Markham Capital Partners: Helping Entrepreneurs Exit Gracefully And Get What They Want Out Of Life With Andrew Kilpatrick

TRAS Andrew | Markham Capital Partners

What can you accomplish with a Bachelor’s Degree in Genetics and Religious Studies? Apparently, quite a lot. Before founding his own private equity firm, Markham Capital Partners, Andrew Kilpatrick has been in the trenches for a while doing things that had nothing to do with that degree. But his forays from one thing to the other eventually led him to space where he can make a difference in helping entrepreneurs get what they want out of life by providing them with generous exit solutions. Joining The Real Jason Duncan in this episode, Andrew tells us how passion, place, people, preparedness, and plan all played into his huge levels of success in all the roles life has placed upon him to play. Listen in and pick up a thing or two that can guide you on your own path to success.

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Markham Capital Partners: Helping Entrepreneurs Exit Gracefully And Get What They Want Out Of Life With Andrew Kilpatrick

Thank you for tuning in. This is where I interview successful entrepreneurs and talk about how they grew their incredible companies. I have this theory that there are five keys to success that every entrepreneur has that they use to grow their companies. It’s through this show where we’re going to find out if my theory is in fact, correct. We’re going to talk with very successful entrepreneurs on how they started their business, how they grew their business, talk about their lives, talk about how they reach success, what success means to them, etc.

We’re proud to be syndicated on the C-Suite Network, which is a network. It’s a premier source of the world’s leading business podcasts for C-Suite executives, business executives, entrepreneurs, etc. We’re grateful for their support and happy to be on their syndicated network. If you’re reading this, we appreciate you doing that. Please make sure you subscribe and leave us a review. If you ever visit Nashville, you’ve got to come and visit The Standard. It’s 18,000 square feet of Southern sophistication and style, where you can smoke cigars, drink bourbon, you can hang out, have a very nice steak dinner. It’s owned and operated by the one and only, Josh Sterling Smith. It’s a fantastic place. It’s my happy place. I love hanging out here. I love being at this place. I’m happy to be here, honored to be a guest in the Matador Room and a member of The Standard Club.

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Now on with the show. Let’s do this. What can you accomplish with a Bachelor’s degree in Genetics and Religious Studies? You could be the project manager for a $50 million company. You could be the chairman of the board for an Angel investing company. You could manage over 7.5 million square feet of commercial property that you and your team own. You could run a family office with over $500 million in assets under management. You could even start your own private equity firm and return 15% internal rates of return for your investors and not a single one ever loses any money. That’s what you could do with a degree in Genetics and Religious Studies. At least one person did that and that’s my guest for this show. He has a Bachelor’s degree in Genetics and Religious Studies. He’s married to a beautiful lady. They have six amazing kids. Please meet my honored guest for this show, Mr. Andrew Kilpatrick. Thank you for being here.

It’s my pleasure. Thanks for having me.

I’m glad that you’re here. Tell us and we want to know how you went from degree in Genetics, which I don’t think I’ve ever met a person with a degree in Genetics. A degree in Genetics and Religious Studies to being an uber successful entrepreneur, how did that happen?

It’s entirely by accident. I was working construction straight out of high school. I got married. We had one kid and another on the way. I was not thrilled with my career path. I was wrestling with that for about six months. My wife finally got tired of living with me, moping around the house and she said, “Figure out what you want to do and go do it.” I thought for a few weeks and came back and said, “I want to be a doctor. I want to help people. I want to go overseas and work where they don’t have access to medical care.” She said, “I wasn’t expecting that. What would that look like?” I said, “I should probably go to college.” I did. I quit working at the construction company. I got some jobs where I could go to school full-time.

She started working part-time, put me through college. It’s a lot of things in life that I was curious. At that time I was going to school, Genetics was a pioneering major. It just was not well-known, well-understood. The genomic project had started. I was curious. As I took more and more classes, it became obvious I was going to get a major, whether I applied for it or not. It’s the same thing with Religious Studies. I started taking some classes. It was one professor I loved to learn from. I took every class he taught and it was one class short from a minor. I took another class. It’s all by accident.

After college, in between undergrad and graduate school, I decided to take a year off to replenish the coffers. Knowing that medical school was going to be a big undertaking and take a lot of time and focus. We had three kids at that time. I wanted to spend a year with my family. That year turned into a lot more. I deferred my enrollment for a year at medical school thinking I’m going to go back to it. I never did. I ended up with a fun career.

TRAS Andrew | Markham Capital Partners
Markham Capital Partners: Figure out what you want to do and then do it.

 

Genetics and Religious Studies by accident, not necessarily on purpose, but then you didn’t do the medical stuff. You didn’t go into those things. You didn’t even use your Religious Studies degree at least as far as I could tell by your story. How did that move from a young married guy, kids early, degrees that you’re not technically using? Where did entrepreneurial-ism and that spark start for you?

