336 Michael Butler

Jeffrey Feldberg: [00:00:00] Michael Butler is a Senior Director at Footprint Capital and is responsible for leading the sell-side and buy-side engagements with business owners.

In addition, Michael cultivates relationships with clients, prospects, centers of influence, and private equity firms and family offices. Michael's previous roles include auditor and consultant with a Big Four Accounting Firm, corporate executive with an insurance and financial service group, president of a securities broker and dealer, venture capital, business owner, angel investor, and board member.

These roles included numerous acquisitions and exits bring a wealth of experience to any engagement.

And before we start this episode, a quick word from our sponsor, Deep Wealth and the 90 Day Deep Wealth Mastery Program. Here's Jane, a graduate who says, and I quote, the Deep Wealth Mastery Program prevented me from making what would have been one of the biggest mistakes of my career. I almost signed on the dotted line with an unsolicited offer that I now realized would have shortchanged my hard work and my future had I accepted that offer. Deep Wealth Mastery [00:01:00] has tilted the playing field to my advantage.

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Welcome to the Deep Wealth Podcast. Well, he is back. Our friend, Michael [00:04:00] from Footprint Capital is back with us. Yes, that mythical creature, otherwise known as an investment banker, is here to share some really interesting insights. But I'm going to keep you in suspense of what it's going to be, but it's going to be worth your while, so hang on to your seats.

Michael, welcome back to the Deep Wealth Podcast. And you know what? Since you've last been on, our community has been growing by leaps and bounds. So for the new listeners, Michael, what's your story behind the story? What got you from where you were to where you are today?

Michael Butler: Hey, thank you. Appreciate it. Hey, great to be back with you. I enjoy what you do so much. And we are really trying to help people maximize things on both sides here. Yeah. So my story is this I'm I'm based out of Columbus, Ohio with a firm called Footprint Capital. And Footprint is a, you know, We call ourselves a boutique investment bank, which is a fancy way of saying we help people buy and sell companies mostly on the sell side, helping those owners at the end of their career.

Who have decided that either their uh, children are not interested or not capable of taking over the business and their management [00:05:00] teams aren't in a position to to buy the business. So they're looking for third party people to sell it to. But my story back on me is started out out of, college as a CPA.

Working for one of the big accounting firms in those days in both the audit and consulting services and got exposed to businesses and small businesses in particular working with them on financial modeling and so on, then became a chief financial officer and in that role, it was lucky enough to have done several acquisitions of companies, but then we ultimately got acquired ourselves.

And with that, I was on the side of the table of a company being acquired, and I survived the acquisition, worked for the new owner for a period of time, then decided to go the corporate route, joined a large corporate, large enterprise level company, and helped them start a business or two.

Did that for a bit, and then before investment banking, my last gig was in venture capital. Investing in early stage technology companies in the Midwest and both buying and selling those young companies. So I was both involved in both sides of the equation [00:06:00] and found my way to investment banking.

And really for me, it's kind of the pinnacle of taking all the knowledge and all the sides of the table I've been involved with in the past and fully utilizing that and helping people get the best possible exit they can. 

Jeffrey Feldberg: MicMichael what I love, Love about your journey, you've been, as you say, on all sides of the table. You've bought companies, you've sold companies, you've run companies, capital raises, all those things. Very unique. You've done that. Not a lot of people have that experience. So, here at Deep Wealth, we are really all about the entrepreneur, the founder, the business owner, who's looking to sell the company.

We're going to get to this in just a moment with what we're talking about. We're still keeping the audience in suspense of what the topic is, but let me ask you this. When you were the buyer, when you were the investor and you're looking at companies to either buy or invest in, for the benefit of our listeners, what were the characteristics of some of the companies that you said, Oh, wow, I want to be a part of that company.

I want to buy that company or invest in that company. So in other words, what were the best practices that really. [00:07:00] I'm going to suspect it's old Pareto's law, 80 percent of the companies weren't doing it right. 20 percent were, and those were the ones that were generating 80 percent of the results.

So those 20 percent of the companies that were just hitting it out of the park, is there a characteristic or strategy or two? That really sent out for you,

Michael Butler: yeah, I appreciate that. There's, a lot of things, of course, are different, that differ by industry, but I'll say in a general sense, this, think of a buyer pretty, simple, pretty commonsensical, and they're looking to reduce risk, And maximize opportunity, okay? It's really those two things.

So if you think about on the reduced risk side, what's predictable about the business? How many recurring revenue customers do they have? And if they're not just typically recurring revenue, how many repeat customers, what's the length of time of those customers? Are they likely to buy next year?

And you have to also ask yourself the question, are they likely to buy if the owner is no longer there? The current owner is no longer there. They, if that owner then retires, rides off into the sunset, was a relationship with that owner and it's going to go away next year because that owner is not in [00:08:00] that in that role anymore.

so reducing risk is about. Predictability and what can be thought of. Now, from the standpoint of the second part was opportunity. Where can this business go? Where can it be taken? What hasn't been done that needs to be done? It could be as simple as taking a business international, could you expand the horizons? and, or is it a new product? Is it a new service? Is it an investment in salespeople and marketing efforts? Do they have a great website? And is that adding to their story? So those two things are like the, I try to keep things simple in that regard, Jeffrey, from the standpoint of reducing risk.

