Jon Thompson, Cofounder and Chief Strategy Officer at Blue Margin, sits down with Adam Coffey, #1 bestselling author of The Private Equity Playbook and The Exit Strategy Playbook, to discuss the state of private equity investments, strategies for reinvestment at the time of exit, and how data analytics supports executives in operations and diligence.

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Read a summary of our key takeaways here: Adam Coffey and The Exit Strategy Playbook [Interview Highlights]


Full interview transcript:

Jon Thompson: Today, I have the privilege of speaking with Adam Coffey, author of The Private Equity Playbook and his new release, The Exit Strategy Playbook. Adam is a serial executive having served as president and CEO of two* service companies owned by private equity firms, WASH Multifamily Laundry Systems, and most recently CoolSys, a market leading refrigeration and HVAC services company.

At CoolSys, Adam drove rapid expansion through acquisitions and organic growth as part of a buy and build strategy. CoolSys has 21 brands operating in 44 states and serves more than 50,000 customer locations across the US. During Adam's tenure as president and CEO at CoolSys from 2016 to 2021, revenue grew from $240 million to $750 million* partly during a global pandemic. Recently, Adam founded CEO Advisory Guru LLC to "share" his experience with other CEOs, private equity portfolio companies, founders, family offices, and C-suite executives to help them succeed and drive transformative growth.

You can find him at Adam has accomplished more in one lifetime than many of us would in 10 serving as a board director, a chief executive, a bestselling author, army veteran, executive coach, thought leader, consultant, mentor, keynote speaker, you name it. Welcome, Adam. It's a pleasure to speak with you again.

*Corrections: Adam served as the CEO of three service companies owned by private equity firms: Masterplan, WASH Multifamily Laundry Systems, and CoolSys. Revenue at CoolSys grew from $240 million to $650 million.

Adam Coffey:  Hey, it's good to be here. Boy, you make me sound so good. I'm sure I got to owe you some money somewhere along the way.

Jon Thompson: Yeah, I'll send an invoice.

Adam Coffey:  Thank you for that.

Jon Thompson: You bet. So, I know we share a hobby, e-bikes. Before we jump in, what's been holding your interest of late outside of work?

Adam Coffey:  This whole last couple of years has been weird for a lot of people. So I would say generally speaking pre-pandemic, my wife and I love to travel, and getting out and going places really got shut down for like the last couple of years. And so we've been closer to home, a lot more walks. You mentioned the e-bike, boy, I would have to say that people tricked out their cars, all kinds of toys.

I also like to fly airplanes, but my e-bike is looking pretty sharp right now with some new toys that I've bought and added onto it. So still like to get out, still like to call it be adventurous, but now no longer doing as much traveling. Just now starting to turn that all back on. So looking forward to it.

Jon Thompson: Yeah. Maskless travel is fantastic. I can relate. My e-bike looks more like a car with its dashboard and cup holder and everything else-

Adam Coffey:  And an iPhone holder and my nice rear-view mirrors. I mean I've been adding toys. Just in the last week, I added some accessories.

Jon Thompson: It takes a no shame attitude for sure. So we'll have to get you out here at Fort Collins for our e-bike brewery tour, unsanctioned, unlicensed. I think you'd enjoy it.

Adam Coffey:  I hear a rumor that might be coming up soon, too.

Jon Thompson: Yep, in June. All right. So your new book, The Exit Strategy Playbook was published in September of 2021, congratulations.

Adam Coffey:  Thank you.

Jon Thompson: As an author of one book, I have to ask what possessed you to write a second?

Adam Coffey:  There was more to say, I think is really it, and I'm actually planning a series of probably five books when it's totally done. So when I wrote The Private Equity Playbook, I don't think I was totally prepared for kind of the cult following that that book was going to have. It's literally been over three years now since that book came out and it still routinely hits number one on the charts in several different business categories.

So that book still does phenomenally well. And really what happened was I was getting a bunch of inbound inquiries from people who read The Private Equity Playbook, and they had questions and the questions were more refined around exiting their businesses. And so that stimulated, call it the readers of my first book their input back to me, their questions back to me was the direct stimulus that led me to write The Exit Strategy Playbook.

