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Joining John on today’s podcast is Greg Moran. Greg currently runs his own podcast called "The Founder’s Journey." He started in the music industry and realized it wasn’t for him. Then, 13 years ago, he started a company called Check.com. Today he has moved to again work with Early Stage Founders and started a Venture Fund called Evergreen Mountain Equity Partners that focuses on the future of work. Here he works with founders to start companies that are really going to define the next generation of work.
Tune-in as Greg and John discuss his vision for the future of this very new venture fund he just started in January of 2022. He’s got a ways to go to get there, but he has the excitement and steps in place to get to where he wants to be.
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John Wilson: @WilsonCompanies on Twitter
Greg Moran: @EvergreenMEP on Twitter
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Brandon Niro: Joining John on today's podcast is Greg Moran. Greg currently runs his own podcast called the founders journey. He started in the music industry and realized it wasn't for him. Then 13 years ago, he started a company called Check. com. Today, he has moved to again work with early stage founders and started a venture fund called Evergreen Mountain Equity Partners that focuses on the future of work.
Brandon Niro: Here he works with founders starting companies that are really going to define the next generation of work. Tune in as Greg and John discuss his vision for the future of this very new venture fund he just started in January of 2022. He's got a ways to goes to get there, but he has the excitement and steps in place to get to where he wants to be.
Brandon Niro: Enjoy the show.
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John Wilson: The U. S. based team has taken care of small business bookkeeping and taxes since 2005. Find them online at Appletreebusiness. com or email Patrick at Appletreebusiness. com. Welcome back to Owned and Operated. Today I have Greg Moran on with me. Welcome Greg. Hey John. Appreciate you having me on and happy to be on, happy to be talking with you today.
John Wilson: Yeah, this'll be good. This is going to be a good one. Greg, how about you get the audience introduced with what you're up to and what we're going to be talking about today?
Greg Moran: Yeah, sure. I guess you could probably characterize me as a serial entrepreneur started my first business after a very bizarre start in the music industry, decided that the music industry was not where I wanted to go.
Greg Moran: And executive recruiting is where I was going. Started my first business back a number of years ago and, have grown a few along the way. Yeah. But most recently. Started a company back 13 years ago called checked. com. And we started in a little town up in upstate New York called Saratoga Springs, New York.
Greg Moran: If anybody knows that best known for its horse racing, but it also incubated a little startup up there called checked over the years, over 13 years, we managed to build that company pretty significantly from, really a PowerPoint presentation and really a flat footed start. Through one of the leaders in the digital transformation of hiring for, really large global companies around the world, companies like Disney and American airlines and Subway restaurants, and a lot of really great brands like that used our technology to make hiring faster, but most importantly, more predictable and bringing in talent.
Greg Moran: So did that for. 13 years wound down as the CEO of that finally back this October and decided that what I wanted to do is get back with earlier stage founders again and started a venture fund focused on future of work. So that's where my background was. And that venture fund is called evergreen mountain equity partners.
Greg Moran: And, we're relatively small, highly specialized fund that works with founders that are starting companies that are really going to define the next generation of work on a global level.
John Wilson: How many people are on the team at Evergreen?
Greg Moran: We're really small today. We've got five of us. There's four partners, four partners in the fund and an analyst, but we're the definition of future work, right?
Greg Moran: We're really, we're very much a remote and freelance organization. So we've, our analyst is a freelancer. We've got freelancers that are, supporting us from an administrative side and from a fund administration side. But about five of us today. So it's pretty small. And how big is the fund?
Greg Moran: It's about a 20 million fund. And, we are doing, we're primarily looking at, I would call it seed plus to series a kind of deals. We're really coming in when a company has some revenue, but they don't have to have a lot, so we're really looking at very early stage. They've proven their ability to take a product to market.
Greg Moran: And we're really there to typically be the first institutional money coming in, but also because it is highly specialized, we're really we almost have almost like a hybrid PE model in a lot of ways, right? Where even though we're investing at an early stage, we can come in with the resources and the experience and the network and things like that, that can really accelerate a company's growth.
Greg Moran: If they're, if they're showing that momentum, we can really drive them probably faster than they, at least the way it was when I started, which was, if I wanted to get a contact to somebody who, to get an integration done or a partnership or something, it took me, Six months and 300 calls of driving somebody insane before I got a return phone call back and we try to bring that down to one phone call in 10 minutes if we
John Wilson: can.
John Wilson: Yeah. Yeah. And how many companies, is it portfolio companies? Is that how you're defining them? How many portfolio companies do you guys have?
Greg Moran: Yeah, we are brand new. We actually just launched the fund formally in January. And yeah, so it's really new. I just, I was the CEO of check. com. I never actually mentioned this check.
Greg Moran: com became a company called outmatch, which then recently rebranded as Harvard. So over 13 years, we've taken on a couple of brands, but I just wound down my role as CEO there in October. We launched this fund in January. And so we will, by the end of next week, we will have our Third portfolio company in, which we're super excited about.
John Wilson: Yeah. When you're doing seed, like the advantage of starting that early is you get more of the pie, right? But you're taking a higher risk so you can take more of the equity.
Greg Moran: Yeah. Theoretically. Yes. However, the way that it really works is, we're coming in and the companies that we're funding are early stage, right?
Greg Moran: And they will typically need to raise. We're coming in at the sea, maybe series a level, all the terms on this stuff have blended together. So it's. It's hard to tell whatever somebody calls around, but we're coming in early and, we're usually coming in at somewhere between 250 to maybe a million and a half, on our check, but we will also lead larger rounds as well. It's all around maybe two or 3 million. It's sometimes a little bit larger than that, but what ends up happening is, as the business grows, our job is to essentially be the feeder to larger venture funds and larger investors. PE funds, right?
