Dealquest_episode_276 - Matt Putra - Audio
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Corey Kupfer: [00:00:00] Matt Putra is a chief financial officer experienced in scaling, transforming, and financing small business and medium sized businesses. He makes sure that you have the resources you need to achieve your mission. Matt, I know, also has a PE background and has helped clients buy and sell businesses. So he definitely has deal experience not only getting companies ready to be sold and be in a position to do that, but actual deal as well.
Matt, welcome to the program.
Matt Putra: Thank you so much, Corey. My honor to be here.
Corey Kupfer: So Matt, before we get into all your experience around deals and also the CFO work, the outsourced CFO work you do with the small and medium sized businesses, I want to take you back to when you were a little kid growing up, maybe 10, 12 years old.
What did you want to be? Because I'm guessing an outsourced CFO wasn't in at that time, but you tell me.
Matt Putra: I was going to be playing in the NBA. That's what I was going to do.
Corey Kupfer: Okay. All right. And how tall you?
Matt Putra: Five foot nine. I had the youthful naivete, so to speak.
Corey Kupfer: Yeah. I I remember [00:01:00] those days I'm five, eight.
At what at what point did that dream come to an end? ?
Matt Putra: I think probably around 16 I realized. I was like, oh yeah, I joined the high school var, like the varsity team did fine, but way bigger and just got beat up. So then I realized that it wasn't gonna work if I couldn't hang out in small town Canada high school basketball.
I wasn't gonna make it in the NBA .
Corey Kupfer: I love it. And one more question, looking back, what was your first deal of any type? It could have been something small when you were a kid or early in your career. And he got a deal that comes to mind.
Matt Putra: Ooh, good question. I probably negotiated an Xbox with my parents.
Hey, I'll do, all these chores and I'll, I'll go mow the neighbor's lawn and I'll give you my birthday money for the next, couple of birthdays and Christmas money and all these things. I got my Xbox. Yeah, probably I was probably 14 or so.
Corey Kupfer: I love that future birthday one. It's future draft picks.
Matt Putra: Exactly. Yeah. Yeah. We can capitalize my future income streams, mom,
Corey Kupfer: [00:02:00] oh, that's fantastic. So just give us a couple of minutes. Obviously we mentioned that you're, you provide CFO service. Just give us a couple of minutes on the types of clients and industries and how you work with clients.
And then I want to swing over to the deal side.
Matt Putra: You got it. Yeah. So I work in a couple of main industries, e commerce we work in clean tech, green tech, and that would include e commerce when it comes to retail wholesale. Like we have clients that do 30 million a year with big grocery, things like that.
And we do a bit of SAS work as well. And. Typical size of business is anywhere between 50 and sort of 80 to 90 million a year in revenue. And other, if you don't have that, then you're funded and you have your board breathing down your neck and we're going to help you deal with them to
Corey Kupfer: Love it.
And w and just give us a little bit on the range of services. A lot of people know. But also CFOs do some people. We actually moved a couple of years ago from just, an accountant and a bookkeeper to a CFO. Wonderful. So it's made the world of difference for us. I'll let you, I'll let you talk about it.
Matt Putra: Sure. Yeah. So there's a universal services start with the [00:03:00] easy one. So bookkeeping controllership, we just make sure the books are in order. You're complying with your governments and all that, getting clients, getting paid vendors, getting paid all these things. So that's easy. From there, we stack in like a financial analyst team and a CFO.
So there we're looking at where's this business going? Where could it go? How do we optimize the levers and the balance sheet and the margins and the collection timeframes? How do we optimize all that to get you where you want to go or where you're bored? Or you as a CEO want to go, along that path, we're with you.
We're embedded. So we look at contracts for you. We look at hiring planning. We look at, what services could you offer? What products could you offer? What products should you cut? Like we just did with a client of mine. We're cutting 50 percent of their SKUs because they don't move as much money.
And so I'm just saying, let's not focus on those. Let's cut them. So we have hyper focus on the ones that deliver. So now we only have, yeah, like four categories out of the 12 that we were currently selling. We're cutting a bunch. We're cutting business units all [00:04:00] kinds of things to optimize for growth along the path.
We look at, governance. So how do you do internal controls? How do you make sure that there's nobody stealing money? We look at board or investor reporting. How do you make sure that the board investors know enough about you so they're comfortable, but you don't want them all in the weeds, right?
