Arthur Petropoulos Podcast Transcript

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Headshot of Founder Arthur Petropoulos

Arthur Petropoulos Podcast Transcript

Arthur Petropoulos joins host Brian Thomas on The Digital Executive Podcast.

Welcome to Coruzant Technologies, Home of The Digital Executive Podcast.

Brian Thomas: Welcome to The Digital Executive. Today’s guest is Arthur Petropoulos. Arthur Petropoulos founded Hill View Partners in 2016 after a successful tenure on Wall Street as an investment banker, private equity investor, and head of mergers and acquisitions and corporate development for a high growth operating company.

Welcome to Hill View Partners provides mergers and acquisitions and capital advisory services to privately held family, entrepreneurs, and small investment group owned companies generating between 1,000,000 to 10,000,000 of EBITDA across all industries. Effectively, they do two things help companies sell themselves and help companies secure capital.

Arthur has been involved with over one billion transaction value across 100+ transactions closing in on a decade as the Founder and Managing Partner of Hill View Partners.

Well, good afternoon, Arthur. Welcome to the show!

Arthur Petropoulos: Great to be here, Brian.

Brian Thomas: Appreciate it. You bet. I’m excited as well. There’s a lot of stuff we’re going to learn here today through a few questions here and we’ll get you out of here.

So, Arthur, jumping into the first question. After a notable tenure on Wall Street, you founded Hill View Partners in 2016. What was the gap you saw in the market for privately held companies that motivated you to start this venture?

Arthur Petropoulos: Sure. No, I appreciate the question. So, in my tenure in Wall Street, I was on the side of investment banking, as well as private equities to helping companies sell themselves as well as on the side of buying companies.

And I think what I saw as the recurring theme was companies that were kind of is our representative of our target market now, but companies that are privately held, not private equity or venture capital back for the most part, but are owned by families, entrepreneurs. Small groups of investors typically generate half a million dollars in pretax profit a year when companies like that, we’re going to sell themselves or find capital.

We just saw it on a recurring basis. Whichever side of the table we were on was just a very fragmented, inefficient process and that the intermediaries or the representatives of these companies were just really taking a large kind of. Hoping approach or hanging a shingle approach, if you will, where they would take all the information of the company kind of throw it out to the universe of 20,000 people or whoever was on the mailing list and pray for the phone to ring.

And from our perspective, it was just not an efficient process. It took too long. It was distracting. It wasn’t discreet and ultimately the results were somewhat middling. And so, in seeing this time and time and time again, that was really the impetus for us to start Hill View Partners, really with them.

Goals, primary goals of just mitigating all of these pain points and making a much more effective and efficient process to solve the pain points ultimately yield better results.

Brian Thomas: Thank you. And again, this podcast has a lot of entrepreneurs on it, Arthur, and talk about pain points, right? And, and there’s gotta be a better way, a more efficient way.

And at the end of the day this podcast is about technology and entrepreneurs making life better for people across the globe. So, I appreciate the story and Arthur moving on to the next question here. With your firm providing key services and mergers and acquisitions and capital advisory, how has emerging technology changed the way you approach these services, especially for family and entrepreneur owned companies?

Arthur Petropoulos: Sure, I think I think technology in particular helps us gauge situations, helps us implement change more rapidly. And I think helps companies scale in a more organic manner, but in a more efficient manner. And so, I would say is that via the processes and tech that we use, we can really kind of look at a company and digest the information and.

Try to extract where some of the areas of inefficiency may be, or conversely, where the areas of optimization are so that when we are in the market, either securing capital or discussing with acquirers that we can really have. Very pointed discussions, sort of the point of kind of everybody, kind of sending the information and praying for results.

If we can get out to the market and discuss a business on the terms of fundamentals on the access, the client has to the end markets that they operate in and to their proprietary capabilities, it makes a much more compelling case. So, we use technology in that regard. And then what I’d say from a scaling business perspective, is it used to be if you wanted to grow a business, you just needed tons of people.