Greg Moran: So what we want to do is essentially help them mature the product to market fit, help them mature their operating systems and process and start to bring them to scale. So call that maybe a few million in ARR up to call it 10 million in ARR. And then our job is to really keep the path clear so that we can bring in, a much larger fund that can really then write the 20, 30, 50, a hundred million dollar check, whatever that is to really provide them the massive fuel.
Greg Moran: We may be in absolute terms taking a larger percentage. We're typically our target is somewhere, around the 20%. Range is really what we look for. Maybe a little bit lower than that in some cases, but that's going to get heavily diluted over the whole period of the, for the most successful companies over the whole period of that investment and the whole periods can be fairly considerable.
Greg Moran: Our job is to try to keep investing, in those great companies and invest alongside, much larger funds. So we're the machine that's trying to generate enough of the fuel for the large funds to step in. Gotcha.
John Wilson: Okay. That makes sense. Roughly you get around 20 percent and then on the next, you trade up to the next guy.
John Wilson: Are you able to co invest? Is that always written in?
Greg Moran: We certainly try to, I can't imagine us, we've never had a scenario. Out of my vast four months of experience, we haven't had a scenario yet where we haven't. And honestly, from a founder perspective, they want us co investing, right?
Greg Moran: Because they
John Wilson: helped you in the journey. They were there from the beginning. Yeah. That makes sense.
Greg Moran: Yeah, absolutely. There's a loyalty factor. And honestly, there's an expertise factor. A lot of the large funds don't have that kind of sector expertise that we can bring in. So we can still continue to add value over the life of that journey with them.
Greg Moran: It's hard to envision a scenario where we wouldn't want to continue to co invest if we believe, that the company has real strong growth potential.
John Wilson: Yeah. I'm sorry for asking. What's probably the basic. Yeah. I don't think I've ever had someone like in VC currently on the show. So I'm just like, what else do I want to know about VC?
John Wilson: I got to get this out. I'm glad to be the first. Keep firing away. No problem. It's always we've had a few folks that sort of do the anti VC thing where they are investing in tech companies, but not to get a venture backed outcome. It's to get like a sustainable 10 million a year company. Absolutely.
John Wilson: So we've had two or three of those. We had someone on who got venture backed, which was interesting off his business, Ryan Young. I don't remember what episode number that was, but that was interesting. Okay. Yeah. What else do I want to know about venture?
Greg Moran: What's funny while you're thinking of it, the reason we got into venture, the reason that my business partner and I into venture is because We've been operators, right?
Greg Moran: I had been a portfolio company CEO for multiple venture firms and for private equity, two different private equity firms. And, we had seen this from both sides, right? And we, neither my partner, nor I have, the typical pedigree of a VC. Coming in, right? You just, you think of the, and they've got usually the Ivy league degree and a from an Ivy league school and they're, they're coming in through those ranks as investment banker or something like that.
Greg Moran: Now, there's anything wrong with that career path. It's certainly, one that can be highly lucrative and, really great for somebody. We didn't come in right from that. Both my business partner and I joke about this all the time. We graduated from state schools in New York and, we went out and we ground our way into building successful companies normally, mostly because of just trying to be dumb enough to follow everybody else's lead, right?
Greg Moran: Did not try to make this stuff up and we managed to we managed to grind our way there. It's just not the typical pedigree, but I think, what's interesting when you look at VC, when you talk about anti VC versus VC, We are VCs, but we tend to be that anti VC sort of mindset, right?
Greg Moran: We're not going out looking for the next unicorn. We don't need to do that to produce a nice return for our limited partners. We're really trying to do is provide, a significant amount of value to early stage founders and to build something really special. And there's a lot of directions that can go right.
Greg Moran: And if you look at my company. And I know we're going to get into this, we didn't follow, we were a VC backed company, but we didn't follow a traditional VC playbook at all. We ended up buying, our way to high growth. And we did most of that through MNA. That's not the typical VC playbook, but it worked.
Greg Moran: And so I think we are really open about the multiple paths that a founder can take because that's the path that we took. So I think that's the beauty of coming in from an operator mindset, as opposed to the traditional, I can model this on a spreadsheet 12 different ways and it looks great until, the first time, like I just joked about until the first time you try to call a prospect and they walk
John Wilson: all the way back, right?
John Wilson: Yeah. Yeah. That's fascinating. And I'm into that. I like it. I think if I did. We've done two startup investments. It's exciting. Like it's intoxicating, right? Oh, totally. Cause you're like, what could happen? What could this be? How can I help? How can I, be a small part of whatever this journey is.
John Wilson: And then you remember that the chances are very against it going anywhere, but maybe with a fund, that's better than as an individual investor where what you need Two or three winners. And that sort of carries the rest of it.
Greg Moran: Yeah. Yes, is the answer, right? When you look at how to maximize returns on a fund, you're typically going to have this bell curve, right?
Greg Moran: And it's just, if we can keep 60 percent of our companies in the money over the longterm, we're doing great. And that, when I say, like in the money, basically like they're in business. And. They're making money of some form and, you're going to have kind of that middle curve.
Greg Moran: That's going to go out and they're going to produce extraordinary companies. And they're going to do it with a two to three X return for us, which is fantastic, and for the founder for us, that's perfectly okay. You are in some ways looking for that, those. One or two that really can hit sort of the stratospheric levels.
Greg Moran: You don't have to have it. And I think that, there's much to be made of when you look at the big VC funds and they're truly playing a portfolio management approach, right? They're just out there investing in hundreds of companies. They're not really actively engaged. They say they are, but they're just sitting on the board and they're really not adding any value or anything like that.
Greg Moran: And you do have to do that when you're a specialized fund and you're really diving in. We can create a market in a lot of ways for a company that may be struggling where traditional VC would just write them off.
