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[Music] greetings and welcome to this episode of the deal flow show i'm jp moroni your host along with paul nicolini my co-host here at the deal flow show in harbor city capital today we've got matt pluster from bridgepoint investment banking and it's good to have you on the show um paul and daniel had talked a little bit about you and your background eager to find out how you got started and that's kind of where i want to lead off is find out how you got started in the investment making or the capital markets and then we have obviously some questions that we'd like to ask you about through your deal flow process and things that you're working on today but maybe take us back a little bit and talk about how you got started in the business yeah appreciate it it's uh it's been a long and uh unwinding road but i started uh my career on uh wall street 20 years ago uh typical analyst one uh started at deutsche bank which was the second biggest bank in the world at the time and i often tell the story that your priorities at uh at 20 years old are quite different than your priorities at 40 and i'm sure you know later in life as well but basically went into investment banking because it's the it's the one thing 20 years ago you could you know make a hundred thousand dollars right out of college at and i didn't really even know what it was but i knew that that sounded exciting and uh was kind of the one percenter job right back then as well if you were kind of top of your class from a top ten school that's kind of what you aspired to do maybe maybe now that's silicon valley or something but but back then that was the case and i was a high achieving over eager uh kid and so that's that's how i got into uh investment banking not really with grand designs on hey i want to be a capital markets professional for the next 40 years uh turns out i really enjoy it it's dynamic work good at it and uh most importantly think that um it gives me real purpose and our firm real purpose every day to get up and do the work that we do and so got into it purely because of the money um that's not why i get up today and go to work and build bridge point but uh that's the beginning of the story spent the first ten years of my uh career gentlemen at uh deutsche bank and then at morgan stanley doing large bulge bracket transactions i'm a a yokel from a town of three or four hundred people in nebraska and so working on wall street journal stuff every day was a great experience and a great training ground and certainly have utilized that experience today at bridgepoint down market to do what we think is even more important uh work and for even a higher calling so was it everything you thought i mean i know you went in you said for the it was uh for the money hey there's nothing wrong with that by the way you said silicon valley it's funny because uh obviously elon musk has moved to texas to texas now and i saw that larry ellison the oracle's moving their headquarters has moved their headquarters to austin so we may have to be saying texas silicon valley yeah or silicon oil valley there we go here in the midwest we call it the silicon prairie prairie oh there you go yeah there you go i think i think it was all that i thought it would be i think the asterisk though that i missed was the if you do if you did the hourly wage that you know that it didn't work out that well right because you were working we're working 100 plus hours and certainly this is uh this is back in the days where uh the uh the hours were probably even more intense than they are today but you know uh the rear view mirror everything looks fun i look back fondly on the experience a lot of great relationships uh most importantly you know uh investment banking in the capital markets really are an apprentice industry right you learn to do deals by doing deals and and you also learn what how not to do deals right or what you don't want to do as well and so uh while the experience was challenging i'd i've looked back on it very fondly very thankful for the opportunity and uh but it was certainly certainly an intense experience uh i think i've said this on another podcast maybe but i averaged 114 hours in the office my first year at a bulge bracket investment bank which is all of the hours uh if you've done that and uh and so i you know i think the the younger guys at our firm now kind of roll their eyes and we start telling more stories about how hard we worked right like we did with all all different with our parents but great experience i'm very thankful for it i wouldn't uh wouldn't trade it for the world yeah i was going to say the hours aside that's probably one of the better places to start because you're getting such a different perspective of it well you said you mentioned the relationships were there any if you think back were there any role models deal makers in that business early on that you were like man that's that's someone i need to attach myself and learn from absolutely uh absolutely and i would say that that went both ways right people that you admired and you admired how they went about their business whether it was skill set or more importantly ethics right integrity but i think we also uh natasha's my wife she's our ceo as well so we're husband wife uh leadership team and ownership team uh but i think you also learn a lot about how you don't wanna do things right from like seeing seeing people and how they operate but i had a the first mentor i had uh turned out to be a very senior and accomplished banker um and he was brilliant but more importantly uh he was a very high integrity gentleman and just seeing how he operated right a young guy out of college where you know in a really kind of money first focused world really always inspired to be like him he was kind of always the guy that people really looked up to not just because he was really smart but also because he was of an unquestionable integrity and driven by the right driven by the right things um and i also think he's