#161 - Duane Jackson | Investing in Founder-Led Businesses and Building Author Capital Partners

[00:00:03] This is the Lets Grab Coffee Podcast and I'm your host, George Khalife. Welcome to the Lets Grab Coffee Podcast. I appreciate you making the time and I'm really appreciative of you doing the show. George, I appreciate the invitation. I've been excited to have this conversation with you and to share a bit both on Author Capital Partners as well as my background. Yeah, definitely. Especially great to have, you know, a Chicago-based leader that's sort of grown up as a native to Chicago, is building in Chicago.

[00:00:30] I know you also spend a lot of time in different cities. So I'm excited just to get to know your background, upbringing, your time in PE, all that good stuff. Wanted to start with a quick question. I know I see that you've lived in six different cities, right? Yeah. Which were? I didn't see them highlighted so I'm like, what are those? Yeah, that was a great question. You know, obviously Chicago, born and raised here and thrilled to be building, you know, this firm in Chicago.

[00:00:53] But I'd say across, you know, my career, Boston, where I attended Harvard Business School, Washington, D.C., where I went to undergrad at the George Washington University, GW. Also had a stint at the U.S. Treasury Department back during the financial crisis. Spent a year and a half at D.C. at that time. I've had shorter stints in Austin, Texas, Minnesota, San Francisco, you know, a number of other places. But I'd say consistently kind of found myself coming back to Chicago.

[00:01:22] Fortunate to be married to a New Yorker. And, you know, the day that she admitted that Chicago is a better city to raise a family and to live in general, you know, it was a happy day for me. We are. That's a big win. That's a big win for you out in the city. I think that that is a compliment. You talk a lot about, you know, why Chicago or that Chicago is great for a lot of folks listening who either do live in the city or who don't and who don't know it as intimately.

[00:01:48] Why is growing up in Chicago? Why is building in Chicago as a business leader? Do you think so advantageous, so beneficial and so important? Yeah. I'll touch on two points that you made, you know, growing up in Chicago and building a business, being a business leader in Chicago, because I think kind of, you know, two distinct points. But having grown up in Chicago, it's a world class city with phenomenal museums and attractions. You know, I love going to the Museum of Science and Industry as a kid.

[00:02:17] Loved STEM, loved all things science. My first job was actually working at the Museum of Science and Industry when I was in high school as a tour guide. And so, you know, where I count those days very fondly and now having two kids here, my wife and I having two kids and raising them, having access to all of the same resources has been great. When it comes to business, Chicago is a hub and centrally located in the United States with access to so many others within the ecosystem.

[00:02:45] When I think about investing in private equity, I think someone showed me a list once of 80 different private equity firms in Chicago. And I had no idea that there were that many firms in Chicago, but 80 different private equity firms. Obviously, all of our partners, law firms, accounting firms, all the complements to really build our organization and have, you know, a president across the United States.

[00:03:12] Yeah, that's interesting. I wonder if during the time that you spent and that you continue to spend in Chicago, do you think it has a different sort of grit versus other cities? And I wonder if, you know, this is almost like hardship to building in the Midwest. You can't rely on a plethora of capital. Sure, there are a lot of P firms, but still a different volume relative to, say, New York or California. And so do you think that's a part of it for both founders and investors?

[00:03:39] Yeah, absolutely. And whether, you know, whether it's you're talking about venture stage or private equity where we typically invest, there's obviously larger ecosystems in places like New York City or in terms of venture, you know, on the West Coast, maybe in Boston as well for biotech. But, you know, I'd say that in a lot of ways we make up for, you know, that lighter ecosystem that we have. We oftentimes, you know, call Chicago the second city.

[00:04:06] But, you know, in certain respects, you know, if you think about the ecosystem, it might be third in terms of relative to New York or the move, the migration to Florida by so many firms, maybe Texas as well. Nonetheless, you know, I think there really is critical mass of folks that are here in Chicago eager to be in Chicago and to continue operating businesses here.

[00:04:29] And, you know, it's presented itself as a phenomenal hub in terms of accessibility and travel anywhere across the United States from kind of a centralized vocation. So I think, you know, the business environment in Chicago itself is friendly. We've been able to garner the support of so many, you know, folks, investors, family offices that are all Chicago based that have, you know, supported us through our group. And you grew up in the South, correct? I think you were telling me. I grew up in the South side of the city, working with a class family.

