Brian Adams (00:00):
For me, the epiphany was, I actually started listening to what my logical investor days wanted. I started giving them what they wanted, which was capital preservation in congener ration yields, and a lot of tax benefits. I mean, it’s pretty simplistic, but honestly, that’s what they want. And I can give you my pitch in two sentences. Once I figured out that part of it, the capital raising went relatively smoothly and the syndication business, and that model is a terrific model. And I think a really underserved marketplace still to accredited investors. And the mistake we made was we became deal.
Reed Goossens (00:50):
G’day, welcome to investing in the U S a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the U S market join Reed. As he interviews go getters risk takers and the best in the business about their journey towards financial freedom and the sheer joy of creating something from
Reed Goossens (01:09):
Nothing good. I get a letter. Hello, and welcome to another cracking edition of investing in the us podcast from Los Angeles. I’m your host, Rick, Goossens good as always every with us on the show. Now, I’m glad that you’ve all tuned in to learn from my incredible guests and each and every one of them are the cream of the crop here in the United States. When it comes to real estate, investing, business, investing and entrepreneurship, each show, I try and tease out their incredible stories of how they have successfully created the businesses here in the U S how they’ve created financial freedom, massive amounts of cashflow, and ultimately create extraordinary lives for themselves and their families life by design. As I like to say, hopefully these guests will inspire all of my cracking listeners, which are you guys to get off the couch and go and take massive amounts of action.
Reed Goossens (01:56):
If these guys can do it. So can you now, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys, and there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you do like this show, the easiest way to give back is to give us a review on iTunes. And you can follow me on Facebook and Twitter by searching at Reed Goossens. You can find the show, every podcast on iTunes, SoundCloud, Stitcher, and Google play, but you can also find these episodes up on my YouTube channel. So head over to Reed goossens.com, click on the video link, and it’ll take you to the video recordings of these podcasts, where you can see my ugly mug, four faces of my guests each and every week. All right, enough of me let’s get cracking and into today’s show.
Reed Goossens (02:43):
Turn the stove, the pleasure of speaking with Brian Adams, Brian president, and founder of Excelsior capital, where he spearheads the investor relations and capital markets arm of the firm. He has over 10 years experience in real estate, private equity, and has advanced knowledge and best practices for strategic real estate investing prior to forming Excelsior capital Brian co-founded primer properties and institutional real estate equity sponsor. I’m really pumped and excited to have him on the show today to share his incredible knowledge with us, but nothing to mean. Let’s get him out of here. Can I, Brian, welcome to the show.
Brian Adams (03:15):
Hey, thank you for having me. You doing okay,
Reed Goossens (03:18):
Mate? Where are you dialing in from you? You, you, uh, given it’s COVID I see that you’re working from home office. Yeah,
Brian Adams (03:23):
I am. Yeah, I’ve been Nashville, Tennessee, so I love it. Love it.
Reed Goossens (03:28):
Bye. Well, look, before we dive into the nuts and bolts of what you do, um, I kick off the show with every guest and, uh, rewind the clock and tell me how you made your first ever dollar as a
Brian Adams (03:36):
Kid. Sure. Yeah. So I’m from New York, originally from upstate New York out of the country, kind of close to Canada. And my dad is a grumpy old attorney. That’s still grinding. And, um, when we got into high school and my brother and I, um, every summer we would work heavy road construction. Uh, he had a client that owned a, a business up there. And so that was my first real job, um, and was a good life lesson in, uh, how difficult manual labor is. And those guys, um, continue to play a part of my life in terms of always trying to improve my educational, uh, base because, uh, it’s a very difficult way to make a letter.
Reed Goossens (04:17):
It’s funny you say that I spent a summer first year in uni, I was doing civil engineering and a prerequisite in Australia was that you had to do, you know, your summer jobs had to be internships. And I worked for a company called roadtec in Australia, which was the government arm of building roads. And I remember being 18 years of age and on a job in this hot summer, you had to wear long sleeve shirts because as you know, very skin cancer prone and just, you know, I remember pouring diesel on the concrete forms. So the concrete wouldn’t stick to the, it was the first real like, oh, why do you put diesel on concrete forms? So it doesn’t stick, or why do you put a little bit of a, uh, dishwashing liquid in the concrete? So it has more viscosity, like all these little things, you learn being a civil engineer, you to really learn it in the, in the costume makes you learn it grinding. And I just, the boys are worked with, it was a long slogs of days. And to your point that the education piece is, uh, it, it really drives home to like do well at university. So you don’t have to ever have to, you know, I was working with guys 60 years of age and it’s like, that’s, I’ve been doing there. Hi life.