And to be honest with you, it's kind of like the Star Wars trilogy, the originals, I probably started on episode four, and The Exit Strategy Playbook probably should have come first because it was broader in scope and The Private Equity Playbook is very narrow just about private equity per se. But at any rate, it was really a result of reader input from the first book that led to the second book.

Jon Thompson: Yeah. I like it because it's a primer. It really steps you through piece by piece. It's something we use to get our staff up to speed on private equity. So let's walk through your book, more or less chronologically, and maybe you can indulge us by expanding on a few of the key insights with some extra emphasis on the use of data intelligence in your approach generally in business. The book is organized into four parts, the universe of buyers, prepping your business, building your advising team and the sales process.

In part one, the universe of buyers, you mentioned that during the past 30 years, PE as an asset class has averaged over two times the average stock market of roughly 7% return. A 14% ROI is impressive in any industry. And it does give some light to why there's over 6,000 PE firms with over $4 trillion in assets under management. At the same time, this unicorn industry is subject as any industry is to market forces. What's your forecast for private equity with Fed interest rates rising in response to inflation, stocks dropping, potential economic recession on the horizon, alien invasion, meteor strikes, the usual stuff?

Adam Coffey:  Boy, I think you covered the gamut there. It's interesting because, just even the numbers you mentioned are already stale. When I went back to just three and a half years ago, so call it four years ago when I was doing research for The Private Equity Playbook, the number of the assets under management was under $3 trillion. It was like $2.8 trillion. You just referenced $4 trillion.

A recent statistic I just saw now puts it over $5 trillion in private equity. It's seven plus trillion if you include debt funds, but the apples-to-apples comparison is you've essentially doubled the amount of assets under management in the last four years within private equity. So, massive amounts of money continuing to flow into this alternative asset class, really driven by shareholder return profiles.

So even the stock market, 7%, 8% kind of historical number has ticked up recently. Recent studies I've been reading say, "Hey, the 30-year average now for the S&P 500 or for the total stock market index is closer to 10% now." But private equity continues to outpace that return threshold. And so as a result, money keeps on pouring in. And there's more money that has to be put to work now currently about $1.9 trillion in committed capital looking for something to buy.

So to answer your question now, more specifically, let's use wine as a good analogy here. You have a vineyard that's putting out their wine every year and certain vintage years, historically over time were better than others because growth conditions were good. There's still making wine every year. They're not stopping, but some years are better than others, just based on the profile of what the temperature was like, or the conditions during that year.

Same kind of holds true for private equity. Money isn't going to stop coming in just because interest rates are ticking up or there's a recession. What you're going to have is funds that are started this year, or this vintage are going to be different than funds that started pre-pandemic, or five years before the pandemic. So, vintage funds are all rated against similar vintage funds. So the return thresholds may moderate, but if you also look at just the stock market, what's happened most recently in the stock market, it's been a pretty down year for stocks.

And so the comparative is not funds from 10 years ago, it's other funds that were started this year making first investments this year. And so I think as a general asset class, it will continue to hold true that private equity will continue to outperform the broader market. And I don't want to call it a bubble because people have been waiting for something to change in the private equity world, just more money keeps coming in.

So more money comes in, the multiples being paid are high and it requires an active management style to ensure that private equity firms are hitting their return thresholds that they're looking for today.

Jon Thompson: Yeah. It's not the same simple formula of 10 years ago.

Adam Coffey:  No, not at all, but you would think at some level, things have to change. However, if you look at the price of gas, does anybody really think we're going to get back to a buck 80 a gallon here in Texas? I don't know, maybe we do. I hope we do. For some, the gas in California was expensive when I left and I got to Texas and I thought, "Boy, price of gas is great." And now it looks like the price of gas in California did a few years ago.

So, all things are inflating. You go through different economic cycles, generally speaking, on an apples-to-apples basis. I don't see any change to what's going on today.