John Wilson: Yeah. That makes sense. I appreciate the explanation. I'm going at your career backwards.
John Wilson: We're going to get to the deal where you bought something four times your size, but I want to go back to just December winding down from the CEO position. Can you walk me through that? That sounds like obviously a big thing, professionally, a big thing, personally, it was your journey for 13 years.
John Wilson: Walk me through it.
Greg Moran: Yeah, it was. I think a lot of it, I'm still digesting the speed of it, right? We started, like I said, we started this business as a PowerPoint presentation 13 years ago. And, over the years we had raised multiple rounds of capital. We had done a lot of acquisitions, we had grown the business really well.
Greg Moran: And actually March, 2020, which was like the most bizarre time in human history to go out and actually sell your company to private equity. We did, we closed that transaction on March 1st, 2020. I live. In Denver, outside of Denver, Colorado, but our office was in Dallas and I was commuting every week down to Dallas, but it just turns out the private equity firm who purchased us is just a terrific firm.
Greg Moran: I love these guys. Can't recommend them highly enough called Rubicon Technology Partners. Coincidentally, they're in Boulder, which is like 40 minutes from my house, so we closed the transaction on March 1st and yeah, I fly down to Dallas with the partners from Rubicon and we do a company wide meeting and everybody's there.
Greg Moran: And this is like maybe March 3rd, and we do this company wide meeting and there's this whole thing about coronavirus going on and all this stuff. But everyone's God, I don't know if it seems bad, but we're all there and we do it. And I left our Dallas office that day. For the last time without knowing that was the last time.
Greg Moran: I went back to pick up stuff in July or something like that, but that was it. It was over. And I stayed on as the CEO. At that point, we started doing a number of acquisitions through that time. Rubicon was terrific at, during that to really back the company. This was a tough period for us.
Greg Moran: Our clients were restaurants, retail, hospitality, and airlines. If you want to try to find a global pandemic and be in a worse place, That's where it is, right? But they got really aggressive. We all did and started doing a lot of acquisitions. So did a large acquisition, a really transformative acquisition for a company in Amsterdam back in last April called Harvard and the company outmatch was the company is now rebranded as Harvard.
Greg Moran: So I was actually living in Amsterdam for most of 2021. Right now, while I'm talking to you, I'm sitting in Livingston, Montana, my two kids who go to Montana State University, not too far from here up in Bozeman. So every time my wife and I wanted to see our kids, we would fly from Amsterdam to Bozeman, Montana.
Greg Moran: Now you try to figure out what that flight looks like. Yeah, I bet. And honestly, it had been 13 years and it was, it was really grinding and it was that inflection point for the company. And I think where. I had to be honest with myself, and say, at this point we had about 50 million in revenue.
Greg Moran: We had 300 people all over the world. I was traveling constantly still. And it just wasn't that much fun anymore. I'm an early stage founder guy and there are people and we found one of them. Fortunately, there are people. That are out there that can do that job as CEO of that company so much better than I could ever dream of doing.
Greg Moran: And I had a, there's a lot of soul searching involved in that, to take it to that point. But that's really where it got was, look, I'm just not the guy I am still on the board and I'm still a large investor and, but I just was not the guy to lead that company anymore. I wasn't the right person to do it.
Greg Moran: And I wasn't enjoying it. And, fortunately we went out, we started a search. Rubicon was fantastic about it. We started a search, went out and found, an incredible new CEO, to run that business, who's just doing an unbelievable job today. Who's, I joke all the time. He's like a real CEO, right?
Greg Moran: Where I was the founder CEO who managed to grind their way to that role, I've over a lot of years.
John Wilson: Yeah.
Greg Moran: So that was it. It was more of a, very personal decision.
John Wilson: Yeah, it sounds like I see that decision on my horizon. I think I've talked about this on the show where I'm still having fun, but I'm having fun because we're engaging in M and a, but soon and probably very soon, M and a is going to be the least important thing to our business, right?
John Wilson: It's going to be processed. It's going to be standardization. It's going to be all the things that I really don't want to do.
Greg Moran: Yeah, exactly. That is literally what you just said was exactly where I was. Verbatim, you could have just replaced my face with yours and that was it.
Greg Moran: Nice. I loved m and a. I was doing all the m and a. I had a great time doing it. I was stacking one company on top of each other. The problem was the integration part sucked. .
John Wilson: It does.
Greg Moran: The process just was all that stuff. It's like you get the heroine. Yeah. I think we were just on audio.
Greg Moran: We could see me smacking my wrist with the hair. I totally saw
John Wilson: it and I got it. . Yeah. Then you gotta go do the next one. Yeah, that's right. . Exactly. Yeah, I struggled with that for a long time because you see the Zuckerbergs and all of that, the founder CEO, who's the CEO still however many billions.
John Wilson: And you're right. I think you made the right decision from knowing you for the last 20 minutes. I think you made the right decision. That means a lot. I appreciate it. I know you got on here to hear that. I'm sure. But I think there's this like heroization or something of the founder CEO that still runs their company.
John Wilson: And the reality is you're probably the wrong guy. Like you, anybody, like you're not it just cause you made the company, just cause you got it to where it is. It's the same with team members. Whoever got you here might not get you there. And I know that I've got a limit. We haven't hit it yet, but I see it.
Greg Moran: That's totally it, right? We talk all the time, and, when I'm doing any kind of coaching for a CEO or, just working with a portfolio company or just chatting with anybody, right? We talk all the time about, we understand the need to top grade our talent over a course of time in our company, because what got you from one stage is not necessarily what's going to get you from another.
Greg Moran: But it's really funny. You talk to most CEOs about that, like founder, CEOs, and immediately, they're like squirming around in their seat. They're like pulling on their hair. They're like, tapping anything that they could, because it's an uncomfortable conversation. It's like your own mortality, right?
