Jeffrey Gold is President of Goldmark Advisers, Inc., the boutique investment banking firm he founded in 1985. In early 2017, Goldmark became an affiliated company of Young America Capital LLC, where Jeffrey is continuing to practice his successful consultative approach to mergers and acquisitions, as well as assisting mid-sized companies and promising new ventures in capital formation.
Jeffrey’s M&A and funding expertise – reflected in his track record of nearly 100 transactions – focuses primarily on publishing, media, food, beverage and health care businesses. Simultaneous with his leadership of Goldmark Advisers, Jeffrey served for 20 years, through 2012, as Chairman of the U.S. subsidiary of The Quarto Group, Inc., a publicly held international illustrated book-publishing company, helping the London-based company to grow through several significant acquisitions.
Before establishing the Goldmark firm, Jeffrey was Executive Vice President & Chief Financial Officer of Esquire, Inc., a NYSE-listed publishing, technology and communications company. In that role, he also served as the company’s principal negotiator when it was sold to Paramount Communications. After the acquisition, he was named Executive Vice President in charge of corporate development & strategic planning for its Simon & Schuster Division. While at Paramount, Jeffrey initiated the contact that led to the acquisition of Prentice-Hall, the well-regarded textbook and professional publishing company. Earlier in his career,
Jeffrey was Vice President and Corporate Controller of National Patent Development Corporation (now known as Wright Investors’ Service Holdings), which, among other activities, pioneered the development of the soft contact lenses. He began his career at Main Hurdman, which is now part of KPMG, the Big Four accounting and professional services firm. A graduate of Pace University with a degree in business administration, Jeffrey has guest-lectured on corporate and financial subjects at the Columbia University Graduate School of Business, and served on the Board of Directors of Lighthouse International.
He holds Series 79 and Series 63 licenses.
Listen to this episode as Seth and Jeff discuss:
Identifying the ideal client.
Some of the biggest mistakes middle market firms are making when it comes to thinking about their acquisition and exit strategies.
How the landscape of the industry change since the COVID pandemic.
Joel S. Isaacson, Founder and Chairman Joel Isaacson & Co
Founder and Chairman, Joel Isaacson, is considered by many to be a leader in the industry, helping clients and their families achieve their goals and sharing his knowledge with colleagues and the next generation of industry leaders. As a teacher as well as a practitioner,
Joel is active in many industry organizations, having served on numerous boards and speaking on topics to share his insights, including: the New York Chapter of the International Association for Financial Planning, now FPA; Chairman of the Personal Financial Planning Committee of the New York State Society of Certified Public Accountants; the American Institute of Certified Public Accountants and the Estate Planning Council. He has taught financial and tax planning at New York University, The New School in New York City, and Iona College.
He holds a BS in accounting from Lehigh University and a MBA in financial planning from Golden Gate University in San Francisco, where he was recently honored as their ‘man of the year’.
Frequently named one of America’s Top Financial Advisors by Worth magazine, Joel is often quoted in financial publications such as the Wall Street Journal, New York Times, Business Week and Fortune, as well as on radio and television.
Listen to this episode as Seth and Joel discuss:
The key factors that lead to the unprecedented growth of Joel’s firm.
Getting recognitions and accolades in press.
Post Covid challenges in the financial advisor industry.
Team Building and getting the most out of your staff.
The most common challenges that the industry faces now.
Seth Greene: 1:14 Let’s go back in time, how did you get started in the business?
Joel Isaacson 1:32 Wow, it was a different kind of a business back then. But I was I was working in San Francisco for an accounting firm. And one day I looked in the paper and there was a MBA in financial planning at a school in San Francisco Golden Gate University. At the time, it was the only one in the country offering financial planning as a degree. Back then I think the CFP, you could take, I don’t even think you had to take an exam. I don’t I think it was sort of like, you know, pretty straightforward. So I wanted to get the education. And I left my job with a big eight accounting firm, went through the grad school, and then came back to New York and, you know, took a job as an entry level position there.
Seth Greene 2:14 And then I’m sure the longer version is in some of those articles or the books, but then how did you get from there to where you are now.
Joel Isaacson 2:22 So when I came back to New York, I worked for so and I took a 50% salary cut, you know, because again, it was an entry level position. And you know, and I probably learned more in that year of what not to do, it was someone who was one of these people that charges a lot for the plan, and then didn’t have the ongoing revenues to you know, keep it going. And these were the days, it’s a little embarrassed to say we used to do plans by modem used to cost us 1500 hours each plan to do by modem to get them done. And so I started with this person. And while I was there, I got recruited. My background was accounting firms, I got recruited by one of the top accounting firms in New York to start their practice. And I believe we were the first one to register as an investment advisor was in 1985. And, and that was great, it was really good chance to, you know, kind of use the NBA use the opportunity to start a practice and I was only 26 at the time.
Seth Greene 3:24 And then how did you get from there to the you know, I mean, you’re a leader in the industry, how did that transition? How did that growth curve happen?
Joel Isaacson 3:35 Again, yeah, so you know, when, again, it was a, it was a great chance, because you know, as well as things where I started bringing in clients, but you know, when you’re an accounting firm, one of the things you you know, you always get promised by all your partners is they’re gonna keep bringing you clients and bringing your clients. One thing I really learned and I also started teaching back then I started teaching the CFP. But one thing I learned was don’t depend on your partners for business. So I started, you know, being able to bring in business. And then at the accounting firm, where they made me a partner after 10 years, I also saw how much the managing partners were making. And I said, there’s something wrong here. So I went out on a we went on my own with two of the people from the firm, you know, as partners, we started, and it started with three people and it just built up, you know, slowly by surely by always, you know, putting the client first. You know, we would never on the sales side, you know, always the planning side. And, you know, again, just a lot of hard work client by client building up, you know, to the point where now we have I think over $6 billion in assets under management.
Seth Greene 4:38 That is absolutely incredible. How have What do you think, have been some of the biggest factors responsible for such amazing growth?
Joel Isaacson 4:47 Yeah, I mean, I think, you know, again, also is like sort of was, to a certain extent, some of it being early, you know, back then I think it and I’m not sure I would say we’re a full profession yet. You know, I think that we still have to do more at the college. levels to get education into the schools for financial planning. But I think it was being early, I think it was also having a CPA and, you know, experience back then. And I also got involved with, you know, with teaching at schools, I got involved with the FPA back then it was called the ISP, I was present in the New York chapter. So it’s constantly hustling and networking, we didn’t do any marketing. But it was just really an opportunity to, you know, develop clients in New York, you know, and again, it was really one at a time, a couple things where we got into when I was teaching, I got introduced to some people that worked in the Benefits Office at IBM. So we got an opportunity to, you know, go off to some corporate programs, and some of my students did there. And through contact, we also got involved with equitable life insurance, which at one point, we probably had 20 executives from there, and they used to have a financial planning program. So you know, those type of relationships, and that’s really what it was, it was all relationships or referrals from, you know, people we met in the business, and they looked at us as a firm that was, again, fee only, you know, high quality. And, and I think also having the tax practice gave us a, you know, an edge also in being able to kind of be more of the one stop shop for individuals.
