Episode Transcript
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Henry Kaestner: Ladies and gentlemen, welcome back to the Faith Driven Investor podcast. This is an episode that I’ve been looking forward to for a long time. When I think about men and women that have really made an impact in the way that I think about being a Faith Driven Entrepreneur and a Faith Driven investor, there are few, if any, that top Wade Myers. He’s been very thoughtful about how he runs his life in a way that brings glory to God at scale and with success. And he’s got such a great story. So I’m grateful that he’s on. Wade, thank you.
Wade Myersr: Oh, thank you, Henry. It’s great to be on the program.
Henry Kaester: So there’s a ton that we can cover today. And I hope that we going gonna get the most out of it. But before we get to that, I want to hear and our audience wants to hear a little bit more of a background in your personal story. So a couple of facts that I’ve heard about you. Can you tell us if any of this isn’t true? But these are the things that I’ve heard, that you grew up in a house that didn’t have electricity or plumbing. That there are only six people in your school and that you worked from 12-8am through high school. And finally, that you once defended thousands of school children in Denmark from a horde of killer fire ants. Are all those true?
Wade Myers: All but the last one.
Henry Kaestner: So tell us about growing up. You had a very interesting and incredibly formative background.
Wade Myers: It was a lot of fun. So my grandfather was a Mennonite, left a Mennonite colony at the homestead in western North Dakota, not exactly the place you’d want to homestead without, you know, the value of services such as electricity and indoor plumbing. And so my mother grew up as a Mennonite. But outside of the colony. And so my father, who grew up Irish, married my mother, the Mennonite. And so we grew up with this Mennonite background. And the religious influence was the Mennonite magazines that we got. There was trips back to the Mennonite colony to visit cousins that had, you know, horses and buggies and bonnets and so forth. And we were in the middle of nowhere in the badlands of North Dakota.
Wade Myers: So the combination of all of that meant there was just no services available. So my parents built our house with a hammer and a handsaw. They had no electricity. Didn’t even have a miter box. They just basically built this humble little home with a dirt floor. So we raised chickens and pigs in the basement in the early spring is way too cold for baby pigs or chicks to be outside who had kind of raised them up until the weather warmed up and they got a large and healthy enough and put them outside. There’s a very interesting way to grow up. You know, no television, no telephone. And it was really a lot of fun. My parents were wonderful. They modeled a wonderful marriage. My mother was very creative and entrepreneurial. And so my siblings and I just went to work at an early age. I started selling door to door at about nine years old, worked in construction, starting in sixth grade and back then and the rural environment to get a driver’s license.
You could start driving at a very early age. It was like a rural kind of driver’s permit and you get a regular driver’s license at 14 and started working. Right. So that was kind of life growing up. But it was wonderful. You know, we blasted coal out of the side of a creek and burned coal in a furnace and burned wood in a furnace. We had a cookstove in the kitchen and an icebox. You know, we’d bring in ice and all that. And we had a pond that my father put in and we had muddy pond water kind of pipes into the house. And so we had one faucet that, you know, you might get a salamander out of the end of the faucet or mud. That’s kind of how much rainfall we got. But it was a really neat way to grow up.
Henry Kaestner: Wow. So and you worked through high school. I mean, you’d worked nights.