An increasing opportunity. And those are the businesses that tend to shine if you can show both of those things. And that's what the preparation phase that you're very involved with with all these people can highlight.

Jeffrey Feldberg: Michael, what I love about that is, and again, for our listeners, I promise you, I did not speak to Michael ahead of time to say this. I mean, this is a page right out of our playbook. You're talking about step five, winning mindset and understanding, Hey, for a [00:09:00] buyer. I want to minimize their risk. I want to maximize their return on investment, their profit.

And that goes right into step three, future buyer, or in this case, it could be an investor. So I love what you're saying. And then you talk about step two, X Factors, one of the big ones. Hey, does your business run without you? So if you've got abducted by aliens today, and you came back five years from now, would you have a bigger business?

Would you even have a business? The answer matters because I'm sure, Michael, you can tell me, Jeffrey, on base, off base, back in the days when you were buying a company or investing in a company, the last thing I'm sure you wanted is another full time job running the company because the owner's no longer there.

It's falling apart. Nothing's written down. Everyone's saying, what do we do? Only so and so knew how to do that. How am I doing with that?

Michael Butler: Oh, yeah. No you're right on point. That's the number one thing we start to ask about. And in fact, one of the simple, one of the easiest introductory kind of questions we ask to some entrepreneurs, we say, do you take vacations? And they'll think, well, that sounds like a really weird first question, Michael.

But the point, what we're getting to [00:10:00] is, can you leave the office? Okay, if you do go on vacation, how often do you call in? If someone says, I got to call in twice a day, make things, make sure things are going on, blah, blah, blah. The best answer I got was someone who said, listen, Michael, I go hunting in the upper Yukon where there's no cell service for 10 weeks. And he said, I don't, the place runs without me. In fact, they say it might even run better without me. So with that, those are the kinds of things that owner dominance, or lack of owner dominance, if you will, if you state it in a more positive way, is one of the huge keys of making sure a business is transferable.

Jeffrey Feldberg: Michael is interesting on a very selective basis. We will be the Chief Exit Advisor. Some people call that a success coach, a business coach. One of the first things that we do and the clients look at us like we're crazy. We say, Hey Jim, Hey Sally, could you take some time off? Yeah. Okay, sure. I could take maybe a day or two.

No, no, no, No. I don't want you taking a day or two off. Can we start with a week? Can we work our way up to three months? I'm like, Jeffrey, are you crazy? And we're saying, well, no, there's a method to the madness. [00:11:00] Let me tell you why. When you're not there, it's a stress test and whatever falls through, wouldn't you want to know about that now rather than later?

And by the way, when you're raising capital or you're in a liquidity event and that future investor or buyer asks your team, are you there all the time? Does the company run without you? To your point, Michael, you want your team saying, well, actually, let me tell you about the time when they were away for three months.

And we had to run the company on our own. I mean, that's what every investor and buyer wants to hear. Now, speaking of investors and buyers, you came to me, you reached me offline and said, Hey, Jeffrey. Is it just me or are you finding that the people you're speaking to, the business owners, they are getting a lot of cold calls, outreach, whether it's from private equity or the competition or investment bankers looking to get involved or invest in the company or buy the company.

And I said, yeah, Michael I am. We're seeing that too. And he said, well, what do you think? Is that just a waste of time for them or do you think they can do something with it? Because we've developed some strategies. Here at [00:12:00] Footprint of how you actually capitalize on that. And I said, Oh, Michael, that sounds really interesting.

So let me put it back to you. So what's going on with that? You came up with some really interesting insights because I tell you, Michael, if our clients had a dollar for every outreach they had, they would not need a liquidity event. They could retire on that alone. So what's going on? You came up with some really unique strategies, but what's the story behind the story?

Michael Butler: Yeah. You got it. I'll tell you, the outreach is at a fever pitch.

Jeffrey it's buyers themselves reaching out. It's investment bankers working on the buy side and working on their behalf. it's private equity firms going direct and wanting to not be introduced to companies by someone like myself, but wanting to find those companies.

They call that sometimes proprietary deal flow, if you will. So in that regard, they're making those outreaches. They could be phone calls. They could be emails. They could be, any kind of communications to get in front of people. And so we're saying, how do you leverage that? How do you just not blow that off, if you will?

And how do you make the best of. Those inbound calls, first of all, the first thing I would have [00:13:00] you do is record those. We will ask clients, do you have some of the outreach? Oh yeah, I've been keeping those in a file paper file, digital file, whatever the case may be, send those to us.

We want to know who's interested in your company. So that's the number one is keep those emails. Somewhere, if it's just printing out a copy and throwing it in a paper file, just so it doesn't get lost, that'd be fantastic because anybody like myself is going to want to see who some of those names might be.

And by the time we get around to it, let's say your exits in the future, those people may not be searching anymore, but it's just a way to get going. But on the chance that you do, receive those emails and phone calls and want to turn it to your advantage, I kind of say flip the script, if you will, or turn the table on those phone calls.

