Hard Lessons in Buying, Scaling, and Exiting with Carl Kleimann

0:00So on today's show, we talked to Carl Kleinman, you know, and we learned a lot about his journey from building one company and exiting and rolling equity to rolling equity again, to rolling it again and to starting another company and being success. But, you know, Casey, what were your key takeaways on Carl's episode today? Yeah, you know, you meet people and you get a chance to learn a little bit about their backgrounds and what you realize about leadership is when people either have that leadership, they've learned the leadership to be able to guide and make things happen, right? And Carl's what I would call one of those people that's an infectious leader, right? You get around him, you want to rise to the occasion. And so that leadership and that journey, the story matches somebody that just has that servant leadership mentality. Yeah, that was kind of the takeaway that I got was that he's just a good guy, a good soul and, you know, cared about his customers, cared about his team members, you know, and brought that to the table for the private equity guys. And I think you probably humanized a lot of this stuff too.

1:00Oh, and it was incredible just to kind of see the longevity that he lasted within that private equity space too. And I'd also say, you know, there's also that constant learning mentality, right? Because what we do is hard. There's nothing easy about starting a business, having employees, but instead of looking at it going, why is this happening? It's more like, you know, like, what can I do with this? How do I get better from it? And so to say, Hey, I've stayed on and I'm going to roll in my equity. And then I'm going to learn, man, you got a big check. Most people's ego's like, shoot, man, I'm out of the door. I'm going to the beach. And instead, it's like, Hey, I want to learn to become better. And then that skill set takes you to another opportunity that scales to $259. Yeah, you know, so this is an incredible episode. Once you guys are staying tuned to it and look forward to the next one. Welcome to the M&A Launchpad podcast with your host, Casey and Ferris with Equity Launchpad. On this podcast, you will gain insights on acquiring investing in and selling profitable businesses in the lower to middle market.

2:02Whether you're a business owner, investor, or a spa entrepreneur, at Equity Launchpad, we will provide you with the knowledge, guidance, and capital to navigate the world of mergers and acquisitions. Hey there. This is Casey with the M&A Launchpad podcast. We want to let you know about October 25th. Put it on your calendar. This is a do not miss one day event. There's going to be incredible headliners, but really at the end of the day, you're going to get a chance to talk to people that have made acquisitions, learn from some of the challenges that they've made, because this is definitely a challenging process. But more importantly, there's going to be people there that can help you and support you along the way from great vendors, quality of earnings, how to run the due diligence process. And how do I get financed? How do I raise capital? How do I structure all of these things? October 25th in Chicago, we're going to be gathering. It's going to be hundreds of people that are all focused, like-minded people, and man, everyone that's come has given us incredible feedback. So mark your calendar, October 25th in Chicago. We look forward to seeing you.

3:03Hey Carl, welcome to the show. Thanks, great to be with you. Yeah, it's just, you know, we've known each other for so long, and I've gotten to watch all of the things you've done, and to talk about it, and just been a great mentor. And so we've had to have you on the show, and talk a little bit about some cool things. Yeah, I think I'm really excited about today's show for our listeners. I mean, you know, I know the company that Carl's currently at. I know the family behind it, and I'd love to hear that story too, but I think it's nice to, I think a lot of our, you know, the people that we have on his guests are showing us different parts of this journey. And I think Carl's part of the journey is, what is that, what is that pot of gold at the end of the rainbow look like, right? And what we're all the challenges, trials, and tribulations to get to that pot of gold. And I think that that's important for people to keep in the back of their mind as on their vision board, or, you know, whatever goals are going to put up there, that ultimately if you want to be an entrepreneur, and you want to run these companies, right, you need to have an exit strategy, right? And what is that exit strategy look like?