Wade Myers: Yeah. So what’s interesting is I was always trying to find out how to make more money. And so the roofers helper kind of roofers assistant job in the sixth grade was 50 cents an hour. It wasn’t very much. But when I was a freshman in high school or maybe as a sophomore, they put on a big truck stop up on the hill by the interstate. And the interstate had gone through only a few years earlier. And all of a sudden there’s this big truck stop and tons of big fueling stations and 18 wheelers would come through. And so I thought, aha. So some of my friends in school that were older got a job there. And so I got a job there as well. And it was funny because you kind of start off as the newest employee on the dog shift, right. So midnight to eight was the hardest shift for them to start. And usually guys by myself. But it was you know, it wasn’t that busy. So I think we had eight fueling islands, which meant 16 trucks, maximum, you know, one on each side. And, you know, I had to change tires in the back on the big 18 wheelers and change oil as well as, you know, fuel and take care of the trucks. But normally, you only had two or three trucks at a time. And then we had truckers showers and truckers sleeping rooms. And so what I could do is as soon as I got off at eight o’clock in the morning when the manager showed up, I could grab a quick shower in a trucker shower and run over to school, which is only like a quarter mile down the road and make the morning bell. And then but I’d drive home to our little farm and just crash at three thirty or four and a half there. Just exhausted. It was really fun. And then once in a while, I’d pull a double shift and weekends were kind of crazy, but I had a blast. I would have my textbooks laid on the counter and run out to fuel trucks, you know, ring them up. And that was a neat experience. And I really enjoyed the work ethic of helping contribute to the family and helping our family farm survive and all that.
Henry Kaestner: So coming back to this show, this show being about investors, we talked to a lot of entrepreneurs as well. You are both. Tell us about the venture academy.
Wade Myers: Oh, yes. So the Venture Academy was a series of videos just under two hundred videos that I did several years ago. That was kind of a basic training for entrepreneurs. So what happened was whenever I spoke about entrepreneurship, oftentimes people would say, I’d love to be an entrepreneur. I’ve got this idea. But they didn’t really have the skills or training to be an entrepreneur. There there’s just a lot of holes missing. Oftentimes, there may maybe a mid career executive or, you know, had experience and just operations would say, and they weren’t broadly experienced and started up in strategy and, you know, H.R. and service and technology and all the things that you sort of have to manage as an entrepreneur.
Wade Myers: And there’s just really misalignment between kind of, hey, I feel God calling me to be an entrepreneur and have my own business. But they didn’t have the skill set. So I kept spending a lot of time explaining the same things over and over again. I thought, well, I’m going to make that scalable and repeatable. So I put on the event where I had about 75 people in the audience set it up, styled it like a Harvard Business School MBA classroom. Right. And then taught think it was a 13 Harvard Business School case studies and did a bunch of lectures and produced, you know, 200 odd videos that were just kind of basic training. Hey, here’s the basics of sales, the basics of marketing, the basics of how to raise capital, et cetera.
Henry Kaestner: 200 videos is. A lot of videos.
Wade Myers: And many of them are kind of, you know, two to four minutes, maybe 10 minutes, just sort of popping by topic. And we kind of had processes and I had principles like here’s seven key processes about marketing. Here is, you know, six key marketing principles you need to know. And then at the end of those lectures, I think sales and marketing is like 30 lectures, then we had case studies. Here’s a Harvard Business School case study on sales. Here’s one on marketing. And so it’s a wonderful program. We videotaped at all the twelve person film crew. And now that’s being distributed worldwide by right now media as well as by Crown Financial Ministries.
Henry Kaestner: Gotcha. Gotcha. We are huge fans of right now media and Crown. Chuck Bentley, just a super friend. What great distribution partners to have, so that’s some pretty decent scale.
William Norvell: That’s great, Wade. Thanks so much for walking us through that. William here. I’d love to shift a little bit to something. I know you work a lot with business owners and entrepreneurs to think about exit planning, and that’s a topic that invariably comes up. As I often say, every business in the world either gets old or dies. Those are kind of the options eventually. But it’s a topic that people don’t really want to talk about a lot. And specifically in the Christian landscape as well as you set out on holy ambition that you feel like God has led you to to start thinking about what that could look like either if you’re investing in a company or if you’re starting a company can be a little awkward. So I’d love for you maybe to give us a little bit about how you work with both sides of those equations, maybe take the investor first and the entrepreneur second and walk us through how you encourage people to think about exit planning.