Jon Thompson: So still bullish. I see that as well. Okay, so thank you for that. In both of your books, you emphasize avoiding a one-and-done paycheck as a major theme. I like your advice of investing 34% of your first payout back into the business and expecting a 3x return or better. You call this riding the coattails. For the executive considering a PE buyer, what are a couple of the essentials for positioning themselves to follow this formula in terms of preparation, negotiation, deal structure? If you had a moment at a cocktail party, what would be the primary things you'd shared there?

Adam Coffey:  Well, so one question I've been getting asked a lot lately is just, how do I, as an executive, call it a mid-career executive in the Fortune 500 world, how do I get private equity to notice me? How do I get an opportunity to create that swing of the bat? Or how do I get into this game? And so, I recently put out a paper on LinkedIn that anybody can go see, I won't get into great detail here. I threw it out there because there's really three things that you can do to increase the chances that you'll be noticed by a private equity portfolio company looking for a senior executive to come into the fold, and so separate conversation.

But just to an answer the question, normally when an executive and there's really, if you think about The Private Equity Playbook, I talked about Josh, I talked about Rose and I talked about one of these people was an entrepreneur who was selling a business. And so, they're getting a liquidity event and they can create a rollover investment opportunity by rolling forward a portion of that liquidity.

But for a transitioning executive who isn't selling a business to join the game, typically, there's three different components to compensation. There's a base salary, there's a bonus plan, and then there is a part of an incentive equity pool. In the Fortune 500 world, it would be known as a stock option. In the private world, we get a little bit better tax treatment, and we create these things called incentive units, which track the value of the stock gain. But they also get capital gains treatment as opposed to ordinary income like a stock option does.

And so, they'll be given based upon their position in the company. A CEO probably gets the largest tranche and then a CFO and then a COO and then vice presidents will also get small pieces of that. But there's incentive equity. But anytime you come into a private equity backed company, you also have an ability to write a check. And it's a combination of writing a check, getting incentive equity. If you can't write a check, a lot of people transitioning don't have the net worth to write a big check.

So could be that the first time they're in a private equity environment, they're going to ride very heavily on that incentive equity. But once they get paid, now they do have, call it an ability to roll forward in the next bite of the apple. But generally speaking, those are the ways that it's done. Typical private equity model is about a three times multiple of invested capital.

If I invest a buck buying a company, I'm hoping to get a $3 or a $4 return. I say $3 to $4. My career batting average is over a four times multiple of invested capital. And so what I often tell people is when they are making a rollover if they're an entrepreneur selling a business, to think about the hold period that's upcoming over about a five-year period, what is the private equity firm underwriting?

If it's a three times return on investment, then you have to invest 34 cents on a dollar of what you've been paid, roll that forward so that when a three times multiple of invested capital happens, 3 times 34 equals a dollar too. Your second bite of the apple is bigger than the first. And so that gets to be very exciting for entrepreneurs who've sold businesses for a lot of money.

A lot of people think with a mindset of one and done. “I built this business, built this empire. I'm cashing out my chips.” Arrogantly, potentially think “if I'm not the sole owner, if I don't have control, I don't want to have any money tied up in this business.” And yet people buy stocks every day, and they're not the main owner or driver of public companies that they're investing in for the most part.

But in the world of private equity, these are some very sophisticated folks, who we just said a minute ago are earning double the stock market on average and money keeps pouring in. And so, an entrepreneur or a mid-level career type executive in the Fortune 500 world who's transitioned, they get an opportunity to participate, ride the coattails of what I consider to be the world's most sophisticated finance years and investors on the planet as an asset class.

To go from $0 to over $5 trillion in assets under management in about a 30-year period is pretty phenomenal, and it's because of outsized returns. I'm not going to argue with that. I'm going to grab onto those coattails. And, as I have for 21 years, I'm going to ride alongside and do my best to take advantage of the opportunity that they've created.

Jon Thompson: Yeah. So, you've got a chance to invest in a company where you do have some influence that's being backed by arguably the most sophisticated asset class out there. And one that you've presumably vetted for the group that fits you best and that you think you can execute well, it's a good investment in your opinion.

