreneur is thinking about their business plan, how long does that process usually take?

Charlie Paparelli: [00:37:39] Well, it’s a hard question to answer, but if I’d say in general terms, I would say 90 days.

Michael Blake: [00:37:47] Okay.

Charlie Paparelli: [00:37:47] Okay. But it’s highly dependent. If we’re speaking to entrepreneurs and business people here, it’s highly dependent upon the quality of your business. If you are sitting here, and you don’t really have anything, and the idea doesn’t really even solve a clear business problem, you can spend the next two years trying to find the first person that’s going to put money behind that. And in that two years, you’re going to change, change, change, improve, do better until you hit on some business that makes sense based on your expertise. And then, the 90 days will kick in.

Michael Blake: [00:38:23] Right.

Charlie Paparelli: [00:38:23] All right. So, it could be forever to never, okay? Or if you really do, in fact, have something, it could be as quick as 30 days, okay? That happens if you get the first person who has high credibility as an angel in the deal, then it’s a pile-on. Everybody’s got to be in the deal, right, because the credibility went up. If Charlie thinks that Mike has got a really good shot at this, and Charlie’s done a lot of these deals, I’ll put money in that deal. Well, what’s the deal? I don’t even know what it is, but Charlie’s on the deal. I’m going to do the deal. You know, that’s the old thing that we had about the t-shirt for Sig Mosley, right, who was sort of the godfather of angel investing in Atlanta that said “Sig said no.”

Michael Blake: [00:39:08] Yeah.

Charlie Paparelli: [00:39:10] Right? If Sig said no, you were dead.

Michael Blake: [00:39:12] That was already a horse head in your bed, basically.

Charlie Paparelli: [00:39:13] Yeah, exactly. That’s what it was. But if he said yes, everybody wanted in on the deal. They don’t even know what they were investing.

Michael Blake: [00:39:20] Right.

Charlie Paparelli: [00:39:21] That’s the [crosstalk].

Michael Blake: [00:39:22] It could have been alpaca as a service. And if Sig was in, you’re in.

Charlie Paparelli: [00:39:26] That’s it.

Michael Blake: [00:39:26] Now,  saddle me up, right.

Charlie Paparelli: [00:39:28] That was it.

Michael Blake: [00:39:29] So, what do you think about angel groups? There are angel groups out there. We have won the Atlanta Technology Angels, which, as my editorializing, some years are great; some years, you don’t quite know where they are. I don’t think you’ve ever been a very active member as an investor of angel groups, if I’m — correct me if I’m wrong, obviously. But do you have an opinion of angel groups as a place for somebody to go to look for capital?

Charlie Paparelli: [00:39:55] Yeah, I think that angel groups have been — angel groups have been through a process here over the last, I would say 20 years. And it’s taken them that long to get to a model that actually works. And what they’re serving is not entrepreneurs. What they’re serving as passive investors. And passive investors, I always say that wealthy — the passive investors are independently wealthy people. And my definition, personal definition of independently wealthy is I can do whatever I want, whenever I want, which means I have complete control over my time. Well, I might say as a wealthy individual, “I want to be an angel investor.” Well, if all of a sudden, I create a relationship with the entrepreneur, and I put money in, and he sees value in me, well, I might start getting calls like on Saturday morning, which is when I play golf, that this guy lost a big deal, and he just has to meet me for breakfast.

Charlie Paparelli: [00:41:00] Well, what happens is we have all these people that want to do it, but they don’t want to put time in. So, they need somebody to kind of represent them. So, what happened is over the years, these models went from sort of loosely-goosey, “Let’s have a meeting and see who wants to invest,” to actually putting putting in paying dues and paying a group of people to actually vet the deals, present the deals, do the due diligence on the deals, put the terms sheets together, negotiate the term sheets, and then present them to these passive investors. That’s where these groups have gone now. So, if you look at AIM, A-I-M-

Michael Blake: [00:41:38] Yeah, familiar with them.

Charlie Paparelli: [00:41:38] Right? Down in Birmingham. And then, you look also at Matt Dunbar Venture South in Greenville, they have adopted that model. It took them a while to get there, but they’ve adopted the model, and it works because it satisfies the needs and interests of the passive angel investors. So, they have these huge networks of people.

Michael Blake: [00:42:02] And they are funding deals. I know AIM would probably be one of the most active angel investors in Georgia, I think.

Charlie Paparelli: [00:42:10] They are one of. In fact, they started a group here in Atlanta.

Michael Blake: [00:42:16] Oh, okay. I didn’t know that.

Charlie Paparelli: [00:42:17] Yeah, they have their own group. And ATA, the Atlanta Technology Angels, like you said, they’ve had their ups and downs. And so, they haven’t quite had the leadership to kind of build something out longer term. So, they have ebbed and flowed, but they’ve been at a few good deals, you know. Even with this sort of loosey-goosey unstructured model that they have.

Michael Blake: [00:42:38] So, I want to ask you a question I get asked a lot. And that is, from your perspective, how much do business plans and financial models matter? Are they overrated? Are they underrated?

Charlie Paparelli: [00:42:52] Well, I’m a very early stage investor.

Michael Blake: [00:42:55] Right.

Charlie Paparelli: [00:42:55] Right? So, for me, they’re not rated, all right? So, what I look for is my business plan, where we kind of get started, is to say, “Let’s do a three-month forecast. Let’s start with how much money you’re going to spend over that three months.”

Michael Blake: [00:43:11] Got it.

Charlie Paparelli: [00:43:11] “And is there any opportunity for any kind of revenue in that time?” So, really, we’re very granular, okay?  But to sit here and say, “Well, here’s my five-year plan,” I say, “The first thing we need to do is we need to be able to get to cash-flow positive. Then, we can have a plan going forward. But if we can’t get the cash flow positive, that deficit is going to be make up by investors, and investors are going to be part of this drag on you as you try to kind of go forward.” So, I don’t know.

Michael Blake: [00:43:43] And that’s why you like — I mean, in your model, you like to kind of be the only guy, because I think it’s less of a distraction, right?

Charlie Paparelli: [00:43:50] Well, what I’ve done is always — it’s been me and maybe two or three other guys.

Michael Blake: [00:43:56] Okay.

Charlie Paparelli: [00:43:56] But they’re people that I trust. People don’t even know they exist. But I bring them along in some cases. Like one guy, I invite invested in a sales tax business that was selling to telecom, and there was a sales tax prep business, who I called it the ADP of sales tax. Well, I didn’t know telecom buyers. Well, I brought a fellow that’s a very good friend of mine who was a telecom executive, worked for AT&T, fast track guy. I brought him in. He walked me into two deals. Just walked in. One call, boom, we went in, they bought the stuff. Well, that’s really high value.

Michael Blake: [00:44:31] Yeah.

Charlie Paparelli: [00:44:31] So, he knew telecom, and he knew the buyers. So, I understand how to build companies from scratch, and I understand building leadership teams. He was on the other hand. He was the industry expertise that kind of brought us, and he had network like that. Sometimes, I’ll bring in somebody who’s a sales expert in the particular channel, and that would be another guy to kind of bring along that would be very helpful in the deal. So, everybody I bring along has got to be additive to the deal-

Michael Blake: [00:44:59] Okay.