So how do you optimize that relationship? aNd then just a range of things, right? So we, sometimes we, yeah, contracts, all kinds of stuff, but financing, of course, series, a series B venture, all the whole thing we do.
Corey Kupfer: Yeah. And so this is, I'm sure anybody who does listen to this podcast or otherwise on the sales deals understands that there's so much in.
That list of items that you just said that can ultimately end up affecting deals. Obviously whether it's raising capital, whether it's selling the company there's two big buckets, at least of what you talked about. One is all these optimization things that makes it make a company more profitable, even it goes up, obviously multiples of even is one of the ways that comes to value.
But however, the valuation [00:05:00] method is. The bottom line is, more even at the bottom line the more value, most absolutely. I understand that there are some tech companies that have no even and sell, but that, that's a, but even then there's other efficiencies that could be, so that's, there's one category and then there's another category in what Matt said, which is all around like the governor stuff and the cleanup stuff or whatever.
Which is all the stuff that anybody, any buyer, any investor is going to look for and due diligence and going to help either get a deal done or not, or raise concerns and things like that. So Matt, why don't we just jump into that, that lead in? Part of what you also do is, help companies get prepared to, to sell and raise capital.
I gave a high overview, but yeah, let's delve in a little bit about how those services impact, getting deals done, valuation, things like that.
Matt Putra: Sure. Typically someone will come to me sometimes a year before they want to sell and one to two years. So now there's lots that we can do with two years runway, right?
So this client is doing about 20 million a year, maybe 25 million a year. They're doing like 20 percent EBITDA. So [00:06:00] great. And they're growing 50 percent or more a year. So what are we doing? a Or we're budgeting. So 1st thing 1st, let's just budget, let's show an acquirer that we know how to budget.
Let's show an acquirer. We know how to stick to a budget. So that's table stakes. Basically, from there, we're looking at systems. Do they have the right systems that they're going to need to leverage into a bigger company? They want to grow to 40M and then exit. So we're putting in an ERP material requirements, planning, inventory, forecasting, institutionalizing some of these practices that show the big boys that you know what you're doing, right?
From there what we're trying to do now is work on getting the owners like, not fully out of the day to day, but to the point where they can disappear for a month and the business just runs without them. So we're looking at operating systems, team alignment, strategic goal setting. All those kind of things.
And of course, everything can be systemized, even strategy. So we just got to implement the right system. We use playing to win typically. And so we're looking at playing to win plus a combination of like E. O. S. and O. K. R. S. And again if you can set [00:07:00] your corporate level goals and your team knows the systems to set the strategy and cascade everything down the business can actually run without you.
At least it can show up once a quarter for planning. Other than that, we're, optimizing margins. They're really good. This is not a lot of work to do there, but we're looking at dual sourcing just to make sure you have failovers for supply chain. We're looking at, oh, the other thing we're doing is the most small businesses, their books aren't super clean or they aren't always.
So what we're doing is we're trying to walk the balance between keeping Apple Sam happy, keeping our clients happy, but then having acquisition ready books. So what we're doing for this client, okay. We're not ready to do full, proper gap bookkeeping yet, but we're, what we're doing is my team is doing it like an off books sort of gap records.
So that these sort of off books gap financial statements can be reviewed by the acquirer and, we'll prove the balances, but not within their QuickBooks file because you do need to switch to proper accrual accounting. But not everyone's ready to do it right away. So we're going to do this [00:08:00] off of QuickBooks.
What else? There's more to do, contracts and, staff contracts and all these things to prepare for as we get up into the bigger leagues.
Corey Kupfer: I love it.. Listen, folks, that's a great example for those out there. Obviously, if you use a great out, so CFO service like Matt has they can help you but this is also a laundry list of the kind of things that you should be looking at in your business, by the way, whether you're going to sell or raise capital or not, these are all, these are best practices for successful businesses.
The deal side as well,
Matt Putra: do you think I missed anything in that list, Corey?
Corey Kupfer: I was pretty it was pretty comprehensive. I think what you didn't you said it, but, I want to emphasize it is that, is that ability to have the business be able to run without the principles, right?
That's such a big factor in in deals and valuations, the ability to sell the company, certainly in the ability to Sell a company that you don't then have to be locked into a five year employment contract And continue to work if that's not what you want to do, for example And also even if you are willing to be locked in, you know You're going to get higher valuations if the company's not, not as dependent upon you and it's [00:09:00] got more systems in place so so you know, you said it but i'll highlight that one because that's You know, and it's interesting because a lot of entrepreneurs that I know You know, around the entrepreneurs organization community, for example, which I've been a part of for many everybody.