Seth Greene 6:18 That makes a lot of sense, how you’ve garnered a lot of press accolades over the years, how have you been able to get that recognition?
Joel Isaacson 6:28 Yeah, you know, again, nowadays is a lot tougher. But in the beginning, you know, part of one of the people got involved with was involved with the New York Times. And so back in the 80s, you know, and, and the journal, you know, we knew some of the people there also, but it was really just, you know, a lot of networking opportunities. So one that the times took a, you know, liking to me, and he used to write a column every Saturday on your money. And back, then it meant a lot to be in the press. Now, there’s so much press, and so much out there, PR wise was there. But if you got involved with the times, and you got that kind of prospect, then it became a good catalyst to other press and different things. And then I think, you know, again, a lot of the organizations were involved with with the right ones, you know, we were early, involved with nappo, with the FPA. And, you know, and again, it’s, you know, is always one of those things like we weren’t in this for the short run, we weren’t looking to make a big hit, we were in this for the long run. And we always felt if we took care of clients, that the rest would come there. And that’s also I think, part of the way is every time we got involved, like, we also didn’t find fire, the brokers we didn’t, you know, bring in new lawyers, we got to know the lawyers, we got to know the brokers. And some of those people that we met through clients actually became great referral sources to us over time.
Seth Greene 7:45 How has the COVID pandemic affected your clients in your business?
Joel Isaacson 7:52 So I think, you know, it’s, well, I think it’s changed our business fundamentally, as to how we deliver it, I think, you know, for a lot of our clients, you know, the zoom feature is something that I think they like, so, you know, that’s there, we also have a lot of young staff that are having babies. So we had been trying to, before the pandemic, figure out how to do remote work, and for people to be accountable for it and different things. And obviously, we get thrown into the fire with that. So it’s worked out? Well. Our business has been okay, you know, is, I mean, as the, you know, I would say the third big, black swan event in the last 20 years, it’s, I think it was more taxing this time, you know, from some of the other ones. And, you know, especially around New York last March and April, the kind of that dread and the you know, that it felt like the black cloud over the city in the whole country and different things, was a tough one. So I think we’ve, you know, we’re more valuable to our clients in tough markets than we are in a good market. 2019. You know, the market did amazing clients were happy, you know, no big deal. I think getting through clients through the tough times, these black swan events are, are the key for what we do, and to have had a build lasting relationship. And probably, I would say, this pandemic, for some reason, because I think, you know, it just hit people so close to home net, probably more people panicked a little bit this time than in the past. and stuff, but, you know, businesses, again, is we grow our top line, probably seven to 10% a year. So last year was a little bit different in, you know, the new business part, you know, we still, we still grew nicely, but I would say, you know, not necessarily referrals, but new business slowed down a little bit only from a standpoint of, you know, all the lunches that you have, and seeing people that I think, are a good catalyst from that stuff, but we’re starting to see it pick up again, and I think, you know, for our clients, a lot of it became is figuring out life, you know, do they stay in the city, do they, you know, they move the Hamptons, I’ve always spent a lot of time we deal with tax issues in New York and everybody thinks it’s easy to get out of New York. taxes because they’re living in Connecticut for a year or, you know, upstate New York or things like that. So, you know, sometimes we have to be the bearer of bad news on certain situations, but our clients been amazing, you know, they, they are our greatest resource. And, you know, I would say, you know, again, we got them all through good, I don’t think at the, you know, the middle of the pandemic, you know, back last March, April, I don’t think anyone would have felt that it would finish the year up like they did, it was a, you know, crazy year overall,
Seth Greene 10:31 absolutely, who’s an ideal client for your firm?
Joel Isaacson 10:36 You know, we, you know, it’s a, you know, for us somewhere, just someone that really could use kind of that one stop shop of, you know, having, you know, things all in one place, so, from corporate executives, to doctors, to lawyers, to anyone in the five to 25 million ranges, that kind of our bread and butter, and then probably 20% of our clients are in the 25 and up category. So, again, it’s, you know, for us, we also try and do sets a little different is, you know, fair fees for clients. So in that in a you m shop, generally, you know, so we try and do fair fee. So wherever we can add value for the money, that’s the most important thing, because, you know, what we find is with that kind of relationship where it’s more retainer based, that, you know, clients look at your as their advocate, and and, and that is an adversary, which I think sometimes with the IOM, you know, you’re always trying to take assets away from someone else with us, we don’t care what the assets are, as long as it’s the right thing for clients and the people that are handling money and doing the right thing. And again, you know, it’s, it’s, it’s nice sometimes to have co pilots on things,
Seth Greene 11:44 you’ve achieved so much success over the decades, what’s your biggest challenge now?
Joel Isaacson 11:50 Um, you know, I think part of this, Seth is, you know, and for some of those on the back nine, I think, you know, it’s, you know, like, right now, we are transitioning, like, I turned over a CEO role last year to one of my younger partners, because I think it was necessary on some of the technology and different things. And for me, to kind of get back into the, you know, into the area of just, you know, dealing with clients and mentoring staff and things like that, I think the biggest challenge going forward for the industry is finding good professionals, you know, people that, you know, want to make this into a profession want to have a career with this thing, and go forward. And then I think, you know, what we saw also is like, I don’t know, probably in the last few months, just the whole Bitcoin, you know, Reddit rally, you know, just dealing with clients who all sudden their kids are geniuses, you know, that a buying GameStop and different things. And everybody all sudden became a risk taker, you know, with the, you know, the Tesla’s of the world and all the, you know, all the crypto currency and everything like that. So, you know, it’s really, I think the challenging point now is just to really for clients to understand fundamentals, and that valuations matter, and investment fundamentals will be a sense, to me, part of it is, you know, whether, you know, on the investment side, you know, things change radically and every time you think that they do they kind of tend to you know, revert back to the old ways of doing things.
Seth Greene 13:14 Your Passion is obvious, what do you like best about what you do?
