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March 20, 2023

Investment Banker Chris Huchinson Reveals Success Strategies And M&A Trends You Need To Know (#213)

Investment Banker Chris Huchinson Reveals Success Strategies And M&A Trends You Need To Know (#213)
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“I took longer than I needed to build confidence in myself.” -Chris Hutchinson

Chris is a Partner and Senior Vice President with Ernst & Young Orenda Corporate Finance Inc. and has over 15 years of transaction experience​. He is focused exclusively on private company transactions providing advisory services including mergers and acquisitions, financial due diligence, and valuation services​. 

Chris’ work has spanned a wide range of industries, including transportation and logistics, business services, consumer products, and technology. ​Chris previously spent two years in EY’s Private assurance practice​. Chris is regularly published on trends in private company transactions, and participates and is a regular presenter on EY’s Private Company Webcast Series.

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Chris Hutchinson - EY Orenda Corporate Finance Inc. Senior Vice President

Chris Hutchinson - Partner - EY | LinkedIn

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This podcast is brought to you by Deep Wealth. 

Your liquidity event is the most important financial transaction of your life. You have one chance to get it right, and you better make it count. 

But unfortunately, up to 90% of liquidity events fail. Think about all that time, money and effort wasted. Of the "successful" liquidity events, most business owners leave 50% to over 100% of their deal value in the buyer's pocket and don't even know it.

Our founders said "no" to a 7-figure offer and "yes" to a 9-figure offer less than two years later. 

Don't become a statistic and make the fatal mistake of believing that the skills that built your business are the same ones for your liquidity event. 

After all, how can you master something you've never done before? 

Are you leaving millions on the table? 

Learn how the 90-day Deep Wealth Experience and our 9-step roadmap helps you capture the maximum value for your liquidity event.  

Click here to book your free exploratory strategy session.

Enjoy the interview!


​​[00:00:00] Jeffrey Feldberg: Welcome to the Deep Wealth Podcast where you learn how to extract your business and personal Deep Wealth.

I'm your host Jeffrey Feldberg.

This podcast is brought to you by Deep Wealth and the 90-day Deep Wealth Experience.

When it comes to your business deep wealth, your exit or liquidity event is the most important financial decision of your life.

But unfortunately, up to 90% of liquidity events fail. Think about all that time and your hard earned money wasted.

Of the quote unquote "successful" liquidity events, most business owners leave 50% to over 100% of the deal value in the buyer's pocket and don't even know it.

I should know. I said "no" to a seven-figure offer. And "yes" to mastering the art and the science of a liquidity event. Two years later, I said "yes" to a different buyer with a nine figure deal.

Are you thinking about an exit or liquidity event?

Don't become a statistic and make the fatal mistake of believing the skills that built your business are the same ones to sell it.

After all, how can you master something you've never done before?

Let the 90-day Deep Wealth Experience and the 9-step roadmap of preparation help you capture the best deal instead of any deal.

At the end of this episode, take a moment and hear from business owners like you, who went through the Deep Wealth Experience.

Welcome to the Deep Wealth Podcast. And for our listeners, I have a very special episode for you today.

I have one of those mythical creatures, otherwise known as an investment banker here and in the person. And we are gonna go behind the scenes. You're gonna hear things that you're likely not going to hear elsewhere. So, I'm gonna stop it there. No spoiler alerts. Chris, welcome to the Deep Wealth Podcast.

An absolute pleasure to have you with us, and Chris, there's always a story behind the story. Chris, what's your story? What got you to where you are today?

[00:02:05] Chris Hutchinson: Sure. Thanks, Jeffrey. And good to connect again. It's always nice to chat. So, my story really is I started as an accountant, I came out of school. And did few years in auditing.

Personally, what I did is I didn't like the concept of auditing big public companies, so I went into a firm where I could audit a whole bunch of different private companies. Learned a lot about private businesses and. After a couple years, I switched over into our investment banking or corporate finance group, and really since that time, 16 plus years have been doing private company M&A, so, buying, helping private clients and business owners either buy or sell a business.

And really, for me, what I love about it is just that opportunity to have meaningful impact on the business owners' lives. And often, what we're doing is helping them achieve the biggest transaction of their lifetime. And so there's a lot of ups and downs and emotional roller coasters along with that.

But the kind of the payoff at the end of a successful transaction is very personally rewarding for me.

[00:03:11] Jeffrey Feldberg: Wow. so, quite the background there. And I'm just wondering, Chris, when you went from the number side on the accounting side and then into M&A, into investment banking, how has that changed your perspective or, what's gone on with that?