Michael Gerber's, he met this is a Bible or work on your business, not in your business. It's a mantra. It's what everybody talks about. But, it's easy to say, but. The ability to get there is really the challenge and, certainly the services you guys provide help people get there.
So that's great. I want to take you back to you spent some time in PE before you had the business, right? So tell me how how did you, what was that career trajectory? How'd you get into PE? And then I want to talk about some, some of the lessons, you learned from that, but just how did you get that into that space?
Let's start there.
Matt Putra: I'm going to go ahead and just be honest. And it was a total fluke. I was a good accountant, good controller. And I went to an accounting firm because I to help a lot of people by working in an accounting firm. And anyway, that's not how it works. But I was approached by this firm.[00:10:00]
They said, Hey and I was on a board of a nonprofit and a couple of things, and they somehow found my LinkedIn profile. And they said, Hey, do you want to come be our VP finance? And I was like, what are you talking about? I'm just like controller level, whatever. And they said, yeah, please interview.
And I was like, okay, cool. So I went and I interviewed and did really well in interviews and the case studies and all the things, and I got the role. So I'm like, okay, here you are. And I was like, you guys know, I don't know PE, right? And I'm like, yeah, but you seem smart and you seem, coachable.
So let's go. So I had to learn from top to bottom what PE was all about. When buying a business, I had not bought a business before that. I hadn't sold one before that. I hadn't done due diligence before that. They, to their credit, taught me everything to my credit. I worked my ass off to try to learn it.
But yeah. And so from VP, within the year. And then I was group CFO within two, three years. And because we were small I did obviously all the back office, but I got to do deal side as well. So I worked deal side all across Canada, real estate, private lending, and the whole thing. And it [00:11:00] was a wonderful experience, wonderful team.
I Would be doing it now if I didn't want to work from home basically. And yeah, I got through everything. Down to even, writing up term sheets and redlining documentation back and forth at the finish line.
Corey Kupfer: It's interesting because obviously we've talked about PE on this podcast.
I I, I have many clients who, PE funded or. Or have sold to PE funded aggregators. Oh yeah. That kind of stuff. And there, there's a lot of, people have a very strong opinion on pe and of course easy answer is not every PE firm's equal and all that kind of stuff, whatever, but, but but there is, listen, there is a fund.
One of the things I always say to my clients is there's a fundamental difference. The minute you take anybody else's capital, right? Let's just stop there. Even if it's friends and family or angel or whatever, right? There's a fundamental difference there. And then there's a difference when you take PE capital because that's professional capital.
And and, you've heard horror stories of founders, say they got pushed out of their own company. You heard great stories of people who say, Hey, this was the money we needed to. The catalyst and they're a great [00:12:00] partner from the inside on the P, from the inside of the PV view it's interesting what is that whole range of conversations and at least perceived outcomes from factors.
Give us, give me your thoughts on that, but what your experience was and what you saw, where things go.
Matt Putra: While I was there, we never pushed anybody out, but we gave people a lot of headaches, right? When you tell us the projects are going to go a certain way and I'm watching the, cause I, monthly reporting or quarterly reporting and I'm seeing, it's not going that way.
I'm asking you questions and you're, we're meeting and we're talking and. There's no easy answers and you're going to, you're going to send me your first answers and I'm going to go, okay that triggered this question and that question. And so sometimes a quarterly review for a portcote portfolio company be a week or 2.
if I didn't like what was happening. And so just imagine the drag on your time. You have to do all your regular work. And you have to let me fuck with you for two weeks, once a quarter, based on the story, excuse my language but you have to do that and all your regular work.[00:13:00] And sometimes I can give you grace, but I'm managing tens of billions of money from somebody else, so I fiduciary to them, so I'm going to make you do what I need you to do.
And when we see things are getting a little tougher then we're going, okay what are we doing now? So now it's monthly reporting. Now you need to send me this certificate or that certificate or this document or that document. Now I want to see a rent roll every month or something like that.
It's we're getting as the trouble gets worse, we're getting into more and more detail with you, which means more and more of your time. And then, if it gets really bad Let's say you default, right? Then it's am I stepping in? Yep. Are you allowed to have your business for a little while longer?