Joel Isaacson 13:19 You know, it’s, it’s, it’s an interesting one, because you kind of think about stuff in life and say, like, did you do you make a difference on things? You know, I’ve been doing this for 40 years. And, you know, you, you know, you see all these people that are doing things in the military or in science, you know, Dr. Fauci and everyone fighting this virus, and you say, you know, are we just making rich people richer? But, you know, I think part of that I would say, Seth, is our relationship with our clients is that type is like, you know, like, I’m in the middle one of my clients died three weeks ago, where I’m the trustee, I’m the executor and now dealing with her, you know, her nieces and sister in law in different things. And it’s that kind of trust that people have in us in the relationships we have that are there. I mean, sometimes it’s, you know, it’s above and beyond certain things, like, you know, just dealing with having to watch someone, you know, slowly die is not an easy thing. But, you know, the intimacy of our relationship is is hard to, it’s hard to be, you know, it’s just that and I think that part of being, like being the client advocate and being on that side, I think, is the part that really is the driving force. And I you know, I think the pandemic for me set it up so that I look at this and say like, my dad retired, never really retired. He, he liked working, I mean, his clients started retiring, and dying off and different things, but I really like working with people and helping them and and i think that part of, you know, just seeing, you know, the family relationship and kind of working with people to get them like, again, another one my favorite clients was from publicity. In the 80s we were in the Daily News and someone that probably never made $60,000 or more than 60,000 our life she was a secretary of the firm and I don’t know I helped her with a, you know, project last week, she got very emotional about and stuff. But you know, someone that was just, you know, save scraps and you know, little bit in the 401k. And she’s, you know, she’s probably worth three or $4 million. Now, I’m not sure we would have taken her on as a client, like we did in the 80s. Now you know, where we started with it, but to see where she is, and be able to tell us go buy a car, don’t worry about it, you know, you don’t have to worry about money and different things and to see, you know, how smoothly we made her life has been very rewarding overall,
Seth Greene 15:30 that’s beautiful. You’ve also built an incredible team, how do you get everyone doing what they’re supposed to do at the right time? in the right way? How do you how do you develop yourself as a leader, because I know, you are always improving, you’re kind of committed to learning and committed to growing talk a little bit about that aspect of the business. You know, I
Joel Isaacson 15:54 and thank you for all the nice things you’re saying. So that’s, I think the part of, you know, for, you know, IT staff is, I think, for staff, a lot of it is that, you know, the on the job training, you know, that there’s not a lot of the people that came to us that necessarily thought of financial planning as career but through friends or, you know, relationships, they still work for us. And then I think the way they saw us treat clients and their relationships for clients was, I think that, you know, that’s our, that’s our greater resources, those relationships with clients. So it was always you know, was it you know, like, you see in some of the boiler room stuff, you know, where they treat him, like, you know, this is just way to get money and take money from people. In ours, it’s really the respect, that’s client in that part. And now, you know, I see the next generation is the relationship, our staff is having babies, and the clients are sending them gifts, and, you know, it’s like, it’s just a nice family relationship there. So I always treated you know, I think staff to learn, brought them into client relationships, I’ve had some people like, you know, within the first six months to sitting in meetings, and it’s just a, I think, a chance, and then, you know, they see these very high level executives and doctors and, you know, hospital, people that are running companies, and they, they see their reliance on us, and it’s a it’s a very heady thing, and it’s, it’s intoxicating, to, you know, to work with people and for them to listen. And, and again, we also learn from clients, I’ve, I had my anniversary, I actually thank my clients, because, you know, over time, I just seen their ethics and, and the treatment and the way they handle things in business, and they’ve inspired me.
Seth Greene 17:35 What else do you want to share that we didn’t think to ask you?
Joel Isaacson 17:39 Um, I would just say, you know, again, from a standpoint of the field, I do think that, you know, aspects of the field that there’s still more to be done with the schools, I don’t think the professional organizations necessarily do as much with the schools, but I do feel like with accounting, you know, the big thing will be is more and more of the undergraduate programs, and then, you know, kind of the job placement. So I think they try, like, again, there’s programs here, but it’s always kind of like dependent on who’s running the program and who they have relationships with. But I do feel like for the field, that is more and more that at the undergraduate level be helpful. And I think for people in school, you know, if they saw it that way, I think it kind of goes in a cycle to take it to that next level is profession. To me, the CFP is nice, but I don’t I don’t consider passing exam as really the thing that’s there. I think people need to learn more. And I’ve taught, and I remember when I used to teach, and I’d get off the curriculum a little bit, try and give practical knowledge. People didn’t really want to learn that way. They just really wanted to pass the test.
Joel Magerman brings Insight Into Cannabis Investing.
Joel Magerman of Emerald Park capital is a successful investor, principal and investment banker with over 30 years of experience. During the course of his career, he has been involved in closing over 150 deals representing a total transaction value in excess of $6 billion. Listen to this episode as Seth and Joel discuss: Why the cannabis industry has been neglected and underserved by capital providers. Why this may be the new ground floor of cannabis. The vetting process and due diligence in providing finance to the cannabis industry. Identifying bad risk in the cannabis industry. The most common challenges that these cannabis companies are facing other than access to debt … and much more.
Joel Magerman is a successful investor, principal, and investment banker with over 30 years of experience. During the course of his career, he has been involved in closing over 150 deals, representing a total transaction value in excess of $6 billion.
For almost 20 years, Joel has been the CEO of Bryant Park Capital, where he has led clients and deal teams through complex financing and M&A processes, across both traditional and highly regulated industries. From 1995 until 2001 Joel was the President of Associated Venture Management where he oversaw a family office that invested and raised approximately $250 million of transactions for its portfolio companies. Portfolio investments included investments in the specialty finance, software, technology and healthcare services sectors. From 1991 to 1995 Joel was the Senior Vice President for FCA International, LTD (FCA:TSX), where he headed corporate development, M&A, and US sales, marketing and customer service. In that capacity he founded and was President of Structured Financial Capital, the second largest purchaser of structured settlements issued by the state of NJ. He also was a founder & operating partner with Reliant Partners, a firm that purchased over $1.5 billion of non-performing assets from the Resolution Trust Corporation.
Prior to FCA, Joel was one of the founders and board members of Odyssey Golf, the number one putter company in the world that was later sold to Callaway Golf. Earlier in his career, Joel was the Director of Finance and Technology for Citicorp Diners Club. Joel has his MS from the University of Pennsylvania and his BA from UCLA. He serves on the boards of ValueHealth LLC and Maccabi USA Sports for Israel, and has previously served on the boards of other for profit and not for profit organizations.
