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The Wise Exit is an open dialogue with fellow founders and former business owners sharing real stories and offering honest advice around selling their companies to some of the top acquirers in the world.
Beyond the entertaining and educational exit stories, host and M&A Advisor, Todd Sullivan is here to help demystify the Mergers & Acquisitions (M&A) process. For example:
- How much is my business worth?
- What is Net Working Capital?
- When should I get a Quality of Earnings analysis
- Should I hire an Investment Banker, M&A Advisor, or Business Broker?
- When do I talk to my Key Employees about a possible transaction?
We hope you enjoy... and learn a few things along the way!
Peter Bray | E34 | The Cashing Out Mergers & Acquisitions (M&A) Podcast
00:00:01:01 - 00:00:18:23
Peter Bray
It makes sure that whoever is doing the acquiring really understands your business and has demonstrated that before the acquisition. You need people who work from the industry, in the industry, on the board of the companies doing the acquiring not have just learned about industry. This is really key.
00:00:19:22 - 00:00:50:07
Todd Sullivan
Welcome to the Cashing Out podcast, where our fellow founders share real stories and offer honest advice around selling their companies to some of the top acquirers in the world. My name is Todd Sullivan, CEO of Exitwise, where we help business owners create the exits they deserve. On today's episode, I speak with Peter Bray. Peter has held executive roles with some of the largest ad agencies in the world, including Saatchi and Saatchi, where he was CEO of the Brand Shop and WPP, where he was the firm's global head of digital.
00:00:50:22 - 00:01:12:21
Todd Sullivan
But early in his career, Peter was a highly successful agency entrepreneur who sold his first ad agency to a public holding company in Australia in 2010. Now, Peter bet the farm on this exit and tied 100% of his financial outcome to his buyers public stock, which dropped 97% in the first six months because of fraud at the board level.
00:01:13:14 - 00:01:37:03
Todd Sullivan
Although Peter's dream of a life changing financial windfall disappeared seemingly overnight, he was able to leverage his experience and reputation into enormous professional wins. In our conversation, we talk about doing due diligence on your buyer, taking chips off the table when you have a chance, and how putting a win on the board by selling your company can elevate your professional career to new heights.
00:01:37:14 - 00:01:59:14
Todd Sullivan
I hope you enjoy my conversation with Peter Bray. Hello, everyone. I'd like to take a minute to highlight this week, sponsor Darren Mayhew, a top 60 national accounting tax and M&A advisory firm who we frequently recommend to conduct sell side Q of or quality of earnings for our clients. In 2023, there are a lot of things changing in the world of M&A.
00:01:59:21 - 00:02:24:00
Todd Sullivan
Economic headwinds failed banks and big bankruptcies. But with the credibility of a sell side Quality of Earnings from a top firm like Doeren Mayhew, more buyers will look at your deal. Buyer diligence will run faster and your investment banker will be armed with clean financial data to be able to address any buyer questions with well-conceived responses. What this really means is you're more likely to maximize your exit.
00:02:24:11 - 00:02:46:21
Todd Sullivan
Doeren Mayhew is one of Forbes best tax and accounting firms in the United States. Check out their quality of earnings offerings and everything else they can help you with at dawn. That's d-o-e-r-e-n dot com. We'll make sure to put a link in the show notes. Peter, I'm really excited. As you can tell in our previous conversations to have you on our episode.
00:02:47:07 - 00:03:13:14
Todd Sullivan
Your experience is really unique. Your story is unique. Even how we got to know each other is unique, that you've been seeing our content, the exits that we're having. And there was an outreach and we got to hear your story. And this is a story that everybody needs to hear to be a little bit more specific. I think that your exit happening, what is it close to 13 years ago now?
00:03:14:06 - 00:03:17:05
Peter Bray
Is that about 16 years ago? Yeah.