Brian Adams (05:18):
Yeah. Brutal work and tough on the tough on the body. These guys would just crush it all summer and then try to kind of put together odd jobs in the winter and make enough money in the summer that they could live and hard, hard living people too. Um, so that was the first book I ever made. That’s awesome.
Reed Goossens (05:36):
That’s awesome. So now walk me through the journey, right? The, the, the, the entrepreneurial journey through, through college and afterwards, before breaking out on your own and, and starting Excelsior.
Brian Adams (05:47):
Yeah. So, uh, like I said, my father’s an attorney in upstate New York grew up out in the country. I went to an all boys military school for middle school and high school. And then I went to a small liberal arts college in Connecticut where I played the cross. Um, and I met my wife in college. So we were up in Connecticut together. She’s from Nashville. Originally. We did the Northeast thing for a little bit. I went to law school in Boston and then moved to Nashville about 15 years ago. Uh, I practiced law for a couple of years. My wife’s family has a single family office based here in Tennessee that has exposure and has invested with, uh, sponsors and GPS in the private equity real estate space over the last 25, 30 years. And so I just had enormous, um, luck and fortune to marry into a family that had these types of connections and resources.
Brian Adams (06:38):
And that’s how I got into the business really through the LP side of things, um, connected with a business partner. Who’s another New York guy that married a national girl 10 years ago. We started our company and we’ll probably get into this. Uh, we started syndicating capital to individuals and families. We grew really fast, raised quite a bit of money, which I know is relative in our business, but call it 60 $65 million of equity, probably in three or four years, really screwed up the business for a whole host of reasons that we can talk about later. Um, I had to reformat everything, take it down to the screws and build it back up, um, pet my teeth kicked in by most of my investors for about a year, um, and have relaunched probably in the last two years, continued to syndicate, but not make the same mistakes that I made the first time around. Interesting
Reed Goossens (07:29):
That you’ve had a bit of a launching pad with your wife, because a lot of people get into this business, particularly syndication through the retail investors, the 50, 60, $70,000 investors, but to come in sort of at a, at a single family office level. Um, it’s pretty awesome. So how was that in terms of, did that allow you to learn from the grass up or did you have that sort of, it was so good at the beginning that you didn’t know what you didn’t know that tends why you ended up having some stumbling blocks.
Brian Adams (07:58):
Yeah. Let’s just kind of be real here for a minute. I not only am I a decent looking white guy with a great education, so I just have enormous amounts of privilege where I can almost get any meeting that I want marrying into my wife’s family gave me a huge advantage over the marketplace. So, you know, it has positives and negatives, frankly. Uh, my father-in-law is, um, a level one trauma surgeon who took the company public in the nineties. He’s had enormous success. It’s very difficult to be his son-in-law in Nashville because I’ve always going to be Dr. Morris’s son in law, as opposed to, by one person to a lot of people that being said, I could get any meeting I wanted, for the most part I could pitch almost anybody that I wanted. And so that just gave me an unfair advantage. I would say that coming from the family office background, um, definitely gave me a different perspective on capital raising and how I wanted to structure the company and informed the business model from day one. It took some time to kind of work through that, but definitely a different approach from say, a leasing broker or capital markets guy who got into the business. I really came about it from the LP side as opposed to the GP side. So I think it does give me a little bit of different perspective on things
Reed Goossens (09:17):
A hundred percent. And then you’ve got the other element, which is this massive syndication, you know, through friends and family and, you know, very small checks. I remember raising my first hundred thousand dollars from five different people with 28, with $20,000. And that it was just a very raw experience trying to pitch to someone who maybe doesn’t have a ton of money, right? So I think there’s an element of who you come from money in, you know, parting ways with 50 or a hundred thousand dollars is a lot easier than coming, trying to pitch someone who may not know a lot about real estate, but they want to get involved. And they’re trusting you with a, with a lot, not a large sum, but quite a large portion of their wealth and their there’s two sort of sides of that LPs that you coin you can raise from. And, uh, did you ever have any experience on that? This was a lower end retail side with, with the, the not as well to do LP and, and, and investors.
Brian Adams (10:04):
Sure. So the hardest thing my father only ever did, but I think ultimately probably the best thing he ever did was he wrote a check for a hundred thousand dollars when I wanted to start the company, no questions asked and he said, listen, you can tell everybody you talk to that. I’ve been an investor with you personally, not just a family, Corpus like him as a person, which is different, and I’m going to make two introductions for you other than that, you’re on your own. And I was kind of hoping for more frankly, more money and more introductions and just more help, but it forced me to go through and grind out coffee meetings, lunches, getting in the car, getting on a plane, asking for that warm introduction, begging for that referral, closing that first investor to a 5,000, $10,000 checks doing it the hard way having, you know, learning about sales doing, I tried to do 10 calls a day, um, and five meetings a day, um, every day when I first got into the business.
