Business Innovators Radio - Interview with Jason Somerville, Founding Partner of GW Partners & South Col

Episode Date: June 7, 2023

Jason is a seasoned entrepreneur and investment banking professional with nearly 20 years of experience in capital markets, M&A, strategic planning, business operations, and brand building.He is a founding partner of GW Partners (formerly known as Global Wired Advisors) and South Col, a growth fund that invests in brand-driven consumer product businesses. Before launching GW Partners, Jason executed over $50 billion of Fortune 500 capital markets transactions for companies like Bank of America and Bayview Asset Management. He also purchased or started and exited five different companies as a solo entrepreneur. He has successfully executed over $300 million of M&A sell-side transactions in the Ecommerce industry.Today, Jason’s passion is working with founders/owners to help them maximize the value of their businesses in a sale and ensure they are rewarded for all their hard work and investment. His wealth of experience leading billions of dollars of transactions in his career makes him a powerful ally for his clients.Learn More: https://www.gw.partners/ | https://www.southcol.co/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-jason-somerville-founding-partner-of-gw-partners-south-col

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with us Jason Somerville, who's the founding partner of GW Partners and Southcall. Jason, welcome to the program. Thanks, Mike. Glad to be here. Hey, looking forward to talking with you and learning about what you do and how you do it and get it started with your story.

What's your background and how did you get into the industry? Absolutely. Thanks. Yeah. My story has a bit of a winding road. I started. Don't they all? I mean, for real, you know, you talk to someone and like you're at M&A and all that. I'm sure in third grade you didn't get up and go, you know, my dream job is not fireman, not police officer, but I'm going to get, I mean, it's always the winding. That's awesome. It is. Yeah.

Well, my dream job actually, depends on what age you asked me. But it was, it was being a professional baseball player. And then when I realized that wasn't going to happen, I was wanting to be a sports agent. But then I realized I was going to have to go to law school probably to do that. And so I said, no way. I'm going to finance. Awesome. So that's where I started.

I started as an investment banker with Bank of America, kind of right out of college in Chicago. you know, working on large transactions across debt, equity, M&A, capital markets for, you know, Fortune 500-type clients, obviously all the big companies that a big bank like Bank of America services. I spent about three years there and then I actually went down to a really a hedge fund, essentially was what it was in Miami, known as Bayview Financial. I ran capital markets there for almost seven years and actually left that right as the financial crisis of 2008 was upon us. And, you know, I had kind of decided after that that I wanted to no longer be a W-2 employee. I wanted to kind of make my way as an entrepreneur and try to make my own journey. So, you know, I sort of, my next couple of ventures were small businesses. I had a helicopter leasing company.

I actually bought a company that modified homes and businesses so that they could be wheelchair accessible. And that was kind of what kicked me off into my entrepreneur journey. So I kind of left the world of investment banking and finance, moved into, you know, very legitimate, you know, kind of small business entrepreneurship. And then kind of found my way back to sort of a blend of both about six years ago or so. And, you know, started GW partners, which is essentially an investment bank kind of slash M&A advisory firm and business consulting firm that focuses very heavily on founder-owned companies typically in the lower middle market. So normally under 100 million of revenue on down from there. So, you know, and really the onus for that was, you know, in my journey, actually selling small businesses as an owner. And after coming from that, you know, crazy, pure Wall Street world,

I came to the conclusion that there were all of these, you know, founders that wanted to sell their companies, but were kind of almost forced to work with advisors that, quite frankly, I felt like weren't doing them a great service. And I thought, you know what? You know, I think what I would love to do is to take my skills and having been kind of at every seat of the table and all of that great training I got in, you know, big, large transactions and also all of the, call it ground level training I got, understanding what it's like to actually run a small company and put it all together and try to help founders really think through and maximize and kind of strategically plan their process for selling their businesses and then take

them through, you know, kind of a really a much more sophisticated, robust dial approach that's very similar to how it's done in large deals in the smaller, you know, universe and try to really, you know, take all this hard work and sacrifice that all of these great founders and entrepreneurs have put in over the years and try to, you know, maximize the results for them and their families. You know, correct me if I'm wrong, but it sounds like your unique selling proposition competitive advantage is we're not just an M&A firm that helps you exit. We help you get to the best exit to maximize that with consulting and strategic planning and

all of that that goes into it. Otherwise, if someone just says, I want to exit and they go to someone and we go, great, here's the price tag and we got it, but are we leaving money on the table? Did something fall through the cracks? but you're able to help amplify and optimize all of that before you get to that part. That's absolutely right. And I think to take that a little bit further, you know, if you simply do a Google search, I mean, you can find your way to all kinds of what I would call exit planning checklists and things

like that where, you know, kind of there's this standard, you know, ABCs of if you're starting to think about selling your company, here are some of the things you might want to do. but I think, you know, really going far beyond that and really sort of trying to understand, well, what is it about my company that makes it attractive? What is it about my company that might not make it so attractive? Can I help, you know, eliminate those negatives while really amplifying those positives? But also, it comes down to, you know, having a real understanding of the market that you play in. What is your positioning? You know, what is, what makes you unique or how to increase the things that make you unique as you're planning

for that eventual transaction. And where we can be incredibly helpful is across all of it because we are, you know, we have been operators before. We understand kind of the DNA of how to, you know, run businesses and improve different functional areas within those companies, but also bringing that expertise of how is an acquirer going to look at this opportunity, right? You know, being in that seat and being, say, going through and saying, you know what, you know, if I'm an acquire and I'm a, let's say a private equity firm where I'm a strategic corporate acquire and I come in and I look at your company, here are all the things that I'm going to like about it and here's all the things I'm not going to like about it.

