Brian T. Franco – expert at helping entrepreneurs exit

NOTES

Brian T. Franco on LinkedIn

Meritage Partners website: Meritage-Partners.com

Private Capital Mastery Podcast on Spotify

Private Capital Mastery Podcast on Apple

Book Recommendations:

• The 4-Hour Workweek: Escape the 9-5, Live Anywhere, and Join the New Rich by Timothy Ferriss
• The 21 Irrefutable Laws of Leadership by John C. Maxwell

SUMMARY

Brian T. Franco is the founder and managing partner of Meritage Partners, an M&A advisory firm that has deployed over $2 billion in capital across diverse industries.

Brian grew up with an entrepreneurial father who exposed him to real estate transactions at a young age. He caught the entrepreneurial bug early with endeavors like lemonade stands and neighborhood car washes.

As a teen parent at age 16, Brian had to step into adulthood quickly. He graduated high school early and worked while pursuing various business-related fields of study in college. In his early 20s, Brian gained experience in commercial lending and small business financing, which led to his advising on mergers and acquisitions.

In 2005, at age 25, while engaged and already a father, Brian took the leap to start his own M&A advisory firm, Meritage Partners. The firm has now facilitated hundreds of exits and recently celebrated its 18th anniversary.

At Meritage Partners, Brian and his team help entrepreneurial clients maximize their company’s enterprise value and prepare them for a strategic exit to generate liquidity. This involves assessing the company’s transferability, shoring up its financial reporting, enhancing its market perception, accessing growth capital, and navigating the sale to bring the optimal return to the owners.

Throughout his career of working closely with entrepreneurs, Brian has noticed some key attributes among those who are most successful:

• They stay disciplined and focused on the core strengths that made them successful in launching and building the company.
• They remain consistent in their leadership despite company growth and operational distractions.
• They develop or leverage systems and processes to scale rather than trying to do it all themselves.

Ultimately, Brian aims to provide options to business owners – whether that be immediately selling and moving on or structuring a transaction in stages while retaining the upside. His puzzle-loving nature drives Brian to customize creative solutions to advance an entrepreneur’s personal and financial aspirations through a company sale.

Kyle Knowles:
Hello, there. Welcome to the Make Your Manager Money podcast, a podcast about entrepreneurs, solopreneurs, founders, business owners, and business partnerships, from startups to stay-ups, to inspire entrepreneurs to keep going and future entrepreneurs to just start.
My name is Kyle Knowles and it’s a Friday in Carlsbad, California. We’re actually in the Carlsbad Room at Kiln Carlsbad. Kiln is completely killing it in the coworking space industry, and I believe that they are the GOATs, they are the LeBron James, or, if you’re old-school, the Michael Jordan of co-working (laughs) spaces.
Today’s guest is Brian T. Franco, founder and managing partner of Meritage Partners, a leading M&A advisory firm based in Newport Beach, California. With nearly two decades of experience, Brian is an expert in guiding companies towards successful exits, having deployed over two billion in capital across diverse industries, such as architecture, engineering, and construction, or AEC, for short, healthcare, tech, B2B, business to business, and B2C, business to consumer services. Welcome to the podcast, Brian.

Brian T. Franco:
Thank you for having me, and it’s fun to be here, and it’s, it’s interesting to hear that intro because it brings me back to kind of my journey, right, as a human, as an entrepreneur, and looking forward to unpacking that and just sharing more with you guys. So, thank you for having me on the show, though.

Kyle Knowles:
Thanks for being here and thanks for making the effort to get down here.

Brian T. Franco:
Yes.

Kyle Knowles:
There’s so much more to this. I mean, I’ve had a couple of introductory calls with you, we’ve talked offline, um, so let’s just, let’s get into, I guess, tell me about your childhood, let’s, let’s (laughing) start there, and, and, and how you developed into an entrepreneur. Let’s just start-

Brian T. Franco:
Yeah.

Kyle Knowles:
… from the beginning. Did you have parents, family members that were entrepreneurs-

Brian T. Franco:
Yeah.

Kyle Knowles:
… and how did you start getting into it? Did you have a lemonade stand, those kind of things.

Brian T. Franco:
(laughs) I did have a lemonade stand, and we did actually, yeah, a neighborhood car wash, uh, my brother and I, and, uh, that was fun. That, that was very… man, gosh, I haven’t thought about that for a long time. But yeah, my father was, uh, my father was an entrepreneur. Uh, he hown- he owned several businesses, primarily service businesses, and, uh, you know, with that wealth and with that income, he, he, diverted that into real estate holdings. And, and, so I saw that at a young age.
I remember, you know, my father sharing, and likely bragging, right, about his son, Brian, how I can articulate the process of a real estate transaction at 10 years old. And I knew what escrow was, I knew what purpose of deposit was, and he just loved that I knew that. But, I-I just learned way of osmosis, just hanging out with dad, you know, going to meetings with dad. And they were boring at times, right, but you would still absorb the information, you’d still hear the words being spoken. And they didn’t have as much substance as they, they do today, but, I was still absorbing it, right? And in kids, I have four, and they don’t miss anything (laughs). They hear-

Kyle Knowles:
They pick it up.

Brian T. Franco:
… everything (laughs). So, yeah, so my parents are, are, today are still married and, um, my father has since retired. Um, but in my journey, in my life, uh, I grew up as a middle child. I have an older sister and a younger brother. Although, I do call my older sister, Kristy, I call her my little sister, um, uh, but as a middle child, I liked to, I liked to imagine how I come into the work that I am in today, because I was always the peacekeeper of the family. I was always the intermediary, right, working and sorting through, I don’t wanna say problems, but challenges, in the, in the household dynamic.
And it was always important to me that, you know, I, I spent time, you know, with, with everyone in the family. And, uh, but as middle child, you know, you’re sometimes, you have to work harder, ’cause you’re sometimes left out of the game, or sometimes you’re, you know, you’re left out of the conversation, right, because, you know, the, the, baby’s the baby, always will be the baby in the family, right? So they’ll always get that love and attention, just like my daughter (laughing). And then the oldest will always be that guinea pig of the family, right? So-

Kyle Knowles:
Right.

Brian T. Franco:
Um, you know, you typically, the oldest child in the family is, the parents are the most strict-

Kyle Knowles:
Right.

Brian T. Franco:
… and, and typically, they’re the most rebellious. And so, you see that dynamic play out. And I did as a child, right? But growing up, I mean, you know, from having lemonade stands to, uh, uh, we, we would go around washing cars. And, uh, I remember one summer, you know, the other kids were, like inspired by it, they’re like, “Whoa, you’re making money doing this?” I’m like, “Yeah.” And you’re having fun?” “Yeah. “Can we do it?” I’m like, “Sure.” You know? And so, we, we actually had a, a choice of who would help us.
And so we would, my brother and I would figure out who was, like, the most efficient, and we would, th-those that were efficient, we’d bring ’em back for the next job or jobs. And everyone was always so, like, willing to have you wash their car, right? And so that made it easier for us to step into that. But in that, we had a budget, right? We knew what our soap costs were, we knew what our time was worth, we knew, you know, to go out there and, and, establish the relationship with the customer to wash their was.
So we ended up, you know, we’d, we would write this out, even, um, pencil, like, No. 2 pencil and paper, and everyone would, we would divvy up the payments at the end, and we’d do it over and over and again. And… Which was, what was cool about that is, years later with, with my son, Braden, who’s now 13, I went through that same exercise with him, because he was, he was, he didn’t do a lemonade stand. His his, his niche was lemonade delivered. And so, he would make the lemonade at home, they’d put it in a wagon, and then they would go around the neighborhood and they would sell it.
And he did, he did great. So, we estimated, like, okay, one pound bag of sugar is, I don’t, I don’t remember the cost. Let’s say it was $5. And then he’d, we would determine how much sugar he would use per batch and how much lemons. Sometimes, he would have to buy the lemons, but sometimes, the neighbor would give him free lemons, right? (laughs) so it’s like, his, his cost of goods sold would change-

Kyle Knowles:
Yeah.