Greg Moran: For a founder, it's probably way scarier than your own mortality in a lot of ways. And, but it's very real. We all have that ceiling. It's not to say you can't force your way over it. I probably could have stayed in that role. I probably could have done an adequate job to get me through and probably not have gotten fired.
Greg Moran: I don't know. Maybe Rubicon is just crazy, but who knows? They're probably saying, if they're listening, there's probably saying, oh, what's he talking about? We're going to fire him the next day. I probably could have continued to manage my way through it, but I didn't want to.
Greg Moran: And because I didn't want to, I wasn't going to be good at that. That's just the hard thing because, as founders, we just, our self identities are so tied up in our companies. And at some point, I don't know, I'm 49 years old. Maybe I just grew out of that, but it's a hard decision for sure.
John Wilson: Yeah. How long did it take to find the CEO? About three months. And then you incubated them for a year.
Greg Moran: No, I still continue to talk to him. I'm on the board and everything, but no CEO came in from outside. And the day he started was the day I wasn't doing it. Still, he's become a good friend and, we chat and, but no, I didn't incubate him at all.
Greg Moran: If anything, he took the reins and ran, which is exactly what we wanted to do.
John Wilson: Yeah. I've always wondered about the CEO transition. It seems I don't know which is better. And honestly it's the same thing as buying a company, probably, where it makes sense for the seller to not be there anymore.
John Wilson: That's probably the same thing with CEOs. But it also it's such a big position. How do you not incubate them? Like, how do they not sit there for a year and, I don't know. Obviously you did it one way, what's your take?
Greg Moran: Every instinct in me. So when this happened, when I went to Rubicon and said, Hey, yeah, I think the time is here.
Greg Moran: Let's do a transition. I think that was on a Wednesday. And I think my last day was on Friday because Rubicon's position on it, which I have come to adamantly agree with was, okay, if we're going to do this, there's gotta be the runway. We've got to give this person the opportunity without interference to go do what they're going to do.
Greg Moran: And I absolutely agree with that approach. I think I've seen a lot of founders who try to hang on and you see this at a public level. It's a lot of ways you see this. I don't know, like today, if you've been following a lot of what's going on at Disney, where, you see this a lot today at a public level, but you also see it, on a smaller level.
Greg Moran: Where you've got founders who say, okay, I'm going to try to help this person and I'm going to teach them everything I know when really, what they need is to get control. What they need is to get you out of their way. I saw this so often, John, with companies that we acquired, right? With the founder would say let me hang on and I'm going to try to help you out.
Greg Moran: And I'm going to stay in here for six months. I'm going to do, and I can tell you every single time it went bad. And it wasn't that they were bad people in any way at all. It wasn't that they had ill intentions, but I had a vision for what I needed to go do. And I needed to go execute on that. What I didn't need was somebody that was telling me, Hey, yeah, but this isn't the way that it worked.
Greg Moran: And I'll tell you, had I not left when I did, had Scott, the new CEO, not stepped in and had a clear runway, I would have been that guy. And I wouldn't have ever meant it. I would have thought I was helping him. It would have never been, with any ill intention, but I would have been that guy. I know I would have.
John Wilson: Yeah. Because I
Greg Moran: thought it was doing the right thing. I thought it was helping him. I thought it was or I thought I would have that. And I fortunately wasn't in that position. I have rarely ever seen long transitions work well in that CEO role.
John Wilson: That makes sense. That makes sense. I don't think I'd ever thought about it really until you shared your story.
John Wilson: I just assumed there'd be a long transition and maybe that's because I'm a control freak.
John Wilson: Okay. I'm going to think more on that one. You need to do some introspection here. That's right. Yeah. All right. So I appreciate you sharing that story. I'm sure the audience will be into it. I know. I personally, I'm going to think a lot on it. Let's dive into M& A. So you guys bought a bunch of stuff. Okay.
John Wilson: Yeah. How much did you buy? What'd you buy? Why'd you do it?
Greg Moran: Oh, man. I think over the life of the business, we probably did 11 or 12 transactions, something like that. Started very early. We were like, maybe a hundred thousand dollars there are when we did our first acquisition. It was crazy, there's a couple of things and let me tell you.
Greg Moran: But the acquisition is how we got on that path. But, from that point, like I said, I think we did 11 or 12, most of them. So our industry, was what I identify as what I've called talent selection. But really what we were, was a pre employment testing company. We did pre employment assessment, right?
Greg Moran: Now I'm sure everybody that's listening right now has taken some form of pre employment test or some sort of psychological test at some point in their career, right? Whether it's like Myers Briggs or predictive index, or, there's a million of them out there. And that's what we provided, but we provided it to large companies at scale.
Greg Moran: And, that industry is an interesting one because it's long been the domain of industrial psychologists who, the model itself was not particularly scalable. It was very much typically like almost a tech enabled service, right? You had a bunch of IO psychologists who would write a test, it was still very manual, very consulting heavy.
Greg Moran: And we wanted to change that and we had a very modern platform that could accommodate all different kinds of tests and we could bring them on there. And we stumbled into this model early on where, Hey, look, there's a lot of companies that are out there doing in this really labor intensive way.
Greg Moran: They're charging companies per test basis where companies want to be charged on a SAS subscription and, not have to pay for every single test so they can do it earlier in the hiring process. So we started actually buying these companies. These IO psychologists led businesses and rolling them up is essentially what we're doing.
Greg Moran: And we had a really successful model with that. We were building that, where we could go in, we could acquire these companies. We could get most of their clients onto our platform and 90 days or, some 120 days. And the clients were happy. The clients actually ended up paying less because they were paying on a per test basis.
