Episode 25: 1+1 = 3: A&M meets Harvard meets value creation with brand

Speaker A: Uh, welcome to Beer Stories for Private Equity. Join us for our weekly happy hour, tapping into 27 years of PE experience one pint at a time. This podcast is powered by Monogram Group. Find us@monogramgroup.com this episode is sponsored by Private Equity Professional, PE's news leader since 2007. Stay connected to the latest news, insights and trends in private equity@peprofessional.com welcome to Beer Stories for Private Equity, episode 25. Today, we're delighted to be joined by Elliot Kurland Jr. Managing partner of Broadway Capital in Dallas. If you'd like to be considered as a guest in our lineup, please email us@podcastonogramgroup.com and for Monogram Group, here's your host, Scott Markman.

Speaker B: Please fasten your seatbelts.

Speaker A: So, welcome to Beer Stores for Private Equity. It's a Friday afternoon here in Chicago. It's a beautiful late summer day. Um, the sun is shining, I'm wearing shorts, and I want to introduce everybody listening to Ellie, uh, Kerland, founding partner, uh, of Broadway Capital in Dallas. Welcome to the podcast, Elliot.

Speaker B: Thank you. Thanks for having me. It's a pleasure to be here, and great way to spend a Friday afternoon.

Speaker A: Elliot is in, um, what, North Central Dallas? Is that correct?

Speaker B: Yeah. Yeah, we're. We're kind of seven minutes from downtown,

Speaker A: and they just moved into some gorgeous new offices, so I have to give that a plug as well. We always like to start with some, uh, just personal background stuff because I think that people's individual stories, um, are important. So you were born and raised where.

Speaker B: Born and raised in Fort Worth, Texas. Cowtown, where the west begins. Yeah.

Speaker A: So you just, you hopped I35 and went east, huh?

Speaker B: Well, it was a little less direct than that. I, um, I actually only came to Dallas three, four times growing up. I, um, remember, like, a birthday party. I remember a school trip to see King Tut, you know, at the. At the state fairgrounds, um, and maybe one or two concerts and that. And that was really it. Everything we did revolved around Fort Worth, Texas, which we used to say felt like the, uh, the biggest small town in. In the U.S. you know, I mean,

Speaker A: so I have actually, uh, been to Fort Worth because my son applied to tcu.

Speaker B: Sure.

Speaker A: We went to the, like, the rodeo and, like, that area in that sort of downtown Fort Worth and One street with all the tourist stuff. It was awesome.

Speaker B: Yeah, it's pretty authentic, too. I mean, it's not. It's not just for show. I. I still evangelize for Fort Worth, even though I haven't lived in the city proper for. For a while now, but, uh, it is the home of the first indoor rodeo, I believe. And, you know, even though it was very much, um, a city and we lived inside the city limits, we still raised rabbits and showed them every year at the stock show. Had chicken, had dogs. Someone asked me, you know, y' all don't. Y' all don't get snow or, you know, how cold does it get in Texas? And in North Texas, it can get pretty cold.

Speaker A: Chicago takes a lot of shit for our weather and the winters, it deserves it. And if I never spend on the winter, other winter here for the rest of my life, it's fine by me. But, uh, the range temperature in Dallas, which is probably 114 down to about 32, is, you know, equally as interesting.

Speaker B: Yeah, it's. It's quite the range.

Speaker A: So, um, I did, uh, some homework on you and saw that you went to Texas A and M undergrad, um, then Harvard Business School, you know, uh, graduate. What can you sort of share with our listeners about sort of the compare contrast of those experiences?

Speaker B: So, growing up in Fort Worth, I spent a lot of time at tcu. Uh, my mom went to tcu, my dad went to smu. Uh, and so I was kind of ready to get outside of Fort Worth. I went to A and M when it was a large school, about 45,000 students. I was very excited to go. I, um, just knew I wanted to kind of look outside of Fort Worth, Texas. So when I arrived at A and M, I remember studying in the library, and it's a massive concrete structure, and it was fall, and I was in a study room, and I was looking outside at these leaves that had changed color, and I was like, man, this feels like I'm at an Ivy League school. I bet this is what it's like at Harvard. I remember thinking that, and I was so far off base.