Wade Myersl: Sure. So Capital Works is the companies flash technology platform that I built to solve this issue. So what I learned as over the last 25 years, I’ve simultaneously been an entrepreneur and an investor and have just made kind of small angel investments and built up to where I made larger investments and have a seed capital fund I’m part of, and always was spinning up entrepreneurial ventures and always doing a lot of acquisitions of other small business owner operator businesses for those entrepreneurial efforts. So, for example, one company I started here in the Dallas Fort Worth area 16 years ago, we’ve done, you know, 40, 45 acquisitions of small businesses from other small business owners to bulk that company up to where it’s now one of the largest in the industry. So for 25 years, I’ve done all kinds of investments, acquisitions and startups and, you know, own businesses, et cetera. And I kept seeing the same issues from both sides. Right. Investors are looking for high quality investment opportunities that fit a specific investment thesis. And the same with lenders. I’ve also done some high yield lending and, of course, worked with a lot of banks on lending. So it’s the same with lenders that are looking for a specific lending thesis. And in terms of a faith based investor, you’re looking for great companies led by a faith based management team that live by certain principles. Right. But that’s just kind of let’s call it a demographic feature. But in terms of your investment thesis, it might be a private equity firm fund might say I invest in turnarounds or distressed companies. And there’s a lot of that activity going on right now given the current recession. There might be ones just to do it. Minority growth investments take a minority stake and so forth. So they all have a specific investment thesis. Typically, they write that into their LP agreements and investment memos and they create the fund, if it’s a family office, oftentimes are looking for acquisitions that fit the family office structure. Hey, we might be experts at automotive parts. That’s how the family, you know, made their money initially. So they’re looking to acquire automotive parts companies underneath the core family office assets, that kind of thing. So I always would see these very specific, you know, strategies for investing and lending. And I could just call that generally capital providers. So whether it’s a family office or a fund or a bank. Right. And on the other side, the nurses, entrepreneurs that are always looking for some sort of capital to seventy nine point one percent of all middle market companies. And when I say middle market, I kind of think of a million in revenue to a billion in revenue, give or take, you know, not the small roll micro businesses, but kind of called a million to a billion. There’s about a million a half a million, six companies of that size in the U.S., seventy nine point one percent of them have debts, for example. So they’re always trying to get capital, mostly working capital debt. And so any entrepreneur in any room, we just had our big Lion’s Den virtual event this year in Dallas Fort Worth area. You know, entrepreneurs are almost always seeking capital. Right. And so here we have this issue. You got entrepreneurs looking for capital or maybe looking for an exit. In any case, they’re looking for some kind of transaction typically. Right. And then you have investors and lenders and family offices looking for, you know, opportunities to deploy capital. You go with it. Why is it so hard? Why is it that between family offices and private equity funds and, you know, overseas foreign direct investment, that there’s like six or seven trillion of, you know, dry powder looking for deals? Right. Roughly a trillion or so between family offices, corporate acquisitions and private equity funds, plus another three or four trillion of foreign direct investment from Europe and China and so forth looking for U.S. deals. So here we get all this money looking for deals. And on the entrepreneurs side, you get all these companies looking for some sort of cap or transaction. And, you know, it’s just like this is just a mess. And every time I entered into those kind of transactions, it was always kind of like a process that was, you know, typically not done well. Everything is sort of ad hoc. Everything looked different. And so over time, I developed a set of analytics style of analyzing. And it became really apparent that whether I was advising a company, whether I had invested in a company, owned the company, or just advising them whether I sell on a company, buying a company, invest in a company is kind of the same. Core analysis is same or analytics that you used every time. So as Capital Works, we put together all the software in the marketplace to say once we do this. Now, whether the company is trying to get a construction bond to grow their construction firm, whether they’re trying to get a loan, whether they’re trying to get a minority growth investment or trying to exit or form a strategic alliance, whatever it is, that same core set of analytics is really central to any kind of transaction. But the problem then became was every company’s financials and information was different and customized and every company thought they were super different and special and unique. And every investor kind of had their sense of that. So then it’s just a matter of standardization and codifying that to where we built the process. Well, we just kind of. Or in the company’s information, on