Brian Adams (11:08):
And so I’ve built up this network of people and I got all nos, right? And we just, everyone, no, no, no, no, no. And I would meet with anybody about anything. And all I kept doing was taking these meetings to try to be helpful to these people, making introductions for them, trying to build up that karma. And it was very difficult, but I think ultimately made me a better salesperson and understand marketing for sure. But I’ve also built up this just huge network and resources of karma that continues to play out to this day where people think, okay, well, I had coffee with this guy five years ago. He made four introductions for me. I’m going to keep him in mind and I still get warm intros out of those people, that property and casualty insurance brokers, the life insurance sales guys, there’s a lot that you can learn from those people.
Brian Adams (11:58):
Um, so definitely have perspective on, on the retail investor. And I frankly still mostly work with individuals. So we don’t have any institutional LPs and I don’t want any, um, and that’s where I spend most of my time still. I think they’re terrific investors, but you’ve just got to understand the right way to approach them. And there’s 12.4 million accreditor investor households in America and individuals households. So it’s really just a matter of, okay, well you need to go out there and get the nos. Are you going to get some yeses? But this is a huge population and you just have to have the right mindset. Well, you bring
Reed Goossens (12:31):
Up two really good points that I think people don’t want to skip over here. And that’s referrals, referrals, referrals, referrals, more than likely. And I’ve been in this, in the exact same boat where you start with your mobile phone, the people in your mobile phone, your friends, your family, your cousins, your best mate from school that probably doesn’t have a lot of money. You know, let’s be honest when you’re first starting out and it’s through educating people about what you do, right. There’s that first step. And I think what I’m hearing from you is that you would known as a son in law to, to a very well to do guy. And you had to get rid of that stigma, right? Like myself. I was a civil engineer and trying to get Mike a wine real estate is like on aren’t you a civil engineer?
Reed Goossens (13:08):
And that’s sort of telling people 7, 8, 10 times before someone says, oh, like, I know what you do and oh, okay. I actually don’t have any money, but I know some people who do and that referral is just the such the critical thing and, and the Shia massive, which you have to go out and apply yourself. I still remember the, that first a hundred thousand dollars. I had 50 people in my email database and I was like, oh, I’m going to easy, right. At half a million here. And just the, the stark reality and the cold shower of like out of those 50 people, only four people invested crazy. And there’s nothing better than having you can, you can pitch you a great pitch deck and you know, good marketing stuff. And they’ll come to me when you got a real deal. And the reality is when you have a real deal, everything, Scott is like cockroaches, right. And it’s, it’s, it is real interesting type of like having to just keep going, keep grinding and then grow that database. So let’s now pivot a little bit into the lessons, like what happened coming from that, that sort of single family office, that a hundred thousand dollars that your father-in-law gave you, then you could use his name. What did you learn? What went wrong in that first iteration?
Brian Adams (14:14):
Yeah. So I’ve been doing a lot of these interviews and, and it’s been terrific. I’ve had a lot of aspiring sponsors reach out and they kind of asked the same question like, well, how’d you do it, the right answers don’t make these mistakes. But I think to give some people, some actionable advice, if you want to start in this business, you need to write down a hundred people that will take your meeting. We all have a hundred people that will take a meeting. If you’ve been, if you’re, you know, in your twenties and your professional, there’s a hundred people in your network, take 10 people that will never give you money like that jerk uncle that doesn’t like real estate or your attorney that is super risk, uh, resistant. And it’s just never going to invest, take those 10 people, take them to lunch and pitch them and ask them for really, really tough feedback and criticism.
Brian Adams (15:09):
Do that 10 times, get the pitch a little bit tighter, then take the next 10 people who probably aren’t going to give you money and try it on them, but do not go after your best prospects out of the gate. And I think that’s a huge mistake that people make. They say, oh, I’ve got my cousin. He’s a tech entrepreneur. He had a liquidity event. I’m gonna go ask him, don’t do that because you’re not ready. And this guy probably knows a lot about private deals. He’s going to crush. You wait until you’ve got your pitch down a little bit better. And hopefully you’ve got a business partner and you can kind of Batman and Robin and tandem up. Then it gets better a pitch. Keep those guys in the cooler until you’re ready and go after him. You know, after you’ve done this a couple hundred times, because I think that’s kind of step one for me personally, the biggest kind of mental shift in how I was able to scale the business was, and I see this a lot.
