Mathew Pettit: Healthcare Services Investing

Craig Castelli (00:05):
Welcome to the Close M&A podcast with Caber Hill Advisors. I’m your host, Craig Castelli, and today my guest is Matt Pettit, founder of Seven Hills Capital, healthcare focused private equity firm based in Nashville. And Matt, you have the distinction of my first private equity guest on The Close. We’re closing in on Episode 25. It is mostly been founders up to this point, so I guess don’t screw things up.

Matthew Pettit (00:30):
No, Craig, I appreciate it. And I mean at the end of in my heart, I’m still a founder. I mean, when you and I first met probably eight or nine years ago, I mean I was working out of a Regis in Chicago. I just hung my own shingle after selling my first business I as an operator in. And it’s been really fun to see Caber Hill grow. Hopefully it’s been fun to see Seven Hills grow and I’m excited about the conversation.

Craig Castelli (00:53):
Yeah, you guys are crushing it. So I think we want to start really at the beginning here. I mean, you could have had what to most people looks like a pretty cushy life working in middle market pe. You’d be a partner by now. Instead you decided to start your own firm. So going back to the beginning, what was the idea and why’d you think it would work?

Matthew Pettit (01:13):
I don’t know that I was convinced it would’ve work, but I was convinced they had an entrepreneurial itch. And so when I think back to when I was working in upper middle market private equity in Chicago and before I started Seven Hills, I ran one business kind of as a search fund, kind of as an entrepreneur. I self-funded, so that’s why I say kind of as a search fund, but bought the assets of a dermatology business, built that up and then exited. And ultimately when I was in formal private equity, I found myself navigating sponsor relationships vis-a-vis operator relationships and usually siding with the operator. And in that case I decided, well, I’m going to try my hand at this. And then as I look back now, I’m very glad I did. I think what we’re building at Seven Hills allows us to keep our operating hats on, but leverage what we’ve learned from sponsors. And there are some great sponsors out there and private equity does do a lot of great things, but I think as the business community starts to understand the art of possible, the art of the possible part of me, the need for smaller private equity only continues to grow or the need for larger private equity while still very important is shifting to more of a liquidity measurement as opposed to really building the companies.

Craig Castelli (02:25):
Yeah, it really is for sure, especially the larger you go, but you’re solving that need for liquidity at the smaller scale and you can’t ever discount the value of having sat in the shoes of an operator having dealt with those sleepless nights, having had the eternal optimism of the next month, the next quarter, the next year. You’re right on the cusp of crushing it. Somebody who’s only worked in finance their whole career will never be able to forge that bond with an operator the way that you can if you’ve done it.

Matthew Pettit (02:55):
Yeah, I mean I didn’t appreciate it when I was kind of growing up in private equity, what it’s like to send an email to an operator and say, Hey, can you guys fund payroll on Thursday versus after having to be the person to fund the payroll on Thursday, something that I’m sure a lot of your clients that entrepreneurs you work with have gone through until you set in that seat. It’s really hard to understand exactly how lonely the CEO job is, how lonely the entrepreneur job is and how ultimately I think the way to win in anything in life is by building a great team around you.

Craig Castelli (03:28):
Yeah, there’s no question. So the way you started out, you were search fund, you start Seven Hills, you take the independent sponsor approach, and then last year, congrats by the way you announced the raising of your first fund. I want to understand some of the why behind that. Before we get into that, can you just explain to anybody listening who doesn’t necessarily understand this jargon, what’s the difference between being an independent sponsor, the way you started and having to commit a capital fund like you did today?

Matthew Pettit (03:56):
Yeah, so the independent sponsor model to me is a wonderful model and I was blessed enough that the first business, we acquired a business called the First Care Group that we built up from three counties in Michigan to five states. Now, the way we did that was through a combination of bank financing through some of our friends in Chicago where I started Seven Hills, that’s Nashville in the background by the way, but also through equity that I had made in my sales. So I was able to really do things the way I wanted to do it in that. But as we grew and as we built Reliable Medical, which started in Minnesota as now its 17 states, we brought in institutional capital alongside of us for that one particular asset for that one particular strategy. So a lot of private equity firms and they’ll put anywhere from five to 10 investments in any given fund.

