In this episode of the M&A Launchpad Podcast, hosts Casey Minshew and Ben Suttles are joined by Carl Kleimann, a proven entrepreneur with deep experience in scaling and exiting small businesses. Carl takes us through his business journey—from losing a $200K client, to navigating private equity partnerships, to launching his current venture, Moffitt Services.
He dives into the real-world lessons of leadership, the pivotal role of PEOs (Professional Employer Organizations), and why humility and a servant mentality are essential traits for any founder. Whether you’re considering your first acquisition or preparing for an exit, Carl’s insight will change the way you think about business, leadership, and long-term growth.
Key Topics Discussed
• How Carl lost a $200,000 customer—and bounced back
• Why leadership with humility leads to better business outcomes
• What every entrepreneur should know about exit strategy
• The upside (and downside) of private equity
• The role of PEOs in helping small businesses stay competitive
• How to maintain relationships through the stress of acquisitions
• Why continuous learning is key to long-term entrepreneurial success
• Carl’s new venture: Moffitt Services and what he’s building next
Guest Contact Info
• LinkedIn: https://www.linkedin.com/in/carlkleimann/
• Website: https://www.moffittservices.com
• Email: online@moffittservices.com
Additional Resources:
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Transcript
00:00 So on today’s show, we talked to Carl Kleinman, you know, and and we learned a lot about his journey from building one
00:08 company and exiting and rolling equity to rolling equity again to rolling it again to starting another company and
00:14 being success. But you know, Casey, what were your key takeaways on Carl’s episode today?
00:19 Yeah, you know, you meet people and you get a chance to learn a little bit about their backgrounds. And what you realize
00:26 about leadership is people either have that leadership, they’ve learned the leadership to be able to guide and make
00:33 things happen, right? And Carl’s what I would call one of those people that’s an infectious leader, right? You get around
00:39 him, you want to rise to the occasion. And so that leadership and that and that that journey, the story matches somebody
00:46 that just has that servant leadership me mentality. Yeah, that was kind of the takeaway that I got was that he’s just a
00:51 good guy, a good soul, and you know, care cared about his customers, cared about his team members, you know, and
00:57 brought that to the table for the private equity guys. And I think he probably humanized a lot of this stuff, too. And it was it was incredible just
01:02 to kind of see that, you know, the the longevity that he lasted within that private equity space, too. And I’d also say, you know, there’s also
01:08 that constant learning mentality, right? Yeah. Because what we do is hard. There’s nothing easy about starting a business,
01:15 having employees, but instead of looking at it going, why is this happening me? Instead of it’s more like, you know,
01:21 like what can I do with this? How do I get better from it? And so to to say, hey, I’ve stayed on and I’m going to
01:27 roll in my equity and then I’m going to learn, man, you got a big check. Most people’s
01:32 ego is like, shoot, man, I’m out the door. I’m going to the beach. And and instead, it’s like, hey, I want to learn and become better. And then then that
01:38 skill set takes you to another opportunity that scales to 250 million. Yeah. You know, so this incredible
01:45 episode want you guys to stay in tuned to it and uh look forward to the next one.
01:53 Welcome to the M&A Launchpad podcast with your host Casey and Ferris with Equity Launchpad. On this podcast you
01:58 will gain insights on acquiring, investing in, and selling profitable businesses in the lower to middle market. Whether you’re a business owner,
02:04 investor, or spying entrepreneur, at Equity Launchpad, we will provide you with the knowledge, guidance, and capital to navigate the world of mergers
02:10 and acquisitions. Hey there, this is Casey with the M&A Launchpad podcast. Want to let you know
02:17 about October 25th. Put it on your calendar. This is a do not missed one-day event. There’s going to be
02:23 incredible headliners, but really at the end of the day, you’re going to get a chance to talk to people that have made
02:29 acquisitions, learn from some of the challenges that they’ve made, because this is definitely a challenging process, but more importantly, there’s
02:36 going to be people there that can help you and support you along the way from great vendors, quality of earnings, how
02:42 to run the due diligence process, and how do I get financed, how do I raise capital, how do I structure all of these
02:48 things? October 25th in Chicago, we’re going to be gathering. It’s going to be hundreds of people that are all focused,
02:54 like-minded people. And man, everyone that’s come has given us incredible feedback. So, mark your calendar.
03:00 October 25th in Chicago. We look forward to seeing you. Hey, Carl, welcome to the show.
