How To Build and Grow a Tech-Enabled Service Provider With Sean Frank

John Corcoran 9:36

there. How do you exist in that kind of environment in a, in a market like that, where prices have gone down? Competition has gone up significantly?

Sean Frank 9:47

It’s tough and, you know, we see that across all technology. I mean, you know, game servers is another area that we you know, my business eventually expanded to and it was a similar trend there. You know, as you see, technological advances come out, it becomes a cheaper and more economical for the hosting provider to operate. And, you know, inevitably, with low barriers to entry entry, it creates more competition and then you know, eventually have to compete on price and pass those savings down to the consumer. So it’s definitely not ideal to be in any of those, you know, industries. But you know, you really focus on ways that you can command a higher price to your to your end users. And so in industries that I mentioned, like hosting, or even game servers, one way that you can do that as service. And so that’s always been a very important attribute of our business is trying to have the highest quality service to our clients. And so you know, when I was in the hosting business, we focused a lot on having very quick response times. I mean, I think we’d like a 15 minute response time guarantee on all support tickets, you know, 24/7, live chat, 24/7 phone support, but really being focused on trying to help the customer in a quick way as possible, and not just kind of directing the customer in what to do or telling them that we can, you know, support them. And so in, in an industry where there’s increased competition, and prices are getting driven down, I think that’s one way that a business can try to compete and really justify a higher price point to say, hey, we’re not just this commoditized product, like a hosting service, but we actually provide you, you know, good quality, technical support customer service on top of that.

John Corcoran 11:17

Now, at what point in this journey, you know, you’re started out in middle school, you’re in high school, at what point do you start hiring people? Were you hiring people that were working for you, while you’re, you know, showing up to high school?

Sean Frank 11:29

Yeah, I think even before that, I mean, I’m fairly confident like, by the end of middle school, I had a couple of employees. You know, there’s one forum that I really used as as a pivotal area to learn a lot about the hosting business and the technology and how to, you know, really legitimize the businesses this forum called a Web Hosting Talk. And it has a section in it for people who are looking to hire or people who are looking for jobs. And so I got a lot of early hires from there. They were totally

John Corcoran 11:57

overloaded. I imagine them they weren’t, yeah, never wrote, We had no office back then. I mean, even early days of hiring people overseas and offshore staffing. That’s, you know, there weren’t as many, maybe oDesk was around in the early 2000s. I can’t remember.

Sean Frank 12:11

Yeah, my first hires were all overseas, you know, just contractors that I found remotely. And, you know, looking back, it was definitely a lot of trust that I put in them, you know, I did an interview, and I did, you know, kind of the limited reference checks and whatever that I could think to do back then. But at the end of the day, I handed them the keys to, you know, my servers, and you know, if I made a bad hire, someone wanted to, you know, mess your day, but if they could have ruined my company, you know, so it’s definitely, it was a lot of risk. But, you know, some of my earliest hires are people that I still do work with today. You know, they don’t work for us here at clad equity group. But when we need to hire a contractor to maybe help with the project, or to step in with one of our portfolio companies, I mean, some of the early guys or people that I still, you know, it’s 20 years later, and you don’t have a relationship with, do you?

John Corcoran 12:55

Did you grow up an entrepreneurial family? What did your parents think of all this? You’re You’re

Sean Frank 13:01

not an entrepreneurial family at all, I guess my grandfather, you know, had started a business. But you know, my parents, my, my mom was a teacher, and my dad was a doctor. So you know, no, nothing really there. I think, you know, just, I became interested in technology. And, you know, I’ll attribute this I think, to my dad, my dad’s always been very interested in technology as well. And, you know, as I look back to a time where, like, computers were just becoming accessible to homes, you know, we had probably four computers in our house before, you know, the average family had one computer in the house. And when I look back at like, internet first becoming available, you know, most people were on dial up, or like, maybe a DSL connection. And we had, you know, already a cable connection. So my dad was always very interested in technology. And I think that’s really what kind of got passed down to me and, you know, having access to computers and internet and websites, I wanted to learn more, and hey, how can I do this myself? And it really just sparked kind of my own curiosity and really just grew from there.