(04:44):
So it’s commingled investors into multiple companies with an independent sponsor, you’re investing in one idea in one company, and so the capital knows they’re going behind you for one company, but that also means that that company has to really perform really well. I did not want to lose that when we ended up going the formal private equity route. And so because of that we run a very concentrated portfolio. So our fund one has three businesses in it now. We’ll likely have four businesses in it and our fund two, which will kick off probably at the beginning of the year, hopefully you’ll see an announcement about that. We’ll only have four or five businesses in that too. So what we’re trying to do is harness the great of the independent sponsor model, which is really committed partnership focus on one asset, complete transparency, complete alignment with the entrepreneur, the owner, but do that on a larger scale through the fund.

(05:37):
And the reason I decided to do that, what’s really important to me is always being one of the largest investors in anything we do. I believe if you show me the incentives, you’re going to show me the outcome. But by building a fund structure, I was able to build a team. So it used to be Seven Hills without of Seven Hills without a mat. That has changed drastically. I mean there are 10 plus people in our management company now, and I would argue that I’m now one of the least important people around. And by having the fund structure, I’ve been able to cut multiple people into that so that everybody can take the same sense of ownership that I was able to build as an independent sponsor.

Craig Castelli (06:13):
Has it changed anything about how you invest?

Matthew Pettit (06:18):
The one thing that’s changed, Craig, and that’s a good question. It doesn’t change what we look for in initial platform. It doesn’t change in what we look for in our operating partners. What it has changed a little bit is our ability to bring in more outside directors to be able to move quicker and to focus more resources on a couple themes versus one theme at a time. But it’s also made add-on acquisitions a little bit easier. I think the one hiccup of the independent sponsor model can be when people allocate a set amount of capital to that deal, if you want to reinvest in a great company, you kind of have to go sometimes go rera the money from your same investors and people leave firms, people go to new firms, their liquidity might’ve wound down. So this has given us the flexibility to get very committed to a partnership which you were before, but never have to worry about will there be enough gas in the tank to get us all the way to the finish line.

Craig Castelli (07:15):
Yeah, I mean just like you can’t scale yourself when it’s just you as the independent sponsor and you don’t have the team that you have today. It’s hard to scale those companies when you’re still concentrated with that single source of capital that may or may not be on board for the growth plans that you and founder laid out.

Matthew Pettit (07:32):
So for the last three businesses we’ve built two out of the three we’ve gone in with all equity, right? We’ve put no debt capital in the business, and then we brought debt capital in later on once we felt like the company was ready to handle it. That’s a luxury that you really can’t do as an independent sponsor. You can with some investors, but a lot of investors are trying to maximize the capital structure efficiency on day one versus the fund structure allows us to kind of do that over time, which is suited the healthcare rollup strategy. I mean, ultimately we don’t need to go to 10 M&A deals to make our math work, but what we do need to do is grow our businesses and to grow your businesses under a leverage situation, especially in this industry and environment. I get we’ve got two rate cuts is still, in my opinion, difficult.

Craig Castelli (08:17):
I mean even if you are growing by M&A, the fact that you’re starting out with a leverage ratio of zero gives you so much more player power to make acquisitions as you grow. You’re not starting right up against covenants on day one and you and the company have to figure things out. And if you have a bad quarter in that first year, you’re already behind the eight ball.

Matthew Pettit (08:36):
Correct.

Craig Castelli (08:38):
So I mean you hinted at some of the market forces with interest rates being cut a couple times this year and certainly that helps. What other trends or market forces are influencing how you think about the next 12 to 18 months?