03:06 Thanks. Great to be with you. Yeah, it’s just uh you know, we’ve known each other for so long and I’ve gotten to watch all
03:13 of the things you’ve done and you know, getting to talk about it and just been a great mentor and so we’ve had to have
03:18 you on the show and uh talk a little bit about some cool things. Yeah, I think I’m really really excited about today’s show for our listeners. I
03:24 mean, you know, I I I know the the the company that Carl’s currently at. I I know the the family behind it and I’d
03:30 love to hear that story, too. But I think I think it’s nice to I think a lot of our our our you know the people that
03:36 we have on as guests are showing us different parts of this journey and I think Carl’s part of the journey is what
03:42 is that what does that pot of gold at the end of the rainbow look like right and is and and what were all the
03:47 challenges trials and tribulations to get to that pot of gold and and I think that that’s important for for people to
03:52 to to keep in the back of their mind as on their vision board or you know whatever goals are going to put up there
03:58 that ultimately if you want to be an entrepreneur and you want to run these companies, right? You need to have an exit strategy, right? And and what does
04:04 that exit strategy look like? And so really really excited to drive in kind of dive in with Carl today and kind of
04:10 talk about what that looks like. Carl, so give us just a snapshot about your background and uh we’ll start beating you up with questions here.
04:17 Uh I kind of got off to an early start with the entrepreneurial bug. So in high school I uh was a Texico uh had a Texico
04:26 station in one in Tombball uh and then one in Magnolia. uh along with my
04:32 stepbrother Brent uh Kennedy and uh so kind of got an early exposure to what it
04:37 feels like to have to you know make payroll and deal with inventory and deal with employees and and things of that
04:44 nature. uh kind of got the bug and then when I went to college I really did focus on college uh got out of that
04:52 business focused on school and when I got out I went to work for ADP automatic data processing
04:58 spent about four years there which was very valuable worked with some great folks great company learned a lot
05:05 created a lot of uh uh connections there and then went on to get into the PEO
05:10 professional employer organization business which is how I met uh and uh spent uh you know over 25
05:18 years uh in that in that industry. Exited that industry. Uh the 2000 in
05:25 2014 Rusty Moffett and I started uh this business Moffet Services. Um and here we
05:32 are. So Carl, let’s let’s go back to the PEO conversation because I I personally
05:38 think that it was one of the best experiences of my entrepreneurial career was going and selling PEO services.
05:46 Not only did I get a chance to sell to seuite, but it’s really helped me focus on a lot of the administrative stuff
05:52 that happens in a company where you don’t really think about right processing payroll and all those things.
05:57 So just kind of in in in your back, you know, 25 years of of doing the industry,
06:02 you know, and it was your and it was your first exit, right? Your first company that you were part of and exit and it’s a great story.
06:08 Talk just real quick about why you think PEO is important for the small business world and what you saw in it and then
06:13 tell us about the journey that you had from Odyssey all the way through co-advantage. Yeah. Well, well, first to to your
06:19 point, it is an absolutely great lens to the business world, right? What I
06:27 enjoyed most about that business and it was similar at ADP is that we were industry agnostic. We got to work with
06:33 all types and sizes of business, all industries. I was I was in it long
06:39 enough to go through, you know, economic cycles. Uh, and you learn a lot more
06:44 than just about payroll and HR and employee benefits. You learn a lot uh
06:50 about the businesses that you’re working with. I had the great fortune of working with thousands of businesses in my PEO
06:57 uh career. So, uh absolutely love that. Now, to your question of why are PEOs
07:03 important to small businesses, uh I guess this is one where you can never really take the hat off, right? We
07:10 when I rust when Rusty and I started Mafet, we started uh with a PEO, right?
07:16 Uh, and the reason that we did, and the reason it’s important is when you’re running a small business, and we all
07:22 define small businesses differently, but let’s just put it this way. If you have less than a 100 employees, you probably
07:28 don’t have a lot of depth of expertise around things like um uh employment
07:35 regulations, you know, how how to combat an an unemployment claim, how to
07:41 minimize or mitigate uh liability for, you know, violations, discriminatory
07:47 actions. But on the on the on the flip side of that, you probably don’t have a depth of skill around how to recruit
07:53 talent. And by the way, that game has evolved tremendously even in the years
07:59 since I’ve been out of the industry, right? I’ve been out of the industry now for a little over 10 years. uh and so I
08:06 think peeos at least what we tried to do at Odyssey and and then co-advantage is
08:12 to bring that com that that expertise which translates into competitive
08:18 advantage to smaller companies that would not have otherwise had that whether it was more expertise, better
08:23 recruiting, better employee benefits, more affordable employee benefits, retirement plans, things that help level
08:30 the playing field for the smaller companies competing against the larger folks.
08:36 You know, one of those big selling points of BO at that point was also better insurance, health insurance. And
08:41 I think that world is uh slowly, well, not slowly, I think that world is gone. I think benefit health insurance is just
08:47 out of whack and crazy. But again, it’s these things, it’s these things that, you know, and I kind of get into the PEO
08:53 conversation because it feeds into your business journey, right? Because when you’re in the back office,
08:59 you’re talking to these business owners, why do they need our services? All of a sudden, you start helping, you start realizing that all of these companies
09:05 have the same problems, right? They may not be having the same problems at the same time, right? But they they have
09:11 them and and you’re like, we use a PEO for our agent inflating company and you
09:16 know, we had somebody that that we had a worker fall, you know, something fell on top of them and they sued us.