What are we doing then? Do you need more money? And if you need more money what do you think happens then? The constraints get even tighter on you with if you need more money from us, if you need even. And so we had someone ask for more leeway. And we go, okay, we'll give you that leeway or we're going to take it away over here.
So nothing comes free. And we were a friendly PE group, to be honest, [00:14:00] like we weren't as harsh as others could have been. We never had to call funding, we never kicked anybody out, but really we did give people headaches. And it's not cause it's not cause I want to, but again, I'm managing, I told a bunch of people that they're going to get a certain percentage return and I have to give that.
I got to make sure it's coming
Corey Kupfer: and it's interesting because there's always this tension. I know when somebody is presenting to a PE firm or any investment venture capital, even angels, whatever, but certainly, there's this, P's expecting a certain return.
In order to raise the capital the entrepreneur, the founder of the management group, whoever it is. Wants to show projections that will get them at least that return and more to get them excited about the deal. But then practically what PE is going to do in most cases, and, it's understandable is to say, okay, if we're going to buy your projections and on the right, the deal based upon them, then we're going to have certain expectations that you're actually going to hit them.
Matt Putra: Absolutely. Absolutely.
Corey Kupfer: So I, I always say to clients, that, you want to balance your optimistic projections, [00:15:00] whether enough, obviously, to get somebody interested if you, if it's legit but understand that you don't want to overplay your hand because that sets up for disappointment and consequences.
Again, not because the people are bad people, but just because. They're structuring and underwriting the deal based upon what you've told them you can achieve and that's the expectations that you've created for them.
Matt Putra: Yeah, and I will say in my experience cause I work in like the UK and Canada, US and Australia and all over.
I, I've noticed that in the UK. Investors are typically store a little more conservative. Mostly North America your run rate better be a hundred million in five years in the UK. Investors are okay with 40 or 50 million pounds, because I don't know what it is exactly why, but that is more realistic in general.
And so it seems that there, you can still raise money with the run rate like that, even in your model in the UK.
Corey Kupfer: Interesting, yeah, that's right. Things are different places. The other thing that's interesting to me is that, that process you described of. Holding the founders of management accountable and then, if things don't improve, or if [00:16:00] the questions unveil deeper issues, getting even more in terms of whether it's meeting frequency or level of detail reporting on the positive side, what I've people that I know have had really good experiences with their PA firm will often say to me, or say, I've seen them say presentations or as well that, the benefit of working with peas that it brings discipline, brings financial discipline, brings operational discipline, brings, governance and reporting discipline and often that's something that companies that, most companies don't start out with those disciplines just because it's not the way entrepreneurs work and you don't have the time or money or, and it's not necessary, frankly, in the very beginning, although the earlier you get some of these systems in place, the better, but practically.
That's just not the way entrepreneurs work. And some, the ones that where it's worked out well, often will tell me exactly those words that they appreciated and needed the discipline.
Matt Putra: Yeah, I would say again, in as much as I gave people headaches, most of the time they were appreciative.
Because then when it came to, [00:17:00] Oh, hey, my bank is saying this we obviously have a view of what banks are saying in general too. And so sometimes we can come to the table with you with your bank. And there's a few situations in which we help people. I wouldn't say out of a jam, but we help people get maybe a little more than they would have gotten from their banks if we weren't at the table.
And then of course, Someone goes, Hey, Paul, we're looking at our budgets and we see this. What do you think? Then, okay, great. You're coming to me. Cool. So now we can go, okay when I budget, I look at this and this, and these are some best practices that I know, and here's some ways your controller can do the reporting.
And here's a chart of accounts that we like to see. And there's a lot of things that we can be helpful with. And and you'd probably agree that PE group, it's not just how much money will they give you, but how do they work with their founders is important to know.
Corey Kupfer: Yeah, absolutely. So you were there, did you say about 6 years or
Matt Putra: 5 years?
I think.
Corey Kupfer: Okay. And then so what Abby and you alluded to something about if you didn't want to be working from home. So give me a little more on that transition. Is it this business that you have now that you,
Matt Putra: yes, it is. Yeah. So [00:18:00] I was working, so I'm in, in Canada and I'm in the Vancouver area. So I was commuting about 3 hours a day from my home to like downtown Vancouver to do this thing.
When COVID happened. I got all this time back and I was like, Oh, I see my kids so much more. And I was like, so I told him, I was like, Hey, when COVID is over, I want to work from home like four days a week, three days, whatever. They said, actually we need to get, we need to get back to the office full time.