Adam Coffey:  Absolutely. A matter of fact, I tell people all the time, "Think of it this way, think of how many people there are that work in the Fortune 500 world. As a percent of the employee base, how many people do we think earn a million bucks a year or more?" It's a very, very small number. My guess is well less than 1%.

If I then think of middle market, private equity backed businesses, whether they're platform companies or strategics that are buying other companies and rolling up an industry, when I think of middle market, private equity backed, I think about, boy, what's the percent of employees who are going to get seven-figure paydays when a company is sold every five years? The number is astronomically higher. If someone told me today, "Geez, Adam, it's been 21 years working in middle market. Would you go back to Fortune 500? Would you want to go back and be a senior executive in a Fortune 500 company?" And the answer is, "Hell, no."

The middle market is where the money is. It's where the action is. And it's so much easier for a person with a strong business acumen to take a company that's relatively small speaking and triple it in size versus taking one of the largest companies on the planet and trying to double it in size. It's my sweet spot for sure. Love middle market, love private equity backed middle market just because the wealth creation opportunities are so large for the common executive.

And so, one of the things that I think the best day of my career always is the day we sell a company on behalf of one sponsor, and then we get to re-up with another sponsor and keep going. But it's to not just see what happens to my own bank account, but to look at the management team that I built and have worked with for, call it a three to five-year period, and to see how many people for the first time became millionaires and/or participated in the wealth creation that took place.

And to watch the look on their face when they realize, "Oh, my god, I just got this million-dollar wire into my bank account." It's a fun time.

Jon Thompson: Now, contrasting your perspective on going back to the Fortune 500 and the hell no perspective on that versus maybe a lot of entrepreneurs that are out there who think about private equity as five years as a horse being ridden hard and put away wet, is it worth it? How did you walk that process without getting burned out or feeling just so pressured by the process?

Adam Coffey:  I feel after 21 years of doing this and it's actually been three companies that nine different sponsors, equity sponsors, multiple hold periods in each company. And when I think back across my career, I try to equate it to professional sports in The Private Equity Playbook. And I think about, imagine the pressure on a Kobe Bryant and the LA Lakers to be champions every year (and pick any sports team in any city), and this is the epitome of sports.

And the speed with which the professional sport is played is very different. And as I said, private equity, in my opinion, is the direct comparable. It's kind of the professional sport of investing and making money and returns. And it can be very, very intense. So, to your point, and I look at professional athletes look at a Michael Jordan, look at ... I'm using basketball right now. You could pick a David Beckham. We could go any sport you want to go and just think about the players, Ronaldo, think about the players over time and think about the fact that these guys have to get up in the spring or whenever their season's starting, and they’ve got to practice. And they practice every day and they're working out in the gym. It never stops.

And that's the intensity level of a private equity backed company. It's a professional sport. Be ready for that. Embrace that because what you get in return for investing that sweat equity in building a business with a private equity sponsor is you get a chance to create wealth, not just for yourself but for the management team. You get to create a great place to work for the employees. A growing business is so much funner than a shrinking business or a business that's not performing. It gives you an opportunity to invest in all of the things that go with building a culture and building an employee environment.

When I think of the last company that I was running, I had 3,000 employees, but we also had a great culture. People enjoyed getting up. Engagement scores were high. We had excellent benefits. We were taking good care of our employees. And so, we were creating opportunity for everyone, not just for shareholders and investors.

But it is intense. It really can be intense. This is the first time in my entire career, for the last seven months that I've been consulting now where I've had, call it time to kind de-stress and decompress from the sport that is private equity. And it's been nice to relax a little bit, but it is like playing a professional sport at the highest level.

Jon Thompson: I appreciate that you don't downplay the commitment and effort, but there is something to being on a championship team that is it's hard to beat. So that's great. I appreciate that.

In part two, prepping your business, you really hit on the importance of cleaning up business financials, starting the preparation for sale three years in advance in order to secure top value. You discuss good financials, audited statements, the creation of a sales side quality of earnings report.

