Find Your Platters: Interview with Sue Keith

Elizabeth Shea sits down with Sue Keith, co-founder of Ceres Talent, to share her story of building a specialized recruiting firm and navigating an unexpected path to exit. Sue discusses her unconventional career journey, how she and her partner grew the business organically by reaching key inflection points, and how a chance meeting at a conference led to a successful acquisition by Landrum HR. She offers candid insights into the realities of the deal process: from timelines and negotiations to identifying non-negotiables and protecting employees. Sue also reflects on life after the sale and the importance of cultural fit and shared values in choosing the right partner.

Transcript

SPEAKER_00 0:00

Hello and welcome to Branching Out, a Tree Fork Strategies podcast. I'm Elizabeth Shea, the founder and CEO, and I created this show to help business owners navigate the ins and outs of an exit event. So each episode, I sit down with seasoned founders and CEOs who have successfully sold their companies through a strategic or financial transaction. Together we discuss what went into their decision to sell, what worked, what they would do differently, and the valuable lessons that they would like to pass along to founders with a sale on the horizon. Our goal is simple to provide a playbook that you can use as you approach your own sale with confidence and clarity, knowing that you're not alone in the process. This is Branching Out. Thank you for joining me. Hello, everybody, and welcome to Branching Out. I am so excited to have Sue Keith in our office today, who was the co-founder of Cirrus Talent and who exited her business with her business partner successfully to Landrum HR in 2022. Welcome, Sue. I'm so glad to have you here. Oh, thanks for having me. I'm excited to talk with you. Yes, well, you have a fascinating story, and I saw you as you went through your journey with Kathy, your business partner. So I'd love to hear a little bit more. Let's let's let's hear your story. You know, tell us how you got started and how you got into the business and what your experience was like. Sure.

SPEAKER_01 1:18

Um, well, I have a bit of an uh unorthodox career path, if you will. So I started as an I have an accounting degree, um, and I started at Deloitte and Audit for about four years. From there, I truly stumbled into a longtime marketing career, mostly with telecom and tech companies, and then eventually turned into uh running Sirius Talent, which is a search firm, search recruiting firm specializing in marketing communications products and design roles. Um, the reason that all came to be is my business partner, Kathy McCollum and I met when we were both in marketing at Nextel. And at some point we said, what if we launched this recruiting firm and specializing in the stuff we know how to do? And that's how it started. We did each at that time have, we had monogamous clients. What I mean by that, each of us was doing uh staff augmentation work for our respective clients. So we didn't ditch it all and start a business from scratch. We did continue working with our clients uh as we built Cirrus Talent until we reached what the point at which we were hoping we were reached, where we couldn't keep doing each well. So we effectively divorced our clients and then went all in on building the business. That's so cool. And it was basically a talent recruitment for marketing folks, right? Exactly. It started as purely contract, meaning staff augmentation. So let's say you have someone going on maternity leave, or you have the CMO has put another project on your plate that you don't have enough bodies on your team to handle. So to bring someone in on a temporary basis to kind of serve as what we call a relief valve. And then that grew into also doing direct placements.

SPEAKER_00 2:55

Okay. Well, I do know that you created quite a brand for yourself, for you and your business. So congratulations on that. I do think that what was really amazing to watch is how you really infiltrated the tech community within the DC area, and I imagine probably even outside of the DC area. So, why did you suddenly decide then that you might want to sell the business? What drove that decision?