Matthew Pettit (08:52):
Well, we only invest in healthcare services and out of our six companies today, five of them have government reimbursement and it’s a little busy in Washington DC right now. Maybe, maybe not because the government as we are recording this podcast is still shut down, I think by the time this publish is, it’ll be back online. But anything we invest in has to fit three parts of our thematic roadmap. It has to work for the patients and the patient’s families. It has to work for the providers and the support staff for the providers, and it has to work for payers and therefore the insurance companies, Medicare, Medicaid, whoever sits around there. So when we think about where we want to invest, anything we invest in has to fit that criteria but also has to have a reason to win. So healthcare is a great example of, you’ll see a lot of fly by night operators who the margins seem too good to be true, the idea seems too good to be true and oftentimes it is too good to be true.

(09:49):
So we really look for something that’s enduring, something that has a local moat, but then most importantly, somebody who wants a partner, we invest in businesses that aren’t to the institutional capital line. If you think about what an upper middle market private equity firm wants in a platform, there are kind of few and far between. We’re going in when companies are really small, putting everybody on the same ERP system, putting everybody on the same RCM function, putting everybody on the same people management software, putting everybody on the same reporting metrics so that we can take a founder and entrepreneur’s great idea, scale it up and essentially build inventory for that up open to market buyer.

Craig Castelli (10:29):
Yeah, I mean I think it’s interesting when you talk about a founder who wants a partner and how you’re going to help build that business together because the next thing I’m going to ask you about is misconceptions that people have about private equity. And I’m going to say one first, you can’t steal mine, but I think oftentimes founders think of private equity as just like, this is my paycheck. I’m just going to go here and you’re going to pay me a boatload of money and then you’re going to do the work. When in reality, these are not typically full exits, especially at the lower end of the middle market. These are partnerships to build together and eventually have an exit together in the future. And it takes a certain entrepreneur and a certain mindset to really appreciate that and to want to do that because it’s not easy. There are easier ways to make a buck, probably easier ways to lose sleep at night. What else do you commonly find that the average person just doesn’t understand or just misconceive about private equity?

Matthew Pettit (11:25):
I think that the way people think about private equity, your point can be for liquidity mechanism, but when people harness the value of private equity is when they see that the sum of parts two plus two is not equal four, it can equal six or seven. And I say that because a great private equity sponsor and I think we’re one, there’s certainly a lot of other ones out there will take a founder’s vision and put scaffolding around it, put concrete in the ground so that they can scale it. I mean, it is expensive to scale a business. It’s not just expensive from a capital standpoint, but from a time perspective and almost it is, okay, go ahead and fail forward, build your team. No longer make no, you don’t have to be in every meeting anymore. We’re going to help you get out of the day to day. That’s where founders can really leverage it for their own personal growth. And ultimately if they’re rolling over real value of their rollover, we have multiple examples where we gave somebody a very, I think, big upfront purchase price, but ultimately the value of their rollover just diminishes it because when the eggs on that second bite of the apple, it’s much bigger than the initial business worth.

Craig Castelli (12:33):
Those are the stories that you love to hear when that second bite, as they like to say was bigger than the upfront cash. It doesn’t always happen, but what it does, things work. I think your choice of the word scaffolding is perfect there because there’s a lot of chaos running around in the heads of the average entrepreneur and they know what they’re supposed to be doing, but without that scaffolding of that proper foundation, it can just be really, really hard to build the business and do all of those things that they know at some fundamental level they know they should do.

Matthew Pettit (13:03):
Yeah, I’ve seen it in my business when we first met and I had one transaction I was working on that doesn’t work with six transactions soon to be seven. I mean ultimately you need to build scaffolding and policies and procedures and all those tools going to be placed where you can disappear for three weeks. You can go to summer camp with your son or daughter and not have to worry about how the business is running. And with the right private equity partner, they will enable you to do that and look, push a founder and entrepreneur out of their comfort zone. And to me, that’s where the magic happens.

Craig Castelli (13:36):
So aside from a company size or its financial performance, how can a business owner know that what they’ve built is right to be the next PE platform?