[00:04:58] My dad worked the night shift at Coca-Cola for many, many years. My mom worked as an executive assistant at what was then Amoco and then BP and, you know, other firms. But working class family and was introduced to private equity when I was in high school by a gentleman who is today still a dear friend, a mentor, Brian Cressy.

[00:05:19] Brian is the C in GTCR, one of the co-founders and ultimately spun out to form Tomo Cressy Equity Partners, now Tomo Bravo, as well as Cressy Equity Partners and Cressy Ventures. You know, a number of successful organizations. And I met him as a sophomore in high school and he talked about his passion for sitting across the table from entrepreneurs and being able to provide more than capital.

[00:05:44] Not just capital, but being a thought partner, helping those owners, those entrepreneurs realize their full potential. And that was really, that was in large part the premise of all three capital partners. I was, you know, mid-career, very successful in terms of the firms that I had worked with and cut my teeth at and had completed transactions at. But really wanted to take, you know, the expertise and network that I had developed and, you know, have a real impact on small to mid-sized businesses.

[00:06:12] Businesses in the lower middle market and, you know, across the firm's history. I'm, you know, really cherish those opportunities, as Brian Cressy put it, to sit across the table from those entrepreneurs and provide more than capital. We've had a lot of success here doing that across a number of investments and it's, we find it deeply rewarding. So you, you meet him in high school? I did. You know, he gave you like a presentation or was it like a one-on-one? How did that? You know, it's funny.

[00:06:37] I was sitting in a dorm and so I went to Lake Forest Academy, a boarding school, half boarding students, half day students. And I was sitting in a dorm and I had two good friends on a sofa next to me. They were watching CNBC. They were on their laptops day trading. This is back in the days of dial-up modems and 56K, you know, no Wi-Fi, hardwired across the room into the internet. And a faculty member, a teacher, Dr. S, tapped me on the shoulder and whispered in my ear.

[00:07:05] He said, I hear, you know, you're interested in investing in finance and economics. You know, let's talk about it more. You know, use me as a resource. And candidly, what didn't make a lot of sense about his comment was the fact that Dr. S was an English teacher. I said, you know, what does this English teacher have to know about investing? And so, of course, you know, I took Dr. S up on that. I met him in his office. He gave me a stack of books on investing. You know, the Motley Fool Guide to Investing and so many others.

[00:07:34] So many others that were play, you know, playful names and play on words. But really underscoring that you don't need to take life too seriously. Investing itself can be intimidating. It shouldn't be intimidating. There's so many phenomenal resources out there if you're simply pointing to them. And that's really what Dr. S did early on. But more importantly, you know, what I quickly realized, Dr. S, his PhD was actually in economics. He went to Northwestern, had a PhD in economics and was a pretty astute personal investor.

[00:08:02] You know, knew how to think about and analyze companies and talking about, you know, ROE and ROA and EBITDA and other things and EPS. And so he taught me quite a bit. And most importantly, most importantly, we put together an investment club called the Junk Bond Society, where he would invite in my classmates' parents, many of whom were prominent executives across Chicago. Business executives, private equity executives, venture capitalists. He'd invite them in on a routine basis to talk about their professions.

[00:08:30] And that's how I met Brian Cressy. Interesting. So many pieces of that story. I don't know if these are, I guess, lessons that have resonated with you through that piece in time. But the three things I wrote were sort of time and opportunity. You know, interesting how sometimes, like you can call it maybe luck, but it's being at the right place at the right time. Uncovering the opportunity for you was mentioning what you're interested in to your teacher that then placed you in that position. Absolutely.

[00:08:57] Also, like, you know, don't judge a book by the cover, an interesting one about the teacher, you know, being an English teacher, but actually turns out to be a seasoned economist under the hood who had a lot to offer. And I think the third piece, which I know you're a big proponent of, is extending, you know, the hand to help. What an awesome thing for that teacher to do at that time in your life, I think is quite extraordinary. Absolutely right.

[00:09:20] And not judging a book by its cover, but also just introducing, you know, others to opportunity and to the world of resources around us. You know, and being introduced, in my case, to the world of business and finance and investing at such a young age, opened, you know, my eyes to a profession that I just didn't know existed. And allowed me to, you know, start to develop resources and a network that has really supported me through my career to date.