My dad always worked for himself. The idea of working for somebody else long-term, I always knew I wasn’t going to do it and knew that eventually, I’d be my own boss. I always knew I would make a terrible long-term employee. I didn’t want to be somewhere for 50 years and get a gold watch. I didn’t even think of it as being an entrepreneur. I always knew I was going to work for myself, whether I was a solopreneur or doing my own thing. As a doctor, you work for yourself. You work for your patients. I don’t think I ever made a conscious decision around that. I knew. It bubbled up through different choices going to school. In between undergrad and grad school, I took a job, working in the family business for my wife’s grandfather. I went in.

At the time of medical school in Northern California, they said, “If you want to go do some outreach, we’ll defer your enrollment and you can go and do outreach as a non-traditional student.” Being married with kids, I was a non-traditional student. They were trying to do a lot more outreach to that group to try and get more folks in. They felt like that made a more well-rounded medical student. I said, “Sure, I’ll do that. I need a job with some flexibility.” I went in and talked to my grandfather-in-law who had a big commercial real estate development company. I said, “I’ve swept floors. I’ve run projects. I’ve bid work. I purchased. I’ve done anything. I need a job that I have some flexibility. I can be down in Fresno at a medical school conference and be able to represent the school.”

He listened patiently and said, “I don’t have a job for you.” I said, “You have 400 people working for you. I’ll do anything. I don’t need to make a lot of money. I need something.” He said, “If you want to dedicate your life to this business, I have a job for you. If you don’t, you’re taking a job from somebody who does.” I said, “Thank you.” I went home. My wife goes, “How did it go?” I said, “I didn’t get it.” She said, “That’s crazy. I’m going to call.” I said, “No, don’t call. He did offer me a job, but only if I didn’t want to go to medical school.”

My wife said, “Take the job because I’m tired. We’ve worked hard. We’ve got these kids. It’ll be ten years before your first paycheck.” I wanted to be a surgeon, four years of medical school, one year of internship and five years of residency. She said, “It’s ten years before you’re even making any money. We’re going into debt on that.” I was completely intransigent. I’m not going to do it. After about three weeks, she changed text and said, “If you can be successful and learn from my grandfather, go and do what he did, how many people could you send in your place? If you go overseas or you help people who don’t have access to medical care, that’s one set of hands, one pair. If you can be successful, could you send 2 or 5 or 10? What’s the multiplier if you go and take advantage of the opportunity that’s in front of you?”

I’m good at math. I could do the math on that and realized, “There’s going to be a much bigger force multiplier if I go do something else and send other people with the heart, but not the opportunity to go.” I reluctantly went back. I deferred my enrollment because I held in the back of my mind that, “I’m going to go prove her wrong and come back and enroll in medical school next year.” I deferred my enrolment. I said, “You do commercial real estate. You’re vertically integrated. I’ll do anything except do brokerage.” Brokerage is one step above or maybe a half step above used car sales. I do not want to go. I knew the ethics of it. It didn’t align with my values. He smiled and said, “If you’re going to know this business, that’s your lifeblood. If you’re not willing to do that, you don’t belong in this business.” I said, “Yes, sir.” I went and I got my agents license. I sat in the back. I had no idea what I was doing. One thing led to another.

In your story, your wife said, “If you could be successful at this other thing, you could then send all these other people to do the things, the mission that you had in your heart to do the passion that you wanted to accomplish.” Let’s talk about how you did make that pivot mentally from medical school to “I’m going to go do the brokerage job.” Apologies to all brokers reading, but that was his perspective at the time. He became one. Fast forward all these years, you didn’t go to medical school. You didn’t do surgery on people in third world countries, but you’ve sent a lot of people over there to do those things. Tell us what you do now. What is your main business now? I listed in the intro all of these things that you’ve done with project management and brokering and family offices.

Let me say about the brokerage. A lot of what you’ll hear in my story is that there was a lot of ignorance about a certain industry or job that I thought I knew, and then you get into it and you don’t. There are some great people in brokerage. I didn’t understand, but I had this opinion. I’d formed strong opinions that were uninformed. That was one of them. What I do now is I build enduring businesses from lower middle market companies, which is another way to say I do private equity. I buy businesses. I make them better and I sell them.

Tell us how you got into that.

I started working for my grandfather-in-law. I went back for six months. He didn’t talk to me. I didn’t know what I was doing. I was calling people and I found some commonality. On Friday nights at about 5:30, that was the best time to call on business owners. Everybody else had gone home, but business owners were still there and there’s no gatekeeper. I found that working a little bit late, especially on Friday when all the other brokers or agents were taking a three-cocktail lunch, which were more popular back then, but they’d take off at noon. They’d never come back. I was dialing for dollars, calling, “How can I help? When is your lease expired? Just getting information,” and trying to support other brokers and talk to the asset management folks. I was a sponge. I wanted to learn everything because I thought, “If I’m going to do this, I want to do it well.” I saw a lot of tension in certain relationships. The broker didn’t want to get all the information, which left the asset manager frustrated. There was a gap and then they were chasing it around.