Greg Moran: So they're usually paying somewhere around a third less than they were before, and they're getting unlimited use of the software and it's fully automated. So it was like a. Talk about a win, right? Everybody loved this. We gave liquidity to the founders and it was a good model.
Greg Moran: And so we did a lot of that back in the early days. And as we got larger, then we started expanding the scope of what we could provide, because at that point now we had maybe a thousand customers or a couple of thousand customers. On our platform, we said, Hey, we can start to sell more stuff to these same customers.
Greg Moran: So we started really building out a full talent selection platform. So then our strategy morphed from this rollup strategy into more adding on different products that we could deliver into our client base, all within talent selection. That was our strategy. It, it proved out. Really well.
Greg Moran: We, deployed hundreds of millions into M& A over the years. And, we got pretty good at, building kind of an M& A machine over more than a decade, but it was in the DNA of our business. I had done M& A in my past life and my board, at the time was very well versed in M& A and not afraid of it at all.
Greg Moran: And, they really pushed me to think, just not be afraid of it. And even though at that point, we were young really as a company when we did our first couple, they weren't afraid to try to use it to achieve scale pretty quickly. And it worked fantastically well.
John Wilson: This was a PE company that owned you at that time.
Greg Moran: No, actually these were a couple of small VCs at the time. This was, and a couple kind of high net worth individuals at this point. That were involved, but I think, what we had, and I think, This is a point that I've talked to a lot of founders about, right? At an early stage, we were just so fortunate to have a few people on our board, Martin Babinec being one.
Greg Moran: And if you've never had more, I don't know if you ever, if Martin or have had him on the show, but Martin is a fascinating guy. And he founded a company called Trinet. Trinet is now, I think they're the largest PEO in the world. They're public trade in New York stock exchange, huge company. Martin was the founder and CEO.
John Wilson: I just
Greg Moran: read about
John Wilson: him.
Greg Moran: Yeah. There's a lot written about it. He's a fast. Oh, he's in small giants. He is. He's featured in and Bo. Yeah.
John Wilson: I literally was just reading that book over the weekend. Yeah. Yeah.
Greg Moran: Okay. Martin is one of my closest friends in the world has been a mentor for me for so long. And he was one of my first investors and on my board.
Greg Moran: And he was a guy who really helped, facilitate this and just said, look, you don't, we're small, but we don't have to act small. And, we can act. Bigger. And we can do bigger things if we allow ourselves to do it. And so that is really what got us, because of that sort of DNA, that's what got us on that path.
Greg Moran: And interestingly, and I know we're going to get there. It also led to really what was the most transformative acquisition in the history of the company, which was, we were a couple million dollars in ARR and we went out and we bought a company that was, almost 10 million in ARR. All because Martin had said to me one day, hey, they kept coming to us and saying, Hey, we want to acquire you guys, except they were growing at like 20%.
Greg Moran: We were growing at 120%. And we were never going to be able to get there on the valuation. And Martin just one day said to me, I think we were in a board meeting or just a phone call or something said to me why don't we just go buy them? And I said, Martin, that's ridiculous. Like we're 2 million, like how we can't go buy it.
Greg Moran: These guys are four or five times our size. We can't go do that. And Martin said, why is it? Because we don't have enough money. Martin said, who says. And, that's the way that whole thing started. And, we ended up doing this acquisition and, in one afternoon, on August 6th of 2015, I only remember the date because August 6th is also my birthday.
Greg Moran: We went from 2 million in ARR to 10 plus, and, it was crazy. 15, just a band of 15 people trying to build something from scratch to 60, 70 people, which was just a huge leap, which just set everything else apart.
John Wilson: Yeah. Yeah. What number deal was that?
Greg Moran: It was probably the third, I think.
John Wilson: Okay. So still like fairly new into M& A being ingrained in your organization?
Greg Moran: It was, but we had stumbled on this strategy of this kind of, to call it a roll up is probably overstating the formality of it, but that's essentially what we were doing, right? We were going out and rolling these companies up.
Greg Moran: The model was already, we were already thinking in those terms. But, and that's actually what that transaction was. So we acquired a company in Dallas called assess systems. That's actually what that transaction was. It was a rollup. They were just much bigger than we were. That's all.
Greg Moran: But it was the exact same strategy. It was just, They were larger, so it didn't break the model that we were trying to build. It just, it really dramatically accelerated the model.
John Wilson: I've got a couple of different things I want to say on this and then I'll dive into questions, but first off, I love it.
John Wilson: I think that's sweet. And we've tried to buy companies larger than us before, and there's a mental block there. What you had were like can I do this? They're bigger and you have to get over that. But what I found was not just the mental block, but the ego of this other guy, the guy who is bigger, they don't want to be the bigger company that's bought by the smaller company.
John Wilson: That's right. That's the most direct pushback I've received. There was a company we were doing 4 million a year. And this other company was doing seven or eight. So it was double, but still like in the grand scheme of things, 8 million, it's just not that much money. Really yeah, you're double, but we're all still small.
John Wilson: And we approached them cause they're a great company. We would have loved that. Buy them. It would have been transformative. And they were like, I can't sell to you. You're smaller. And I'm like I have the money. Cause I would imagine that's the biggest problem. And yeah, they just weren't able to get over that.
John Wilson: Yeah. Mental hump. Yeah.
Greg Moran: How did you get through that? It takes a strong leader on the other side too, to get over that ego block, a couple of things happened. I think that really helped number one, when we said, okay, we're going to try this. I had developed a strong relationship by this point with the other CEO.
Greg Moran: And we got along really well. There was trust there. So when I called him, it's not like this kind of was, it was happening out of the blue that we were shifting the table, but at least our relationship wasn't brand new. One of the things that we had done over time that worked well was we really spent a lot of time cultivating relationships.