Transcript:
Seth Greene 0:00 Welcome to the podcast. This is your co host, Seth Green’s had the good fortune to be doing interviewing Joel Megaman of Emerald Park capital. He is a successful investor, principal and investment banker with over 30 years of experience. During the course of his career, he has been involved in closing approximately 150 deals representing a total transaction value in excess of $6 billion. Joel, thanks so much for joining us. Thanks for having me, Seth. So let’s go back in time a little bit, howdid you get started?
Joel Magerman 0:33 So long ago, I started working in on the business side of new business opportunities in the early 80s. And sort of saw how interesting it was in new business formation and sort of follow that path. circuitous route that followed it over the next, you know, few decades.
Seth Greene 0:53 I’m sure the longer version of that story could probably fill a book somewhere, if it hasn’t already. Tell us a little Europe, just some really interesting things. Tell us a little bit about Emerald Park.
Joel Magerman 1:04 Yeah, Emerald Park is a provider of capital predominantly debt, but also can provide equity as well in the cannabis sector. And it was very interesting does because it’s a sector that has been growing exponentially compound annual growth rate of 25 to 30%, over a 10 year period, but was significantly underserved in its access to capital. And we thought that created a unique opportunity for us to to raise a fund and actually be one of those capital providers.
Seth Greene 1:37 So why do you think for our folks who may not be aware Why do you think the cannabis industry has been neglected and underserved in this department?
Joel Magerman 1:47 Well, I think I think there are a number of reasons. Number one, there’s there was initially federal legislation that made people uncomfortable providing capital in the space, a number of things have happened over the last five to seven years, including 42, states that now consider it legal. And a number of things that have happened under under federal guidelines that provide greater comfort, but there’s some ambiguity in that. And that ambiguity has caused a number of companies and firms to be uncomfortable providing capital, they’re still, even though a increasing number of folks have continued to get comfortable and more and more capital is coming into the sector.
Seth Greene 2:32 And it’s not just debt. Right. It’s also that historically, there have been issues getting, you know, merchant processing, credit card processing bank accounts. Yeah, literally everything. Why do you think you’ve been quoted? Why do you think this is the new new ground floor of cannabis? Well, I mean, we’re, look, we’re
Joel Magerman 2:51 in the very early stages right there. There’s, if you sort of think of the evolution and think about alcohol that, you know, right after prohibition, by example, right, we’re in the early stages, because right now, there are states that it’s still legal, there are states where it’s legal, but only for medicinal purposes. And their states where it’s legal for medicinal and adult use recreational use. And so we’re still a long ways away from, you know, it being approved at a federal level, where can be used in every, every state across the union, based on each one of the state’s laws and the Fed, approving it. And so we’re, you know, we’re probably, you know, some number of years away from, you know, that happening, and then people need to get comfortable with the usage of it, like, like anything else, you know, when you have something that is, you know, initially, for example, approved for cancer patients, or there’s a number of drugs where cannabis is approved, it’s people still don’t necessarily understand it, and nor do you know, state and federal government. And so once everybody gets comfortable, I think there’ll be a continual growth in that.
Seth Greene 4:04 Absolutely. Now, you chose to predominantly focus on the loan, the debt part of the sector, why did you go in that direction, as opposed to you know, equity?
Joel Magerman 4:16 Again, I think it was of the, there are two reasons really, number one, I think it was more underserved. There was less access to capital on the debt side than the equity side. Um, number two, I think that our bias, our personal bias, and we have a lot of money in the fund is that we sort of liked the risk reward arbitrage on the debt side. You know, if you financed a non cannabis business that looks call it small to middle market between depending on what you’re financing, let’s say you’re financing real estate, you might get a 5% loan, and if you’re doing Junior debt, you may pay 15 percent in the cannabis sector to take that same economic risk, you’re probably getting three to five times your potential returns. And so we thought that was a great risk adjusted return profile for us. And it was an underserved spot in the marketplace. And so we thought it was a good place to be further underserved. And that being said, we’ve also made a couple equity investments as well. So we’re, we’re very supportive of helping companies grow, whether it be on the debt, or the equity side of the balance sheet, but we prefer debt.
Seth Greene 5:31 That makes total sense. Now, with there, it seems like every other day, there’s another company popping up, um, in some way, shape, or form in this space. Talk a little bit about your vetting process and your due diligence, because you’re kind of known for making really smart decisions.
Joel Magerman 5:49 Well, I mean, one of the things that, you know, being old means you have experience and seeing lots of things. So we’ve seen lots of deals and transactions over our lifetime. And we have certain things that we think are important to focus on. And we incorporate that in our vetting process. Today, we’ve seen in excess of 725 deals, we’ve invested made eight investments. So you know, that being said, we’ve probably bid on two to three times that number of transactions and for various reasons, either we learned something we didn’t like, or they maybe got better pricing, whatever the case might be, but we’ve you know, we’ve we have a pretty rigorous process, we want to make sure that we at our investors get our money back. And as a result of that, you know, hope is not a plan, right. And so if people don’t have the things, you need to be comfortable, we don’t want to just hope we get our money back, we really want to have analytics and comfort that says we’re going to get it back when we really, we really try to be thoughtful in our approach and understand the company well, which means you need to do a lot of work. And some of these companies didn’t have and don’t have the infrastructure, the people to support to give us the information and the data, we need to be comfortable.
Seth Greene 7:09 What our menu, if I heard you correctly, you had about a 1% rate in terms of the deals that you actually bid on an accepted. So what are some of the things that are warning signs to you to stay away?
Joel Magerman 7:26 Lack of internal controls is a is a major one. You know, people don’t have financial, financial, the appropriate financial systems, and that’s critical in this sector. That you mentioned banking, relationships, those are those are much less of an issue than people think. But some folks don’t have it. Very few folks have audited financials, which is a big deal for us, we want someone to have a third party review those financials and get comfortable with those. And you know, some of its the sophistication of management it you know, coming up with an idea and and so hot making this up but someone to say I want to build a chain of 50 dispensaries. Well building one and operating one dispensary does take some skill, but building an operating 15 centuries is a different skill set. And so some people are skilled in opening an operating number one, but they don’t have the wherewithal to open 50. And so some of it is just the breadth and depth of management.
Seth Greene 8:27 What are you finding are some of the most common challenges that these cannabis companies are facing other than access to debt?