Charlie Paparelli: [00:44:59] … to mitigate the risk and increase chances of success.

Michael Blake: [00:45:04] All right. So, we’re running out of time, but I have two questions I want to ask before we get you out of here and get you back to doing your angel investing. Three founder traits that turn you on?

Charlie Paparelli: [00:45:16] Three founder traits that turn me on. One is that this is the time for this company to start in this person’s life. So, I look at an idea as an arc, and I look at a person’s life as an arc, okay? So, I look at this intersection between where you are in your life as an entrepreneur, and this idea, and where it is in the marketplace. And if there looks like there’s an intersection, I call that, it’s almost like a God moment. It’s a miracle has happened, okay? It’s not artificial. It’s like it had to happen. And I think if we look back at companies like Apple, and Amazon, and Facebook, those are all those kind of moments. And I’m not saying I’ve ever invested in billion-dollar kind of companies, but that’s what I look for in an entrepreneur because it’s very personal. So, it’s not just, “Oh, I was walking down the street, and I came up with this idea.” It has to fit in their life.

Charlie Paparelli: [00:46:12] Secondly is they have to have — for me, they have to have the industry expertise. So, they are 35. So, they do have expertise in a particular functional area. And they also have a lot of experience in that marketplace. So, they have customers they can call on. They have employees who would like to come along with them because they respect them. So, that mitigates risk.

Charlie Paparelli: [00:46:35] And then, lastly, I look for character. And the character I look for, for me, which has been easy to just look for somebody who has a Christian foundation. And the reason for that is, at least, I know what they are supposed to stand for, all right?

Michael Blake: [00:46:54] I know why you’re saying it like that. Okay.

Charlie Paparelli: [00:46:55] There is some level. We’re all hypocrites, we’re all sinners, okay? But there has to be some level of integrity that we can count on. There’s a reason for your [indiscernible]. I say there’s two types of entrepreneurs. There’s those entrepreneurs who believe that there is a God, and it’s them. And there’s other entrepreneurs who realize there is a God, and it’s not them. I invest in the people who know there’s a God, and it’s not them. So, there’s higher level moral authority effect that speaks into their life. When everything’s going well, everybody’s honest, and everybody’s hard working, and everybody believes in helping the other guy. When things get tough, that’s when the values show up. So, I try to get — that last piece of character is very important to me.

Michael Blake: [00:47:41] That’s a great note to kind of wrap things up on. Can people contact you if they have more questions about this angel investing thing?

Charlie Paparelli: [00:47:50] They could write me. That would work.

Michael Blake: [00:47:52] How would they write you?

Charlie Paparelli: [00:47:53] They could send an e-mail to charlie@paparelli.com.

Michael Blake: [00:47:57] Okay.

Charlie Paparelli: [00:47:58] But sign up for the blog at paparelli.com.

Michael Blake: [00:48:03] Yeah.

Charlie Paparelli: [00:48:03] That would be great.

Michael Blake: [00:48:04] Do sign up for it. I kid you not, when it comes out, I read it. I don’t — I can’t remember the last time. It was late. It may have been late once or twice. And when it is, I miss it. So, keep doing. I’m very glad that you do it. It’s very inspirational.

Charlie Paparelli: [00:48:16] Thank you for your support.

Michael Blake: [00:48:16] So, that’s going to wrap it up for today’s program. I’d like to thank Charlie Paparelli so much for joining us and sharing his expertise with us today. We’ll be exploring a new topic each week. So, please tune in, so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy this podcast, please consider leaving a review with your favorite podcasts aggregator. It helps people find us, so that we can help them. Once again, this is Mike Blake. Our sponsor’s Brady Ware & Company. And this has been the Decision Vision Podcast.

Inspiring Women, Episode 12: Taking Your Business to the Next Level (An Interview with Catherine Lang-Cline)

by

Inspiring Women PodCast with Betty Collins
Inspiring Women PodCast with Betty Collins
Inspiring Women, Episode 12: Taking Your Business to the Next Level (An Interview with Catherine Lang-Cline)
Loading
/
Catherine Lang-Cline and Betty Collins

Taking Your Business to the Next Level

Is your business stuck? What do you need to do to take your business to the next level? Betty Collins, host of the “Inspiring Women” podcast, addresses these issues and more. Betty also interviews Catherine Lang-Cline of Portfolio Creative on the challenges she faced in scaling her business. “Inspiring Women” is presented by Brady Ware & Company.

Catherine Lang-Cline, Portfolio Creative

Catherine Lang-Cline

Catherine Lang-Cline is the President and Co-Creator of Portfolio Creative. Prior to forming Portfolio Creative, Catherine spent more than 20 years in the creative industry as a designer for corporations and ad agencies, both as an employee and as a freelancer. Along with her co-founder Kristen Harris, Catherine felt that there needed to be a place to help artists find work and help clients find talent. They combined their experience and opened Portfolio Creative.

Portfolio Creative connects the best of the best in the creative industry. They connect the best creative clients with the best creative talent. That can come in the form of direct-hire, temp-to-hire, projects with contractors, or other needs. They handle all areas of marketing and advertising. For more information go to the Portfolio Creative website.

Catherine is a Certified Staffing Professional with the American Staffing Association. She serves as a board member for the Greater Columbus Arts Council, the Columbus Chamber of Commerce and is chair of the Chamber’s Small Business Council. She is also an active member of WPO and is currently President of NAWBO Columbus.

Catherine resides in Columbus and enjoys art, traveling, cooking, doing home renovation, and riding motorcycles.

Betty Collins, CPA, Brady Ware & Company and Host of the “Inspiring Women” Podcast

Betty Collins, Brady Ware & Company

Betty Collins is the Office Lead for Brady Ware’s Columbus office and a Shareholder in the firm. Betty joined Brady Ware & Company in 2012 through a merger with Nipps, Brown, Collins & Associates. She started her career in public accounting in 1988. Betty is co-leader of the Long Term Care service team, which helps providers of services to Individuals with Intellectual and Developmental Disabilities and nursing centers establish effective operational models that also maximize available funding. She consults with other small businesses, helping them prosper with advice on general operations management, cash flow optimization, and tax minimization strategies.

In addition, Betty serves on the Board of Directors for Brady Ware and Company. She leads Brady Ware’s Women’s Initiative, a program designed to empower female employees, allowing them to tap into unique resources and unleash their full potential.  Betty helps her colleagues create a work/life balance while inspiring them to set and reach personal and professional goals. The Women’s Initiative promotes women-to-women business relationships for clients and holds an annual conference that supports women business owners, women leaders, and other women who want to succeed. Betty actively participates in women-oriented conferences through speaking engagements and board activity.

Betty is a member of the National Association of Women Business Owners (NAWBO) and she is the President-elect for the Columbus Chapter. Brady Ware also partners with the Women’s Small Business Accelerator (WSBA), an organization designed to help female business owners develop and implement a strong business strategy through education and mentorship, and Betty participates in their mentor match program. She is passionate about WSBA because she believes in their acceleration program and matching women with the right advisors to help them achieve their business ownership goals. Betty supports the WSBA and NAWBO because these organizations deliver resources that help other women-owned and managed businesses thrive.