Brian T. Franco:
… (laughs) from batch to batch.

Kyle Knowles:
Right.

Brian T. Franco:
But then they would determine, “Okay, this is what we have to sell it for.” It was, it was good for him, like… And so, I believe that, you know, that was an experience that will stay with him, and, uh, hopefully it’ll stay with him in a good way, because it showed him how to be a good steward of that money that he was earning, while covering his cogs and his-

Kyle Knowles:
Right.

Brian T. Franco:
… labor, ’cause his labor was his younger brother, and one of the neighborhood kids actually. So it was cool. It was cool. But, you know, growing up, um, I, I, what’s, what’s unique about my story, and you mentioned that, uh, I was, uh, um, um, on the board of a women’s care center. A women’s care center is a leading inner-city center design for, to really reach out to crisis pregnancy scenarios and situations. And so, as a teenage father, which I was, my oldest, Jacob, will be 28, two, in two weeks. And, um, so I, he was born in 2000… I’m so sorry, late 1900s, 1995 he was born.
I was a sophomore, second half of my sophomore in high school. I was 16 years old, a month shy of 17. I turned 17 on January 22nd. And, and this whole experience sling-shotted me into manhood. I knew that I was too young to be married. I knew that Jacob’s mother was not my destined wife, but I knew that, you know, look, the, the natural consequence of being a promiscuous child is a child (laughs), is a baby, right? So, um, but Jacob was born and, uh, I graduated high school at 17 and a half.
I went to, I went to summer school every year, so I got those extra credits and so it allowed me to… But my senior year, my second half of my senior year, I had two electives. One of ’em was work experience, so I worked, and the other one, was, uh, an art class. So I literally finished high school, uh, half way through my senior year, but the last half was me just fillin’ out a coloring book, ’cause it was an art class. It was more than a coloring book, right?n then I was working.
And I worked at a, uh, that time, I worked at a movie prop house. We had nothing but medical movie props on the sets. We had permanent sets on Chicago Hope and ER, if you remember those shows-

Kyle Knowles:
Yeah, yeah. Yeah.

Brian T. Franco:
… and, uh, and we did, you know fun sets like, uh, we had a set on, um, what’s the movie where Arnold Schwarzenegger gave birth? It’s not like, not Kindergarten Cop, but one of those.

Kyle Knowles:
Uh, it’s not Twins, or-

Brian T. Franco:
Nah, not Twins. I always forget the name of that movie, but we, we did-

Kyle Knowles:
Yeah.

Brian T. Franco:
… scene where Ar-Arnold Schwarzenegger gave birth to a child (laughing). Can’t remember that… I have to remember that name of that movie if I’m going to say this story. And then, um, there was a funny movie… well, not funny, but, it was a terrible movie, that which made it funny. Volcano. And Volcano was a movie about how the La Brea Tar Pits in LA erupted into a volcano, and so it’s just mass hysteria. It was, it was a fun experience, but we had, like, we managed that whole set. We had gurneys, and… Was a cool experience.
So, I did that while I was in, in college. And in college, I, I did this a la carte education where I was studying accounting. Um, my, my desire was to be a CPA and I also enjoyed law. So I specifically studied real estate law and, and ended up earning my broker’s, real estate broker’s license at… I was 20 or 21 years old, so I, I always had it and, and it was, it was fun to me.
So right outta college, I end up working, um, Oh, oh, one important thing, I, I also went to school for computer science, specifically, with an emphasis in networking, computer networking. And so we learned a lot about the Novell networks-

Kyle Knowles:
Mm-hmm.

Brian T. Franco:
… at that time, right? Which was the origin of, call it, if you used Google Drive, you can figure out, No-No-Novell, right (laughs)?

Kyle Knowles:
Right.

Brian T. Franco:
It’s just permissioning and access-

Kyle Knowles:
Yeah.

Brian T. Franco:
… rights, right?

Kyle Knowles:
Yeah.

Brian T. Franco:
And so, um, I, with my accounting background, and with the computer networking emphasis, um, I worked with a mortgage company that, uh, uh, I, I, just, I had looked on the other side of the table and saw the movement and the puzzle pieces being solved on the daily basis, so I plied my account background to that, and I immediately got into mortgages. Not, within a year, right? And, um, which then led to, which was more residential focus that evolved into, uh, commercial industrial, which evolved into business lending, SBA, products like 504 products and 7A products.
And through that and in that, you know, I am experienced and I’m still, in, in, my early 20s here, I was, you know, 22 years old, uh, to going through all of this, and experiencing all of this. And what we did was, my business clients were, were very happy with the, with the performance and the work and our, our, my ability to access capital that they needed. Granted, I mean, these were small transactions at that time. A million-dollar deal for me at that time was like, I felt like I was on top of the world.

Kyle Knowles:
(laughs)

Brian T. Franco:
Right? I mean, where at, today is like, and typically, we like our clients to be profiting $2 million or more a year, right?

Kyle Knowles:
Right.

Brian T. Franco:
So you see the evolution, but at that time, you know, i was able to cut my teeth and, you know, learn about modeling and about debt service and about, you know, how a balance sheets, how a balance sheet impacts underwriting, uh, and ultimately, you know, uh, uh, allowing for an approval or not.

Kyle Knowles:
Right, right.

Brian T. Franco:
And so, uh, uh, what I found is that our clients were asking us, ’cause a lot of these, not a lot, but some of these financing requests were for business acquisitions. These business acquisition loans were, were unique, because not a lot of folks were servicing this type of clientele, and, and I just knew it very well. Um, and, and that led to clients saying, “Well, I acquire this company and I want acquire that company. I want to scale my company.” So that led to me targeting opportunities for them. So, I was, at that time, very, uh, my name was very well known in the auto towing industry. And, uh-

Kyle Knowles:
Why?