Matthew Pettit (13:47):
I think they need to have a few things in place if they want to be a PE platform. One, and I see a lot of people miss on this, and I missed on this when I was running a company. They need a really strong people plan. It can’t be you’re in the management meeting or you’re at dinner with a private equity investor and you’re answering every question. People don’t realize that while that might seem strong to them in the moment that they have all the answers, it actually is a little bit of a deterrent to the investor. The investor is going to say, look, if plane goes down or somebody gets hit by a bus, if Craig’s the entire business, that can be really challenging. The other piece is being very thoughtful about how you’re going to grow. So having a growth plan in place that will allow the investor to either invest more capital but bank it on the business, but to have clear levers where you can add to the EBITDA, you can add to the profitability, you can add to the market share.

(14:39):
And the last piece of it is aversion to doing things the way you always have done. So if you say, well, we’ve always been on QuickBooks, it’s fine, we’ve always done cash accounting, it’s fine. But an openness and a communication with your potential partner of we know we might have to go to Sage Intacct, we know we might have to go to NetSuite. We know we have to change your accounting a little bit. We know we probably need to pay these people a little bit more. We can’t lose ’em. When all that comes together, the partnership really starts to take hold.

Craig Castelli (15:10):
Yeah, it is almost rare and refreshing when you can find somebody who’s self-aware enough to acknowledge like, yeah, I’ve probably been getting away with this for a little bit too long, or maybe it will work for me if I’m going to continue on this, but I know I need to make this change. We’ve seen entrepreneurs get really, really defensive when a potential investor is saying, here are some of the tools that we can bring to the table. It’s almost like they take it as you’re saying, well, what I’ve done is not good enough. And the reality is when they can open their eyes and acknowledge there may be a better way or what got me here won’t get me there, then they can be successful.

Matthew Pettit (15:47):
I think entrepreneurs need to remember that what they’ve done is something that any private equity investor likely couldn’t do or they, they couldn’t come up with a white sheet of paper and start a company, attack an industry, do something special. And so it’s a privilege for the private equity firm to meet the entrepreneur. So it’s not just that the private equity firm is there to interview the person, but the entrepreneur is there to interview the private equity firm as well. That fit has to work really both ways, which is in my opinion, why the independent sponsor model, which we started as can be really powerful because then the independent sponsor can say, look, I’m going to work on one, maybe two or three things at any given time. I’m going to be in this car with you. It’s a thing we talk about here at Seven Hills all the time is making sure we don’t get so big that we lose that we have to have a tough conversation. We’ll be there for coffee as opposed to a teams meeting.

Craig Castelli (16:45):
And it’s always creates challenges when whoever shows up to pitch the deal, win the deal, close the deal disappears to move on to the next deal, and now A CEO is stuck working with a team that they’d never met before.

Matthew Pettit (16:59):
I mean, if I was one of your clients, I’m sure you advise ’em on all this because you guys do a great job, especially in the part of the market you serve. But just say to ’em, make sure that that firm brings who I’m going to work with going forward because firms grow. But you want to know who you’re going to be in the trenches with because you are going to be in the trenches.

Craig Castelli (17:19):
Yeah. There’s a couple things that we always say. First of all, we explain to all of our clients management meetings are mutual selection process, mutual interview process. Think of the private equity firm that you’re meeting with. They are going to come in and ask you a ton of questions, but they also need to come in and sell themselves. They need to convince you that money aside, they’re better than everybody else. And you need to ask a couple fundamental questions. One beam, are those of you in the room who I’m going to be working with for the duration of your investment to what’s the board look like? Which of you are going to be on it? Am I on it? What does that whole dynamic look like? Because so much of that is going to shape the relationship, and this is not a one night stand, this is a marriage and you need to do the proper level of diligence.

Matthew Pettit (18:04):
It’s a marriage and no marriage are perfect, right? I mean, I’ve been married 15 years, I think I have a great marriage, but it’s not to say that every day is perfect, right? And no partnership’s going to be perfect. You’re going to have to make sure the person across the table from you is going to hear your opinion, present their point of view, and the best idea should win.