Betty is a graduate of Mount Vernon Nazarene College, a member of the American Institute of Certified Public Accountants, and a member of the Ohio Society of Certified Public Accountants. Betty is also the Board Chairwoman for the Gahanna Area Chamber of Commerce, and she serves on the Board of the Community Improvement Corporation of Gahanna as Treasurer.

“Inspiring Women” Podcast Series

“Inspiring Women” is THE podcast that advances women toward economic, social and political achievement. The show is hosted by Betty Collins, CPA, and presented by Brady Ware and Company. Brady Ware is committed to empowering women to go their distance in the workplace and at home. Past episodes of “Inspiring Women” can be found here.

Show Transcript

Betty Collins: [00:00:00] Today, this podcast is about going to the next level in your business. We could go on and on about going to the next level in your professional life or in your career, in your company and in your personal life, but today I want to talk really about the business. It’s your business. It’s a woman-owned business, and we’re going to focus on that. For part of the podcast, I’m going to interview Catherine Lang-Cline. She’s with Portfolio Creative, and she has a great story. The reason I chose her is just encouragement.

Betty Collins: [00:00:30] She’s done an amazing job, and it looks easy from the outside, but she’s been through anything probably that you have been through. I have known her through being involved with the National Association of Women Business Owners, the NAWBO Columbus chapter. I had the privilege of serving with her on the board, watching her leadership. It’s no wonder she’s had success. She’s very known in Central Ohio area due to that success, but also just her involvement within the community.

Betty Collins: [00:00:56] I chose the topic today because women are starting businesses at a rapid pace. Here’s some numbers, and this is from the Women’s Business Enterprise National Council, so they’re pretty accurate, and it was done in 2018, so it probably hasn’t changed tremendously. As of 2018, there are 12.3 million owned businesses. When you look back in 1972, when they started tracking this stuff, there was 402,000 businesses, so we go, “Okay, yay! We’ve done some good things.” Here’s a statistic that’s great, women own 4 out of every 10 businesses in the US. That’s pretty significant, considering in 1988 you couldn’t even get your own financing. There was law that finally went into place for that if you were a business owner.

Betty Collins: [00:01:42] Since 2007, the number of women-owned businesses have increased 58 percent, which is better than businesses, overall. Again, we’re going kind of at this rapid pace. Last year, 1,821 businesses started a day, every day, and they were started by women. That’s pretty significant. Sounds really great. Sounds really cool. Women are slightly more likely to start a business than men. Why is that? I don’t know the reasoning behind that, but women have that interest. They have that drive. Women-owned businesses employ 9.2 million people. That is just only, though, eight percent of the private sector, but that’s a lot of people.

Betty Collins: [00:02:29] Women-owned businesses generate $1.8 trillion in revenue, which is about 4.3 percent of the revenue out there. The last one is, that’s really cool, from 2007 up to 2018, total employment by women-owned businesses rose 21 percent so, obviously, we are making some bold moves, some big moves in the marketplace that are changing the marketplace. I always say, when the marketplace works, the country works because households have provision, right? So, it’s just a huge, huge thing, and part of what I like to do in the business world is utilize accounting. Being a CPA is the venue for me to be part of that success. As much as all of these things sound really awesome, women struggle in business, and that’s just a reality.

Betty Collins: [00:03:20] Eighty-eight percent of women-owned businesses generate less than $100,000 in revenue. There could be a lot of things behind that number, so you don’t want to, you know, big doesn’t mean better. It could be what they do. It could be that they’re a sole proprietor, maybe they just got started. You know, when you’re a consultant, you can only consult so many dollars when you’re the actual, like an executive coach, there’s only so much to you get to that. But this group is growing, and it continues. Their revenues are growing. They have a little bit of struggle. And, then, 1.7 percent of women-owned businesses, though, do generate a million dollars in revenue or more.

Betty Collins: [00:03:58] Some people think a million dollars is a lot. Some people think a million dollars is nothing when you have that revenue, and those continue to increase, but women struggle getting to that hundred thousand and then a half a million, then over a million. I don’t know if it’s just all of a sudden you’re over a million, your mindset’s different and everything swoosh, and it just goes happily down the road, but they struggle, and it’s not easy being an entrepreneur whether you are a man or a woman.

Betty Collins: [00:04:25] What are the barriers that most women, you know, feel like are there … I’m going to just say business, in general, I think, but of getting to that next level? A lot of times you are this original, and you have an idea and you’re different and you’re passionate and you might want to do things. I mean, I’m considered a unique CPA because I’m fairly personable. As long as I keep that personal side of Betty Collins, I’m a different CPA. I’m still this original over here, but a lot of times we become copies, and we think we need to transform and be the norm, and a lot of times that takes away from who we are. Capital, less than three percent of venture capital goes to women-owned businesses.

Betty Collins: [00:05:08] I’m trying to ask a different question as to why that is because we know it’s true, but we just don’t really know the why so we can get to the problem of how to solve it. More women use credit cards for capital. Your banker would have a whole conversation about that, where you really should be using a bank and have a relationship with a banker that can give you the right capital, and a lot of times you’d use the wrong start-up money, and then you’re in a credit crisis. Being taking taken serious, that’s a huge thing for women. I do tell women if you want to be not looked at as like a clown, then quit going to the circus.

Betty Collins: [00:05:47] If you want to be taken serious, I mean, I think of Lady Gaga. I will admit this out loud that I went to see A Star is Born and thought, “Man, this singer is amazing,” and I didn’t realize ’til the end when they were doing the credits that it was Lady Gaga, right? She talks about, I wish I was taken more seriously. She’s a talented amazing singer. I mean, she can do all kinds of it, right? You have to sometimes, maybe, be different to be taken serious, but that’s a barrier. Owning your accomplishments, men will own them all day long, but women, they don’t do that as much. “Oh, well, you know, it was a group effort,” and all that kind of stuff. I do the same type of thing but, if you’re going to sell yourself, and you’re going to sell that idea and that stuff to venture capitalists, you own what you have created. We don’t do that well.

Betty Collins: [00:06:40] Building a supportive network. Generally, if you have a bad advisor, you just didn’t know what advisor you probably needed. So, a lot of times, you’ve got to have the right supportive network around you, beyond the banker and even the insurance, you know? It’s why I have a supportive network like NAWBO, or that I give to an organization like the WSBA. Because, when you build those networks, they definitely work for everyone that’s involved. And, then, balancing personal and professional life. That’s a barrier not just for moms. That should be a barrier for parents, that should be a barrier for everybody trying to get that stuff working out. You will never have the perfect balance. It’s a myth. You just won’t, so you have to decide which is more important and how you want it to go.

Betty Collins: [00:07:23] The last barrier that, I think, that’s out there is just fear. Nobody wants to fail, and there’s a lot of risk in being an entrepreneur, and so women really have more of an issue with fear. I think men ignore fear, maybe, I don’t know, or they just don’t let you know it’s there. Let me ask you this question before we kind of talk with Catherine. Where are you in the mix for owning a business? Maybe you have the idea, or maybe there’s a passion, or maybe that idea is now on paper and it could become real, or maybe the start-up has actually started and you’re going, “What was I thinking?” Maybe you’ve made it through two or three years and you’re going, “Wow, is there ever going to be light at the end of the tunnel?” There will be. You might be at the stage where, “I want this to be worth it.”