John Corcoran 13:58

Yeah. Now, we were talking before and you said there was a moment in middle school? I think you said it was where you realize this was a legitimate user, business, and you were starting to make as much or more money than your teachers. Take us back, you know, talk to us about what that was, like that kind of realization. Yeah, it’s

Sean Frank 14:17

an interesting thought, you know, I never really thought much about money because, you know, I grew up in, you know, a family that was very supportive and you know, as a middle school kid, or even when I got to high school, and I didn’t have any expenses, my parents paid for everything, you don’t need clothes, or you know, extracurricular activities, or sports or whatever. So I had no need for money, it was nice to get, but I had no need for it. And so I would just reinvest all my money back into the business over and over and over again. And I think that was a really key thing that helped my business to scale is that I didn’t need to take money out of the business. I could just reinvest all of it and you know, get a return on on sort of that reinvestment but yeah, I mean, there was so with that, you know, I never resonated like how much I was making or anything like that because I wasn’t keeping it at the end of the day. I was going back Again, but yeah, I mean, there was there was definitely a point sometime in middle school where I said, you know, hey, the money that I’m earning each month even though I’m not, you know, keeping it free investing it like this is a decent amount of money. I mean, I’m making more than some adults. So I think that was kind of a pivotal point in my entrepreneurial career where I said, Hey, you know, maybe this is a bit more than a hobby. And you know, this is actually turning into, you know, legitimate business.

John Corcoran 15:25

Yeah. I’m curious, my son, Mason just came in here from after school, he’s 12 years old, you started your business at 12 years old. Mason is a actually just made his first sale on Ebay, which he’s really excited about. So he’s been delving in a couple of different entrepreneurial endeavors. If you think back to 12 year old you, what lessons can you reflect on, that you would want to impart on young 12 year old Sean, and by extension, all the other 12 year olds out there?

Sean Frank 16:00

Yeah, I mean, I’ll just, I’ll just speak to 12 year olds, generally. I mean, I think that when you’re young, and I’ve said this before, I think that when you’re young, it’s the best time to take those risks, right? You know, you’re not dependent on your money to live, you’re not supporting a family, you’re not, you know, you don’t really have expenses. And so if you’re gonna, you know, go out and take a risk and say, I’m going to try to earn some money, but I’m gonna just keep putting it all back in, it’s really the best time to do it. I mean, I heard the same advice from, you know, other people, and this was was many years later, just talking about, really careers and people’s careers, generally, I mean, you can obviously, you know, be much more tolerant to risk when you’re younger, and, you know, the money, I guess, is less important for survival and other things. And so, you know, I think for 12 year olds out there that, you know, maybe have a passion or a dream, or, you know, have an entrepreneurial spark, and when it tried to do something, I mean, just go for whatever it is. And the thing, too, is that there’s this misconception that, you know, you need to know exactly what you’re doing, and, you know, have this well thought out idea, and you’re just going to stick to it. And, you know, if you don’t have that nothing had happened. I mean, that’s not really true, I started as a hobby. And it just, you know, as I was doing it, I kept seeing new opportunities, and from those new opportunities, I would pursue them and see other opportunities, and it’s really a cumulative effect. And that really took me from building websites at 12 to, you know, running a private equity firm today.

John Corcoran 17:23

You realize how, like implausible that sounds? Just when you say anyone.

Sean Frank 17:27

I mean, I would have thought I would have thought it was too. And that’s why, you know, I always reiterate that fact is that you don’t need to know where you’re going, just being on the journey is, you know, part of it, you know, I would have never thought that, you know, 20, even I would be an asset management, you know, back then I was still focused on, you know, being a strategic operator and having this company being a CEO. And so, you know, life will always present opportunities, and you know, just about seeing those and, you know, wanting to take advantage of or pursue them.

John Corcoran 17:53

Yeah. Did you would take me back to some of your early acquisitions. When, what was your first acquisition or second acquisition? And what motivated them? And how did you get through them when you were kind of figuring it out? Yeah. So

Sean Frank 18:10

I think I actually spoke about this once I had a talk at Harvard a couple of years ago. And I made reference to this, I don’t recall the details. But my very first acquisition was actually my hosting provider that I bought for $800. And this was as probably

John Corcoran 18:24

like a year talk 14 year old company, we were talking about the you were learning from you ended up acquiring them for $800. For $800.