09:22 Yep. Right. And we didn’t do anything. We sent it over to our EPI. They managed it. They handled they settled it. We
09:28 didn’t even have to worry about it. But if I wouldn’t have had that, I don’t even know where it would start. Yeah, I think that it’s it’s definitely
09:35 one of those things that I and you kind of hit on it, Carl, where as you’re starting off, it’s good to have somebody in your back court that you can scale
09:41 with until you get to a point where you can bring some of those things in house. One of the other things I always thought
09:46 was interesting about the PEO is that you guys are when you’re selling it, you’re in front of the business owners.
09:52 And so, so to kind of tie tie that thread for our listeners, too, right? great contacts for people that are
09:58 searching for business owners and contacts to business owners and 100% and to tie it back to our found H&M
10:03 that’s how we found H&M which is was our was was Equity Launchpad’s first acquisition was through a PEO provider
10:09 and a business owner a broker broker excuse me yeah and so like the the the point is is like these
10:15 people are talking to seuite you know and to the business owner themselves you know they’re going to know what is their
10:20 journey like are they looking to sell they not looking to sell they looking to expand potentially and so I think You
10:26 know, if you’re a listener to this podcast, I think it’s important to put those people on your list of lawyers,
10:31 CPAs, you know, the financial advisors that that that that work with the business owners, but also PEOs.
10:37 Yeah. And some of the guys, Carl, that we’ve worked with on the sales side, I mean, they’re super sharp. I mean, these are not these are not your everyday
10:44 ordinary salespeople. These most of the PEO sales people that I have run across, these are efficient business people.
10:49 They understand how business works, right? Very sharp. Case in point, Ben, he was a PEO sales
10:55 rep. So that’s true. That’s very true. He’s he’s going to pat himself on the back, you know. I love it. Hey, I’m I’m giving credit to a lot of
11:01 the guys I worked with because they’re impressive. No, no, no. And and obviously we’ve worked with them, too. And in my case,
11:06 several business different businesses and they’re very very sharp, right? And so, you know, they’re they’re in a good position to have that knowledge of the
11:13 business and the business owner himself, right? Or herself. So, let’s take that that snapshot on on that and and let’s talk about the
11:19 evolution of what happened to you. you started Odyssey and then to exiting 25
11:25 years later and then being a part of a group that you had multiple exits inside of. I think that is a very good
11:31 conversation for people to think about because you started Odyssey and you didn’t buy it, you started it and that was just
11:38 from you went to business owner to business owner to business owner, right? Uh and and and you scoured it and then
11:45 you built it over time and and the beautiful part of that business is it’s recurring revenue, right? Right. So,
11:50 those are some of those things that make it very sticky and it’s hard to move if you do your job right. So, talk to us a
11:56 little bit about Odyssey to to Co- Advantage and and the exit and all the fun stuff. Sure. I’m actually going to go one step
12:02 further back. So, after, you know, over four years at at ADP,
12:08 um uh I left there to actually join a PEO out of the out of the woodlands
12:14 called Contract Employment Systems. worked there for a short time and uh one
12:19 of my co-workers at at ADP, a guy named Scott Davis and I decided that we wanted to start a PEO. Uh I believe it was in
12:28 October uh of 1990 when we officially started. I understand at this point the
12:35 the industry was just beginning. administ staff for for those of you who know now inspired uh really got their
12:43 start in the mid 80s and so you know we were only about five years in now the relevance of that is that there there
12:50 there was this was a brand new industry and one where there was no regulatory frameworks so up until that point an
12:57 employment employer employee relationship was I’m the employer you’re the employee right now enter a
13:03 three-prong relationship where you have the employer who’s running the business you have this PEO who’s the employer of
13:09 record for tax and benefit purposes and the employee labor laws weren’t written
13:15 that way right and so uh the relevance of that is yeah after Scott and I got
13:20 started we we got off to a pretty quick start within just a couple of years we had a few thousand employees in our PEO
13:28 group which you know back then was a reasonable size uh and and then the industry hit a bit of a brick wall we
13:35 got as an industry we we we got into a legal dispute with the state board of insurance over whether we had the right
13:42 as an industry to buy workers compensation insurance and and so that that that was an interesting time and it
13:48 was painful at the time because most of us as PEOs saw business dwindle at a
13:54 minimum we we saw a big slowdown in capturing new customers because nobody
13:59 was real sure whether the industry would survive this or not. Ultimately we we did but there we went through a couple
14:06 of mergers uh during that time and one of those mergers was with Odyssey. So
14:12 our company was called the Laxis Group. The Laxis Group and Odyssey merged in November in fact November 8th of 1993 I
14:20 believe it was David Williams and his sister Pat Fry. Um and we we merged
14:26 those companies and and never looked back. Um and so uh in fast forward to
14:33 2011, we had grown the business. We had about 10,000 uh what we call work site
14:38 employees or customer employees uh about 400 customers, about 400 million in in
14:45 revenue. Uh and we then sold that business uh uh to Madison Capital uh out
14:52 of out of Chicago. That was kind of the first uh round of of of private equity.