one side, the outcomes of standardize profile of exactly what the company is looking for. Same exact analytics for every single company, whether it’s healthcares, marketing, services or manufacturing. Doesn’t matter. And now we can match. Now we can match the untapped capital supply with the unmet capital demand and match that along just hundreds and hundreds of dimensions, including demographic dimensions like this is a faith based management team looking for faith based investors or there’s, you know, whatever the social or, you know, might be a veteran owned business or whatever it is, as the demographics are just sort of one of the pieces that provide that match. And so in this way. So this is a faith based investor podcast, right. So investors are just looking for deals that fit well and they want to reduce the amount of diligence and the number of failed deals. As an investor, we all know that there’s tons of deal fatigue. You’re just trying to get the information from the company. And as soon as you get it, it’s usually not as clear as you’d like. And it kind of begs a whole bunch more questions. Right. And so you kind of getting this process of kind of Q&A and the Östberg is sort of worn out and says, when will this ever be over? Right. And meanwhile, as the investors say, wow, now that we see what you gave us, we got some more questions. And so this process usit goes on for about nine or 10 months. I think it’s like nine 1/2 months on average for a typical exit or buyout transaction to take place. You go, wow, that’s just painfully difficult. And many transactions result in failure. About half of loan applications don’t get funded. About three fourths of companies that are trying to get sold never sell. And only about 20 or 25 percent of all letters and the Tander term sheets that funds, you know, sign ever get closed. And so, you know, there’s a myriad issues there. But that’s what we’re trying to achieve, is to say we’re going to bring velocity and efficiency to this process. So it has had an amazing impact so far. So we’re we’re thrilled with that. That’s kind of been some of my lessons learned and what build up to how we’re trying to help this problem of helping out faith based investors and faith based entrepreneurs.
William Norvell: That’s great. Thanks for walking us through that Wade, I really appreciate that. And I feel like what I wantask next is I feel like that’s a great overview of some of the pragmatic business issues that face people as they come around thinking about exit. Could you walk us through you? Seems that you just get to work with a ton of people facing this decision, maybe the emotional side. Could you let our audience into, you know, what an investor would likely see as they approach a business owner and maybe what a business owner would be feeling as they’ve built a business for either two years or 20 years? Right. Or sometimes 40 or 50. How do you walk people through that process? Get them ready for that. Help them think about God’s stewardship of the business to this point. And now what will happen to the business, the employees? All those things as well as, of course, obviously what they can do with the capital and how to balance those things as they approach this kind of big transition.
Wade Myers: Yes, great question. So I’ve got this one diagram I show where emotionally most sellers say no and walk away from the table about three times during the course of a process because of the just the emotional nature of this one is the letter of intent in terms sheet stage, where it’s kind of the first time they’re seeing someone else’s opinion of the value of their business. It’s like, wait a minute. Are you kidding me? And it is kind of like they feel like you called their baby ugly, because most business owners always joke that most of them think their business is worth exactly two times the market value. I mean, this is like handing off your daughter in marriage, right? You gave birth to her. You took care of her. You protected her. And now years later, someone tells you it’s not that special. This is all it’s worth. Right. So that’s usually one inflection point that says I’m just out of here. I’m so disappointed. Another one is the length of the due diligence and the effort, which means so usually it’s a complete distraction. The business starts to head south in terms of they’re not there to do the rainmaking or to keep an eye. Things are so busy in the due diligence process, you know, and kind of along the way, you’ll usually see some really emotional bumps. And then a third one, frankly, is seller’s remorse in many cases, once they sell and if they do right. And it’s over is kind of like now. Now what? I kind of lost my purpose. Right? Like, what do they do now? And so one of the things that we try to do is to tell them there are way more options than just the binary options of, you know. Keep your business or selling. There’s many more options to pursue. And so, first of all, that reduces a lot of the pressure in a lot of the stress and a lot of the emotion if they realize that, oh, I could take on a minority growth investments, still run the company, kind of leverage someone else’s cap or reduce my risk, diversify. There’s all kinds of ways of doing this. But what’s really important for us is on the entrepeneur side. We help walk them through how the process works, kind of education. And, you know, if you’ve heard the Dunning Kruger effect, it’s these two professors within all this analysis on kind of like this, a two by two grid. Right.