Sean Frank 18:32

Yeah, I knew nothing at all about hosting back then I knew nothing about technology, nothing about infrastructure, I had no idea what I was doing. But I went to my dad, and I said, Hey, can I have an $800 loan? I think I can pay you back, you know, $15 a month for the next, you know, whatever, I forget what the economics were, you know, and he, for some reason, just said, yeah, and gave me the money. And we made a little payment schedule. And I paid him back monthly until, you know, he got all his money back. But that was my very first acquisition. You know, the thing that I liked about this industry you’re hosting specifically is, you know, it’s all the recurring revenue. And I was able to see at a young age that, hey, if I am collecting revenue, and I know what my costs are, there’s profit. And if I just focus all my profits paying back my dad, because I didn’t need money for anything, you know, I can, you know, really just focus on you know, how quick can I pay him back. And in my first acquisitions, it really just came down to timer to repayment was was the most important metric for me. And, you know, I was able to find opportunities where I can pay him back in like six months. And so as I did more of these, and you had economies of scale to reduce costs, I mean, I got down to like, three months at one point,

John Corcoran 19:35

so why was it so cheap?

Sean Frank 19:38

That was a small business. But yeah, I mean,

John Corcoran 19:42

that was this was the company that I mean, this is so interesting, because it was the company that you were learning from you were using them, you were reselling them to your clients, and then you end up Yeah, I started.

Sean Frank 19:51

Exactly, yeah, so I started off with with what’s called a reseller plan when I first got into hosting and so I really just had a hosting account that allowed me to create other hosting accounts is kind of a white label service. And so it’s a very affordable way that most people, you know, start off in hosting, you don’t have to invest in infrastructure, you don’t have to invest in servers, anything like that. It’s just, you know, a low monthly cost, and you have to plan and so, you know, somehow back then, like live, live chat software didn’t even exist. And so the way that you would get support is AOL Instant Messenger. And so the company had an official channel, and, you know, it’s a small company. So there was just these two founders and, you know, they were providing the support. So through, you know, support engagement is how I developed a relationship with ship with them in got to know them. But yeah, at some point, they, I guess, decided they didn’t want to be anymore. It was a very small business, obviously, I could can’t even remember what kind of revenue was making. 

John Corcoran 20:47

But candidly, if they were

Sean Frank 20:50

tiny, I mean, like I said, I had no idea what I was doing. And you know, my dad trusted me with the $100 to buy it. You know, but it really sparked and I won’t even say it, that was a successful acquisition at all. I mean, I literally knew nothing about kind of the technology side. I mean, it probably didn’t make money, and I was able to kind of rebuild it a little bit. You know, I did pay him back, obviously. But that’s really what sparked everything and, you know, started going from, you know, that tiny business to, you know, was it a couple $1,000 to, you know, ones that were more than that, you know, till, you know, doing acquisitions for, you know, several $100,000, you know, all while in kind of middle school and high school, high school?

John Corcoran 21:25

What was the first one that you did that made you kind of stop and think, oh, man, what am I doing here?

Sean Frank 21:33

You know, it’s funny, I don’t know that we necessarily feel it anymore. But, you know, the night before closing of any transaction, regardless of size, I mean, you always, at least there was a time where you would always just kind of second guess everything, like, Am I making the right decision? Is the smart investment in Am I gonna buy this and it just flops, you know, and you get nervous? You know, I think it’s a little different today, because we’re much more sophisticated, the investments that we do, but you know, growing up, and when I did a lot of these early acquisitions, I mean, it didn’t matter the size, you always got that feeling and that kind of unease. And really, the first month, you’re watching your numbers, you know, literally daily just to be on top of, you know, is anything not as expected, did I mess up anywhere? You know, but I think that, you know, with every new largest transaction is, you know, a new milestone, and they’re always exciting, you know, as you continue to do them, and you get economies of scale, and you could say, Hey, this guy is operating at, you know, maybe a 10% margin, but I know that I can operate at a 25% margin. And so it took me three months to get there. You know, it just it keeps being exciting, and they keep getting better and better. So, you know, they’re all exciting every acquisition that we did. But certainly any milestone would be kind of the largest acquisition, you know, at that point in time.