15:00 So I mean just that alone um why don’t you tell us just for a second about dealing with the private equity for the
15:07 first time. Yeah. So what I will tell you is that
15:13 from you know 1990 starting the business to 2011 I I learned a lot. I think I
15:20 learned a lot more in the, you know, few years after that in in working with the
15:26 the private equity firms. I certainly learned different things and I value all of that, all of that learning. Uh, but
15:33 in in 2011, David and Pat were ready to retire. Um, uh, I I was, uh, one that
15:40 went with the business when, uh, Larry Geese at Madison Capital decided to buy
15:45 us. Larry had already purchased two other PEOs. uh all within just the past,
15:50 you know, year prior to acquiring his third, which which was which was
15:56 Odyssey. That was in September of 2011.
16:01 Uh uh learned a tremendous amount, rolled part of my equity in with uh Madison Capital. Uh and we sold that
16:09 business uh 16 months later, December 31st, 2012 to Compass Investment
16:15 Partners uh out of New York. um rolled part of my equity again, uh put my head
16:22 back down with a with a with a larger group of of folks and we went and rolled up several other PEOs. Uh and then sold
16:30 that business years later to Morgan Stanley Private Equity. Uh to your question about what I learned from from
16:37 private equity, uh you know, a lot of lessons that you just I wouldn’t have gotten as just as just an entrepreneur.
16:45 We could talk more about those in a few minutes, but Well, no. I mean, I was going to say what’s what’s the good and what’s the
16:50 bad, right? You know, because I think that’s if you’re an entrepreneur that’s been thinking about this and and
16:56 understanding like what’s my exit look like? It’s, you know, on the smaller side, it’s to a, you know, somebody
17:01 that’s just looking to buy a company. But if you’re a little bit bigger, right, call it, you know, probably anywhere two to five million in Ebida
17:08 and up, you’re probably selling to a private equity firm. So what what was the good? Give me maybe two examples of
17:15 good and two examples of bad just so people are kind of aware at least of your situation. Obviously everybody’s situation will be unique, you know, um
17:22 that something things that you just didn’t you weren’t aware of when you got into this journey. Yeah. So, so regarding the good, I would
17:29 say for for one, Ben, none of us are experts at everything. And I would say
17:34 one of the things I always cherished about my partnership with with David and Pat and other members of their family
17:41 that I work closely with, Mark Turner, uh, is that, you know, we we all have
17:46 complimentary skills. Uh, and that’s important in a business. What I found with the particularly the private equity
17:52 folks that I worked with is that they really brought you know a lot of of
17:58 depth and and complimentary things that as a small business person I I wasn’t
18:04 quite as proficient with particularly around you know financial uh uh you know
18:10 engineering the financial aspects of you know we we grew co-advantaged to a billion almost billion dollar business
18:18 um and and and and and that takes a different skill set right and I didn’t have that experience
18:25 uh you know coming out of this more entrepreneurial environment and that served me well you know in in in years
18:32 after that right the second thing is a broader team uh so it’s not just the
18:38 experience but you know really getting to work with very uh kind of more depth of experience and in in skills by the
18:45 time you know we had acquired our sixth or seventh company. We had a senior leadership team. There were 13 of us on
18:52 that team led by a guy named Mike Medada. Um, a hard guy.
18:58 Yeah. Impressive guy. Uh, Casey knows him. Uh, very impressive. I learned a ton from Mike. I learned a ton from
19:05 others that just had a more more depth of experience in the in the individual
19:10 areas. Guys like Wade Laam, who was our our safety and risk manager. guys like
19:16 Chad Parody who was our sales leader. Uh just I could go on and on. I learned a
19:21 ton from them. Funny little side story though. So I he was talking about Mike Meta. So I I was
19:27 so I worked for Carl at right after he sold the co advantage. So I was the one sales guy in Houston. Really it was just
19:34 me and Kurt Deathb and then Mark another guy and you know Carl had the office but he didn’t come in all the time and so it
19:41 was just us and Kurt was our new sales manager. Anyways, I made it to the club that year and so I’m sitting there at a
19:47 dinner with it’s Mike Metta and a couple of the guys and you know I’m I’m pretty direct, right? It’s not I wasn’t sugar
19:53 coating. He said he says he just says to me he was like, “So, hey Casey, so is there what do you think? Is there
19:58 anything we can improve upon?” And man, I just spent the next like 10 minutes like just new guy to the whole thing
20:04 just laying it out. And this guy Josh is one of their guys, he’s kicking me on the table. He’s like, “Dude, like what
20:10 are you doing?” And I’m like, “He asked me a question. I thought it was supposed to be candid.