one of those guys that kind of just got the joke right i mean i think that some investment bankers think they're the most important person in the world and certainly the work we do is very dynamic and important but he also was a was a real person and a good person and that that said a lot to me as a 22 year old coming out of college right there were certainly uh other successful bankers who made a lot of money and got a lot of big deals done but uh the his ethics and integrity were something that have really stuck with me we we maintain a relationship to this day i actually did a podcast maybe a year ago and i referenced him as well and it was neat i texted him after and said hey forward to the 9 20 mark that's you i'm talking about so i won't name him because there's lots of certainly good friends and and mentors that i've had along the way but uh he's always stuck out in my mind mostly because of integrity how he carried himself and and uh always did the right thing even in tough situations which you don't always see particularly in on deals right with big dollar signs uh in front of them and then i would say uh on the flip side you know there were certainly people who uh were effective but uh cut corners and i think we learned a lot about who we wanted to be what we wanted bridgepoint to be also from people that we saw doing it in a way that we thought could be done better and with a different level of core values and so i you know your experiences really inform you and they certainly have informed us on how we want to carry ourselves how we want to define our culture and our company and quite frankly we're a big part of why we founded bridgepoint 10 11 years ago now well tell us a little bit more about bridgepoint uh the size of the company and what kind of deals you guys get involved in if you would yeah sure so bridgepoint investment banking is a middle market boutique investment bank uh founded the firm 11 years ago i guess now a true entrepreneurial story i mentioned that i had started my career at deutsche bank deutsche bank was 82 000 bankers at the time uh my wife and i we also we met working at deutsche bank she was a deutsche banker as well and then worked at a private equity firm in chicago uh we moved back to nebraska a very non-investment bank non-private equity place uh 11 years ago and uh we even though we're bankers and do deals this is our own very humble entrepreneurial story and deal and we've got nice nice offices now and and nice things but i we had an analyst down last month for dinner with his wife and i said here jump in the car i want to go show you the first bridgepoint office and it was uh it was the right garage door on our first house and uh i often joke that i you know went from an 82 000 person you know number two bank in the world to a home office that was in a garage about 10 feet from the trash cans and so uh true entrepreneurial story uh you know we weren't trust fund babies didn't have a big pile of cash other than kind of what we'd made on on wall street and reinvested that in uh building our own firm that we thought was needed uh in a place that we thought it was needed for people that we thought needed the service and so really just started in home office two guys uh fast forward to today we've been uh very fortunate and blessed were 20 to 25 uh bankers and people working mostly out of the midwest i had headquartered in lincoln and omaha nebraska recently started an office in denver i have an office in des moines have an office in chicago spend a lot of time in that market but even though we're in the midwest in those markets it's truly a national practice even do a fair amount of cross-border work really focused on on providing full service investment banking which we don't really see done well at this end of the market we see it done really well by all the big banks that we used to work at on wall street right if you're a big sponsor owned company or a publicly owned company a publicly traded company you've got access to all those capital structure solutions and capital market solutions really as you come down market we saw kind of brokers and you know hey let me know when you want me to put you on your website and sell you but really not the not the suite of solutions across the capital structure in capital markets that you know if our dad owned a 100 million dollar company or 15 million dollar company the options that we would want them to have available to them and so really really set up the firm because we thought there was a real need at that end of the market for those same solutions and we've built it through close a deal hire another good banker do the right thing people come back to you uh not really sexy stuff but really important stuff around core values around integrity uh honesty tenacity and so that's that's been really fun some of those characteristics unfortunately in our industry are defining characteristics um and there are a lot of good people in investment banking that have kind of come particularly the last two or three years to our platform because they want to do important work they want to stay in the capital markets and investment banking but they want to do it with integrity they want to do with other people they believe in that are driven by the right things as well and so uh bridge point is uh that's a long way of saying uh boutique investment bank really focused on both capital raising throughout the capital structure as well as m a work and we mean that we're at least 50 percent if not more at any given time on the capital market side of the business um and uh 20 bankers really spend all of our time in on deals of call it 20 to 200 250 million dollars i think last year our average transaction was somewhere between 50 and 60 million dollars and so really a lot in the 20 to 100 million dollar space those are those are folks that we don't find get service obviously from our old employers and that we can really move the needle for in our solutions and the service that we can provide and you know fast