Wade Myers: So all of us, when we enter into a new process or a new situation and we’ve never done before. We’re unconsciously incompetent. We don’t know what we don’t know. And over time, you know, we become more aware of what we’re not good at or what we don’t know. And that’s conscious incompetence. And and hopefully we move over into, you know, conscious competence. We’re really good and we’re aware what we’re doing. And then finally, the ultimate is unconscious competence, where you just it just comes second nature. It’s just, you know, you don’t even have to think about it. But for an entrepreneur, every time you grow your company, when you grow from one million to five million or five to 10, you know, huge milestones, you kind of fall back into the unconscious incompetence. It’s like this is way different. This is, you know, once you have multiple branches, like one of my companies I grew, we’ve got now 40 or so branches across the US. I remember trying to deal with like three or four or five branches going, wow, this is way different than a single location. Right.
And so when an entrepreneur is thinking about selling, they’re in that quadrant of unconscious incompetence. You’d expect that they’ve never done this before. Typically, they’ve never been involved in M&A. They don’t know the terminology, the lexicon. Investors tend to speak the language of finance. Entrepreneurs speak the language of operations. Meanwhile, accountants and CPA speak the language of accounting. It’s like they’re all speaking. It’s like the Tower of Babel. And so we try our best to sort of translate and say, OK, if you’re looking for capital to help grow and you want to take some chips off the table and sort of diversify your risk and not just risk your own capital. That’s called of minority growth investment or that’s called growth equity. And this is how the style works. We’re looking for a non control investor, so our platform actually translates. So the company can put in what they’re looking to do. In typical operations language, I want capital to acquire a competitor. I need capital to buy more equipment, whatever that is. And then our platform translates that the capital provider side, because they speak the language of finance and they want to know, well, is this a minority growth investment or is this a control investment or non control? Is it a buyout? Is a distressed right. And so to get the entrepreneur ready for an exit is more than just an exit, sort of. First of all, saying lots of options out there. What are you trying to do? I always want to have our team focus on their goals. And in many cases, what they’ll say is I just want to redeem my time. So one quick story. I a guy that on the roofing company with his brother and he called through a referral and said, hey, I’d like to know how the sale process works. I’m thinking about selling my business and starting a ministry. I said, oh, tell me more about that. Like, what are your overall goals? They said, well, you know, I don’t really know. But I just really I want to be more faithful to God. I just want to figure out how to better serve, you know, the kingdom. And I’m thinking like maybe marriage and family and raising kids kind of ministry. Now, he was only about 40, so he had, you know, a lot of time and energy left to keep running the business or what have you. But he just was kind of thinking that to really serve God well, he had to go do something in ministry. And often, as all of us on the call knows, that’s often kind of a misnomer that people think, well, to do God’s work, I really have to be kind of a person of the cloth and not run the businesses in itself, a ministry. So the first thing I said was, well, OK, so tell me a little bit about your company. And he tells me about the company and the value the company was, I think was like a couple of million dollars, you know, two or three million in terms of equity value. I was very familiar with roofing contractors and what the multiples were in the valuation. So he’s telling me as earnings kind of go on. OK, well, here’s part of the problem. He and his brother were there 50/50 owners. So if you guys take, you know, that call it three million dollars. And after the 30 percent friction costs Sipan, 20 percent capital gains and, you know, lawyers and CPA and investment bankers and so forth, you know, you’re going to end up with like 70 percent. And then if you take that in never touch capital and you took that away safely, maybe three percent, five percent annualized, that’s the last check you’re ever going to see. And now your income is going to be way, way lower than what you’re pulling out of your business right now. Right. So I think I think it was so forgiver was I think with six. Thousand of earnings, right? So times five is three million. So he and his brother split up about three thousand per year. So now imagine if you only took, you know, two and a half million. Put that away at, you know, five percent. A hundred and twenty thousand gross before taxes. Maybe it’s one hundred thousand after tax that you and your brother split. You’re going from three hundred each gross to only, you know, of fifty each gross or sixty thousand each girl. So it’s at the very time that you want to start a ministry, you have way less earnings because now you’re a fixed income are at best. Maybe the market goes down in a recession. You have no returns for that particular year. And so I said, let’s think of it this way. How many employees you have? One hundred employees. OK, they each have four or five family members. You’ve got customers. You’ve got vendors. I said your ministry is, you know, hundreds, if not thousands of people. And I kind of just walked in through that now. I was in the position to help him sell business and make a commission. But I talk them out of it completely. I said, no, no, why don’t you just