Betty Collins: [00:08:11] I can tell you right now, one reason I’m a business owner is because I have a piece of stock and one day I will sell that stock. It has to be worth something, right? I’m not going to do all this for nothing. Maybe you think bigger is better. There has to be more. More is always better, and then you’re finding out we grew it too fast, we’re too big, and we’ve lost our identities. Maybe legacy is becoming a familiar word, kind of a scary word but, for me, I really hope legacy is not something I run from, but maybe you’re in that stage of “I want another generation to do this,” or, hopefully, what I did had some impact or, maybe, you’re just ready to sell. It’s time to go to the beach. It’s time to get those premium dollars. You might be anywhere in this mix and you may need to go to different levels, but it all is still, I think, the same principles of getting to that next level.

Betty Collins: [00:09:00] You also have to ask yourself what keeps you up at night? Then you’ll know why you’re not getting to the next level. That’s, as an advisor, I probably try to apply that to my business owners the most. What keeps you up at night? It could be that you don’t have any talent to hire. It could be that your line of credit has to renew again, and you’re going “Will it renew?” And payroll needs to be met again. It’s already Friday and it’s two weeks ago. Maybe your business partner who you thought you could do and be in business with forever, their personal life is completely out of control. Guess what? You’re married when that’s your partner. So, you know, these are things that keep you up, maybe bad advisors and now you realize you have them. You’re not keeping up with competition.

Betty Collins: [00:09:43] I had an interesting conversation with someone the other day who’s just been around forever doing something, and she said to me, “I’m behind. I didn’t do what I needed to, and now I’m trying to catch up,” or maybe there’s just not capital available for what you do, and you’re kind of tied. These are things that where are you in business, and what are the things that keep you up at night? Probably you’re not alone if you start talking to other businesses around you. The business community and the importance of the marketplace is too crucial to let those things get you down. You’re too crucial to, hey, go to that next level, so it plays an important part in our marketplace and for those around you.

Betty Collins: [00:10:24] Someone who has done this with just ease is Catherine Lang-Cline, and she is the owner of Portfolio Creative. She’s really admired in our community and respected because her leadership skills, she does make it look easy, but she hasn’t always been that, so I welcome you to the podcast today. I’m glad that you are with us.

Catherine Lang-Cline: [00:10:44] Thank you. I’m very excited to be here.

Betty Collins: [00:10:44] Yes. You said yes immediately, so I was grateful for that. I’d like to start with talking about your company today, so give my audience an overview of here we are now.

Catherine Lang-Cline: [00:10:58] Okay. Well, Portfolio Creative has been around for about 14 years now. We do staffing and recruiting for anything in the advertising and marketing field. In a good year, we can have as much as $9 million in revenue. On average, were around six. Essentially, we just work in the Columbus region, and we are now starting to push out to Cleveland and Cincinnati. We do have some placements in Pittsburgh, and we have worked in New York because, essentially, if people call us, we’ll try and find them someone. Sometimes, people that we used to work with move to those places and ask if we can still do it in that area, so that kind of has helped us grown as well.

Betty Collins: [00:11:36] Oh, that’s great. How many employees do you have today, just approximately?

Catherine Lang-Cline: [00:11:39] Right now, we have about 10, and that includes myself and my business owner. The people that we place, that ranges by season, so that can be anywhere from like 60 to 100 people.

Betty Collins: [00:11:48] Okay, so back when you were ready to start this, talk about your idea and that glass of wine. Tell us about that moment.

Catherine Lang-Cline: [00:11:58] I don’t remember necessarily wine being involved, but I can tell you how I did start.

Betty Collins: [00:12:03] Okay.

Catherine Lang-Cline: [00:12:04] Essentially, both Kristen Harris, my business partner and I, worked for the The Limited Brands, so we had been in marketing and advertising for years and years. She mostly works with corporate America, and I kind of jumped between corporate and freelance, so I knew exactly what it was like to kind of be on my own and how to bill properly and find work at the same time. At that time, I was freelancing for her. Our paths had crossed again, and this time I was working with her as, you know, kind of her contract employee.

Catherine Lang-Cline: [00:12:36] She came up to me and she said, “I spend half my time looking for great, creative talent, and if there was only a service that I could farm this out to, that would be great.” And then, maybe, like the next day she came back and said, “Now, would you use a company like this if you were looking for freelance work?” I was like, “Absolutely.” When I lived in Chicago, I worked for companies like that all the time. I would let them know when I was available, they would find me work, I’d find work on my own, and it was a really, really great way to kind of back fill your pipeline.

Betty Collins: [00:13:03] Sure.

Catherine Lang-Cline: [00:13:05] She was like, “Great, you know how to do this, so I would love to have a partner to try this.” Essentially, we found this book that was called “Six Weeks ‘Til Startup.” It was really more … and I cannot remember the author, but it’s on Amazon, and it’s essentially a workbook that you fill out. It took us more like six months to start up because we were both working at the same time, and we also had to decide, well, when are we going to pull the trigger on this? We picked January 1st of 2005. As an accountant, you’ll appreciate that our books are always based on a calendar versus fiscal year.

Betty Collins: [00:13:36] Yes.

Catherine Lang-Cline: [00:13:36] That worked out well for us because we’re designers, you know, we had not worked in a business, but the reason I mentioned where we both work from, it was that it was a great place to learn about business. When people talk about starting their own business, I’m like, “Where have you worked before?” Because you can teach yourself on someone else’s dime, for the most part, how to run a business. Anyway, so we went through this workbook, which, essentially, went through the process of setting up a business. I would really recommend it to anybody, especially, if they have a business partner, to kind of make sure that you’re on the same page because we have been incredibly lucky that 14 years later, we still get along fantastic.

Betty Collins: [00:14:15] Sure.

Catherine Lang-Cline: [00:14:15] Some of that formula is, everything that I wanted to do, she did not want to do, and everything that she wanted to do, I did not want to do.

Betty Collins: [00:14:23] Perfect.

Catherine Lang-Cline: [00:14:23] Which worked out really great, so it wasn’t everybody was doing sales, or everybody was trying to place talent. I love the sales, she loved finding the talent, and we both stayed in our lane. Actually, going through the workbook, that really helped, too, because it took you step by step as far as what would your mission be for this company? What do you value? How do you vision the company? And you can run into a partner that, and there’s nothing wrong with either scenario, that one, wants, anytime there’s money being made, they want to reinvest in the business, they want to hire more people, and another one wants to buy a boat. If you are that skewed in where you would like the business to go, then yeah, it’s time to have a conversation, and maybe it’s not a good partnership. People also start their businesses with their very best friend. I always like to joke that Kristen and I are not friends. We are business partners.

Betty Collins: [00:15:09] That’s a different thing. That’s good.

Catherine Lang-Cline: [00:15:10] While we would probably do very fine out socially, but we very rarely socialize, and we really did not know each other beyond our work experience and ethics that we found each other. I said, “You know what? Kristen’s always been a hard worker, and I think she would be a great business partner,” and she thought the same of me, so that’s how we kind of started.