Brian Adams (16:05):
You’ve got the shiny, wonderful object that you think is just terrific. You’ve got this deal and this idea, and you’re very excited about it. If you can’t raise money in this business, that idea is art. And art’s great. It’s not a business instead of going out there and just cramming down the idea of the product that you have, talk to your logical investor base. Like those hundred people, there’s 200 people that will take the pitch and spend some time asking them what they want. Hey, have you invested in real estate? You have cool. Have you done private deals? You have great. What do you like about them? What do you hate about them? What’s the experience been like? You’ll start to hear the same narratives over and over again. You’ll see the same trends, figure out what they want, figure out what they don’t want, understand the experience that they expect, being an investor and just fashion the product to meet those pain points. Because I think that big mistake I see with people pitching is they do the resonate. I’m really smart. I went to Harvard, I went to Wharton and I’ve got this cool idea. Nobody cares how smart you are. Talk to me about solving my problems. Talk to me and listen to me about what my problems are. And if you come at me right out the gate with ways to solve the pain points I have in my problems, the pitch will go a lot smoother.
Reed Goossens (17:40):
I talk a little bit about, um, uh, I’ve come up with this acronym called the six P rule and, and these different PS of raising capital and I’ve fashioned this and one of the pieces is pitching and talking about, you know, uh, an effective pitch, right? And an effective pitch, think of, you know, Martin Luther king, right? He didn’t get on the Washington monument by pitching at once. It was thousands and thousands of pitches. So what advice when you’re trying to go into a meeting, because you’ve got the social pitch, right? Where you meet someone at a social setting and then they like what you do, but how do you make sure that you’re getting the emotive response they’ve want to engage with you rather than being that sort of an order say. But that I went to Harvard, I went to Wharton, I went to blah, blah, blah, and bombarding with too much crap that doesn’t, you know, to your point, it’s not solving the problem. It just you’re boosting your own ego at the same time.
Brian Adams (18:30):
Yeah. And that’s the key, right? It’s, sublimating your ego. The pitch is not about you. It’s not even about your product. You need to come at pitching and sales from an empathetic standpoint. So putting yourselves, literally in the shoes of the person, across the table that you’re selling to and understanding what they want. And I think once you shift that mentally and being just as empathetic as you can understanding as much about that person before the meeting and now with social media and, um, you know, the internet, you can get a pretty good sense of who that person is and what their life has been like. And probably extrapolate from that what the pain points are for them. If you go into that meeting with an empathetic mindset and you just give, give everything away, like you don’t have a secret sauce, just give it all away. I think, I mean, you’re still going to get a lot of nos, but I promise you the first 10 minutes of the meeting, if you just go through the resume, people did just blah, blah, blah, blah, blah, blah, blah, blah, blah, blah. It’s it’s the teacher from peanuts. Like, no, they’re just tuning out because they’ve heard it before. So if you go in there with an inquisitive mindset and an empathetic mindset, you’ll have a much better conversation.
Reed Goossens (19:50):
I don’t want to be rude in this way that I’m going to use the analogy. But you know, when you’re, when you’re trying to attract a partner or girlfriend or boyfriend or whatever that might be, you know, I was always taught as a young kid duck, talk about yourself, ask, ask questions and, and, and being, as you said, inquisitive, because being inquisitive means that it’s not your agenda, or it’s not at least perceived to be your agenda. When you’re sitting down to pitch someone it’s, you’re, you’re genuinely asking, coming from a place of vulnerability and being genuine in the, in your ask of different questions, how’s your family. How’s, COVID impacting how’s, you know, how’s your daughter going, uh, you know, graduating from university or whatever it might be that brings that emotional side into it, that they can start letting down that God, and you can be vulnerable with you. And that’s where you can get into the real nuts and bolts of what their problem is in asking that question, what is the problem I can help solve through investment solution of real estate or stocks or whatever it might be. Would you agree with that
Brian Adams (20:46):
A hundred percent? And I think, you know, that’s exactly the right approach to go to the meeting with is, you know, if you’re spending the most of the meeting, talking yourself, it’s a bad pitch, a great pitches when you don’t talk that much. And the other person is asking questions and telling their own story to just start out, getting some easy yeses. Are you a human being? Yes. Like, are you interested in making more money? Yes. I mean, those are bad examples, but gets an easy yeses, get the conversation flow in the right way, um, and skip the resume. And I just, you know, I think we can do better than that, frankly. Uh, I
Reed Goossens (21:27):
Want to just jump in there. I come from a country where so many people put our emphasis on what high school you went to. Oh, what private school did you go to? Oh, you know, you all went to so-and-so, boy’s calling you like, who cares. You know, like here in the states, there’s a little bit more on the college side. I went to Wharton, I went to the USC, I went to UCLA or whatever it might be. And I, I tend to agree when you’re talking to an everyday person, you know, an average person that it’s sort of who cares at the end of the day. They can look that up themselves. Um, I want to pivot a little bit now into some of the other mistakes that you made and that you learned in the beginning, you know, obviously there’s a pitching and incoming coming from vulnerability, but what else ultimately was your undoing and it, maybe that was it. But was there anything else that you could, you could look back and say, yeah. Okay. Ego and pitching was a real problem, but there was also this other thing that, that also had to solve
Brian Adams (22:13):
For. Yeah. I mean, I made a thousand mistakes and I continued to make mistakes, but there’s a couple of big ones for me. The epiphany was, I actually started listening to what my logical investor base wanted. I started giving them what they wanted, which was capital preservation, income, generation yield, and a lot of tax benefits. I mean, it’s pretty simplistic, but honestly that’s what they want. And I can give you my pitch in two sentences. Once I figured out that part of it, the capital raising went relatively smoothly and the syndication business, and that model is a terrific model. And I think a really underserved marketplace still for accredited investors. And the mistake we made was we became deal guys. We just, because we could raise on deals, we did them to closing deals, acquiring more property and constantly on the hunt. And we didn’t realize, and this is something I talked to aspiring entrepreneurs about a lot when you’re, when you’re talking about addressing issues in the pitch on the front for there, the real estate deals, and they’ve got to work, but then there’s this whole other part of the process that is you’re taking a risk as a small business owner, because all of these things like investor relations, reporting, communication, HR, even asset management to sub level tax accounting, they have nothing to do with the deals themselves in terms of the underlying real estate aspect of it.