And you mentioned that you've bought 18 companies. The ones with clean books, have sold in as little as 23 days, those running on Excel in as much as a year or more, which all makes sense. Thinking about the role of data, have you seen a correlation, Adam, between a seller's use of data analytics, (i.e. business intelligence, dashboards, etc.), and the time it takes to close a sale? And in the same turn, what about a correlation to sale price or valuation?

Adam Coffey:  Yeah, so listen, I think in the book, I must have been referencing a specific platform because I think the number is 58 businesses that I bought over the years. So, I'm going to step aside for just a second before I get back to your question, I just want to talk about running a business in general and the use of data dashboards, business intelligence, machine learning, all of these things.

From my perspective, when I'm the CEO of a business, I'm the captain of a ship. And if I'm sailing that ship at night in the fog, in a storm, I can't see where I'm going, and it's data and analytics that create the radar and all the gauges that tell me the health of the business and allow me to navigate in situations like that.

So now wrapping it back to the question about a business, a business that makes extreme use of data and analytics and dashboards, first of all, chances are I'm probably buying a company with a sophisticated management system in place, which includes the people, the process, the visibility. And that business probably is trading at a much higher multiple than one that has none of that.

One where someone sticks a finger up in the air and says, "How am I doing? I think I'm doing great," is different than one that can bring up dashboards and analytics and talk about trends and how things have been improving over time in a given set of circumstances. So, from my perspective, having those capabilities makes the company itself more valuable. Having those capabilities probably leads to a higher outcome.

All businesses trade for a multiple within a range. An industry might trade for, call it 8 to 10 times for a given size, or 10 to 15, or 15 to 20, whatever the multiple range is. A company that has good visibility to data and analytics is going to be perceived to be a better company than one that does not. It's going to trade for higher in the multiple range just on its own face. You and I have worked together in companies in the past. And you've always brought extreme value to me as an operator.

But now switching gears back to exiting a business, one of the biggest pieces of the process is something that's called diligence. And it's during diligence, I mentioned in both of my books, that diligence is a proctology exam that never ends. It seems for six months, it could be two to three months, four months, whatever the length of time is, the universe of buyers/the buyer is going to ask a multitude of questions.

And when you have analytics and data, it's just so much easier to present information to the universe of buyers, or to a specific party, and give them comfort in where that data is coming from. I have an ERP system in place. I've got a data lake and I'm using a tool like a BI 365 or something like that to pull information out. I'm populating dashboards.

I'm always doing buy-and-builds. Buy-and-builds are always messy from a data and analytics perspective. So, having a strategy to follow because I may be pulling data from multiple systems because I'm buying multiple companies and they're at different phases of being integrated - all of these things create issues and problems. And it's through the use of data and analytics that you solve these problems.

And so, yes, I have closed companies ... Literally, the last time I sold a company I was running, we sold it in three weeks. And a lot of work was done in the three weeks, but certainly the only reason I could do that is because I had the capability to answer questions and present information with that kind of speed that made it extremely possible to actually get something like that done.

But yes, it plays a big role in diligence. It helps present a company in its best light. Companies that are more sophisticated from a data perspective are then also more valuable. They trade for a higher multiple, they probably have better growth trajectories than businesses that do not because they have a very cohesive set of operating parameters that they're following as they're pursuing business in whatever industry they're in.

Jon Thompson: Yeah. Great. I appreciate that. What's your experience just briefly with companies or moments in companies when you didn't have good visibility? What does that result in your experience?

Adam Coffey:  Well, I call it riding the wave. And so, if you are running a business that is in favorable economic times, it may not kill you because the rising tide is floating all ships equally. But where it really, I think, makes a bigger difference is in a downturn or a slowdown, or a pandemic, or a recession, periods of high inflation. If margins are falling, why is that? Do I have supply chain issues? Is it a labor issue? Am I bidding correctly/incorrectly? I mean, there's just a multitude of questions that you could ask where the data could help you analyze and adjust the way that you're operating.