Here's some examples of what I would have you do. First of all don't share anything without an NDA in place. An NDA is a non disclosure agreement. And that really is a, an agreement that says anything that they receive is going to be held confidential and not shared. And obviously it's a contract and you hope [00:14:00] people will honor that contract.

Also in a, in an NDA, there is also in many cases information around not having those people or what we call a non solicitation agreement around the employees. So, just because you start to talk about maybe potentially exiting the business, we want to make sure they don't just all of a sudden start finding your employees on LinkedIn or some other sources and reaching out to them and saying, hey, you may not be there very long.

The company's going to change, and those kinds of things strike fear in the heart of employees. So, so just get that NDA in place and make sure it has a non solicitation component to it for the employees. But let's talk about The real heart of it though, the very first question I would ask someone who's calling you is, what are you the buyer, or who is the buyer?

If it's not you, a lot of times people I've seen a lot of emails that say, Hey, I've got an undisclosed buyer, which may mean. There really isn't a buyer and they're playing the role of just trying to unearth some information in hopes that they could go find a buyer that would meet [00:15:00] the need, and who have you been hired by is the very first question I would have.

did you have a comment about that, Jeffrey?

Jeffrey Feldberg: there's a lot to unpack there. Let's Put a quick pause on this. And for our listeners, Michael, everything that you're saying, it's a lot is going on. And what our listeners don't necessarily appreciate, to start reaching out to the other side, to start speaking with them, it's a tremendous time investment.

You're signing NDAs, they're going to be asking all these questions. And we'll talk about how to navigate through that. But at the very least, and again, you can tell me Jeffrey, on base, off base, Perhaps do that knowing that, you know what, I got Michael and team on board. I'll do maybe a little preliminary.

I'll save the emails. I'll have a spreadsheet of who reached out, their name, their email address, or phone number, but this is not for the faint of heart. Would you agree with that? That time wise, information wise, if it's my, one of my favorite rhetorical questions, how can you master something you've never done before, the skills to build a business?

These are not the same ones to sell it. And so, Michael, you're putting some great strategies out there, but again, for our [00:16:00] listeners, listen to what Michael's saying, but in the back of your mind, wouldn't you rather have Michael and team behind the scenes, helping you, coaching you through this, guiding you through this, or even doing this on your behalf?

But Michael, please continue with what you've done because I love what you're sharing and what you're saying that, hey, someone's reaching out, Michael, hi, this is Geoffrey. I have someone who's interested in buying your company, would love to talk to you about that. Who is this? Well, I can't tell you that.

Michael Butler: we even role played this, Jeffrey. So Jeffrey, tell me about your client. I'm not willing to share anything, but I do want to know a little bit more about it. And and what I'm going to do is pursue that phone call and ask a bit more about the buyer. Who is it?

Yeah, I guess I'll ask, first of all, how did you find me? Where did you find my information? There's a lot of great public sources of data these days, and particularly, why did you reach out? What about our company made this attractive? And what you'll start to get to is they may have, they may have a good understanding of your business and they may not.

They may say, hey, we understand you're in the, I'll just make it up here. We work. Extensively in the HVAC business. Yeah. I understand you're in the HVAC [00:17:00] business in Kansas city. And that's, we're looking for companies that have that kind of capability. Oh, okay. And I'm just gonna fake this a little bit here, so I won't drag you into it, Jeffrey, but yeah, so what size of companies are you looking for?

And then we'll say, oh, it's got to be in excess of 5 million top line or 10 million top. So what you're starting to get here is what gets you on their radar screens. Okay. And what's going to be valuable about your company to them, then we'll say, okay, so what kind of capabilities are you looking for?

Again, I'll just continue to play with this HVAC example. Are you looking for commercial HVAC companies? Are you looking for residential? Oh, we're really looking for residential, we're looking for folks that do the servicing of those things. Okay. what about us, we might do some of that and so what about us are you looking for?

Are you looking for a certain number of employees, a certain number of trucks in the HVAC business that kind of is important, getting an idea of, and I got a list of, I've got a list of questions and I'll kind of throw some of these out here, food for thought and we're glad to actually make these, take these phone calls with you or without you, [00:18:00] frankly, as a business owner, but we'll ask, what sort of gross margin is, you know, a lot of times we'll find when you start to this onion a bit, you can go to different layers.

A lot of times they'll say, okay, it's 5 million top line or 10 million top line, but they also have to have a gross margin of X.

Or so they have to have some amount of growth per year. we're not interested. My buyers are and interested in a or a business that's even declining.

You may want, they may want to say that's something that has predictable growth through the years, then keep going further, them answering the questions, you know, and if they can have good answers for these questions, they really haven't thought through it very much, how would you value a company like mine?

How would you go about doing that? Was it do you just take the bottom line, type which is kind of typical? Is it a three year average of that bottom line? Is it the last 12 months? Are we able to add adjustments back to that? Okay. And let's say we hit those bars.

What sort of deal are you looking to do? Do you wanna buy a hundred percent of my company or are you look trying to buy control in my company? When I say control, you typically 51% or would you potentially be [00:19:00] interested in buying just a minority of my company? So what you're doing is just getting them to share their playbook.