forward 20 years in our career it's really that is really what it's about for us is what do we get up in the morning to do who get up in the morning to help and that's been a lot of fun quite frankly it's been more fun than doing you know five billion dollar on average deals where you got 50 bankers and you know if you fell over dead there'd be another guy in your chair in about 20 minutes right these are these are much more kind of one shot of goal family stories and uh that's really exciting and we think we can make a real difference for folks i was going to ask is this all is this both private and and public transactions it is it's mostly private company transactions we've got a couple public company clients we find generally that public companies have access to good advice and capital market solutions um so mostly mostly our focus is on private companies on foundered uh entrepreneur uh family-owned companies versus sponsor-owned companies uh we think it's important not to be conflicted so we generally work for non-sponsored companies um and like to beat up sponsors and the folks in new york and chicago with the big checkbooks for on behalf of real companies and real entrepreneurial stories you mentioned you felt like it was an underserved area of the market what do you think it is that sets you all apart in terms of how you approach what you do absolutely yeah so i think the the first uh the first thing is really the full suite of solutions and so if a corporate attorney calls us and says hey you know matt bridgepoint we've got this 50 million company that wants to sell we take a lot of pride not just educating them on what the sell side process looks like of course we do that right that's what good bankers do we also take a lot of pride in backing up and saying okay are you saying you actually want to sell or and by the way did you know about these other options for liquidity monetization as well as growth etc um so really bringing together bringing to bear the full suite of solutions for company owners and for boards and management teams and not just hey you know let us tell you why your company's worth another half turn of ebitda and why we've got more tombstones right for us that's fairly commoditized work we're big on education and bringing to bear solutions to private companies that they probably didn't know exist right existed before most private companies have kind of a commercial banking relationship right the bank tells them how much money they can get at four percent and oh by the way someday they're going to push the red button and sell their company we think it's really exciting to educate and bring to bear solutions on the in between as well that can move the needle on growth access to capital and access to liquidity maybe without having to give somebody else the keys to your you know third generation family company so i think that's the the biggest thing is really just with purpose it's not just on our website because most investment bank websites say they do all those things where really most boutique investment banks really just sell companies for us that's maybe 25 to 50 percent of our work we are very intentional about we don't let our process drive what the outcome should be we let companies and owners and their priorities and needs and wants drive what the solutions should be we can bring to bear all those transactions and we love showing them at the outset what those transactions look like what's available what it would mean for them and so it's very solution based selling versus you know i'm the best trained chimpanzee with the best train uh the best sell side process something that i've often thought about and when people have as many transactions as you all do in a given year and then over a period of time is is there a way to capture the combined knowledge of all of those years when you have founders exiting like that do you all do anything i've asked this of other bankers and people involved in the process and private equity and things like that is is there any kind of a process you all have created or are you doing anything to capture that knowledge and the years of experience or to leverage it with other companies that you're involved with perhaps advisory or board seats or whatever um yeah it's kind of an open-ended question but it's something that i've often wondered about it just seems like latent opportunity and missed opportunity that's left there absolutely i agree i agree with you i think in you know an investment banking of capital markets it's kind of you know people that truly do sell side work they basically get paid to fire their clients right get a deal done and you know send me a note from the beach or the golf course right um i think that is part of the beauty of the full service business right so we're not just selling companies in fact a lot of our clients really become we've become a part of their business so i'll give you an example we um over the last three or four years there's an i.t services company a nice company 50 to 100 million dollars they came to us i want to say six maybe six years ago and it was true entrepreneurial story hey i need a new banking relationship you know my hair is on fire i need to make payroll right so we started with just a commercial banking deal uh the owner then said hey this is my life's work i don't want to sell it but i have you know i'm like most owners i don't have any personal liquidity i've got this thing this gray thing that's a liquid on my pfs that really i can't invest right and it could go to nothing overnight we did a dividend recap for them and also brought in some growth capital uh to allow them to keep their company and achieve liquidity we then advise them on actually a cross-border acquisition where we help them buy something and now we're uh in process of helping them actually do a majority recap and full monetization and over that period we've become a part of their business right not just the guys over here that did one transaction for us and i think that's consistent with