[00:03:24] Chris Hutchinson: I think I wouldn't say that my perspective has changed so much as you put a different hat on, and I think when you're doing an audit, it's an important process, but that business owner doesn't necessarily see the personal reward of getting the audit complete, the way they would get the personal reward of a transaction complete and so I do think what you see is the skills that you learn and as an accountant are very important because they teach you about business and they teach you about how to dig behind those numbers and figure out what it means in terms of the trends of the business and how to position the business. But what it changes is that you know, you're really having a dialogue about what a value of a business is and how to present things and create a transaction, so it is a different lens than that kind of completion of a particular point in time, an audit, and then done and you move on.

[00:04:21] Jeffrey Feldberg: Interesting. And you know, speaking of that, I'm sure with your experience, you've seen the good, the bad, the ugly, and I know offline. We were talking about some interesting things, business owners and here at Deep Wealth were very privileged and fortunate. We speak to a lot of business owners and when it comes to both having an Exit and when it comes to investment bankers, there's a lot of misconceptions and most of them aren't good.

I would say ignorance is certainly not bliss when it comes to an Exit and M&A and I'd be from your vantage point, I'm just curious. What are you seeing in terms of business owners where they're really missing the mark to their detriment like it's not helping them? If anything, it's either killing the deal or even lowering enterprise value.

What would be at the top of your list for that?

[00:05:04] Chris Hutchinson: I would say if I put top three for that, I think the first would be lack of preparation and so the way we always think about it is you should always be doing the good hygiene and kind of doing a lot of these things, but if you're gonna contemplate selling your business, you wanna be years ahead of that, starting to make sure you've got, the right finance in place, the right legal agreements in place, the right employment agreements in place, you can have a good handle on, your houses in order. If your incurring costs that are not normal. You're tracking those. You're not having to go back and try and it out later. If there's changes you should make in the business, we should carry less inventory.

If you just say you should carry less inventory right up until closing, nobody's going to recognize that. But if you actually carry less inventory, then people will recognize that. So, I think number one is preparation. I think number two is the hard part is often people's view is, the hard part is finding the buyer, getting an offer when in fact, the hard part is closing a deal because a lot of buyers will come along and be happy to give an offer. But if they don't have competitive pressures to complete the deal in a certain timeframe and feel like there's other people at the table that might buy the business. You know what they can do death by a thousand cuts and kind diligence you forever and maybe not finish with the same offer. They started with so I think sometimes we see a business owner come in and say I don't really need much help because I already have the buyer and I've done the hard work.

Unfortunately, closing the deal is the hard work. That's the second one. And then I think really the third one is people who don't prepare the business to be managed and successful without them. And so, as a business owner, if you are the one that every decision runs through and without you there, the decisions don't get made.

It's very hard for a buyer to come in and say, okay, I'm gonna buy the business, give you cash today, and you walk away and we're fine. really gonna say is if you walk away, I don't know what I'm getting anymore, and therefore I either need you to sign a long-term employment agreement.

I need you to take an earn-out. I need you to take role equity and some of those things are fine, but I just think a lot of business owners, they have a view of what their business is worth, but it's hard to separate their value from the value of the business.

[00:07:42] Jeffrey Feldberg: And for our listeners, I promise you, I really do promise you Chris and I never spoke about this before. This is unscripted because Chris, all three of those points are a page write out of our own playbook and lack of preparation. That's what we're all about here at Deep Wealth. And Chris, maybe you can speak to those listeners because they're out there.

I speak with them every day on business owners. You know, as business owners, we're terrific in so, many ways. Sometimes though, our view that the glass is always half full. I'll figure it out. I always do so, for the business owners that are saying, I'll prepare shortly before the liquidity event. Yeah.

You know what? Maybe a few months before I'll start preparing and get that ready. What's in it for them when they start going down that path and they don't follow your advice of preparing well in advance?

[00:08:24] Chris Hutchinson: It just becomes selling your business and again, you've been through it. Selling your business is probably one of the most difficult things you'll ever do in your life. Because not only is it such an emotional rollercoaster, you're also, you have to make sure the business performs while you're doing the process. And you know, guess what? We can plan everything in the world. And there's always twists and turns. There's always surprises. So, it never goes exactly as expected. And so if you start the process by having to do a whole bunch of work to get ready that you really weren't doing before, you're almost elongating that difficult period of your life and by the time you get near the end of the process compared to someone who was fully prepared and didn't have to do a big change and a big stress to get ready, you'll be a lot more tired and fed up with the process and more likely to either settle on something that isn't ideal or potentially say I'm walking away from a deal because you've just, you've hit a breaking point.