So I was like I can't do that. I had done it for four years. I missed dinners with my kids during the week for five years, basically. So I said, no, I'm not going to do that. And then I started working on this. I had been helping a couple of friends with their finances just on the side of my desk and really enjoyed it, to be honest.
And so then I asked these friends, Hey, do you have anybody else that needs help? And slowly just started getting whatever else. And then eventually I said, Hey, this is going really well. I'm going to move on. And yeah, I still see them probably once a quarter, the same guys that I used to work with.
Good people. But now I'm doing this full time.
Corey Kupfer: Love it. Love it. And it sounds like it's going well. It's been fun. It's been great. Yeah. It's interesting because you've been. I Talk [00:19:00] about these mindset shifts off and I talk about, there's a mindset shift or a different mindset between an employee and an entrepreneur.
And and then I also make a distinction or say there's a different mindset between an entrepreneur and a dealmaker. There are plenty of successful entrepreneurs who are not dealmakers. They grow, they get a growing out, maybe they're great at marketing or sales or whatever it is. They grow organically and they can build a very nice business that way.
I think they're missing out on another growth sleeve, whether it's, MNA or capital raising or joint ventures or strategic alliances or licensing, or we talk about all those kinds of deals. You've been. On the PE side as a dealmaker you've clearly been an entrepreneur, you've helped clients do, do deals.
What do you think? First of all, do you, by my premise that these are different mindsets and second of all, what, in these clients, everything you do is going to prepare people, what you're doing now. The deals, but not everybody's going to do one. What's your observation about entrepreneurs, even in your own experience about, those different mindsets and who was successful, doing deals as well as just being a successful entrepreneur, running the company.[00:20:00]
Matt Putra: Oh, wow. Good question. I do buy the premise that it's different mindsets. I am still proving myself as an entrepreneur. Like I'm a great CFO, great deal maker. And will I have the staying power as an entrepreneur? Who knows? I think I will, but we're proving it out daily. I Don't, I would say we're not in a, like we're doing, like we're doing fine, but we're not like stable and the business won't run without me yet.
So there's a ways to go.
Corey Kupfer: Sure.
Matt Putra: I think, , entrepreneurship is of the things that we mentioned to me, feels the hardest of all the things I've had to do. You've got to do everything, like you've got to know a little bit about everything. You've got to be able to let you decide a conversation with my sales team today.
And they're like, we want to do this. I'm like what about all these things? And they're like you're worrying too much. And I was like, you know what? I gotta get the fuck out of your way, so you have to be able to let go and know when to jump in. And so entrepreneurship is hard. A common thing I see among successful entrepreneurs is thus far, they operate as lean as they can for as long as they can.
That's what I've seen. They are focused. They know when to say no. They attract good talent [00:21:00] and they let them run when they find them. I don't know that there's a ton of other similarities that I can see, but I think those three are huge. It's saying no is something I'm working on right now, saying no to more things successful dealmaker, man, I think a really good listener is what I've seen to be really effective.
And my managing director from this P group is who I'm thinking about right now. Outstanding listener, super open mind, we're looking for a win in a situation can, how do both of us win? And then just super smart. And he, this guy, he, this guy did deals like with made like billions, right?
And to learn from him was a wonderful experience and just so smart and just knows a bunch of the tools and the processes and these kinds of things. But I don't know that I have a hugest purview on dealmakers, but that's what I've seen,
Corey Kupfer: yeah. Yeah. That's great. It's interesting because yeah, trust me, I had various businesses, including, a firm for decades and I've had the ups and downs of the entrepreneurial journey.[00:22:00]
And, in a lot of ways I do agree that's, maybe the toughest one. But I also find it's funny. Some people are just really natural. I think it depends on the person, but they just don't wrap their heads around like dealmaking, obviously you come out of, you come out of, you come out of that world even before you became an entrepreneur.
So that might seem. But I see so I, I don't know if you're seeing that in your clients as well, if there's anyone who has strong national entrepreneurship but isn't is hesitant in some way or for whatever reason, hasn't taken advantage of the deal opportunities that they might be able to.
Matt Putra: Oh, yeah. I think people know less about deals than they should. Like you just mentioned, I think I'm learning a little bit if I'm honest about MNA and JVs and all these things I don't, I think more people could grow faster, better if they knew they had more of that insight.