I built bridges with the folks that I knew were going to be important for me, legal, asset management and capital markets. They taught me a lot. That’s another thing I learned. People love to teach. They love to pass on knowledge if you’re curious and ask questions. I was poured into and I was a sponge. After six months, I thought I was going to get some mentorship and my grandfather didn’t talk to me. Nobody else back there other than carry the garbage out. I got no respect back there, but I was dialing for dollars. Friday afternoon came and about six months in, he would walk back and look around and say, “What’s up?” He’d go to each broker and go, “What’s up?” He wanted to know the deals. He liked to be involved.

Friday afternoon, there’s nobody there but me. It was like one light on over a desk. It was dark in the whole place. It was those motion sensor lights. All the lights had gone out except over at my desk. He walks over and he looks at me, he goes, “What’s up?” I’ve been waiting for this moment. I was ready. I said, “I’ve got this deal. I don’t even know what I’m doing. I’ve talked to this person. They seemed open.” We spent the next couple of hours talking through those deals as opportunities when I turned up.

TRAS Andrew | Markham Capital Partners
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At the end of it, he stood up. He smiled, winked at me and then walked out. I went home that night. I said, “I passed a test.” On Monday morning, he walked by my desk and threw a Master Tax Guide. I did the TurboTax. I knew nothing about the Tax Code. He threw a thick book, a Master Tax Guide on my desk and said, “Read that, you’re going to need to know it.” I said, “Yes, sir.” He started bringing me into meetings that I didn’t belong in. He’d say, “Sit down and shut up.” I said, “Yes, sir.” I’d take notes. Afterwards he’d say, “What’d you learn?” I embarked on a year and a half long mentorship process under him where he was teaching me all the time.

One time I remember getting paged, “Come to my office.” I came to his office. I had called Ashland. I said, “I’m with your grandfather. I don’t know where we’re going. I don’t know when I’m going to be back, but I’m okay,” because this is pre-cell phones. We shared one. We get in his car. He doesn’t say anything. We drive. We’re talking deals. We get to the airport. He had a corporate jet and we get onto his jet. I’m like, “Where are we going?” He said, “We’re going to Phoenix.” We were living in Northern Cal at the time. We go down to Phoenix. He goes and speaks at this group of industry leaders. We go out to dinner and we head back. I’m the guy with thunder. I’m nobody. Nobody cares who I am. That’s fine.

I’m just the guy accompanying him. My grandfather-in-law had started his career as a locksmith in a key shop. He was making locks and keys to the building trade and then started doing builder supply. He has an incredible story. We’re flying back on his airplane and they picked us up in a Rolls Royce. This is pretty heady stuff. I’d never experienced anything like this. We’re flying back. It’s he and I in the back of this jet. I’ve got this light on because I’m now catching up with all my work for the day.

He’s sleeping. He looks up at me and he says, “Can you imagine this? I’m just a key maker?” They laid his head back down. I was struck at his humility that here’s a guy who has been extremely successful, that has forgotten more than I’ll probably ever know, and is in demand to speak. He’s been wined and dined and yet he still sees himself as a very humble key maker, who a lot of good things had happened to. It stuck with me that despite all the success he had achieved, there was great humility in his heart.

I want to dig into some of those points. How did that lead to now you’re buying and selling companies? That has nothing to do with it on the surface.

Fast forward, we started a family office. We had a vertically integrated development company, capital markets, asset management, development and brokerage.

Some people won’t know what a family office is. Would you give me 30-second of what that means?

Family offices come in lots of different shapes, sizes and purposes. Our family office had a big portfolio and there were a lot of outside partnerships that were involved in some real estate transactions, deals, investments that we had done. We wanted to have a little bit more flexibility and a little bit different timeline, investment horizon and purpose around managing some of those assets. We started the family office with my grandfather-in-law, myself and another partner to manage those assets separately, primarily real estate, but there were other things as well, business investments, instruments and things. We started that with the goal where we didn’t have to lump it in and manage it along with all the other assets.

As it happens, we got a little bit bored. We didn’t want to manage. We said, “Let’s start building some buildings,” and so we did. We started buying land and building buildings. This was 2009. We were down in Palm Springs. We looked around with all these foreclosed homes and said, “There’s got to be an opportunity here.” We started buying foreclosed homes. In over two years, we bought and sold 200 homes. We flipped them in Palm Springs. Another friend came and said, “I’m thinking of opening a restaurant.” I didn’t know anything about any of this stuff. I was learning on the job. One thing led to another until we were continuing to manage a lot of different assets, all within a family or very close ownership. That’s what our family office did.