Brian Adams (23:49):
So you’ve got two risks, you’ve got the real estate risk, and then you’ve got the small business startup risk. And I completely under appreciated the amount of time, money, and resources that would go into having a small business. And so I either third-party at it or I didn’t pay enough attention or time on it. And it ended up crushing me. And when you don’t give investors a hundred percent transparency and terrific reporting, they’re going to assume the worst, even if the deals are working because how are they supposed to know they’re not living it day to day. And so I got my teeth kicked in for about a year and I had to go to 254 investors and explain to them, why are my reporting was garbage? Why my investor relationship was pathetic, reassure them that the deals were still working. And I mean, it was terrible. And it’s something that you can easily avoid if you just make sure that you’re doing the right thing from an infrastructure perspective on your small business,
Reed Goossens (24:49):
With that being said, what types of things weren’t you doing that you’re now doing today in terms of communication to the investors, to keep them feeling like there’s a pulse there and up to date with everything that’s going on. Yeah.
Brian Adams (25:02):
I just crushed them with information, uh, and just absolute massive transparency. Uh, so we do some, I mean, these are things that I think a lot of people are aware of, but you know, I was oblivious to, we have Juniper square as our investor portal, right? So 24, 7, 365 people can go on and check the account. They can look at historical distributions, they can upload the [inaudible] in a secure fashion. And it’s terrific. We send out monthly P and L statements on the asset level. Every month we send out quarterly distributions via ACH, as opposed to live check two weeks. After the end of the quarter, every quarter, we send out really, really, really, really, really good quarterly updates on both the asset and the market level. And we spend a ton of time on it. So things like that, it will actually save you a lot more time because you just won’t get the phone calls.
Brian Adams (25:56):
As long as you’re doing a good job of communicating and investor relations. From that perspective, it will ultimately save you a lot of time and money. I think, frankly, to not have to go back, do the conference calls, go to that. Person’s office explained everything that’s happening because people can, for the most part, pioneer with individuals and families, they can accept when deals don’t go, right? I mean, it’s a, it’s a big boy game. There’s a reason you need to be accredited investor. You’re taking risks there, but there’s no reason that everything else involved in small business side, can’t be institutional level at this point, considering the amount of tech products that are out there that are frankly, pretty affordable.
Reed Goossens (26:37):
What personnel did you bring in house in order to help you? How and what I’m hearing, not necessarily all it’s more business, but it’s customer service, right? That’s what it is. And it’s making sure you’re having the best outward facing customer service. When someone comes into your sphere, that from soup to nuts, from signing up to also from getting to know you, to understanding the deal, to signing up through, you know, investing in actual deal, looking at your reporting process. You’re right. See, a lot of it can be quote unquote outsource, but who did you have to bring in house to make sure that you weren’t missing any of those steps along the way? And people felt like they were being treated with cotton Wallen and, and you know,
Brian Adams (27:15):
Gloves. Yeah. And this is where if you listen to a lot of, um, SAS B2B podcast, or if you follow some of these folks on LinkedIn, they talk about it as the customer’s journey. And I, and I think that’s the right analogy for this is paint me a picture of what it looks like to be your investor from when I have coffee with you until five years into the deal. And if you can’t as a sponsor operator, tell me exactly what that journey looks like. Every step of the way you’re making a mistake because you should be able to. And one of the biggest issues I had was I didn’t have an internal controller. And so the first thing I did was I hired a CPA with a public accounting tax background who actually could speak to people like a human being. And this made all the difference in the world.
