332 - How To Find The Right Chairperson For Your Board?

0:00Today, we're going to dive into one of the most critical steps in building a credible acquisition team. and that is how to find the right chairperson for your board. This is an absolutely critical step. A strong chairperson will give you instant credibility to sellers, lenders, investors, and help in acquiring other board members that really are the cornerstone or the anchor of your board. And they certainly, if picked the right way, provide guidance, industry knowledge, and connections that can really fast track your acquisition success. So let's talk about that. First and foremost, understand what the criteria is that you are looking for in the right chair person.

0:46They must have hands-on experience in acquisitions, and the ideal candidate is someone who's successfully acquired and grown businesses, not just advised on deals. So what are you looking for. You're looking for former C-suite executives, COOs, CEOs, CFOs, or business owners, entrepreneurs, who have built their business through multiple acquisitions. Industry experience is a big plus if you can find it. For instance, if you're in healthcare, the specific niche, if they've rolled up, that's great. But if you can't, you're going to have industry experts, so at least they should have experience in health care.

1:29And that experience, if you target the right person, they will understand market dynamics, valuation trends, potential pitfalls, what's worked and what hasn't worked for them in the past. And they'll also be able to help you with negotiations with the seller. Oftentimes, industry insiders trust their own. And if you have someone that fits into that category, they may very well understand and know that person. But you don't just want an advisor. You want a dealmaker. You're looking for someone who is not a consultant. You need someone who has sat on the buy side of deals, not just provided advisory services.

2:13And if you begin to see M &A people, maybe bankers, maybe private equity people, oftentimes they just did a sliver of a deal, oftentimes the financing. And then you want them to be well-connected and respected in the industry. They can certainly introduce you to lenders, investors, acquisition targets, and their reputation can absolutely elevate yours overnight. Their reputation essentially becomes in part your reputation. So where do you find the right chairperson? Certainly LinkedIn is something you can look at in strategic Google searches. Search for former CEOs or business owners in your industry.

2:54Use LinkedIn and do searches which have the filters where you will include the industry, maybe past C-level executives, public board experience, and M &A experience. But again, be careful with that, that you don't just pick a private equity person who has only done a sliver of the deal. And look at their activity. Are they still engaged in the business world? If so, that's a plus. Remind them that this is a non-executive position. They're not going to be working from 9 to 5 on this. They're going to help you steer the boat, not row the boat. Industry events and conferences, you can certainly look into those.

3:36Either attend them in person or sometimes look for the panelists and speakers or retired execs that are still active in those networking circles. You can look at investor and CEO peer groups. Many experienced operators are still engaged in private equity networks, maybe mastermind groups or industry associations. Again, be careful about the private equity. You know, there are certainly some examples of that. The YPO, the Young President's Organization, SCORE, which is the service corps of retired executives. that I've had mixed results there, but it's worth looking into. And then your existing network.

4:18Ask your accountants. Ask your lawyers. They often know executives looking for their next challenge. So most importantly, how do you separate yourself from the bots, and how do you stand out and secure the right chairperson? Good question. Most good chairpersons get multiple requests, So you will not be the only person who's ever contacted them. So why should they choose you? Good question. You know, frame your acquisition as something that's compelling. I've heard more than once where a candidate says, how is the world a better place for your great idea? So think about how it'll improve customer service, how it'll change an industry, or at least enhance an industry.

5:05and explain why your roll-up or acquisition strategy is compelling. You know, make sure you focus on them. Show that you're serious, prepared, have a clear plan. It doesn't have to be a business plan. And lead with value. Just don't ask, will you join my board? I frequently get requests, and the whole letter or email is I, me, and very few you or yours. So focus on the other person. But many executives have been there and done that. They really don't need a title. What they're looking for is sometimes equity participation. You're going to give that. A chance to shape an emerging acquisition company using their expertise.

5:51They think it's fun. And then a role where they don't have to run the business. As I said before, they're steering the boat, not rowing the boat, but they can provide strategic guidance. And a lot of those people do look at this as fun. It's hard to find good mentees. So when you stand out above the crowd, you will certainly draw their attention oftentimes. And then use a professional approach. Don't be a bot. Don't send generic form letters. Use a personalized, compelling pitch. I would highly recommend if it's a real big hitter that you do an actual letter and then send it by FedEx to their home if you can find that address.

6:35There's not a lot of people who are going to do that. They will definitely open it. And the only thing that you want to, well not the only thing, but one of the things you want to remember is what is your exact desired outcome from that letter or from that email or from that LinkedIn message. Most of the time, it's to get a response and a phone call or an agreement to have a meeting. That's what you're looking for. So have a call to action in those. But keep it concise. I would say no more than the page, who you are, what your acquisition focus is, why you believe they would be a fit. Use some personal things in there.

7:13What's in it for them. Let them know that there is founders equity. They won't be asked to contribute capital. and then why it's important to you. And if you're reaching out from LinkedIn, oftentimes follow up with an email if possible because most of them aren't going to spend hours and hours on LinkedIn. So what are some key takeaways from this? The right share person isn't just a name on paper. They're experienced dealmakers with industry knowledge and connections. And as far as an action step, start your search today using LinkedIn, industry events, referrals, all the things I mentioned, and then craft a standout pitch that separates you from the crowd.

7:56And then finally, a thought, a great chairperson can really transform your credibility overnight. Take the time to find the right one, and it will pay off in every deal you do. Even if you don't have experience, even if you've never done this before, People with the right board around you and the right chairperson will say, well, he doesn't have a lot of experience, but these people, boy, there's something else. So they must have seen something in him. So I hope that helps. If you're looking for the steps, if you're looking at things like seller finance, if you're looking for coaching, go over to BruceWhipple.com.

8:33There's a menu of things that I could help you with, I think. So take a look at that. But finding the right chairperson is critical, and I hope this helps you to be able to do that.