grow your business? And if you just want more time, bring in just more professional manja team members, you know, just, you know, hire someone to be our CFO, hire someone to do this kind of step back, gain some your time. But now at least you’re not giving up all of your earnings. You’re maintaining the assets. And so capital works. We call that legacy value to say if you think about your business as just your first family office investment or just it’s one of your income producing assets, you don’t need to sell the golden goose. You just want to nurture it. Bring in people who can help you run it and gain whatever you want to gain out of what you thought an exit would get you. He thought an exit would give him a pile of cash that would make life easier the rest of his year of his life and that he would free up enough time to start a ministry when he kind of heard the sobering facts and kind of realized, well, yeah, I’d never want to touch the core amount of principle that I got. That was my last check. And now you’re right. If I just give out to a wealth manager and only live on the returns, there’s no way I can live on fifty or sixty thousand dollars a year. My wife used to me bringing home three hundred grand and growing. Right. Yeah. Yeah. The growth is the key issue. So. So that’s an example of there’s way more options. Let’s talk through them all. But first, tell me what you’re trying to achieve and then we kind of can fill in some blanks and open up those options and then match that with investors who say, yeah, that’s exactly what we’re looking to do.
Henry Kaestner: So Wade, I think that’s really important. And you’re getting something there that obviously points to the fact that not all transactions are black and white as just a straight sell and understanding and with any negotiation what each side really wants. There’s a dynamic, of course, you know about with the mass exit of baby boomers from their business, generational transfer businesses that are being sold. And I think that they’ve played a role in some of the illustrations you have, but talk to us a little bit more about the mistakes you see sellers make in looking at that. But then also that buyers make as buyers are interested in a business and are wading into a family business, what are some mistakes both sides make?
Wade Myers: Yeah. Good question. So you have this huge baby boomer thing, right? Two thirds of all business owners, I think it’s about 63 percent are baby boomers, which are probably on average around 65 years old. And so with this massive golf ball working its way through the garden hose and they all should be thinking about an exit or some kind of transition, not necessarily again selling, but just transitioning in some way. So that that’s huge. I estimate that to be about 10 trillion dollars of business wealth that’s going to be sold or transferred or potentially lost. So think of it this way. 50 percent of all transitions by a business owner are unplanned. They’re completely involuntary. And I’m quoting exit planning institute data because of the five D death, disability, disagreement, distress, or divorce. And so it’s an unplanned event. So if an entrepreneur, let’s say, just, you know, is called home and dies at their desk, 50 percent of all entrepreneurs are going to leave their family with a mess because they weren’t ready for an involuntary business transition. They didn’t have their ducks in a row. And I’ve seen some of those where I’ve been called in to try to help you just go. This is just a mess. The family doesn’t know anything. They’ll have the passwords for the operating account, for the business. It was, you know, maybe it was the dad that ran the business. The wife can make it to the office. It’s like, where’s the key to the front door? You know, there’s all kinds of stuff that it’s a real problem. So we do have this huge issue and it’s looming right before us because everyone is at that age to where they need to be really planning this. So the first thing is to get a plan in place, get everything organized, at least for the benefit of your family and your estate. Not have a mess to mop up. And so there is a big issue of just trying to get organized and small business owners are very, very busy. So but they have to. They have to stop kind of do the planning. Get all that lined up and really think through the goals and have family meetings and family discussion and figure this out. Right. On the other side, for investors, there’s oftentimes, you know, in a fund environment, there’s just a pressure to deploy capital. LPs are constantly, you know, trying to understand why aren’t you putting capital to work, you know, or how many deals you’ve done this year? What’s really funny in our analysis is of these 48 hundred odd private equity funds in the US. And that includes from seed capital all the way to buyout, forty eight hundred funds, give or take. They only average point eight deals per year per fund. So, you know, one deal a year now in the early days of a fund, that’s not very interesting. So you got to hurry up and deploy capital. You gonna start charging management fees. And oftentimes manager fees are only charged on what capital’s been deployed. And so what I see the mistake on the investor side, you know, not so much that pressure on a family office, but more on the fund side is there’s so much pressure to deploy capital that you can tend to overpay. Right. So frothy environment. You’re competing for deals and you get deals that don’t fit your thesis where you’ve kind of caved to close, you know, a term that’s common, which says, well, you really were looking for X, Y and Z, you kind of caved and just took X, right. And you kind of gave up on Y and Z didn’t really live out your strategy, your thesis, and you kind of, you know, caved on it. Right. And so they want to hurry up and put capital to work.