And I think that's probably the number one risk with not being prepared in advance.

[00:09:38] Jeffrey Feldberg: So, True as business owners, we don't often realize if we're not prepared, what we are preparing for is to give up our health, our money, and our time. Because to your point, so, astutely said Chris. We've gotta run the business while the liquidity event is taking place, which means the projections that we've given, some of them are falling right in line with the liquidity event.

I mean, talk about pressure, all eyes on the business, and Chris, tell me if I'm on or off base with this. I know some buyers if a business owner isn't prepared, will just walk away. They don't want to waste their time or money and diligence on some kind of a mess that's likely gonna happen. Having said that though, There's also some buyers who put their hands and they rub them together.

They're licking their chops. Amazing. This guy's gonna make so many mistakes, or This guy's gonna make so many mistakes. I'm gonna get this deal on a song and a dance because of all those mistakes. I'm going to put penalties and are gonna lower enterprise value. What would you say to that?

[00:10:34] Chris Hutchinson: I would say that those things can both happen. Hopefully, if people have an Advisor working alongside them, they'll avoid some of those mistakes even if they aren't prepared. But I think doing again if you're doing the prep when you've already got the Advisor, it just kind of elongates that process and adds to the stress versus if you're doing it well in advance, in a timely, easy, thoughtful manner, then it makes it easier. But you're a hundred percent that somebody that isn't prepared can either be viewed as this is too much of a mess. I don't even want to go there. Or this is a mess and we're gonna be able to, nobody else would do this so we'll be able to get it for what we want.

[00:11:19] Jeffrey Feldberg: Oh, exactly. And just before we get to some rabbit holes that we're gonna jump into, we're talking offline. Very excited to get there. One of the things just around things out and not a day goes by where I speak to a business owner who says something like the following, the names may change some of the circumstances, but the narrative is more or less the same.

Yeah. You know, Jeffrey, I have been approached by maybe one, sometimes even two or more companies that wanna buy my business. Why pay an investment banker? I can just negotiate it myself and yeah. I mean, My goodness. We can have a whole series on that. But Chris, the short narrative to a business owner who is either believing that, thinking that or is in that situation right now, what would you tell them?

[00:11:57] Chris Hutchinson: I think what I would say is just that an offer at an early stage is just an offer. And really what that means is, that buyer is gonna do a whole bunch more work, find out a whole bunch more things. And if they're doing it unsolicited, ie. They're just approaching you, really what they're trying to do, and it's not malicious, it's just what they're trying to do is see if they can build a relationship, see if they can learn more about the business, see if they can get into a situation where you wanna sell to them.

And it, what you're really giving them is an option, right? An option to do a deal. And if, dig in and see things they don't like you're either gonna have a different deal or they're gonna decide to walk away. And so, I think the benefit of an Advisor, again, whether you've already received an offer from one party or not, is to really be able to get in and ask the tough questions of you first and be able to understand what those questions are gonna yield from an answer perspective, and think about what that means to the deal, what that means to the buyer, and actually give them thoughtful information and put a little bit of pressure on them. Even if you don't decide to speak to other parties. You know the fact that you've got somebody there who understands what your business should be worth, understands who would buy your business could be able to reach out and get other people at the table. It makes a very big difference.

[00:13:23] Jeffrey Feldberg: And word of caution for our listeners. It's a rhetorical question, but I love to ask it. And Chris, you can tell me your thoughts on this. As business owners, how in the world can we master something we've never done before? And so, when it comes to an Exit when it comes to negotiating the sale of a business, something so personal, we've put our blood, sweat, and tears into this it's really a recipe for failure as opposed to bringing in a professional like yourself. This is all you do day in, day out, and again, you can correct me if I'm off base, wrong base here with someone like yourself involved, you don't have to deal with the buyer again, so you can be the bad cop in this and really push the envelope.

And as the business owner well, yeah, you know, I just got a terrific investment banker. That's what they're doing. That's why they are, but you know, here I am. Let's just get this done and move it forward. So, having independent representation, a third party like yourself, I would imagine will get a deal over the finish line, number one and number two, not only get it across a finish line but get a better financial outcome and a better deal.

[00:14:25] Chris Hutchinson: Yeah, I would agree with that. And to your point, over the years, I've probably worked, I've worked on hundreds of deals, so I've seen it all, and I know what people are going to do in various stages of a deal and what some of the potential pitfalls are and how to prepare for them and avoid them.