Brian Adams (28:04):
I brought a marketing person in house. So we create tons of content. I try to be considered a thought leader. I crushed my investors that I network with educational, um, thought pieces, best practices, things that have nothing to do with real estate directly, right? Because I want, when they have a problem in their financial life, I want to be the first phone call. Brian. I want to sell my business. I don’t trust these investment bankers who you got. I need a new PNC person. I have a 10 31 problem, et cetera, et cetera. I want them to call me because it’s not just about the deals and the real estate. It’s about that relationship. And I think that going back to our kind of empathy conversation, that is the key to success, because what we talked about earlier is exactly right, getting a current investor to re-up with you and open up their Rolodex of contacts so much easier than going out and bringing in a new relationship. It just takes time. 100 years should be, it should take time. So the more that you can focus on your current LP base and just smother them with love, content, everything they want and understand exactly the issues they’re having, the better your business will be. And the better you’ll grow.
Reed Goossens (29:23):
I took a lot about on this show and actually interviewed the author of a book called key person of influence Dan Priestley. And he talks a lot about being that thought leader. And in real estate specifically, you know, people invest in you first and foremost, Reed Goossens or Brian Adams, you know, whoever it might be because they trust and respect you the deals actually second. Yeah, it’s the cherry on top. It’s the icing on the cake, whatever you want analogy, you want to talk about it, but, but having that trust and transparency where you’re coming from a point of education and teaching people about what you do and the, and back to the steps in which this is what you’re going to expect, these are the types of reports you’re going to get from us. And that’s what I learned when I, when I tried to raise that first a hundred thousand dollars, what I had the cold shower of, and probably similar to yourself, Brian, was that I wasn’t doing a good enough job on the education side.
Reed Goossens (30:10):
People didn’t have not heard from me enough to say, I trust him. I trust him to do right with my money because I haven’t been both coming. And that was really the inward facing self-reflection that I needed to say, okay, I need to go the do, be better at marketing, double down on the podcast, w whatever it might be, but similar to yourself, you also had that epiphany of like, okay, I need to be a thought leader, a key person of influence in my sphere, right? Because people are going to trust you. And through that, trust comes more referrals. And that’s having that warm lead, who then introduces to more invest is it’s so much easier to cultivate than trying to go out and go do it cold. So I, 100% agree with you on that. What are your thoughts on that key person of influence sort of status and being that thought leader, and how important has it been to you?
Brian Adams (30:54):
Yeah, I think it’s huge. And COVID has really struck home to me, all of the tools and network available to me to essentially be a 24 7 access point for these folks, right. I mean, through LinkedIn, through podcasts, through webinars, through blog pieces, I’m constantly there for them, even though I might be playing with my kid or sleeping for parts of the day, we have all these terrific tools around us where we can be accessed 24 7. And, and I think your author is exactly right.
Reed Goossens (31:29):
Little assets is what it is, right. You’re magnifying your story, your pitch, your processes, all that stuff. It using podcasting webinars, blogs, you know, videos. So I, 100% agree. I want to you, you said something earlier, which was kind of interesting that the love for those small LPs versus the institutional, you obviously come from institutional background with the family office, with raising money from public markets. Do you wanna talk to me a little bit about that and why is it that? And I hear that a lot, and I built my business on the same thing, 50,000 other checks at a time. And we’re actually now in a, going down the path of the first time I’ve ever a private equity firm. And we w we, cause we never done it before we think, oh, this is going to be easy than trying to herd 250 cats into a boat and get it going, give me your perspective.
Brian Adams (32:15):
Yeah. And I don’t want to write on your parade and I have strong feelings about this. Um, I think a lot of sponsors and syndicators and Jen, both partners think that private equity is the solution to their problems. The golden key that when they reach it, they can unlock the castle doors. And everything’s good. And it’s the right fit for certain people than in what I’m going to say is based on my personal experiences, you’ve got to understand that doing these private equity deals, these 95 5 deals, these 90 10 deals, whatever it is, it is a no way that private equity groups, interests to ever see you be successful outside of your relationship with them, because then your competition and these people are smart. They have tons of capital behind them and they work very hard. Why on earth would they let a talented sponsor or GP ever have the ability to go out and raise their own fund of discretionary capital and talk to their LPs?