And how do we kind of, again, think about it in that frame of mind and then take a, take the appropriate amount of time and care to kind of get it really ready and get it to a place where it's got a lot of strategic value to it rather than being treated more like a commodity. And I think that's an area where we very much focus. If you're a business owner that wants to sell your company and your business is kind of would be seen as a commodity, then that's, That's something you want to try to move away from. You don't want to just be one of any kind of run-of-the-mill company that does what you do. You need to be unique in some way or multiple ways. You know, what you just mentioned there about checklist. You know, what you provide goes way beyond just let me Google this, fill this out. We're good to go. Google's great and checklist are great for some things. But wow, if you can get into embedded into that organization and look at it through the eyes of, you know, a VC even. and go, you know, let's even talk in terms of real estate.

Let's polish up the curb appeal. What's that business going to look like from the outside? And then what's the next level in? And how do we make the numbers look good? And how do we all of those things? Boy, you could, and maybe you could even give an example. But what's an example of company A that thinks they want to exit and they put this price tag on it.

But once you work your magic, boy, it was a 2x, 3x, 4x increase because of the things that you were doing. What does that look like? Well, I mean, I can tell you that, you know, when we get involved in any opportunity, whether that's as a client of GW partners or actually as a client of Southcall, which is, you know, kind of a, it's another venture that I'm a partner in. And really, the main difference between the two is that GW Partners is very much an advisory firm and a consulting business, whereas Southcall is actually an investment platform where we're making investments into companies. companies taking really minority interests in those businesses and then kind of helping to improve them over a let's say a one to two year period. It all kind of triangulates though around the same sort of concepts. And if we don't believe that we can at least sort of three X, the value of

the business, then we typically will be like, you know what, that would be considered kind of a failure for us. And so we're going in, and that's kind of the bare minimum. And, you know, so far, you know, we've done that in every instance. And, you know, and that we can't attribute all of that, of course, to ourselves. I mean, really what we're there to do is we're really there to add a bunch of tailwind and provide a bunch of direction to the company, get it kind of hands and feet where we can really jump in and really be part of the team and then also give guidance in other areas where we may not be executing, you know, on behalf of the founder or the team, but we're kind of giving them the proper direction of what to what to go and do.

And so it's kind of all put in it in a big, really big pot and hopefully comes out as a, as a stew that tastes pretty good. Yeah. I mean, there's effort. You can't just wave a magic wand. you can guide and say here's what needs to be done, but the founder and the company need to roll up their sleeves and work as well. So where do you start when you start working with a company? What should founders be doing to make their company strategically valuable as like an acquisition target? Well, I mean, the first place we start usually is just kind of assessing the current situation, which obviously is a bit of just common sense. Hey, let's figure out where we are and let's identify the areas that not only where the company is weaker, but also the areas of

opportunity to differentiate. So really, if you think about any company, any business, you know, you kind of have a core list of functions within that business. We're talking about finance and marketing and, you know, supply chain and things of those, you know, things of that nature. And we're going into each one and we're effectively assessing everything about. that functional and we're giving it a scorecard and we're saying look here's an opportunity for us to improve in this functional area or that functional area and then you know kind of building that up

into really an ex kind of a strategic plan that's incredibly detailed that that is a roadmap to the the goal that we all have and that's another key is alignment right i think that um you know Business owners, as I'm sure you're well aware, there's a large variety of perspectives around where they ultimately want to take their companies, you know, and they have a lot of different motivations for things. I know a lot of people automatically just assume that everything is kind of financially driven. Not always the case, right? I know we have had plenty of clients over the years that cared more about their company being sold to, you know, a high quality, a quality of. inquirer that had certain characteristics, sometimes the people themselves, you know, wanted to believe they're good people that are going to take really good care of this business that they've built over the years. And that even if, even if party A is willing to pay a little more than

party B, but party B has all those other intangibles, they'd rather, they'd rather sell it to party B and take a little bit less. So really understanding what those goals, you know, are, that's kind of going to be our North Star that we're going to drive towards. And so that assessment, which kind of flows into that execution plan, kind of leads us to that. And so this is our roadmap. Now let's go out and let's execute on it. So again, breaking it down into those functional areas,

these are all, these are the things we need to go and execute and do. And where we are, you know, I always make fun of myself because I like to use the Bruce Lee quote, which is be water. And so we try to effectively be water. And we flow in to the areas where we are most needed, right, in order to execute the plan.

