The Shore Resource Team | Shore University

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The Shore Resource Team

The Shore Resource Team (SRT) is a dedicated team of finance and operations professionals within Shore Capital. SRT offers support, expertise, and bandwidth to portfolio companies to help go faster with less risk. In this episode, Jeff Williams, Shore Capital COO, and members of the SRT describe how the team works, the types of projects they take on, and the impact they have on the growth of our companies.

Transcript

Introduction

Anderson Williams: Welcome to Bigger. Stronger. Faster., the podcast exploring how Shore Capital Partners brings billion dollar resources to the microcap space. In this episode, we're talking about the Shore Resource Team, one of the key investments Shore Capital Partners has made in helping our companies grow bigger, stronger, faster.

The SRT as it's more commonly known is a team of subject matter experts focused on building and strengthening scalable, repeatable processes to support growth at Shore portfolio companies. They help maximize the network effect of shared experiences, resources, and learning across the portfolio. Given this unique resource, I wanted to start this episode by having Jeff Williams, the Chief Operating Officer at Shore, just describe Shore's approach to the Microcap space.

How do you describe the Shore capital approach to the microcap space? Just generally, how does Shore think about the microcap space and approach our investments?

Jeff Williams: We are a buy and build investor. We are a hands-on partner and we offer assistance that I think is extremely unique in the space that we invest and participate in.

A lot of firms out there have financial professionals that part-time as operators. And what makes us, in my opinion, black and white different is we have a number of people here that all they focus on all day and what they enjoy are operating and being involved with the businesses day-to-day on a hands-on basis, which is, I think, very different.

Not only the microcap space, but I think it's very different across even middle market or large market investors.

Anderson Williams: And when you think about being hands-on, how does that work? If I'm on the executive team, if I'm the CEO, talk a little bit about how that works as a partnership and not so much like you're in my business, running my business kind of thing.

Jeff Williams: So when something happens at a company and you're an operator, and as an ex-CFO, I can relate to this, if you know where you have opportunities to improve, and oftentimes it's hard to carve out the hours to go do it. Also, you may not have the horsepower on staff to do it. Because everybody has a day job, so your initial option is to call a third party consulting firm.

Generally expensive. There's generally some efficiencies lost upfront because they don't know your business, they don't know your personality, established timelines, deliverables, and so on. Where we are very different and where we come in and help is we already know the story. We were there from the get go of the initial partnership.

We've been in weekly meetings about what's happening in the business, the good, the bad, and the ugly, where the opportunities are. We sit in the board meetings with you, and when you need extra hours to help, we're there for them. So it takes on a very team approach, partnership approach, versus third party arms length consulting approach.

A Key Ingredient

Anderson Williams: And can you say a little bit, I mean that one of the things that's implied there is not just that we know the business and we know the investment thesis and so forth, but that the way Shore invests, there's also patterns. And so our resources are also coming in, whether it's in a different company or a different vertical, but having recognized some of the patterns that happen in our holding period.

Jeff Williams: I think this is one of the key ingredients that's super hard to articulate. When you're a first time C-suite executive or a second time or a third time, the game starts to slow down for you, obviously, with the more reps you get. You probably know the right answer, but not having that experience, having gone through some of these things, you attack it maybe a little less fast or a little less sure of yourself. You can ultimately get there, I think, and muscle through it.

But the second or third or the fourth or the fifth time, you've seen a similar pattern of events or problems, issues popping up, you're only gonna get better at it with experience. And I think in our space, the speed in which we grow and acquire, and it's at a speed that's so unique and unlike most experiences people will ever have.

So having repetitions in this sort of break neck speed environment, like we play in literally every day and almost every single partnership we have, those experiences over time, they add up. And they're super valuable, I think, to help our platform partnerships grow with less risk because we have those reps.

And there's different variations of course, but having seen so many of those things over and over again, it helps not only with your speed of execution, it decreases your risk of execution and just gives you an overall helpful confidence.

Anderson Williams: So within that context, I asked Jeff to describe the Shore Resource Team and who they are and what they do.

Jeff Williams: It's a group of younger and very hungry professionals, typically out of larger consulting firms, typically financial experts that want to be an operator someday, and it's really hard for a younger "A" player to leave consulting and land into an operator role.

The market, right or wrong, I think it's wrong, discounts it somewhat. We offer a really attractive option for these people that don't want to make partner in their firms, their consulting firms. But do want to find an awesome place to go that is surrounded by people that are high octane, supercharged group like I think Shore is, but then gives them that exposure to pivot into operations and learn with our C-suite operators.

And then someday, a shot to become C-suite operators in a Shore backed portfolio company.