00:03:17:07 - 00:03:41:06
Todd Sullivan
16 years. I'm really excited to hear about how that exit has elevated you into the kind of upper echelon of your industry. In the ad agency world. At the top, firms that then catapults you further to building the company that you're building today, which after our conversation, this is like the company you belong building, running, executing. All of the above.
00:03:41:13 - 00:03:50:15
Todd Sullivan
And as you can tell. All right, like I'm so excited to do this. Mark Cuban actually had this time slot and I bumped him to get you in. So thank you for being here.
00:03:51:10 - 00:03:53:11
Peter Bray
Always happy to bump Mark Cuban from anything.
00:03:55:09 - 00:04:13:01
Todd Sullivan
So, you know, I was debating because your story is so interesting at so many different phases. I was thinking like, hey, do we jump around on timeline? But I think why don't we start kind of from the beginning? How did you get into this world to launching your your first company?
00:04:13:08 - 00:04:46:10
Peter Bray
Sure. There's I mean, there's a good story there as well. So I neither of my parents were commercial professionals, so I was basically in academia world. I was doing a Ph.D. I started college pretty young. I'm Australian originally, obviously not English. I started college pretty young at 16, and I was doing my PhD at 20. Problem was, I was paying my own way and I need to have some kind of income to survive.
00:04:47:08 - 00:05:18:06
Peter Bray
And so I was lecturing part time at a university called Macquarie University in Australia. But you know, that doesn't pay much. And when you're just doing a patch day, you don't get many slots. So it's like I need extra cash. And back then, because of my doctorate research, which was actually in French film theory and psychology, which ended up being useful, I used the thing that very early version of the Internet, a very early version, a thing called Gopher.
00:05:18:19 - 00:05:39:16
Peter Bray
Gopher was something that allowed you to magically look at books that were in other libraries, even overseas. So this is you know, this is you know, we hear about the birth of the Internet being, you know, the three colleges in the U.S. But really, it was a it was also a network that I was using. So I need extra cash.
00:05:40:01 - 00:05:58:21
Peter Bray
And I was looking in the newspaper, as you did at the time, and there was an ad and all it said was, we're looking for people who know how to use the Internet, actually know how to use the Internet. If this is you apply here. And I thought, Woah. This is incredible. Actually, I know what this thing is.
00:05:59:11 - 00:06:23:16
Peter Bray
Again, there were no pictures on the screen. There was nothing was just text on a green screen. So I went to this. I went to this company not knowing a thing. They said Right. Very something that was going to give you a test about the Internet. And I'm on. Okay. And it was quite a technical test. There were 25 questions and I failed dismally.
00:06:23:16 - 00:06:27:15
Peter Bray
I got seven out of 25. I'll never forget I got seven out of 25.
00:06:27:23 - 00:06:29:08
Todd Sullivan
Seven more than I would have gotten.
00:06:29:11 - 00:07:00:10
Peter Bray
Yeah, seven. And I was like, What is eight TPS? What does that mean? I have no idea. I course, I know it stands for Hypertext Transfer Protocol, but back then I didn't know. So I failed this test. But they called me back and said, Look, Peter, you performed extremely poorly. But the interesting thing about you is you can clearly talk about quite complex ideas in plain speak in simple language.
00:07:00:11 - 00:07:25:14
Peter Bray
We like that. And they said, we'd like you to be part of the team. So I started off in customer service, which was just a few of us, but basically went from gosh, 30 people to about 450 in one year. Wow. And that company became very famous in Australia. It was Australia's equivalent to AOL. It was called Aussie Mail.
00:07:25:14 - 00:07:51:21
Peter Bray
I used a email so more than one in every two Australians had an Aussie mail email address. But that's kind of how I fell into advertising. And what was interesting is that my background that was I thought would never help me with a job, which was about psychology and essentially linguistics and that being the perfect thing for advertising because all about humans.
00:07:52:09 - 00:08:12:16
Peter Bray
So that's how I fell in and then, you know, went from there to a startup in 19 another stock in 1997 and then ended up running. There was a PR agency that I had a friend working at, and I thought they were like, Oh, we're going to start this agency. We've got these clients wanting these things called web pages.