John Corcoran 22:46

At what point did you decide that this is something I want to pivot into professionally into private equity? Did you did you get burned out on running the hosting company and decided that you just didn’t want to do that anymore?

Sean Frank 22:58

Yeah, so that’s a good question. So got a lot into m&a. And, you know, when I was in high school, I became connected with a guy named Andrew McKelvey. He was the founder and original founder and CEO of, the one who had taken it public, and at the time, he’d already exited monster, and he was running a private equity firm in New York called Blackfin. Capital. And so that was really the first time in my career that, you know, I had a mentor that helped me to legitimize my business, you know, up until that point, in kind of your early education, you don’t really take any business classes. And so everything I knew is what I had learned on on, you know, taught myself, you know, there was no formal education there. And so it was the first time that I had a resource of someone who actually ran a business and was very successful. And he his story, too, is also very entrepreneurial, and was able to share a lot of insight.

John Corcoran 23:48

But in addition, how did you how did you connect with him, by the way?

Sean Frank 23:52

So he had a scholarship program for young entrepreneurs called the McKelvey Entrepreneurial Foundation and tracing back to his roots. I mean, this was a guy who his original career was, I think, like selling papers, you know, and then started a paper route as local community. And, you know, that transitioned into some other venture, and somehow that transition and a monster and, you know, obviously, that blew up and became a publicly traded company. But so he wanted to give back and there’s a number of different philanthropies he had, but this was one where he wanted to just become a resource and connect with young entrepreneurs. And eventually this would go partially to college scholarship. And, you know, there’s a lot of networking component, and once he would do an event that everyone comes to, so it was a cool thing, but I don’t remember how I found that maybe it was word of mouth or Google or whatever, but, you know, applied for that and got accepted. And through that, you know, I became close with him and his family. You know, and he was an invaluable resource, but you know, really taught me how to legitimize the business, but also taught me how to legitimize the m&a process and how you can borrow money for example, to do an acquisition. You don’t use all your own money and why that’s better and you know these things They’re very intuitive now. But back then and you know, as kind of a young high school student wasn’t really that intuitive. But, you know, he really helped to accelerate and, and legitimize I think a lot of the m&a that we were doing. And at the time, it was just really buying similar businesses to mine to either kind of grow my existing company, or maybe help us to expand it a new product line or different vertical. So just doing a lot of these acquisitions. And, you know, what I found is that I really loved doing the acquisition and the m&a side of it. But it didn’t really love the idea of being the CEO, the guy that needs to oversee everything, and you’re dealing with HR issues, and you’re dealing with, you know, the vendor relationships and the customer

John Corcoran 25:38

15 minute promise of responding to every incoming inquiry, I mean, that people get burned out on that sort of thing.

