Investor Brent Beshore Wants Boring Businesses

Brent Beshore founded private equity firm adventur.es in 2007. Read on to learn his biggest priorities as CEO of the firm, who inspires him, and and why adventur.es no longer looks for “sexy businesses.”

What were you doing before founding adventur.es?  

Prior to founding adventur.es, I was an entrepreneur, learning how to operate a company and lead a team the hard way. I started my first company while in grad school. The company created branding events, which was the hot “new” marketing technique back in 2007. It was a very challenging experience and provided a tremendous amount of experience, quickly. We had never a run a business and didn’t know what we didn’t know. Ultimately, I ended up selling the company to an employee.

How has adventur.es changed since its founding?

A decade later, adventur.es looks and acts differently than it did in the beginning. We’ve learned quite a bit through the years, and certainly continue to do so. We used to be attracted to sexy businesses — technology, film, food, and drink. But we learned that those industries have low margins, high competition, are subject to changing consumer tastes, and are more easily disrupted. Now, we greatly prefer boring businesses. We look for stable industries that will be fairly unchanged over the next 10-20 years.

Tell me a little bit about your firm’s BD strategy.

Adventur.es is a family of companies that acquires firms with $1M to $10M EBIT and a regional or industry-specific competitive advantage. Presidential Pools is a great example. They’re the nation’s largest swimming pool builder, but currently only build pools in Phoenix and Tucson. They have a strong regional brand, a deep expertise in their craft, and a leadership team that is constantly thinking about how to build pools better.

How do you evaluate which companies are right for you?

In any given year, there are thousands of companies for sale in our financial size range, but the vast majority don’t fit our investment strategy. Many are better served by joining a larger corporation, being acquired by a traditional private equity group who can install a CEO, or finding an individual owner-operator. But for the select few that benefit from autonomy, management continuity, and long-term investment partners, we want to be there. That means that we must make ourselves easily available to company leaders — directly, through Axial, through intermediaries, and through our personal networks. You’d be surprised how often our inbox pings on the weekends.
[pull_right]”We must make ourselves easily available to company leaders — directly, through Axial, through intermediaries, and through our personal networks.”[/pull_right]

Culture is probably the biggest non-financial indicator. As Peter Drucker once wrote, “Culture eats strategy for breakfast.” We like to say that culture is nothing more than what you reward and punish. We’re looking for cultures that respect employees as valuable partners, and not merely as faceless cogs in a system. We love to see how conflict is handled, how decisions are made, and how new ideas get treated. Ultimately, the tone is set at the top, and so we spend considerable time trying to understand company leadership.

What’s an example of how you added value for a portfolio company post-acquisition?

Since I already mentioned them, I’ll go back to Presidential Pools. One of the areas we like to examine closely in opportunities is marketing and sales. It’s the lifeblood of any organization. Presidential had already done very well in building their brand and had experimented with a wide variety of marketing techniques, especially mass media. We were able to come alongside their team and really hone their digital presence, making it easier for customers to get in touch in whatever way was most comfortable for them. It has given the business a nice bump as customers seem to appreciate it.

Your firm is very active in sending messages and receiving deals on Axial — why?

A lot of intermediaries are using Axial as their initial distribution system on deals and one of our core principles is reliability. We try very hard to be responsive and thoughtful to any and all opportunities. We have met some great people through Axial.

Who’s one person who inspires you?

Jay and Robert Pritzker of The Marmon Group parlayed a $3.5M acquisition into a $10 billion business, and did so through patience and persistence.

What might we find you doing when you’re not at work?

This answer used to involve friends and travel, but I now have a two-year-old and a four-month-old, so you would likely find me on a walk, at a playground, at our church, or trying my best to avoid stepping on another Peppa Pig figurine. When they’re sleeping, I try to keep up a healthy reading habit. And I tweet occasionally.