4:05And so really excited to dive in, kind of dive in with Carl today, and kind of talk about what that looks like. Carl, so give us just a snapshot about your background, and we'll start beating you up with questions here. Kind of got off to an early start with the entrepreneurial bugs. So in high school, I was a Texaco, I had a Texaco station in one in Tom Ball, and then one in Magnolia, along with my stepbrother, Brent, Kennedy. And so kind of got an early exposure to what it feels like to have to, you know, make payroll and deal with inventory and deal with the employees and things of that nature, kind of got the bug. And then when I went to college, I really did focus on college, got out of that business, focused on school, and when I got out, I went to work for ADP, automatic native processing. I spent about four years there, which was very valuable, worked with some great folks. Great company, learned a lot, created a lot of connections there,

5:08and then went on to get into the PEO, professional employer organization business, which is how I met you, and spent, you know, over 25 years in that industry, exited that industry, the 2000, 2014 Rusty Moffitt, and I started this business Moffitt services. And here we are. So Carl, let's go back to the PEO conversation, because I personally think that it was one of the best experiences of my entrepreneurial career was going and selling the services. Not only did I get a chance to sell to C-suite, but it's really helped me focus on a lot of the administrative stuff that happens in a company where you don't really think about, right? Processing payroll and all those things. So just kind of in your back, you know, 25 years of doing the industry, you know, and it was your first exit, right? Your first company that you were part of in exit, and it's a great story. Talk just real quick about why you think PEO is important

6:09for the small business world and what you saw in it, and then tell us about the journey that you had from Odyssey, all the way through Co-AdVantage. Yeah, well, first, to your point, it is an absolutely great lens to the business world, right? What I enjoyed most about that business, and it was similar at ADP, is that we were industry agnostic. We got to work with all types and sizes of business, all industries. I was in that long enough to go through, you know, economic cycles. And you learn a lot more than just about payroll and HR and employee benefits. You learn a lot about the businesses that you're working with, that the great fortune of working with thousands of businesses in my PEO career. So, I absolutely love that. Now, to your question of why are PEOs important to small businesses? I guess this is one where you can never really take the hat off, right? When I started Moffitt, we started with a PEO, right?

7:16And the reason that we did, and the reason it's important is, when you're running a small business, and we all define small businesses differently, but let's just put it this way. If you have less than 100 employees, you probably don't have a lot of depth of expertise around things like employment regulations, you know, how to combat an unemployment claim, how to minimize or mitigate liability for, you know, violations and discriminatory actions. But on the flip side of that, you probably don't have a depth of skill around how to recruit talent. And by the way, that game has evolved tremendously. Even in the years since I've been out of the industry, right? I've been out of the industry now for a little over 10 years. And so, I think PEOs, at least what we tried to do at Odyssey and then co-advantage, is to bring that expertise, which translates into competitive advantage to smaller companies

8:19that would not have otherwise had that. Whether it was more expertise, better recruiting, better employee benefits, more affordable employee benefits, retirement plans, things that help level the playing field for the smaller companies competing against the larger foes. One of those big selling points of the PEO at that point was also better insurance, health insurance. And I think that world is slowly, not slowly. I think that world is gone. Having benefit health insurance is just out of whack and crazy. But again, it sees things that, you know, and I kind of get into the PEO conversation because it feeds into your business journey, right? Because when you're in the back office, you're talking to these business owners, why do they need our services? All of a sudden, you start helping, you start realizing that all of these companies have the same problems, right? They may not be having the same problems at the same time, right? But they have them. And, you know, like, we use a PEO for our aging and plating company. And, you know, we had somebody that we had a worker fall, you know, something fell on top of them and they sued us, right? And we didn't do

