The Next Step

Steve Ressler is an entrepreneur and an experienced investor and advisor in the Search Fund space. He's originally from Ohio and presently based in Washinton DC. 

Steve was attracted to the Search Fund model because it had similarities to private equity, where you buy great businesses or invest in one at a fair price, but also having the responsibility of an entrepreneur, where you reform and manage a business to reach new heights. 

Steve is now backing over 30 searchers and has followed on into over 30 individual acquisitions in the small business space in America.

In this episode, I had an interesting conversation with Steve. Having heard of Steve's experience and background, I used this opportunity to ask him a lot about the investor's perspective; what do investors look for in a good Searcher? What do Searchers typically learn during their Search Phase and into their operation phase? 

I gleaned some insights from his experience that can help anyone that is thinking about coming to Search and the ways in which they can test whether or not it might be a good fit for them. 

Show Notes: 

• 02:46 – Steve talks about his history from being a government employee to being involved in startups, and how he got into the Search space. 
• 05:41 – Steve talks about his experience in dealing with other co-investors in the Search space, and having invested in different kind of businesses such as first-generation businesses and talks about the difference between private equity and the Search Fund model.  
• 11:48 – Steve shares his thought about typical things that he is looking for a Searcher in which he could determine whether or not that person is going to have a successful time being a Searcher 
• 15:52 – Steve talks about what Searchers learn during the Search Phase and operation phase, and what are his insights and experience from these phases in the search fund procedures.
• 29:37 – Steve talks about the skill set that a Searcher must-have, and he shares his tips for new emerging markets that would make sure they are on the right path for growth. 

Connect with Pete: LinkedIn

 Connect with Steve: LinkedIn

Ahron Oddman is the CEO of PSS, a small business he bought in early 2020 that provides software and learning on demand for school students in America. Ahron has a diverse background, including spending 15 years in the military as a Marine and five years working in sales for a startup. He's also done an MBA at Harvard. 

Through all of that experience, he concluded that the next step for him was to commence a Search. He did a self-funded Search in late 2019 and acquired his business in early 2020, an interesting and challenging time as the world was dealing with the start of the COVID 19 pandemic. 

In this episode, we dig into Ahron's journey and how he came to Search in the first place, where he thinks his attributes and aspirations were a good fit for the model, and a little bit about his experience during the search process. We also discuss some of the lessons he's learned during the first 18 months in the hot seat running the business that he acquired. 

It's a great conversation. I enjoyed speaking to Ahron. I look forward to catching up with him again in another 12 months when his business continues to grow and even starts to launch some new products. 

Show Notes:

• 02:03 – Ahron talks about his journey coming to Search, coming through the military, and getting a degree in business.
• 11:29 – Ahron talk about what are the necessary skill you must develop if you’re planning to start a search in a couple of years, such as Sales, Operation, Accounting, etc.
• 17:24 – Talks about a leader’s standpoint in changing operation, to not have a debate but rather an interactive conversation on what are the steps that would take the business to new heights.
• 19:26 – Ahron talk about his business and how he ended up buying the company.
• 28:03 – Ahron talk about taking steps in the Search process and not just waiting on a perfect business and having another opportunity to pass by.

Connect with Pete: LinkedIn
Connect with Ahron: LinkedIn

Alex Simmons is the founder of Voyager Equity, Australia's first traditional Search Fund launched in early 2019. Before launching that fund, Alex was a manager with Partners in Performance in Sydney and prior to that, an investment manager in the UK. He's had some interesting experience across management, consulting, and also private equity. 

In this episode, I get Alex's perspective on the search phase as he prepares to complete an acquisition later this year. We discuss in this conversation how he's used a steady approach to ensuring that he doesn't just buy any business, he wants to buy a good business with which to build value.

Alex gives us the highs, the lows, some of the challenges, and also talks through some of the attributes that others might need to think about if they're considering Search for themselves. I hope you enjoy it. 

Show Notes:

• 01:44 – Alex talks about how quickly you can connect with people in a range of other markets. How culture affects different kinds of markets, and how a lot of things might work in this country but don't work in other countries.
• 04:24 – Alex talks about how he got involved in the search and what really took him to the point to decide that it is the right path to take for himself and what are the important things you need to ask yourself before taking the searchers path.
• 11:34 – Coming to the end of his search phase, Alex talks about his experience and some key take-outs, good and bad, that might help reflect what he's been through in that search journey and what he would tell people considering that in mind.
• 16:57 – Alex talks about his expectation coming to the search on the marketplace in terms of vendor and vendor response and his current perspective of the vendors in the Australian market and the market itself. 
• 26:09 – Alex talks about his priorities what he would be focusing on in his six to twelve months of acquisition.

• Connect with Pete: LinkedIn
• Connect with Alex: LinkedIn

Paul O'Farrell is an experienced banking professional and chartered accountant with over 30 years of international banking and risk management experience with companies such as PwC, National Australia Bank and Bankwest. 