Through the downturn, the Great Recession, starting in 2008, I would sit down with business owners and they would say, “I need rent concessions. My business is off, and debt,” and all this stuff. I tell them all the same thing, “Bring your last three years of tax returns and year-to-date financials.” Let’s figure out a path forward. If we’re going to be successful, we need our clients or tenants to be successful. Over dozens, maybe 100 tenants sitting down with them and going through their financials, I got pretty good at reading financials. I got pretty good at recognizing who was going to make it and who wasn’t and why. At the time, I didn’t realize it. For me, it was a necessity. I wanted to keep my buildings full. I wanted to keep them occupied, even if it were underperforming. I still wanted to keep them and having rent coming in and covering expenses. It was a necessity for me to do. It wasn’t programmatic. It wasn’t planned, but that ended up leading to some other things.

It taught you how to look at business from a critical eye. What businesses are valuable and have a probability of success and that led to you buying and selling businesses.

It led me to first, learning how to have very difficult conversations around things of identity, issues of legacy and heart. If somebody started a business and they’re on the brink of bankruptcy, losing their house, you don’t go in guns blazing, but you also need to have a lot of truth in that conversation. Learning how to do that, how to both honor the person, respect what they’ve done, but also be able to have an honest conversation about what you see. Not always with a specific outcome, but sometimes you did, you had to get to that certain point.

Business done right is the greatest force for good on the planet. Click To Tweet

Learning how to guide that conversation to an end and that’s repetition. What I found was I was bad at the beginning, but through a lot of conversations, you end up learning how to navigate those. These are skills I now use all the time. At the time, it was all necessity. I learned over time that I liked solving business problems. I solved for them primarily through real estate. I would get invited in. I’ve 40,000 feet production. We need 60,000 feet. I walked through and said, “What’s your opportunity?” We’d talk about where their marketplace was, where they were in the marketplace. I’d say, “You probably need 100,000 feet and we’d negotiate and maybe settle on 80,000 feet.”

You’re going to regret that because I had the opportunity. If you do this, you’re going to need to add two more lines. You’re only adding one, for instance, of a production company. We’d build that 80,000 feet. They’d move in. Twelve months later, they’d call and say, “You’re right. We should have done 100,000.” I found that once the project was underway, under construction, I didn’t love to go out and walk the site. It was fun but I loved solving the strategic business problems. That’s what drove me and what I enjoyed about the process. I surrounded myself with people who love to put buildings up or love to manage the tenant relations afterward because I didn’t love those parts. I liked working with entrepreneurs solving problems, but I didn’t necessarily like to manage those things. I had a great team. I’ve been very fortunate with people.

Tell us the name of your company now and specifically what it is that you’re doing now?

Markham Capital Partners is the name of our private equity firm. We’re based in Nashville. We do service all of the lower 48. Any of the contiguous states, we’ll work in. My partner, Mark and I started comparing notes. I moved to Nashville a few years ago from California. I didn’t know why. I’m a strategic guy and this was the least strategic move for me. I have no network, relationships and opportunities that I was aware of at the time, but my wife felt like this is where we needed to be. We moved here. I started talking with people and telling them about my story and what I’m about.

That led to a conversation with a guy named Mark Graham, who became my partner, but I told him, “I believe that business done right is the greatest force for good on the planet that allows ideas to be released into the world. It gives dignity and connection for people. It stabilizes communities and families. It’s the lifeblood of governmental and charitable organizations that it’s done more for humanity than about any other force. I believe the best thing that we can be doing is building great enduring businesses.”

He said, “Me too. I’ve done that in private equity.” I said, “I’ve done that over here.” Comparing notes, we said, “What if we did it together?” That’s what we focused on. There’s always a tension between wanting to scale and how do I grow this and amplify this and focusing on where you have the most joy in what you’re doing. Do we want to go after $50 million in EBITDA or $20 million in EBITDA and these bigger companies? For me, at least, I looked around and said, “Most businesses in the United States are not big businesses.” They’re lower middle-market companies. Those are the ones that are the most engaged in communities. Those are the ones that employ.

Even if the financial opportunity is not as great, it has the biggest impact. That’s where we chose to focus. Companies with $2 million to $10 million in EBITDA will go up to $15 million, but our sweet spot is $2 million to $10 million in EBITDA and local, regional businesses that are in some transition. Maybe it’s a succession. Maybe it’s a spinoff of a bigger company. Having my background in both the family office side, understanding identity and legacy, having the discipline of doing IPOs and running public companies and running private equity-backed companies, we have a good marriage of understanding those companies in transition and then how to take them from where they are to become an enduring business.

I love the perspective that, “Business done right is one of the greatest forces for good in the world.” I love that concept. That’s quotable. It’s good stuff. A lot of our readers will also agree because they’re business people and they want to do business right. Talk about success. This is the root of all success. You’ve been at least in my estimation, based on my relationship with you, what I know about you and the story that you told indicates a high level of success. It’s always interesting to me to hear somebody answer the question, “Do you think you’re successful?” Do you think you’re a successful person, a business owner?

