Mike: It’s Evergreen’s 10th Anniversary, what does that mean to you?
Rick: It’s a sign of a business model that has some merit to it. We were able to stick to something that in hindsight weathered two of the worst economic cycles in our history, going back to the dot-com blow up in 2001-2002 and more recently in the last 3 years of the “great recession” , as its been coined. In 2010, we had our best year, with our best people on board. Therefore, for me it is a badge of honor, its perseverance.
Mike: When you started Evergreen, was there something that was in your mind about what it could be, where you wanted to take it?
Rick: I don’t know that it’s wildly different from where we are today. I probably would have guessed it would have been easier than it was. However, I always viewed the model to have merit to it because I have watched other boutique investment banking firms struggle during the lean times and in some cases struggle even during the better times, due to being totally transaction focused. I felt like there was a big gap in the marketplace for folks who understood the right side of the balance sheet; which is in essence what investment banking is all about. Capital raise and bank debt, evaluation, and sophisticated CFO services, all of that is also understanding the right side of the balance sheet as well as understanding the other aspects of the business.
Mike: You started Evergreen by providing CFO Advisory Services, and then added valuations, capital raise, and the mergers and acquisitions capabilities. How have you integrated those, to create the unique Evergreen business model?
Rick: I think what we tried to do was primarily be an investment bank, but provide the other skill sets that are really required and inherent in that area. Clearly, we are trying to grow our investment banking in the middle market mergers and acquisitions area. However, beyond that in the late 90’s early 2000’s, there were a number of great ideas and early stage companies that were spinning out as a result of the internet. We had a lot of good skills that we could bring to the table, including co-founding our own angel fund, to create an access to capital that didn’t exist here in Maryland.
Mike: That has gone well hasn’t it?
Rick: It has, we have been fortunate; we have invested in 11 companies and had 4 successful exits.
Mike: That would be a pretty good batting average if you could get at least six out of the 11.
Rick: It’s been great with two that have exceeded expectations. Neat technologies and neat ideas; some in the medical area, some in the IT area, and a litany in the software area. That has helped hone our skills, because now we are not only working with companies that we have tried to raise capital for but we now have put our own money into deals. We have structured the deals, helped find partners, completed the next round of financing, seen down rounds, up rounds, and so we are more than just a broker. We have done the work and we’ve invested our money, time, and effort.
Mike: I heard an old expression the other day, “it’s what I learned after I knew it all that counts.” Well 10 years have gone by since you started Evergreen Advisors, what have you learned after you knew it all?
Rick: What have I learned about this industry is that it is constantly evolving in terms of whom you know, what you know, what is applicable, and what is not. It’s an art not a science and that art changes frequently. You have to be conscious of it, you have to understand how it impacts the clients, and you have to be the one coming to the table with solutions. We have dozens of cases where we were able to come up with creative solutions to bring deals to a successful close. Whether it’s financing opportunities looking for a buyer, or trying to make an acquisition, it takes one part finance, one part psychology, and one part creativity to be able to pull transactions together. If you are missing one of those components, you will probably have a less likelihood of success.
Mike: For you personally what aspects of the business gets you the most excited?
Rick: I love working with owners and their businesses because you get to work with something that they are passionate about – their dreams, their anxieties, and the things that keep them up at night. You get to help them at some stage in their company where you can hopefully check that box for them. Everybody who owns their own business has issues. You look at companies and you think Google came out of nowhere or Facebook came out of nowhere, or Dell, yet they all have had many ups and downs that no one gets to know unless someone does the autobiography. When you work closely with business owners, you see the ups and downs that they go through over time. To be able to help them anywhere along that life cycle and obviously, ultimately to a successful sale of the company, where they can put the liquidity in their pocket they are entitled to, that’s a fun process.
Mike: Evergreen’s slogan is “Realize Your Destiny”. What does that mean to you?
Rick: Well I think every owner for the most part has a passion that they bring to the table. Some product or service that they hope to be able to create value from whether it is from a personal or business standpoint. The ideal is when you have the right people around you as you go through that process to help to mitigate the downside and maximize the upside. When an owner comes to a point where they are able to realize and maximize what they are entitled to, based on what they have created over all these years- that is realizing their destiny.
Mike: In the 10 years you have seen different types of competitors, local, large, small, some very focused in mergers and acquisitions, some a little broader, what has been the differentiator for Evergreen Advisors?
Rick: I think we are very creative and capable of finding solutions that others don’t find. I think it tends to be a business where people try to take and get there quicker, better, and faster. If it is harder, they tend to let it go by the wayside. For us when we take on a project, we are going to take it on to the end. Best effort, creativity, and integrity are the three areas that we are as good as or better than any firm. Certainly not because we are better capitalized or we came off of Wall Street or our Outlook data base is 10 times bigger than someone else’s, it’s because we have challenged ourselves. We have great people who work hard for the client.
Mike: You have touched on a couple key points, best effort, creativity, integrity. Talk about the culture of Evergreen Advisors.
Rick: I have worked hard to make it a relationship business not a solely transaction focused business. So it’s not always about the fee, the fee is a result of a lot of good work and relationship building and seeing things to the end. Some projects take three years through no fault of the client or through no fault of our own. In the last three years because of the economic debacle the country has faced, it would have been easier to throw in the towel. We closed a transaction like that this past fall, it was not what the owner wanted, but it was a result that helped him accomplish what he wanted to accomplish. He was greatly impacted by the change in the economy in his business, but we got it done and it is a relationship we will have for the rest of our lives.
Mike: What is your near term outlook relative to Evergreen’s prospects and is the economy helping?
Rick: I think the economy is improving. People are starting to make decisions and investing money into opportunities, ideas, and acquisitions. I think they are still cautious in what they do and I think we haven’t gotten back to mid 2000’s by any stretch of the imagination, but I think that bodes well for Evergreen. We are clearly in a good position to take advantage of the improvement. We have invested very heavily in the last two or three years in our Board of Advisors, in people, and in marketing. We are coming off our best year ever and off to a very good start for 2011, no reason it should not continue.
Mike: 2021, describe Evergreen 10 years from now.
Rick: We will have expanded geographically throughout the Mid-Atlantic and emulated the same qualities of integrity, creativity, and determination. We are not going to be the biggest firm out there but we are going to work to put out the best quality work. I can also see us potentially putting another fund together. Maybe by then since its ten years out, two more funds. We will continue to have a meaningful impact in the companies that we run across to help them realize their destiny.