He has an in-depth understanding of the issues facing businesses when applying for finance and a strong network of relationships throughout the banking industry. Paul's blend of corporate banking, credit risk, and business assessment across a range of industries provides an interesting perspective for those looking to be proactive with their financial position and also their banking options, including funding for growth. 

It was really fun talking to Paul. We had a chat about the Australian debt markets and what they mean for small businesses. He helped me understand the lens that banks apply when assessing debt and lending for small businesses. And he also discussed the ways in which you can integrate the debt process with the rest of your search and acquisition processes to remove any perceived hurdles in leveraging your acquisition. 

Debt can be quite an unfamiliar thing for a lot of people that are considering search or are already going through a search process because borrowing money for a small business is quite a unique process. It's important to make sure that you understand it's not as much of a hurdle as what you might first perceive. It's actually something that can really supercharge your deal and also help with the returns from an equity perspective. 

Show Notes:

• 02:05 – Paul talks about his background and experiences and what exposed him to the search fund model. He also talks about the succession aspect of the Australian market as the prior generation (Baby Boomers and older Gen X) will have their retirement in 5 to 10 years.
• 06:20 – Paul talks about his perspective on small business lending and small business debt markets in Australia, and what bankers are looking for in a searcher and the business that he is operating.   
• 16:57 – Paul talks about how much of a hurdle debt is for small businesses and how the search process will put you at an advantage over others. 
• 28:27 – Paul talks about what should be the right thing to do for those people starting their search journey but are not very familiar with the debt process from a business perspective. 

Connect with Pete: LinkedIn
Connect with Paul: LinkedIn

Nima Sedaghat is the co-founder of Wayfinder Capital, the first institutional fund of search funds and searcher-led transactions in Australia and a partner of Australian law firm HWL Ebsworth, a full-service commercial law firm with offices all around Australia. 

He's been advising business owners, executives, Australian and foreign investors, as well as sponsors on restructures, mergers, acquisitions, and investment transactions for almost 15 years. Since 2017, he's been active in the Australian search fund ecosystem. 

He was introduced to the search fund model by a well-known person in the Australian search community Nick Bamford. He has continued his journey in search and met a lot of interesting people in the community. 

In this episode, Nima shares with us his knowledge not only in relation to legal and structuring issues but also in relation to the Australian search fund ecosystem. In this conversation, I had a great time getting into a bit of the nitty-gritty detail from a legal perspective in relation to the search fund structure. This is something that can be an unnecessary hurdle for those people thinking about search as a career path. 

Trying to consider the legal and tax implications of the search fund structure can be daunting, so it's great to know that there are people in Australia that have considered the application of the commercials of a search fund from a legal and tax perspective. It's really great to have people like Nima in our community who are helping people come to market. I hope you enjoy the conversation. 

Show Notes: 

• 02:08 – Nima talks about his previous career and how the Search fund model was introduced to him by Nick Bamford who is a well-known personality in the search fund community here in Australia. 
  
  
• 07:25 – Nima talks about the key attributes of the search fund structure from a legal perspective, the Australian search fund structure itself, the investor's rights, and the technicalities of tax implications on searchers in the Australian market.      
  
  
• 16:05 – Nima talks about the foreign investments into the Australian-based search vehicle and what are the factors that would affect the Australian market and the hurdles that it is dealing with.  
  
  
• 18:16 – Nima talks about the search community, the people he met along the way, the current activities that the Wayfinder Capital is working on, and how local investors give comfort and confidence to searchers in the market.
  
  
• 26:30 – Nima discusses the next stage for the Australian market, what to look forward to in 2022 and how raising awareness about the model would greatly affect the community.

 Connect with Pete: LinkedIn

 Connect with Nima: LinkedIn

Frank Versace is the Chief Risk Officer at Judo bank, one of Australia's newest banks. Judo is taking on the long-established big four banks in the Australian market, with a focus on Small to Medium Businesses... and they're doing a great job at it, too!

Through his broad banking experience and first hand involvement building Judo, Frank has a wealth of knowledge and insights in relation to Small Business Lending, including the things that Searchers should consider when preparing for those initial discussions with a bank.

I was excited to have Frank on this week's podcast because of the clear overlap between Judo's target market and the kinds of businesses that Searchers typically seek to acquire. In this conversation we cover a whole range of things from the early days of Judo, their own startup experience and vision, and importantly, their approach to the Small Business market.

Show Notes:

•03:14 – Frank shares about his Judo Bank journey and how it came to life in the first place a few years ago and how it's evolved over the last couple of years.

•06:36 – Frank talks about what Judo is trying to bring to the Australian market, what is approaching that Judo bank is taking to try and fill the gap.

•09:27 – Frank and I discuss the search fund model in terms of not only finding a business to buy but then leading, operating, and growing it over time.