20:15 So, all I got to say, Carlos, Glenda was absolutely embarrassed and she was like,
20:21 like I wasn’t rude. I just was candid. And uh Mike appreciated though because we had a good dialogue. But it was just
20:26 one of those funny stories where you just look and you go, “Yeah, maybe I shouldn’t have gotten that deep at the dinner table.”
20:33 And it was right, look, it was right at the time health care reform was happening, right? Yes. So, you had Obamacare coming in and you
20:40 had a total shift. And so Carl headed up the entire that was his thing. He took that whole I mean Carl you went I mean
20:46 you went to I mean you you really got into the healthcare reform side and made co-advantage a leader in that space
20:52 around it. But it was a lot of stuff going on. So when you’re talking about health benefits right like all of a
20:58 sudden you went from you know being able to offer your clients a bulk kind of pricing and you could segment out the
21:03 cost. Now you’ve got a flat rate per age banded rate and so you’re really not competitive anymore right? you’re
21:09 selling. So anyways, long without getting deep, these were like some serious things going on, right? And Carl led that whole transition of healthcare
21:16 reform. It was pretty impressive. Love it. Love it. So, you know, shifting over to the bad, right, Carl? And I
21:23 don’t want you to feel like you gota you got to disparage anybody, but just more so just maybe lessons learned or or
21:28 things that maybe you would have done differently, you know, now kind of looking back at in terms of, you know, the process and how
21:34 it kind of went down. Can you maybe kind of expand on some of that? Sure. And and before I do, if I could,
21:40 there’s one one more good that I would say, uh, Ben, and that is, you know, running a more of what I would have
21:46 called a lifestyle business that that the, you know, the Williams family, myself, and others that part of the
21:51 Odyssey team, um, you know, we we a lot of things a lot of decisions we make out
21:57 of what we’re comfortable with. One of the things I learned is how to balance that a little bit better around just
22:03 making more data driven decisions and maybe a little less gut and a little more uh data. And I I talked about that
22:10 at your your recent conference. That that is a skill that I honed quite a bit working with the the professionals that
22:17 I worked with at the various private equity firms and the senior leadership team. So just wanted to throw that in.
22:23 Uh I think they’re they’re a bunch of they’re they I think the one thing just to expand on what you said, right, is a
22:28 lot of they’re there a lot of finance guys and gals, right? And they know their way around spreadsheets and they know how to do performance and
22:34 projections and trends and I think that they do use that quite a bit. And that’s that’s something that I think, you know,
22:40 when you’re talking to these business owners, again, I’m trying to thread a needle for our listeners. You know, you need to realize, you know, if you if you
22:47 try to if you try if you use too many ter too much of these terminologies with some of these business owners are going to think that you’re talking down to
22:53 them. So, just be careful with that. But I think it’s important to understand that that’s where the world’s going, right? Is modeling and understanding how
22:59 to put these things together. There’s a lot of financial engineering in terms of deal structure that I think the the the
23:04 PE shops and some of the bigger kind of guys that that come into this space, they know how to do that really really
23:09 well. Well, they they know how to solve business owners problems and do it creatively and financially engineer it and put the
23:15 capital stack together effectively so everybody wins. And I think that’s why a lot of these guys are pretty successful.
23:20 And I would imagine Carl that that that data driven part of your experience has now allowed you when you guys work with
23:26 Main Street to be able to handle that transition too because I would imagine
23:32 you know the language, you know how to run that side of it. So it wasn’t like a total shock to the system when that
23:38 occurred, right? So it’s like you wouldn’t have known that you got that from there to get you to like to right
23:43 now. It’s pretty incredible. Yep. No, that that’s absolutely true. And I think a good segue into to the bad. So,
23:49 so I would say one of the bad is kind of coming into this in in 2011,
23:55 uh, you know, not having had experience with private equity, uh, you you have a
24:02 tendency to maybe, uh, not push back as hard and and we definitely
24:08 maybe got a little too data driven there for a brief period where we, you know,
24:14 changed the way the the business worked. Maybe we would make decisions around the way customer service works or the way c,
24:22 you know, certain people who who would, you know, when you’re when you’re meshing companies together, when you’re
24:27 trying to put three companies together and then seven companies together and nine companies together, look, the
24:32 reality is changes have to be made. Not everyone can be the head of sales or the
24:38 head of customer service or uh even on the sales team. And it was it, you know,
24:45 we definitely made some mistakes around not identifying the value of certain
24:50 people and certain processes when we were trying to standardize things. We went at that a little bit too quick. In
24:57 some cases, we underestimated the the relationships that certain individuals had with certain customers and and we
25:03 lost those. So, so, you know, while we thought we were saving $50,000 here, we
25:09 lost a $200,000 customer, you know, relationship, right? So, that that’s the
25:15 bad. Uh, I would say, you know, you you have to iterate. You have to keep kind
25:20 of learning from those things and not making those mistakes over. And I think what it taught me is kind of how to be a
25:25 better partner with private equity. how how to I think they respect when you know kind of when to push back and and
25:32 and when to to you know to not push back on on that kind of pure modeling. I
25:38 think uh we also learn how to just get better at the kind of data the quality of data that we you know use in in those
25:45 kind of analytics. So people decisions we we we definitely uh uh made some
25:50 mistakes. I would say another one that would be relevant for for for uh for
25:55 your audience would be we almost always overestimated the long-term longevity or
26:04 interest that the sellers would have to be a part of our model. Mo most of the
26:10 purchases that we made, most of the acquisitions we made were made with the same model that that that I came into
26:16 where you as the business owner were going to come in and play a role in this broader team. You’re going to own a
26:22 smaller piece of a bigger pie. It’s going to trade at bigger multiples. We’re going to make it more efficient.