Betty Collins: [00:15:32] Okay.

Catherine Lang-Cline: [00:15:32] And then everything else just came like, “Well, what do you have? Well, I have a computer and you have a printer and a fax machine,” because back then we needed a fax machine.

Betty Collins: [00:15:39] Right. Do we have those now? I don’t know if we have those now.

Catherine Lang-Cline: [00:15:41] We don’t anymore.

Betty Collins: [00:15:44] You don’t need them. Well, I mean, what I do like you hearing it saying is, so when we’re talking about the mix of people that are listening to the audience today, there was some thought before you opened doors.

Catherine Lang-Cline: [00:15:55] A lot of thought.

Betty Collins: [00:15:56] There was a lot of planning, so you knew, you know, I guess you could call it marriage counseling. You still might get a divorce.

Catherine Lang-Cline: [00:16:02] Exactly, or Pre-Cana or whatever (inaudible) good marriage.

Betty Collins: [00:16:02] Right, but you had really thought through some good things.

Catherine Lang-Cline: [00:16:10] Yes.

Betty Collins: [00:16:11] So the idea becoming reality was there was a lot of discussion. It wasn’t just, “Here’s my shingle, let’s go.”

Catherine Lang-Cline: [00:16:17] Right, right.

Betty Collins: [00:16:18] Okay.

Catherine Lang-Cline: [00:16:19] Of course, at that time, because you talked a little bit about, you know, funding and things like that.

Betty Collins: [00:16:23] Yeah.

Catherine Lang-Cline: [00:16:25] A lot of it was all, it was all bootstrapped. I mean, Kristin had some money, some cash to start. I was still working part of the time. You know, you’re finding talent to place and, in some instances, I would say, “Well, if I can’t find you the perfect person, it’ll be me. I will come by and do it.”

Betty Collins: [00:16:40] Right.

Catherine Lang-Cline: [00:16:40] There was at least twice that I had to go and do that where, you know, our database was not that deep, and I wanted everyone to have the perfect person to do it and, in some cases, these were my past clients, so I felt I had to kind of handhold it through until I find someone as good as me or better to take the job on.

Betty Collins: [00:16:57] Well, when did you realize that, “Wow, so we talked it through,” because some people think, “I’ve created my LLC with the State of Ohio, everything’s ready to go,” which is not how it works. At what point did you decide, I mean, “We have the idea. We’ve started up, and this is great. We’re off and going?” But when did you decide let’s make this worth our time? When did you see, maybe, give us a time period, how events fell out? When did it become like, “We’re going to make this worth our time”?

Catherine Lang-Cline: [00:17:32] Well, I don’t know how realistic this is for everyone, but for us, we decided that after six months, if we cannot pay ourselves, we were just gonna get a job.

Betty Collins: [00:17:42] Okay.

Catherine Lang-Cline: [00:17:42] We had a lot of networking experience at that point, so we figure we could get a job anywhere, I suppose, at that point. But that was the first finish line we had to cross before we knew this was a real business, and six months came along and we could, so we’re like, “Okay, I guess we’re doing this.” After that point, that’s when we realized, you know, we’re gonna have to start being a little more brave and getting larger clients and get really connected to the people that we know that we used to work with that were now in those companies and find our champions and just kind of went after it and said, “Based on how you know me and how I work and what I can produce, could you take a chance on this?” And we had a number of people that just, essentially, just walked us right into HR or right to the diversity person and got us signed up.

Betty Collins: [00:18:28] So, your mindset changed pretty quickly into this?

Catherine Lang-Cline: [00:18:32] Yeah. Once we realized … because we thought if we paid ourselves, people were buying it, you know?

Betty Collins: [00:18:37] Right. You got Kool-Aid, and they’re drinking it.

Catherine Lang-Cline: [00:18:39] Yeah, exactly. We felt a lot more confident and (inaudible) said hey, “Let’s just keep this momentum going,” and it was just a while, just the two of us, until we started, you know, having a little more success, a little more work, and then we started, you know, hiring interns and part-time people to kind of help with things.

Betty Collins: [00:18:56] When you started expanding and you started getting to, “Hey, now I’ve got a payroll to meet, or I’ve got some volunteer interns. This is awesome,” but what was the hardest transition about, “Man, it was just Kristen and I, we could do these things, now I’ve got an office full of people.” What were those challenges for you?

Catherine Lang-Cline: [00:19:18] One of the larger challenges was delegation, I will say that, because who else is going to do it better than me?

Betty Collins: [00:19:25] Right, right. Right. I am.

Catherine Lang-Cline: [00:19:28] I loved, for example, this is always one of my favorite stories. I love keeping the books. There’s nothing more fun than, you know, when the checks come in and you get to add them up and run them to the bank and things like that. It got to the point where it’s like, “Well, I could probably delegate that.” You know, someone had said to me early on, “Catherine, you need to focus on the things that only you can do, and then you have to hire people that can do these things better or at least get them off your plate,” so that’s kind of where we started with our hiring of people. People that could do the paperwork, people that could do the books, people that could, you know, handle the paychecks and things like that. I would stick with the selling and the relationships and the client, you know, partnerships and things like that.

Betty Collins: [00:20:08] The things that really generated the checks that were going into the bank, right?

Catherine Lang-Cline: [00:20:11] Absolutely.

Betty Collins: [00:20:11] That’s where the business owner is. But I do want it be known that she liked accounting.

Catherine Lang-Cline: [00:20:17] I did. I really did.

Betty Collins: [00:20:18] We have to say that.

Catherine Lang-Cline: [00:20:20] QuickBooks is an amazing thing still to this day.

Betty Collins: [00:20:21] It is.

Catherine Lang-Cline: [00:20:23] That was definitely one. And, then, as we started growing, too, because it is a business where you have to pay people before you get paid, based on the size of the company. I think it’s the larger the company, it’s the longer you have to wait for the check. We had to figure out how we were going to start financing this, because once we started getting into big companies, corporations, it was, you know, like thousands and thousands of dollars, and we couldn’t … Again, we went to the banks, and I can tell you that, you know, unless you can really prove that you’re credible … and you think about that with anything, if a relative comes to you and asks for money and you’re like, “Oh, I don’t know if I like this idea,” they’re not going to loan you the money.

Catherine Lang-Cline: [00:21:01] So, we found a factoring company that would help us, and that is a great way to kind of help you through some of the more challenging times just because they will buy out your invoice, essentially, and they’ll handle … you get the money right away and, essentially, when they get paid, then you get the rest of the money, and they keep a little smidge of it for their time. That works out for about a year, I want to say, until we started being cash rich enough where we could handle it. At that point, once we got to about a million dollars, we then went back to the bank and then suddenly we were friends.

Betty Collins: [00:21:31] Yeah, you were their best client. Right.

Catherine Lang-Cline: [00:21:33] Then, with the help of the SBA, we were able to get a line of credit, and that’s always been kind of the slush fund, if you will. If we are waiting for some money to come in, we’ll just take out the line of credit and then pay it back once the check comes in.

Betty Collins: [00:21:48] Well, I mean, so you go from the idea to you have a passion, you see a need because you’re living in the need, right, and then you get it started. It sounds like things, really, went off fairly quickly for you.