By my standards now, no and yes. I read a book called Conversations with Bono. I’m a U2 fan. They won all the Grammys. They were the biggest act in the world. They achieved the pinnacle of success. Some of Bono’s bandmates were asking, “Why are we still pushing so hard?” Bono’s response was, “Until the music that we play perfectly replicates the music that’s in my head, in my heart, we’re not successful.” I love that definition. I absorbed that many years ago when I read the book. I said, “That’s my definition.” Until what I want to do in here is faithfully replicated in the world around me, I’m not successful.

On the other side of my life, I have a wife who loves me and who has bear with me, as I’ve become a better and better husband, and a better man over the years. I’ve got great six kids. I’m going to be a grandfather here. That’s rocking my world a little bit. I’ve got a great family. I get to wake up and do what I love to do every day with people I love to do it with. There are still hard things. The challenges of living, relationships and work. In that regard, I am very satisfied with where I am.

TRAS Andrew | Markham Capital Partners
Markham Capital Partners: You can’t remove yourself from your time and place in history.

 

One of the things that I teach a lot in my strategic consulting and coaching business is if you look at what success means, it has not as much to do about wealth and money or fame as many people think that is. The guy driving the Ferrari or the Lamborghini, you think that guy is successful, might be or might not be. That doesn’t have a whole lot to do with it. “Success is achieving the desired result.” That’s what I think what Bono said more eloquently. If you have a desired result, a goal in mind, “This is what I want to accomplish,” and you achieve that, that’s success. To that degree, it sounds like you have achieved a lot of success, but goals grow and there’s more to come. That’s where you’re heading.

Let me ask you a couple of questions around this concept of success. In your life, you’ve been that broker with a grandfather-in-law with a successful company. He was a key maker turned into a successful company, the private jet. Here you are living now in Nashville with a brand-new partner, brand-new company, doing private equity, buying, building and selling businesses. All of that is fantastic. My theory is that there are five specific things that show up in every entrepreneur’s story who is successful. It starts with passion.

The way I describe passion is that it is this willingness to endure. It’s not necessarily excitement and joy about it because that wanes, it comes and goes. This willingness to endure is what passion is. Think back to your story, do you see this willingness to endure? I see it in how you told me your story, but you endured through those. Being a broker and you didn’t want to be a broker, you endured through that, but it was there that you learned how to be successful. Talk about how passion was a part of your story as an entrepreneur.

First of all, you’re 100% right. Passion was something that for me has evolved. I’ve always been a learner. I’m always curious. Being a broker for me was about learning the business. I talked about that. I was a sponge. I wanted to learn all about it. That for me is one of my passions. As I got better and better at the development business, I found that I didn’t love doing what I had to do. It was extremely lucrative. I provided very well for my family and I hated going to work. In that time because I’d been through two different family successions, one planned, one unplanned. I dealt a lot with legacy issues and worked with a lot of entrepreneurs. People started asking me if I can help them navigate it.

“Junior doesn’t want to take the business over. I don’t know what to do with this thing.” I realize now in hindsight, it was pro-bono consulting, but at the time, I was trying to help friends navigate difficult things that I could use some of my experience to help them process and understand. At the end of one of those conversations, I’d spent a better half of a day with somebody. They looked at me and said, “Why don’t you buy my business? You know it better than anybody else now.”

You’re talking about ignorance. I didn’t know you could do that. I’ve built businesses and sold them. I didn’t think about buying somebody else’s business and growing it. It never occurred to me that would be something that I could do. Dumb luck he asked me that and I ended up thinking in my head immediately, I go, “I wouldn’t touch your business because you had not done these things.” I knew what he needed to do, but I thought I don’t want to necessarily buy that. A light bulb went on where I thought, “If I could figure out how to do that with my life, it would jazz me up. I would love going to work every day if I could figure that out.”

There’s a difference between when a seed is planted and when it matures and bears fruit. That felt like there was a seed planted in my heart that said, “All these experiences that you’ve had in walking with businesses and understanding the financials and all the strategizing around what the business needs, all of these things are going to culminate in this other thing that you get to do.” I never would have had those opportunities had I not walked through. It wasn’t a passion at the beginning that I knew what it was and I wanted to pursue it. It was a real curiosity and a learning about how things work and a discovery that it’s what I want to do.

Going back to your story as a broker, you are successful at it in terms of you made good money. It was lucrative, etc., but the willingness to endure wasn’t present. You were like, “If I had to do this for the rest of my life,” you didn’t say this, but I can imagine you were like, “I do not want to do this for the rest of my life.” Even if I made $1 million a year, I’m not interested, but now you found this opportunity in private equity and buying, selling and building businesses, you’re willing to endure for that. I get up and go to work and it’s exciting. Let’s talk about the second P in my five Ps of success. First is passion. The second is place, being in the right place at the right time. Here’s what I heard in your story. The place like being there in that place and going to work for him in that place sounds to me like that’s the right place, right time and that led to your success.