26:28 Uh and and all of that sounds good up until it doesn’t. Right? And when you
26:34 take people who have been entrepreneurial all their life or for decades and all of a sudden now you put
26:40 them in a group of 12 with 12 other people where you know sharing decisions
26:46 really I was shocked at at how few people made it through that. Honestly, at the end of, you know, my my my reign
26:54 after, you know, the years I I spent there, I was one of only two of the
26:59 sellers that remained out of the nine acquisitions in total that we had made,
27:05 meaning seven had had fled. And they all fled within the first 12 months uh of
27:11 their of their stint, right? So, be conscious of that. If that entrepreneur that you’re buying is is really
27:17 important to the business, you better either download as much of that information as you can or you better
27:23 build a model where they can kind of continue that more entrepreneurial uh uh
27:30 spirit because if not, you’re you’re going to hit a brick wall there most likely. And yeah, I mean and and we’ve learned
27:36 that uh firsthand as well. So I mean I think you you um you you need to realize
27:41 that you I mean once once that check has been stroked right those people at least you know subconsciously are already kind
27:47 of stepping back right and you need to find a role that that scratches that entrepreneurial itch is I think what Carl what you’re saying you
27:54 know you want to stay involved if you want if you want them to stay involved right and and so I was curious
27:59 Carl that kind of leads to my next question for you but you know how do you why what what skill or what style do you
28:07 feel like you had that allowed you to to be one of those two of of of nine that
28:12 stayed around? Was it just I’m gonna cut you off on that. I can tell you exactly what it is, man.
28:18 I don’t know how you don’t fall in love with Carl. Like, he’s just an incredible human being. Like, he’s not he does not
28:24 have a huge ego. He’s there to support and I mean, he’s very good at what he
28:30 does. But I think the humility that he brings, right, where he doesn’t talk down to people, he’s there to ed I mean
28:36 the relationship blossoms when you’re around a leadership, right? Yeah. So anyways, sorry to cut you off, Carl, but I had to I had to answer that one
28:42 for you. No, and that’s probably it, right? I think the problem that you probably see as an entrepreneur is that everybody’s a
28:48 type A alpha and they want to you make all the decisions and they don’t want anybody countering them and you know and
28:55 if you if you’ve built a company that for the last 20 or 30 years and you’re the only boss nobody ever told you elsewhere now you’re on a committee
29:01 you know so I think that you know people that are listening like if if you’re a part of that on either the buyer or the sales side just understand that dynamic
29:08 and um you know your thoughts Carl was I right I don’t know how I could top that answer
29:14 unless we called my mom and patched her into this thing. I appreciate that. But the the the the reality is for me is I
29:22 wanted that experience. Like I knew that that I had, you know, I knew I was short
29:28 on skills in, you know, kind of the higher end of the mid midm market, right? I as an entrepreneur, I’d done it
29:35 for a long time. Felt like I had a good grasp, but I had something to learn, right? It’s like paying tuition to go to
29:41 college, right? It might not be the most fun sitting in the class, but you’re there for a reason. And I I really kind
29:47 of showed up every day with that in mind that I’m going to learn something here that I’m going to take away with me and
29:53 I’m going to, you know, reapply it somewhere else. And and that worked out. Uh fortunately, you know, being an
29:58 equity player with the private equity guys was was enjoyable, too, right? We we we were fortunate. We were blessed.
