Speaker 1 (00:00:02) - All right. We got seven minutes on the clock. We're going to have a conversation with my friend Mr. Dave talking about hunting for M&A deals. Dave, welcome to the show.

Speaker 2 (00:00:10) - Thank you Josh. Glad to be here I appreciate the opportunity.

Speaker 1 (00:00:13) - You are welcome. You and I are hunters. We're working on a bunch of deals right now looking to do some acquisition targets. But I want to know who are you and what do you do?

Speaker 2 (00:00:24) - The question. Well, for the last 15 years I've had my own business called Front Runner Consulting. It's both an executive recruiting and M&A intermediary where I match buyers and sellers of companies and the sweet spot to be working with an executive who's between jobs. I like to call a free agent. They're going down the traditional job search path, and my business model is to have them look at maybe some of the companies that were for sale with their past employer, see if it makes sense for them to pursue personally, and if so, taking the premise they don't have the millions to buy the business themselves.

Speaker 2 (00:01:00) - I'll go out to my network of institutional buyers who are sponsor of the deal and have that executive run it.

Speaker 1 (00:01:08) - . Yeah. Super cool. So on the M&A side, that's the other the flip side of your business. So you you do recruiting in acquisitions. How do they how do they match up. That's I'm curious about that.

Speaker 2 (00:01:19) - Well yeah. Whether you're trying to replace an executive with a company or a company with a buyer, it's kind of the same premise. You want to make sure it's suitable for both parties and make sure it's aligned with what they're looking for. So if I'm recruiting for like a metal fabrication CEO, I'm not going to present a software executive. And if I have a guy to a private equity group or strategic buyer family office looking for like a software company, I'm not going to present them metal, a metal fabrication company. So it needs to be aligned with their interests and especially on the M&A side, you know, you want that industry alignment with the relevant personnel experience as well.

Speaker 2 (00:01:58) - So they can step in on day one and do the job.

Speaker 3 (00:02:00) - Yeah.

Speaker 1 (00:02:01) - All right. So now let's talk about hunting. You've been doing this for a long time. And you have established a huge database of of people. So you know what when it comes to hunting what how do you go hunting in database. How does that work in your world?

Speaker 2 (00:02:18) - Yeah, it's a pretty large database that's accumulated to over 20,000 contacts, comprising 1200 different industries. So, you know, a lot of times people talk about being a numbers game, but I like to say it's a smart numbers game. So you do a regular outreach to your contacts. And in the meantime I get a lot of inflow of opportunities as well. So it's always trying to identify that business that's presented to me, that's for sale, matching it up with the buyers and then being able to also do that outreach to let people know what I do, because I'm not usually going to be a top of mind for everybody. So if I can do that regular, you know, email distribution as an example or follow up on a regular basis with a phone call, checking in to see what opportunities are out there, that's what needs to be done.

Speaker 1 (00:03:06) - Yeah. So in in the world of mergers, acquisitions or even real estate for that case, there's a there's a saying that I've heard growing up was buyers are liars right. Like, yeah I'm looking to buy this thing. And and then you go do all this work because you're, you're contingent firm. Right. So like, you get paid when the deal's done. How do you filter out buyers are liars versus true buyers that with checkbook in hand. How do you do that.

Speaker 2 (00:03:29) - Well sure. Well you could have buyers or liars, but you also have sellers or liars as well too. So you could have that business for sale that you're going through the whole process. And when it comes time to actually signing the contract, you may have seller's remorse as well too., on the flip side, when you talk about buyers or liars, I find it more of a challenge of having them say, okay, I'm looking for this particular business in this revenue range. You present them the opportunities and usually they'll find every reason not to pursue it, even though what aligns with what they want.

Speaker 2 (00:04:01) - So when you do find that opportunity, then the question is making sure everything aligns. But it's but it's you know, the situation could be flipped and the seller could be, you know, saying, hey, I'm for the right price, I'll sell to anybody. Well, that's not really a motivated seller, but if you have somebody who's at, say, retirement age or maybe there's a sickness in the family and they need to sell, those are good motivational signs to make it a suitable situation. But still, at the end of the day, you know, the deal is not done to the paperwork is signed and and money has changed hands.

Speaker 1 (00:04:35) - And until you get paid. Right. So when it comes to single buyer versus multiple buyers. Right. So I might be a single buyer where it's like, yeah, I'm retiring from my government job. I'm too young to quit. I'm looking to buy something versus we're a hedge fund, private equity group, whatever. And we're looking to buy 100 companies.

Speaker 1 (00:04:52) - Like what? What are the differences in how you approach and serve them?

Speaker 2 (00:04:56) - Well? You try to find out, first of all, committed capital, whether that individual has the capital to get the deal closed is half the battle. And you may have a large buyer that has dozens of companies in the portfolio, but if they don't have that committed capital, it could take them to three months just to raise that capital. So if they have money in the bank behind them, that's obviously going to be reducing that time frame in terms of getting the deal done. But it doesn't exclude somebody who. We have to go out and raise the capital. It's just shortening that, that cycle. But yeah, money speaks. So whether you're trying to buy a house all cash or trying to buy a business all cash, if you if you got the money behind you and you're not going to leverage the deal with a lot of debt, that's going to be attractive definitely to the owners as well.

Speaker 3 (00:05:41) - Yeah.

Speaker 1 (00:05:42) - Super cool.

Speaker 1 (00:05:42) - So for my friends out there listening in and they're looking to actually buy some companies, you have some basic deal criteria that you work with in your what what's your deal criteria. And then how could people connect with you and do a deal?

Speaker 2 (00:05:55) - Sure. I mean, for for me, I try to find those businesses that are maybe smaller. They get underserved from traditional bankers, so it may be as small as 5 or 10 million revenue, maybe a million of net income. But they don't even have to be profitable because I have stress and,, distressed buyers as well. So to get Ahold of me, the website is front runner consulting.com. Better if you just email me Dave at Front Runner consulting.com Martin happy to help.

Speaker 1 (00:06:24) - Yeah man. Super awesome. So,, fellow listeners, as you guys are out there making deals,, my request is that you always reach out to our guests. Hey, thanks for being on the show. Thanks for sharing your wisdom and knowledge. And then reach out to them and do a deal.

Speaker 1 (00:06:38) - Mission and purpose. Put deals and dealmakers together. I hope you're enjoying these seven minute,, videos. And,, if you have a deal that you'd like to talk about, head on over to the deal scout.com, fill out a quick form, maybe get you on the show next. Till then, we'll talk to you all on the next episode.