SRT’s Three Focus Areas

Anderson Williams: So what are some examples, just from a definition kind of standpoint, of the types of projects that SRT will take on for companies? I know there's a range of things, but sort of in the sweet spot. What are the kinds of things SRT's working on?

Jeff Williams: There's three items I think we like to focus on. One is the a hundred day plan, and I think of that as the white glove onboarding experience with a new platform or partnership. Typically when a seller joins private equity it's a very big event in their life, so there's a lot of changes. You have a new ownership structure, you have banks you have to deal with.

You have different board meeting demands and so on. So our Shore Resource Team literally sits onsite with them for the first a hundred days and helps them through that transitional experience and helps prepare them for transformational growth in the future. The second leg of the stool that we like to focus on, we come in and help you fix your headaches, you know where your problems are.

You lack either typically the hours to get after it or maybe some of the expertise and repetitions. Our teams can come in and help alleviate some of those problems. I'll give you an example. Your quoting process to a customer takes too long, and oftentimes you're quoting off the wrong cost. Well, we can help you with your accounting team develop a quick and easy way for your salespeople in the field to quote, have the confidence that the costing's correct and have it ultimately get to market a lot quicker.

The third leg of the stool, when you are ready to exit. We have experts that have gone through multiple due diligence processes, information memorandum, production management presentations, and so on. We help sit with the C-suite and help be their legs really to help them drive through the sell side transaction.

The 100 Day Plan

Anderson Williams: Given Jeff's descriptions, I wanted to hear from some of the SRT team members to better understand the work they do with portfolio companies. I asked Chase Hall to share a little bit more about the a hundred day plans.

Chase Hall: So we complete a hundred day plan with every platform right after the head acquisition closes.

So we partner with the management team of that platform to prepare that organization for really rapid growth. So there's a lot that we can see around the corner and build from day one. So we prepare financial systems and so we sort of professionalize that part of their business. So that won't break when they complete their, you know, first big acquisition or their fifth acquisition.

Those things are better to build. As soon as we partner with that organization. We build operational measurement systems, so dashboards, KPI measurement, value stream mapping, so we really understand what drives value in that business and what we wanna measure as it grows. And then third, we partner with management on strategy.

So they're probably hiring a CFO for the first time. They might be hiring a VP of Marketing because we complete these a hundred day plans all the time we really can help them identify who those candidates are, what they might experience in their first year. And help them prepare for that strategic growth.

Anderson Williams: So is it fair to say that it's really setting up the baseline for the platform itself, even though you've got a company that you've acquired that is the foundational business of the platform, it's not the platform and the a hundred day plan is putting in the systems and structures for the platform.

Chase Hall: Yeah, one thing we say all the time at Shore is we bring billion dollar resources to the microcap space. And so we're in the a hundred day plan, really implementing billion dollar resources with the idea that that company's gonna grow into them, rather than needing to react as they grow and things break.

So we're really improving the sophistication of the business from day one, which helps them grow faster, run their business better.

Internal Consultation

Anderson Williams: This is Shannon Finocchi.

Shannon Finocchi: A hundred a plans are our bread and butter, but we get pulled into different engagements all the time, throughout all stages of the hold period for our different portfolio companies.

So whether that be being an interim CFO or helping to integrate additional add-ons into your finance function, we can get engaged in a lot of different types of projects and not just finance. Although we're all finance professionals by trade, and so a lot of these seller founders, as they become new platform kind of partnerships, they understand that Shore offers much more than the majority of private equity firms.

I used to always joke that as a consultant, my job was to understand the business in a week, spend three weeks putting together a hundred page deck and then send it and then move on to the next one and kind of rinse and repeat. So the big difference having an internal consulting team is that we are invested in the outcome and the project that we're putting together.

You're gonna see us walking down the hall. We're not going away. We are invested in the execution and making sure that it's delivered and it's successful and in many cases, that means having to kind of understand the results, own the results, defend the results, and so because of that nature of it, we all take our time to really care about the projects that we're producing and the impact that they have.

Anderson Williams: Shannon makes a really important point about the SRT as a sort of internal consulting team. SRT is invested not just in creating some report and handing it off to the company. They're invested in meaningful execution and held accountable for supporting the company to achieve the right outcomes. So while most SRT members come with some consulting background, they've often joined SRT wanting to have more skin in the game. To have more sense of meaning and purpose to their work.

This close relationship between SRT and the portfolio company is fundamental given all of this, I asked Shannon for an example of a project she's worked on that really highlights the value of SRT and the network effect that they help create across the portfolio.

Shannon Finocchi: One big learning for me has been ERP implementation, so that's super meaningful for all of our platforms is that you move off of your smaller QuickBooks instance in many cases, and you move to something that's more sophisticated and more scalable.