Speaker A: The second half of your commentary, A

Speaker B: and M is a little more of a, uh, you know, kind of concrete jungle. Honestly. We have some beautiful older, uh, buildings, but a lot of them are very recent. So you compare that with Harvard and actually going to the university or the graduate school, the business school, both very, very good academic institutions, research institutions. One similarity would be the school colors. They're fairly close. I don't know if I. Maybe that's all crimson, maroon. You know, I can kind of get by wearing either.

Speaker A: First of all, you're. You're spot on. And second of all, nobody in the history of podcasts ever made that comparison of School colors between Texas A and M and Harvard. But if you're dead, not so on. It's awesome. Brief time out, um, here on, uh, Beer Source for Private Equity. We always crack open a cold one. And because you're talking about undergrad life, I'm going to rip into a Smith Red Ale. So, uh, my son was married this summer. The rehearsal dinner was at the Guinness Brewery in downtown Chicago. And we didn't quite meet our minimums and they required us to take the balance in four packs and I'm talking 80. My wife and I inherited just a bucket of this stuff. You know, all the different Guinness brands, which are terrific. So.

Speaker B: Right.

Speaker A: Um, I'm working through it diligently, but that's why I have a Smithix.

Speaker B: Gotcha. I don't, I don't have a podcast Friday afternoons where I get to crack open beer. So I don't usually have a drink Friday afternoon. But so that you're not drinking alone, I went ahead and poured a, uh, little bourbon and uh, sir, cheers.

Speaker A: Because I'm a bourbon nut of an urban nut,

Speaker B: so the brand doesn't matter as much as is one that I like. But it is in a Harvard Club of New York City cup, which kind of marries two of my favorite parts of being in the Northeast when I was at Harvard Business School and then living in New York City.

Speaker A: Next time you're in Chicago, I'm going to take you to, um, Micro distillery about eight blocks from here called Koval. And they have actually an American single malt that just came out where they have a new line and it is unbelievable.

Speaker B: I can't wait. Yeah.

Speaker A: So why go into business Finance versus anything else?

Speaker B: So I looked at some other career tracks. Actually when I came to A and M, um, my degree plan was to do business in pre med. I was a finance major and I wanted to go to med school. I started out, you know, with organic and physics and biology and a lot of the labs. I worked in a microbiology lab for a year, really went deep on, on the sciences and loved that. But I thought I could get the business degree on the side. And as I got into my upper level classes, A and M M had a lot of programs in for business. They have even more now and so they really leaned into it. It's actually the largest undergraduate college of business in the nation. When I graduated, weighed over 6,000 students just in the College of Business and it's grown from there. The facilities are even better now. But as I was getting in my junior year and a lot of my friends and fellows were going to work for accounting firms and getting paid and, you know, having great internships. I was thinking about the MCAT and what I could do to prepare. So I was shadowing doctors. And I worked for an HMO in the business office next to a hospital, the hospital where I was born in Fort Worth. I was doing data entry, very basic stuff. But a lot of the folks on the HMO floor in management were doctors, they were MDs. And I was kind of thinking to myself, why are all these doctors not practicing medicine? So, uh, I wanted to know more about what an MBA was. Thought maybe I could do an analyst type program for a couple years. And as I learned more and more about business coming out of the sciences, I realized smart people are doing this. A, uh, good economy and jobs that provide dignity and income for people is a huge benefit to society. It's necessary for society to flourish. That's how I ended up kind of looking into investment banking. Really wanting to go deep on the finance side of things. And if I was going to do that, why not go to New York?

Speaker A: Makes perfect sense. Ah, by the way, a quick kind of parallel. So I went to Washington, St. Louis. Um, we had an undergraduate business program. I was able to take a year of marketing. Yeah, and I work right away. And even what I do today, um, it comes into play. I just understand marketing for, like, from a client's perspective, um, you know, for, for 40 years.

Speaker B: Pretty cool.

Speaker A: So, um, I want to jump a little bit, um, into your, you know, your tenure at Inside Equity. Um, one thing I noticed when I sort of did my homework was that you were there for a long time. So what was the growth trajectory and sort of the role and responsibility that you kind of grew into there over time?