And that doesn't mean that I've seen everything, but I've seen more than someone who's never sold a business before. And again, that's me. Or that's any, I'm not the only one who's seen all these things, whether it's me or some of my partners or teammates that I work with, or an Advisor that you're working with that I don't know.

It's just that experience of how do you do this? How do you do it successfully? Where can it go wrong? How do you steer away from that? I can't imagine trying to do that on my own if I was a business owner.

[00:15:15] Jeffrey Feldberg: Well said, Chris. And the last myth to dispel, and then we'll get into some really interesting topics is a lot of business owners feel it's their responsibility. It's their job to know who the future buyer is going to be, even to the point of researching or even reaching out to other parties. And at Deep Wealth.

And I would love for you to expand on this. Our short answer to that is absolutely not. It's not your job is not your responsibility. This would be why you have someone like yourself, Chris, come on board as an investment bank or an M&A Advisor to cast that wide net. So, can you share for the business owners, for our listeners, what you're doing behind the scenes, that they don't have to worry about this, they can get a good sleep tonight?

Knowing that someone like yourself, you're gonna go out there and cast a very wide net to run a competitive process.

[00:16:03] Chris Hutchinson: Yeah, So, I think what we do is obviously a lot of research. A lot of times we have experts that are specific to industries. So, the experts will know what's going on in that industry. We have a number of non-strategic buyers that we've worked with, private equity family offices. Other types of non-strategic buyers, and really our goal and our job, because we're generally aligned from a fee perspective with our clients, we want a successful deal, and therefore we wanna do our best to find those buyers.

We also wanna do our best to find buyers that we know. We'll act in good faith and are, good at buying businesses and we can see that they're going to get a deal done and do what they say they, they will do. So, that's really our job. The one thing I would say, Jeffrey, though, is that for sure we want our client's input, cuz often they do know who the most likely buyer is and they'd often know how the fit would be.

And so, that's incredibly valuable. But the risk and the pitfall that sometimes they see is if people start a lot of dialogue with potential buyers, it's a double-edged sword. On the one hand, they're starting to build a relationship and they have a sense of who really might have an interest or not.

But the flip side of that is that usually the vendor hasn't necessarily thought through the full story. Thought about the kind of messaging and how to put the business in the right story for that particular buyer. And it's tough to go to somebody that you've talked to a year ago and told them, we're gonna do this and this, and this is what's great about my business.

And then you come back 12 months later, and you're telling a completely different story. Or the numbers that you may have shared are they weren't normalized, they weren't properly analyzed to come up with really how to understand them. And so that's the danger is getting too far ahead where they've kind of, you can't tell the story multiple ways, multiple times. You really need to be thoughtful about how you tell the story.

[00:18:03] Jeffrey Feldberg: And Chris, two really interesting points that you bring up there. And I agree with you in terms of business owners may know who a potential buyer can be. And for our listeners out there, when you get these requests, follow Chris's advice. Don't respond back. But why not start a file and you take a note who contacted you, contact information the date, and this way you work with someone like Chris.

Okay. Over the past 12, 24 months. Look, here's a list of people that were interested in us. Here you go. And then the other thing that was interesting, Chris, that you said that most business owners don't realize when they try and do it themselves, it's. Almost like trying to sell your house on your own. And in the real estate industry, they call it the FSBO for sale by owner.

And you get all these calls of, people trying to buy the house. And when it comes to the business side, for our listeners, Chris, is weeding out the buyers that just want to kick the tires. Or maybe they're not even buyers, maybe they're competitors, they just want to find out what's going on in the business and so your quality control, Chris, just to keep the real bonafide buyers in the process.

There's a lot to be said for that.

[00:19:08] Chris Hutchinson: Yep. I would agree with that, Jeffrey. And again, on top of the qualification side, it's really just managing the process in a timely manner. Discussions can just be discussions and they can meander back and forth forever. But having proper marketing process where you understand as a buyer that you've got a certain amount of time, and you need to submit an offer under a certain format and a certain timeline, and you're gonna be compared apples to apples with the other buyers that would be looking at the business.

It puts some time on it and puts it into a better scenario for a vendor than just a meandering conversation.

[00:19:49] Jeffrey Feldberg: Absolutely and so for our listeners, Chris and I have been covering some of the basics here. I would put that under the preparation category, and really the big takeaway is, hey, you can't master something you haven't done before, but you can master it when you have someone like Chris, an investment banker who does this day-in-and day out, who's part of the team and guiding you through the process.