Wade Myers: And so mistakes are made on not having a proper pipeline in place, not following, you know, the investment thesis. And because of those pressures on both sides, it means a lot of deals are fairly messy and don’t really live up to their potential and in many cases, disappointment on both sides of not, you know, seeing the outcome that they would hope for.
William Norvell: Wade, as we come to a close, one question I did want to ask was, how do you think about the faith driven aspect of a company during a transition? So obviously, people sell companies to other folks that aren’t as faith driven and just recognize that they’ve built a great company with the great culture. How should an owner think about, you know, look at the thoughts running through my head from common grace to, you know, even still the culture. And it’s going to continue, whether you’re leading it or not, to how there could really be a lot of destruction of value there. And what do we do? Our job while we were running the company, just lots of thoughts could be gone through my head. I feel like our listeners could as well maybe walk us through how you walk through that with owners.
Wade Myers: Sure. So one is the cultural aspect where that honor has built a culture on top of a biblical framework and their style of how they operate is very much imbued with those values. What comes to mind is ServiceMaster, which had a really simple, you know, three point cultural and value statement. Number one, we honor God and all we do. And then they talked about employees and customers. Right. And so the honoring God and all we do thing was the critical point of their culture, which that kind of like set the tone for everything when they sold to a private equity firm. They had a massive Chicago area headquarters. That and this huge lobby with this big statue of Jesus washing the disciples feet. The first thing the private equity buyers did was had a crane come remove the statue and crush it up and throw it away. And you just kind of go that right there, just sort of killed the soul of the company and then they scrub the honor God in all we do from the value statement, and that’s kind of a nightmare of a lot of faith based entrepreneurs, is say none. No. I built this company. I committed it to God. I care for employees and customers and the community in a way that’s different. That’s a huge part of the soul of the company. Now, there’s also a lot of analysis that faith based companies and companies that are trying to do social good and kind of say we care about all constituents, not just shareholder value, that those companies almost always outperform regular companies that are just focused on the bottom line. And again, it makes sense. It’s the biblical economics that who should do the right thing and treat everyone’s respect and golden rule that generally, you know, things will turn out better. So there is an aspect of I had one owner tell me the worst thing I could imagine is I sell the company. I take a whole bunch of money away. I walk away, leave my employees. They’re at the mercy of the buyers. And then I bump into the employees at the grocery store or the park or something. They say, great, you sold us out. So happy for you that you made a pile of cash. Look what we’re stuck with at work, right? And so there is this sense of a lot of faith based entrepreneurs that says, I want to do this right. And I would prefer to sell to a buyer. If I sell to a buyer, that is going to continue. The culture continues of values, continue the ethos of the company, because that’s really critical to what we do and it’s critical to the value that we’ve created and to our outperformance. Because, again, the analysts would say that faith based companies and companies that are focused on kind of social good and are looking at all constituents almost always outperform. So it it does tie together. Right, with the culture and the performance, et cetera. So that’s usually a pretty big deal. Well, there’s other entrepeneurs that would just say, well, I want to maximize the proceeds.