[00:09:47] Is that sort of the driver that wanted to get you into financial advisory, which you spent, I think, four years at Merrill as a financial advisor, you know, giving that kind of advice, helping prop up generational wealth. Was that the segment for you? Yeah. During college, you know, I realized very quickly that the path to becoming an investor oftentimes started off with being an investment banker. And so I started off, you know, my career as a financial advisor and investment banker to banks.

[00:10:15] And in that role, I served as a banker at Merrill Lynch, primarily advising financial institutions, financial institutions broad-based to everything from insurance companies to banks, asset managers, fintech companies, advising them on mergers, acquisitions, and capital raising.

[00:10:32] And for me, it allowed an opportunity to provide an opportunity to really understand the fundamentals of those businesses, how you think about valuing those businesses, how you think about the growth opportunity in any of those businesses and their capital needs. But beyond that, you know, early in my career, I had the opportunity to work with some pretty phenomenal people, one of whom, you know, another I talked about, Brian Cressy.

[00:10:55] But Mike O'Grady, the CEO of Northern Trust today, was one of those bankers at Merrill Lynch, who I grew close to and very much looked up to and followed. And he provided ample opportunity for me to stick my neck out and learn as much as possible, own as much of a deal process as possible. So, you know, grateful to those early encounters, you know, in my career.

[00:11:17] It was a gentleman that I worked very closely with at Merrill Lynch, who ultimately ended up leaving to join the U.S. Treasury Department during the financial crisis. And gave me a phone call on a weekend and said, look, I need someone who has, you know, your work ethic, who's your work style, someone I've worked with and know and can hit the ground running. And, you know, a week later, I was on the ground in D.C. during the financial crisis at the Treasury Department.

[00:11:41] But, you know, I underscore that because there were a number of folks early in my career who were instrumental to providing, you know, the next opportunity and the next opportunity and being in the right time, the right place. But also keeping my head down and working hard and trying to create value, drive value for those around me, whether it was clients or colleagues. I think it's something that has really helped, you know, to sustain a certain trajectory.

[00:12:05] Hmm. So I have an important question I really want to ask you, which I think a lot of sort of up and coming professionals, leaders think about, care a lot about, but don't often speak about publicly at least. But I know they feel is a little bit of that imposter syndrome. You know, like think back to those pivotal years for you, both at the Treasury, when you were in investment banking.

[00:12:28] And you're basically acting as an advisor to senior executives, many of whom have much more experience than you did at that point in time. I resonate a lot with that as well when I think about my career early on and even sometimes at this point. What was your sort of rulebook to build agency and credibility even when you were getting started?

[00:12:50] Candidly, I think it's about being self-aware and being vulnerable and not overplaying your hand, being open and honest about what you know and what you don't know. I've talked to so many clients, I've advised so many business owners who know their business better than I ever will. They know their sector and their space and ecosystem better than I ever will. And so I never try to pretend that I know their business or that I've been in their shoes. I have to trust them for what they bring.

[00:13:18] But I also, you know, I'm very comfortable and confident in the skills that I, you know, can bring to the table as well. And so whether that was early in my career, career, you know, right out of college, just being willing to work extremely hard, staying up, you know, super late nights and working the long hours in the office to absorb as much information as possible. To, you know, where I am in my career today and having a, you know, critical skill set around transactions and negotiations and creating win-win outcomes with business owners.

[00:13:48] Taking, you know, taking business owners, taking their business, putting the strategic plans in place, helping them think strategically, and then ultimately helping to finance capital needs and growth objectives for the companies. Like, that's where I excel. And I like to marry that with those clients, those portfolio company executives, the families of founders, their expertise.

[00:14:06] But I think, you know, just being aware of what they bring and hopefully an ideal world partnering with others who are also self-aware such that they recognize the limits of their own abilities and can appreciate what myself and my colleagues here then bring to the table. Yeah, I love that. And speaking of self-awareness, when did you, I guess, become aware, to use a good segue that you're giving me, when did you become self-aware to pivot into private equity? Because up until that point, I don't think you cracked into PE.

[00:14:34] You've always had a nugget that you're like, hey, I'm really interested in family-led businesses, founder-led businesses. It honestly was going back to that encounter in high school with Brian Cressy, you know, seeing him as a successful investor. And, you know, when I really thought about what investing means, you invest in companies for three, four, five, six years. Ultimately, there's a track record. There's a scorecard, so to speak, of whether you were successful at creating value in that enterprise or not. I love that fact.