And all of those people had to be W2 and in today’s environment. You can grow a business or start a business, expand a large business, whichever season you’re in through the utilization of vendors, through the utilization of contractors, through the utilization of. Broad contributors, software, there’s just so many different options of how you want to get leverage points in a business that that’s the amazing part of it.

And just. It can be simple in terms of just communication technology, and we have people that contribute to our company and that work for our company that are based all over the world. And some of them are local and some of them are global, but just the fact that you could have someone in. Western Europe and Canada and South America contributing to your business.

On an everyday real time, basis. Has really been a novel item over the last 5 years brought upon by faster Internet by zoom meetings, things of that nature. And then also, if the company wants to automate its outbound services, there’s software for that. There’s more research on chat. That isn’t necessarily going to work.

Replace people, but it’s going to make 1 research analyst at your company as effective as 5 used to be. And so, it’s, it’s, it’s not so much that tech. Supplants are completely obviates anything, but it meaningfully enhances the power and the capabilities of almost every aspect of your business. And we see that on a daily basis.

With all the clients we work with, as well as within our own business.

Brian Thomas: Thank you. And we’re seeing such a lot of that just in the last probably year and a half of the proliferation of these applications that are leveraging generative AI, which is fabulous, and that’s kind of the Genesis for this podcast.

We, I saw a need in all these emerging technologies about three years ago, and it’s just been a joy ride, honestly. So, Arthur, the next question I have for you is having been involved in over 1 billion of transactions, when that’s one with a B, I guess, billion across 100 plus transactions, what key strategies have you found most effective in navigating the complexities of these deals?

Arthur Petropoulos: Sure. So, I think, you know, we really try to follow a very lockstep and process oriented system and bringing mark deals to the market, whether again, it’s capital or exits, and I would say is it begins with the proper characterization of a business. And so typically companies of our size have historically been defined purely on their financial capabilities.

And so, it’s what’s revenue, what’s gross profit, what are operating expenses, what’s EBITDA. But in reality, companies making that kind of 1 to 10 million in profit, you really have to think they’re not competing on the price of capital. They’re not competing on economies of scale. So, there is something proprietary or unique about them.

And you really have to emphasize those points. So, in the characterization of the business, again, we always hit the same 3 prongs is fundamentals, access and capabilities. Much representation of companies in the space is limited to just the fundamentals, which doesn’t spell the whole picture. And so, when we go out to the market, we are researching.

Yeah. Okay. Again, we think of it as an extraction offer of processes, not a waiting passive process. And so, it is a proactive, not reactive, reaching out to a smaller subset of parties, but much more tactical, much more targeted and laser focused. Because if we can characterize it correctly, we can communicate it better and in a way that highlights our client as the missing puzzle piece to what the larger organization or the.

Perspective acquirers looking to accomplish. And so if we can go to, we’re selling a, let’s call it a lower middle market software company, and we go to an Oracle or a Microsoft, and we say, you should buy this company, that’s where usually where most people stop and then they dump all of the onus on the acquirer to kind of figure out why, but we go to the wire and we say, you should want to buy this company because you’re already entering this space or already trying to do this thing.

This would accelerate. What you’re already trying to do. Think of it by verse build. You can just buy something that’s going to take all of the time risk resource risk capital risk away and have much more certainty. And so, if someone thinks of it as by verse build versus just a return on capital makes it a much more compelling case.

And so, we’ve been able to be effective because we characterize the businesses. With an acuity that others do not, we do our research as to the prospective counterparties and who the optimal ones would be again with the level of acuity and granularity and meticulousness that’s typically not the case.

And then we facilitate the balance of the process in a lockstep manner, where it’s not just waiting and hoping and thinking this might happen. We have steps that go along the way to really drive the process. As we say, on our on our site anywhere else, we want offers in 100 days and deals closed within 6 months.