9:24anything. We sent it over to our EPLI. They managed it. They handled it. They settled it. We didn't even have to worry about it. But if I wouldn't have had that, I don't even know where it's start. Yeah, I think that it's definitely one of those things that I, and you kind of hit on a car or word as you're starting off, it's good to have somebody in your back court that you can scale with until you get to a point where you can bring some of those things in house. One of the other things I always thought was interesting about the PEO is that you guys are, when you're selling it, you're in front of the business owners. And so, so to kind of tie that thread for our listeners too, right? Great contacts for people that are searching for business owners and contacts to business owners. And 100% to tie it back to ours. That's how we found an H&M, which was our, was, was equity launch pad's first acquisition was through a PEO provider. And a business owner, a broker. Yeah, and so like the point is, is like, these people are talking to see sweet, you know, and to the business owners themselves, you know, they're going to know, what is their journey? Like, are they looking to sell? They're not looking to sell. They look an expand potentially. And so, I think, you know, if you're a listener to this podcast, I think

10:27it's important to put those people on the list of lawyers, CPAs, you know, the financial advisors that that that work with the business owners, but also PEOs. Yeah, and some of the guys, Carl that we've worked with on the sales side, I mean, they're super sharp. I mean, these are not, these are not your everyday ordinary salespeople. These, most of the PEO salespeople that I have run across, these are efficient business people to understand how it is. Absolutely, very sharp. Case in point, man, he was a PEO sales rep, so that's true. That's very true. He's got to pat himself on the back, you know, I'm giving credit to a lot of the guys I worked with because they're impressive. No, no, no, no, and obviously we've worked with them too. And in my case, several different businesses in their very, very sharp, right? And so, you know, they're in a good position to have that knowledge of the business and the business owner himself, right, or herself. So let's take that, that snapshot on that, and let's talk about the evolution of what happened to you, starting Odyssey, and then to exiting 25 years later, and then being a part of a group that you had multiple exits inside of. I think that is a very good conversation for people to think

11:32that because you started Odyssey, and you didn't buy it, you started it, and that was just from CUP, you went to business owner to business owner to business owner, right? And you scoured it, and then you built it over time, and the beautiful part of that business is it's recurring revenue. So those are some of those things that make it very sticky, and it's hard to move if you do your job right. So talk a little bit about Odyssey to code vantage and the exit and all the fun stuff. Sure, I'm actually going to go one step from the back. So after, you know, over four years at ADP, I left there to actually join a PEO out of the woodlands called Contract Employment Systems, worked there for a short time, and one of my co-workers at ADP, a guy named Scott Davis, and I decided that we wanted to start a PEO. I believe it was in October of 1990, when we officially started. Now understand at this point, the industry was just beginning

12:37at Ministaff, for those of you who know now in Sparity, really got their start in the mid-80s. And so, you know, we were only about five years in, and the relevance of that is that this was a brand new industry, and one where there was no regulatory frameworks. So up until that point, an employer-employer relationship was, I'm the employer, you're the employee, right. Now enter a three-prong relationship where you have the employer who's running the business, you have this PEO who's the employer of record for tax and benefit purposes, and the employee. Labor laws weren't written that way, right. And so, the relevance of that is, yeah, after Scott and I got started, we got off to a pretty quick start within just a couple of years. We had a few thousand employees in our PEO group, which, you know, back then was a reasonable size, and then the industry had a bit of a break-wall. We got, as an industry, we had into a legal dispute with the state board of insurance over whether we had the right as an

13:42industry to buy workers' compensation insurance. And so, that was an interesting time, and it was painful at the time, because most of us as PEO saw business dwindle, at a minimum, we saw big slowdown and capturing new customers, because nobody was real sure whether the industry would survive this or not. Ultimately, we did, but we went through a couple of mergers during that time, and one of those mergers was with Odyssey. So, our company was called the Laxis Group. The Laxis Group, and Odyssey merged in November, in fact, November 8, 1993, I believe it was, David Williams and his sister Pat Fry. And we merged those companies and never looked back. And so, fast forward to 2011, we had grown the business. We had about 10,000, what we call work site employees or customer employees, about 400 customers, about 400 million in revenue,