Catherine Lang-Cline: [00:21:59] Mm-hmm.

Betty Collins: [00:22:01] But then you realized, “I got to have bigger clients.” I mean, you can have, you know, 100 $10-clients, or you can have 10 $100-dollar clients.

Catherine Lang-Cline: [00:22:07] Yes.

Betty Collins: [00:22:07] You know, that’s the better way to go. I’m sure you were seeing this growth, but what probably, at this point, were some game changers that just maybe took you off the charts or went, “Wow!” You can look back and go, “That was a game changer”?

Catherine Lang-Cline: [00:22:24] The game changers come when you have a client that everybody’s heard of. Like, for us, we were from The Limited, and we knew a lot of people there, so we found a champion in there to get us in, and we had them within our first year of business.

Betty Collins: [00:22:37] That’s big.

Catherine Lang-Cline: [00:22:38] I know people, you know, really like, “Oh, if I could only work with The Limited.” The difference that made it work, too, was that not only do we have a champion, but we knew exactly what they wanted. We came from their marketing department. We knew exactly what they needed. We knew the right person to go in there, so it was somewhat of an easy sell. It wasn’t like we were coming in and now trying to sell them, you know, office supplies or something because we would have absolutely no experience with that, and we had to work, you know, a couple partnerships and they let us dip our toe in at first. But, for us, if we had five people placed there, it was like Christmas. It had grown exponentially since then because we were able to prove it and keep delivering and you can’t fail once you’re at that level too. A lot of it, I think, also came from just a belief in what we did too. You had talked about how sometimes women will get scared in business and things like that. I can, honestly, say I never have been. I just figured it was worth a try.

Betty Collins: [00:23:33] Yeah.

Catherine Lang-Cline: [00:23:33] It was also a little bit of almost like a math problem, too, “Okay, that didn’t work this time, so what else can we try to get in there. Now, how can we try…” you know, you’re just poking at all these different angles. “Who do we know? Who can we find? What networking event will they be at? Who’s a friend of a friend that could get me in there?” Because it was never a “No,” it was a “No, not yet,” or, “No, not now,” and I just felt like, well, why wouldn’t they want to work with us, you know? For me, it was just no question, we were just gonna get in there and we were just gonna do it, and I just hoped that Kristen was able to handle everything I threw back at her and she did, so.

Betty Collins: [00:24:10] Yeah, but I like the fact one of the barriers we talked about was owning, kind of owning your success, owning your idea, believing in that, and it sounds like you had no issue with that.

Catherine Lang-Cline: [00:24:18] Right. A lot of people might think, “Oh, I’m not like that,” but everybody kind of is. I think you have to kind of get over your own personal hump with that too. I had that as well. My life could be its own podcast, you know, as far as some of the struggles that I’ve gone through and, you know, a past marriage and, you know, things like that.

Betty Collins: [00:24:37] Sure.

Catherine Lang-Cline: [00:24:37] Some of the things that changed my life, that really kind of helped, is that I had that great support team. It started initially with, at that time, my boyfriend, who then became my husband. I had said, you know, “I have this crazy idea, I’m going to start a business,” and the first words out of his mouth were, “Oh, I think you’d be great at that.”

Betty Collins: [00:24:55] Awesome.

Catherine Lang-Cline: [00:24:56] And people who were surrounding me said, “Yeah, I think you could do that,” and then when I started, I don’t know, kind of getting more and more into it, you do start connecting with, you know, like the people at NAWBO and other people who run a business, and you find out that a lot of your worries are the same worries that they had, especially at start-up or they run into a certain crisis, which, you know, scares you because you’re not sure how you can handle it.

Betty Collins: [00:25:20] Right.

Catherine Lang-Cline: [00:25:20] But, then, you have people beside you that you can talk to and say, “What do you do in this situation?” And they’re like, “You know? Nothing. It’s going to be fine.”

Betty Collins: [00:25:25] Right.

Catherine Lang-Cline: [00:25:26] We lost a client, and I was able reach out to one of my NAWBO sisters, and she’s like, “Oh, yeah, that happened to us too,” and I’m like, “Well, what did you do?” You know, as I’m still sweating, and she said, “You get more clients,” it was just that simple.

Betty Collins: [00:25:43] Oh, okay. Thank you.

Catherine Lang-Cline: [00:25:45] Oh, okay. The fact that it happened to her and she’s super successful, it took all the sting out of it.

Betty Collins: [00:25:50] Yeah.

Catherine Lang-Cline: [00:25:51] So, then I just knew, you know, all right, then I just have to get more clients and it kind of made the ship a little more right at that point.

Betty Collins: [00:25:58] Well, there’s all kinds of people listening today who are, you know, business owners. You’ve been through all kinds of things, but what is the best advice you give to a business owner who is struggling or they’re just stuck? Like, “Man, you know, Kristen and I came together over six months and then we, all of a sudden, we were the bank’s best friend, and then, you know, hey, we got some big names in,” but then you kind of came to this plateau, you get stuck. What would be the advice you would say about that?

Catherine Lang-Cline: [00:26:26] Just start thinking about things differently. You know, you have to change something to get change. If you keep everything status quo, it will stay status quo, and status quo is a very safe place to be because it works. We could stay at a certain level and be perfectly fine with it. You know, you had mentioned that some of the revenue that women have reached and that’s the average. When I have a bad day, sometimes I think, you know, I have a multi-million-dollar business, and that’s kind of unheard of for a woman-owned business. There’s a lot that just don’t reach that and so, at that point, I’m just like, “Well, I’ve just got to figure this out then,” because clearly, it’s working. Something just has gone off track a little bit, and we have to just try different marketing. We have to try different networking events. We have to try different people. We have to try different cities. So, it’s always problem solving and trying to keep ahead of whatever the latest trend is.

Betty Collins: [00:27:22] I was just talking to someone today and we were trying to solve a problem, and I said, “Maybe we’re just asking the wrong question.”

Catherine Lang-Cline: [00:27:27] Right. Right.

Betty Collins: [00:27:28] Let’s think about what other questions are out there that surround this? I know when I merged my business from a small company to Brady, where in 2012, it was very nerve racking, but I was in that plateau. I was in that stock. This was it. I knew what my next 10 years was going to look like, right? Brady, where I’ve never known what my next 10 years was going to look like, but I did have to ask, step back, what am I going to do differently because I don’t want to stay here?

Catherine Lang-Cline: [00:27:57] Mm-hmm. Yes.

Betty Collins: [00:27:58] Because I believe, you know, my coach will tell you you’re either going forward or you’re going backward, you’re not going to stay right there.

Catherine Lang-Cline: [00:28:04] Yeah. Actually, what you did was definitely a viable option. I mean, merging with other companies, or (inaudible) is a different way of rethinking it. You know, if I have this backing me, I know I can take this farther.

Betty Collins: [00:28:16] Yes.

Catherine Lang-Cline: [00:28:16] So, yeah, it could be advisors, it could be partners, it could be anything but, yeah, it’s really just sitting around and kind of figuring out what is (inaudible) because you might be in an area, too, where you are just tapped out of people, which we have thought of too. Have we talked to everybody? Is this as big as we get? Are we going to be happy with this? Are we going to push it further?