SPEAKER_01 3:18

So, um, you know, one of your previous guests on your podcast called it an accidental exit. I think I'm gonna call ours a premature exit. And the reason I'm saying that is we had started thinking about what that could look like. So we were about eight or nine years into the business. Uh, we had been growing, growing well. Uh, we were at four and a half employees at that point. And a friend of mine who also had successfully sold another recruiting firm and had started up another one said to me one day, So is this a lifestyle business? Are you building this to sell? And I honestly, I don't think either Kathy or I had really seriously thought about what was, you know, and what's the end game here. So that really started the wheels turning. Um, kind of a funny story. So when we first kicked things off, Kathy and I, we hired a small business consultant who we had known who had successfully exited her business in a similar field to what was supposed to be our five-year plan. So picture this is quite a while ago. So it was still things being printed on paper. So picture giant spreadsheets of five-year plans all over her office, the consultant's office, where okay, you're gonna be doing okay, and then you're gonna hire another BD person, and then you're gonna be upside down cash flow for a while, and then you're gonna write the ship. And after a couple of months of this, Kathy and I just looked at each other and thought, this is stressing us out. Let's grow this thing organically. And the idea of being upside down cash flow-wise was scary to both of us. So we kind of recycled, you know, we shredded all that and just started running the business. And, you know, you talk about inflection points in the work that you do. And that's very much how we kind of, if you look, if we look back on our 10 years before we sold the business, um, it was really building the business was about reaching certain inflection points. And what I mean by that is kind of reaching a point where the status quo is too painful to continue. So that could be meaning, okay, it's time to hire an employee. That's a really scary proposition when the first time you ever hire an employee, because now you're really responsible for someone's livelihood. It was committing to an office lease, you know, where we were meeting candidates in Starbucks. And at some point, Kathy said to me, We really need to look, you know, more professional in this. Um, we had to bring in twice we we brought in a newer and more robust CRM. You know, again, these are pretty expensive investments, but just the status quo was not working anymore, and we had to make that investment to kind of grow the business even further.

SPEAKER_00 5:53

Yeah, good counsel. So you continue to grow the business, and um and I think you had a pretty good role. And so when did you decide that it that it wasn't a lifestyle business and that it wanted that it could be something more?

SPEAKER_01 6:05

So actually, in talking with you, and you know, your success in selling speaker box got us really thinking about what could this look like? And really the question was how big do we need to be in order to be attractive to a buyer? And we didn't think we were at the time. Um, so we talked to we talked to one broker, and honestly, it felt like a used car experience. It felt like I'll sell your business for an 8% fee. Um, and it really didn't feel as though that person really cared about who we sold to, what the post-exit experience would be like, just collect their fee and move on. So that just didn't feel right. So we walked away from that. And we were in the midst of talking to a couple other brokers who also offered, served more as a strategic growth advisor to really help with our growth strategy. And we thought we still had at least another five years uh ahead of us to get to whatever that magic number was gonna be. And then I serendipitously went to a staffing conference in Austin where I met the CEO of the company who eventually bought us. We we met by joking about our bad box lunches that we were eating at lunch in this hotel ballroom, and we started talking about his business, our business. And I actually said the words to him one of the reasons I'm here at this conference is because I want to understand how big we need to be in order to be attractive. And I said, quote, we're too small at this point. And he said, I'm not so sure about that. And that's what kicked things off.

SPEAKER_00 7:34

Wow. Oh, it gives me the goosebumps. That's really interesting. I don't think I'd heard that story. So you start having conversations. Did you ever enlist a broker after that point, or did you just the suit? I did not, no fee was ever paid. Well, I'm curious what you found was attractive about the company that did acquire you. I mean, how did you continue the conversation? Did it start financial did it start out financially, or did it start out in terms of like how you're gonna be managing this? Or can you tell us a little about that journey? Sure.

SPEAKER_01 8:03

Um, so it started with so that first conversation over a bad box lunch uh turned into a Zoom meeting with that same CEO plus their CEO, who is now the president of the combined, all of the combined company. They have three divisions. Um and I I think that was initially it. And it just the conversation was so comfortable and they just felt like our people. Uh and so I think that moved to the next step. And then I think it was a conversation with the COO and the CFO, at which point it ended with, Well, we'll be sending you an LOI. And Kathy and I looked at each other and said, What's gonna be in that? Seriously. We I we say, like, are they gonna make the offer in this thing? And sure enough, they did. And um in the end, it was the offer was better than we were expecting. The multiple was better than we had anticipated.