I really do. Even me. And now you've got me thinking actually, cause there could be some strategic alliances or JVs that I could do that would be very value add for both parties and clients. So anyway I think that, yeah. In general, if entrepreneurs new deals better [00:23:00] they'd be better off a hundred percent.
Corey Kupfer: Yeah. And listen, frankly, it's one of the reasons I do this podcast, right? It's to provide that content and a different way of thinking. One of the questions I often ask, and I'll just, I'll throw it out because it benefits the audience. And you might find that interesting is and I'm sure you have questions you ask for what you do, I always say, Hey, listen to what what frustration, pain point, et cetera, whatever do you have?
Or, where are you where is this something in your business that you haven't been able, you're not growing as fast as you like, you're trying to get this geographical expansion, but somehow, it's not working. You want to go into a new product line, an ancillary product line or tap into a new industry.
And what happens sometimes is that it's just because they don't, like I said, they don't know the alternatives. They try to do all those things organically, and they're frustrated, right? They try to, whatever, hire a sales team in Birmingham, Alabama, because, that's where they want to, whatever they want to expand to.
But they, they don't know, whatever, and they don't think about, maybe they inquire somebody down there, or do a joint venture, or, a joint marketing deal, or whatever, or they're trying to get into [00:24:00] sell into a new industry, because they got a great product who would like that.
And I always ask them who has access to that industry already? Don't worry how the deal is going to be structured, but who has access? Oh there's so and so company. They're not competitive to us. They do, they sell us on a product, but it's in that direct market. Great. There's a tons of deals, you can do a joint market agreement, you can do a strategic alliance, you can do a joint venture company that you create, that you call on with them, you can acquire them.
They can acquire you, whatever, you can license, maybe it's, yeah I don't expect clients or prospects or business owners to understand the deals but if you ask them the question about what is the frustration or what is the opportunity you're not being able to take advantage of, or what's, what do you really want to accomplish it and have been able to do there's probably a deal for that to at least consider.
Matt Putra: I like that a lot. Yeah. I like that a lot. Yeah. I think most people are it's buy or sell. That's most people's exposure to deals and, even for someone like me that come from a different environment, it's still hard to think, to not think like that. And, but I am, yeah, I'm exploring a couple of things right [00:25:00] now, like a JV but, yeah, but I think I could do it better to be honest.
Corey Kupfer: Listen, there's a whole reason we're doing this. Yeah, that's great. You help your clients do a lot of things better. And this is what we help
people.
Matt Putra: Totally. Yeah, that's awesome. Very cool.
Corey Kupfer: Excellent. So what have you seen, whether it's from your PE experience or from, what you do now which includes helping people prepare and you've done, work with suppliers who sold and bought.
What do you see that, what are some of the things that people make mistakes on that run 'em into trouble in terms of, achieving
those deals?
Matt Putra: . I think honestly a big one is the bookkeeping side of things. I see that all the time. The books aren't in, in great order, or key things are not done well.
I helped someone sell who, um, did all their recurring revenue through Stripe and we're getting to the weeds here, but they did it through Stripe. And so in the bookkeeping, there got net deposits from Stripe. And so that was their net revenue. And the acquirer came by and said, okay prove to me which clients did what and how do they pay?
But you [00:26:00] can't use net deposits from Stripe because they hack off their spread and their fees. And so then you can't reconcile anything. And so that was a major project for me to reconcile revenue from clients to their deposits in Stripe. It took a lot of time and it would have been a deal killer if they didn't have someone that could have done that.
Other people can do it. I did it in this case, but it would have been a deal killer. I think if they couldn't reconcile. But so I would say bookkeeping in general is 1 that needs to be done really well. Another 1 is tax exposure, especially in the States. If you don't know where you're exposed, you can't rep that, you're not exposed.
And so that has been a tough 1 to get through with a few people. What else? I would say, yeah, the over promising issue. So what you highlighted is if you over promise and it's hard to deliver on it, but what I've seen too, is you over promise and diligence takes too long and you're, they begin to see over promise in the [00:27:00] diligence period, which that is a shitty conversation to have with somebody.
Yeah. We had a deal where it was diligence took four months and they eventually, we lost the deal to be honest, but and I shouldn't say we, but the client lost the deal and the client. Projected 1 way, and then we were all fighting about how do we do it? And I was like, look, just, anyway, but as the diligence progressed, they kept going why are your revenues lower than this month?