Brian T. Franco:
… not a very, you know, the glamour was in the green, but why is because I had a couple clients in that space. And auto towing was, is one of those industries where, y-you just kinda imagine like a dirty, grimy, greasy guy just, you know, coming out and servicing a car, but it was much more than that. And these clients, they had contracts with AAA, you know, to do lock [out 00:14:03], battery jumps. So they did that service aspect, right, but there was also contracts with California Highway Patrol, the CHP, with the police departments, with the sheriff departments. And these contracts were well sought out.
So think of, you know, waste management. Waste management is the la… nation’s largest rubbish collector, trash collector, right? And so, they have, waste management has municipal contracts to collect that trash, which is ultimately paid through, um, the cities typically, right? And, uh, this towing operations were no different. So they had these contracts w-with municipalities, so, um, let’s say you were unfortunately in a car accident, right? So, um, if you’re on the highway AAA cannot come to tow you. The contract was with, uh, an approved highway patrol tower.
So they would come, they’d move you, tow you, move you off the freeway, and then if you had third-party service to come get you, great. They would, they would figure that out. But these contracts were very valuable. And so, what they made them valuable was the amount of cash flow they would generate. And there was asp… that the, the, the money that was being made was not just on towing the vehicle but also the aftermath of an accident, or the aftermath of let’s say, if someone was irresponsible and had, uh, a DUI.
So when you have a DUI, the vehicle… well, the driver goes to jail, but guess what? So does that vehicle. So that vehicle goes to jail for 90 days. It, it ranges, but 30 to 90 days. And so, the tow your car, they lock it up, just like, you know, the human being gets locked up. And they have to pay a daily rate for that vehicle. So 90 days later, right, and if, if th-the daily charges were a hundred dollars, right, they’re comin’ in outta pocket, and spending the money to get their car out of car jail (laughs) basically. And then there is towing fees or lease fees, so on and so forth.
So, I, I did, before I was 23, actually, yeah, probably before I was 23 years of age, I probably did over two dozen towing M&A transactions and, yeah, I just, you know, there was a lot to, to navigate through. From not just the financing aspect, right, which was complex in itself, but how do you get these contracts that were, they didn’t have, um, there was no provisions in those contracts that, that allowed an owner to transfer the contract to another owner. You had to go through a certain process, because these were municipalities. But I figured that out. I figured out how to do it, right, and we did it. We did it over, rinse and repeat, over and over and over and over again.
And so, that led to me working with a smaller boutique, uh, group and I was there until 2000 and… from, uh, 2003 to 2005. Uh, I remember, uh, in January of ’05, we were doin’ a year in review of 2004. In, in 2004, I was 72 % of the company’s revenues at, at, at that time, I was 25 years old. So, I, uh, i-in, in May 5th of 2005, after having this vision of building my own firm, I did it. And, I, you know, filed, uh, uh, their corporation. And, um, and this was, keep in mind, uh, this was three months before my wife, Melody and I were married. We were married in, in August 13th of 2005.
And so, it was scary, you know, my son Jacob was, I think, six, seven years old at that time, I had my first house, I was en… I was engaged, you know, so all, everything just moving, moving, moving, moving, right? And this year, here w-we, where we sit, right, at the end of 20223, we, this year, we celebrated 18 of the firm and 18 years of the marriage. And it’s been a crazy run. It’s been a fun run. But, you know, so that’s, that’s my journey. That’s how I, that’s where I started.
And, and, you know, so you think about, wh-what were the motivating drivers for me, you know? Early on, it was, it was my son, Jacob, right? Um, I knew I needed to be a role model for him. I knew I needed to provide for him. And so, um, to where I sit today, I’m 44 years old. I’ll be 45 next month. I’ve been a, I’ve been a father and a provider longer than I haven’t at, at this time in my life. And so Jacob’s birthday’s comin’ up on the 29th. He’ll be 28, uh, and then I have my wife, Melody and I, we have, uh, Braden, who’s 13. Nolan, who’s 10, and Layla, who just turned eight years old yesterday. And, uh, so we spent the af… evening at Knott’s Berry Farm (laughing).

Kyle Knowles:
Happy birthday Layla.

Brian T. Franco:
Yeah, yeah. We all-

Kyle Knowles:
That’s awesome.

Brian T. Franco:
… we all woke up with a little, we call it a, amusement, amusement park hangover, right? We’re just exhausted from the-

Kyle Knowles:
Spinning around-

Brian T. Franco:
Yeah. Spinning around-

Kyle Knowles:
Doin’ all the rides and stuff. Yeah, yeah.

Brian T. Franco:
… and walkin’ around, just ingesting all that sugar (laughing), but it was a good time. So, but yeah, that’s, that’s, that’s the story. But Meritage Partners today, you know, we, we, as you described, we’ve deployed over $2 billion in capital. And is an investment banking firm, what we do is we advise our entrepreneur clients on strategies to grow, scale, and exit their companies. What makes us unique is that we design and build a strategy for the entrepreneur that ultimately collapses time for them.
The strategy is not just your typical, you know, generate more revenue, generate more profit, right? It’s more than that, ’cause w-w-we’re really reverse engineerin’ the str… the, the ultimate plan is reverse engineered, I should say, so that we can enable them to collapse time to, yes, grow and enhance their income, but to generate a massive outcome through exit strategies. And those exit strategies typically come through some sort of M&A transaction and process, creating a liquidity then, thus creating generational wealth for our clients. Which, you know…
I-i-it’s interesting, we’re in one of those industries where the, the quicker we, we, we lose a client, the better? (laughs) because, you know-

Kyle Knowles:
Right.

Brian T. Franco:
… th-that’s what-

Kyle Knowles:
That means success.

Brian T. Franco:
That means-

Kyle Knowles:
Yeah.

Brian T. Franco:
… success, right?

Kyle Knowles:
Yeah.

Brian T. Franco:
But, um, I don’t want to say we lose the client. Because there’s a fine line there where, you know, you develop lifelong relationships. And how many times, uh, if I could count that I’ve been invited to go fly-fishing in Montana, you know, with, with a business owners or stakeholders of a company we just sold, I mean, it’s, it’s countless, right? And, you know, but I always remind them, “Hey, I’m still working. (laughing)

Kyle Knowles:
That sounds great.

Brian T. Franco:
Yeah. Every now and then, I’ll, I’ll join, you know, some of these adventures and, and they are fun. They are, and it’s very rewarding, um, both from, you know, yes, the monetary reward is there.

Kyle Knowles:
But you’re still working.

Brian T. Franco:
Yeah, yeah, so I’m still working. Right.

Kyle Knowles:
I didn’t sell my company. I’m not retiring.

Brian T. Franco:
(laughs) Just… Yes, exactly. I mean, certainly in the plan, right? But no, we didn’t sell our company, but, you know, we, we do develop these lifelong relationships. And a lot of times, um, we, we maintain those relationships, we stay in touch. And, of cour… You know, early on in, in the firm, you know, we, we didn’t, zero marketing. Our marketing was by way, of word of mouth and referral. And the, I was describing to you that the reward is twofold for us, you know. There’s monetary value, yes. But, the big piece of the reward, for me as an individual, is being able to solve that puzzle piece.
I have different… and, and, at levels, always had the ability to look at a situation almost in three-dimension, you know, eyes open or eyes closed, and I can take that three-dimensional design, whatever it might be, in, in the work that we do, it’s, it’s really structure, right? I could pull it apart, I could twist it around, I could put it back together, I could see it inside and out. And, and that natural-born talent has enabled me to provide the guidance that we do to entrepreneurs. Because every deal, you know, the process is the same, but every deal is different because expectations are different.
And entrepreneurs are, are artists, really, when you think about it. They have an artistic ability of developing a business, and no one… I, I would argue that, you know, no one, you could be, you and I could in the same industry, but we would build different companies, because, we would build different cultures, and cultures is the element of what we’re building, right? And so, from that standpoint, it isn’t art. You know, there is science to it, yes, but there is an art to it.

Kyle Knowles:
So, I, I guess, wh-what I would ask you, Brian, is, pretend I’m an entrepreneur-

Brian T. Franco:
Okay.