[00:15:03] I mean, it takes a long time to actually realize that value and for that report card to get published. But I love the fact that at the end of the day, there is a firm, you know, affirmation that you've done your job or not. And so that was something that attracted me to, you know, the world of investing. Candidly, when I was in high school, I wasn't sure if I'd be a private equity investor, a venture capital investor, working at a hedge fund, public markets, whatever it might be. I knew that I would be analyzing businesses in some sort of way and putting dollars to work.

[00:15:30] But, you know, it took some time, some soul-searching and a lot of experience, you know, and business to really figure out exactly what form that would take. And as I sit here today, you know, 20-plus years out of college, I reflect on where we are today and the skills that we bring to bear as a team at All4 Capital Partners.

[00:15:50] And it really is a reflection of all of the experiences, the varied experiences I've had across my career, as well as the rest of the team here, a fairly diverse team and bringing in a unique set of experiences for the benefit of the companies we invest in. I mean, the only thing I can think of when I look at your story, and we're kind of skimming because you end up going to Vista, Toigo, BDT.

[00:16:14] These are massive investment firms, merchant banks, like notable, you know, big brand, especially in the PE and the family office space, very well known in the middle. And as you go through that, what I wonder is what makes you think of starting up and launching your first private equity firm on your own in the middle of COVID in 2020? I just think, I mean, I almost feel like crazy. And I'm like firing and firing at the same time, which are two usual recipes for...

[00:16:41] I say every great entrepreneur out there is both crazy and... And I think it takes a lot of guts. You know, candidly, I don't necessarily think about myself as anyone that's gutsy. I think it was a very, you know, calculated risk around the network, the resources, the support that we as a team had, you know, developed over a 20-year stretch.

[00:17:03] You know, having the confidence to know that I could leave a large established organization where I learned a ton and develop close relationships, working relationships with so many to strike out independently and have traction. And it took a lot of planning, you know, it wasn't an overnight decision. So even when I think about the timeframe, we launched the firm in July of 2020, a few months into the pandemic. Well, you know, the planning for that started two years prior.

[00:17:30] The vision for, you know, what we have today here at Author Capital started even long before that. Building, you know, an organization that can partner with business-hunting families, founders, highly entrepreneurial management teams, and a differentiated, a unique way. Putting their best interests first, creating win-win solutions. I didn't see enough of that in the lower middle market.

[00:17:51] You know, as I said at my last firm, and I think that, you know, at BDT and MSC Partners, we did a phenomenal job of providing that exact level of advice and expertise to larger-scale businesses. I really wanted to bring that exact same approach, down market, to some of these smaller businesses to make a difference. I like that. I mean, it takes a lot of stability, you know, in one's mind to also, to your point, it's like you've been thinking about this for a long time. The vision was there.

[00:18:19] The planning was obviously well before COVID started. And then, as you're launching, this external thing happens that you have no control over. How do you and your partners maintain that, you know, calmness, I would say, while you're building and you're trying to be aggressive and you're trying to push forward? And just this, the world around you is shifting while you're trying to figure out how to piece the puzzle, you know? You know, on the one hand, you know, I'll share that.

[00:18:44] I thought about my alma mater, BDT and MSC Partners, and Byron Trott there, and, you know, the timeframe in which that firm was launched. It was launched during the financial crisis. And I think there's no better time to lean into those strong relationships that you have, as well as new relationships. It's no better time when business owners are yearning for advice and partnership to help navigate uncertainty.

[00:19:08] And so I think when you have these, you know, periods of uncertainty in the market, it's a critical time to really expand your network, to develop deep relationships and earn people's trust. And so when the pandemic, you know, hit a bit, you know, a bit maybe of pattern recognition, I said, you know, I've seen this before and I've worked, you know, in a rescue position during the financial crisis. You know, I'm comfortable and confident in my expertise to help others navigate, you know, the unseen, the unknown here in terms of the pandemic.

[00:19:38] And I think about the first, you know, months of building the firm here, a lot of our relationships were built over Zoom. They were built remotely. That's both companies that we ultimately ended up partnering with and investing in, but also investors. It may be, you know, a unique time and experience and history.

[00:19:56] Obviously, an uncanny ability to connect with people, but I would say, you know, harder to actually, you know, close transactions and get people to, you know, move without seeing someone face to face. And so there were a lot of pros and cons, you know, about launching during the pandemic, but I saw it as a net positive, just given how much uncertainty there was in the marketplace. And the need by so many business owners, especially smaller business owners to help navigate uncertainty.