Before you've shared any information with them, before you've signed an NDA, before you've done anything. And if they try to turn the questions back on you, I would say, Hey, I've not signed the NDA. I'm not going to do this. I just want to make sure there's a good fit here before we have any further conversations.

Jeffrey Feldberg: Or, Michael, even worse, you don't realize it, you're speaking to someone from a boiler room. They have no decision making authority. They simply got your name and number, somehow it's on some list out there, but they sound official. They sound like they know what they're doing, but you're really dealing with an entry level person 

Michael Butler: Yeah. 

Jeffrey Feldberg: lo and behold, you're spending hours and they're taking this information, they're collecting that.

Like we say at Deep Wealth, when you're in the world of M& A, when you're speaking with a potential investor, a buyer, or even someone, a telemarketer, what you say can and will be used against you, you are never innocent and because first impressions are everything. So why don't we go back on what you said for just a moment?

What would be some questions [00:20:00] that I can ask? Okay. Is this just a telemarketer or is this someone who really is high level private equity or really from an investment banker that there's a bona fide, legitimate interest?

Michael Butler: Well, the one thing is, look them up on LinkedIn. It's all readily available. That'd be a quick, let me make sure I get the spelling of your name. Let's check you out. And you'll see whether it's an entry level employee, someone who's just graduated from college. to be disparaging towards that, because everybody's got to start somewhere.

But the point being is how much do they really know? And I think what you're going to find is the answers to these questions are going to tell you pretty quickly what they really know. And typically you may find them, oh, hey, you need to be talking to my boss or supervisor if you really want to answer and know some of the answers to some of these questions.

But check those things out to know who you're talking to. And and one thing is, you know, you may be talking to not just someone who's out there dialing for dollars, as they say, but someone who is legitimately the buyer of the company. I had an experience in the past where we uh, had a company was growing nicely, was starting to hit the radar [00:21:00] screens of different buyers, and someone called up from exactly the kind of company that we would want to sell to.

And we started that conversation and it was exactly the right person in the right role looking to buy this company. lo and behold, we were lucky enough to get that kind of person. You're not always that lucky, of course. But you will find that that, that can occur.

And really what that did for us, that set us on the effort of then ultimately selling that company. But we didn't just talk to that one company alone, we brought in competition. All right. it was kind of the straw, as they say, to convince the owners of the company, it was time to sell.

And so we brought others into the mix. And we are fans of as investment bankers, we run what we call a private or a closed auction for the business. Meaning that we bring many parties to the table, many viable. Companies that we can demonstrate to have the ability to write the check that's necessary or to complete a transaction. But what you get into here is, just to maybe throw a couple more of these questions on the table here, Jeffrey, so what would be the valuation as we talked about, [00:22:00] would you want me as an owner to stick around, what's the transition plan?

Are you looking for that? What would be the terms of the deal? How much is cash at close? How much does it earn out? Many of these companies know exactly what they'd be willing to pay. And they want it to, they would pay, Hey, we'd only pay 50 percent of this out at the time of sale and the rest would be on an earn out basis which is sort of at a higher risk to you as an owner selling, but here's a really key one though.

What capabilities would drive a higher value for you? What, so let's go back to that HVAC example. this is a outstanding question. Cause you, you may have that capability and you may not. What it may point you towards is here's what I need to be doing with my business over the next couple of years before I sell.

They may want to say, Hey, if if you do this type of work, in addition to just make it up here in addition to HVAC, if you also did plumbing. That would really be value enhancer for us. So then you say, hey, maybe I ought to be thinking about adding plumbing to my capabilities, so, and then also things like are some gotta haves versus some nice to haves for a [00:23:00] potential to buy. They may want to say, hey, the business has got to be located in Kansas City, just make it up here. We're really looking for a Kansas City location.

We're in the town and we want to grow our presence there, and what nice to have might be, it's got to be located in the Midwest, so a little bit more flexible. Here's another one too, just what other acquisitions has the buyer done? This is the first acquisition. Not that, like I said, everybody's got to start somewhere, but it just will show you their level of expertise and acquisitions.

If this is the ninth acquisition they're doing of similar companies, you're dealing with a pro here, and you've certainly got to make sure that you get some pros on your side. To be able to match firepower with the knowledge base of doing an acquisition or doing a sell in your case, a sale of your business in your case.

So the point being is, these are all things that will just start to show you how viable this really is. And then there's even just deeper level questions, but for a first call asking some of these things, we'll just really, kind of, sort out who you got on the line there. 

 , 

Yeah, You didn't quite say it this way, so I want you to tell me, Jeffrey, you're on base or [00:24:00] off base, but one strategy that I really like of what you're suggesting, and we actually talk about this in the Deep Wealth Mastery program. Until you sign, in this case, a letter of intent, but in our conversation, it's an NDA. That's when you lose your leverage. So before you sign anything, you have all the leverage. And one potential strategy could be someone calls you up over the phone. They want you to talk about all kinds of things. And hey, tell you what, I have some preliminary questions. Answer these questions. And if it makes sense, we'll take this call further. Now you're not making any commitments. You're not giving any specifics. But what I like is we have leverage, they're calling us, not the other way around, and the questions that you're asking, hey, what capabilities would I need to increase my enterprise value? Or why are you calling me? Is there a specific interest?