So, I have run businesses -- as a matter of fact, most of the time when I come to a business, I have what I call “poor gauges”. I walk on the bridge, and I'm tweaking on the dials and not much is working. And it's like, okay, I have no visibility. If this ship hits a bridge or hits a barge without knowing where I'm going, I have no sense of direction. A storm or fog, that's the analogy of a recession or a pandemic, and it's during these times of poor visibility in running a business where the data matters.

So usually I come into a business, I don't have the data that I need. I'm running blind, and I have to create some base level of metrics fairly quickly in order to steer the company and to start being able to see if the changes that I'm making as a CEO are causing a change in traction or trajectory. And then I immediately start working on trying to put in place more sophisticated systems, which would help give me better visibility. Some visibility is better than none. Very, very good visibility is better than limited visibility. You could go on for days with those analogies.

But yes, I have run businesses without it, and it's not fun. I'm riding the wave. It may be going up. It may be coming down. I have little ability to impact because I don't have visibility into the nuances of my business.

Jon Thompson: Yeah, that's helpful. Thank you. We'll jump ahead here. So, in part four, the sales process. Thinking about the exit a little more directly, you shift your focus to the actual transaction. You mentioned that Q4 around the holidays should generally be avoided as a time to sell. So should August, which is notorious for out of office.

So those are general timeframes, but I'm wondering how the state of the market affects selling potential. NASDAQ is down 20%, depending on what day you look, S&P down 15%. What's the state of the selling market right now generally? What are you seeing, and are multiples dropping in certain industries? Should sellers wait for the market to rebound or hurry up and sell? What's your general advice there (if it's possible to apply a general overview in that?)

Adam Coffey:  I would say that although the market is in turmoil, and although interest rates are ticking up, they're still near historic lows relatively speaking, if you go back 20, 30 years ago and look at interest rates. So, from my perspective, still a very strong seller's market, lot of capital chasing very few deals. And as a result of that, I'm still seeing very robust sales activity.

There are, however, businesses themselves that have been impacted differently by COVID or by supply chain or by, call it just the general economic malaise that we're currently facing. And so potentially, a business may want to alter its timing of sale because its earnings are down or its revenues down significantly, or something has happened. However, if a business is flat or neutral, or still growing through this type of turmoil, boy, that's indicative of a very strong operating business because so many businesses have been hammered.

There's almost the, I'll call it the COVID shuffle. Businesses that have been impacted during COVID, many have. And what I'm seeing is even those businesses, as long as they can show the recovery in '21 or '22, and they can show that they're digging out, aren't being penalized for the hits that they took during COVID because if they were, it would impact virtually every company on the planet.

But the company that can show it actually grew during COVID and has been growing through, call it the supply chain issues and the current market conditions that we're in, those companies have become more valuable. So, the money's still there, looking for something to buy. As we talked about in the very beginning, there will be different vintage funds. Some years will be better than others in terms of when funds started, but the money still needs to get put to work. Multiples are still high. Interest rates are still low comparative to historical norms.

So as a result, I'm seeing very little disruption, if any, in terms of buyer appetite to pay market clearing prices for businesses. However, some businesses that have been hammered may be delaying their move into the market and just waiting for their own financials to recover before selling, but nothing wrong with the universe of buyers.

Jon Thompson: Yeah. So, it's helpful to remember that the buyers are not working in a vacuum. They're aware of the context and if you're flat and down market, you're actually winning.

Adam Coffey:  Yes.

Jon Thompson: Great. Final quick question. So, for those focused on digital transformation – a phrase that I hear a lot in private equity right now as a growth strategy – what priorities should they place on putting their data to work? What would you recommend they do to make that happen? You've said that you walk on the bridge and when you're having to flick the controls to get some readout, the first thing you do is start putting better systems in place. I think for a lot of companies that feels like climbing Everest. What's the first step?

Adam Coffey:  A lot of times, you can actively put some systems in place that can be easy to focus on and easy to create a starting point. And so digital transformation is a journey, it's not a destination. And so, you don't have to go from, I have nothing, to I'm world class. You can take some teeny steps on the way along the journey.