•13:10 – Frank gives some knowledge of how you'll understand why your business is different, how it's uniquely positioning in its market.

•15:54 – Frank shares about how you can conduct a relationship with your customers.

•22:08 – Frank talks about how to prove the sustainability of the earnings profile.

Connect with Pete: LinkedIn
Connect with Frank: LinkedIn

Rob Gaunt is the Chief Executive Officer of Ace Training who recently took on that role after successfully completing an acquisition of it as a searcher (potentially Australia’s first traditionally funded successful search!).

Through his time searching, Rob had the opportunity to look at a whole range of businesses across Australia before pinning one down to acquire, so he has plenty of great insights to share.

In this episode of The Next Step Podcast, I speak to Rob about how he came to search in the first place, what his reflections on the search phase were, and what it looked like to actually work through a deal and get it to completion. 

For anyone out there that is thinking about taking on a search, Rob delivers some raw, recent first-hand experience that I'm sure you'll find very valuable.

Show Notes
•01:30 - Rob shares his journey about the last two weeks of being in a training company as the CEO.
•02:45 – Rob talks about his career before search and what it was about search that made him interested.
•07:11- Rob and Pete talk about search, how to build, own and operate a business.
•09:37– Rob shares about his experience in SME ventures and how that helped him search his journey.
•13:48 – Rob and Pete discuss what a partnership can do to a search and how it can help you become successful in a business.
•16:36– Rob shares tips on how to determine what type of search to do.

Connect with Rob: LinkedIn

Connect with Pete: LinkedIn

In this episode of the Next Step Podcast, I speak to Jack Lancaster. Jack's currently the director and CEO of Evolution Surgical, a business he acquired as part of a self-funded search.

Jack's got a broad and diverse background, including spending time studying in the UK and even attempting to start up his own business from scratch.

Jack went into search in early 2020 (an interesting time to start a search with COVID 19 hitting!) and successfully acquired Evolution Surgical in October 2020.

I spend some time with Jack talking around the different aspects of search, with most of the discussion revolving around his first nine months in the hot seat of operation.

Jack shares some amazing insights straight from the front line around what it looks like in those first three months after buying the business, what people should be aware of when they first get their feet under the desk, and the kinds of things they should look out for in that those first 12 months of operation.

Connect with Jack: LinkedIn
Connect with Pete:  LinkedIn

Tim Moore and Jake Maisey run Dorado Capital, one of the few Australian family offices actively investing in search funds. Dorado has invested in traditional and self-funded searches both in Australia and overseas. 

Tim has an MBA and is a chartered accountant who started his career in investment banking and led a self-funded search that resulted in the acquisition of Surpac, a software business servicing the mining industry. 

Before joining Dorado capital, Jake was at KPMG in corporate finance for five years and spent several years in the UK with Stenprop (a Real Estate Investment Trust).

In this episode of The Next Step Podcast we cover a range of topics, but particularly on the themes that bring a good perspective on what investors are looking for when they consider searches and backing searches. We also touch on what investors should be thinking about when considering search as an asset class. I hope you enjoyed the episode.

Show Notes: 

·     01:35 –Tim and Jake talked about how they come across search and asset class and what are the things that they have been doing to really get themselves up the curve of what search is as an opportunity.

·     6:17– Pete and our guests discussed investments offshore, particularly in the UK market, comparing the Australian and UK market's maturity and the opportunities that are coming for the Australian market. 

·     09:07 – Pete and our guests talked about the range of structural options when it comes to establishing a search in the Australian market.

·     13:28- Pete and our guests discussed the increase in the volume of searchers, executives, and operators that are thinking about coming to market, whether it is a self-funded or a funded vehicle model of search.

·     18:39- Pete and our guests talked about the kind of characteristics of a searcher that is defined to be backable by investors and the necessary steps to continue in order to keep lighting a fire under the Australian search market. 

Learn more about Search Fund and entrepreneurship through acquisition and connect with Pete, Tim, and Jake: 

Connect with Pete: LinkedIn
Connect with Tim: LinkedIn
Connect with Jake: LinkedIn

In this episode, I talk about the four seasons of search. I think the seasons of the year are a great metaphor to help searchers understand their own journey and the different 'seasons' they will find themselves in along the way. 

This episode is for all those people out there that are thinking about taking the search journey. If you are someone that's is just about to start a search or have already begun, but you want to get a better context of what's that journey look like holistically, then this would be a really valuable ten minutes of your time.  

It will give you a helpful overview of the search experience, from start to finish, and a few pointers along the way as you find yourself in each of these very distinct phases of the search. 

I also highlight some of the questions you should be asking your investors at each of those stages too. I've been through this process many times both as a search and an investor, so I have shared some insights on how you can leverage your relationship with your investors in such a way they can help you through each stage of the journey. 

I hope you enjoy the four seasons of search and find it useful when framing your own journey and what to expect along the way.