most of our relationships very very trusted relationships and become a part of their business and their strategic plan their board conversation uh if you will we also quite frequently during deals um and even before deals uh we may maintain good relationships and contacts with our clients and ex-clients and we'll actually you know to your point if there's an issue that's operational or how do i tell my people about this or by the way can i talk to three of your folks that had to notify their people right how did that go we we maintain that uh that dialogue closely and often put them directly in contact with our clients or prospects to help them because it's one thing for an investment banker to blabber to them about how they've seen 100 go it's another thing to allow them to talk to three or four or five other owners who have been through it themselves and give them some peace about it and some tribal knowledge about it so we're big believers in relationship and experience and i think the other way we do that is i think you see a lot of investment banks that they might carry the same business cards but they're really pods of people right whether it's a sector group or a product group etc collaboration is something is quite frankly a reason that people join and so when you hire our firm we're big believers that yeah you might have a deal team of three or four or five bankers but you're really getting the full firm right and so we're having standard actually twice a week calls reviewing all the deals hey even though i'm not the md on that deal i've got an experience or a contact how do i help you on this deal and most importantly that's driven by how do we help our clients win and achieve the best outcomes they can and it's not a whose deal is it conversation it's how do we collectively as 20 some people with to your point a couple hundred deals and all these relationships help our clients win and we don't keep score of whose deal that is it's it's one team and one client and if it's good for one client it's good for everybody at the firm and we think that we press that really hard because we it's definitely something that we didn't see on wall street the collaboration right everybody's worried about their p l for the year and then it's on to the next year and i think that's at the detriment of clients to your point in companies and more collaboration and more experience around the table is good good for clients and we really push it i'd like to talk about your deal process in just a moment but if you're watching or listening to this episode of the deal flow show you can go to our website thedillflowshow.com and get access to our archives all of our past episodes as well as subscribe and follow us and get access to future episodes and by the way while you're there if you think you know of a great guest for the show you can recommend a guest to us there on the website so what i'd like to do is come back matt and ask when your it's kind of a two-part question number one when you're going into a brand new deal folks that you haven't worked with before do you have kind of a toolbox or a process that you go through and i'm curious as to how much of that developed early on by modeling and seeing how other folks did deals when you came into the business and how much of that has come about over your 11-year entrepreneurial journey yeah great great question and i think the the reality is it's it's ongoing continuous improvement and excellence as to process and what works and what helps people um and so obviously learned a lot right and doing 40 some billion dollars of transactions and seeing a lot of deals but i would say our process has only improved from there and very very intentionally and so every deal every rep is better right and we say hey this worked really well let's share that with the team let's make sure that that's in our process the client really appreciated that and really a lot of it is driven by the client we're big believers in exit interviews for our clients right and seeking feedback on what you wish was better what went well etc that's something that i didn't see early in my career and quite frankly i think a lot of bankers probably have big egos and don't want to hear about what didn't go well we think it's really important our clients are why we get up in the morning to make differences for real companies in the middle market and so we think it's important to ask them you know hey these five things were awesome i love you guys right but i really wish the attorney process went different or i wish that somebody would have given me a list and said hey when you go announce the sale or the recap to your team here are some things to say and not say right and so certainly over the last you 11 years that's really developed and we've incorporated a lot of those things from exit interviews and best practices from deals we think that's important and i have no doubt over the next 10 years that'll only continue right one of our core values we talk about is continuous improvement and continuous excellence and so we're never satisfied that hey our process is perfect because it's not and it can always get better and if we learn something on one of the 20 deals we're doing right now that would be good across the other 19 we're going to implement it like that because if it's good for our clients it's good for a process and we want to we want to do we want to we want to operate with excellence and serve people to the best of our abilities and so it continues to grow it continues to more if it's a living breathing thing i would say about our process the most important thing to get right is up front to really drill into what are the goals what are the priorities what are the needs wants of these private companies which sometimes is really hard to pry out right these are uncomfortable conversations about desires for liquidity etc that maybe they're used to kind of towing the company in line and and then sending their people and rallying the troops but it's really important to get