SPEAKER_00 9:03

Wow. Well, good for you. Um, congratulations. Um, can you can you tell us about the preparation that went into this? Did you did you feel prepared when they sent you this LOI? Did you feel like you needed to do more more research, or did you just trust your instinct and say this is going to be a good thing? Tell us about that preparation. That's a good question.

SPEAKER_01 9:22

I think it's a combination of trusting our instincts and hiring a really good lawyer. We hired a bulldog and she was fantastic. There was, you know, she looked at everything with ice cold eyes, all in our interest, to the point where sometimes we had to say, okay, we need to soften our stance a little bit on this point, whatever, whatever negotiating point we were dealing with. But um I think it was that. But it was a lot of gut. They're uh they're a family-owned business. There was no, you know, no outside funding involved. They'd been around for 50 years. The CEO was the son of the founder. Just felt um, they just felt like good people.

SPEAKER_00 10:00

Yeah, interesting. So, from the standpoint of, you know, looking at financial terms and buyouts and earnouts and whatever the case might be, did that meet your satisfaction? Was that what you were looking for? Or did you have to negotiate hard on those points?

SPEAKER_01 10:15

Well, that's I think the most ironic part of this, or maybe surprising is a better word, was the deal terms themselves were probably the easiest part because we were happy with the multiplier. We did a little bit of tweaking on the upfront offer, but beyond that, the upfront plus the earnout were pretty much acceptable to us. What we didn't expect were some other things. And when they first put a timeline in front of us, I think it was about six months out. We were expecting the close. And I thought, what could possibly take six months? We're a four and a half person company. Um, how could this be that with, you know, we have rent and we really don't have any capital assets, we don't produce anything, you know, we're a professional services business. What could be complicated? No inventory. But one of the things I would I would give advice is this is usually gonna take longer than you think. I think one of your previous guests also talked about thinking about going through another can of shaving cream. Oh, yes, that was Sean Griffey. Remember that? He said, I can't, I thought I'd be done by the end of this last one, but I'm here I am opening another one. Yes. So it definitely takes longer than you think. And I don't think we did this very proactively, but it came super clear throughout the deal. Um, well, let me step back for a sec. So my business partner, Kathy's husband, Dave, is a longtime sales exec. And he said, quote, a deal dies three times before it closes. Oh, totally. Yep. At the beginning of this. And that was super helpful to keep in the back of our minds because the deal almost did die three times over three different things. And it was exactly three. I think, I think helpful would be going in before you even get too far, is identifying your non-negotiables. Like, for example, in our case, we wanted to make sure our employees were protected from day one. And that, and I say that became a bit of a sticking point, not in that the acquiring company was planning on getting rid of them immediately, but we just wanted some protections written into the document they had not traditionally done. So, for for that, that was a really important part for us. And it was both altruistically because we really cared about these people who had helped us grow the business, but also for our own benefit, because we needed this business to succeed post-close. So we wanted those people who were fantastic recruiters and really just our business partners to still be there. So that, and I'd say some of the other harder parts beyond the deal terms were, you know, non-compete language, severance terms, you know, like I said, ensuring our people were protected. But in looking back on this, I kind of chuckled at myself because I'm like, wow, the easiest part of this were the the actual the numbers.

SPEAKER_00 12:48

Totally. I mean, I think sometimes it's overlooked when, you know, I have said before that it's it's not necessarily the the price or the multiple or the terms, it's it's all the other things that go outside of the actual financial transaction. So the culture, the, you know, the environment, what it's going to feel like after after the transaction takes place. So I'm assuming you pop some champagne or something along those lines when you close the.

SPEAKER_01 13:13

We did. In fact, when Kathy calls me, the picture on her profile picture is us with our bottle of champagne, which had nicely been sent to me by a candidate, I think I placed just as a thank you. So it was kind of a cool way to open that bottle for a different reason. But yeah, we we celebrated. And one of the things I'd also say too is the timeline had six months. It took us nine. I thought it was gonna be three. Um I I did say to I've said to a lot of people after those nine months and the deal was done, and we were able to publicly announce the deal that if you still like the people you've just spent nine months negotiating with, that's saying something.