Speaker B: I joined in 2005. What really attracted me there was the operational approach to private equity. And 20 ago that was still relatively unique, that was still relatively rare. You could make a lot of money with financial engineering. Um, you had some specialist firms that really focused on particular industries, but you didn't have a lot of operational approach. There weren't a lot of operating partners regular. So our approach was really built off of the Bain Co. Toolkit. And using that in the lower middle market, um, we would invest in companies where we then went on site to help deliver value creation initiatives, work with management to analyze their business, create actionable tactics from that analysis and implement it. So that was what attracted me to the firm and that's really what I loved. And so, uh, it was investing sourcing investments, developing themes, structuring, closing, diligencing investments, and then working on site, sometimes for quite a while as we work, worked with companies, trying to help them achieve transformational upside.

Speaker A: So I noticed another thing on your, uh, your LinkedIn, uh, bio that you referenced from your day's Insight, and I'm quoting this. US, Canada, Mexico, Australia, Sweden, Belgium, Norway and China. Now 98.6% of private equity doesn't go beyond North America. So what does that refer to and why did, why did the firm do that?

Speaker B: It's actually a great, uh, uh, it's a great question because our focus was very different than that. Our focus was North American based companies. But as we grew a company, if there was a great opportunity overseas, then we would pursue that and add that on as well. And so with multiple of our investments, for different reasons, we ended up, yes, growing into Mexico, um, did a couple acquisitions in Australia actually, which were product acquisitions, but really it was to get the product into the US market and really use our existing platform for production and distribution to our existing customer relationships. Um, same thing with Sweden, Belgium, Norway. Uh, we acquired a couple of companies there. And then in China, uh, I haven't acquired things, but I've done business there. We, we set up a sourcing and engineering office in Shanghai. Um, we set up a wire harness manufacturing facility in wuhu and over time that equalized with Mexico. And so we found ourselves as we were doing acquisitions for Greenfields, looking more and more at Mexico as well.

Speaker A: We, the agency and I spent nine years doing business in China, so I've been there nine times.

Speaker B: It's a long flight, but it's a great place to visit.

Speaker A: Is there a deal in your tenure at Insight that you can say this was my favorite deal and reasons beyond returns, something that you kind of go, boy, I just remember that so fondly.

Speaker B: There are multiple investments that I remember very fondly. The common themes are the management team we worked with. And it's not just that they're really good at what they do, is that we genuinely like people. I genuinely like people. I want to build relationships with them. And I believe if, if we're pulling in the same direction and there's a high degree of trust, then we can accomplish really great things, wonderful things over years. And that's what we did. It's very rewarding to see the products of the companies you invest in out in the world. We supported one company and the engineering team in completely redesigning their product during the gfc and it turned out to be a revolutionary product so working with companies to do the right thing, to build their businesses is, is highly. I mean, all of them were rewarding, but it was the people, the products, and execute on the plan to grow, grow platforms.

Speaker A: So at some point, you know, you kind of decide to, um, you know, come to the dark side of entrepreneurship and create your own firm. So what was the catalyst for that?

Speaker B: Well, it wasn't something I'd done before, so it was definitely new territory. A lot of lessons to learn. To be honest, I've loved it. Um, I don't know that I would call myself an entrepreneur, but I've enjoyed the entrepreneurial process of starting a firm. And really, Broadwing is an idea that we can bring broad resources to companies in the lower middle market who haven't been able to enjoy those before. And we talk about Broadwing hawks. Broadwing hawks go high, far, fast. They're one of the few hawks in falcon families that actually travel together when they traverse very long distances. And so we like this idea of helping companies spread their wings, broaden their wingspan so we can go higher, further, faster together. And that's the aspirational vision for us as a team. And one of the ways we do that is with deep operational resources. So this operational approach that has been key to my investing over the last two decades plus and my partner at Insight, Andrew Boiseau, who started Broadway with me, key to his investing philosophy has been operational support. But we found that we can be broader as a team. We can offer broader resources with a bench of executives and operators that in many cases we've worked with before, who can help implement, who can sit beside management, can say, I've been in your shoes before. I'm, um, here as a resource. And so for Broadwing, it's all about resources in the lower middle market. For companies that have platform potential but haven't had that opportunity, haven't taken that entrepreneurial risk or step before. They've been doing what they do really well for years, but now they can expand in a new way and they're looking for a partner to help them do that.