Betty Collins: [00:28:33] Right.

Catherine Lang-Cline: [00:28:33] That changes day to day.

Betty Collins: [00:28:35] Sure.

Catherine Lang-Cline: [00:28:35] Because, sometimes, you know, it’s good to stay in the easy part.

Betty Collins: [00:28:37] Yes.

Catherine Lang-Cline: [00:28:38] But, every once in a while, we’re like, “Let’s just see what happens if,” and that’s just how we grow.

Betty Collins: [00:28:45] Well, share with the audience just the memories or events, something that really impacted your success today, you know, something that you can go, you always, when you’re having a bad day or you’re plateauing, you can go back to that moment.

Catherine Lang-Cline: [00:29:01] Probably the first time we were on the Fast 50 list. I never thought of, at all, about having an award-winning company. At that point, it’s like, you know what? It’s not me that thinks it’s great, me and Kristen, other people are thinking we’re doing a great job too. That is reflected in, you know, a few other awards that we have received too, where it’s like, you know what? People are seeing that we’re making a difference, and so that also helps you kind of raise your game, too, because once you get that first award, you’re like, “Okay, well, can we stay on that list for next year? Can we keep the growth going? What else should we be, you know, trying to get or obtain,” or things like that?

Catherine Lang-Cline: [00:29:41] That’s also how we kind of got more into community involvement, too. We started getting super grateful with how the community was welcoming us, and we’re like we have to give back, and with that becomes a lot of reward, too, just by your growth potential. You know, being on boards, I think, you won’t believe how much you grow when you’re on a board. Volunteer work, you know, things like that. Writing blogs, you know, just to show your expertise in a blog or a podcast or things like that. It’s all that little stuff that kind of helps you own your space, and then people think of you first when things come up.

Betty Collins: [00:30:21] They do. Well, I’m sure there’s a next level, and this isn’t a question on the list, but I’ll ask it anyways. Do you see a next level? Something you are like, “Man, if I could just do that”?

Catherine Lang-Cline: [00:30:30] Oh, gosh. There’s so much I want to do, especially because I have been gifted, I will say, access, to a lot of different opportunities. I would still, on a personal level, would like to break through the corporate board ceiling. That’s one thing that’s on my list of to-do’s. As far as the company itself, I think, I would like to just have it to have a continued, steady growth. I’d like to see it, you know, reach $10 million. That’s been a goal of ours for a while.

Betty Collins: [00:30:58] Sure.

Catherine Lang-Cline: [00:30:58] We talked about, you know, topping off again. It’s like I’d like to reach $10 million but, in the long run, that’s just a number. You know, we have a great team. You know, I’m in good health. You know, there’s nothing that I really need, need. My family’s great. So, sometimes, I’m like, you know, “Don’t rock the boat. Be happy with what you got,” but then, every once in a while, like I said, you’re like, “You know, $10 million would be kind of good bragging rights.”

Betty Collins: [00:31:25] Exactly. They’d be awesome. But there are those things that, I mean, we just learned with Elise Mitchell about the destination versus the journey-

Catherine Lang-Cline: [00:31:34] Yeah. Oh, the journey is so great.

Betty Collins: [00:31:35] Right. You have to have that destination thing out there, though.

Catherine Lang-Cline: [00:31:35] That would, probably, be the one thing that I would add, too, to anybody who starts a business is really kind of enjoy the journey, and every part of it, like the pitfalls and the peaks. I mean, all of it is you learn so freaking much in all of that, and then you can go out and you can help others, you can mentor others. You can be that person that just says, “Oh, you just get more clients,” you know?

Betty Collins: [00:31:59] Right. And they go, “Oh, well, if she said that, I’m sure it’s true.”

Catherine Lang-Cline: [00:32:02] “That happened to her, like, really, I can do it too,” which is definitely reassuring.

Betty Collins: [00:32:07] Yeah.

Catherine Lang-Cline: [00:32:07] The one thing, too, that I would also kind of mention about women business owners, too, is I run into a lot, because I have had the opportunity to mentor a couple, where they kind of feel like they’re a little unworthy of, or scared of, kind of getting super successful, and the reasons are really kind of interesting and, in many cases, true. They don’t want to fail. I mean, I think that women do treat failure a little differently than men do and kind of getting over that. But, then, also, I think they’re afraid of losing friends and family.

Betty Collins: [00:32:39] Sure.

Catherine Lang-Cline: [00:32:39] That was one thing that I had heard a couple of times where if I own a million-dollar business, “How’s my family and friends going to treat me? Am I going to always have to pick up the check? Are they going to always come to me for money? Are they going to call me, ‘Well, you know, Miss Moneybags over there,'” you know? And I have experienced some of that. You have to be prepared that some people are not going to like this new version of you, and anybody that’s kinda holding you back, you might have to think about just kind of not seeing so much, and it’s hard when it’s family or you’re your best, best friends, but there’s a lot of women out there that are more than happy to, you know, enjoy a glass of wine with you, too, so you really have to find your cheerleaders and hang around them.

Betty Collins: [00:33:22] One thing my husband and I talk about a lot is just, because I kind of run into it with my family as well, a little bit of, “Well, she owns that company.” You don’t know how much I own. You don’t know anything about me, okay, but it’s important that, as women, we share in your success and be glad for it, you know?

Catherine Lang-Cline: [00:33:40] Yes.

Betty Collins: [00:33:40] And we say, “Yes, this is all good,” or help that person get to have the success that you’ve had. That’s okay to do.

Catherine Lang-Cline: [00:33:48] Absolutely.

Betty Collins: [00:33:48] Well, I so appreciate you coming today.

Catherine Lang-Cline: [00:33:51] Thank you, again, for having me.

Betty Collins: [00:33:52] You’ve been really insightful. I know that, statistically, we have about 90,000 downloads of my podcast.

Catherine Lang-Cline: [00:33:59] Oh, nice!

Betty Collins: [00:33:59] So, this will go out, and we will be out there telling your story. But, you know, going to the next level, whether it’s your professional career, because you’re not maybe a business owner or you’re a parent or, you know, you’re in certain phases of your life, get with people that you see that the level you would like to be with and get there, and so that’s why we had Catherine come today. So, going to that next level, wherever you are in the mix, don’t let those barriers get you. I’m Betty Collins, and I appreciate your time today.

Katharine Chestnut with Alkaloid Networks, Lisa Laday-Davis with Kennesaw CPA and Nikkita Gordon with Cute and Cocky

by

ABR-6-10-19-Feature
Atlanta Business Radio
Katharine Chestnut with Alkaloid Networks, Lisa Laday-Davis with Kennesaw CPA and Nikkita Gordon with Cute and Cocky
Loading
/

ABR-6-10-19-Group

Katharine Chestnut spent 30+ years focused on marketing strategy continues to provide marketing consulting along being active as a speaker and mentor. She opened Alkaloid Networks, an Atlanta coworking office, four+ years ago and recently launched the Atlanta Coworking Alliance.

Connect with Katharine on LinkedIn, follow Alkaloid Networks on Twitter and Facebook, and Atlanta Coworking Alliance on LinkedIn, Twitter and Facebook.