Joel Magerman 8:40 Well, access to capital overall has has has been a concern, but it’s less of a concern now but still remains a concern. The markets are very geographic focused on a state by state basis. So there are certain states where the ability to grow is there’s there’s not enough licenses, it’s a Limited License state. There are hypothetically going to the state’s going to issue 50 licenses if you’re not one of the 50 you can’t play. So you know that’s a major hurdle. Having people that understand, right i mean if you think about cannabis as a particularly, it’s different types of uses, you know, you think about someone needs to understand how to cultivate and grow this and produce it in a large scale fashion. And, you know, just because someone grew it in their basement in college doesn’t mean that they actually know how to run a cultivation facility. So having people that are skilled and understand how to be a cultivator how to how to maximize you know the the efficiencies of the growing cycle and take advantage of that is another important is another important skill. And then once the business gets to the point where it’s thinking about growth in a meaningful way, how do you attract skilled management and You know, a lot of people think, Hey, I got it up and running on the entrepreneur. I don’t need other people, I know how to do it. But the reality of it is that, I mean, if you if you look at Bill Gates, he knew he needed to bring in Steve Ballmer on the business, he might have invented Microsoft, but he needed someone to run the day to day. A lot of these folks think they don’t need those people or they think just because someone worked at a big company, they have this skill set. And really, it’s it’s attracting the right kind of people the right kind of capital, and the right resources to really create a successful enterprise.
Seth Greene 10:35 That makes a lot of sense, your your passions obvious, what do you like best about what you do.
Unknown Speaker 10:41 Um,
Joel Magerman 10:42 I love working with passionate people that and I’m really trying to help them in their journey to to attain a much greater level of success. I mean, that’s, that’s what’s rewarding, right? It’s, it’s hard, you know, being successful with a new idea. And creating that new idea into a business that can be successful and rewarding is a lot harder than people think. And being part of that journey and helping an entrepreneur be successful. And that is something that we love to do.
Seth Greene 11:13 What has been some of the biggest lessons you’ve learned along the way in the 30 years of investment banking and m&a experience? Wow.
Joel Magerman 11:25 That’s a, that’s a big takeaway. I think the most important thing is don’t underestimate the importance of people. A great manager of a business can make a bad business successful, and a poor manager of a business can make a successful business failure. And so if you’re really investing in people, even though there’s a lot that goes around it, you’re all you’re ultimately investing in good people.
Seth Greene 11:52 What do you think the time horizon is for cannabis before it gets to the point where a lot of these hurdles that you’re benefiting from, you know, kind of get erased and VA becomes more commonplace? Um, we won’t call you.
Joel Magerman 12:07 I know, I think it’s, I think it’s a it’s a multi step process. Um, a lot of people thought when Biden was elected, that all these barriers going to be knocked down, and all of a sudden, a lot more capital came into the market, they thought all of a sudden there was going to be federal legalization. That didn’t happen. What everybody’s sort of learning is that’s going to be a process in and of itself, when they figure out federal legalization. It’s not going to be all of a sudden that things change. And there’s a magic wand, right? All of a sudden, all the federal agencies that now touch this are going to do what they do, right? If you’re a regulator Your job is to regulate. So you think about when hemp was federally approved, all of a sudden the FDA came out and said on March 19, of 2019, we’re going to tell you how what the regulation is to ingest a hemp derived product CBD effectively, we’re still waiting. almost two years later, we’re still waiting. So I don’t think people have realized that there I mean, totally comprehended that even federal legalization is going to require the federal, you know, arms of government, time to figure out what all that means. And until sort of all that gets cleared, I think we’re gonna have to see all that happen. Before you see a cannabis business look exactly like a consumer packaged goods company that’s selling sneakers. And we’re just so we’re some number of years away from that.
Seth Greene 13:38 You’ve achieved an immense amount of success and worked on some incredible deals over your career. What’s your biggest challenge now?
Joel Magerman 13:47 Actually, we have the same challenge that the companies have is access to capital. The biggest ones in cannabis would be deemed the most the tiniest funds in the non cannabis world. There are dozens and dozens and dozens of firms that are multi billion dollar funds in the regular world. There’s not a single one in the cannabis sector, a big fund is a few 100 million dollars. And so access to capital is is is an issue for process providers and capital, as well as for the companies and and all of that’s getting better. You know, but I think that, you know, until all the gates sort of open, it’s easier for someone to open a gate and write a check in many ways, other than maybe the top dozen companies to us because we can show an institutional track record. And they’re one step removed, let let us do our job. But you know, until that sort of goes up and down the whole life cycle, we’re we’ve still got a ways to go.
Seth Greene 14:54 What How are you attracting investment capital for your funds at this point?
Joel Magerman 15:00 We’re telling the story, we’re telling you the same story that, you know, we’re outlining to you it’s and people, people get it, right. It’s a, it’s a, they understand the size of the market, they understand, or hopefully they do after we speak. They understand what the opportunities are and the growth that’s happening. And they’re, they’re willing to take, effectively a little more risk for a greater return. And if they believe that risk reward quotient works the same way we do, then we’re lucky and we have we have investors and we’ve, we’ve been fortunate, we’ve been able to trust attract some great investors. And but we’re always looking for more.
Seth Greene 15:41 With all that you’ve shared, is there anything you want to share that I didn’t think to ask you yet? Um,
Joel Magerman 15:49 I guess, I mean, there are a couple things that I think are sort of interesting. I mean, you know, number one, I think a lot of folks sort of think about cannabis, and they, you know, they may try to tie it to alcohol. When you think about cannabis, the three major uses from all the surveys are out there or for pain, relief, anxiety, and sleep, they’re really much more medicinal than most people think about, Hey, I’m going to go get drunk, or I’m going to go get high. So number one, I mean, there’s a big medicinal aspect of this that I think is overlooked. And that’s what the vast majority of the products being used for number one. Number two, there’s a whole new world of pharmaceutical experimentation that’s going on using cannabinoids. And there are a number of drugs that are FDA approved from cannabis derived products that are incredibly successful. And there is 10s of millions of dollars being spent in research around the world, that I think we’re going to come out with some really exciting new drugs. And I think people don’t necessarily appreciate the the the medicinal and wellness benefits that the the actual cannabis plant represents. And so I think that’s worth noting.
Seth Greene 17:10 Absolutely. where can our folks who are interested in learning more about what you’re doing go to learn more.
Joel Magerman 17:16 So we have a website, Emerald Park capital, there’s contact information on there, they can also go to LinkedIn and look up Emerald Park capital or look me up, as well, but happy to talk to any interested parties. And we’d love the opportunity to share what we know.
Seth Greene 17:33 All right. Well, we greatly appreciate your time. We know it’s incredibly valuable. This has been Seth Green with Joel omegamon of Emerald Park capital. Joel, thanks so much for joining us. Thanks, Jeff. Have a good day. Thanks, everybody, for watching or listening. We’ll see you next time.
Marcus Magarian is Managing Director at Chatsworth Securities, LLC. Marcus brings more than expertise in technology and data analysis experience to the investment banking industry. Marcus works with multinational corporations in origination and placing capital for private equity, feeder funds, and private placements, between the US, EU & Latin America for Real Estate, Energy, Oil and Gas, Infrastructure, and Corporate interests.