And on other areas that, you know, the teams can just kind of say, hey, this is great. We're working together. We're arm and arm. We all agree that this is the, this is where we want to go. And we think we can actually go and execute. We don't need you guys there, like, you know, being very, very, you know, involved in the day to day. And then there's other areas, you know, and, you know, companies and founders, they tend to have different strengths and different weaknesses, things that they love to do, things they don't love to do. So lots of them are great marketers, but they hate finance.

And some I've seen the complete opposite. We just had a transaction where, you know, the owner very successful, companies grow on like a weed, but he's a finance guy. And the marketing is the biggest driver of the company. And so we need to figure that out and did figure it out to make it really grow and sing, just not his, just not his wheelhouse. So, you know, it's a lot of detail. But in general, it's kind of assessing and then building an execution plan and then going in and executing. That's kind of the first really half of what we're doing.

Yeah, 100%. And, you know, I love, I'm a big quote person. So you mentioned Bruce Lee, and I like the other quote that he, uh, uh, has is known for where he said something to the effect of. I don't fear the person that knows 10,000 punches. I fear the person that knows one punch and has practiced it 10,000 times. And then that just gets into what you're just saying about finance and marketing. You know what? Let's not get someone that's kind of good, a little bit good at a lot of things. Let's get someone like you guys that are really good with yes, M&A, but everything that goes into it. Because if you can have someone that

has the mindset and the expertise of what leads to a successful exit, boy, all the pieces then are working together. Absolutely. Yeah. And we like to tell, you know, another one of our taglines is we know the answers to the test. That's what we tell people all the time is, look, we know what's going to happen when the deal comes to market. Like, we can tell you right now, I can give you the first 10, 20 things people are going to

say, good and bad. And I'm going to tell you the first 50 questions they're going to. to ask. And so knowing that and kind of going into the process where you do have all the answers to the test, it not only makes it a much smoother process, it tends to make it much more successful. You know, marketing a company for sale is not an easy task if you're doing it well. And what happens a lot of times is deals get bogged down with things that they frankly shouldn't be bogged down with, that if given enough time to prepare, they could have been dealt with way before and there's no problem, whether that's accounting problems or legal issues or, you know, safety and compliance issues with your products or even just these are little,

these are more little things, but they can turn into big things and a deal. And anything that slows an M&A process down or causes bumps in the road, eventually a lot of it ends up, somehow weighing on the transaction terms, either the valuation or some of the other terms, it'll kind of find its way in there. So, you know, it's a little bit like, again, I've been known as a kind of an analogy king, unfortunately, but, you know, it's a lot like getting ready for a big fight as a boxer, right? You've got an eight-week training camp to get you ready so that when you go in there, you're in top physical condition. I look at it a little bit, you know, like this, right? And it's kind of knowing that, look, you owe it to yourself.

You've spent all of that time, energy, money, sacrifice, taking all of that risk to try to take something as serious and typically as life changing in our market. Like you're talking about normally transactions that are frankly more money than people have ever encountered in their life. And this is kind of like one of their big, if not their biggest life liquidity event. You know, let's do it in the way that is going to really, really maximize it. Right. And the point you made before about the strategic kind of, you know, components. And, you know, one thing again, I'll say, and I said it before, I think I love this market. I love the small business market and the lower middle market. I'd work in it any day of the week over the Fortune 500 market. I just, I love founders. I love the people that we encounter. And I love working with them. And I think it's a market that, unfortunately, it's been largely neglected by. what I would call, you know, really high-level service providers. And so, you know, the things that I'm saying have been taking place, you know, in larger companies for a long time. It's really just kind of bringing that type of strategic thinking to smaller businesses and really being, you know, very critical but proactive about your company and ways to differentiate.

You know, again, we're talking about let's just use a product company. If I look at it and say, okay, well, you know, how is my product ultimately unique compared to the competitors in the marketplace, right? Does it have the best technology? Does it have the best features? You know, even little details like the packaging, you know, is it top quality? You know, is it really reflect my customer, you know, or is it just kind of the thing I chose when I was getting the company going? And, you know, I just didn't pay that much attention to it in the beginning. okay, well, fine.

You've been successful. Now's the time to pay attention. Yes. And sometimes you're too close to the forest to see the tree, so you need that external third party to come in and go, okay, here's the path forward, here's the plan, and let's take a step by step, the blueprint. We're going to guide you through the process,

and the transformation is going to be, boom, this 3x, 4x multiple up higher than what it would have been. And that's what you guys bring to the table. So I just think you guys are just putting all these pieces together so well, And Jason, if someone is interested in learning more and reaching out, connecting to you, what's the best way that they can do that? Sure, yeah. The best thing to do is you can find us on our website. It's www.gw.g-W-Partners actually is the extension.

You can also find us at Southcall, which is www. southc-c-o-o-o-c-o-c-. And, yeah, we have forms on there. So if you want to reach us, you can always just fill up the contact form. and we'll get the email and we'll be in touch. Awesome. Well, Jason, thank you so much for coming on. It's been a real pleasure talking with you. Yeah, same to you, Mike.

Appreciate having me, buddy. Take care. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www.influentialentrepreneurs radio.com.