14:46and we then sold that business to Madison Capital out of Chicago. That was kind of the first round of the private equity. So, I mean, just not alone. Why don't you tell us just for a second about dealing with the private equity for the first time? Yeah. So, what I will tell you is that from 1990, starting the business to 2011, I learned a lot. I think I learned a lot more in the few years after that in working with the private equity firms. I certainly learned different things, and I value all of that, all of that learning. But in 2011, David and Pat were ready to retire. I was one that went with the business when Larry Geese at Madison Capital decided to buy us. Larry had already purchased two other PEOs all within just the past,

15:50you know, a year prior to acquiring his third, which was Odyssey. That was in September of 2011. I learned a tremendous amount, rolled part of my equity in with Madison Capital. And we sold that business 16 months later, December 31, 2012, to Compass Investment Partners out of New York, rolled part of my equity again, put my head back down with a larger group of folks, and we went and rolled up several other PEOs, and then sold that business years later to Morgan Stanley private equity. To your question about what I learned from private equity, you know, a lot of lessons that you just, I wouldn't have gotten as just an entrepreneur. We can talk more about those in a few minutes. Well, no, I mean, I was going to say, what's the good and what's the bad, right? You know, because I think that's, if you're an entrepreneur that's been thinking about

16:54this and understanding, like, what's my exit look like? It's, you know, on the smaller side, it's to a, you know, somebody that's just looking to buy a company, but if you're a little bit bigger, I call it, you know, probably anywhere two to five million in EBITDA. You're probably selling to a private equity firm. So what was the good, you mean, maybe two examples of good and two examples of bad, just so people are kind of aware, at least of your situation, obviously, everybody's situation, you know, there's something things that you just didn't, you weren't aware of when you got into this journey. Yeah, so, so regarding the good, I would say for one, been none of us are experts at everything, and I would say one of the things I always cherished about my partnership with David and Pat and other members of their family that I work closely with, Mark Turner, is that, you know, we all have complimentary skills, and that's important in a business. What I found with particularly the private equity folks that I worked with is that they really brought, you know, a lot of depth and complimentary things that

18:00as a small business person, I wasn't quite as proficient with, particularly around, you know, financial, you know, engineering, the financial aspects of, you know, we grew co-advantaged to a billion, almost a billion dollar business, and that takes a different skill set, right? And I didn't have that experience, you know, coming out of this more entrepreneurial environment, and that served me well, you know, in years after that, right? The second thing is a broader team, so it's not just the experience, but, you know, really getting to work with very kind of more depth of experience in skills, by the time, you know, we had acquired our sixth or seventh company, we had a senior leadership team, there were 13 of us on that team led by a guy named Mike Mercedes, a hard-working guy. Yeah, impressive guy, Casey Nosem, very impressive, I learned a ton from Mike,

19:03I learned a ton from others that just had a more depth of experience in the individual areas, guys like Wade Latham, who was our safety and risk manager, guys like Chad Porody, who was our sales leader, I could go on and on, I learned a ton from them. It's a funny little side story though, so he was talking about Mike Mercedes, so I worked for Carl right after he sold the code advantage, so I was the one sales guy in Houston, really he was just me and Kurt Deffenbaugh and another guy, and you know, Carl had the office, but he didn't come in all the time, and so it was us and Kurt was our new sales manager. Anyways, I made it to club that year, and so I'm sitting there in a dinner with Mike Mercedes and a couple of the guys, you know, I'm pretty direct, right? It's not, I wasn't sugarcoating. He says, he just says to me, he was like, hey Casey, so is there, what do you think? Is there anything we can improve upon? And man, I just spent the next like 10 minutes, like just, new guy to the whole thing, just lay