I remember when I first got to that laundry company, and we had very poor visibility to data. And so, I created a metric. I was putting commercial washers and dryers out on tens of thousands of customer locations, and I had employees. I could measure productivity as simple as how many machines do I have divided by number of employees in the company equals machines per employee. And so, I could create a metric that gave me a starting point, and then I'm investing millions of dollars in ERP systems. And that takes years.

And certainly, when I come into a lot of companies, I do have data, but the data is located in different systems or different places and there's no aggregation of that data. And so, I could start with a digital transformation where I have a vision for where I want to be over time, create a roadmap that will take me there over time. But then also look at short term, what can I do from a short-term perspective?

I can call someone like a Blue Margin and I can say, "Hey, look. I don't have anything, and this is where I want to be three years from now and $15 million later, but can we do something today? Can I suck some data out of QuickBooks over here and an old ERP over there and an HRIS system? And can I create a data lake? And can I start fishing in that data lake and start to make some decisions based on data as an interim baby step?” Not an ideal solution, but it gets me started on the journey, helps me improve my business rather than just saying, “There's nothing I can do,” and “I'm going to wait until the perfect system is built by the IT department in five years.”

I can take baby steps along the way. And my suggestion is to think of digital transformation as it's a journey, it's never a destination. You're always going to be looking for better and for more. And start. That's the key. Take the first step.

Jon Thompson: Quick wins early even when you've got QuickBooks, the bane of the buy-and-build model. That's great. Lastly, Adam, what's next for you? What are you most excited about?

Adam Coffey:  So, it's interesting. I did make this pivot late last year and the thesis in my brain was ... So first of all, I was bored being a CEO after 21 years. And I said, "Look, I believe I can impact multiple companies at a time. I can't do that by being CEO of one company. I want to work with multiple entrepreneurs, multiple CEOs, multiple PE firms.”

And so, I created the CEO Advisory Guru. I think at last count, I'm working with six PE firms, a couple global banks, and a couple of founders. And so, I'm now working on impacting multiple companies at a time, much like you do. And that part is fun, and it's stimulating, and it's very in engaging from my perspective.

So, happy doing the things that I'm doing. Have not totally ruled out another run in a CEO seat, we'll see how that goes. Phone keeps ringing and I keep thinking, "Huh, what's next for me?" In a perfect world, I'll build the consulting business. It's been doing really good so far. I'll impact multiple companies at a time and help them really transform their businesses.

And my thesis was for private equity firms, such high prices are being paid today that a higher level of active management is required in order to hit your return thresholds. And so, in most of the companies that I'm working with, I serve as a CEO coach, a CEO mentor, I'm talking to senior leadership weekly. I'm in-person with them either monthly or quarterly, in addition to all the normal PE kind of portfolio type work that goes with being on a board.

I'm more active. I'm actively engaged as a thought partner with a leadership team, helping them bend the curve, drive results. They got to get out of the gates quicker. They need to get a growth trajectory really hit early out of the gates because the PE firm probably paid too much money in the beginning. And the only way they're going to keep that multiple arbitrage going and hit the return profiles is to have a more active management type presence.

And so, I'm creating that more active oversight for a PE firm today, working with their portfolio companies. And it's been a lot of fun.

Jon Thompson: I love to hear that. That fits well with our perspective. Brady has come back twice. The fact that you've considered a third time says a lot about the experience, I would say. Thanks, Adam, for joining us today and sharing your insights on the executive's role as investor in their business. It's been a pleasure. I look forward to following your journey into your next several books, it sounds like, and speaking again sometime.

Adam Coffey:  Thanks for having me, Jon. I appreciate it. And thanks to all your listeners, and maybe we can get that e-bike trip in Denver, make that happen really soon. That'd be fun.

Jon Thompson: Absolutely. All right. Take care.

Adam Coffey:  See you.

Jon Thompson: Bye-Bye.


Jon Thompson

Written by Jon Thompson

Jon Thompson is co-founder and Chief Strategy Officer at Blue Margin Inc. An author and speaker, Jon sheds light on how businesses can take advantage of a revolution in business intelligence to become data-driven and accelerate their success.