Craig Castelli (18:28):
So when you’re looking at a company as a potential new investment, what gets you the most excited?

Matthew Pettit (18:34):
The passion from the founder, the entrepreneur on why the company can grow, that gets me the most excited. What gets me the most worried is when I hear things from founders like, well, my team can’t do it. I’m the one who can do it. I’m tired. I don’t want to do this. I get it. I built a company myself. It is tiring. The way to me to take that to the next level is you have a growth plan that you want to lay out, but you want to work with us to get the capital and the people in place to do it. It can be a little disheartening to a private equity investor or an independent sponsor or anyone for that matter when you’re hear is, we can grow this, but nobody else can do it but me. That sends alarm bells off to the investor community.

Craig Castelli (19:19):
And we talked about how do you know if you right to be a platform? That’s one of a few things that tells you you’re wrong to be a platform. You’re allowed to be tired, you’re allowed to build it, but you own the business. You’re allowed to build it however you want to build it, but then when it comes time for that exit, it may just mean you have to choose a different path.

Matthew Pettit (19:36):
Right. No, I totally agree with that. And you guys are in the market, right? I mean, there’s a lot of strategics out there who are always looking to acquire great businesses now with interest rates and everything else. Strategics aren’t the buyers they used to be, but ultimately platform investing is, it’s a different kind of work. And you’re not going to go into a big corporate and go run a division for a little while that just got acquired. I mean, you’re going to build a business from the ground up, and that’s HR, that’s accounting. That’s all the things that entrepreneurs most of the time don’t love to work on.

Craig Castelli (20:11):
So you touched on this a little bit, but perhaps we can go a layer or two deeper. Obviously when you invest, you solve a capital need, you solve a liquidity need both personally and within the business. But what are the other big problems? And maybe let’s think about it this way. So I’m going to ask you about what problems you help a business owner solve, but what are the problems that they perceive they have that you can help ’em solve? Because maybe they don’t perceive that QuickBooks should really be sage or that their enterprise software for whatever they’re doing is lackluster for the growth that they’re going to achieve. But what are the acute problems that they can feel and touch on a daily basis that you can come in and say, Hey, at Seven Hills, we got your back on this. We’re going to solve this for you.

Matthew Pettit (20:57):
I think the biggest opportunity that every entrepreneur has in front of ’em, and the biggest challenge entrepreneur has in front of ’em is human capital. Because when you’re the entrepreneur and you own the company, you have a tendency and not every entrepreneur to have people who have been with you for 10, 15, 20 years who know the old way of doing it, but oftentimes are holding the company back from going to the next level. Now, those people can be enhanced, awarded transaction bonuses, they might have ownership in the company, but those people are oftentimes in their wrong seat on a platform bus and founders, they have a tough time sometimes looking at somebody they’ve worked for 10 or 15 years or worked with and saying, Craig, this is maybe not the right spot for you. And I think that’s where bringing a new partner into the transaction to the table is able to move those things around a lot quicker.

Craig Castelli (21:54):
It takes some of the pressure off of them of making that decision, even if they have to deliver the news. But it also, they probably know it and they probably have known it for a while, and it takes the nudge of a partner saying, we’re in this together and this is what we need to do. I think for them to fully convince themselves it’s the right move.

Matthew Pettit (22:14):
I mean, if you’re a founder and you’re wearing 10 different hats, it’s really easy to be treading water on five tough decisions need to happen by bringing a partner in. We can help with those five tough decisions, do it in a quick way, and then they’re out of sight, out of mind. You’re onto the next thing and on to growing the business.

Craig Castelli (22:32):
Yeah, I think there’s also a big trust issue there and this fear of the unknown. I may know that this person has been with me forever or is not really suited for this C-level job, but what if I can’t find anybody better if I interview and then I burn myself in both ends?