Now, Chris, offline, you had mentioned something interesting that we said, you know what? Let's really talk about this in our discussion today. And you said, It's just so, easy to get caught up in the headlines that we see today to really, as business owners, throw us for a spin. So, let's go behind the scenes.

We're now going into the M&A world where most business owners would not have access to this information. What should we know? Because we see the headlines and whether it's boom, whether it's bust, regardless of what's we're seeing press wise, media-wise announcements, everything else. What's the real deal here?

What's going on?

[00:20:42] Chris Hutchinson: Yeah, I think what I always think about is in the middle market, which is where I tend to do most of my work, and I think where you would have a lot of your clients, these aren't, the odd time we work on very large deals, but often it's owner manage middle market. The ups and downs that you see in the headlines are much less extreme in the middle market.

The leverage in terms of how much debt people put on businesses when they buy them in the middle market, it doesn't change a lot, especially in Canada. The banks have been consistent for a number of years on, how many turns of EBITDA they'll put on a buyout In the middle market, usually 3, 4, 4.

It's not usually much more than that. It's usually not less than that, versus sometimes in the US or these bigger deals, it might be 7, 10, 15 times leverage, and that causes big swings in valuation, so, when

[00:21:35] Chris Hutchinson: it's hot, and when it's not so, that's, I think, one of the big differences.

And the other thing that's happened over the last 10 years, really in that Canadian mid-market is it's gone from a very underinvested market where there just wasn't that many buyers. You had traditional private equity looking at 5 million EBITDA and up and you didn't really have people focused below that.

Now what I would tell you is I probably get a call every week from, a new person out there either with a search fund or they've sold a business and wanna buy another one. Or they've worked somewhere and made some money and have some contacts and wanna buy a business. There's an incredible number of people now looking for kinda 1 million of EBITDA to 10 million of EBITDA. So, the market on that supply side is significant now, and it creates, what I always like to say from a private equity perspective is I've never seen a private equity firm raise a second fund because they didn't do any deals in the first fund. People have to do deals. The whole industry is built on getting deals done.

It doesn't mean they're gonna do every deal and that they wanna do bad deals, but naturally, there's a demand for businesses now in that, one to 10 million EBITDA in the Canadian market. That is, is a very permanent demand and there's a permanent supply from the perspective that we've been hearing for years about the retiring baby boomers and how there's a lot of businesses that need to be sold. It's been delayed and pushed back and pushed back and pushed back. I think Covid had a psychological impact on a lot of business owners where a lot of them came to that point of saying this isn't worth it anymore. I'm ready to move. And the other thing that's happened is that I think 10 or 20 years ago.

There was not the same number of people starting businesses with the intent of selling them. I think the traditional model, going back 20, 30 years, before I was doing this job, traditional thing was there was a lot of multi-generation family businesses. The natural step of any business owner, if they started a business, was, I'm gonna pass this to my kids.

And that family, that generation says, okay, I'm gonna pass this to my kids. I think that while that is still a great option, there's some fantastic family businesses out there that is not just the kind of default anymore. There's a lot of business owners that start a business now and think, I'm going to do this really exciting opportunity.

I'm gonna grow something. I have a passion for it. I'm gonna get it to a level that is what I am capable of, and then I'm going to sell it to an owner who can take it to the next level and that now is a model that makes a lot of sense.

[00:24:19] Jeffrey Feldberg: Lot of takeaways there, and let's firstly start with location, so you're highlighting a few things in the Canadian market. You mentioned a few things in the US market, and so, for business owners that have businesses in both, perhaps in the US perhaps in Canada. Perhaps even in Europe that it's going to be situational and what's working in one market may not be in another market.

And you gave the terrific example. While in the US, the multiples may be significantly higher, and so, because of that. When it comes to leverage, when it comes to debt, depending on what's going on in the marketplace, they may be more susceptible to boom times to not so, great times. ebb and flow according to what's going on in the market.

But if you have a market that's not the case, you mentioned Canada being one of those, or perhaps even in Europe, then it's just good to know that.

[00:25:05] Chris Hutchinson: And it's not to say that in, you know, specific markets, there is no fluctuation. There's absolutely trends, but they're just not as extreme because of the extremes were never as high, and so the extremes are not gonna be as low. And I would just add that I think we do a lot of work across a lot of markets and think there's similarities in each, but the other really important thing now is that there's much less of a border when it comes to doing transactions again, in the middle market, there was never borders doing, billions and dollars of deals but really the mid-market, the kind of private entrepreneur stuff, There's a lot more access to capital.