00:08:13:17 - 00:08:26:14
Peter Bray
We need someone to run it. And that was the agency that I was at and grew successfully before. I thought, right time to do it myself. And that's where I started. My first agency, which was the one I sold, which was called Clear Blue Day.
00:08:27:18 - 00:08:43:11
Todd Sullivan
That's a great story. You know, while you're talking, I'm trying to think of something clever to say that you started college at 16 years old, and I can't remember what I was doing at 16, but it was definitely nothing productive. So you don't have to.
00:08:44:13 - 00:08:47:02
Peter Bray
You certainly wasn't productive for me all that time. Don't worry.
00:08:48:18 - 00:09:06:00
Todd Sullivan
Nevertheless, right. You started very early. You're on the forefront of technology that's changing the world. You find yourself in marketing. It feels like this is the home, particularly with your your natural skill set, an educational skill set. So you're off to start this this agency. So, yeah, take it from there.
00:09:07:14 - 00:09:32:05
Peter Bray
Yes. So I'm actually there's a story about how I started the agency as well. So yes. So I was at this division of a PR agency. The division was the power agency. Founders were incredible and I owe them everything to this day. Tony Blackie and his wife Jen, they my friend was a techie guy. I was never a techie guy.
00:09:32:22 - 00:10:01:17
Peter Bray
I was more so the advertising guy. Boy, you know, I built this little interactive agency at the time and we ended up, you know, winning significant clients. You know, we won a $14 million contract with a Tourism Victoria. It was we were quite successful and we'd been blitzing all the metrics. But then the CFO of the group started really diving into expenses.
00:10:02:11 - 00:10:37:22
Peter Bray
And I'll never forget, and this is a true story, I wanted to get a stapler, a stapler, and I needed to get approval for it. And on that day I decided, Right, I'm out of here. This is ridiculous - a stapler. And I looked up domains that were available and clear blue sky was taken and I thought, Right, what's the next closest one clear blue day and half an hour before I officially resigned.
00:10:38:12 - 00:11:04:22
Peter Bray
Bought the domain. So if you go and look at the WHO is records of clear blue dye, you can see that they resigned and started the agency and I took with me a couple of key people two other people try to director and CTO and we started Clear Blue Day and that's how the agency started in Sydney first.
00:11:05:13 - 00:11:08:23
Peter Bray
Then we opened up an office in Melbourne, then we opened up an office in New York.
00:11:09:14 - 00:11:14:22
Todd Sullivan
That's great. I thought you were going to say that you took a stapler. We had we have a previous class.
00:11:15:07 - 00:11:21:05
Peter Bray
I should say. I can all the Staples website for that.
00:11:21:05 - 00:11:38:14
Todd Sullivan
It's actually not a unique story. We've had another guest, remember Greg Packer and he when he got acquired, they couldn't figure out how to get kind of print material out to anyone because all the printers were broken. So he took it, put a printer on his Amex, and they're like, No, we don't do that here. And he's like, All right, I'm out of here.
00:11:38:14 - 00:11:44:10
Todd Sullivan
This doesn't work. I'm solving problems. Yeah. And you guys are worried about, you know, how you record all of it?
00:11:44:14 - 00:11:46:21
Peter Bray
Exactly. Yeah, it was. I'll never forget it was a stapler.
00:11:47:14 - 00:11:53:23
Todd Sullivan
So clear Blue day. You spend, what, nine years building that agency with obviously a very talented team.
00:11:54:08 - 00:12:21:08
Peter Bray
Yeah. So seven years building and finish the well. Eight years building was gone during year nine. Yeah. Very fortunate. We were quite unique in that I'd recognized already that most digital agencies at the time were very tech driven, all about building web pages, and I could see it was going to be commoditized one way or another. But there weren't agencies of specialized in strategy, digital strategy.