[00:20:22] You bring up a lot of, or I guess you keep mentioning the word relationships and connectivity and network. And I know it's super important in your world as it is in basically every single industry and every profession. It's something that's often very talked about. I know someone you look up to and admires Warren Buffett, who credit Dale Carnegie, how to influence people, how to make friends and influence people or win friends.

[00:20:46] Curious, if you were a Dale Carnegie and writing a book for yourself and your friends on how to win friends and influence people, what are some of the tenets that you would lean on? Yeah. That's a great question. And I think a big one that I always try to remind myself of is just being authentic.

[00:21:02] And I think if it's, you know, it's in your core, if it's in your DNA to connect with people authentically, to be vulnerable, to, you know, share your thoughts and beliefs openly and to learn, you know, to earnestly learn about others and their thoughts and beliefs and what's driving them and to bridge divides, to bridge gaps, to just genuinely connect with people. I think that goes a long way. It goes a long way toward ultimately earning people's trust, getting people to follow.

[00:21:31] So oftentimes we give owners advice and, you know, business owners don't have to take our advice, but I think it's through trusting relationships and experience and track record that people oftentimes, you know, follow the advice that we give them. So, you know, if I'm, you know, thinking about the one piece of advice, it's just being authentic and connecting with people on an authentic basis. Hmm. Yeah, no, a hundred percent. I would definitely agree.

[00:21:59] I mean, a lot of people talk about this too, is just finding ways to be of value. I do think it's starting to be commoditized and not genuine, you know, in the sense of people jump on a call and they ask, how can I be of value? My recommendation on that is like, take a step further and actually do some of the work and get on a call and say, hey, Dwayne, I've done some of my homework. Here are three ways I can be of value and you let me know which ones are the most important. I think there was a ranking. Yeah, it's a great idea. And I think that goes a long way.

[00:22:26] We try to do that, you know, from time to time, actually taking ideas, whether it's an acquisition opportunity or looking at someone's capture structure, looking at inventory, working capital, but going in with thoughts and advice as opposed to just asking a big blanket question of how can I be helpful? So many, especially, you know, I find that so many business owners are so far into the weeds in their own business that they don't necessarily appreciate what you don't know about their business.

[00:22:52] And so you have to sit in common on any of us to really do the work ourselves and to come up with thoughts and suggestions and ideas. But at the end of the day, you have to add value. And it's harder more than ever. You know, so much of the info, so much of the value, a lot of it is public. A lot of it is shareable. When you think about, I guess this sort of lends to a question I wanted to ask you, which is, what do you find is the hardest part about being an emerging private equity investor? When I say emerging, I know you're a seasoned, you know, professional at the...

[00:23:22] Very much. An emerging firm. But emerging firm on your own, right? And so what is the hardest part? Aside maybe from admin and the back office, but just what is it about being a PE investor that's the hardest for you? You know, I'll put it in two buckets. And, you know, one of which is I had the luxury at prior organizations to simply be an investor. Whereas, you know, here at All for Capital, I have managerial responsibilities that ties into, you know, human capital and resources. It ties into talent management.

[00:23:50] It ties into the finances of the firm itself and operations and growth. So it's so much more than just investing. And, you know, I love business building. And I think the exact same principles, guiding principles, operating procedures that we will suggest business owners we invest with and partner with to clients, the just that they use. We have to apply those same principles to our business here. And that's enjoyable.

[00:24:16] So, you know, I think there's an opportunity, you know, for us here to build what I genuinely believe people will look at as a distinct organization that ties into culture, that ties into our focus. You know, there are tons of private equity firms out there. And so, you know, we have to continue to strive to be differentiated and unique in terms of how we operate. It goes back to being authentic in terms of who we are and always keeping that in mind, having a cohesive team.

[00:24:45] One that is battle tested and has been through ups and downs together and knows how, you know, each of us operate. But there's a lot that goes into it. And a lot, frankly, that excites me day to day. A lot in there I want to ask. So, I love, first of all, I love the fact that you brought up because I was going to sort of pin down on one thing that you were saying, which is a lot of what we sort of extend to businesses that we invest in or we even look at a lot of that advice. We try to take the ownership of applying it internally.

[00:25:13] So, curious, what's one example that you constantly, you and the team constantly preach about to other companies that you've infused in author itself? I think process is a big one. You know, if you haven't codified it, if you haven't written it down, if you can't see it, then it doesn't necessarily exist. And so, as I think about us here and our process of sourcing transactions, new investments, you know, we have a lot of discussions internally.