Kyle Knowles:
… I’ve grown this business for 20 years. I’m kinda ready to exit, like at what, at what stage does as an entrepreneur reach out to a company like yours, and say, “Help me to get hands, a little more hands off and get the company ready to exit. I’m ready to do this.” And then, yet, typically, how long is the process of you working with a company?

Brian T. Franco:
So when a client is introduced, or potential client’s introduced to us, and they say to me, “Brian, I want to exit in five years so I’ll give you a call in five years.” And, uh, my response to me is, “You know, you should probably call me in six to 12 months.” Right? “And, and arguably, we should start now, and here’s why.” If you want to be exited, or if you want to exit your business in five years, right, and depending on what you’re doing, you could be a pr… you could provide a product, you provide a service, it could be a combination thereof, but we, we are experts at maximizing enterprise value.
And we do that by way of almost a SWOT analysis, initially, that helps us understand the transferability of the company. And typically, entrepreneurs of businesses that are generating profit from, let’s say, a million dollars to $15 million dollars a year, and this is profit not revenue, they are a very big part of the day-to-day operation, right? And you can’t surgically just remove that individual from the organization, because the organization is organic in some capacity, right?
So in this initial analysis, we, we determine, you know, what is that, wh-wh-what, how do they score from a transferability standpoint? Right? And we, it’s a, it’s a scale from zero to a hundred. We want the client to score an 80 or greater. And that scoring mechanism shows us where they typically land on the valuation spectrum, right? So let’s say you’re in and industry that is trading at four to six times EBITDA, right? Well, which is it? Is it four? Is it four and a half? Is it five, five and a half? Is it six? What is it, right? So, the initial assessment that we do allows us to pinpoint on that spectrum of where you would fall, right?
Are you best in class or are you struggling to get through the day-to-day? Right? And if you’re struggling, I mean, even if you’re, the spectrum evaluation ranges four to six, you might be a two, you might be a two and a half, right? Because when you compare this to a, let’s say, a real estate transaction, a building, that building has a specific purpose, and, and sometimes it can have multiple purposes if there’s, if it’s gonna be redeveloped. But even if, in that situation, it has a special purpose. And based on that purpose, it’s gonna have a, it’s gonna derive a valuation, right?
A business is not too different, right? It’s, it’s designed to provide a product, a service, or a combination thereof. And if that entrepreneur is working and that business, and, and wearing several hats, which typically they are, and that’s okay, that business is gonna be impacted if they were to exit. And sometimes those exits are planned when you, when you reach out to our firm, and we’ve had situations where we’re, we’re, we’re working with what we’re dealt with.
In one situation, we had a client that was, um, in his early 40s. He was in the, um, oil business, lubricants, commercial lubricants. And he left the, the office on a Friday. He was a motorcycle rider, you know, rode over the weekend and he never showed up to work again. Um, he was in an accident and ended up being a quadriplegic. And, um, es-essentially, you know, he, as time, he went on, he was a human vegetable. Could not run the business, was, you know, for all we know, he was unaware of what had happened. Right? So we ended up comin’ in, pr-putting a strategy together.
Um, and that strategy was designed, and, and, and worked on with his grandmother, right, because his mother was not of mental capacity to kinda go through this process. And fortunately, we did get the transaction done. We sold it to strategic acquirer, because th-that’s, that’s what’s also unique about us, is we’re looking for that one plus one equals three or greater equation. One plus one, if it equals two, that’s, you know, anyone could do that in my mind, right? But, what makes us unique is finding that extra value. And that’s typically through strategic acquirers or investors in the marketplace, and that’s exactly what we did for this gentleman. I should say with his family.
And, you know, y-y-you feel accomplished, yes, when you, when you consummate that transaction, but your heart also breaks, right, because you see so many willing and able, and capable entrepreneurs, that go about their daily lives, thinking there’s no end in sight, this is not gonna stop. Right? I could always do this, and I could always do it at the levels that I’m showing up with at, you know, today even. And so, this is why this assessments crucial, because it helps illustrate to an entrepreneur, or the stakeholders of a company, that there’s a partnership. What is the transferability of your, of your company? And what’s the viability of your business to an investor? Right?
Now, it’s not the end of the world if there, if you’re scoring a 70, you know, if you can’t score an 80, because you are just so involved in the business. Because there are, it just tells us what, what strategy to employ, right, and, and to, to execute on. But that planning takes at least a year to, one, you know, assess upfront. There are tweaks that could be made at, at, in 30 days, 60 days, and 90 days. But, then there are also some, uh, um, transitions that will occur, you know, over a year period. And when you take an inventory of those, that analysis, there are always some items, let’s say, that cannot be cured from a transferability standpoint until the deal is done.
And so, so as long as we know that, we, we could plan for that. We don’t come to market by way of looking, you know, desperate or unprepared, or e-even in the situation where we lose leverage, right? We never go, go to market in that, with that mindset, right, and with that type of plan. If those items of, of lack of transferability are inventoried and presented as, in terms of the rationale for the transaction or the sale or merger, then that becomes the advertising piece of this to investors and buyers, because they, too, are looking for that one plus one equals greater than three equation, right?
If there’s synergies, if there’s cross-pollination, if there’s some way and somehow to access critical mass, whether that’s geographic reach, discipline, or even product reach. And it’s the better together model. Right? And so some of those items will be cured. Again, I’m repeating myself, but will, they’ll be cured by the transaction itself. And that transaction can occur where w-we call it the, you know, rip off the rearview mirror approach, where y-y-you’re in the car, you rip off the rearview mirror, and you never look back. And that, for some, some entrepreneurs, that is the expectation. And we could, we could achieve that, we could reach that with proper planning.
And in, with some clients, I’ll, I’ll give you a case study we’re working on right now. It’s a infrastructure company, uh, focused on dry utilities so they could power, power tr-, uh, transmission and telecom. He’s 50 years old, relatively young. He’s nowhere near retirement in my mind. He’s got a ton of energy, m-more energy than, than, than you see in a typical 50-year-old. And what’s unique about him is that he sits in an industry where his peer group are late in their 60s, 70, and they’re looking for an exit strategy. Right?
But, he he has what he calls a platform, and that platform can, can grow by way of organic growth, yes, right? And that’s just, you know, hiring the right people, bringin’ on new clients and customers, and executing on that. But then there, there’s growth through or acquisition where the, his peer group, that’s in their 60s, late 60s and 70s, they’re looking for a way out, and he’s perfectly positioned to acquire those companies, roll them up under his platform, at 50. And we have a plan with him, you know, it’s just two years, right, two-year plan to do this, to approach this roll-up strategy, double the size of his company. We think we could do it in 18 months, but we’re going to have to leverage the capital markets, which we’re experts at. You know, we, we understand, based on the situation, where do they access that capital?
Capital typically comes in two forms, it’s either debt or equity, or a combination thereof. And figuring out that puzzle, uh, you know we’re discussing earlier, um, allows them and enables them to execute on those strategies, whether it’s organic growth or growth through acquisition. And at 50 years old, even if he decided to retire in, in two years, which he could, um, in that planning, as we developed the business, we’re going to bring on h-his wife. I didn’t mention this, I should, but his wife’s the controller today. So she’s the first one to exit.
We’re gonna bring on a professional CFO, we’re going to, we’re gonna set this platform up for this growth that I’m describing, and then we’re go-, we’ve already identified his replacement or a CEO that would replace him. And, and that CEO would be positioned to run a company that’s twice the size that it is today. Today, they’re about $20 million, point of reference, l-last year, they were 20 million, this year, they’ll generate, um, uh, 24 of revenues, so they have, you know, substantial growth.
So, at the end of this, this strategy, he has options. He could either, you know, sell the company that we just, you know, grew, ideally doubled, or, and, um, he could, he could exit the business, h-he’d exited the business or he can keep the CEO that we’re putting in place and just sit on the board. He has options. And that’s where you always want as an entrepreneurs options. Because if you’re ever backed in a corner, and you’re, you’re making decisions under that are duress.
I don’t know about you, but the decisions that I’ve had made under duress, you know, I don’t know about you, but the decisions that I’ve had to made under duress, when I look back, I’m not happy with those decisions, because usually, I did not achieve what I had intended. I mean, granted, I-I learned something along the way, right, but I did not achieve or reach my intended goal or target. And that’s what I love about options.
And even when we negotiate, this is something that we employ and, and, our tactics is, you know, if, if, if an investor is giving us an offer for a client, I always encourage that investor to give us two options. Right? You don’t need to hit the target, the bullseye or the target the first time. Um, give us two options, compare and contrast. Right? Let’s see, let’s test what you’re offering, what you’re able to offer with our client, and let’s see if there’s a pathway forward.
Our fiduciary responsibilities with, typically the seller client, and we’ll, we’ll show them, you know, by way of comparison, you know, what is more aligned with their expectations, what, what maximizes enterprise value while minimizing risks and providing the same level of liquidity. There’s always an answer there, we just have to figure out, you know, what it is. But, you don’t figure that out by giving somebody one flavor, right? I always say, if you just give me a plain vanilla and I don’t like it, you don’t know what I like. Right? But, if you gave me, uh, uh, chocolate, vanilla, and strawberry, I could tell you which flavor I like and why. Right? It’s a simple, silly illustration, but it really, it really articulates, like, what we’re tryin’ to find out, you know, with the client in this process.
So, I could go on and on, on different case studies, but I think this helps gives some color to, to what that process looks like. And in terms of planning, we would love to plan five years out. If it’s a year or two years, we have ways to collapse time and, and to get to the intended destination. And, and I will say that the transaction itself is not the destination. Because, at times what happens is, we can have a client that we sell majority of the company, but they maintain a minority piece of equity, you know, with the larger strategic buyer.
And, and, and, and, another case study in transaction we just closed in June, that was our client’s situation, where he was looking to retire. His wife has since retired, so she put the pressure on him like, “Hey, you know, I’m sittin’ home alone. We’re supposed to be travelin’ the world together and you’re working.” So he had that pressure at home, which was good pressure. Is motivation more than anything.