SPEAKER_00 13:51

True. And so that was the case, it sounds like. Yeah, absolutely. That's that's excellent. Well, you're very fortunate. So tell me about post-transaction life. What was that like? Because you stayed for a year or two, I believe. What was that? Three three years. Three years.

SPEAKER_01 14:08

Yeah, it's it was three years. They went really quickly. If you say, like, what do you should know then that you don't know now? I think one of these things was this was a strategic acquisition. So they had purchased, like I said, they had three business divisions and they had purchased another specialized recruiting firm in the HR space, and they were adding in our marketing communication specialized firm into that division to create a Landrip talent division. So very much a strategic acquisition. One of the things I I think we had asked more questions about is what was the buyer's vision for how our services would be integrated into their existing product or services portfolio? You know, how would our services be integrated into their sales strategy? Who would be doing the selling? How would our services be incorporated into their comp plans? So that was definitely something that we should have asked about because it we we kind of inherited a group of senior salespeople who were very comfortable selling the services they'd been selling for the last 10, 15 years and struggled a little bit with adding ours in. Um, and we were reliant on that BD team to do that work. Um so and I think the other thing I'd I'd say too is if you look at kind of lessons learned, the bottom line is this isn't your company anymore. You know, I as I say, like they wrote us a check. So they get final decision on things, and you are absolutely there to help the combined company be successful. That was something Kathy and I felt really strongly about. Um, but at some point, your vision for the company may not completely align with the buyer's vision, and you have to be ready to accept that.

SPEAKER_00 15:42

Yes, yes. It is very consistent with a lot of the other messages that we've heard from other guests on the show that, you know, it's not your company and it it there's a time when you need to walk away. What do you think was the secret sauce for the fact that you stayed for the three years? What um what do you think went well?

SPEAKER_01 16:00

I think we, you know, we we definitely just felt initially, like I said, you know, after negotiating on some pretty tough things for nine months and you still like the people across the table from you, that says a lot. So the culture, it was really fun to kind of meet this other half of our team who became the combined Landrum talent. Um we everyone was good people, everyone really approached recruiting from a human perspective. I oftentimes say the human in HR gets forgotten, um, especially when it comes to hiring. Everybody felt really, I just we've had the, like I said, same values when it came to treating people the right way. Um because Kathy and I were both former marketers, we were heavily involved in the rebrand from Cirrus Talent to Landrub talent, because the other, the HR side of the house had a different brand. So that was fun to bring that together. And I think we had, you know, I again, I think it was everybody having the same commitment to the business, and also not only having the same commitment to the business, but also having the same values on how we're gonna execute against that.

SPEAKER_00 17:08

So important. That is so important. I I I applaud you for managing through that process. Now you've exited from Landrum Talent. So um, what drove that decision and and what are you doing now? Tell us a little bit more about that.

SPEAKER_01 17:21

So, quite frankly, we had a three-year commitment and we felt very it was really important to honor that. Kathy said, once, no matter what happens, we want to leave the place better than we found it. So that was really important to us to make sure we, you know, gave everything we had over those three years of commitment we had made. But then it was, it was really more of a personal decision for me. I had been at that point doing, we sold on what was almost exactly the 10-year anniversary of the business. So it was a nice way to celebrate that. I had then at that point been in recruiting, and I never intended to be in recruiting, that was accidental, for 13 years. And I had just decided, you know what, it's time to to hang up my recruiter hat and do something different.

SPEAKER_00 18:00

Yeah. So what are you doing now? I mean, did you did you purposely set out to find another role? I mean, you're with DCA Live now, I believe.