Matthew Pettit (22:50):
One thing that we do with any entrepreneur or founder that we’re going to partner with, I mean, it’s not a legal document, but we have our partnership contract and it’s just bullet points and it’s like, here’s how the board is going to run the business. By the way, you’re going to be on the board. We did love you to adhere to this, but do what’s best for the company. Do what’s best for the best employees, focus on the outcomes, and start to watch the say do ratio. Because a lot of times employees will say, say, but they don’t do, do, do. And when a founder’s running the entire business with no one checking the rear view mirror for ’em, it’s really easy to miss some of that. But once you remove some of that, businesses really just take off.

Craig Castelli (23:30):
Have you trademarked that phrase, the say do ratio, because I’m going to steal that.

Matthew Pettit (23:34):
One of our operating partners did, and I think he got it from General Electric, so Jack Welsh probably trademarked it somehow

Craig Castelli (23:40):
Sounds like a Jack Welsh-ism for sure.

Matthew Pettit (23:44):
A lot of fun. That’s thing the fund’s been allowed us to do. And just like as you built your team up by having more capital, by having more opportunities and more companies, you start to attract other people who want to win with you. So we built an operating partner bench just like you’ve grown your team. That same thing happens when a company becomes a platform, word gets out, industry contacts get out. Suddenly people know and they want to be a part of it because ultimately success is something that other people want to share in. And by becoming a platform, you’ll attract a lot stronger teammates now that your current teammates aren’t strong, but you’ll be able to kind of go to that next institutional level.

Craig Castelli (24:24):
It’s that thinking of as I’m out there interviewing, what does this candidate offer to me as the employer, but also what do I offer to them? And you’re just raising the caliber of both the offer on both sides when you have institutional backing, when you have the ability to clearly articulate that growth plan and not just say it, but match it with the do because you have the firepower behind you to execute

Matthew Pettit (24:49):
And let people share in it. I mean, no, when you advise your clients, you talk about, well, here’s what the stock option plan looks like. That is a powerful tool that doesn’t matter to all people, but those who it does matter to will ensure that that equity value goes up because ultimately them and their families are going to participate in that upside.

Craig Castelli (25:08):
And these can be, regardless of what the actual dollars are relative to take home pay, I typically see these as meaningful amounts of money to everybody who participates in these plans when the company performs even at or slightly above expectations. We don’t need the crazy 10x returns, but just your traditional on par performance, meaningful rewards for these employees.

Matthew Pettit (25:32):
I mean, college gets paid for, your house gets paid for, and you’ve also, if they ever move on to another opportunity, they’re more attracted to anyone who would want to onboard them either to run a company or be a key leader in it. Because they’ve sat in those meetings, they’ve been part of a transaction, which there’s not a dearth of capital out there. I mean, they’re go down Wacker Drive, they’re a whole lot of private equity firms, a whole lot of independent sponsors, a whole lot of banks. There’s not that many great founders or great operators. And so people who are battle tested and have been through that before, they’re in high demand.

Craig Castelli (26:09):
Yeah, I mean, you just can’t replicate that experience. You can’t teach that experience. The level of intensity that you have to work in or under or add or whatever the right proposition is, there is second to none when you’re in that environment. And yeah, I see the same thing. And we counsel this to some of our clients or some of their key leaders like, Hey, look, life is going to be different, but if this works for you and if this is successful, your life is going to be changed for the better in all these ways. And it’s not just the financial reward, it’s the opportunities that come downstream as well.

Matthew Pettit (26:43):
Yeah, life is different. But I want to hit on that for a second because one of my maturations, I guess as I’ve done this for a while now, is a lot of times you’ll see founders and CEOs who, right, when they partner, look at me. I’m working at one in the morning, I’m working at two in the morning. I’m doing all that. I’m like, why? Because ultimately, whether it’s Seven Hills or any other private equity firm, we have young kids, we have aging parents, we have lives. The results matter and the say do ratio trademarked matters, but ultimately there’s no trophy for working crazy hours and doing everything. And that is something that we talked to a lot of our founders with about, it’s like, look, it might have felt like when you were the only person in the room, you had to do this. One of the reasons you partnered with us is so that if you go on vacation for a week, we got it. There is no prize for burning out over a five year investment hold.