Lisa Laday-Davis has been a CPA for over 18 years Specializing in Accounting, Tax and Business Planning. She started Kennesaw CPA with the goal of assisting small business owners and entrepreneurs in creating and maintaining thriving businesses. She creates educational webinars, programming and products specifically for business owners.

Laday-Davis is a graduate of Louisiana State University and is licensed in the field of accounting, insurance and risk management. She lives in the Metro Atlanta area.

Follow Kennesaw CPA on LinkedIn, Twitter and Facebook.

Nikkita Gordon, CEO of Cute and Cocky. Never Be Compromised with Cute & Cocky Firearm Accessories and Apparel.

LEADERSHIP LOWDOWN Ross Dietrich with Price Kong and Gay Meyer with USAA

by

LEADERSHIP-LOWDOWN-Ross-Dietrich-with-Price-Kong-and-Gay-Meyer-with-USAA
Phoenix Business Radio
LEADERSHIP LOWDOWN Ross Dietrich with Price Kong and Gay Meyer with USAA
Loading
/

LEADERSHIP-LOWDOWN-Ross-Dietrich-with-Price-Kong-and-Gay-Meyer-with-USAA1

LEADERSHIP LOWDOWN Ross Dietrich with Price Kong and Gay Meyer with USAA

Price-Kong-Logo

Price Kong is a local CPA firm. The firm provides tax, consulting and financial statement and financial planning services to a wide range of industries and client. Price Kong currently has 50 team members and helps clients large and small.

Ross-Dietrich-on-Phoenix-Business-RadioXRoss Dietrich is the managing partner of Price Kong. Ross is originally from Michigan and has been in the valley for more than 20 years. Ross has been with Price Kong for more than 13 years and has been a partner with the firm for 6 years. Ross also is the audit partner for Price Kong and leads the construction services group for the firm.

Ross’s number one passion is his family. He and his wife Tara have 5 children including 8 year old twin boys that keep them on their toes.

Connect with Ross on LinkedIn and follow Price Kong on Facebook.

The mission of USAA is to facilitate the financial security of its members, associates and their families through provision of a full range of highly competitive financial usaa-logo.max-500x500products and services; in so doing, USAA seeks to be the provider of choice for the military community.

Gay-Meyer-on-Phoenix-Business-RadioXGay Meyer is the AVP of HR Regional Operations for USAA and is responsible for HR operations for the Phoenix campus and the development of an integrated strategy across all USAA regions to include Colorado Springs, Tampa, and Dallas.

Based on USAA’s strong commitment to attract, develop and retain the best talent available for their growing company, Gay seeks to develop a unique employment brand for each market and ensure every employee that joins the company has an incredible employee experience.

Follow USAA Careers on Facebook.

The Leadership Lowdown was created to share the REAL story behind valley leaders’ rise to the top, and the truth about what it takes to TRULY succeed in life and business. Hear the raw stories of these leaders’ journeys…the pitfalls, the victories, and all of the heartaches and triumphs in between.

ABOUT YOUR HOST

Jodi Low is an accomplished corporate trainer, inspirational speaker, and the Founder and CEO of U & Improved. Jodi has trained thousands of entrepreneurs and executives on how to build a booming business, master a mindset for success, and achieve the lifestyle they desire through heart-fueled leadership.

Through U & Improved—an award-winning personal and professional leadership development company based in Scottsdale—Jodi has redefined traditional leadership training by creating a sustainable and actionable model that is personal, challenging and meaningful to each and every individual who enrolls in any of the two-and-a-half-day experiential training classes. She and her elite training team have advanced the charge in heart-based leadership
development and empower U & Improved graduates with knowledge, tools and awareness to immediately be more effective and responsive leaders at work, home and within their communities. U & Improved

Among her many accomplishments as a Valley leader, Jodi launched a teen leadership program in 2014 to empower young adults to become more confident, motivated and focused stewards of our future. In 2016, she founded a non-profit arm of the company—the U & Improved Leadership Foundation—that makes the program more accessible to deserving teens.

Jodi has been recognized by industry publications and organizations for her work in leadership development and serves as a source of inspiration within the community. In 2015, she was honored as an “Outstanding Women in Business” by the Phoenix Business Journal and by the Phoenix Suns and National Bank of Arizona with the “Amazing Women” award. She has received both the prestigious “Diversity Leader of the Year” and the Scottsdale Chamber of Commerce’s “Sterling Award.” She was also awarded a Silver Stevie Award for Female Entrepreneur of the Year 2015 and was a finalist for the Junior League of Phoenix’s Valley Impact Award. Jodi is a devoted single parent who volunteers her time at her daughters’ school programs and with organizations such as Angel Mamas, where she’s served on the board for three years.

 

Accountants Coach and Advisor Doug Hoffman

by

Doug Hoffman
Coach The Coach
Accountants Coach and Advisor Doug Hoffman
Loading
/

Doug HoffmanDoug Hoffman has been working with a wide variety of clients, from small family-owned businesses to high net worth individuals, with their estate, tax, business, and personal planning for more than 40 years. He started his own CPA firm in 1977 and grew it from a sole proprietorship with no employees to a regional CPA firm with 5 offices and grossing several millions of dollars in fees per year. Doug will be retiring as managing partner of Hoffman Eells Group CPAs in January 2020 and will be devoting his time to Doug Hoffman, CPA; a firm dedicated to coaching and mentoring other CPA and accounting firms.

His passion in retirement will be to “pay it forward” by giving back his experience to the CPA and accounting industry coaching firms to effectively manage, market, grow, prosper and be more successful. He will introduce them to value added services so the firms can offer the same services to their clients thereby helping the clients manage, market, grow and prosper. This will be the best way to leverage his skills to as many small business owners as possible which is his reason “why”!

Prior to starting his own CPA firm, Doug worked for Price Waterhouse & Co. and was the controller (CFO) for the Lake Placid 1980 Olympic Winter Games. He also has experience of starting and operating thirteen businesses with his wife and his three adult children in their family business enterprises.

Doug is a consultant and principal in American Business Transitions, Inc. (www.CFO2grow.biz) (www.businessprofit2grow.com); an organization dedicated to consulting and coaching small, medium and family owned businesses. He is also a partner in Adirondack Asset Management, LLC, a personal financial planning and investment management firm dedicated to building and maintaining wealth of his clients.

He received his BS in Accounting from SUNY Plattsburgh and his MBA from the University of Connecticut. In addition to the CPA designation, he has also been accredited with the Personal Financial Specialist (PFS) designation by the American Institute of Certified Public Accountants.

Connect with Doug on LinkedIn.

Tagged With:

Our Mission

We help local business leaders get the word out about the important work they’re doing to serve their market, their community, and their profession.

We support and celebrate business by sharing positive business stories that traditional media ignores. Some media leans left. Some media leans right. We lean business.

Sponsor a Show

Build Relationships and Grow Your Business. Click here for more details.

Partner With Us

Discover More Here

Terms and Conditions
Privacy Policy

Connect with us

Want to keep up with the latest in pro-business news across the network? Follow us on social media for the latest stories!

Business RadioX® Headquarters
1000 Abernathy Rd. NE
Building 400, Suite L-10
Sandy Springs, GA 30328