Wade Myers: And then with those proceeds, I have a plan for how I use that for faith based purposes. Right. And in that case, as someone came along and offered a much higher price, that was a not a faith based investor, you know. Now, there’s a decision of am I trying to be a good steward of the potential value in proceeds and how I can use that and how much of the culture and so forth would survive under this acquiring entity. In some cases, that acquiring entity might be so convinced by what’s going on that they’re open to continuing that. And it serves as a testimony to people that otherwise wouldn’t have been testified to. Right. In terms of, wow, there’s really something here. But in general, a faith based entrepreneur is very concerned about what happens to their employees or customers, their values, their culture. And it’s a big deal. And I think to your question, there’s tons of opportunities to do this right to match, you know, the buyers and the sellers together in this ecosystem that says if that’s what’s important to here’s all these opportunities. I think all of us have been involved in some of these, you know, events. And you guys are putting on events. There’s all kinds of events. People are just really kind of waking up to, wow, there’s this all movement of faith based investors and faith based entrepreneurs and trying to bring them together. This is great because it’s more opportunities than most business owners realized to find a great buyer and potentially just matches up the whole thing. And I’d like to keep a stake in a company. But I don’t want to keep a stake in a company with a buyer that’s going to completely change the company. Right. And so there’s all kinds of opportunities now to really be fully aligned on the values dimension, as well as just the financial dimension.
William Norvell: Wade, that’s good. And, you know, we talk to a lot of folks as well. And I think it’s one of the phrases we say a lot. is one size really does fit one. And you just really never know what God’s doing for every kind of tragedy story as the ones you mentioned there. And, you know, some great experiences with private equity firms and other buyers and all kinds of things. I’m sure you do as well. You know, just it really is so good to hear how you think about it and how we can encourage others to think about it as they come up on that, you know, pretty big decision in their life, as you’ve said so well. And as we come to a wrap here on the Faith Driven Investor podcast, I would love to invite you to share with our audience where God has you today in his word and what he may be telling you. It could be today, could be the season, could be something he’s just had on your heart and that you’ve been working through. Would you mind just let us in a little bit into where God has Wade, in his word?
Wade Myers: Yeah, absolutely. So, you know, given the whole Covid impact and the recession, there are so many entrepreneurs that are in trouble, that are anxious, that are being forced to lay off employees, being forced to shut down. And what I’m really grateful for is we have all of our analytics in our platform that we can turn on for free and just say, well, let us help. Let us just help you get through this. And, you know, raising capital for companies that need it, saving jobs. And so one of the things I’m really grateful for right now is just being faithful and being a good steward of what, you know, is right at my disposal and just offering to be a wonderful help to those that need it and to really try to make a difference with that at the same time. I have one of my five children is fairly ill right now and we’re wrestling with that. And so other thing God is telling me is just execute well on all fronts. On the family front, you know, as well as the business front, there’s all these balls that we’re constantly juggling and just trying to do it all well and trying to lead faithfully through good times and bad times and through, you know, good health and bad health and just coming out the other side and knowing that it’s just a growth opportunity. And so as I meet with entrepreneurs right now, they’re struggling and are worried. The nice thing is God has taken me through a lot of experiences where I’ve learned a lot of hard knocks and made a lot of mistakes. So there is a degree of empathy that God is able to use to help them just, you know, understand that you’re not alone. Because most entrepreneurs feel very isolated and lonely and like I’m a failure. Right. It’s like, no, this is a different environment. Let’s help you through it. So I’m really grateful to be in that position. But clearly, God is saying take what you have and offer it. A lot of what you have free right now just to help businesses get through this next, you know, three months, six months, whatever it is, until kind of people can get back on their feet.
Henry Kaestner: Wade, thank you very much for your time. Thank you for your faithfulness and for sharing. And for encouraging our faith driven investor audience. May God bless you and your family and your child that’s going through these difficult times.
Wade Myersr: Thank you very much. I appreciate it.