20:04in it out, and this guy, Josh, he's one of those guys, he's kicking me on the table, he's like, dude, what are you doing? And I'm like, he asked me a question, I thought I was supposed to get it. So I got to say, Carl's Glenda was absolutely embarrassed, and she was like, like I wouldn't rude, I just was candid, and Mike appreciated though, because we had a good dialogue, but it was one of those funny stories where you're just looking, yeah, I mean, I shouldn't have gotten that deep at the dinner table. It was right, look, it was right at the time, health care reform was happening, right? So you had a bomb of care coming in, and you had a total shift, and so Carl headed up the entire, that was his thing, he took that whole, I mean, Carl, you went, I mean, you really got into the health care reform side and made co-advantage a leader in that space around it, but it was a lot of stuff going on, so when you're talking about health benefits, right? Like all of a sudden you went from being able to offer your clients a bulk kind of pricing, and you could segment out the cost, now you've got a flat rate per age band rate, and so you're really not competitive anymore,

21:08right? You're selling the, it's anyways, without getting a deep, these were like some serious things going on, right? And Carl led that whole transition of health care reform, it was pretty impressive. Love it, love it, so you know, it shifted over to the bad, right? Carl, and I don't want you to feel like you got to, you got to disparage anybody, but just, so just maybe lessons learned, or things that maybe you would have done differently, and now kind of looking back in terms of, you know, the process and how it kind of went down, can you maybe kind of expand on some of that? Sure, and before I do, if I could, there's one more good that I would say, band, and that is, you know, running more of what I would have called a lifestyle business, that the, you know, the Williams family, myself, and others, that part of the Odyssey team, you know, we, a lot of things, a lot of decisions we make out of what we're comfortable with. One of the things I learned is how to balance that a little bit better around just making more data-driven decisions and maybe a little less gut and a little more data. And I talked about that

22:10at your recent conference. That is a skill that I honed quite a bit working with, the professionals that I worked with, that the various private equity firms and the senior leadership team, so just wanted to throw that in. And I think they're a bunch of, they, I think the one thing just to expand on what you said, right, is a lot of, they're a lot of finance guys and gals, right? And they know their way around spreadsheets and they know how to do performance and projections and trends. And I think that they do use that quite a bit. And that's, that's something that I think, you know, when you're talking to these business owners, again, I'm trying to thread a needle for our listeners, you know, you need to realize, you know, if you, if you try to, if you try, if you use too many, too many to these terminologies with some of these business owners, they're going to think that you're talking down to them. So just be careful with that. But I think it's important to understand that that's where the world's going, right? Is modeling and understanding how to put these things together? It's a lot of financial engineering in terms of deal structure. And I think the, the, the, the pee shops and some of the bigger kind of guys that, that come into the space, they know how to do that really, really well. They don't have, they don't have to solve

23:10business owners problems and do it creatively and financial engineer and put the capels stacked together effectively. So everybody wins. And I think that's what a lot of these guys are pretty successful. And I would imagine, Pearl, that that, that data driven part of your experiences now allowed you guys work with Main Street to be able to handle that transition too, because I would imagine, you know the language, you know how to run that side of it. So it wasn't like a total shock to the system when that occurred, right? So it's like, you wouldn't have known that you got that from there to get you to, like, to right now. It's pretty incredible. Yeah. Now that's absolutely true. And I think a good segue into, to the bad. So, so I would say one of the bad is kind of coming into this in 2011, you know, not having had experience with private equity, you have a tendency to maybe not push back as hard. And we definitely maybe got a little two data driven there for a brief period where we, you know, changed the way the, the business

24:15work, maybe we would make decisions around the way customer service works are the certain, you know, certain people who would, you know, when you're when you're meshing companies together, when you're trying to put three companies together and then seven companies together and nine companies together, look, the reality is changes have to be made and not everyone can be the head of sales or the head of customer service or even on the sales team. And it was, you know, we definitely made some mistakes around not identifying the value of certain people and certain processes. When we were trying to standardize things, we went at that a little bit too quick. And in some cases, we underestimated the relationships that certain individuals had with certain customers. And we lost those. So, you know, while we thought we were saving $50,000 here, we lost a $200,000 customer, you know, relationship, right? So that's the bad. I would say, you know, you have