Why are they now lower this month? So for various reasons, not just that we lost this deal, there was shareholder issues, but, that's 1. Contracts documentation is another. If you don't have employee contracts, if you don't have material supplier contracts again, that's another problem.
IP licensing trademarks is one. Those are some of the biggest ones that have gotten me stuck.
Corey Kupfer: Yeah.
And, the other thing you alluded to the time factor, right? Even in that case where you had to come in and clean up all of the stripe, and um, fortunately, they were able to get you in and get it done.
And it didn't, the deal got done. But, something like that could. Just because, I always talk about, there's a rhythm and there's a flow to deals on both sides. If you [00:28:00] slow it down too much, sometimes it'll kill the deal. Totally. And if you push it forward too, too anxiously, too hard, it can kill the deal.
It's one thing to say, oh, we can hire great people to come in and clean stuff up for us. But first of all if the buyer's already there, right? If you're not doing this pre going out, let's say, you have a backer and you go out on a process and you do it all in advance.
Okay. Maybe that's a big pain and headache to, to get all the cleanup done. And the slow you down, but at least it doesn't kill a deal. Cause you haven't gone to shop yet, if you're doing this, after you have, maybe it's an unsolicited office, so you weren't ready to sell, but it's a good enough offer where you say, Oh, look at this.
And now you're scrambling. First of all, the fact that you have to scramble is going to have the buyer. Have some hesitation, right? They can say I always talk about in due diligence is always there's always the worry of this smoke is the fire, right? So anything that yeah, shaky, they don't know what's behind that.
And then also just time, there's a lot that can happen. The revenues can go down, the market can change, interest rates can go up, right? So time's not on your side. I'm not talking about pushing [00:29:00] it artificially fast, but staying in the flow of the deal. If you have stuff that slows you down.
Any of those issues that Matt brought up, it could really just the delay in getting that act together that can really hurt you on getting the
deal done.
Matt Putra: , and I will say I've seen a couple of things that help a deal and I'm not just trying to toot your horn, but good counsel is incredibly helpful.
I've seen both not great and very good and and both on the broker side as well. So good brokers and good counsel. When you have. Good counsel. They know how to listen. They know how to give people what they want and get you what you want. And they know how to negotiate the tricky clauses instead of picking a fight with someone.
It's more of a, Oh, tell me what you think. And let's co create the way out of this. And I think having a deal maker for a council and one that's good is the best way to go through. And then broker, of course, to the broker that I worked with on this, the one with the stripe issues the broker did a very good job of saying, look, guys, We're talking about X, [00:30:00] let's leave it.
It's fine. We've done it. And he was Todd task is his name. Very good broker that I worked with on that and council site as well. We had a deal that I was involved in. We had a litigator on the other side of the table, and it was a fucking nightmare. Everything was a fight.
Everything was a gotcha. And our counsel on our side was cool, calm, collected, talked him off the ledge a number of times and again, helped us get it done.
Corey Kupfer: Yeah. It's interesting people who are less initiated and deals. I might think that let's say you have a a serial acquirer and they might, you might think they'd prefer if they were less experienced or, counsel on the other side, on the sell side, because, oh, they can take advantage where, if you speak to any consistent buyer, whether it's the business people or whether it's their lawyers, they're going to say they want quality counsel, quality experience, still counsel on the other side of the deal because, they don't mind.
They're not afraid of because, the aggregators who. Especially the ones who do multiple [00:31:00] deals. They know exactly what they're willing to give in the agreement, right? They've got a model on the way they do it. They've got some play in certain clauses. They know they're going to do that if they're not tripping.
If if you came in and asked for ridiculous things, that they just wanted to do a little in the next 1. So they're not worried about good counsel that they just get crazy. I had somebody that was at a conference once and we were talking about it. And it was the CEO, one of the, one of the aggregators in the financial services and the wealth management space.
And he said to me that yeah, we just don't, we used to try to work our way through it. Now we actually look at the background of the council of the seller. And if they are not dealers, we tell them if you don't get a lawyer without, there's no point without doing a deal.
Matt Putra: That
lesson cost me 40 grand. I'll never make it again. My deal could have got done for 2025. I paid 65 to get it done. The guy on the other end he had an issue with representing that we own all the assets we say we own. And he's like, why are we doing that? I'm like, because that's how it works.[00:32:00]
And again, so I learned my lesson paid a lot to get that lesson. But here we are.