Jeffrey Feldberg: Well, yeah, Jeffrey, we really like. We really like your clients, and we really like the workforce that you have, and so it's a great way of learning competitive insights, and I'm going to even say some [00:25:00] weaknesses. Well, what don't you like about our company? What would have to change? Oh, yeah, well, Jeffrey, you know, we looked at it, and you're not doing this, you're not doing that.

And a relatively short conversation, we're not sharing financials, we're not signing any NDAs at this point, we're not opening up the kimono, so to speak, and sharing corporate secrets, but we are learning a lot from the other side that when I begin to work with you, hey, Michael, let me tell you about these 10 conversations I had.

I took notes, here's what they were asking, here's what they liked about us, here's what they didn't like about us. I imagine that's a tremendous benefit for you.

Michael Butler: You got it. You got it. Absolutely. I think the more of these calls you would do, the more of a fact pattern you would start to generate. That people are interested in residential HVAC in Kansas City, and it would have to have X number of employees and, you're, are they buying you for talent?

Are they buying you for, like I said, workforce, like you mentioned, or are they buying you for capabilities? I mean, I mean, they just want to expand and they want to, they'd rather buy than build, start a new company from scratch and. Be several years down the road before they're of the size that you're looking to do.[00:26:00]

But I think the key is, turning this ultimately, at some point in time you're so right about the leverage with an NDA, you're not going to answer any questions without an NDA, and you're not going to sign an NDA unless we get these, some answers to these questions, so I think you really do have that ultimate leverage, and they want to, get more information from you, but you've got some steps to go through here.

But the one thing I want to bring up, is what we call in the business running a process, we call it that, and really what that simply means is just getting multiple qualified buyers involved, and that could be five of them, it could be ten of them, we could reach out to hundreds of them, depend upon The company and attractiveness of the company and that industry and whatnot.

And so every time we work with a client, we determine how big of a net we're going to cast as it relates to reaching out to people, let me give you a great case study that I think really highlights something that this is our story, if you will, but it really highlights the value of a process.

And getting other people in the business, we were contacted by a company who had actually had gone ahead and already had signed a letter of intent letters of intent, as you may know, are non binding in the sense that they [00:27:00] usually have a timeframe by which they expire, but they've signed this and this, and specific details of this is that it was for 22 million to sell their company, a nice sum two founders who that's probably more money than they ever envisioned they would sell the company for.

And they were quite taken with it. But they were going through the process and having some trouble just really, since they had sort of gotten this far on their own, they needed some help and they were recommended to speak with us. We talked to them, looked at the uh, letter of intent, looked at the offer, looked at the company, and suggested that they just let that offer expire.

And they, like I said, these LOIs letters of intent, typically have expiration date associated with it. So they, let it expire. And the reason being is we saw a lot more value in the company than they did. We went about then learning more about the company, reformatting the materials they had offered to the other the buyer that we discussed, and put together what we call a SIM, a confidential information memorandum, which gave all the details of the staffing and the [00:28:00] financials and the market space and the opportunities and that sort of thing.

We put all that material together. We then went about and did what we call a Quality of Earnings Review. We don't do it ourselves, but we actually had it done by an outside firm. And a Quality of Earnings Review, or what sometimes is called a Q of E is really like an audit, but it's a little bit more forward looking in terms of, it's kind of trying to assess those things we mentioned earlier the risk of the organization and the opportunity of the organization going forward.

So we did that, encouraged them to do one of those and actually hire an outside firm to do that. And then what we did is then re approach the market. We then went out to multiple companies with now, more detailed, more comprehensive story around the organization. We then ultimately got an offer for the company for 44 million.

And if you recall in the story, it was 22 million. It was exactly double the original offer they had, and they were just overjoyed. But here's the kind of the kicker of it all. The 44 million was actually from the same bidder. [00:29:00] As the original offer, they were being then held to a level of competition.

They were still very interested in the company, but they saw the value that we had been able to demonstrate. We didn't create the value. We just better communicated the value of the company and also brought competition to bear and they didn't want to lose it. So they actually ended up being the buyer of this company at double the price.

They probably didn't enjoy seeing us. Get involved here, but hey we're working for the owners here. and those two gentlemen in this case, had a great exit as a result of going through this process. And it's a value, it just really trying to hopefully show the value of a process, the value of competition and obviously better packaging of the company as well.

Right.

Jeffrey Feldberg: what you said, that you didn't create value for the company. You did. You created value through the process, and that's why at Deep Wealth, one of the things that we say when it comes to the unsolicited offer, for all our listeners out there, and you know this, you've heard me say it before, an unsolicited offer is usually the worst offer.

[00:30:00] Michael, in your story, it was an unsolicited offer, it was 22 million. You got involved, you're professional, this is all you do day in, day out, and you over doubled it. And that's the difference. So for an unsolicited offer, sure, it's interesting to hear what they have to say, but know that there's always more.