25:17to iterate, you have to keep kind of learning from those things and not making those mistakes over. And I think what it taught me is kind of how to be a better partner with private equity, how to, I think they respect when you know kind of wind pushback and wind to, you know, not pushback on that kind of pure modeling. I think we also learned how to just get better at the kind of data, the quality of data that we, you know, use in those kind of analytics. So, people decisions, we definitely made some mistakes. I would say another one that would be relevant for your audience would be we almost always overestimated the long-term longevity or interest that the sellers would have to be a part of our model. Most of the purchases that we made, most of the acquisitions we made were made with the same model that I came into, where you as the business owner were going to come in and play a role in this broader team. You're going to

26:21have a smaller piece of a bigger pie. It's going to trade at bigger multiples. We're going to make it more efficient and all of that sounds good up until it doesn't, right? And when you take people who've been entrepreneurial all their life are for decades and all of a sudden now you put them in a group of 12, with 12 other people where you're, you know, sharing decisions. Really, I was shocked at how few people made it through that. Honestly, at the end of, you know, my, my reign after, you know, the years I spent there, I was one of only two of the sellers that remained out of the nine acquisitions in total that we had made. Many seven had fled and they all fled within the first 12 months of their, of their stint, right? So be conscious of that. If that entrepreneur that you're buying is really important to the business, you better either download as much of that information

27:22as you can or you better build a model where they can kind of continue that more entrepreneurial spirit because if not, you're going to have to break all their moves likely. And we've learned that firsthand as well. So I mean, I think you, you need to realize that, you know, once that check has been stroked, right? Those people at least, you know, subconsciously are already kind of stepping back, right? And you need to find a role that scratches that entrepreneurial itches, I think, what Carl, what you're saying, you know, you want to stay involved if you want to stay with them to stay involved, right? And so I was curious, Carl, that kind of leads to my next question for you. But, you know, how do you, why, what, what skill or what style do you feel like you had that allowed you to, to be one of those two of, of, of nine that stayed around? Oh, I'm going to cut you off. I can tell you exactly what it is, man. I don't know how you don't fall in love with Carl. Like he was just an incredible human being. Like he's not, he does not have a huge ego. He's there

28:26to support and highly, and he's very good at what he does. But I think the humility that he brings, right? Where he doesn't talk down to people. He's there to, I mean, the relationship blossoms when you're around a leadership, right? So I knew I started to cut you off, Carl, but I had to, I had to answer that one for you. No, that's probably it, right? I think the problem that you probably see as an entrepreneur is that everybody's a type A alpha. And they want to, you know, make all the decisions. They don't want anybody countering them. And, you know, and if you've, if you've built a company that flossed 20 or 30 years and you're the only boss, don't be ever told you elsewhere. Now you're on a committee. So I think that, you know, people that are listening, like if you're a part of that on either the buyer or the sales side, just understand that dynamic. Well, I don't know how I could top that answer unless we call my mom and patched her into this appreciate that. But the reality is for me is I wanted that experience. Like I knew that, that I, you know, I knew I was short on skills in, you know, kind of the higher end of the mid market,

29:32right? As an entrepreneur, I'd done it for a long time, felt like I had a good grasp, but I had something to learn, right? It's like paying tuition to go to college, right? It might not be the most fun sitting in the class, but you're there for a reason. And I really want to show it up every day with that in mind that I'm going to learn something here that I'm going to take away with me, and I'm going to, you know, reapply it somewhere else and that worked out. Fortunately, you know, being an equity player with the private equity guys was enjoyable too, right? We were fortunate. We were blessed. We did create, you know, some great results. And when you're right alongside that, everybody's aligned from a financial standpoint. That was, that was fun. It was rewarding. And I don't regret a day of it. So that's a great segue to talk about all those skills and all that you did to just rolling them off it, right? So you leave co-advantaged, or you at the end, where you also, I think it was, who was the last private equity that acquired? It was a change. It was, it was Morgan Stanley private equity was the last one