I don’t think you can remove yourself from your time and place in history. It wasn’t by accident that I was there. There was when I was younger, this desire, “If I would have been born here, if I would’ve done this boy, I woulda, shoulda, coulda.” When I look back now, I go, “I was exactly where I needed to be at exactly the moment in time I needed to be there.” I couldn’t define it there, but in hindsight, I can that at that stage of his life, when we launched the family office, he was 80 years old. Who starts a business at 80 years old? Nobody I know.

“Until what I want to do in my mind is faithfully replicated in the world around me, I'm not successful.” – Andrew Kilpatrick Click To Tweet

I also got to see what it looked like to be successful as a human being, as a man, as a husband, as a dad, after having made a bunch of mistakes. That and the lessons I learned in that have influenced a lot of the way I think, and what I do now in a way that I couldn’t have gotten, had I mentored somebody who was younger, who was still driving forward. You can call it right place and right time. That resonates with me. That’s exactly what happened.

You said that it’s not by accident. Here’s what I think people misunderstand when I talk about that one of the keys to success is right place and right time. A lot of people have a victim mentality like, “I’m never there.” I haven’t hit that sweet spot yet.” You went and did it like you and your wife had the conversation, “What am I going to do?” She’s like, “Go work for my grandfather.” You forced yourself into that opportunity where that became the right place, the right time, that led to success. All these people that have this victim mentality, “I’m never at the right place,” what are you doing? Are you staying at home playing Nintendo? Are you staying at your office 40 hours a week? Are you going out and going to lunch with people? Going and joining clubs, doing things where you’re rubbing elbows because you never know where that right place might be.

You hit on what I think is the core of it. I was having this conversation with my nineteen-year-old is don’t focus on the what or the where, focus on first who. If you focus on who you are and becoming that person, “Who do I want to be now, next week, in the future?” then the what, the where, the how, the why, all those things start to work themselves out. Those are the lessons I learned from mentoring under somebody who was at the end of their career. They recognized that the values that they carry, that who they are mattered a lot more. It brought the right people around them. It created opportunities because people said, “I trust you. I trust who you’re about. I trust what you’re doing. Even if it doesn’t succeed, I know you did it for the right reasons. I believe that you will do what you say you’re going to do.”

That comes from character. It comes from who you are, not what you do. I still would meet with a lot of entrepreneurs and there are a lot of folks who are doing it for the wrong reasons. They want to go out and make millions of dollars so that they can do the thing they want to do. Instead of becoming somebody who would be trustworthy with that and then allowing that to lead them into where they’re going to exercise their passions and their interests.

I always say that connections are the most valuable resource and your reputation is the currency. That leads to the third P which is people. You had a person or two, there’s probably more, but that were very pivotal in your success. Your grandfather-in-law, which I hadn’t heard that term before, but I get it. I understand it. Your grandfather-in-law was one of those people that led to your success because had you not met him, worked for him and known him, it’s not likely that you’re sitting at this table in the Matador Room at The Standard having this conversation about your success. You might’ve been successful completely in a different way.

Probably be a doctor, the headwinds they’re facing.

Who else were instrumental? Besides your wife, your grandfather-in-law and perhaps your partner here in Nashville, are there other people that you could say, “This person is instrumental?” We’d like to know who those people are.

I’ve been very lucky in people, across the board, from the parents that raised me to the people who mentored me growing up. I think that I was driven by a desire to become a good person. Whatever I touched, I wanted to be good. I wanted to be excellent at it. That attracted people who said, “I’ll invest in that person because they care. They care about what they’re doing, what they’re going. I’ll spend the time.” It was worth the investment of their time. I ended up with a friend’s parents who I would go and I would talk to. I would gravitate to them and I’d be asking them questions. They became informal mentors to me. I was a voracious reader. I still am. I love to learn from what other people have learned.

Even my father-in-law when I worked for him, I learned a lot from him. The first loan I ever got was for $10 million at which at the time you might as well have said, “You need a $1 trillion loan on this.” I had no idea. I had gotten a mortgage for my house and that was it. I remember I called up a couple of bankers that I knew we had done business with. I called them and I said, “I need to get a loan on this building for $10 million.” I was waiting for them to go, “You’ll never,” and there was this long pause and they said, “Here’s what you need to do.”

They thought, “This guy doesn’t know what he’s doing. I would love to do business with him, but I need to educate him before he’s going to be ready to do business.” I had a lot of informal mentors like that throughout my life, being authentic with people, “Here’s what I’m about.” I’ve had a lot of people go, “I’m not about that.” Maybe they don’t say it. You have one meeting and they never circle back. That’s okay. For me, it’s not about trying to, “I need to connect with that person,” because in my experience, you don’t connect the dots yourself.

You look back and this just happened, I was having dinner with a friend. He and his wife were over and we were talking. I do a lot of business in Napa. I studied viticulture and enology at UC Davis in my time there. I have a real passion around good wine. I was saying, “In Nashville, there are a lot of people who like wine, but you don’t have real wine culture and people who want to share that passion with others.” He said, “You need to meet the daughter of a mutual friend. Did you know she’s a Level 2 Master Sommelier?” I said, “I had no idea.” That led to us having a conversation. Now we’re getting ready to launch a business in 2021 that shares wine culture and her passion and our shared passion with the people in this region.