And there's a reason why buyers and investors love unsolicited offers. Hey same thing with me. If I would've said yes to the unsolicited offer of seven figures, I was saying no to the nine figure offer that I created. I just didn't know it was there at the time. And so for a listener, there's a few key takeaways, Michael, with what Michael is sharing with you.

And that is when you get these calls, when you get these emails, maybe you do it once a month or once a quarter, I'll call it your freaky Friday or whatever it's going to be, or my titillating Tuesday, whatever it's going to be, you're going to say, OK. On this day, I will reach out to these unsolicited emails, phone calls that I got, see what I can find out and really how the world is viewing my company.

But when it comes time for showtime, [00:31:00] that's where I'm going to go to a professional, Michael and team. Hey, here's what we've been seeing. Here's what we've been doing. What do you think? And that's where you can bring on board your process. And so, Michael, for the listener, When you went from the 22 million to the 44 million, you said part of it was the process where you got competition involved.

What's your secret sauce? What else were you doing to elevate that enterprise value? 

Michael Butler: Yeah. Well, first of all, going out to the right buyers, in this case, ended up being the same buyer, which was a good one, but you also want to make sure that the buyer fits the objectives of the seller. And let me explain what I mean here. we've had people who just say, Hey, you know what?

I think I'd like to take some of my chips off the table. I want to sell 70 percent of my company, not a hundred percent. And I want to continue working, but I need a financial partner. I want to go out and do some acquisitions. I want to, invest deeper in the company. And right now I can't do that on my own.

So they are reaching out and trying to find a 70 percent owner, but they're looking to stick around. Well, there's only a certain number of buyers that'll want that [00:32:00] type of model. Many say, we buy 100 percent of companies and that's it. so matching the seller's objectives to the buyer type. It's really important right there.

That's one thing I can think of as a response to your question. The other thing that I think is, just the, like I said the packaging and the highlighting of that reduced risk and increased opportunity. That's one of the areas in our materials we highlight is what opportunities, what stones have not been, Turned over by this company currently, and it's maybe because a lack of resources or attention or time.

Let's just say it's the, as simple as the international expansion. Maybe they've never done any business outside the U. S. I'm dealing with a company right now, who's got a very scalable company outside the U. S., but they just haven't done it. They just said that it's not an area of just.

Now I have the time and attention and wherewithal to do it, or I'm getting close to the end of my career and I don't want to make the investment in international expansion because it just not going to pay off in time for my exit, those are the kinds of things I think I can think of in response to your question, Jeffrey.[00:33:00]

Jeffrey Feldberg: And again, for our listeners. I'm going to use myself as an example. When it comes to my car, Michael, I go in my car, I push the button, the car starts, and I drive. I have no idea how the engine works and don't even ask me to change the oil. Let alone fix the engine,

Michael Butler: I'm with you.

Jeffrey Feldberg: analogy though, how many times has business owners?

Oh, I know best. I'm a great negotiator. I've built this business. I can negotiate the sale or the investment of my company. No problem. And it's like Jeffrey trying to fix his car. It's just not going to happen. Save yourself the time, the hassle, take it to in the car analogy, take it into the proper service shop.

That's all they do day in day out. When it comes time for your company, take it to the right M& A investment, the bank and the individuals, investment bankers. Who can take it out and do all the right things. Let's not kid ourselves. Our time is the currency, not money. And there's only so much time, focus, and energy that we have.

Let me ask you this, Michael, when you were the buyer, when you were the seller, [00:34:00] when it came to time, if you look at the most successful companies that you're in, or that you purchased or that you invested in,

Was that team managing their time?

Michael Butler: Yeah, absolutely. That what they should be doing is focusing on the business. And one thing that we have seen occur is when sometimes an owner decides, Hey, I'm going to take on this responsibility of selling the company myself. A lot of times their eye is taken off the ball and they have a bad month, a bad quarter, and the result sometimes a bad year.

And that's absolutely, as you might guess. wrong time to be falling off on any kind of earnings. And so with that is a distraction. If you will. It's a, obviously a viable, healthy distraction, but you can get people like myself that do this all day long and could bring that expertise to the table and make it much more efficient.

So we, we try to take. Much of the burden, off of the company day to day. We take the phone calls. We're you know, we're speaking to the attorney's, the accountant's so working through the process, packaging the company, certainly there's a certain amount of involvement that owners and their team need to [00:35:00] have, to supply the information we need to present.

But the point being is distraction can be challenging to the point of making your company not as sellable as it was before you even started. Good.

Jeffrey Feldberg: you typically don't do this and you may kick me out of the table and say, Jeffrey, don't even say this. Don't even mention it. It's not something that we do. But I would imagine, Michael, if I came to you as a business owner and I said, look, Michael, we're on the Deep Wealth Podcast, we've never worked together before.

I've had these two dozen calls. And I haven't returned the calls. Obviously there's an interest in my company. At one point, I'd like to work with you, but could you reach out to these investors, these buyers, speak with them on my behalf, do an analysis of my company, come back and tell me where our gaps are, that by the time we do go to market, this is something that we'd have to address or fix for higher enterprise value, and we can begin to work together that way.