Kyle Knowles:
Yeah.

Brian T. Franco:
And, uh, but we showed him a pathway where he can scale his time down over the next two years. In the initial transaction, he took two-thirds liquidity and he maintained one-third equity. That equity rolled forward, was with a public company. Now, this is all public information, um, now, because it’s already happened. But, when we announced the deal on a Tuesday, in June, by Friday, the public stock was up 13.8% in a matter of days, and he did nothing to grow his business other than transact. And so that, the one-third equity that he, he maintained, you know, grew by almost, uh, uh, w-was it, yeah, 13, almost 14% in, in the same week he sold it.
And so, a lot of times these are unknowns to entrepreneurs. These are, these are pathways to their destination that they didn’t know they had options, specifically these options. So that’s what we’re very good at. And, and that’s what we love doing. And, as I described earlier, these are the puzzles that I love to solve (laughing). ‘Cause they are, right? You’re given certain pieces and you gotta figure out how to put it together.

Kyle Knowles:
I think it’s a fascinating, um, business to be in and you get to see and you’re, you’re working with so many different types of businesses. I mentioned healthcare and tech and, uh, architecture, all of, all these kinds of businesses. So you meet a whole bunch of different entrepreneurs. So when you come in and do this analysis, right, do you send a team in, do you go in?
And, and, you know, it’s, I, I assume it’s like, “Let me see your books, let me see your processes, your standard (laughs) operating procedures.” But, when you do this, do you, you know, first of all, who’s the team that goes in and does it? Second of all, what are you finding that these businesses and business owners haven’t done to get ready to exit? What’s, what are some of the common things that you’re seeing?

Brian T. Franco:
So, i-initially, I like, we, we call ’em discovery days, and I love to participate in those discovery days and lead those, those meetings. Th-there’s varieties of, of, of what we can do, but it really depends on the client. Because we always say we will move at the speed of the client. And so, the discovery days are, are fun in my mind. You know, they’re typically half, four hours typically. We don’t wanna, you know, t-take up-

Kyle Knowles:
Yeah.

Brian T. Franco:
… e-e-everyone’s entire-

Kyle Knowles:
This is intense, too.

Brian T. Franco:
It’s intense.

Kyle Knowles:
Lotta questions. Yeah.

Brian T. Franco:
Thought-provoking questions, hard questions to answer, because these are, these are questions that either they had never thought of, right, or, um, they’ve never been asked, and/or from somebody or even asked themselves. So, it really helps define where they’re at, in terms of this thinking, but the, the tangible outcome of this, uh, discovery day is this transferability assessment that I was describing. And then, um, so there’s two components to it. And one of the components is the financial analysis.
Now, we could either do that before the discovery day or after. Uh, it really depends on the client. But, I will tell you, there are clients when we do discovery days, it’s revealed to all of us that their financial reporting is weak or subpar. Right? We did a deal a couple of years ago where their financial recordkeeping was done on Excel, and that Excel workbook was messy (laughing). So we had to rebuild and reconstruct the financial statements.
And this was not a small company. This was, uh, over $10 million-a-year revenue company still operating on Excel. It’s just the way they operated. Nothing, there’s no right or wrong way to do it when you’re operating. So, as long as you have those measurements to direct your own business, but when it comes to an outside party looking inward, you have to have some sort of common reporting that, it’s gonna be identifiable to the marketplace. And that’s what we did in that situation.

Kyle Knowles:
What are the tools that you use usually, besides Excel to do that financial analysis then?

Brian T. Franco:
So, so, you know, it’s unique to the business and to the industry, ’cause what we find is our AEC clients will use a certain set of, um, project management tools that have an accounting component, which then provide, you know, financial reporting. A manufacturing company’s gonna use a different software that’s managing, you know, the production of-

Kyle Knowles:
Mm-hmm.

