I wanted to share some insights from the incomparable Kaustubh Deo, who sat down with us for a Private Market Insights episode last month to talk about his #first100days as an owner. A few highlights when it comes to managing this process:

His journey is different from Justin Vogt's experience, who we interviewed on this topic earlier in the fall. Kaustubh is running an owner-operator strategy while Justin is running a #holdco strategy

As the day-to-day operator of Blooma Tree Experts, Kaustubh now manages all things finance, business administration, HR, and more. Here are some of his key insights:

  1. The transition to ownership happens before the deal closes - understanding how much liquidity is needed to operate the business through the transition is key. Kaustubh spent a lot of time pre-close mapping out SOPs, key expenses, and human capital needs. This gave him a clear view on what was needed when it came to working capital at the end of the negotiation process and also help him approach that conversation honestly, with a clear target in mind.

  2. While Kaustubh was worried about the cultural transition, the logistics of changing ownership was much more complicated for him. Sometimes transition challenges can be difficult to anticipate

  3. Kaustubh paid a lot of attention to the “people side” of the transition. He focused on sharing a positive vision for the business and a deep respect for its success up until that point

  4. As part of that focus, Kaustubh focused on retention of key employees. Before signing the final contract, Kaustubh made it a condition to meet key leaders. In this case, being prepared and communicative led to a smoother transition post-acquisition.

  5. Kaustubh advises that new owners should move slow on hiring, because it’s better to hire later and hire well than onboard a bad hire and hurt morale. In his case, he had more success training people internally than hiring externally, which enhanced the entire organization.

  6. Kaustubh received advice from a mentor to spend 20% of his time in the field in order to learn the business and build camaraderie. However, he found that this was exceptionally challenging given the number of business-related decisions and transitions that needed to be managed

Ultimately, his priority is not climbing trees, but growing the business so that everyone can benefit from better opportunities and conditions. He put it to them in a memorable way: “If you see me climbing trees, you should probably find a job.”