Sean Frank 25:43

Yeah, you get burned out. And you know, especially when you’re the guy who starts a business, and I think this is the same in most businesses, I mean, you know, your customers, you know, your early customers, and so you might have a support team, and you know, a customer needs support, and they go to the team, but then the customer has an issue, and they call you. And you know, it’s a lot of stress. And I didn’t necessarily it wasn’t appealing to me, you know, my company was growing is very profitable, I was making a lot of money from it, but it just wasn’t what I wanted to do. You know, and the m&a side was very interesting to me, and just learning you can buy businesses and you know, how you can structure the transaction to make it you know, a little bit more lucrative or betters that requires less money from you. And, you know, it was a great model. And so, you know, I went to school at the University of Pittsburgh, I was still running my company at the side at the time. And I majored in finance. And, you know, I think that’s when I started to learn about, you know, more about investments, and, you know, kind of the idea of, you know, I don’t just need to be buying companies to grow my business, but there’s a whole market out there of, you know, businesses that are in the business of buying selling companies, you buy a company, you add value to it, you grow it, and then you sell it, and you give in return to your investors. And so, I’m really kind of clicked that, you know, hey, I have the industry expertise, you know, I can point to a track record and growing and scaling my own business. I think at that point, I have, you know, financial expertise, at least, that I know what I’m doing. So why don’t I you know, go and start a business and say, hey, you know, I’ll leverage investor capital, and I’m gonna find undervalued businesses, and I’m gonna scale them, and I’m gonna flip them. So, you know, we founded Cloud Equity Group in 2013. And it was an independent sponsor model. And so we quite literally would, would try and find an investment opportunity that we thought made a lot of sense. And it was a business that for whatever reason, was either undervalued or, you know, not reaching its full potential, and you’re very confident that we can grow and scale, then we go to, at the time, predominately friends and family and saying, hey, you know, give us money to help buy this business, and, you know, this is what we’re going to do over this period of time, and then we’re gonna sell it, and here’s the return you’re gonna make. So a very, very labor intensive process, it’s certainly not efficient when you have to first find the opportunity, and then try raise the capital and kind of do everything in conjunction. But, you know, it’s, nonetheless, how a lot of asset management firms start, and we did that from, you know, really 2013 to 2015, you know, did a handful of transactions in that model and showed success, and, you know, each time that transaction was getting larger than the previous and then finally, in 2015, we were able to launch our first discretionary fund. And so that means that investors make a commitment to a fund, and we can draw down on that capital commitment as we have investment opportunities. So it’s a much more efficient model, we can move faster, you know, we can often be more competitive, especially when we’re competing against, you know, other bidders who maybe don’t have committed capital or have to put in offers, you know, contingent on some kind of third party financing. And we’re really able to start accelerating the pace and the rate at which we were doing transactions, we were able to start doing, you know, larger and larger transactions, and you just continued to, you know, compound and to eventually got to, you know, where we are today, where we’re, you know, we only invest at a committed funds. You know, all of our transactions are, you know, pretty sizable, you know, come with teams, you know, small and five employees, and we just closed the transaction last month with probably 45 employees, you know, so it’s allowed us to really scale and grow quite significantly over the past couple of years.

John Corcoran 29:07

And as you made that transition from, as you said, friends and family to more institutional capital, did your unconventional background, or the fact that you were focused on this very specific niche of type of company? Was that a challenge to get the institutional capital interested in investing in your fund?

Sean Frank 29:25

Yeah, so it’s, it’s yes and no. So look, we we are a lot of our early the problem we generally had starting off is, you know, we’re young at this time we started and so we were always able to articulate, you know, here’s the success that I’ve had up until that point, here’s the sector sector expertise, here’s the industry relationships, I’m bringing, you know, everything on paper, if the same thing was being said by someone in their 50s would be, you know, a no brainer. This sounds like a great opportunity. But the fact that you know, I was in my young 20s At the time that we started this, you know, we got a lot of I don’t want to say push back. But you know, people recognize that, you know, I’m still young, and you don’t know what you don’t know. And so, you know, friends and family, obviously, you know, we’re able to take a risk just knowing you personally and had a lot more comfort, there are first groups of outside investors where, you know, people that, you know, maybe the story resonated, you know, they had a child that was entrepreneurial, or reminding the kid or whatever was able to connect, and, you know, they were willing to kind of take that risk. And so it was really a lot of people needing to, you’re getting those first investors, you were able to look past the age and trust the strategy, the strategy and expertise in the track record, willing to take that chance, once you start to develop the track record, and you’d say, Yeah, I’m young. But we’ve also now done this with outside capital for you know, so many years, and we’ve done X amount of transactions, and we’ve exited this many transactions, then the story becomes a lot easier. And so, you know, the sector expertise and non traditional path has always been a very good talking point. And it’s always been a very good story. But I think the biggest bottleneck or the hurdle that we had, you know, when you first started, the asset management firm was really just getting over age bias and getting people to say, you know, it’s okay, that, you know, the founder of this firm is in his 20s. And in his 50s, you know, he still knows what he’s doing and can deliver returns.