Brian T. Franco:
… uh, you know, uh, I’ll say, uh, an aerospace company, let’s say, that has both commercial and defense projects. And there’s, there’s software, specific softwares for that industry, which also has an accounting component to it. But, when you look at these systems, although they are fantastic when it comes to operating the day-to-day and the production, and the work-in-progress, and everything that goes into that, the, the outputs aren’t exactly what the market wants to see from the standpoint of evaluating valuation, from the standpoint of valuing cash flow, you know, um, capital expenditures, and…
So we’ll do that analysis and… But, sometimes, we find that clients are just so far behind in their reporting. Because, you have to understand, when we come in, we’re going to make measurements on their business that they’ve never thought of. And so, in situations like that, and why, why having a year, two years to plan is important is because we might advise them to, to bring on a professional CPA, you know. Or, we might have them on an interim CFO that’s gonna come and, and develop KPIs for them to track and follow.
We might hire a third-party quality of earnings firm to come in qualify those earnings, right? Because, when we go to market, no different than a public stockbroker, trading stocks of a public company, we are, we are training the ownership of a privately held business. The major difference is, we’re working off of snapshots of information at a, at a particular date in time. Where public companies are typically real time, typically, in terms of information and that data that’s flowing through the marketplace.
So, when you are taking a snapshot, financial snapshot of a business that you’re discussing three months later with an investor, the information’s already outdate and if you or the business doesn’t have the tools to produce ongoing reporting, it’s gonna be difficult to get at that type of transaction completed. So, long way of saying, you know, we come in, we do the assessment, i-in the discovery day. I do have a team that does the onboarding for the financial analysis. Uh, I have, um, um, m-my lead financial analyst is Scott. He’s been with me for six years, almost seven years now. And so, he knows exactly what measurements we want and I wanna go in and make on the business. And, ultimately, what we’re, what we’re doing with those measurements is, preparing the business to go to market and helping the buyer or the investor understand the risk in the business, but also understand the benefits of the business.
In a risk, as an example, would be… I-I’ll go back to man- aerospace manufacturing. There’s only so many OEMs out there and, so there’s naturally going to be customer concentration, revenue concentration. But, so as long as that revenue concentration is under 25 to 30% of the total revenues, you know, that’s comfortable. But, if we have a client that has a customer that’s 80% of their revenues, we better have a very good narrative and understanding of why. Is that, is that, is that more transactional or is it more of a partnership? If it is a partnership, you know, is it, is it unilateral or is it bilateral? Are you feeding each other business?
And if, if we can understand that, then we can share that in our narrative, because we call it N-squared, you know, numbers and narrative. Because numbers are great, right, and they, they give us the measurements that we need, but narratives are just as important, because it threads together with the story of that business and why the business is performing as well as it is, or perhaps they’re going through seasonality decline, right, or seasonal decline, I should say. So we have to figure that out. And we do that through the discovery, through the financial analysis, and then we move forward.
You had another question for me and I, it slipped my mind.

Kyle Knowles:
No. Yeah, I, I asked you, like, three questions at once-

Brian T. Franco:
Yeah.

Kyle Knowles:
… but… So, okay, so you do the workshop, you do the financial discovery. You’re seeing that a lot of your clients, the financial reporting maybe isn’t that great?

Brian T. Franco:
Correct.

Kyle Knowles:
And then what, so then you go back, you, you get together with your team and you put together a plan with milestones, I assume? And “This is what we’re suggesting,” and then you have, uh, a meeting. I guess you go back to them and present, basically, your findings. Is that-

Brian T. Franco:
That, that-

Kyle Knowles:
… kinda the next steps?

Brian T. Franco:
… precisely it. Yes. And so what we do is, we take, we take those meetings in 90 day leaps, right? They could be more frequent, they could be less frequent, just depending on where the client is and how much that time they need to make those initial, you know, shifts and adjustments that we’re advising them on. But every 90 days, we have what we calls a transaction trigger. And we have a conversation and we say, “Okay, are we where we want to be, and are we ready to start entering into dialogues with the marketplace about the opportunity?” If the answer is yes, then we move forward. The answer is no, it’s typically because there are tasks that still need to be, you know, completed, right, or elements of the business that still need to be cured from a transferability standpoint. And the fun thing about this is that every 90 days, we will reassess the valuation, you know, based upon how they’re scoring, and specifically on that valuat… spectrum valuation, or valuation spectrum, right? Where do they land? And every 90 days, they’re always improving. So was a, if it was a for to six valuation range, you see the climbing, and climbing and climbing. It is very rewarding. And we, we put together what we call is the Meritage stock ticker, the MST. And it shows them, you know, if the frequency’s every 90 days, the moves that they’re making, how it’s improving the value of their company. So it’s a real-time feedback, well, real time in the sense of every 90 days. But, it, it shows them the reward of the hard work that they’re doing. And that’s how we, and we continue that for as long as that’s needed. Right? And there again, there are some of those transferability tasks or topics that just won’t be cured until we consummate a transaction. Right?
For example, if it’s, um, if it’s a company that’s servicing a specific geography, I mean, it would, in some cases, it would take years to develop, you know, that same business model in a different part of the country or the world. That might be one of those tasks, right, or goals that would be better addressed by the transaction itself. Because, you have to remember, the client is typically looking for a pathway out, which means less risk and less reinvestment, not more time, more risk, and more investment.

Kyle Knowles:
That makes sense. Okay, so that, y-y-y-you have an overall plan, but then you’re meeting every 90 days to say, “Okay, this was our suggestions for the next 90 days. Where are we?

Brian T. Franco:
Yeah.

Kyle Knowles:
Can we keep, you know, do we need to keep moving forward-

Brian T. Franco:
Correct.

Kyle Knowles:
… in, in different ways? So, back to, uh, a question I asked earlier, financial reporting. You’re seeing that as something that maybe entrepreneurs and business owners, maybe there’s some, some improvements that need to be made (laughs), uh, with their financial reporting. What other things are you seeing that companies typically are not, I guess, uh, they’re not strong in?

Brian T. Franco:
Mm-hmm.

Kyle Knowles:
Areas they’re not strong in that helps their valuations.

Brian T. Franco:
And to be fair to, to operators and entrepreneurs, the reality is, their financial reporting could be great for their internal purposes, right? And so, from that standpoint, we, we can’t be too critical. But from the s-

Kyle Knowles:
Right. To keep lights on to-

Brian T. Franco:
Yeah.

Kyle Knowles:
… keep the business going, right-

Brian T. Franco:
Correct.

Kyle Knowles:
… the day-to-day.

Brian T. Franco:
Yes.

Kyle Knowles:
So they’re, they’re in good, they’re in, you know, they’re in the black, right?

Brian T. Franco:
Yes, yes.

Kyle Knowles:
They’re not in the red-

Brian T. Franco:
Yes.

Kyle Knowles:
… but it’s not about the future-

Brian T. Franco:
Yeah.

Kyle Knowles:
… valuation or selling the company.

Brian T. Franco:
Correct. Because when, when it comes to valuating the company, or transferability of the business, we’re gonna make different measurements that they just might not be making. And one, because they may not be aware of it or they may not have the source data to make those measurements. So, in those cases, you know, we do need to retool the way they’re reporting. So, in instances where, you know, you heard the phrase, you know, bad data in bad data out, right, there’s, there’s typically good data there, but if we cannot get to the intended measurement, by way of triangulation at times, you know, we are going to have to start making measurements in the business and suggestions to the operator, and to the owner of that business on what they could be having their team manage, right, or monitor.
A classic one in the AEC space is gonna be work-in-progress. So business cycle is you have a pipeline of opportunities which you work hard to transition to contracts. Those contracts become your backlog, right? And your backlog is then beginning a different types, times for different projects, but that turns to work-in-progress. And that work-in-progress is, is really where the measurements are lacking, right? Where are you in this project? You know, is it progress billing? Is it, is it milestone billing? Is it… you know, what is it? And they always have the answer, but they’re not measuring where they are in that process. So that’s a common measurement that we typically go back and say, “Okay, well, we need to track this on a weekly basis, ideally.”
You know, some companies are able to do it, um, on a daily basis depending on timesheets and, and, and the way they invoice. But that gives us good perspective of, you know, then cash flow and AR and all sorts of other measurements that you typically see on the, on the balance sheet. But until they make it to the balance sheet, you know, pipeline to balance sheet, there’s, there’s a lot of information in there that’s just not recorded or monitored. And that’s what we’re typically focusing on in, let’s say, the AEC space.