Craig Castelli (27:40):
Yeah, I mean, there has to be a part of you at least that a little bit appreciates in the first three to six months they’re working their tails off, a little bit of validation that they’re taking things seriously. But I hear you over time. You want that to drastically decline.

Matthew Pettit (27:53):
We have multiple core values on our wall here. One is we play through the whistle. Another one is we dig the rock. So over that first sixty, ninety, a hundred twenty days, the whistle’s a little farther out. You’re playing a little bit more. And the rocket is you got to dig all the way because no matter what you do in diligence, you’re still going to find things that day after close. That’s just the business that you and I are in. But if you do that on the front end, then you can be addicted to the process, which is another one of our core values. And the process can allow for people to have real RR real time so when they come to work that they can be focused on the right things, not just focused on everything.

Craig Castelli (28:33):
I mean, that’s a great way to phrase it for sure. So I’m going to ask you now to give a piece of advice to a business owner how I always close this, and I feel like you just gave 10, so feel free to say you’re totally tapped out. But I’m curious if there’s anything else you’d want to share to any of the entrepreneurs in the audience that perhaps they’re not going to hear on every other podcast out there.

Matthew Pettit (28:54):
I’m going to share some advice that was given to me by one of our business coaches. We have business coaches here at the firm. I think it’s been instrumental in our growth, but that simply try to remove yourself from as many meetings as possible. And I say that because as a founder, and you’re a founder as well, it’s so easy to think, if I’m not there, something won’t get done. But then why are you paying and partnering with best in class talent if you don’t trust them to do everything they can do until it gets to you? So my advice is simply try and take yourself out of anything that somebody else can do. The downstream effects of that are more time for you to think work on your business. The negative downstream effect is when things hit your desk, it’s probably going to be on fire, but you’re going to be refreshed and ready to think about that as opposed to micromanaging or feeling like you have to have your thumb on everything. When ultimately your best performers, they aren’t going to have a thumb on ’em. They’re going to leave and the business is going to be slower because there’s going to be decision fatigue along the way.

Craig Castelli (30:01):
Yeah, your team’s never going to grow if you have to be there in it, because they will inevitably look to you to answer the tough questions, or you will inevitably just take the reins and not give them a chance to talk. It’s human nature. We all do it. I’m as guilty as anybody out there of being in that position when I’m on calls with my team. But I can assure everybody that Matt and I are practicing what we preach because we’re talking before we hit the record button about the calls that we’re both missing

Matthew Pettit (30:27):
Right now to be here.

(30:29):
No, that’s true. Look, the only other thing, and this is not a commercial for Caber Hill everybody else, but if you’re a founder and entrepreneur listening to this and you’re serious about a partner, you should work with an advisor. We do do some proprietary things, but there are no advisors. They’re always harder. The investment you’ll make in somebody to steer you through the process of finding a partner to me is well worth it. I think it pays for itself, and ultimately, I think it will set the next owner or your next partner up for better success because you’ve thought through a lot of the same questions that any investor’s going to ask.

Craig Castelli (31:07):
Yeah, true words may never be spoken. So Matt, if anybody wants to get in touch with you or learn more about Seven Hills, where are you going to send them?

Matthew Pettit (31:16):
Well, you can come see us in Nashville, Tennessee. Obviously, I lived in Chicago, Craig as you know, for 15 years. Still spend a lot of time there. But check us out at 7hillscap.com. If you’re in the Music City, we’d love to see you. Or if you’re a healthcare operator, we tend to try and go to most industry conferences, so would love to meet everybody out there.

Craig Castelli (31:39):
Well, Matt, this has been a lot of fun. Thanks a lot and thanks for everyone for watching us on The Close.