In this segment of the My First Million podcast, the hosts discuss the acquisition integration philosophy of a private equity firm that owns nine companies. They reject the typical aggressive 30‑, 60‑, 90‑day post‑close plans, opting instead for a humble, collaborative stance that treats the acquired company's leadership as experts. Their approach includes a "dual hook‑in" where the buyer’s finance team integrates with the target’s finance function to create continuous feedback loops. They also employ a "portfolio partner"—a board‑in‑a‑box—that oversees executive leadership and high‑level decisions while allowing each operating unit to remain autonomous. A team of 16 professionals supports these nine portfolio companies, illustrating how the model scales without micromanagement. The conversation emphasizes preventing destabilization of acquired assets and fostering growth through partnership rather than control.
When you buy a company, what is the first 3 months, 6 months? Are you hands-on with that? Is it, uh, do you have an operating partner who does that? How do you guys make sure that when you buy an asset, you don't A, destabilize it, and B, you actually start to grow it, which is, I assume, why you bought it in the first place?
Yeah, so, so our philosophy, there's a lot of, uh, private private equity firms out there that have these like, you know, 30-day, 90-day, 120-day plans, right? We don't do that. What we try to do is take a humble attitude towards it and say, look, we know some things, we have some talents, but we wanna learn and come alongside them. They're the experts, they've been doing it for a long time. So there's a team of 16 of us. So it's not certainly, I don't get the impression this is just me. There's people far talented, more talented than I am on staff. And there, we have a dual hook-in structure post-close. So our financial team hooks into their financial team creates feedback loops. And then we have a, we call it a portfolio partner. They're kind of a board of directors in a box that is overseeing kind of the executive leadership, helping make very high-level decisions. I mean, these are autonomous operating units. I mean, so these are, these are not— we're not injecting these people into the companies to run them, but they're in touch with the leadership teams all the time, doing, you know, a variety of different types of calls and meetings throughout the year.
And how many companies are there? There's 9 that you guys own. Yeah. Got it. So that seems manageable.
Yeah. I mean, it's so for every kind of 3 to 5 companies we acquire, we got to hire one high-level financial person and one portfolio partner. And that's kind of their grouping of companies that they're kind of running. So we're almost creating like a fractal, if you want to think about it that way, down into the organization so that it scales as sort of linearly in that way.