You can have buyers from anywhere in the globe that, that we often see on our deals, and that's important so it doesn't just depend on what's happening in your market.

[00:25:54] Jeffrey Feldberg: Absolutely. A terrific point. They're all terrific points, but the sphere of the buyer has significantly expanded. And Chris, back to your earlier point of, hey, this is something that, as an investment banker, You're going to literally scour the globe to find the most qualified buyers. Now, speaking of buyers, you shared something interesting that a lot of business owners may not be aware of because it's really a whole new movement that started with buyers.

You're not seeing a lot of press, although starting to pick up on that, and you're obviously in the thick of things. So, you've seen it from the beginning, and this is where you have buyers who perhaps aren't as big as a company or a family office, but they have some Wealth behind them. They have some dollars, and they wanna find a business, an existing business that's successful, and you're mentioning $10 million and less, maybe even a million dollars, and go in, help take it to the next level and see where things go.

So, for our listeners. What do you call that kind of buyer? There's all kinds of names that I've seen in the media with this. And what are you seeing with the latest trends with that?

[00:26:54] Chris Hutchinson: Yeah, I think, sometimes now people use the word search funds, which is a very, there's technically search funds, and that's an actual vehicle where people put money into the searcher to help find the deal. But I use it to describe any people out there who don't, they're not a private equity in the sense that they haven't raised a hundred million dollars that is sitting in a pool that is waiting to be deployed.

They're finding deals and finding money at the same time. So, sponsor's fund is another word for it.

And you have to, they're not all created equal. Some of them may never get a deal done. And some of them have been very successful, and we've seen them be serial acquirers and acquire multiple businesses.

I think the biggest thing from a trend perspective is that 10 years ago, there was a few of them, and now it's a significant number. And so, that has really changed the landscape. And I was just at a little event recently, and it's been an event that's been happening year over year for the last 10 years, there was 200 plus people at the event this year, where there would've been 25 to 50 the first year. There's just a lot more people that, are looking for alternative asset classes.

Not everybody wants to invest in the public markets. Not everybody can access traditional private equity, which has minimum check sizes. And I think a lot of people enjoy the concept of being a business owner and being able to put their passion and their skill sets behind something tangible like that.

[00:28:22] Jeffrey Feldberg: Yeah.

[00:28:23] Chris Hutchinson: They recognize that they are not necessarily the people that are going to be the idea certain person that comes up with the next best idea and how to turn that from an idea into a business. That's not necessarily a skill they have, but they have a skill as an investor who can help manage and grow a business.

[00:28:40] Jeffrey Feldberg: So, Really. It's like a board of directors of one, where they're bringing some, potentially some capital, some connections, different experiences, and outlook strategy. And Chris, it really highlights some of the points that you were saying earlier because I feel, and again, correct me if I'm on base or off base, that business owners don't understand how much time and money to go through diligence, so when you have a perspective buyer, it's not a walk in the park. And if you're gonna be doing this, you gotta be prepared for that. And that's why it's not only buyer beware, but it's seller beware in this instance because you gotta make sure you have the right person across the table.

[00:29:18] Chris Hutchinson: For sure. Yeah. Yeah. You can't, as I said, not all buyers are created equal. Whether that's the biggest corporate buyers or the smallest kind of independent buyers that are looking to finance a deal themselves. It's like anything else. There's the good, the bad, and the ugly. I think you said earlier.

[00:29:33] Jeffrey Feldberg: Yes. Chris, let me ask you this on the topic of buyers, because I know that's near and dear to the hearts of business owners and our listeners. If we were to have had this conversation two years ago, three years ago, five years ago, it would've been a very different conversation in that.

There's no longer the typical this is a strategic buyer. This is a financial buyer. You have all these hybrids that have come onto the scene, so once we leave the role of the solo individual buyer or the search fund of one, and we're going now to some of the larger buyers what are some of the latest trends that you've been seeing?

[00:30:07] Chris Hutchinson: The latest trends in terms of if you start from the top bigger corporate buyers, I think there's a lot more of them that recognize that M&A is an important part of their overall strategic objectives. Whether that's selling in terms of carving something out that isn't core or buying in terms of using acquisitions as a strategy for growth. The larger corporates really are viewing organic growth is tough, so inorganic growth through acquisition or, again, growth by getting rid of some, you know, divesting of something that is non-core is becoming really important. Next down the list, if you go private equity records and amounts of money and private equity so they are constantly looking for new industries to go into looking for new opportunities to deploy capital. And then in behind that, you've got those, that next layer of kind of less or less formalized than private equity. Sometimes they're doing bigger deals than private equity but less formalized. And then I think you've got your kind of mid-market private businesses, or mid-market is broad word, you've got your businesses that aren't the big public companies, and a lot of them too are thinking strategically that growth through acquisition is a important part of their strategy. So, I think there's more of an institutionalization of M&A as part of business that probably used to be viewed as just for select few.