John Corcoran 31:13

Yeah. Now, one of the projects you’ve worked on, is one called BrightWorks. Digital, which has been buying smaller digital agencies kind of combining them professionalizing them, which seems like a bit of a jump from the web hosting type of business. So talk a little bit about what your experiences have been like in that area, and and maybe some of the ways that you’ve been able to leverage the previous experience in order to put those types of deals together.

Sean Frank 31:43

Yeah, no, certainly. So, you know, I mentioned before we started off, you know, independent sponsor model at the time, we were exclusively looking at hosting providers, because that’s directly what I was doing. But over time, as we were able to develop a track record and proof of concept and Judy’s investment started to branch off a bit and bit and today we invest in what we broadly define as tech enabled business services. So branched out to really any kind of recurring revenue service oriented business that you know, promotes powers enabled, you know, either cloud or remote connectivity, your web presence, kind of the, the dynamics of these businesses are very similar in this couple of market attributes that we really liked that kind of drive into our investment thesis. But it really branched out a lot from just doing hosting, you know, which was a bread and butter when we started. But yeah, digital agency is, is one area that we’re very interested in, we launched a platform company earlier this year called BrightWorks. Digital. And so we’ve done three acquisitions into that platform company. So far, a web development firm here on Long Island, Kryon EBS universe, which is a web development and search engine optimization firm based in Illinois. And we just recently closed not announced yet a search engine optimization company down in Miami called on the map, it’s the first time I’m publicly saying that. But yeah, just really trying to do this here. Breaking news, press release coming soon. But yeah, thought process being really kind of buying and building a full service service oriented digital agency. So we’re looking to do everything from web development, which is obviously an area that you know, had a lot of experience, experience in Once Upon a Time to, you know, managing Google ads to managing social media channels to, you know, search engine optimization to, you know, full gamut A to Z of anything, digital marketing related, so promotes or enhances online presence drives, more traffic to website, increased conversions, all of that. And so, focusing on building a company that not only does the full gambit in terms of services, but also can support the full gambit in terms of clients and so on, like one of the brands, it’s much more focused towards, you know, kind of small businesses or, you know, maybe small or medium sized businesses. So focusing on lower price point, more affordable service base, and in our recent acquisition, you know, much more oriented towards more medium and larger sized businesses and much more service service oriented, but much higher price point. And so not only trying to build a company that does everything in terms of service offering, but also can provide a service that kind of any price point across its different brands. So we’ve done, you know, three acquisitions there so far this year, and, you know, hopefully we’ll do another two or three before the end of the year, but yeah, it’s it’s an area that we’re very interested in, and how do you

John Corcoran 34:31

manage to put those together under one brand and for them all to operate cohesively? You know, because you hear statistics sometimes about those types of roll ups, you know, there’s a high likelihood of failure. So how do you know that they’re culturally going to be a fit that they’re going to work together? How do you manage that piece of it?

Sean Frank 34:53

Yeah, no, great question. So one of the core things that we like about the different sub sectors We invest in this, we invest in very standardized industries. And so what that means is that if we look at five companies within any sub sector, the technology stack of, you know, maybe for the five, or you almost identical or very, very, very similar. And so it eliminates a lot of the risk of what you’re describing, and just that fit. I mean, as you look at companies that do these roll ups, and these buy and build strategies, just like you’re saying, I mean, one of the biggest risk centers that you have in that is, you know, can company a really jive with Company B, or is it just going to be two difference that you can’t can’t mesh and so we invest in industries, where from a technological or infrastructural perspective, that risk doesn’t exist, because it’s very standardized, and the companies are already using very similar infrastructure. So from there, from an integration perspective, the culture and the people, you know, is one of the biggest risks, but you know, we’ve been doing this for a long time now, and we have a great team of people that’s very good at kind of articulating and working with, you know, people and alleviating concerns, and, you know, mitigating kind of the cultural aspect and making people, you know, be excited about these acquisitions and being part of a larger organization. You know, one of the things that we can often articulate to the companies that we invest in is we provide now much more opportunity to the people and more resources to the people. And I think that’s something that really resonates from day one, you know, at employees at a company that we acquire, you know, before acquisition, they work for a company that maybe is doing, you know, 10 million a year in revenue, whatever it is. And that’s the plateau, right? It’s an organization that maybe has 40 people, and there’s only so high that they can get, and there’s only so many functions that they can, you know, go to, and there’s only so many resources that they have, because they’re limited to that, you know, with by definition, a small business. But from day one, and acquisition, we’re now bringing them into a much larger organization. And so it creates opportunities for career growth. Now they can scale being part of the large organization, it creates the opportunity to maybe change horizontally, if someone likes the company and likes the culture, but doesn’t really like what they’re doing. And they’re looking to do something else, we can create those opportunities. We provide more benefits and resources. And so it’s really something that’s allowed us to be successful in our integration plays in really just being able to articulate to the team all the benefits and enhancements that they get now being part of a larger organization and the things that we can bring to the table.