Brian Adams (33:22):
They wouldn’t. That’s why over 85% of all the institutional LP capital raised over the last cycle has gone to five firms. So the entire structure is set up to never allow you to actually gain enough capital personally, to go out and raise your own fund because a 5% commit or a 10% commit for $250 million blind pool capital fund. That’s big boy stuff that takes a lot of cash. So the structured legally and economically is to have you do all the heavy lifting and the work with the carrot of your carried interest on the back end. But if you want to stay in that private equity game, you need to continuously roll in your carried interests to stay in that game. As the carousel, it’s very difficult to get out of once you get into it. And, and
Reed Goossens (34:12):
It’s interesting, and maybe we need to define private equity for, you know, for me, it’s someone who can write, who probably syndicates their own money, right. Per deal. But they have, uh, a different Rolodex of investors. Then you’ve got the, you know, the insurance companies and the really big PE. So how do you differentiate between the two? Because if for my, if I go to someone who’s got, who can write a $10 million check, I’m like, that’s a private equity fund because I don’t have to go raise $10 million. Maybe in your mind, that’s slightly different. Maybe you can give your perspective on that to the listener.
Brian Adams (34:43):
Yeah. And that’s where I think I get the question a lot of, how do I pitch family offices? How do I do this? I think about it from a perspective of are the LPs and the investors behind that relationship. Are they taxable entities? If they’re not taxable entities, they’re legit institutional. If they’re taxable entities, they just have a lot more zeros behind their names. And I think fundamentally I want to work with individuals and families because they appreciate what I do. And they appreciate that they’re making an allocation to me for a specific niche perspective. I’ve just had negative experiences on the other side where people want to come in and run my business. And that’s what, when somebody wants to coach GP with you, they’re getting in bed with you and that’s running your, I want investors that want to support my business and want to be partners with me, but will let me run the business the way that I think it should be wrong because these Koji P type setups and these non bill investors, they don’t, the interests are not always aligned in my opinion. And we can have a whole different conversation about this, but, um, that’s been my experience
Reed Goossens (35:58):
For those people who might’ve missed that the taxable entities versus the non-taxable entities. And it goes back to the need and the solving of the problem in the beginning when you pitch is because one of the reasons you invest in real estate is a hard asset and has so many tax benefits. Right. And that is so I liked that. I think that’s, that’s good. That’s good. That’s it. So even if you have someone who can write a 10 or $20 million check, and they’ve got taxable entities behind them, they’re not there maybe necessarily quote unquote private equity, but you might, you know, there might be just a big family office or have a group of family offices that they can go pull from.
Brian Adams (36:31):
Yeah. A hundred percent. So if you’re, and I’m very transparent about this LPs that work with me should be concerned about returns on a net of fees after tax basis. Because once you start looking at things on a gross basis, it’s just a different mindset and the Blackstones of the world, et cetera. The reason they focus on gross IRR is because there are no tax implications for their LPs. And the minute they buy something, they hate it because they want to get their carried interest interested in me, my LPs, if the deal’s working and they’re getting quarterly coupons, and I think the deal is underlying, the asset is still going to be a good play for the next five or 10 years. I’ll hold onto it and keep getting the cashflow. But these other groups, it’s all about that carried interest is all about that gross IRR. And, you know, you’re giving away major decision making rights to them. So you might think it’s your deal, but it isn’t. Yeah.
Reed Goossens (37:34):
Oh, a hundred percent agree with all of that. Um, as we come to wrapping up the show here, a couple of last questions for you is one is what made you pieces of advice you had to respiring syndicators capital raises. What’s the one piece of advice you can give to them, listening to the show today. And the second question will be where’s the future of what you’re doing with Excelsior and yeah.
Brian Adams (37:55):
Yeah. So one piece of actual advice I would give folks is understand and embrace the fact that you are the chief sales officer, like when I get pitched a deal and not even real estate, but an entrepreneur and say, okay, well, if you raised $10 million where you can do with it, I’m going to hire a sales team and wrong. You are the sales team because in this business, it’s so capital intensive, that if there’s not somebody in leadership who is a hundred percent focused on building those new relationships and maintain the ones that you have, you will fail. This is not the business for you. And that’s okay. You can go do different things, but this is, this is what we do. And so I think just having that as you, I like that term cold shower. If you, if you have that on this, on the start, I think you’ll be able to manage your emotions and expectations a lot better in terms of the future of the firm.
Brian Adams (38:55):
I’ve been saying for years, and we’re starting to see it play out that the democratization of access to alternatives is real and giving a credited investors access to what for a long time was the purview of only a very small percent of the world to these interesting deals, I think is fundamentally key to your own financial literacy moving forward. Because even if you don’t believe in it now your 401k has private equity in it. They just diluted the accredited investor status. Like private equity is coming for all of us. Even if you don’t want to participate in my deals, you at least need to spend some time educating yourself about what private equity is because the stock market is getting more volatile. There’s fewer publicly traded companies, companies taking longer to go public if they’re staying private indefinitely. And so I think for us at Excelsior, we’re embracing that. And we’re trying to just be there as a resource for people as they try to understand a little bit more about what this whole big complex oftentimes. So pig world of private equity is,
Reed Goossens (40:04):
Well, it might, well, look, I want to thank you for jumping on the show. At the end of every show, we’d like to dive into the top five investing tips, ready to get into it. Let’s do it, but what’s the daily habit you practice to keep on track towards your goals,
Brian Adams (40:15):
Sleep again, as much sleep as I possibly can. I was pre COVID. I was one of those guys grinding it, four, o’clock getting up gym travel, but now I’ve just become obsessed with getting much more sleep and my energy and my efficiency and my productivity has gone through the roof.