Would you ever do something like that? Or is that something that you've

Michael Butler: Well, I'd probably do it a little bit of out of order. So what we do is find out what your objectives are what in your mind is the value of your company, the basis for where you got that. And we would [00:36:00] do a market evaluation of the company, letting you know that either the number in your mind is on site or.

Out of market from what we're seeing today. Then if we all agreed that we were going to move forward, then that's when we would involve those individuals that those back on your example, those 10 companies or whatever the number of companies might be that have reached out in the past. Let's get them involved in the process.

If they reached out in the past, they hopefully would still be available. And so we would get them involved and make sure they're the right kind of buyers and a viable buyer, someone who's able to actually close a transaction. And yeah, there's no reason we wouldn't include those people in our outreach.

Jeffrey Feldberg: And when I say we, I'll put the microscope on myself. I did with that seven figure offer, it was a ready fire aim because what I did was I went into that seven figure offer. I knew there was going to be an offer. I knew I wasn't really ready to sell at that point, but I said, let me go through this

See where the weaknesses in the company are, to [00:37:00] see what the future buyer knows that I don't know.

I got to tell you, Michael, that was a lot of time, effort and money in this case. Doing that is, as I say, it was a ready fire aim, but I can be smart about it, and what you're saying is, hey, Jeffrey, just come to us, we can do an evaluation, we can take a look under the hood, see what's going on, give you some suggestions, and then work with you in terms of where you are now, of how to go from here to there.

Am I hearing that right?

Michael Butler: absolutely. And, and time is of the essence. I mean, when you start something sometimes the inertia of getting it going, well, let's say you just were entertaining this offer and your example, Jeffrey, and weren't really, thinking you were going to go forward with it, but sometimes you get on a treadmill and it kind of, carries you away and sometimes it's difficult, if not impossible, to stop.

And so with that, I wouldn't start without being prepared to want to finish but I think that yeah, I think that the process of doing this is, can be overwhelming, and if you've not been through it before, the biggest example that we, the biggest testimonial we get to our services is people say, I couldn't have done it without you.

It's [00:38:00] a resounding use of that phrase, and the reason being is they didn't realize how we were 10 figure salary? it was going to be, and how over their head they were going to be, because they've not been through this process. We very rarely have someone who's sold a company more than once.

It's usually first time, and it's a company, it's an unforgiving process in the sense that you can't do it twice. So, it's like I was using the analogy of Getting eye surgery, you know, if you're going to get the LASIK surgery to improve your vision, would you go buy the cheapest guy?

Probably not. You got one set of eyes and you got one opportunity and a lot of times it's not correctable what happens. So you really have to ensure that you uh, buy with quality and make sure you get a group that has demonstrated capabilities of being able to execute on transactions appropriately.

Jeffrey Feldberg: So Michael, really, if you take a step back here and we're starting to bump up against some time, we'll have to start wrapping up here. Really, what you're saying is there are some key questions that you can ask without going into a lot of detail, where we're going to turn the tables, as you've said, someone reaches [00:39:00] out to me, Hey, I would consider talking further with you, but I have some questions first.

And, you know, perhaps what we can do in the show notes, we can have people reach out to you and you can email them what those questions are. You can have a dialogue with them, really, but what you're saying is ask these questions. And in this way, without going into reports or accounting or due diligence or sensitive information, you can get some basic insights of why they're calling you, they see your company, how they don't see your company, what that looks like.

And then from there, you can improve your company along the way. And Mike will reach out to you and team to begin that process of really helping to position this company in the right way with the right people at the right time. How am I doing with that?

Michael Butler: Totally agree. And we always say the people that prepare the best. 

Jeffrey Feldberg: Yes. 

Michael Butler: End up the best in terms of both price, I mean, price is important, but price, terms, and chemistry and legacy. You want to make sure you're, turning your, company over to the right company that's going to take it the right place and take care of the employees that you are [00:40:00] in many cases leaving behind as you retire.

And there's so many questions to ask about that and so many things to know. And you want to have options. You want to have more than just one offer to choose from where you can weigh the pros and cons of those various offers. But terms is another thing I kind of glossed over there.

And by terms, I mean, how much is cash at close? there an earn out? Is there a a metrics based earn out? In the future to receive the rest of your money. A lot of other things go into terms, but in terms of reps and warranties and so on, but we won't get into today but with that you're absolutely right, Jeffery, you're on point with your experience and the preparation that you do with the companies involved in your program is key to preparing them to have the best sex that they can.

Jeffrey Feldberg: And thank you for that, Michael. Michael, let me ask you this before we do go into wrap up mode, when it comes to turning the tables on these unsolicited calls, emails, outreaches. Is there a message or an insight that you'd like to share that we haven't spoken about so far?

Michael Butler: Yeah. No, I think that I think the point being is, let's turn what would typically maybe be considered waste of time [00:41:00] into something that's maybe valuable for you to get some good competitive information and doing this with several phone calls and and again, it's it can be a simple phone call with somebody and you'll really ferret out very quickly if they've really got somebody or if they are somebody that's willing to buy and you could be getting a call directly from the buyer themselves or a private equity firm that's looking to get into that area.

there's a possibility there's some great viable buyers there and just finding out some more before you share anything will help to increase your knowledge base.