Greg Moran: With CEOs in our space and, these were competitors in a lot of ways, but it didn't matter, we knew each other, I would try to do quarterly calls and things like that, with them. And there was a foundation for the relationship there. The other thing that I think really helped a lot was, when we decided to go down this path, I had from a previous exit that I had developed a great friend who's today, one of my closest friends who was a partner in a.
Greg Moran: Larger growth equity VC out in the Bay area. And I had called him when we started going down this path. And I said, Hey, Eric, here's this idea we have, do you have any interest at all, and even thinking about this and, his name is Eric Jack and he's just a brilliant. Wonderful human being.
Greg Moran: And it took Eric about three minutes, for Eric to say to me yeah, let's go do this. And that was it. So I think, the other thing that helped was if it were just us coming in and saying, Hey, we want to do this transaction. It probably would have been a lot harder, but then we also had this large growth.
Greg Moran: DC coming in with us to say, okay, but really what's happening here is we're going to take this. We're going to take this. We're going to put them together. And then yes, this company, the CEO is going to come from the smaller company. Yes, the entire management coming from it or most of the management, but it doesn't matter.
Greg Moran: We're putting these things together. So I think, if there were ego concerns there, I think that's probably, what really helped them. We had that sort of third party, right?
John Wilson: Yeah. You got to validate.
Greg Moran: Yeah. Yeah.
John Wilson: Yeah. Yep. Yeah. I'd imagine that'd be pretty helpful. I know. Aside from just the CEO coming from the smaller team, the management team too, because that was going to be our plan too.
John Wilson: And I think that was probably the bigger Concern, which is how can figure out how to manage this? And
Greg Moran: yeah, we did actually combine management teams a lot. So there were a lot of senior leaders that actually came over. There's no way. We were 15 people myself, my COO at the time.
Greg Moran: And, like one or two other people were really going to be leading this thing, but we had to have their leadership team, most of their leadership team with us. They didn't all end up staying, but most of them ended up staying for a while. And, that was really instrumental. So to your point, we could not have run this company had their entire leadership team step away.
Greg Moran: So we really had to treat this as, hey, we're going out and we're building a brand new company together. But we also then at that point, we rebranded the company, right? So we didn't take either company name. We went out and I think one of the big Yeah. Things that we did too early on, we just, we had a few people in the company who were just really brilliant and really defining core values, new core values, and shared values, and really defining what the culture would be moving forward as a brand new entity.
Greg Moran: And I think that helped tremendously and holding the pieces together. And over time, like I said, people did end up migrating away because it was a very different business. We were going from essentially a consulting business to a high growth SAS enterprise SAS play. But. They didn't in the beginning and that made all the difference in the world.
John Wilson: Yeah. So you said it was transformative aside from the obvious. Can you just walk me through what made it so transformative?
Greg Moran: We immediately went from a small upstart player to, a more significant player at scale in our space. So just size alone made a big difference. I think what it also did was it positioned us You know, we had this kind of roll up strategy that we were putting in place and it gave us instant credibility as being a real high potential buyer for somebody.
Greg Moran: So instead of us trying to get people to believe that, hey, we could go do this, we were a highly credible buyer at that point that could execute on the transaction. So I think that helped tremendously. The culture of the company shifted dramatically, the leadership of the, there was not a single thing that was not untouched, right?
Greg Moran: The
John Wilson: word you're looking for
Greg Moran: is broken. Yeah, that's right. That's right. Some of it, we just tried to, we broke everything and some of it we got lucky and we fixed quickly and some stuff we labored under for years.
John Wilson: Yeah. So who were the biggest players? Like, where were you at in the size range of the largest players?
Greg Moran: In the assessment space, we suddenly, because these were, you were talking hundreds of companies that were probably a couple million dollars in revenue. And then you probably had five to 10 that were call it north of maybe 30 million, right? Nobody that was Even a hundred million at that point.
Greg Moran: Now there are, but nobody that was a hundred million at that point. So the entire industry itself was super fragmented. So even being a 10 million player, you broke out of that pool at the bottom. We were immediately viewed as a larger player in the space, even at 10 million, just a really fragmented industry.
John Wilson: That's fascinating. There's probably a lot like my industry too, before COVID that would have been the same as different now. And just in the last two years, they've rolled up the industry so much, there's billion dollar plumbing companies, which is crazy, but yeah, two years ago that didn't exist.
Greg Moran: Yeah. Yeah. But it's the same kind of thing, right? It's you've got just a million different people with a service model, right? When you have that, there's just this kind of economies of scale that can really hit, and that's what we
John Wilson: were doing. Fascinating. All right.
John Wilson: So what was your personal transformation like? Going from, you took over a team four times your size, how'd you approach that as a leader?
Greg Moran: That was crazy. I have always prided myself on being a founder. I'm a startup guy, right? I love the early stage. I love the dirtiness of a startup. I love the passion behind and the raw energy behind trying to take something from zero to a dollar.
Greg Moran: And, here I was running something much larger and I think, the personal transformation was enormous, and I had some great mentors, Eric Jack, who I mentioned Martin Babinec, who would just the fact that these guys hung in there with me and coached me was. I remember suddenly I'm in this world where, I've got to learn real leadership and real management, not startup founder, leadership and management.
Greg Moran: Which is Hey, we're all in this together. We're all in the bunker. We're just trying to survive. And I also had some people on our executive team when we combined the companies, the executive team that we. Combined with there were a couple, just, a few, just very mature leaders there who, man, you talk about being egoless.
Greg Moran: They took me as their leader under their wing and taught me how to be a CEO, which was crazy, that they would have done that, but they did. And, it was just, it's something I'll never forget. I remember back, John, at the early days, this was, we were growing this business and now all of a sudden I had a large VC behind me and we would go on board meetings and I would have no idea what anybody was talking about.