30:05 We did create uh uh you know, some great results. And when you’re right alongside
30:10 that, everybody’s aligned from a financial standpoint. That was that that was that that was fun. It was rewarding
30:17 and I don’t regret a day of it. So that’s a great segue to talk about all those skills and all that you did to
30:24 just roll into them off it. Right. So you you leave co-advantage. Are you at at the end you I think it was who was
30:29 the last private equity that acquired it? Was it uh Jay? It was it was Morgan Stanley Private Equity was the last one
30:35 that that acquired while I was still uh part of that team. So then after that you you took some
30:41 time and then you started another company and so I bet you all those skills that you hustled in on paid off,
30:49 right? Yes. And I I I really didn’t take any time. So what happened just for a little
30:55 background so my my family was in the fuel business you know back in the 70s.
31:01 my mom and stepdad. As I mentioned to you, I was a Texico uh retailer in
31:06 Tombball and Magnolia in the early 80s. Uh very small scale. Uh but some family
31:13 friends of ours, the Mafet family, were in a similar business to my mom and stepdad. Uh Moffet Oil, that company
31:20 been around since 1947. That family sold that business in 2011. Uh they had kids
31:26 working in the business. The kids signed three-year non-competes. Uh the parents signed five-year non-competes uh in 2014
31:34 when the youngest son, Rusty Moffet, my partner, uh when his was up, he reached
31:39 out to me one day and said, “What do you think about starting a fuel company, we’ll call it Moffet Services.” Um and I
31:46 said, “That sounds like a great idea.” Now, the reality was I I was still spending my time and energy with Co-
31:51 Advantage at that point. So, initially I was really a financial partner. Um and
31:57 so I injected some capital. Rusty injected some capital. We uh opened up
32:02 shop right where his family business uh had been before because Sunost Resources
32:08 had bought that business. Uh it didn’t need the name. And so anyway, off we
32:13 went. I would say by 2016, I I was really starting to have to spend a little bit of time in the business, you
32:19 know, with Rusty. The business needed both of us. And by 2017, especially when Hurricane Harvey hit, we have a disaster
32:27 response component to our business, uh we we were incredibly busy and the business really kind of took took off.
32:34 And so that was, you know, when I I uh uh we had sold Morgan Stanley Private
32:39 Equity. It was a good time for me to exit and redirect all of my efforts here to Moffett Services. You know, here we
32:45 are 11 years later. We got about 225 people on our team, about 250 million in
32:52 revenue, and now have Main Street Capital as uh recent uh minority partners. They own about 27% of our
32:59 business now. So you so let’s let’s unpack that. So okay, so you you you sold you rolled,
33:05 you rolled, you rolled, then sold again. Now you you helped a startup with a with a family friend. you guys have built
33:12 that up to an incredible, you know, revenue and and and headcount and now you’re you’re taking on private equity
33:18 again. What was kind of, you know, um the impetus for that? What what was the
33:24 you know, I mean, you you kind of another bite at the apple? Was there an exit that needed to happen? Can you kind
33:30 of unpack that story a little bit for our listeners? Yeah. Yeah, I can. So, one one part I I
33:36 left out in 2016 when Rusty’s dad uh Roy Moffett um uh when his non-compete was
33:43 up, he was living in Portto Viarda, Mexico, living the good life. Uh Rusty and I talked him into coming and joining
33:50 us and and he did and he played a pivotal role uh w with us for you know the next eight years uh a after joining
33:58 us but he was ready to retire this year. uh he retired in in March and part I I
34:04 would say one of the two driving forces with with Main Street was to facilitate Royy’s uh retirement uh you know fi
34:13 financially. The the second was is really to create uh a a path kind of
34:19 long-term because I’ll be the next to retire. By the way, Rusty’s uh 39. Uh
34:25 you know, I’m he’s got a little bit of ways. He’s he’s he’s got he’s got a little ways and it’s
34:30 really important to kind of keep the the legacy business. Uh you know, Rusty has
34:35 five kids and you know, as most fathers, I think at some point, you know, he envisions maybe one of those might want
34:41 to take the helm like, you know, he had the opportunity to do to kind of keep a family tradition going. So, we felt like
34:49 Main Street brought a unique opportunity because they are minority guys at heart,
34:54 right? That’s what they really do. They have about 85 companies in their portfolio and many of them look very
35:01 similar. I’ve met about half of them. Um and so we thought that they would be a
35:06 good partner. I also think they bring the same kind of uh you know
35:11 opportunities to assist with uh the things that you know private equity guys
35:17 even though they’re publicly traded I think of them like private equity. They’re very smart uh you know they they
35:22 they’re they’re very data driven. They’re very analytical and I think they I think they bring value uh when you
35:28 look at the kind of long-term horizon of this business particularly if we decide to you know start growing through
35:34 acquisition which we we really have done very little of up to this point. Uh we’ve made two very small acquisitions
35:41 uh asset acquisitions but I I think they would bring a tremendous value in that model.