Reed Goossens (40:33):
Yeah. And a lot of people sacrifice, sleep thinking they’re going to be more efficient, more productive, but with more productivity comes, uh, attacks on the body that you just can’t ever buy back. Right. And creativity, correct. You, your mind’s so filled with stuff that you can’t have time to think about. Well, what’s the next step and where’s the ship going to love it. Question number two is what is the most influential tool in your business today? And when I say tool, it could be a physical tool, like a journal or a phone, or it could be a piece of software that you use on a daily basis that you can’t run your business without.
Brian Adams (41:06):
Yeah. I say Juniper square. It’s just been a game changer for us. Um, and then LinkedIn, honestly, uh, and part of it was because it was, I was forced to, because of COVID I couldn’t leave my house for awhile. Um, but it’s an incredible platform. And I mean, that’s how you and I connected initially. And it’s 650 million people. Microsoft says they wanted to get to 2.4 billion in the next few years. It’s just a great for other professionals to network and get free advice. That’s what I tell entrepreneurs. I tell investors like you’ve got this unbelievable network at your fingertips and you can just reach out. People probably just give away most of what they think is their secret sauce for free. I will DNA. I’ll tell you anything you want, because I think it just builds Carmen. It always comes back. And so it’s that virtuous
Reed Goossens (41:55):
Cycle. Love it, man. Uh, question number three is who’s been the most influential person in your career to date?
Brian Adams (42:02):
Yeah, my father-in-law for sure. Um, being a level and trauma surgeon running the Lifelight program at Vanderbilt, uh, taking a company public and having three daughters who are all just crushing it, um, a real, he can be intimidating. It was also very inspirational about what you can do. And so, um, he’s taught me everything. I know pretty much about private and public markets.
Reed Goossens (42:28):
Uh, question number four in one sentence. What has been the biggest failure in your career today? I know we’ve talked about a lot of failures, but what’s been the biggest failure. And what did you learn from that failure?
Brian Adams (42:38):
Not scaling the business appropriately
Reed Goossens (42:43):
Brian Adams (42:45):
Investor relations and communication infrastructure.
Reed Goossens (42:47):
Yeah, I think, I think that’s coming quite far to the front, but it’s, uh, it’s going back to what we were saying before about the key person of influence and understanding you are the sale. Like you are the salesperson and they will invest in you first and foremost. Love it, mate. Last question is where can people reach you to continue the conversation they want to be in your sphere? Where do they go?
Brian Adams (43:05):
Yeah, you can go to the website, Excelsior gp.com or I’m very active on LinkedIn, Brian C. Adams, Excelsior, uh, connect with me, drop me a message. I’ll set up a time and talk to you and I’ll try to be as helpful as I can. I think the most novel thing I can do is try to tell you the mistakes that I made so that you don’t step in the same pothole twice.
Reed Goossens (43:24):
I want to thank you for coming on the show today. I just wanna reflect some things that I took away from today’s show. And I think the first and foremost is the vulnerability piece and leaving the ego at the door. When you’re trying to pitch someone is so important to re engaging in them in a way that they don’t care about the resume. I think that the resume thrown out the window, I love what you said about that because it’s people get pitched that all the time and they just get sick of it. So, uh, that’s probably the number one piece of advice I’ve taken away from today’s show. Did I leave anything out?
Brian Adams (43:52):
No, I think this has been a fun conversation. So thank you for having me. Awesome,
Reed Goossens (43:56):
Man. Well, look, I want to thank you again for jumping on the show. Enjoy the rest of your week and we’ll catch up very, very soon. Okay. Sounds good. Thanks for you. Well, they have another cracking episode. Jetpack was an incredible boss from Brian. Please do reach out to him on LinkedIn. He is a wealth of knowledge and is really forthcoming in giving his secrets away. And I think that’s really admirable of him after all the trials and tribulations he’s been through and sort of scars on his knees that he, but he’s been able to get back up on the horse and keep going. I want to thank you all again for taking some time out each day to tune in, to continue to grow your financial IQ, because that’s what we’re all about here on this show. Easiest way to give back to the show is giving it a five star review on a wherever you pump cost. And we’re going to do this all again next week. So remember be bold, be brave and go give life a crack.