Greg Moran: The first couple of board meetings, I literally would have no idea. They were using terms I had never heard before. Brilliant. Brilliant. Brilliant. All everybody was either Harvard or Stanford. There was no, it was like one, one coast or another here with me. And I would literally write stuff down.
Greg Moran: Like I would hear words and I'd try to like, write them down and Hyphenate them in a way that I could actually Google them afterward. That's literally how I was learning terms that today, we all use, I didn't know what tack was right. Customer acquisition costs.
Greg Moran: I didn't know what, LTV was, I didn't know how to calculate these things. I didn't know any of this stuff. And, trying to write these things down and just Google them as fast as I could, and just trying to immerse myself in the learning of it as fast as I possibly could. And thank God I just have people that were incredibly patient.
Greg Moran: With me and we're willing to teach me, I think so much of the founders journey is like that, right? It's you just go through these massive learning experiences, right? And some of them work out well, some of them work out horribly, but they all just it's like learning inside of a tidal wave.
John Wilson: Yeah it's a total shift. I think it's an underappreciated or maybe under discussed. Yeah. But it's a total shift. Like who you are fundamentally has to change in a really short amount of time. And you can either do it or you can't
Greg Moran: do it. Totally. And you talk about like imposter syndrome and all of these things where, you're suddenly in this spot and it's I don't like what the hell, like, how did I get myself into this?
Greg Moran: And how do these people not see me for not knowing what the hell I'm doing? And the answer was they knew I didn't know what I was doing, but they knew I could do it. And that's. The thing, right? It's you just have to invest in a leader. And we just, even today in our venture firm and things like that, you just, it's okay.
Greg Moran: It's okay not to know stuff. It's fine. You'd be a hundred percent transparent, a hundred percent comfortable about it, but you better damn learn it fast.
John Wilson: I'm sure you've had guests on your podcast, which I don't think we've plugged yet, but you said the name, it was the founder's journey.
Greg Moran: The founder journey podcast.
John Wilson: Yep. Yeah. Yeah. Check out Greg's show. And it sounds like it's about this. It's just the transformation personally and professionally of a CEO.
Greg Moran: That's it. That's exactly what we try to do with it is have founders on to tell their story of how they got to where they got, whether that's good.
Greg Moran: We've had founders on that were monumental successes and, in a financial sense. And we've also had founders on that built things and lost every bit of it and are now rebuilding it, but just the power in the lessons. That you learn all along the way. You know what I mean? They're life changing.
John Wilson: Yeah. Yeah. I think that when I think on the last five years, so we've engaged in my career has been M and a, and it didn't mean to start that way, but that's what happened. But it was fascinating. Just there's these just so clear windows of change and I'm still in the middle of one. Now going from how you described your transformation with that large deal, that's what I'm in the middle of to where we four times last year, and we did it in about five months.
John Wilson: So not one day like you, but we got
Greg Moran: the time frame on that doesn't matter.
John Wilson: You're
Greg Moran: doing it.
John Wilson: I'm still figuring I'm sure I will be for a while. This is. Cause now for the first time, instead of just having the title of CEO I actually have to be that.
Greg Moran: Yeah, it's funny the way that happens when you wake up one morning, it's oh, I actually shit.
Greg Moran: It's like a real
John Wilson: job. I don't know how I got that. I did it. Yeah, it's been a funny journey. Who else is coming on the show? Can you walk us through some of the founders that you've had on the show?
Greg Moran: Yeah, this morning, we actually come up on this Friday. We had Barrett O'Neill came on this morning, you and I both know from Twitter and he's a prolific writer on Twitter, but also has just an incredible entrepreneurial story himself getting into the storage business, the on demand storage business.
Greg Moran: And the lessons he's learned along the way, not only from that, but also from building an audience and community and really leveraging that as his next venture, this is like my podcast day. So we interviewed Barrett this morning for one that goes live this Friday. Then you and I are obviously speaking this afternoon.
Greg Moran: We're recording another podcast with Dave Klein. Dave was the former head of talent over at Bridgewater with Ray Dalio's hedge fund. So incredibly. Who's really just an absolute management and leadership guru. We'll be talking about, leadership and management for startups and, for founders that really like you and I, John, that sort of suddenly, okay, now I'm running a larger company. What do I do? Nobody really ever taught me to manage right now. I've got to do it. We've had, one of my recent we had Martin Babinick, who you and I have talked about a couple of times, his just went live last week. So you can find that on Spotify or YouTube today under the founders journey.
Greg Moran: Part of that, we had a fellow by the name of Joe Tassone, who's just got an incredibly fascinating story where he came in, he bootstrapped the company to 25 million in the cellular power space of all things completely fell apart, rebuilt it. Just an incredible story of what real resilience looks like for a founder.
Greg Moran: So great podcast there.
John Wilson: Yeah. Why are you doing a podcast? I love these stories.
Greg Moran: Look, I've been really fortunate in my career. And when I left my role as CEO, what I wanted to do was devote my time to working with founders and CEOs at an earlier stage who are going through the same things that I was, are dealing with all the same emotions, are dealing with all the same highs and lows and the drama of the journey, and to try to make their journey, Lives a little bit and we can make their companies more successful.
Greg Moran: That's great. But to try to make their lives a little bit calmer, because mine wasn't, and it was crazy ride. And I sacrificed a lot for that ride. And, so what I wanted to devote myself to doing was helping founders just. Build great companies, but do it without compromising their entire life.
Greg Moran: And that's it. That's why we started our VC fund. So we can invest behind some of these. That's why I started the podcast. I've got a newsletter and, I spend probably half of my day today writing on Twitter to tell those stories. And Because I love this stuff. And now I'm, I'm doing some coaching of individual founders now and things like that.