Kyle Knowles:
So, the other types of, uh, things that you’re seeing that companies could improve to get ready for an exit?

Brian T. Franco:
So, key personnel, right? So when you think of a business, if you’re a service business, you know, your assets are your people. And it was once illustrated to me that, in a service company, just imagine a high rise building, everyone comes up that elevator every day, they sit at their desk, right, and they work. And they have certain skills and abilities, licenses and education that enables them to do the work that they do. And then at the end of that day, they go down the elevator and they go home, right? You hope that they come back the next day, because those are your assets. And, you know, if you think about more of a manufacturing company, you know, you don’t have to worry about your manufacturing press not showing up to work the next day. Yeah, it might be broken down, right-

Kyle Knowles:
(laughs)

Brian T. Franco:
… or due for maintenance, but it’s always going to be there, right? Where when p… In service companies, your people are your assets. They leave, they come back. And more in the modern world, you know, you just hope they log in from home the next day (laughs). Which is actually a whole nother subject because, you know, that, there’s a big cultural shift there. I mean, if you’re working from the same spot in your home every day, does it, why does it matter to that individual? What, what flag of what company are they waving? Right? That’s, that’s a whole nother topic and subject. But, at least for this topic of key employees that I’m touching on, you need to make sure that, you know, they are committed to the organization as it grows and scales, and potentially merges or even sells to a larger strategic.
But, i-it really comes down to when, when you think about the work that we do in that situation is understanding the expectations and managing those expectations. Sometimes they’re realistic, mostly they’re realistic. Sometimes they’re not. And, but we have to help those individuals understand, you know, what is realistic, what’s achievable, and what does it mean for them? And I’m talking about key employees, non-shareholders, right? Because shareholders are gonna behave in, differently than, uh, a non-shareholder-

Kyle Knowles:
Mm-hmm.

Brian T. Franco:
… because they’re gonna have monetary benefit at the time the transaction closes. So, as an example, there are ways that we can, and, and a lot of entrepreneurs are open to this, but there’s ways that those key employees could be incentivized, either by way of bonuses, minority equity, or some side, sort of upside potential post-transaction. And, so as long as they’re showing up continuing to do what they’re doing, right, then everybody wins, including that key employee. And what I love is when we do a transaction with, let’s say, a, this, you know, single-geography company, merging or selling to a larger, you know, national firm or group or international group.
Let’s say that business is in California and they grew up in Colorado. Right? They merge with this larger entity and now that California employee is saying, “Hmm, I would love to be back closer to home, in Colorado. We have kids now. We can be closer to the in-laws, we can be closer to, you know, parents, the grandparents,” and they have an opportunity to transfer, you know, horizontally, right, without having to restart again at a new organization. And, and they could relocate. And, and that’s something typically a smaller, regional company can’t offer to an employee.
So there are benefits and you just have to understand, you know, what drives, uh, that individual. So we do some of this work, but we also have advisors that specialize on company culture and transferability of company culture, so that that culture maintains itself during, during an integration process. So, which is, which is a whole nother set of services we don’t offer, but we certainly have professionals that are experts in the space. And w-we will tap their shoulder and bring them in, if and where needed.

Kyle Knowles:
Okay. How many companies then have you or, or business owners, let’s say entrepreneurs and business owners-

Brian T. Franco:
Yeah.

Kyle Knowles:
… have you helped exit over the years?

Brian T. Franco:
Oh, gosh, it’s been-

Kyle Knowles:
Just a rough estimate.

Brian T. Franco:
Yeah. Hundreds. Um, i-it’s been, it’s, uh, over hundreds of companies. I mean, you think about two billions, $2 billion of dollars of, of capital deployed, um, you know, I-it’s been over hundreds that our firm has, is managing that. I would say even collectively of those that have worked with the firm. And, you know, one of my mentors, Craig Trass, was with me early on, in 2005. He’s since retired and he’s racing Porsches now and loving life. And, but, you know, uh, collectively, over thousands of companies.

Kyle Knowles:
Okay. So you’ve met with-

Brian T. Franco:
Oh gosh.

Kyle Knowles:
… just hundreds of entrepreneurs and-

Brian T. Franco:
So-

Kyle Knowles:
… business owners.

Brian T. Franco:
Yeah. So many field trips.

Kyle Knowles:
(laughs) And from that experience of sitting across the table and having dinners and lunches and workshops, workshopping with these entrepreneurs, what are, what is one of the top skills or attributes to successful ones that you’ve really, really went, “Wow, this, this, this-

Brian T. Franco:
Yeah.

Kyle Knowles:
… entrepreneur’s very successful.” Whether it’s based on exit numbers, based on who they are as an individual, what are, what are some of those attributes of entrepreneurs?

Brian T. Franco:
So, wh-what’s interesting is, th-the common theme is that what made that entrepreneur successful in the early stages of the development of their business, typically, they become distracted with nuances of running the day-to-day, whether it be insurance renewals, HR-related issues, you know, all of the, all of those task, responsibilities in and around a growing company. But the very thing that allowed them to launch that company, be successful with that business find that those that struggle have become distracted with those other elements of the business. And they lose focus of what made them successful to begin with.
I can tell you personally, um, five years into our firm, I had the most people, I think I had 20 people in the firm. You know, we’re a boutique firm, so we’re about, you know, half a dozen today. But I made the least amount of money with the most amount of people, right, because of those distractions. I personally, at, and at that time and that age, I struggled with that, right? But what made me successful early in my career, and I’ll pick on myself here is that I was very good at solving those puzzle pieces. I was very good at aligning the right capital for the, for the opportunity to get it to the intended target.
And entrepreneurs and clients are not all that different. But the common denominator of those that were successful were very good at, at keeping themselves disciplined on what made them successful, and doing that rinse and repeat, day in, day out, over and over and over again. And creating a system that they weren’t working with the system that they developed was working for them, and enabling them to more of what they’re already good at. Right? And that’s the common theme, common denominator.
One observation I have made, too, is that when you, when you look at an entrepreneur, and I’ve worked for people early in my career, and I’m sure you have, but I can think of those that I worked with or for that just were inconsistent in their behavior. Meaning, you know, uh, let’s pick a Billy, let’s make up a name, Billy. You know, you work for Billy. The Billy you get today is different than the Billy tomorrow. And the Billy you get next week is, a-another version that, you know, m-may not be enjoyable, right, and personally, in, in my personal, in my personal life and my business life, one thing that I have been very mindful of is, is being disciplined and, but more importantly, being consistent. If you show up, you know, you, you just s-said earlier in, in this interview, you know, we had a couple calls, you can expect the same Brian Franco today as you had on those calls. That consistency is, as a human being, we, we look for that, we gravitate towards that. Because when you’re leading an organization, and specifically people, they wanna know, they want that consistency in your leadership, they want that consistency in your guidance, and for, specifically us, as advisors. And if we ever, you know, show up differently, it’s confusing and it, it’s distracting.
And I will tell you those that have, the common denominators of those that have been successful have been both disciplined and consistent. And, and I can distill it down to those two things. Now there’s obviously other reasons, right, what make an individual, uh, uh, successful, but those are just two key elements that I’ve observed in my life.