TRAS Andrew | Markham Capital Partners
Markham Capital Partners: Accidental preparedness is just as important as intentional preparedness.

 

For the readers, if you are a wine aficionado, you love wine, if for no other reason you might want to get in touch with Andrew for that. You’re going to want to find out. Let’s move to the last two Ps. The fourth one is preparedness. The preparedness idea here is what I mean by that when I teach people about this as a key to success is that you’ve got to have the know-how. You couldn’t become a surgeon unless you prepared for that. You could, but one patient you’re done. Your preparedness came in, it sounds to me like your grandfather-in-law prepared you, “Read this tax book, look at these deals.” Over time, you started looking at these deals and that prepared you to be successful. Do you agree that’s part of the key to your success or is there something else besides that?

My preparedness was by accident, but it was critical. There’s the intentional preparedness that comes from study and from being good at what you do. Accidental preparedness is just as important. That’s an intentionality about observing principals. A lot of folks that I meet in business go, “I need the accounting side to be taken care of,” but they don’t understand the accounting is a big part, cashflow management, and balance sheet management. They go, “We’re making money on the P&L. We should be okay.” There’s cashflow. There’s the balance sheet. There are three parts to a financial statement for a reason.

When you only look at one and you think I’m managing around my P&L, you missed the principle behind why there are three parts to it. A lot of the preparation that happened by accident was that I was always looking at, “Why do I believe this business is going to be successful? Why do I think that’s a good deal? Why do I think there’s opportunity there? What’s the downside?” I was always looking behind the surface. The surface is important, but the preparedness also came from being good at what I did. I had to be excellent at what I was doing. If I wasn’t excellent, I would never have had the opportunity to learn and be prepared or be in a position to learn all the other components.

In other words, I had to be good at managing a portfolio of assets in order to be in a place to walk with those clients through their challenges in 2008, 2009, 2010, and then be able to get the information, the knowledge, the experience of underwriting businesses in that. There’s direct, intentional preparation. I have to be good at what I do in order to earn. That’s the price of admission. That’s how you get a seat at the table, but how you keep your seat at the table is you continue to learn and understand the principles behind things. It’s less intentional and focused and saying, “I need to learn this.” It’s more keeping your eyes open and being aware and awake.

The last P is plan. Everyone will forgive me for using another P, but that’s why we’re doing this five Ps so you can remember that. Plan refers to not business plans, because it’s not likely that you sat down and wrote out a business plan, “I’m going to do this and I’m going to do this.” Most successful entrepreneurs I find didn’t do that. What I mean by the plan is the strategy to obtain and deploy the resources specifically financial resources required to make your venture work. Tell me about how that played into your success.

I love plans and I love planning. I love the saying that if you want to make God laugh, make a plan. That’s number one. Number two, it was Eisenhower who said, “Plans are useless, but planning is essential.” I’ve found that to be the case. If you have no target shoot at, if you don’t understand where you’re going, you cannot build a plan around that. You can’t execute around that. It was Mike Tyson who said, “Everyone’s got a plan until they get hit in the face.” I found that to be true. I didn’t plan. If I look back, it wasn’t the plans that I made that succeeded and created this arc of my life.

Focus on your character and values, on who you are and what you want to release into the world. Nothing else matters. Click To Tweet

It’s the process of saying, “What’s that thing in me that I want to release into the world and how do I do that?” I’m going to plan to do that. Along the way, it’s, “I think I’m going to medical school.” No, you’re not. You’re going to get pulled into this. The process of going to medical school and taking that year is what positioned me to be ready for that other opportunity. Plans are important, not because the plan is so important, but because it gives you a path to walk down. As you start walking down that path, you’re going to realize, “That’s a dead-end, but this door opened up that I never would have been prepared for had I not walked down that stretch.”

Part of that too is the financial resources. You told the story about needing to borrow $10 million for that building and you went to the bank. You’re like, “I need to borrow $10 million.” That was your plan like, “I need $10 million. What’s my plan to get it? How do I obtain and deploy the resources in order to be successful?” I will make a grand statement here that everybody would agree with. If you’re in the business, you’re in private equity, there is a lot of planning in terms of financial resources that are required. You can’t say, “I like your $15 million business. Let me write you a check.” You might be able to do that, but that’s not the proper way to obtain and deploy those resources.

To be clear, we have a 100-day plan. “What needs to happen in the first 100 days? What must happen in this business?” I’m not suggesting that plans are not critical for execution. We’re just aware. I’m aware that the 100-day plan will likely not look exactly the way that I think it’s going to look as we get in there and a new opportunity comes up. I’ll give an example. If you were a PPE provider at the beginning of the COVID pandemic, you had a plan that looked very different than what ended up happening. If you’re not intentional about making sure your operations are good, that you’re financially strong, that you’re not executing well, when those opportunities come up, you’re not going to be ready for it.