right and to know what they want to accomplish and sometimes that's that seems like an easy thing but it might be a couple conversations we start every kind of organizational meeting with even though we talk about it a lot during pitches with a goals and priorities page let's talk through the nitty-gritty of how deals go let's talk about what type of deal what type of structure you want to accomplish and more importantly qualitatively what do you want this deal to accomplish for you your family and your company and that's that's very soft but it's it's probably the most important page in the book right anybody can put together a gantt chart on a timeline or a funder list but though you know if those things aren't oriented towards what the client wants in the first place that's you know it's a fool's errand right and so very hyper focused on what companies want not on what we bring to the table right we can bring those options to bear and as i mentioned that's why the biggest differentiator probably is the true full-service offering across the capital structure because we're not beholden to any you know we don't want the answer to be c right quite frankly we don't care we compare the capital markets to what those goals and priorities and wants and needs are and and we think that's we experience it that's different in the capital markets particularly at this end of the market and uh there's a real need for it which is why we founded the firm so what you're saying is you ask your clients what they want and you try to build something that solves their real problems in a way that they'd like it solved that's that's novel no but it's think about that how many businesses out there try to make everybody fit inside of a box and and then they wonder why they're not growing and doing well i did have a question i know you've got a question but i i did have a question in that 11 years that you all have been growing from your wife you and your wife starting in the garage what what was the trajectory to 20 ish bankers and 25ish people was it like this and then it's really grown over the last few years or has it just been steady or it's been fairly steady it's been you know have a good year hire a couple more good people it's like anything i think in building a business the first one's the hardest and the reps get easier right as you build credibility and a track record and people want to join your team and you know now when we go to interview mds we're running a process we just brought on two mds and a director and we hired you know we interviewed a bunch of jpmorgan goldman sachs citigroup type folks we weren't interviewing those people five years ago right we were kind of begging people that maybe were non-traditional to join the team and so certainly i think just by a nature of law of small numbers uh maybe the growth was more five years ago but we're adding incremental incrementally more bodies i would say per year now um and but it's been pretty i would say five years ago we were 10 people right so we've doubled kind of in that time period maybe a little bit more we've had years where we've doubled and last year we added three or four people so maybe that was 20 growth so it's been pretty steady we've grown every year for us it's really about finding the right people and people that we need to do better work and that you know the people business is lumpy it's not an objective of hey let's hire five people this year you know if we find find five of the perfect people we'll hire them and if we five zero find zero we won't hire any right we can't compromise on that but it has been it has been steady growth although boston numbers has been choppy nice matt uh what are some of the deal breakers for you when you're taking on a client you spoke of a few before but to give us a little example of what some of the red flags or deal breakers are for you uh i the biggest thing for us is integrity uh you know we talk a lot about are they good people right do we wanna get up and work for them and are they you know a big part of that is what are they gonna do with the capital we bring to bear right is there going to be a positive impact etc um integrity for us is a non-negotiable and so while uh our clients often reference check we do the same thing right we're not deutsche bank anymore we're not doing a couple hundred transactions a year we're doing you know 10 to 25 transactions a year and you know if we're going to work thousands of hours for somebody we want to work for good people that we can really help uh the second part of that is people that will take advice that there is trust right the trusted advisor uh role quite frankly is everything to us the economics are kind of the outcome and so uh if they're good people that trust us and we trust them and we'll take advice and that we can really help to us that's the most important thing i think we also are very intellectually honest and think everyone should be about are we the best people to help somebody and often it might not be because there's not a deal there but we might not be best suited for it and i think become as you grow right becoming more disciplined about saying no when you're not right or perfect for somebody and convict convicted that you're the right advisor for them is really important i think they're in investment banking there's kind of always the draw to well more deals are better right and i don't think that's necessarily the case we want to work on the right deals where we can really make a difference move the needle for people and all be high-fiving at the closing table saying hey this was a great transaction for everybody involved that's really what we're what we get up in the morning to do and want to work for good people that trust us that we can you know really move the needle for those are those are the most important things the soft things to that point as well yeah you said working with the right people is there any industries or areas that that you you guys as a company stay away from there are five we have five