Evolution’s Jeffrey Kadlic on Business Buff Entrepreneurs: Strive and Thrive
Before co-founding Evolution Capital Partners, I invested a decade in institutional settings making private investments, and discovered rather quickly how critical capital investments were to small businesses hoping to scale their operations. Yet, I also saw something else, something even more critical than an influx of cash, and that was the entrepreneur’s need for corporate practices to be instituted in their business.
Now, 10 years after the start of Evolution, I often get the opportunity to share what’s not only helped me as an entrepreneur, but transformed the lives and livelihood of our partners and their businesses. Recently, I was invited by my friends at Business Buff Entrepreneurs to provide some insight on the struggles and triumphs I’ve experienced over my entrepreneurial career. Read on or listen to our interview here to learn about my entrepreneurial journey and hopefully some tips to help you on your own journey toward small business success.
My Welcome to Buff Nation
After being introduced to the Buff Nation audience by way of my Maltese dog “Peanut” (who I love dearly, by the way), Kenny B asked me to elaborate on what Evolution Capital does in terms of helping Second Stage Companies.
My answer was frank, “Evolution Capital Partners is a private equity fund, so we’re looking to invest money and be a partner with entrepreneurs. And the way we define Second Stage entrepreneurs are businesses that are really through those initial stages of entrepreneurship…and are undercapitalized for that next phase of growth.”
Elaborating further, I mentioned how cutting out the banks was a fundamental part of our process, allowing entrepreneurs to avoid the limits of investments that demand swift repayment, saying, “(We give these entrepreneurs) a balance sheet that allows them to grow…it’s very, very difficult to grow your business when you don’t have permanent capital on the balance sheet.”
Wanting to know more, Kenny B then asked about our selection process — in short, what types of companies we look for. I responded, “We’re actually looking for entrepreneurs that want to ‘go for it’. Those who want to take their business to the next level.”
“What we’re looking for are really those entrepreneurs that are out looking for answers, and are out looking for solutions. They’re frustrated by their current situation…so they self-select into our sphere.” And though not everyone ultimately fits the criteria, I continued, “We still feel like we can share with them what we’ve learned over the last 10-plus years of being entrepreneurs ourselves and hopefully be a positive advocate for them as they (go) down that continuum of growing their business.”
An Evolution Example
Naturally, the conversation led to the investments we’ve made over our 10-year history, and particularly if any had stood out to us as a favorite. My answer, “Our favorite company, actually, was called the Accurate Group, and when we started with the Accurate Group it was about a $7M business and it was generating about a half a million dollars in profits and had about 40 employees.”
Yet, after adding a technology component, as well as helping to improve the organization’s service offerings, “(In roughly 4 years) we grew that business to about $54M in revenue…about $8M in profits…and to about 150 employees, which is something we’re particularly proud of.”
Even in Success, Struggles Exist
Nevertheless, some challenges have arisen during Evolution’s growth. Wanting me to explain how I personally managed to overcome these challenges, I told Kenny B, “We had a lot of success early on at Evolution…[but] we’re plowing a new field. Nobody is investing in these small Second Stage Companies…so we’ve probably been a little premature thinking that the institutions are going to jump on board and support us in our efforts to invest in these Second Stage companies. It can be a big downer.”
But as I explained further, between my wife, kids and other projects and hobbies I have outside of my career at Evolution, I’ve found a great balance that has helped push me towards continued personal and vocational growth. Without these things, I might have allowed entrepreneurial struggles to take away from my mission to help other entrepreneurs with their small businesses. And it’s a commitment I’m even more dedicated to today as a result of overcoming these challenges.
While my business partner, Brendan Anderson, and I have had moments where we’ve struggled, we have experienced remarkable growth at Evolution because we have lived by the very principles we share with the companies we invest in. Many of these principles are based on things we’ve learned from those who have either served as professional mentors or from other entrepreneurs who have shared their own roadmaps to success.
Speaking to this point, I told Kenny B, “Think about how many people don’t know how to (make money). Most people don’t. Most people don’t know how to make money and they don’t know how to create jobs; but entrepreneurs do, and that’s why I have so much respect for entrepreneurs.”
On a specific thought leader who has mentored my own thinking towards entrepreneurship, “Jim Collins, that noted author and entrepreneur advocate, he has this saying, it says that ‘the opposite of success isn’t failure, it’s growth’.” And it’s been this growth, both personal and professional, that’s led to the growth of Evolution and the small businesses and entrepreneurs we believe and invest in.
Want more information on how to create a successful small business? Visit our blog for insights on everything from business practices to the benefits of continuous learning. Also, listen to our own show, The Second Stage, for even more tips that matter to you as an entrepreneur.