In fact, one of my favorite Winston Churchill quotes is, “There comes a time in every man’s life where he’s tapped on the shoulder and asked to do a special thing, uniquely fitted for his talents, what a shame it would be if he was unprepared and incapable at what would be his finest moment or finest hour.” I love that idea that you prepare not and you plan not because you can see the path forward and you know where you’re going to end up. You plan and you prepare because as you walk through, you’re going to have an opportunity where fate is going to tap you on the shoulder and ask you to do a very special thing, uniquely fitted for your talents. You don’t want to miss that moment. That’s what planning helps you do is be ready for that moment.

As we conclude our conversation, is there anything specific that you would like to share with our audience? This audience is full of entrepreneurs and business owners, aspiring entrepreneurs, and business owners. What would you like to share with them? Are there any pieces of advice you would give them about how to be successful?

First, become the right person, focus on your character, on your values, on who you are, and what you want to release into the world. Nothing else matters. You’re going to get to the end of your life. If you’ve made a whole bunch of money and have a bunch of houses and stuff, you’re going to look back. If you didn’t make the world better because of your impact on it and if you didn’t express the passion that was in you to express, and that passion can be everything from creative to changing your community, whatever it is, then you will live with regret. That is your unique note to play at this moment in time.

Number one, focus on that, and that is a discovery process. You may not know what that is. Don’t chase the money. Don’t say, “I’m doing this and then I’m going to use this to fuel what I want to do,” focus on what it is that you love to do, what it is that you’re curious about. What keeps you coming back to go, “I want to go back. I want to do that again and cultivate that?” Another thing is be curious, learn as much as you possibly can about everything. I studied viticulture and enology. I don’t know how this venture is going to go, but I never would have been ready for this venture or open to it had I not studied it and learned about it before. Continue to be curious, pulling the thread and you’ll end up in the right place.

How would people get in touch with you?

I don’t have Facebook or Instagram or any of the social media. The only one I’m on is LinkedIn. Please do not try to friend me if we haven’t connected because in my LinkedIn, I know every single person on there. However, if you want to connect with me, you can email me at [email protected], go to our website, MarkhamCP.com. There’s a contact. I’m very easy to get ahold of. Once we connect, I’m going to add you to my LinkedIn if you want that, but reach out. I’d love to talk to people. I love to help people process through what their next step is, or if they have a business idea they want to do. I love working with good entrepreneurs who want to do something good in the world and maybe need a little bit of help or insight or advice on how to make that happen.

Andrew, thank you so much for being here. When you and I first met, it was casually at a mixer event, and then we were reintroduced later and had lunch. There are not a lot of people that I am that hugely impressed with the first time I meet the way that I was with you. I’m honored to know that you’re a friend of mine, that we’re acquaintances. I appreciate you being here on my show. Thank you for sharing your story. I appreciate it very much.

It’s my pleasure, Jason. Thank you for doing this. It’s helpful and will be important. Candidly, I wish this show existed when I had first started into business. It would have been helpful to avoid a lot of the potholes I had.

I appreciate you saying that.

There you have it, folks. That’s a wrap on this episode. You’ll see in this story of this one successful entrepreneur, Andrew Kilpatrick, that my theory still holds true. That passion, place, people, preparedness and plan all played a part in his huge levels of success as a private equity company owner, formerly a broker, and now he’s buying and selling businesses and helping people get the results they want out of life. I hope that this was helpful for you. I would appreciate it if you subscribe to my YouTube Channel. I post new content every single week, at least a couple of videos not even related to the show, other stuff for entrepreneurs, leaders, financial literacy, sales, etc. I also do some videos on spirituality and faith.

Be prepared for when fate taps you to do a very special thing that’s uniquely fitted for your talents. You don’t want to miss that moment. Click To Tweet

If you’re interested in finding out what your probability of success is as an entrepreneur, I have a special offer for you. If you will go to TheRealJasonDuncan.com/success, you can take an assessment. It’s a free assessment. You could download it, take the assessment and it will give you an indication of your probability of success as it relates to those five Ps that we talked about on the show. After you complete the assessment, you’ll get a personalized PDF report that shows you where you are now. Because you don’t have 100% on all five Ps as illustrated in Andrew’s story, it doesn’t mean you’re not going to be successful, but it will tell you what you need to shore up so that you can get there.

We don’t all start out of the gate 100% running as fast as we can go. We learn over time. As Andrew indicated, there are a lot of happy accidents that happen throughout the process, things that you weren’t planning on but happened. That all contribute to your success. Go to TheRealJasonDuncan.com/success and take that assessment for free. That is my gift to you. Thank you for reading. Please join me on the next episode when I talk with yet another super successful entrepreneur on his or her journey to success. Until then, remember Jesus is King.

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