So, trying back to your question relative to tech, we are implementing all of the advancements that we possibly can to facilitate these processes to do the research to highlight the right things. But at the same time, we’re doing all of the. Not mundane, but all of the legacy items of this exercise in a way that is consistent, that is repeatable and does not deviate from what works.

And so, we find the best things in this world, whether it’s businesses or otherwise, are those that combine the things that have always worked well, done exceptionally well with all of the new advances that we can implement or supplement the process with. And that’s kind of. The key. So, I would say it’s not necessarily one magic bullet.

It’s really an amalgamation of doing a lot of different connected, unexceptional things, exceptionally well, and exceptionally consistently, and then implementing tech and other means of kind of supporting and facilitating the process along the way.

Brian Thomas: Thank you, Arthur. I appreciate that. And I know there’s a lot of research that goes into this stuff, as you mentioned, but you definitely take a different approach to your research and for your clients.

So, I appreciate the share. And Arthur, last question of the day, transitioning from wall street to founding your own firm would have been the most valuable lessons you’ve learned about entrepreneurship and leadership in the finance sector.

Arthur Petropoulos: Sure. I would say from a lesson perspective, you have to be very uncomfortable, very comfortable rather with the discomfort, with the unknown, with the uncertainty that can come along with day to day business.

I don’t know if it was Dostoevsky who said the man who master’s the gray is wise, right? But its, life is not as binary or black and white or cops and robbers as people would like to think. There’s a lot of nuances, there’s a lot of gray area, there’s a lot of uncertainty. Sometimes you need to know if you need to push through something or if you need to make a change.

And oftentimes there’s a lot of, Subtlety along the way, and you’re not going to know if what you’re doing is going to work for a long time. And so, what I’d say is pivoting from a job, if you will, to being an entrepreneur necessitates a comfort with longer feedback loops in business that is going to take longer to see if something works.

You have to have more conviction. You have to have more commitment and you have to have consistency to just keep. Throwing rocks into the ocean staring into the abyss until things work out and you’re going to need your motivation for that. And that’s why. Look, I tell people among other things you better find your God in this world, because for a long time, it’s going to be you and God trying to figure this out.

And if you keep pushing, it will work. But as someone said 1 time, the road to victory, the road to victory and the road to failure, the same thing. Failure is just an off ramp that happens before victory. And so, you really have to get comfortable with, with that. Whatever you wouldn’t do for 10 years, don’t do for 10 minutes.

And lock yourself in for a very long journey, which is a fulfilling one. And when I started my business and I’ll leave it with this last point, Brian is. When I started my business, I was nervous if it was going to work. And I remember asking a gentleman who had his own business for a long time, how do you know this is going to work?

Or what do you worry about? And he said, Arthur, if you do this long enough, the only regret you’re ever going to have is that you didn’t start this sooner and, you know, thank the good Lord, we’ve stuck with it. And I will say that is largely the only regret that I have is that it didn’t start all of this sooner.

So, I think it takes a certain type of temperament. I think you, cannot be excellent at one thing and deficient in other things. You need to be at least very good at everything. But more than anything else, you need to lock in for a long journey and have faith in yourself and God that it’s going to work out.

Ultimately, it will, but the timeline of which it’s going to take is never going to be known to you. And so, you got to just get up every day, dig the holes and chop the wood.

Brian Thomas: Thank you. And really that big, that message resonates with me and, and many of the guests and guests’ entrepreneurs in our audience.

There’s obviously a lot of persistency and consistency that needs to be maintained. And I appreciate that a lot of hard work. So Arthur, it was certainly a pleasure to have you on today and I look forward to speaking with you real soon.

Arthur Petropoulos: Yeah. Likewise, Brian. Appreciate the time here.

Brian Thomas: Bye for now.

Arthur Petropoulos Podcast Transcript. Listen to the audio on the guest’s podcast page.

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