SPEAKER_01 18:07

I am. For those who don't know, DCA Live is uh an events and networking company that brings together executives at different levels for peer-to-peer networking and information sharing, insight sharing, et cetera. So Doug Anderson runs DCA Live. I know you know Doug. Um I had actually been a sponsor of his. We had been putting on monthly virtual CMO roundtables since COVID started. So we had worked together for quite a while, become friends. And when I told him I was thinking about leaving, I was likely leaving Landrum, he said, Hey, you want to join me? So I said, sure. So now I am helping him, helping him grow the business, but also I moderate roundtables with CFOs, controllers, founders, investors, those sort of things. And I am loving it because the conversations are fascinating. And so I still, and I've actually relaunched a virtual CMO and CCO roundtables because I miss the marketing conversations. So I feel incredibly fortunate that Doug gave me a soft landing.

SPEAKER_00 19:07

Oh, that's great. So many people just aren't sure what to do next. And so it sounds like that was purposeful and and with intent. So for the listeners here who are probably founders who are potentially looking to exit at some point, um, what what advice would you want to leave to them as they pursue this journey? I mean, e whether it's from the perspective of how to prepare, what to think about, what what what are some best practices to follow? Can you give some a little bit of advice on that point?

SPEAKER_01 19:38

Sure. I think I would say don't do what we did. And what I mean by that, what I mean by that is sure, did we build a good business? We did. And do we feel, and one of the things Kathy and I also said is we need to be able to look ourselves in the mirror every day. So whatever decisions we make, it has to feel good. So if we have to walk away from revenue or tell a candidate, you know what, we've decided this company is not a good place to work. We're gonna we recommend you pull pull your candidacy out. Um I feel like we did all the right things. We were, I think we did right by our employees. We could feel really good about that. But the actual selling of the company was very serendipitous. And I think if I we were to do it again and not I hadn't happened to go to that conference and run into the CEO of the company, the buyer, I think we would have hired on that strategic advisor to help us figure out what, you know, 10 years later, redo our five-year plan that we re jettisoned earlier on in the business and really figure out what that would look like. Because I we did get lucky.

SPEAKER_00 20:38

Yes, yes. I mean, it's not every day that you run into someone and then it's actually a really good marriage. Right.

SPEAKER_01 20:44

Exactly, exactly. And so I but I would also say if you do look at brokers, and I know people have had really good experiences with brokers, but definitely find someone who feels like you're not a just another widget there letting you and then they're just shopping you around. Find someone who really understands what matters to you, like the values of the the prospective buyer, and make sure your, you know, your people will be taken care of as well.

SPEAKER_00 21:10

Yeah, the culture is so important. I mean, so many people, so many of the guests have talked about that. And how important it is to them that that is retained into the future. So, okay, well, thank you, Sue. This has been an amazing conversation. I really appreciate being here. Any last, any last pieces of wisdom to sprinkle down?

SPEAKER_01 21:28

Well, I think I'd say I um so I went to JMU and I teach a class once a year. Well, I really guess lecture, it's not teaching, uh, a group of graduating seniors. And one of the things I I tell them is look for the platters. And what I mean by that is something, an opportunity coming to you on a silver platter because you've, you know, met you've you've done the right things and you've been a good employee and you you're really good at building relationships with others. And when those things, when you do all those things, doors open or opportunities come on a platter. So as I think about, you know, the fact that I went from an accounting career to a marketing career to a recruiting career to selling the business, you know, I always joke that the accounting piece was the only thing that was intentional. Everything else was accidental, but it's because an opportunity came to me on a platter. So look for those and grab them, even when it feels maybe a little uncomfortable.

SPEAKER_00 22:22

I love that. That's a perfect way to end this episode. Thank you, Sue, so much. We appreciate it. Now, how can we get in touch with you? Are you on LinkedIn, I assume, Sue Keith? Yes, I'm on LinkedIn.

SPEAKER_01 22:31

Um, it's Sue Keith, K-E-I-T-H, and I'd love to hear from anyone who wants to connect.

SPEAKER_00 22:36

Terrific. Thank you so much.