John Corcoran 37:16

All right, I want to ask, we’re almost out of time. But I want to ask kind of a little bit of a selfless, selfish question. Question. Because our company has been part of the reason I booked this interview is because I was just curious to learn from you. And, and we’ve been looking at doing acquisitions of smaller podcast production companies. And what I’m struck by is that, you know, we spent a lot of time thinking about finances and how you set up funding and all that just kind of like, technical pieces, and you know, is the software stack the same, but so much of of acquisitions is managing the psychological or the emotions of the founder or the seller. As you think about this, how much of your energy and attention goes to the psychological elements, managing the emotions of the seller, versus all the technical elements of the financing, and things like that.

Sean Frank 38:11

So fortunately, I have a team that does that. But you know, so we invest primarily in lower end and lower middle market. And so that means that were oftentimes transaction with the founder of the business, who is the seller, right? original founder. And so there is a lot of emotion there, there’s, you know, oftentimes sellers, remorse, there’s oftentimes, you know, it’s an unsophisticated seller, it’s his first time selling a business, it’s his baby, and you know, it can be emotional naturally. And some transactions are easier than others. And some can be very, very difficult to, you know, work with a seller that, you know, every day is questioning if it’s the right thing, because he thinks about how he’s been doing it for the last 20 years, and think about his employees and his clients and all of that. But fortunately, I have a great team behind me that, you know, has a lot of experience in dealing with that. And, you know, I think a lot of time, it just comes down to just compassion and relating with the seller, maybe don’t push anyone to move faster than you know, they want to we try to be very transparent with sellers, one of the things that’s very unique about us is that we offer the opportunity if they want to stay on in some kind of capacity to kind of remain with the business. And so it’s very much a case by case basis, and it can vary based on on, you know, who the seller is, but know, it can be a very difficult process and, you know, require a lot of hand holding and, you know, just kind of a shoulder to lean on and, you know, dealing with some sellers who are, you know, emotional and you’re just unsure in the process. But yeah, fortunately have a great team that’s able to manage that.

John Corcoran 39:33

Alright, last question. So I’m a big fan of gratitude. And if you look around at, let’s say, peers and contemporaries who’ve helped you along the way, maybe mentors, who would you want to shout out who would you want to thank for helping you in your journey?

Sean Frank 39:48

Yeah, so I mean, I think a big I’ll answer in two ways. I mean, certainly all of our earliest investors you know, people who are outside the friends and family who You know, took, you know, a chance in early investments and said, hey, you know, we’re gonna give these guys a shot, you know, recognizing they don’t maybe have a lot of track record and you know, they’re young and whatever. I mean, that’s obviously very important to us. And really, I guess that translate to all of our investors. But if I had a single one person that I think was was very pivotal, Pivotal, you know, I had a friend, Joshua stone, he ran an asset management firm, also here in New York on Wall Street. And, you know, he was very integral, I think, in our early days, making a lot of connections for us, introducing us to a lot of service providers, capital intro firms and investors. You know, but some of our earliest, most meaningful relationships came from that and so, you know, definitely give a shout out to him and helping pave the way for, you know, us getting to where we are today.

John Corcoran 40:49

John, this is a great where can people go to learn more about you and learn more about Cloud Equity Group?

Sean Frank 40:55

So the best place to just speak at our company’s website, which is 

John Corcoran 40:59

Excellent. Sean, thanks so much. 

Sean Frank 41:02

Thanks, John.

Outro 41:05

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