Greg Moran: And we'll continue to do some coaching. It's just, this is where my passion is. This is what I love to do more than anything. I love founders. I love the creativity and the energy and the passion behind what they're trying to do. And I want to be a part of it. I just don't want to go do it again. Yeah.
John Wilson: That part I get. So for founders that are maybe in the middle, So this is selfish. This is a selfish question, by the way. It's okay. I'm going to lay out a scenario. It could be me. It could be anybody. I don't know. But if you've got founders, CEOs. I know a guy. You just started off with that. I know a guy.
John Wilson: I know this guy. Really great guy. And they're in the middle of that. Transformative journey that you went through that I'm going through of transitioning between founder to that of a full CEO, what resources do you think that they should be going to get that, there's not like a college class on how to be a CEO and there's probably a book or two, but.
John Wilson: Yeah. They're under talked about.
Greg Moran: Yeah. Absolutely. Find a peer group, right? I've been a member of YPO for a number of years. Before that I was a member of EO for almost a decade. Getting that peer group is so important. The journey that this hypothetical guy that we're talking about is going through right now can be a really lonely one.
Greg Moran: And and it's not one that most people can identify with. Find a peer group. Vistage is a great one. YPO is a great one. YEO is a great one. Depending on the size of the company, things like that. I think that's where I would definitely start. Get a coach. I used a coach through almost all of that time because what I wanted was access to somebody who just.
Greg Moran: Who I could call up and say, okay, here's what's happening. I don't know what the hell to do about this. And when I got the advice and I spelled by name, Mike Klaus and Mike is just a brilliant guys with CEO coaching international is great organization and Mike is just a brilliant, he was a very senior executive in a number of roles and they use the guy I could just call.
Greg Moran: Whether it's Mike or CEO coaching international, it's YPO or YEO, which is now EO or Vistage. Get a coach. Get a peer group, right? Because you need that resource to be able to call and you can't learn this stuff from a book, right? There's good books out there on, but you can't learn this stuff from a book because when you're in it, the drama is too much, right?
Greg Moran: You need the person to call.
John Wilson: Yeah. Yeah, I agree. We had coaches for a while. For some reason, we haven't had one for like about a year. Which also happened to be, one of the single most transformative years in my entire career, that probably wasn't a good choice, but yeah, I agree. They were a wonderful resource while we had them.
Greg Moran: Yep. Yeah. Big fan of coaching and big fan of peer groups. Like just, you've got to get yourself surrounded by people, who have gone through something like this before, because not many people have. And that's really more than anything else I think was most instrumental to me. Yes, there's good books and management books and theory and stuff like that out there, but until you're living it, it's hard to deal with on your own.
John Wilson: I appreciate that. All right. What is your single biggest challenge right now?
Greg Moran: I would say this is a big transition for me, right? I'm coming out of a 13 year old, yo, and I have not been a solo entrepreneur for, and that's look, I'm still an entrepreneur, right? VC, but we're starting a VC firm. And I say, I'm solo.
Greg Moran: We're all kind of freelancers in this thing. And I, in many ways at 49 years old and redefining my life and my professional life and. I've got a wonderful family and an incredibly supportive wife and, but I'm really transforming everything that I've known about myself for the last, for my entire professional career into something different right now.
Greg Moran: So I think it's exciting. I'm loving every second of it, but it's a real transformation. So I don't know if you call that a challenge, but because it's a lot of stuff in there to figure out, right? What do I want to do with the next 10? 15 years and I'm doing those things now, but how do I start to do this at scale?
Greg Moran: How do I start to provide coaching for, great founders and CEOs at scale? How do I really, start to take this passion for educating around these issues of the founders journey and how do I do it to scale? And it's very new, you and I connected through Twitter.
Greg Moran: I know for the first time, and that's been a really new journey for me in terms of building, my, the team. Twitter audience and engaging with them. So there's just everything in my life is new right now, which is just a wild experience.
John Wilson: Yeah.
John Wilson: Yeah. I would have to imagine. We're talking about transitions.
John Wilson: I think the transition you're going through is way harder than transitioning from like a small CEO to a big CEO. I don't know, it's a lot because there's so much more personal to it. There's self worth and how you think about yourself and your career and how that ties in. And that's a lot going on there.
John Wilson: There is one
Greg Moran: there. Yeah. There's definitely a lot to dissect in your own brain, right? You really do have to, it takes a while to separate yourself from the business that you built and, emotionally make that disconnect. In a lot of ways, it's the most exciting period I've ever gone through in my entire life and my career.
Greg Moran: Because really I can go do anything I want to do at this point, but in some ways, that's it's the curse of too many choices.
John Wilson: Yeah. Oh yeah.
Greg Moran: Really getting narrowed down. I spent a lot of time in the very beginning, in October, like I was like, Oh, I could do this. I can go do that.
Greg Moran: I could be a travel blogger. That was like my big thing for a while. I love to travel. It could have been good, there's all kinds of cool stuff you can go do until, it just took me a while to narrow it down to note. What I want to do is I want to provide coaching. I want to share my experience in a way that's meaningful to other founders.
Greg Moran: But now I've got to figure out actually, how to continue to do that at scale.
John Wilson: Yeah, that's a huge challenge. I appreciate you sharing it. I appreciate you sharing everything you did today. This was awesome. And now I just want to connect with you and come out to Denver and ski. Anytime.
Greg Moran: Anytime Denver skiing or Montana fishing. I don't know if you're a fisherman, but I'm sitting about a half a mile from the Yellowstone river and some of the best fly fishing in the world up here. Oh my gosh. Yeah. So yeah, we'd love to do it anytime, John.
John Wilson: Cool. Thanks for coming on today, Greg. This was fantastic.
Greg Moran: Oh, thanks for having me. I really do appreciate
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