35:47 That is beautiful man. Love it. So great great great story. Um, I will tell you, Carl, uh, very much enjoy our
35:54 friendship and you being here with us. It’s going to be great. So, we’re going to jump, unless we have a couple more things you want to talk about, but I can
35:60 talk. We could have you here for five hours, man. Um, let’s jump into our rocket round and jump into it. Now, for
36:06 our listeners, we always do the rocket round. This is where we ask our uh our guests three questions. So, and I think
36:11 very important questions. So, Carl, what do you like to do in your your in your free time? Uh, well, for one, I have a bay house.
36:20 Uh my wife and I, we have a 10-year-old son, by the way. Um and so we like to
36:25 fish. We like to hang out down in Madagorta. Uh Rusty uh and his family have a house right next door. And Roy
36:32 and his wife have a house about three doors down. So we do spend a fair amount of time on the coast doing doing those
36:37 kind of things. Um you know, with with a 10-year-old, we have baseball and all
36:42 kind of activities going on all the time. So filling free time never seems to be uh never seems to be a challenge.
36:50 with the kiddos. It never is. I, you know, I feel you on that. I got a 11-year-old daughter. So, all right. So,
36:55 most memorable moment in your business journey. I’m sure there’s probably been some, but
37:01 maybe sum it up to to maybe the the the the ultimate one. Yeah.
37:07 Um, most memorable. So, so, uh, in 2011 when we were closing the deal with
37:14 Madison Capital, I was having cold feet. uh you know I was rolling half of my equity uh in in into the business. So, I
37:22 had worked at that point, you know, 21 years building this equity in in this in this business. And I remember sitting
37:28 down with Larry Geese in our office right before the closing and just telling him, you know, I just wasn’t
37:34 sure could we could I have that opportunity, you know, maybe a month or so, we’ been so busy focused on the
37:40 closing and he made a statement that I’ll never never forget. And he just as nice as he could, he said he said the
37:46 answer is no. But he said, “Can you imagine like two years from now, I’m sitting in front of my board of directors and you know, something
37:52 terrible’s happened here. The business has failed and and and and this comes out about at the very last minute like
37:59 one of the one of the owners, one of the sellers didn’t want to invest his own money in this business.” Like, how would
38:06 that look on me? And and honestly, I’m so glad he did that because that was a turning point uh for me. It, you know, I
38:14 got over it pretty quick. I invested and it’s one of the best investments I’ve ever made which gave me the opportunity
38:20 to you know make a couple more right after that but that was a memorable moment and it could have gone either way
38:25 if he would have said okay I understand no problem uh boy you know that would have that would have looked a lot
38:31 different for me been a different path right yeah love it all right last question uh what is your
38:37 favorite tool or resource uh experience and one of the things I I
38:43 love about it is it evolves all the time and and it’s I it’s not just kind of
38:49 what you gain in terms of of experience uh but how you apply it. You know, I
38:54 find as as as I you know get older and and get more experienced, I come at the
39:00 same problems differently and uh and that’s great. You know, I would say the the the other is, you know, just kind of
39:08 having done it right. I I’ I’ve always prided
39:14 myself on having done most of the jobs that people in my organizations are are doing. I I enjoy the details and you
39:21 know for for me personally, it’s served me well, but it’s also rewarding. I I enjoy rolling my sleeves up and getting
39:27 involved, man. Love it. Love it. Awesome. So, Carl, how could our listeners connect with you?
39:33 So, find me on LinkedIn. Uh, also, uh, if they are curious about our business,
39:40 uh, we’re at mafettervices.com. Uh, by the way, we have a a foundation
39:46 called the Moffett Legacy Foundation. We’re doing work in Kirk County in uh,
39:52 assisting some of the folks affected there. If anyone wants to get involved in that, they can do that. Uh, just go
39:57 to Moffett Services and you can link to the Legacy Foundation from there. Love it. Yeah, man. Thanks for what you’re doing.
40:03 That’s really great. No, it’s an incredible uh podcast, Carl. I mean, obviously wealth of experience. You know, you you you’ve been down the
40:09 journey that a lot of I think entrepreneurs are We’re all dreaming for it, man. I’m praying for the problem
40:15 and I can always call you. No, but listen, thank you for really being with us today and we’ll uh we’ll be back
40:21 together soon. Enjoyed it. All right. Thanks. Thank you, brother. You bet. Thank you. Byebye.
40:27 Thank you for listening to the M&A Launchpad podcast. If you’ve enjoyed today’s podcast and would like to support us, please leave us a rating and
40:33 a review after you listen. If you’re looking for guidance on your next business acquisition or sale, capital to
40:38 support your next business transaction or to invest in a private equity opportunity, visit equityaunchpad.com to
40:44 learn more and to connect with our team. If you know of an individual who would be a great guest for the show, head over
40:50 to equityaunchpad.com/nominate where you’ll have the chance to refer yourself or someone else to be a guest
40:56 on our show. I’m Casey Mchu and I look forward to talking with you next week.