[00:31:35] Jeffrey Feldberg: Sure. And Chris, it's interesting with what you're sharing just now because at Deep, Wealth in our a nine-step roadmap, both for growing the company and then also when you get to the point of the growth and accelerated profits, you're at a point where you can actually sell the company. You've mentioned the really salient point of these companies are looking to solve problems. They're looking for strategies. They're gonna help them grow because organic growth isn't going to be enough. And oftentimes, business owners underestimate the power of the narrative. So you can have the best financials. But if you don't have a good narrative behind those financials, there's gonna be issues there even to the point, Chris, where we've had valuators from M&A who come on and say, you know, Jeffrey, when we're looking at the value of a company before we look at the numbers, we look at the narrative, and there are times where the narrative will help us up to 80% of the value. It'll help us come up with that value.

Of course, good narrative. If it's not backed by solid numbers, that's a different story, but a terrific narrative with good numbers, 80% of that value is coming from the narrative so, as feed in the street, as the investment banker out there, you're working these deals. Where does the narrative come into play for you?

Once it, you know, a business owner shows up for you, and how important is that from the early days onwards?

[00:32:52] Chris Hutchinson: I think it's the first thing you have to figure out is the narrative.

That's the way I look at it, is, once you've got the narrative, then you can dig into the numbers to make sure that the numbers support the narrative.

Sometimes when you dig into the numbers, you actually uncover different narratives.

Cause maybe the business owner hasn't looked at a certain trend or a certain subset of data in their business before, and it helps you not necessarily just say, oh, this doesn't line up with your narrative, but actually, we're noticing this trend, and we think that's actually an important narrative to tell, which is, this particular part, maybe it's your recurring revenue, part of your business is growing while top line itself looks flat.

And that's a very different narrative than, it's a steady business. And so, I think that's the narrative is a hundred percent important. Cause that's ultimately when I get on the phone to talk to a potential buyer, that's what I'm trying to do is get them excited about a story. Not the numbers are just what's there to support the story.

[00:33:56] Jeffrey Feldberg: And for our listeners, again, remember Chris's background. He comes from the accounting world, the world of numbers, and you have a numbers guy saying that you know, a narrative will never show up in a spreadsheet, but you start with the narrative and it's so important. And I know in the Deep Wealth process with our nine-step roadmap, step number two, X-Factors, it's all about the narrative of, okay, what are our problems that we're solving.

That will be of interest to someone like yourself, Chris, or to future buyers in terms of what's there and so, Chris, big picture wise for a business owner who is walking away from this episode, and I mean there's a gazillion one things that they can be doing.

If a business owner could do one thing coming out of here, one action item, that by the time they would come to you and say, okay, Chris, here's my business. Let's take this to market. What would that one thing be?

[00:34:47] Chris Hutchinson: I think it's get aligned with your advisors, and again, I'm using advisors as a small A, it's not meaning like, hey, you have to call me tomorrow or an investment banker tomorrow. But really get your advisors, both internal and external. And again, it could be anything from your financial lead in your company to someone like yourself, Jeffrey, or your family, your support network, your lawyer, your accountant, and just start understanding what it is you wanna accomplish in the business ownership, and what are the steps you should be taking to accomplish that? You have to kind of know where you're going to get to the right spot, and so, that's, to me the number one thing is just start thinking.

And it doesn't mean you go tomorrow and tell your cfo, hey, I wanna sell the business in two years, but you should at least start understanding what you want and do some introspection through that discussion with your advisors of figuring out what you want and then going about taking steps to be prepared to achieve it.

[00:35:53] Jeffrey Feldberg: So, clarity, get some clarity big picture-wise of where you want to go. I love that. That's some terrific advice there. Chris, truth be told, I could go down so many rabbit holes who are bumping up again sometimes. Let's begin to wrap this up. And I have the privilege and the honor of asking the one question every guest gets asked.

And I know you know the question because you shared, you did your homework,, and you listened to a few episodes before. We spoke today, and that's okay. We'll see what where we go with this. So, imagine this thought experiment, think of the movie Back to the Future. And in the movie, you have that magical DeLorean car that can take you to any point in time.