[00:25:41] Sourcing meetings, investment committee meetings about what's in our pipeline and who is, you know, going after which sectors, who is staying close to which investment bankers and brokers or other, you know, non-bankers, non-broker intermediaries. But just having a mapped out, well thought out process, iterative process in certain ways, but a well thought out process around our go-to market.

[00:26:04] The go-to market also extends to investors as well because in terms of capital and capital formation, as we grow the firm, we need to raise more and more capital, ever larger funds to, you know, continue to grow our organization. And that requires a lot of outreach. It requires developing and earning the trust of folks, which doesn't happen overnight. It takes multiple conversations, takes a lot of proof points, you know, touch points with different stakeholders.

[00:26:31] Yeah. Well, also on the differentiated piece, I don't know if I said this to you or Nick. I think it was to Nick because we caught up after I had been introduced to you. We had a separate kind of coffee after that. What I told him is the first thing I, the first sort of impression, let's say, or feeling I got from meeting all three of you at the office is the differentiator to me was it felt like home basically. I know this sounds really cheesy and cringy and I'm not doing like a PSA partnership announcement here, but it really did feel very down to earth, very open end.

[00:27:01] You know, you really sort of preach and you look like what your businesses are. I think that matters a lot. Like you resemble what you're investing in, both physically, the office, the partners. Like I think that visually speaks more than you have to come and tell me, okay, we, you know, it could be a tagline and I would never believe it. Yeah. I appreciate, you know, you saying that. And, you know, one of our favorite things is inviting any kind of prospect, a client, an investor into our office, into our home, so to speak.

[00:27:30] You know, we all spend so much time at work, you know, it is, you know, your home next to your home. And I'm proud to spend more time here in the office than I actually do at home with my family and my kids who I love dearly. But this profession and my colleagues here, it's, you know, it's my life's work. I love being here and we love sharing that with others and inviting them into the mix, hopefully for a long-term partnership. You know, earning the trust of investors over decades and maintaining that relationship for decades, earning the trust of portfolio company execs.

[00:27:59] And one of the things that I genuinely love is those companies that we've been able to back who in turn then come back and invest alongside us. Investing alongside us because they trust us, because they have had, you know, meaningful exits themselves and have the capacity then to invest behind us. But that's, it's a meaningful, you know, stamp or validation from those folks that we've, you know, seen happen a few times and really makes us proud. Like many B firms, I'm sure there's a checklist, right?

[00:28:29] I could just, I can hear people probably at this point anxiously if they don't know much about you or haven't seen the website or whatever. Like what, what do you love to invest in? And so in a utopia, what's like the perfect model of a company that you would bet, you know, right away on? Great, great question. You know, thinking about my background, you know, started off investing at Vista Equity Partners, software and technology focused firm.

[00:28:53] And if you think about those attributes of software companies, recurring revenue, some sort of mission critical product and software, typically long-term contract that are, you know, software solutions that are based in the cloud and easy to install and sell it once. Build it once, sell it many kind of models. So therefore high margins, economies of scale. I think so many good software companies, skilled software companies have these kind of holy grail attributes.

[00:29:22] And, you know, from that, from that experience that I had at Vista, I oftentimes will look for so many of those attributes across other businesses. And to give you one, I think, great example, one of our early investments here at Alter Capital Partners was in an internet service provider, a firm called Zentro Internet. Co-founded by two cousins based here in Chicago. They had really done a great job of scaling their business to close to 400 buildings across Chicago and Milwaukee.

[00:29:51] And they did it through word of mouth, a lot of legwork, you know, hard work. When we first met them and I started having strategic dialogue with the CEO, the co-founder, you know, I saw that there were a number of things that they were doing extremely well, but also a number of things that they weren't doing at all. And so therefore, you know, clearly opportunities, opportunities to bring, to augment the team and to bring additional people who could drive value. One of our first hires, you know, based on our advice and us sourcing a candidate was their first ever CFO.

[00:30:20] And it was that CFO who joined and really helped put the finance and financial planning and analysis practice in motion. He's done a phenomenal job at it. But whether it was the financial function, the sales team and effort marketing, operations, inventory management, there were a number of different areas within the business that could be improved. And again, it was a great company, you know, being run by two highly entrepreneurial founders. You've gotten it to, you know, pretty substantial scale.