30:35that acquired while I was still part of that team. So then after that, you took some time, and then you started another company. And so I bet you all those skills that you hustling on paid off, right? Yes. And I really didn't take any time. So what happened just for a little background. So my, my family was in the fuel business, you know, back in the 70s, my mom and stepdad. As I mentioned to you, I was a Texaco retailer in Tom Ball in Magnolia in the early 80s. Very small scale. But some family friends of ours, the Moffa family. We're in a similar business to my mom and stepdad. Moffat oil. That company had been around since 1947. That family sold that business in 2011. They had kids working in the business. The kids signed three or non-compete. The parent signed five year, non-compete. In 2014, when the youngest son, Rusty Moffat, my partner, when his was a, he reached out to me one day and said,

31:40what do you think about starting a fuel company? We'll call it Moffat Services. And I say, that sounds like a great idea. And now the reality was, I was still spending my time in energy with co-edpanage at that point. So initially, I was really a financial partner. And so I injected some capital. Rusty injected some capital. We opened up shop right where his family business had been before because suncoast resources had bought that business. I didn't need the name. And so anyway, off we went, I would say, by 2016, I was really starting to have to spend a little bit of time in the business. With Rusty, the business needed both of us. And by 2017, especially when Hurricane Harvey hit, we had a disaster response component to our business. We were incredibly busy, and the business really kind of took off. And so that was, you know, when I, we had sold a Morgan Stanley private equity. It was a good time for me to

32:41exit and redirect all of my efforts here to Moffat Services. And here we are 11 years later. We get about 225 people on our team, about 250 million in revenue. And now I have Main Street Capital is recent minority partners. They own about 27% of our business now. So let's unpack that. So okay. So you sold your role, your role, your role, disolved again. Now you helped to start up with a family friend. You guys have built that up to an incredible, you know, revenue and headcount. And now you're, you're taking on private equity again. What was kind of, you know, impetus for that? What, what was the, you know, I mean, you kind of, one another body at the Apple, was there an exit that needed to happen? Can you kind of unpack that story a little bit for our listeners? Yeah, yeah, I can. So one part I left out in 2016 when Rusty's dad Roy Moffat, when his nine compete was up, he was living in Port of the Art of Mexico,

33:46living the good life. Rusty and I talked him in to come in and join in us and he did. And he played a pivotal role with us for, you know, the next eight years after joining us. But he was ready to retire this year. He retired in March. And part, I would say one of the two driving forces with Main Street was to facilitate Roy's retirement, you know, financially. The second was, is really to create a path kind of long term, because I'll be the next to retire. By the way, Rusty's 39, you know, he's got a little bit of ways. He's got a little ways. And it's really important to kind of keep the legacy business. You know, Rusty has five kids. And, you know, as most fathers, I think at some point, you know, he envisions maybe one of those might want to take the helm like, you know, he had the opportunity to do to kind of keep a family tradition going.

34:47So we felt like Main Street brought a unique opportunity because they are minority guys at heart, right? That's what they really do. And they have about 85 companies in their portfolio. And many of them look very similar. I've met about half of them. And so we thought that they would be a good partner. I also think they bring the same kind of, you know, opportunities to assist with the things that, you know, private equity guys, even though they're publicly traded, I think of them like private equity. They're very smart. You know, they're very data driven. They're very analytical. And I think they, I think they bring value when you look at the kind of long-term horizon of this business, particularly if we decide just, you know, start growing through acquisition, which we really have done very little of up to this point. We've made two very small acquisitions, asset acquisitions, but I think they would bring a tremendous value in that model.