So, Chris, it's tomorrow morning. You look outside your window, and there it is. Not only is the DeLorean car curb side, but the door is open and is waiting for you to hop on in, so you hop in, and you're now gonna go back in time. So, really any point in your life, Chris, as a young child, as a teenager, whatever point in time it would be, what are you telling your younger self in terms of life lessons, life wisdom, or, hey, Chris, do this, but don't do that.

What would that sound like?

[00:36:54] Chris Hutchinson: Funny enough, I did listen, and as soon as you got to the end of it, I was like, okay. I remember thinking what I was gonna say, but I didn't think about it ahead of jumping on here. But I would say, Jeffrey, that I think people, myself, I probably took longer than I needed to build confidence in myself.

And I think a lot of people are like that where I started, I grew up in a small town, a quiet kid, and I've built up my confidence over years of experience. But I think sometimes people are just afraid to go for it. To take a risk to put themselves out there.

And so I think that to me is an important life lesson for everybody.

[00:37:35] Jeffrey Feldberg: Another C word, confidence. And for our listeners here, you have it straight from Chris. Believe in yourself and Chris, you've made it as an investment banker and not just any investment banker. You're at a huge firm known worldwide, and it just speaks to you believing in yourself.

Congratulations with that, and what terrific advice for our listeners to take away. And speaking of our listeners, we'll put this in the show notes, so, it'll be a point and click. It can't get any easier than that. Chris, if someone would like to reach out to you, ask some questions, and perhaps even explore what it would look like to have you work with them.

Where's the best place online someone can reach you?

[00:38:09] Chris Hutchinson: Probably either LinkedIn or my email, which, if you put in the notes or just call, and it's pretty easy.

[00:38:16] Jeffrey Feldberg: Terrifics. We'll have all that in the show notes for our listeners. It'll be a point and click for you. Chris, it's official. This is a wrap, and as we wrap up the episode, a heartfelt thank you for sharing your insights and your wisdom. And as always, please stay healthy and safe,

[00:38:31] Chris Hutchinson: Thanks Jeffrey, and it's always a fun discussion, so appreciate it.

[00:38:34] Sharon S.: The Deep Wealth Experience was definitely a game-changer for me.

[00:38:37] Lyn M.: This course is one of the best investments you will ever make because you will get an ROI of a hundred times that. Anybody who doesn't go through it will lose millions.

[00:38:47] Kam H.: If you don't have time for this program, you'll never have time for a successful liquidity

[00:38:52] Sharon S.: It was the best value of any business course I've ever taken. The money was very well spent.

[00:38:58] Lyn M.: Compared to when we first began, today I feel better prepared, but in some respects, may be less prepared, not because of the course, but because the course brought to light so many things that I thought we were on top of that we need to fix.

[00:39:14] Kam H.: I 100% believe there's never a great time for a business owner to allocate extra hours into his or her week or day. So it's an investment that will yield results today. I thought I will reap the benefit of this program in three to five years down the road. But as soon as I stepped forward into the program, my mind changed immediately.

[00:39:36] Sharon S.: There was so much value in the experience that the time I invested paid back so much for the energy that was expended.

[00:39:47] Lyn M.: The Deep Wealth Experience compared to other programs is the top. What we learned is very practical. Sometimes you learn stuff that it's great to learn, but you never use it. The stuff we learned from Deep Wealth Experience, I believe it's going to benefit us a boatload.

[00:40:00] Kam H.: I've done an executive MBA. I've worked for billion-dollar companies before. I've worked for smaller companies before I started my business. I've been running my business successfully now for getting close to a decade. We're on a growth trajectory. Reflecting back on the Deep Wealth, I knew less than 10% what I know now, maybe close to 1% even.

[00:40:18] Sharon S.: Hands down the best program in which I've ever participated. And we've done a lot of different things over the years. We've been in other mastermind groups, gone to many seminars, workshops, conferences, retreats, read books. This was so different. I haven't had an experience that's anything close to this in all the years that we've been at this.

It's five-star, A-plus.

[00:40:45] Kam H.: I would highly recommend it to any super busy business owner out there.

Deep Wealth is an accurate name for it. This program leads to deeper wealth and happier wealth, not just deeper wealth. I don't think there's a dollar value that could be associated with such an experience and knowledge that could be applied today and forever.

[00:41:04] Jeffrey Feldberg: Are you leaving millions on the table?

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