focus sectors um so maybe i'll start there because it's more about what we do do than what we don't do industrials and transportation i was a vehicular transportation banker most of my career uh lee meredith is our managing director who leads up that practice really good relationships great track record of capital raising and m a work across the spectrum there gary growth is a managing director who leads our healthcare investment banking practice and a dedicated team under him within the industrials vertical mike anderson's our lead on the manufacturing side brian wallace is our lead on the industrial services side so broadly speaking industrials and transportation one healthcare ii uh business and i.t services chad gardner uh is leads uh that practice we've we've hired three senior folks in that vertical uh recently um and then consumer uh would be fourth uh brian brian walsh uh spends most of his time there and then nick orr is a managing director we brought on in our denver office in and as our tmt lead so those would be our five sectors uh and with all within all those uh we do uh m a and capital raising work and leverage finance work um and we also do related to that do a fair amount of specialty finance work so raising raising capital for other funders lenders etc kind of falls within uh all of those buckets so those would be our five sectors uh we traditionally have not done any oil and gas have not done a lot of project finance type work although we've got a couple great stories around those sectors recently there um but if it's if it's niche or you know sector really matters and it's not one of those sectors particularly on the m a side maybe strategic connectivity will be the first to say hey it's not right for us here's some friends of ours who spend all their time in that space you know that's who you need to talk talk to we call it the dad factor so if it was your dad's company or you were on your dad's board what's the advice you'd give him and firm why that better be the advice that all of our people are giving right in other words are you giving the right advice are you giving the fee advice and we demand firm white that we give the right advice the dad factor advice if you will and think that's really important and unfortunately to your point simple but different so you're in the midwest uh but what what is uh something we ask some of our guests this question we forget sometimes yeah what is something about you matt that people professionally would normally know about you probably the only investment bank founded on a gravel road outside of a town of 300 people that not only doesn't have any stop lights but doesn't have a paved main street that would be something so malcolm nebraska is my hometown i go by the 2000 census because it's in my favor on the small town argument but 372 people and when we play the small town game which we like to do a lot internally uh people always usually talk about how many stoplights do you have well not only do we not have any stop lights we also don't have a paved main street it's gravel so that usually wins a small town game fair enough as folks listen to this show what sort of people would you like to hear from and what's the best way for them to connect with you absolutely thanks for the question obviously company owners who might be thinking through growth access to capital liquidity buying something just what their options are quite frankly we love to educate and bring options to bear and make sure people know obviously other advisors or capital providers right who might have transactions that we could help on or help one another on or refer uh transactions to uh or help people together and so those would be those would be the groups the easiest way to get in contact with us or learn more about us would be our website our website is .bridgepointib.com ib is an investment banking bridgepoint ib.com and all of our contact information is there as well as kind of actually some pretty helpful literature on education as well on the capital markets and the various uh sectors that we work in fantastic matt pluster bridgepoint investment banking great to have you on the show all the way from nebraska and uh the metropolis that you live in you you said there's no stop lights there's is it a is a stop sign is it yield oh yeah we've got we've got a couple stop signs they might have they might have bbs in them but we've got a couple stops done so funny story my wife is from a little bitty town in northwest louisiana and you get there by way of marshall texas the first time i went to see her at her house because we had met in another city first time i went to see her she's telling me you get on this highway you're going down this highway when you come to the st the flashing red light you turn right okay so i'm driving i'm driving i'm driving i end up in some other town come to find out from her direction it's a flash it's a flashing red light from the direction i was getting this flashing yellow yellow so that's what you call country directions right there but uh good to have you on the show matt hope we can get together again soon uh we've got an event coming up in the third quarter early fourth quarter of next year called the deal flow expo and love to have you participate in that be a part of that and maybe bring some of the companies that you're working with and some of your team to the event so that we can meet y'all in person on behalf of mr paul nicolini myself j.p moroney the harbor city team the deal flow show team you are listening to the deal flow show you can get access to our previous episodes subscribe and follow us you can get access to us on nearly every audio and video platform out there podcasting by going to the dealflowshow.com if you think you know of a good guest or you think you might be a good guest you can make that recommendation on the website as well matt good to have you on paul we'll talk to you guys again very very soon take care bye-bye for more episodes visit thedealflowshow.com and subscribe [Music] you