So I've really had to get nitty gritty in my understanding of how an ERP functions, how you come up with a robust chart of accounts, how you make sure that it's scalable going forward. And that's something that as the Shore Resource Team, when we recommend a solution to a CFO and we say, hey, here's a template to implement.

It's meaningful to us because we've taken the time to understand it, make sure it's a best practice, make sure it's a solution that's scalable and has the right reporting and features. And then we're there along the way as you implement it, to answer questions, to leverage other CFO relationships that we have to kind of make sure that you have the best solution and that you're really there to scale.

Anderson Williams: I asked Bob Pollard for a highlight project example from his experience.

Bob Pollard: One of my favorite projects was an M&A add-on integration. So one of our larger healthcare companies bought another very large healthcare company and it kind of doubled the size of the business, so what we call transformational acquisition.

So me and another guy from the SRT, we went down and helped them integrate two of the service lines from that add-on into the existing company. I was understanding headcount and customers and how we communicate with them and how we move things over. We just switch softwares. It was healthcare, so it had a lot more EMRs and different software and sites needed to switch over.

So that was exciting to help work through all that and navigate it so that way the company itself didn't face these huge changes on their own.

Anderson Williams: Whether it's an ERP or an M&A process, the cumulative learning and repetitions for SRT members mean that the entire portfolio gets stronger with every partnership.

There are a few operational things that an executive team is going to face and have to totally figure out on their own. The SRT has likely seen it, and if for some reason they haven't, then they can still step up and be the additional brains and muscle needed to help figure it out. This includes SRT members being able to step into interim CFO roles at critical transition times for portfolio companies.

Brandon Cohn is an SRT member who served in an interim CFO role, so I asked him to add a little bit of color to that experience.

Interim C-Suite Roles

Brandon Coan: I had the opportunity to work with a business in interim CFO capacity, so similar to how you onboard new employees. We had an outgoing executive, so offboarding them, getting the full download there, working with the existing accounting and finance team to make sure that everything that would be changing over to me was gonna happen efficiently in a smooth manner, not ruffle any feathers.

And so kind of being the stop gap there while we were waiting to bring in a new full-time person. And so in that instance, I think it's another example of how SRT can provide value and not necessarily even creating a really cool Excel model that someone can take and run with or quantify something that was more of a, okay, they can actually come in as interim management and be that person for the existing team as a trusted resource.

Anderson Williams: Part of the reason the SRT can step up in such a big way goes back to something Jeff said earlier about the deep connection and alignment with not only the company, but the entire investment thesis that led to the creation of the platform in the first place. They know the industry, they know the investment strategy.

They've worked with similar companies. They've done multiple 100 day plans. They've supported growth and scaling projects across the portfolio. They've supported the exit process. The relative youth of the individual players belies the collective wisdom of the Shore Resource Team, and the team is growing and Shore is growing. So I asked Jeff what's next for the SRT?

So as you think about Shore's growth and next steps. What's next for SRT? How does SRT continue to grow and evolve as you look over the next three, five years, whatever the time horizon?

SRT’s Future

Jeff Williams: I see dozens of CFOs that came out of the Shore Resource Team in the portfolio. I see the Shore Resource Team to continue to grow and appropriately churn people coming in and leaving to a Shore backed portfolio.

I see X Shore Resource Team members being in C-suite positions of a Shore Capital backed company more than once again, the recycle factor. And I can even see some people coming back to Shore Capital. With high growth always leads to more and more opportunities. It's been one of the fastest, if not the fastest growing group within Shore Capital, and I see that continuing, especially as we continue to invest in different verticals.

And with middle market coming on, real estate expanding. The best players out there are the ones that get bored after a few years. And I fully expect them to come in, do a great job here, but then decide, all right, now I'm ready for a CFO role. And we embrace that attitude and encourage it. If someone wants to stay in the Shore Resource Team and it happens, you can stay here for as long as you want, as long as it's a mutually agreed performance and so on.

But most often than not, folks want to have a shot at a C-Suite role, and it's very exciting with equity involved and being on a team like that. It's very exciting.

Anderson Williams: This podcast was produced by Shore Capital Partners with story and narration by Anderson Williams. Recording and editing by Andrew Malone. Editing by Reel Audiobooks. Sound design, mixing and mastering by Mark Galup of Reel Audiobooks.

Special thanks to Jeff Williams, Chase Hall, Shannon Finocchi, Bob Pollard, and Brandon Coan.

This podcast is the property of Shore Capital Partners, LLC. None of the content herein is investment advice, an offer of investment advisory services, nor a recommendation or offer relating to any security. See the terms of use page on the Shore Capital website for other important information.