[00:30:49] And so, you know, we look for partnerships like that where you've got a solid base of recurring revenue. It's an essential service, oftentimes B2B, where we are confident that we and our executives council, it's all business owners and operators who serve on our executives council, where we're confident that they can come in and leverage their expertise to add value.

[00:31:11] Yeah, and I know you talk about, there was a great article, by the way, just to piggyback off of those points, that you shared with Polsky, I believe, and it was Chicago Tribune, if I'm not mistaken, that you and Nick had co-authored, which is about the three pillars, operational efficiency, customer acquisition, and revenue, that I really loved, by the way. Yeah, yeah. Crane Chicago Business, you know, was published very long ago in Crane Chicago Business. And, you know, it was a snapshot of some of our thoughts in terms of the key criteria that we look for in businesses,

[00:31:41] and that we believe that any business owner should look toward to maximize value. And, you know, I talked about kind of the holy grail, maybe a software company that displays so many of these attributes, but across any sector today, you know, to pick on one insurance brokerage, you know, it's a recurring or reoccurring revenue business. It's sticky. If you're providing great service, you're not going to lose your customers or clients. And so, you know, again, we look for some of those attributes.

[00:32:07] And, you know, kudos to any business owner who can start to implement and execute on those same types of KPIs, even absent having a capital partner or any kind of advisor alongside them. Do you, I'm assuming you have, or maybe you currently do, but I know you probably have a playbook as to how to deal with it. I can already imagine that when you're approaching, especially like a family-led business, a founder-led business, you know, these are emotional entities for most people, as you know very well.

[00:32:37] They're businesses that they've built for a very long time. They're like their whole sort of blood, sweat and tears have gone into this organization. And there's also the perception, not for all PE firms, but some that it's kind of like that hawkish attitude. Like you come in, you kind of slice out, you make the oral glean, you take it over. There is that perception that exists. So when you come into a conversation, how do you balance the ability to provide that constructive feedback

[00:33:04] with trust and empathy so that there is openness to even having a conversation over an organization? I think for me, it really starts with earning trust and then having partnership. I'd say that with a capital P. It's really a partnership between us and that family. You know, if I think about the world of private equity and investing, there are companies that are already owned by a private equity firm or institutional. And then there are those that are founder or family owned.

[00:33:31] And it's a lot more challenging to understand, you know, the needs of various different family stakeholders in the context of a transaction relative to just paying top dollar through an auction process to buy, you know, a business that's already private equity owned. You know, you know, the incentives of that private equity firm on the other side. If they own 100% of the business, it's to maximize value and, you know, price. We don't walk away from challenges.

[00:33:55] But I think, you know, one of the challenges that we enjoy really digging into is just understanding the different needs of different family members, founders, seeing how we can align interest across those family members and across us and our investor base to create win-win situations. It creates more work.

[00:34:41] It could have an introduction for you down the road. And so the like how you make them feel and the experience you leave them with is always important, regardless of what outcome ensues in that one situation. I couldn't agree with you more. And, you know, I'm reflecting actually on the lunch that I had recently. It was with a business owner who was looking to raise capital. And they came to us. They said, look, you know, we've gotten to know you over the past five years. We really like your platform and what you've built. We want to, you know, partner with you. Do you have an interest?

[00:35:09] And, you know, to be candid, the business itself just wasn't within our domain in terms of these financial services. But we went out of our way to lean in and make sure that that business owner was thinking about the term sheets that they received the right way. Pushing on the right issues in the term sheet. Giving that business owner advice based on our, you know, private equity lens. We are investors. And, you know, whether it's something we invest in or not, it's about treating people the right way. And, you know, guess what?

[00:35:35] Out of that relationship has come so many other warm introductions to businesses that are indeed, you know, are within our mandate. And so just earning the trust of one person and not taking that relationship for granted. We do that across the board is something that I think will help us, you know, sustain the firm and to build a firm here that's multi-generational. A hundred percent.

[00:35:55] And as you know, Duane, very well, it's that what that would lead to is what people start saying about you and the firm when you're not in the room, you know, because they're in the spaces of the targets you're going after anyways. Like CEOs are friends with CEOs. PE firms are friends with other investors and LPs. And so the circle is quite tight, regardless of how large the universe can seem sometimes. And it's in those pockets, like what people say about Duane, you know, that I think is, and it's very hard to maintain that. I mean, kudos to you. We talk about differentiation. Reputation is one.