Corey Kupfer: Yeah. Yeah. I'm the same way. I always want company counseling on the other side of a deal. Good stuff. What else what are you seeing, whether it's, whether it's in prepping your clients in the way you do, which obviously, impacts deals positively.
Or, an outside factors, economic factors or whatever, just, what do you see it out there? Any trends, any interesting things around entrepreneurial growth and deal, and deal making that you say?
Matt Putra: Oh,
man I don't know that I have enough info to talk about trends to be very frank.
I haven't done a deal for a while. I did a series a couple series days in the beginning of this year. And from my point of view, the trends there is everything's taking longer than it should. And I've done some financings this year and brutally long. I haven't done any sales or exits this year.
But I would say, yeah, if I can lean on, the venture and the financing as a touch point, things are taking way longer. And my suspicion is that. Banks and dealer deal makers are letting things stretch [00:33:00] just a little bit longer to see how things go. I would say that reporting and then the way that they're checking on their reporting, I think is a bit more in detail than it was two years ago.
Corey Kupfer: Yep,
Matt Putra: The big one for me is the length of time to get something done right now.
Corey Kupfer: No, and that's huge. Listen, financing, those, we talk about those deals as well. And obviously not only has cost the capital up, but but there's still money out there, but it's just, I think you're right.
The time it takes, to underwrite the deals, the criteria. Yeah, the level of due diligence
Matt Putra: the explanations alone, like they're going, okay what happened here? I'm like this is what happened. Show us on a spreadsheet, do the waterfall chart. Okay okay, fine.
So yeah that's been tougher this year.
Corey Kupfer: , no, that's a trend we're seeing as well. I think, you have experience in multiple countries. You already talked about one difference between the UK and P expectations on returns and things like that.
Any other country to country differences that are interesting that you can think
of?
Matt Putra: I feel like the Canadian and UK entrepreneurs [00:34:00] is a bit more conservative. The U S from what I can tell there's a lot of aggressive growth planning and movement forward movement.
And that's not a bad thing. I don't think actually, I think in the, in terms of the UK, that one of my frustrations was with that, with someone being very conservative and taking too long to make a decision. But the U S kind of, there's a balance, between them. , other differences are. .
The banking takes a bit longer in the UK from what I've experienced as of late, it's just getting the bankers all on side and singing from the same song sheet is taking a longer time. Other than that, , I think the UK, your boards and investors, you get a bit less leeway. You, yeah, I think they're a bit Tighter, they want to watch everything more other than that.
I, not totally sure. The markets, of course, like paying for customers in the markets is hugely different. It's way more expensive in the US. Typically, for most companies, Canada and the UK are still, you can still do some interesting work with customer acquisition costs and scale a bit quicker.
But of course, the markets smaller. So there is that [00:35:00]
Corey Kupfer: Good stuff. If people want to find out more about your company and your services, , what's the best place for
them to go?
Matt Putra: Yeah, my website is EIGHTX. Co. So EIGHTX. co. And I'm on LinkedIn, Matt Putra, come find me. I'm pretty active on there, commenting, chatting, making tools for people.
So yeah, both of those places are good.
Corey Kupfer: t
My final question on the podcast is always about my highest value in life, , which is freedom. And for me, that means everything from freedom around the world, for all people, from oppression to why I've been an entrepreneur for decades and that bad boss what does freedom mean to you and how does it impact your life and business?
Matt Putra: Oh man, freedom freedom is,, I think knowing that I have a say in what I'm going to do, where I'm going to do it, how I'm going to do it. It's freedom and that's what I do to my kids and vacations and where I spend my money and what I do with my time and where I go and all these things.
I think it's the ability to choose. And for me, this entrepreneurial journey has given me more of that than I have ever had before, both in terms of like [00:36:00] money and everything else. But I can choose to log out early and spend the day with the kids. I can choose to, To do a vacation when I wasn't thinking of it, but, oh, hey, there's an opportunity.
Let's just go. I can choose to. Yeah, I can choose to say no to a client, where if you work for somebody, you can't always say no.
Corey Kupfer: Yeah. I'll tell you that. What about being able to say no is, is pretty tough. Pretty cool.
Matt Putra: Totally, Yeah.
I've said no to audits and tax after I left the PE group.
No more audits and tax for me.
Corey Kupfer: Love it. Love it. Matt, for being such a great guest on the new podcast.
Matt Putra: Thank you. This was awesome.