Listen To This Interview as Cliff and Marcus discuss:
How data analysis of customer behavior in e-commerce drives investment advice.
Examples of what data points to consider in pricing derivatives.
Trends in the e-commerce space that affect your investment strategy.
How COVID-19 has impacted the investor/advisor relationship dynamic with new clients.
How data analysis works in determining risk or predicting ROI.
and more.
email: mmagarian@chatsworthgroup.com
phone: (203) 340-2827 Ext 122
Transcript:
Cliff Locks 0:02 Welcome to the private equities profits podcast. I’m Cliff lox your hosts who With me today is Marcus Magarian, Managing Director of Chatsworth securities, LLC. Marcus brings more than expertise in technology and data analysis experience to the investment banking industry. Marcus works with multinational corporations in origination and placing capital for private equity, feeder funds, and private placements between the US EU and Latin America. For real estate, energy, oil and gas, infrastructure, and corporate interests. Mark is welcome. Please share with the audience a little of your backstory.
Marcus Magarian 0:40 Hi, Cliff. Good afternoon. Thanks for having me here. The pleasure. I’ve been watching a lot of your previous interviews, so very excited to be here. I’m a native New Yorker been here all my life, you know, started out working at my dad’s store at the time square area, got my first job at derivatives at Morgan Stanley Merrill Lynch. After that, then Business School, we opened a Brazilian bank in New York and London doing natural resources, private placements, when that whole thing died off, I was lucky enough to get a job at a tech company doing UX analytics for about three to four years. And coming back into banking, we’ve been focusing quite heavily in things in the payment space, analytic space, everything involving data, which is we’d like to call the new oil.
Cliff Locks 1:23 Very true. How does the data analysis of customers behavior and e commerce drive investment advice?
Marcus Magarian 1:29 The most important thing about data is that it’s free. And it’s so telling, I always like to tell my customers or prospects like you know, it’s kind of like, if you have people in a focus group, it’s like you like Coke? Or do you like Pepsi? And then give us your advice. The first person that speaks, they’ll say, I like Pepsi, or they like Coke, it’ll influence everybody in the room. And what happens with data is that like, it’s completely naked, you know exactly what the people are really thinking, without, you know, ever having to ask them, you know, this I gave an example of this was when we were working with Electrolux, we, I told them, like, Hey, 99.98% of your customers don’t want to buy an air conditioning system. And they have no idea why it’s because the most important thing is that the data told me that this was the case. So we are able to change things increase their sales is about 100 times. I mean, it was easy when you do and you have hardly any sales. But every but using that skill, those skills today, you could basically go to any company and say, okay, you have a million people going to your site, let’s say your average order value is $100, you have about a 2% conversion ratio. So I’ll do $100 times 20,000, you make $2 million. From there, we want to know exactly what their goal is, you know, they’re looking to buy a company, sell a company expand by market share, etc, etc. So, very good. It’s very telling. And it’s a way to advise clients without having to ask them questions.
Cliff Locks 2:56 Can you give us examples of what the data points you consider in pricing derivatives
Marcus Magarian 3:00 with derivatives, I mean, that’s I the one thing I love about derivatives is that it’s very similar to analytics. So back in 2000, when we saw and I started working at Morgan Stanley derivatives, were priced kind of like just taking market data, just same way you would take on through a Google Analytics or some kind of analytics capturing tool. And you know, you want to volatility, you want to know exactly what the buzz is on the stocks or some kind of technical analysis. And today, you have, you know, I use those skills from 30 days in order to price companies. Because everything with digital companies is dependent on data flows. And so like, it’s kind of the example I gave before you have a person that comes into a site, I know how the traffic is behaving, but the most important thing I have to know is where’s that traffic coming from. So if I’m selling fishing equipment, and I’m bringing my traffic from the Wall Street Journal, my sales won’t be as good as if I drove it from another site. That was where the person came into the site, thinking about fishing equipment. And it’s the same thing with so everything with data, it’s how do you manipulate the data, which is really the individuals that are going into your website or to your app, the same way that people engage in the stock market.
Cliff Locks 4:19 I’m excited you’re going into a forensic analysis on those companies that you’re looking to help raise funding at this point. But really understanding what drives revenue. And the sources of that traffic. It’s critical at this point for sustainable sale. What trends are you seeing in e commerce space that affect your investment strategy?
Marcus Magarian 4:40 Right now with COVID? Right now, actually, I have a group out of the UK that I’m a board member of here in New York. It’s called it’s a retail group. And what we’re trying to do now is take possession of stores on Bleecker Street and make it into a COVID store. So it’s it’s important because everything we’re doing in e commerce Everything is becoming more omni channel. So what does a store look like in the future with COVID V is put out a report saying that you had 60% of people were paying by phone or the stores have the ability to pay by phone. Now it’s like 85%. And everything is digitally transforming to this contactless payment world and all these things that didn’t exist before. So what you’ve really had is a really massive acceleration in that market, the digital world online shopping has really converted over into the brick and mortar side. Amazon was way ahead of this when they had the thing where you could go into a store, which, you know, there’s more to it, but you go into a store, you can only go in if you have a phone. It’s a problem. If you don’t have a phone, surprised, no one’s saying about discrimination. But if I go into the store, I could walk out without even talking to a cash register person or paying or pulling out a credit card or anything like that. And the concept that we’re trying to do is saying, okay, 70% or 60% of stores on Bleecker Street, are empty. There’s all these things happening with moratoriums, landlords aren’t getting their rent monies. And Nope, because I was walking in safer give stuff stay home because of social distancing. And all those things. Let’s take stores and do virtual fitting rooms and fulfillment centers. No, no inventories are items that stores and make it like an e commerce store, but with a physical presence. But when you have all that information, you’re collecting the data on your customers store. The way this used to be done when we were much younger, used to see guys in the corner of the streets tapping on these little metal things. And what those guys are doing was counting the foot traffic going left to right. Nowadays on you that everything is digitally tracked, you have you carry a mobile device, the beacon captures everything. So in business school, they were went to business school in France. So we obviously the Louis Vuitton case study, when somebody walks into the Louis Louis Vuitton store one on shawnzy, the likelihood is that a Westerner will turn left. So they put their most expensive and most popular items there like women’s handbags, the ones that you see whatever men’s stuff was to the right. And all the way in the back right was smaller handbags, which were more popular for Asian communities. And so they took an old way of doing a method, which today everyone can do, because it’s very expensive to have someone sit there and click all day. And you also have to understand that the data probably won’t be accurate, if someone’s clicking themselves manually, versus a computer collecting all these things.