35:47That is a beautiful man. Love it. So great, great, great story. I will tell you, Carl, very much enjoy our friendship. And you being here with us, it's going to be great. So we're going to jump. Unless we have a couple more things you want to talk about. We could have you here for five hours, man. Let's jump into our rocket round and jump into it. Now, far listeners, we always do the rocket rounds. We're asking our guests three questions. So, and I think very important questions. So, Carl, what do you like to do in your, in your free time? Well, for one, I have a bay house. My wife and I, we have a ten-year-old son, by the way. And so we like to fish. We like to hang out down in Madagora Rusty, and his family have a house right next door. And Roy and his wife have a house about three doors down. So we do spend fair amount of time on the coast doing those kind of things. You know, with a ten-year-old, we have baseball and all kind of activities going on all the time. So, filling free time never seems to be, never seems to be a challenge. I was the kiddos and never is. I get, you know, I feel

36:52young that I got 11-year-old daughter. So, all right. So, most memorable moment in your business journey. I'm sure there's probably been some, but maybe someone up to maybe the ultimate one. Wow. Most memorable. So, so, in 2011, when we were closing the deal with Madison Capital, I was having cold feet, you know, I was rolling half of my equity into the business. So, I've worked at that point, you know, 21 years building this equity in this, in this business. And I remember sitting down with Larry Geese in our office right before the closing and just telling him, you know, it just wasn't sure. Could we, could I have that opportunity, you know, maybe a month or so. We've been so busy focused on the closing and he made a statement that I'll never forget. And he just, it's nice as he could. He said, he said, the answer's no, but he said, can you imagine like two years from now? I'm sitting in front of my board of directors and, you know, something

37:52terrible's happened here. The business has failed. And this comes out about at the very last minute, like one of the owners, one of the sellers didn't want to invest his own money in this business. Like, how would that look on me? And honestly, I'm so glad he did that because that was a turning point for me. You know, I got over it pretty quick. I invested in this one of the best investments that I've ever made, which gave me the opportunity to, you know, make a couple more right after that. But that was a memorable moment and it could have gone either way if he would have said, okay, I understand no problem. Boy, you know, that would have looked a lot different. All right, last question. What is your favorite tool or resource? Experience. And one of the things that I love about it is it evolves all the time. And it's not just kind of what you gain in terms of experience, but how you apply. And you know, I find it

38:54as as I, you know, get older and get more experienced, I come at the same problems differently. And that's great. You know, I would say the other is, you know, just kind of having done it, right? I've always prided myself on having done most of the jobs that people in my organizations are doing. I enjoy the details. And, you know, for me personally, it serves me well, but it's also rewarding. I enjoy rolling my sleeves up and getting involved. Man. Love it. Love it. Awesome. So, Carl, how can our listeners connect with you? So find me on LinkedIn. Also, if they are curious about our business, we're at MoffitServices.com. By the way, we have a foundation called the Moffit Legacy Foundation. We're doing work in Kerr County in assisting some of the folks affected there. If anyone wants to get involved in that,

39:55they can do that. Just go to MoffitServices and you can lead to the Legacy Foundation from there. Love it. And thanks for what you're doing. That's really great. No, it's an incredible podcast, Carl. I mean, obviously, wealth of experience. You know, you've been down the journey that a lot of, I think entrepreneurs are... We're all dreaming for it, man. I'm praying for the problem. And I can always call you. No, but listen, thank you for really being with us today and we'll be back together soon. Enjoy it. Thank you for listening to the M&A Launchpad Podcast. If you've enjoyed today's podcast and would like to support us, please leave us a rating and a review after you listen. If you're looking for guidance on your next business acquisition or sale, capital to support your next business transaction or to invest in a private equity opportunity, visit equitylaunchpad.com to learn more and to connect with our team. If you know of an individual, you would be a great guest for the show, head over to equitylaunchpad.com ord slash nominate where you'll have the chance to refer yourself or someone else to be a guest on our show. I'm Casey Mentshu and I look forward to

40:58talking with you next week.