#317: Permanent Equity with Brent Beshore

Ep.#3 [THEME FIVE]

Brent Beshore and his firm Permanent Equity are a perfect example that not all private equity firms are the same. Brent is the CEO and founder, and in today’s interview he talks about the unique approach his firm has in a “messy marketplace” to help business owners monetize their largest asset and step back from their day-to-day work in the company, all while maintaining their legacy.

In this episode, Brent and Ryan talk about why Permanent Equity has a 30-year time horizon (typically it’s ten years or less), how he landed on this model, and why he has been able to raise over $300 million based on their philosophy. From there, Brent explains his approach to acquiring companies–both financially and philosophically–and why he focuses so much on alignment with the business owner and management team of the seller. Brent has a very unique approach to private equity, and today you will learn one of the fundamental principles his entire business is built on: transparency–and why it has yielded so much success.

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What You Will Learn

How Permanent Equity returns the capital to their investors with the desired rate of return even though there is a 30-year hold period.
How Brent and Permanent Equity are able to raise hundreds of millions of dollars from investors on inbound requests only.
How Permanent Equity makes money without charging management fees.
Why Brent’s firm has a 30-year time horizon and what doors that has opened up for his firm and portfolio companies.
How Brent and Permanent Equity view deal structures and debt in his acquisitions.
Why Brent believes compounding (money and relationships) over long periods of time will get the maximum year ROI for all the stakeholders.
Why the biggest check written to a business owner could mean they don’t have any say in what happens next with their company.
Why Brent wants to partner with the existing owners of the companies.
Why transparency is Brent’s main philosophy when it comes to working with stakeholders and how it has avoided bad deals.

// USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment

Bio:

Brent Beshore is the CEO and founder of Permanent Equity. Brent leads the firm and, more specifically, the acquisition and diligence teams while supporting portfolio company operators. Brent also serves on the board of Love Columbia, a mid-Missouri-based non-profit.

Interview Quotes:

07:33 - “I was out with a friend and drank too much one night. His wife said, ‘I want to start a business.’ So I said, ‘Great, me too!’ My whole life is a trophy of grace. I always think I’m so smart.” - Brent Beshore

10:23 - “I thought it was going to be straight forward. We just need to due diligence. So I typed into Google ‘d-o-d-i-l-i-g-e-n-c-e,’ do diligence.” - Brent Beshore

19:00 - “How long it takes to buy a company and sell a company, it really gives you about two to three years to do something with the company. The timeline is very short.” - Brent Beshore

19:55 - “If you only looked at spreadsheets, spreadsheets don’t tell you the story at all. They can help tell you part of the story. But the story is all about the people.” - Brent Beshore

29:33 - “People are trying to make tough choices. Historically, the choice has been between, getting compensated fairly for the work you’ve done, and giving up a lot in return.” - Brent Beshore

32:34 - “We do offer, what I would say is, the best of an ESOP, which is a kind, generous, long-term vehicle. And we pair that with the professionalism of private equity.” - Brent Beshore

34:09 - “The businesses that we get involved with, if we chose them well and if we’re doing the deal, it’s not because they’re damaged or a broken business. There’s no rescue going on. They’ll be successful without us. And it’s really important we come from that mindset. Because it’s a mindset of humility.” - Brent Beshore

37:43 - “No one’s perfect and no leadership team is complete.” - Brent Beshore

37:50 - “We’re always looking for opportunities to bring on people with skills which are maybe unusual and experiences that are unusual to help take the business to the next level or two.” - Brent Beshore

42:43 - “Hard discussions have to happen. People are messy. We’re messy. Situations are messy.” - Brent Beshore

45:37 - “I plan on giving everything that we make away, during my lifetime to either the employees that I have or organizations that we want to support. So for me, the game isn’t about accumulation, it’s about how to change the game.” - Brent Beshore

51:37 - “All businesses are loosely functioning disasters that happen to make money.” - Brent Beshore