Cliff Locks 7:32 So how has COVID-19 impacted your investor advisor relationship dynamics with clients,
Marcus Magarian 7:40 we’ve gone from less private placements to more m&a. And I prefer m&a versus it’s harder to do. Because everything. It’s it’s like a marriage. Because the thing is that a private placement, you’ll probably most people will accept 10% 20% of the company. There are those that one like you know more than 50%. But like because of the acceleration that we saw from like those things like the visa reports or contactless payments, or how people are using more digital means. There’s so many players that are completely out of the market. Now they have no choice but to consolidate. And so right now it’s a rush, because it’s like, like, we’re focusing very heavily in the payment space. A lot of our European clients, what’s happening is that they know that they’re having some kind of adverse event happening. But then you have companies like you know, I mean, toast is a bad example. But a company called lightspeed, they’ve raised so much money, they go in, and they just buy out markets. And they’ll overpay, they’ll pay massive multiples. And we’re seeing a lot of those things because and the problem with that is that if these companies don’t sell, because raising capital, forget about it, like because it’s just they’re not gonna be able to be fast enough. This other company, though, they’ll they’ll they buy one player, they’ll have, you know, 10,000 stores or 5000 stores was installed in there with a technology, and then we’ll just start cannibalizing market share, kind of like that scargo thing that, you know, that Walmart did when they first opened and started expanding through the United States. Right now we’re seeing massive land grabs happen. And it’s the Luddite players that either have to move, or they’re going to be out of business. And there are many people that we speak to, who are who know that because of COVID, you had this massive jump in technology, that they know that they have to move somehow it’s either going to sell the company or they get integrated into another company. And we do like a stock swap kind of thing. And that’s really been the play.
Cliff Locks 9:38 I really do get it you have to disrupt yourself at this point.
Marcus Magarian 9:42 Like when I I was an engineering student in college and like I didn’t touch coding for a long time. But I will not go into a deal with I go into a deal I never asked for a pitch deck. I think it’s a waste of time because it is marketing puff and having worked at it. The problem with working at a tech company when you come from an investment bank They have FINRA, so everything has to be transparent, clear. And all these things, how does data analysis work in determining the risk or predicting ROI? It really with data, or with a website, it’s all about your goal. And it has to be very clear. Like, if you take a company like WeChat, they do everything in the United States, WeChat wouldn’t really work. And so the closest thing you have is like Facebook, or like an Amazon, which is not really, it’s still pretty specific. When you work with data analysis, the first thing you want to know is what the purpose of the data is for. So like, if you’re capturing data from a pharmaceutical company versus a cosmetic company, the purpose of the data changes significantly. And this goes back to a point that I was trying to bring up before is that an investment banker today really has to understand database language. So I don’t ask for presentations when I asked for schemas. And I want to know what data you’re capturing and how you’re capturing. Because many times when you’ll speak with a company that’s like in the healthcare space, they said they want to do something with analytics. Great. Are you allowed to get that data? The answer is no. So then you can not do anything with that data, nor will you capture any of that information.
Cliff Locks 11:11 It’s interesting, because we’ve had some conversations with an organization called burst IQ. So it’s the blockchain, HIPAA compliant. And then I’m working with a team and I’m on their board. And we’re using an activity band, you something you and I would like it. And I will watch from Apple at this point in that data is being uploaded to the blockchain permission granted by the user at this point, and then we’re putting analytics against that. And then there’s a chat bot that goes back to the individual to try to motivate them to be more active. And they will actually reward that individual with tokenization, meaning similar to a cryptocurrency, yeah, to be more active than they can convert the crypto to buy organic food products in our Shopify store. So it’s an ecosystem, but it’s really about the wellness of the individual that is our customer at this point, utilizing the app.
Marcus Magarian 12:04 So yeah, like, one thing that you mentioned I love was the tokenization technology, because it prevents credit card fraud. It’s a way where you basically say I want to do a payment. But instead of sending the credit card information, you send a token. It’s like those little grasshoppers used to get back in the day, it’s like you want to log into your email from random country, you had to use the token, despite having to know your username and password.
Cliff Locks 12:29 The technology is accelerating. And the cost to actually build something is decreased substantially, which is somewhat of an equalizer, but you need brilliant people like yourself, Marcus, to step in and analyze, do we really have a market at this point is addressable? Is it going to be vibrant? Do they have the ability to pay? You know, what’s the vision of the future look like? What’s the vision of success, and then work it backwards at this point, it’s got to be profitable, it’s got to iterate. It’s got to be fun, you got to have a really strong team around, you know, when you’re building it out, it’s not just engineers, you need to know business, you and I had a conversation there, you know that the CEOs really need the vision Plus, they got to be able to run a business and allow the company to flourish. And the engineers are really more on the product side and the seamless in the user interfaces. It’s an exciting period of time. That’s the way I look at it. At this point is we digitalize in pretty much everything we’re touching at this point. Yeah.
Marcus Magarian 13:22 But I think because of where we are in the market today, this is why like, now you’re just seeing massive consolidation, or you’re seeing companies that received way too much cash, trying to go public. I haven’t seen as many IPOs since my days, like, you know, Merrill Lynch, where they’re having like an i one to five IPOs a day almost every week, that was like dude, just throwing them out. And what was interesting is that like, the reason why I find it interesting is because there’s the index called the Wilshire 5000. Sure. And it used to have in 1997 7500 stocks on the market. Us USA Today, a couple years ago came up with an article saying like today that 7500 stocks is now 3500 stock, less than half, or at least it’s around half a little more than half. It’s telling because what does it say? The IPO or the publicly traded company isn’t as well, it doesn’t have the same value as did before. So what does that mean? Take, you know, we have the credit crisis in 2008, you had the mortgage backed security. And those things were put into one piece of paper securitize. And yet, let’s say a million mortgages be broken up into millions of pieces and send it to a bunch of pension funds in Scandinavia, Europe or Asia. Today, if you want to manage those mbss there’s a tech company which will cover every single thing for you using analytical data. So you’ll buy the mortgages individually and you say I want specifically these kinds of mortgages, so you no longer have to buy these pre packaged mortgage backed security things. And the way it works is You go to like a bankrate.com, I need a mortgage, you put the mortgage, they sell the lead to a loan provider. The loan provider is like crossover bank. And their job is to structure the mortgage provide the capital in three months, they’ll resell that to a hedge fund. But the hedge fund obviously needs to track it using this technology, which friend of mine actually was one of the founders for its company called pure IQ. And they and so the the, you know, then you could track every single thing individually, but because the computers doing it, and they have a very homogenous way of looking at it, the computer just has to track everything over and over and over again. Did you pay that you’re not paying foreclosures? And what are the risk profiles? When you customize,
Cliff Locks 15:48 strong analytical tool in the right hands?