Speaker A: So, um, I want to expand on that a little bit and sort of skew it into the work we've done together. And in the interest of full disclosure to our audience, Monogram Group is working on three different platforms. Uh, brand sales and marketing work with Broad Wing's, uh, different platforms. One of the things that has been so rewarding, and by the way, I have to say this, the team that we work with at Broadwing, the operating partners for us as relationships are as enjoyable as we have, I appreciate that. Humane, smart. The quality of our interaction with your leadership team and the operating partners and all of it have just been outstanding. One in particular that, uh, I think about is, uh, a platform called Upchurch, and it's a mechanical services play. And it's expanding in variety of dimensions of what private equity does to grow and expand, geography, range of services, value proposition, and all of that. And so what can you share with our audience about the role of brand and how a company goes to market from what it was, which was an exceptional family business, into a whole other version of itself as acquisitions are made and geographies are expanded into and services are added, and all of it has revolutionized how the company sort of presents itself and grows and scales and into a variety of directions.

Speaker B: Yeah, you know, that was a critical consideration for us and for the sellers and frankly was probably a reason, I think they would say, why they chose Broadwing over other folks that they could have partnered with Upchurch. That word, that name stands for something, a promise of quality service delivery, expertise. It's also the last name of the founder. And when his four children were looking at bringing on a partner, it was important to them to protect that name, to continue that legacy. And as we thought about how do we refresh that brand identity without harming it, without changing it, and yet trying to communicate more of the excitement, more of the expansionary vision of the current company, we had a big job ahead of us to balance that, and frankly, working with Monogram, uh, allowed us to think through a lot of those considerations and try and capture that as a story. We also wanted to explain to the market, this is a good thing for you if you're a customer, if you're a supplier, if you're a potential employee, if you're one of our stakeholders in the business, things are going to continue to build on the strength we already have as a company because of new investment, new ideas, additional team members that can support growth.

Speaker A: So. So one of the interesting angles to our, uh, work together is that a. We're building on strength. The reputation and relationships that this company had were exceptional. And the talent that was being brought in to take it to a whole other level was exceptional. But there was an opportunity to reimagine the entire. What does the company do for customers at certain facilities and take it to a whole other level as companies. Companies were added to the platform and the range of service was as expanded. Well, by its very nature, that necessitated reimagining the brand and I don't mean just websites, I mean just who are you? What are you going to do for me? What, what, what value can you add? How will we work together over time and how will be applied at individual buildings or campuses or whatever the case.

Speaker B: Right.

Speaker A: Um, and so we had the opportunity to work with leadership and the operating partners to really roll up our sleeves and get into this in the weeds and then see it go to market. And as again, new companies have been added to the platform, there's been an aspect of planned integration, believe it's gone pretty smoothly and helped your leadership team on that platform kind of find companies, do deals, fold them in and keep on going. And that brand is a strong tip of the spear.

Speaker B: It is, uh, it is. And it's unifying, right? It's unifying. It sends a message to new employees that you're part of a team, you're part of a legacy, you're part of one team. Um, and the reason we make add on investments is very strategic. Right. There's a strategic reason why we're pursuing each of these. So we're not just what I call building a zoom. Right. This isn't just a collection of, you know, different businesses, different animals and all the chaos that ensues at a zoo. And you put it together and you're like, uh, ah, I've got a big company now. We're not doing that. We're thinking about how do we stay true to our core and expand in, in a way that strengthens both the add on acquisitions and the rest of the company. And as we realized the company, what the company does is not just mep, we address a whole suite of needs in building management. And so thinking about what does that look like in a logo, what does that look like as we tell our story, what does that look like as a strategy? When we grow, it actually becomes a very integrated approach to branding. Branding is just a reflection of our strategy if we're doing it right.