Kyle Knowles:
What’s a book that you recommend the most to people, Brian?

Brian T. Franco:
Oh, gosh. I-I think the books that have really resonated for me is… If it’s one book on this topic that I’m talking about, um, and, and I should remember the author of Four Hour Work Week, by Tim Ferriss?

Kyle Knowles:
Oh, okay.

Brian T. Franco:
Great book. Um, i-it speaks to what I was just talking about how, you know, we, as entrepreneurs, can become distracted, right? So you wanna focus… There’s an exercise in that book that have, has you focus on those tasks that make you the most money or generate the most revenue for your company. And those tests that, you know, have to be done but don’t generate revenue, or generate very little revenue, could be, you know, offloaded into a system, right, which ultimately enables, you know, the leaders, um, of an organization, and empowers them to, to, to move forward and grow.
I also love, i-if you’d allow me another book is, uh, 21 Irrefutable Laws of Leadership, by John C. Maxwell. John C. Maxwell in that book talks about, if you want to develop a true leader, right, put them in a nonprofit setting, right, and ha… and see how they lead those people. Because in a nonprofit setting is, maybe you may have experience, you’re dealing with volunteers. Those, those individuals are showing up because they, they want to participate in whatever that nonprofit organization focus is. But they don’t have to listen to you as a leader. They don’t have a paycheck that they’re waiting for at the end of the week, right?
So, you know, you, you don’t have that power over them. And because you don’t have that power over them, you know, uh, I think else, John C. Maxwell says in that book, “You know a good leader by how many followers they have.” Right? And in a nonprofit setting, if, if the driver’s not income, right, for people to show up and you can still lead them and they still follow you, he, he just… And that was one of, one of the rules that he came up with, but… I-it, I see it to be true as well, right?
And I tested that even in my own life, and I’ve seen and experienced that in my own life. And so, I, I think those are two really good books.

Kyle Knowles:
Awesome. So, uh, w-we’ve gone over time. I appreciate-

Brian T. Franco:
Yes (laughing).

Kyle Knowles:
… the time that you’ve spent here. I just have a lightning round of questions to get-

Brian T. Franco:
That’s good.

Kyle Knowles:
… to know you a little bit better and, uh, we’ll wrap up. So-

Brian T. Franco:
Okay, fantastic.

Kyle Knowles:
… So, what is your favorite candy bar?

Brian T. Franco:
Snickers.

Kyle Knowles:
Favorite music artist?

Brian T. Franco:
Ugh, it, it varies, but, uh, uh, I-I’m a big Pearl Jam fan.

Kyle Knowles:
(laughs) Favorite cereal?

Brian T. Franco:
Rice Krispies.

Kyle Knowles:
Mac or PC?

Brian T. Franco:
Mac.

Kyle Knowles:
Google or Microsoft?

Brian T. Franco:
Google.

Kyle Knowles:
Dogs or cats?

Brian T. Franco:
Dogs. I’m allergic to cats (laughing) And cats are just not loyal.

Kyle Knowles:
Phantom or Les Miz.

Brian T. Franco:
Ooh. I’ve seen both. I’m have to go with Les Miz.

Kyle Knowles:
All right. What’s something that most people don’t know about you?

Brian T. Franco:
You know, I shared, uh, uh, uh, in this recording about being, you know, a young father, right, and, um, so a lot, you know, strangers don’t know this about me, right, ’cause I have younger kids. You, you always have people come up to you and say “Hey, be careful. They’re gonna grow up so fast.” And, you know, then it’s like, “Do I explain the story?” (laughing). You know. Uh, but that’s something that most folks don’t know about me.

Kyle Knowles:
I loved learning about that. Because I think it’s part of who you are-

Brian T. Franco:
Absolutely.

Kyle Knowles:
… taking on that responsibility at such a young age. And, uh, you have a wonderful son. And he, he actually is working with you-

Brian T. Franco:
Yes, he works with-

Kyle Knowles:
… producing your podcast. We didn’t get a chance to talk about it yet.

Brian T. Franco:
Yeah.

Kyle Knowles:
But how do people find your podcast, and, and tell us a little bit about that?

Brian T. Franco:
Yeah. So, we, we, my oldest, Jacob, uh, he went to, uh, he graduated from AFI, American Film Institute, last year and he’s now an adjunct professor as well, teaching, uh, film and directing. And what a better teammate to have, right, and happens to be my oldest son. It’s a fun dynamic. But, uh, we, we produced and wr-written a show called, Private Capital Mastery. You can find it on wherever you consume podcasts. The Private Capital Mastery continues to talk about the journey of the entrepreneur and how to leverage the private capital markets to achieve that growth in scale and to ultimately generate, but what I’ll call, you know, create generational wealth through massive exit strategies.
And we talk about, it’s an insider’s playbook on how to do that. And we unpack, little by little by little, every week, ’cause there’s a lot to unpack. And we’ve developed and built a community around this, and it’s been fun. It’s been inspiring, and you meet a lot of really good people, and including yourself. Without that podcast, I don’t think we would’ve ever met and I’m very grateful, to not only be here with you, but to know you and now to have that lasting relationship with you.

Kyle Knowles:
Likewise. I, um, it’s been such a pleasure getting to know you, Brian. We’ll put links to Meritage Partners-

Brian T. Franco:
Yes.

Kyle Knowles:
We’ll, uh, uh, we’ll put links to your podcast, however-

Brian T. Franco:
Yes.

Kyle Knowles:
… your LinkedIn as well.

Brian T. Franco:
Yeah, that’s good. Yeah.

Kyle Knowles:
I know you’re posting clips from the podcast on LinkedIn.

Brian T. Franco:
Yes.

Kyle Knowles:
So I encourage all the listeners to go follow Brian on LinkedIn as well. But thank you so much for driving down-

Brian T. Franco:
Yeah, of course.

Kyle Knowles:
… today to Carlsbad. It’s been so fun to… I, I feel like we could talk for hours.

Brian T. Franco:
(laughs) okay.

Kyle Knowles:
So many things to unpack.

Brian T. Franco:
We could.

Kyle Knowles:
And there’s so many lessons you’ve learned. And the people you’re working with are people that I’d like to reach, you know-

Brian T. Franco:
Yeah. Absolutely.

Kyle Knowles:
… with this podcast, too, and, and so, thank you so much for being here, Brian. I wish you and Meritage Partners massive success in the coming years. And I hope one day you can retire so you can join all the people you had helped to exit, on those fishing trips.

Brian T. Franco:
Yes.

Kyle Knowles:
And, uh, again, thank you for being here.

Brian T. Franco:
M-my pleasure. Thank you for having me. And yes, we could probably go on for another hour or hour and a half, but happy to come at anytime and talk more about anything that you think is relevant to your listener base. But again, we’ll put those links in. But, you know, meritage-partners.com is our website. Private Capital Mastery is our podcast. And, uh, of course, you have my number personally so, I, I look forward to staying in touch and, and getting together, Carlsbad, wherever it may be, yeah, I’ll, I’ll, I’ll come find you.

Kyle Knowles:
I’ll take it. I love the sunny weather here.

Brian T. Franco:
(laughs) Yes, Yes. There’s a lot to love. Thank you so much, Kyle.