Marcus Magarian 15:51 Yeah, and you basically it’s like, you invented dishwashers, or washing dishes. And that gives you the opportunity cost to do something else. It’s like hiring a secretary or, you know, getting a car to get you to point a to point b faster, or using a plane to go to another country.
Cliff Locks 16:08 Describe the culture and the philosophy of your firm.
Marcus Magarian 16:12 Well, we are a firm that’s been around for over 30 years. It’s got a lot of great people we had, it started out really as a big IPO shop. And over the course of time, it’s obviously been transforming to now we’re doing tech deals started to become very successful. And the great thing is that you have a lot of people that are very willing to grow. And it’s interesting because a lot of the players come from very top end Ivy League schools, they were founders of divisions at Goldman Sachs worked at UBS worked at family offices, like the Qatari family fund, and a lot of a lot of very intelligent people. About the opportunity today is taking that knowledge and transforming it to something more digital for the younger generation at Chatsworth, what we’re trying to do, make it more, make it younger. And so like, the great thing is that they’re very open to it, we’ve been successful at it. I know it’s very exciting. I can tell you, it’s better than having a nine to five job at a bulge bracket bank, because you but you have to have a group of people that are open to going next steps,
Cliff Locks 17:19 describe your approach to helping companies structure their corporate direction, great strategy, preparing them for long term and capital stack.
Marcus Magarian 17:28 A lot of the times today on top of all those things that we do is a lot of times CEOs are looking at things at a very granular level, they only see their company’s day to day problems like problems that we will never know. And a lot of times it takes months or weeks to fully understand what a company is going to because people like CEOs exaggerate. They’re afraid there’s a performance factor and the CEO, you know, as we said before, he’s the number one sales guy or company. So he’s he’s selling even if he’s not supposed to sell to me, because my job is to be the buffer for him with investors or buyers. Nowadays, it says we mentioned before, it’s all about acquisitions, for you to be a company, you know, looking to do a startup and do some new idea, etc. It’s a little more challenging today during the Age of COVID. Unless you’re doing some it’s very COVID link, but we’ll have continuity after that. A lot of times we’ve had opportunities where we’re working with the CEO, one CEO for 10 years was paying over 20% cost of debt. Like how do you survive, you’re selling, you’re selling airplanes. And when I looked at the balance sheet, I started noticing they’re putting things like on their current light current ratio, or the current liabilities, making the current ratio going on, like 1.7 or something. And what happened was, I was like, well, no one’s gonna give you a loan. Because you look like you have terrible books. When we restructure the entire balance sheet. We got no current ratio of like four and a half, which is ridiculous, because you’re basically, you know, you’re destroying the value your company, got them alone right away. After 10 years, we cut the cost of the debt from 20 something percent like 22%, down to like 910 depending on what the line of credit was. And it was all because of format. And it was the reason was we had to get rid of the the bookkeeper or the accounts and hire new one restructure the thing cleaned it up.
Cliff Locks 19:18 It’s a millions of dollars worth of savings there.
Marcus Magarian 19:21 Oh my god. It was crazy and getting too specific on what the who the company is. They were not an American company outside. They were operating out of the United States.
Cliff Locks 19:31 What do you love about what you do? And what do you find most rewarding personally,
Marcus Magarian 19:36 at a place like Chatsworth, it’s kind of like a sandbox, you have a lot of free rein to do what you want. It’s very important that we focus in a very specific sector. So we were very focused on things like in the payment space, which payments means everything. It starts with payments, because it’s credit card processing, which became digital banking, which became things like you know, digitizing things like Western Union and things Like analytics companies, which is just, you know, data flows all about the law of large numbers, solving those puzzles for those CEOs is the best, the hardest part is getting cost that barrier where like, you don’t, you can’t tell the client that they’re doing something wrong, you have to give them the idea for them to come up with the idea and then solve the problem. But usually, it’s something that it becomes a difficult thing for people in positions of power, is that you have to do things in a way that makes it seem like it’s where we’ve transformed, we’re doing things very successfully. And we’ve been successful at it, we’ve been transforming those things. And it’s a lot of fun.
Cliff Locks 20:41 So it’s really a partnership between you and the client at that point. 100%.
Marcus Magarian 20:43 Okay, 100%. And the clients use it on an understand like, in the beginning, they’ll have an idea of how things are supposed to be done, when they actually go through it. It’s like, like, I’ve had my last deal, I, we had a, we had an issue with the lawyer, if the lawyer comes, once we pass the deal to the lawyer, it becomes no longer our deal, we have to be polite to the lawyer making sure whatever. And then you have to make sure the lawyer has experience, I’ve had three or four deals where like they hired the wrong kind of lawyer, or they mix the one lawyer to do something else. So simple things like, you know, registering things with the Department of State to transfer the share with the ownership of the shares, or declare that the transfer owner shares the state, you know, lawyers not knowing how to do that, because they’ve never done it never done it before, or lawyers creating adverse things in order to increase billable hours or, you know, sometimes before everything is happening, the client starts getting worried about things like fees. But and I always tell them, it’s like, you haven’t even sold the company yet. So you have a long, long, long way to go. And there’s the issue with clients, the buyer could go away. And then you have to, there’s a lot of massage. So it’s very complicated.
Cliff Locks 21:58 So you had to hold the deal together. That’s really what you do. But you have to make it seem seamless, very positive. You know, I’ve had the privilege of building three companies and selling them and you really, it’s people like yourself and your fine organization that allows these deals to get done. But there’s a lot of emotion involved in it, you know, especially for the entrepreneur. And it’s a privilege to work with professionals, and deals get done now. And that’s the exciting part. What will be your personal legacy?
Marcus Magarian 22:28 My personal use, just enjoy it. That’s it, there’s no The most important thing is not having ego in this business. So like, legacy just got to be make sure you have a good family that you pass the education along and move things forward. The culture of everything I think has changed significantly. Like one thing that Chatsworth used to be was a very private bank, the world has done Facebook and Instagram and Tiktok now and etc, etc. The way you have to present yourself as changed significantly. Like try joining a private club. With a family. We don’t have to just join Facebook and everything shared private clubs have social media things, putting pictures of their parties in there. Things like that. So old legacy systems, or legacy social circles have changed significantly.
Cliff Locks 23:15 I look forward to being back with you shortly for another episode of the private equity profits podcast. The show is produced by market domination, LLC.
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