Speaker A: Spot, Elliot, spot on. We talk about this all the time. Um, it's a clarifying and organizing, uh, way to present any company to a variety of audiences over time and stay on point. And it's not just us, ah, closing a sales pitch and closing deals. It's the everything. Oftentimes it's whacking together disparate entities that have, ah, different cultures and different histories and maybe different services and products into a coherent something. One of the exciting things for us is that brand has become one of the go to things to think about in the value creation model. And the journey so that when you exit, it's for the highest amount of multiples because somebody's going to put a price on what you built or what you've created. That wasn't the case six, seven, eight years ago. It was still the world of financial engineering and other things that were driving the bus and not anymore. You know, brand what we do as a seat at the table for a whole lot of folks in the lower metal market.

Speaker B: Yeah, Yeah, I would imagine.

Speaker A: All right, we're going to wrap up here. Um, we always like to end with personal stuff. So you, you've alluded to your kids and so just anything you can share with our listeners about family, favorite places to travel, things like that.

Speaker B: I have four kiddos been, been married to, uh, to the same Aggie, now that, that I met in, uh, undergrad. Took her, took her from a small Texas town where she grew up and then A and M took her to New York City. And honestly, we love the Northeast. We were up there seven years. Uh, we spent, I think nine summers in a row doing road trips to Colorado to a family camp there. Uh, so we love the mountains. Uh, we'd go there in the summer, you know, know, try, try and teach the kids to ski a little bit. And I like to say my wife's love language is the beach. So if there's sand somewhere in sun, she tans. I don't, uh, we'll go there as well. And I just, I wear a sun hoodie and take a lot of sunscreen

Speaker A: if it makes you feel any better.

Speaker B: Better?

Speaker A: My wife and two kids are redheads and so trust me, I get it. Yeah, I'm not. And so I don't worry about it. I want to ask a question. This was again off of your LinkedIn. It's fascinating. I'll read this to our listeners. Member, um, board of directors, entrepreneurship school, instructor, business plan coach and judge, prison entrepreneurship program that is exceptional and interesting. And in one minute. What can you tell listeners about that?

Speaker B: So the premise is simple. We go into a facility, have an application process with the idea that if you are going to be released from prison, we can help train you in business and life skills in preparation of that. A lot of them are natural entrepreneurs. They have a dream, they have things they would like to do. Um, and so channel that into a business plan. Um, engage with business people who can help provide feedback on the business plan, teach some interview skills, and then they actually graduate from the program if they stay with it for the full five months or six months. Family can attend. For a lot of them, it's the first time they've ever walked the stage in a cap and gown, and so it's a really meaningful life event for them. But then there's a ton of post release support as well. And it's, it's highly rewarding to see lives being changed and people being so grateful for that investment in them.

Speaker A: I have to end on this question. Again, thank you so much for your time and your thoughts today. I need to know A and M's Nil budget and are they getting the internal rate of return on that investment?

Speaker B: Two very different questions. Um, A and M's Nil budget is one of the big ones. I don't know where that even ranks these days. Uh, it's a very different game. It's a very different job. Being a head coach with NIL and the transfer portal. Right between that, we've kind of created, I feel like, professional sports leagues now.

Speaker A: Where are they ranked these days?

Speaker B: We're top 10.

Speaker A: All right, well, if, if you can score me tickets to A and M Texas, I'll be there.

Speaker B: Just saying, if, uh, if we can keep up a good streak here, I guess we'll get a return on it, but I don't know, it's tough to get a return on your Nil dollars, I guess, for everyone.

Speaker A: Well, Washy, we didn't worry about this stuff.

Speaker B: Yeah.

Speaker A: Anyway, Ellie, this was a pleasure. Thank you so much, uh, for your time and enjoying a cold beverage, um, on a Friday afternoon.

Speaker B: Absolutely. Thanks for having me. Good to see you.

Speaker A: Cheers from all of us at Monogram Group. Thanks for tuning in to beer stories for Private Equity, episode 25. This episode is sponsored by Private Equity Professional, PE's news leader since 2007. Stay connected to the latest news, insights and trends in private equity@ah, peprofessional.com. don't forget to hit the subscribe subscribe button and you'll be notified as we release new episodes. Please check out the show notes in the description from today's episode. Our email is podcast at monogramgroup. Com. Feel free to email us with any comments or questions and we'll try to answer them in our next episode.