[00:36:24] Doing that for 20 plus years is not an easy feat, man. I appreciate that. And, you know, I definitely have to point to all the great partners I've had along the way. So obviously working at larger firms with phenomenal colleagues alongside me, you know, here at Author Capital Partners, having Nick and the rest of the team, Andrew Bilton, Kevin, alongside, you know, me building this firm every day. It's maintaining relationships. It takes a team. It takes an army. It takes a village, as some say, to really, you know, build something great.

[00:36:51] So we're constantly looking out, you know, for talent that's interested in joining the firm. You know, folks that are ideally aligned in terms of culture and, you know, value and vision. But it takes, you know, it's not a one-person shop here. And, you know, I couldn't do it alone. Yeah, it always takes a village. What gets you excited aside from Author, which I know probably is like 100% right now and, you know, you have a family. But, like, who's Dwayne outside of PE?

[00:37:21] That's a great question. Yeah. So first and foremost, I try to be as much as possible a family man. And, you know, my wife and I jokingly have code names for our two kids. One is called EQ. The other is IQ. I won't say which. But we do joke that one of them is going to be the CEO one day of a business. The other will be within the business, you know, taking orders, but having meaningful impact. You know, maybe the coder, maybe the software developer, the engineer. But, you know, spending as much time with them as possible. I coach my daughter's basketball team.

[00:37:51] You know, go to every one of my son's soccer games, basketball, dance for my daughter. You know, constantly running them around. I try to play golf as much as I can, which, you know, Chicago is not necessarily conducive to half the year. But spending time with family and friends and maintaining relationships with folks, you know, is really what drives me. How do you manage time? Too many things. Give me the secret. Yeah. Is it balanced? I don't know that there's a secret.

[00:38:19] I try to keep everything on my calendar. You know, and even so much so that if I have a meeting that went long, I will go back and adjust the time on the calendar just to reflect the actual time it took. But I try to keep things on my calendar to try and best manage time. You know, it is a constant juggle. A lot of different priorities that, you know, you have to juggle building a business and managing others' expectations. And that's my colleagues. It's our clients. It's our investors. It's my family.

[00:38:48] So, yeah, for me, it's a part of life. I think, you know, I love engaging with people. And, you know, it's just part of life. Love that. I know, speaking of time, I want to be mindful of yours. I want to end on what I believe is your favorite quote, which I know is online. So maybe I'll leave it to you to share it. Unless there's a new one that's popped up recently that you want to leave us with or sort of parting words, whatever it is, the floor is yours. Favorite quote. We do have one on our website. It's a Warren Buffett quote.

[00:39:16] I believe it goes along something along the lines of, you know, a seed was planted once in order for a tree to be here, you know, today. And I think it underscores that it takes investment. Investment in people, investment in ideas, and a lot of hard work. It's not just planting that seed, but you have to water it religiously. You have to provide it with fertilizer. You have to provide it with, you know, training, mentorship, support. You know, I think about my family. I think about raising my kids.

[00:39:45] I think about training and mentoring my colleagues here at work. And it takes constant effort. Most importantly, you know, as with a tree and, you know, you wake up every year, year over year, that tree adds a new ring and you see it growing and you're happy. You have to enjoy the process. You know, as you see the team around you grow and develop and take on increased responsibility and be in a position to lead transactions.

[00:40:08] You think about where you started or think about my kids and them, you know, learning new things in school and unpacking what they're learning and, you know, connecting all the dots. Like, enjoy the journey. Life is short. It's sweet. And so for anyone, I would just say, you know, try to enjoy every moment, every day. I've enjoyed this conversation with you, George, and being able to share, you know, some of these thoughts with folks. But you have to enjoy every moment. Thank you, sir. And likewise, and I'm going to actually have the quote. So let me, I'm going to read it for you. I don't want to put you on the spot. So you definitely got part of it, right?

[00:40:37] Which is someone sitting in the shade today. Someone is sitting in the shade today because someone planted a tree a long time ago by Warren Buffett. And definitely your story speaks volumes, I think, to internalizing that quote in real life. So kudos to you. Kudos to the team at Author. Love what you guys are building here in Chicago. I will definitely continue to be a supporter. And for anyone who's listening, feel free to get connected, support, be a value add as you see fit. We appreciate your support, George. Thank you.

[00:41:06] If you found this podcast useful, make sure to share it out with your community. And if you haven't already done so, subscribe to the podcast. I'll see you next time.