Jeffrey Feldberg: And again, for our listeners in the show notes, we'll have ways, and Michael, you'll say this on the podcast towards the end, a way that someone can reach out to you, get these questions. I'm sure you'll be happy to share the notes with them of what they could be doing, what they could be asking. But that said, Michael, you are a pro, you know this question we're going to ask, it's our ritual, you've been asked it

Michael Butler: I thought about it this time a little more. Go I'm sure you did, I'm sure you did, but for the benefit of our new listeners, our new community, this is the ritual, the time proven tradition here on the Deep Wealth Podcast.

Jeffrey Feldberg: When you think of the movie Back to the Future, you have that magical DeLorean [00:42:00] car that can take you to any point in time. Michael, a small morning, it's the fun part, you look outside your window, not only is the DeLorean car curbside, The door is open, it's waiting for you to hop on in what you do, and you're now gonna go to any point in your life.

Michael, as a young child, a teenager, whatever point in time that would be, Michael, what are you telling your younger self for life lessons or life wisdom? Why, Michael, do this, but don't do that. What would it sound like?

Michael Butler: Well, I'll tell you, I think this comes out of the fact that I'm having so much fun as an investment banker, hopefully being of great service to so many entrepreneurs, which I really value and hold in high esteem in my life, that I would say, having, if I could go back and earlier in my career and be doing this for a longer period of time, I would really enjoy that.

Although it comes with this little caveat here. I think the things that I mentioned at the top of the show you know, working as a CPA, working as a CFO, working in a big corporate environment where we where we acquired some companies and working as a venture capitalist, all those things contributed to my knowledge base.

So they really [00:43:00] are, for, make me, not to pat myself on the back too much, but make me uniquely qualified to be able to do what I'm doing today. I haven't just always worked as an investment banker, so if I'd taken a job out of college as a young investment banker, it would have been I don't think my skill sets would have been there like they are today, so I'm really enjoying the using and leveraging the experiences I have to do what I do today, but it's It's a fun process and it's fun to have a win we've, I've seen grown men and women cry when they sell their business and it's a gratifying emotional thing many times, but a great thing to be able to have someone really Be rewarded for all risks they've taken all the hard work they've had, and like I said, you can tell that by the way I'm saying this, it's the highest esteem I hold all these business owners.

Jeffrey Feldberg: Absolutely. And Michael, when you do look back at your journey, is it the journey itself now that you have the benefit of hindsight, benefit of 2020, you're looking back, are you saying to yourself Oh, Hey, Michael, the younger Michael, hey man, [00:44:00] just enjoy the journey. It's going to go where it's going to go.

It's all there for a reason. Just enjoy the journey itself.

Michael Butler: Absolutely. I think there was a quote by Steve Jobs about looking at your life in reverse and connecting the dots and only then can you really connect the dots. I think it was a graduation speech he made and it really hit home for me in terms of all the things that I've done have kind of led to this and you do want to be purposeful in your life in terms of if, I didn't know this was going to be the future for me, but I always.

Enjoyed everything I did always took something away from everything I did and always tried to be thoughtful around my career choices and everybody I interacted with yeah it's absolutely the process of getting there. That's the fun part for sure, like you said.

Jeffrey Feldberg: Michael, we're going to have this in the show notes. It'll be a point and click for listeners. If they have a question for you, they want to speak with you or it's, Hey, Michael, where are these questions that I can ask next time I get this unsolicited outreach? Where's the best place to reach you online?

Michael Butler: Yeah. Yeah. So the name of the firm is Footprint Capital and the footprint capital.com is our website. But I'll give you my email address and I'm also on [00:45:00] LinkedIn as well. But it's mButler@footprintcapital.com. I won't give you the phone number. The only reason I won't is. But just because these days as all of us are, we're not answering phone numbers we don't recognize, right?

So much spam is coming into our phones, but if you email me, I'd love to talk to you and I'd love to make available a bit of a one pager on these questions that will prepare you for how you'd go about many of the things I mentioned, a couple I didn't have a chance to, so I think it'll be a great guide, if you will, for those phone calls.

Jeffrey Feldberg: Terrific. And for listeners, Michael gave you his email address. Take him up on it. He's been on all sides of the table. He knows a thing or two about this. Well, Michael, congratulations. It's official. This is a wrap. And as we love to say here at Deep Wealth, may you continue to thrive and prosper while you remain healthy and safe.

Thank you so much.

Michael Butler: Thank you. Thanks for having me. 

Jeffrey Feldberg: So there you have it, Deep Wealth Nation. What did you think? So with all that said and as we wrap it up, I have another question for you.

Actually, it's more of a personal favor. Did you find this episode helpful? Have you found other episodes of the [00:46:00] Deep Wealth Podcast empowering and a game changer for your journey? And if you said yes, and I really hope you did, I have a small but really meaningful way that you can actually help us out and keep these episodes coming to you.

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