00:12:21:22 - 00:12:46:15
Peter Bray
And I'm not talking AdWords, I'm talking actual brand strategy, but using digital first. And so we were quite unique. We were out to get some great clients like, you know, we had McDonald's, we had BMW in the US, which is why we're not in New York. Subaru Pioneer Air. We had a great, great clients, which is why we're an attractive acquisition and we had a high hype, a very high profile.
00:12:46:17 - 00:12:52:12
Todd Sullivan
So you decided to sell the business after eight years of building it, or were you were you approached?
00:12:53:00 - 00:13:26:19
Peter Bray
I knew around year six that I was close to taking it. As far as I thought I could come. I was the majority owner 70% and I was fearful about seeing this wage bill every month. And we were built on projects at the time, project by project and I was exhausted as well. You know, the first three years of Clear Blue Day, I didn't pay myself a wage.
00:13:27:15 - 00:13:53:09
Peter Bray
I made it up pretty quickly. But, you know, I was I'd never become wealthy from it. So I had this agency that had great clients, great workforce, great reputation. But financially, I was probably better off taking a job elsewhere right now. So there'd been no pay off. And so I think that a combination of those things, it wasn't that I wanted to get out of the industry in any way.
00:13:53:17 - 00:14:31:10
Peter Bray
I love the industry. I still do. But the time had come, so I spent a lot of time doing preparation and really getting the books in order, making sure all the paperwork was perfect. You know, I was fortunate we had a a part time CFO who was incredible. I'm really got things into shape. And then at that time, look, if you kind of build it, sometimes you do build it and they actually do come and we had to groups who listed groups, both of which are now defunct, approach us.
00:14:32:09 - 00:14:35:17
Todd Sullivan
When you say listed, Peter, are these are public companies.
00:14:35:18 - 00:14:38:09
Peter Bray
On the Australian Dow both on the Australian Stock Exchange. Yeah.
00:14:38:09 - 00:14:38:16
Todd Sullivan
Got it.
00:14:38:22 - 00:15:06:23
Peter Bray
Yeah. We were an attractive acquisition because of the legitimacy that we would give, especially to a holding companies that were being that were newly formed. Right. Everyone was sort of doing roll ups out of nothing. Right. With, with no previous core agencies involved. And so yeah, I was preparing. And so that's one of the things that has stayed with me is prepared from day one for your exit.
00:15:07:09 - 00:15:24:19
Peter Bray
So I fashion the agency from day one and have a road map with your desired exit in mind. And yes, your pivot to that. It was all quite quick because we know we passed due diligence from our end with flying colors.
00:15:25:13 - 00:15:36:07
Todd Sullivan
Yeah, well, all right, let me back up a little bit, because I think there's a lot here. And, you know, this idea that you started an agency without taking an income for three years.
00:15:36:07 - 00:15:37:06
Peter Bray
No capital either.
00:15:37:14 - 00:15:59:19
Todd Sullivan
And you funded it yourself. What was interesting in my head was I just kind of nodded. Yeah, that's that's what we go through as founders. But I think the majority of the world does not understand the kind of the risk and the financial sacrifice that you take to build something that is incredibly exciting. And yes, we believe that there's going to be a payoff at some point.
00:16:00:02 - 00:16:20:16
Todd Sullivan
But, you know, how long can you go feeding the machine, hiring the people, being responsible for other jobs? And it sounds like, as you said, you were exhausted. You owned 70% of the equity. It was time to take some some chips off the table. It also sounds like you were very much aware to have an exit that was going to be attractive to you.
00:16:20:19 - 00:16:57:17
Todd Sullivan
You really had to have your financial house in order, really have all the contracts in place, really a deal room, essentially write a data room set up before you went to market. Now you're talking about a couple of entities, right? These are public entities in the Australian market. And you and I haven't talked about this, but it sounds a little bit like how we view SPACs, where it's an entity out there, it's got a purpose to to acquire something and there's a ton of risk in that as as what we see today in the, in the US stock market where SPACs have really fallen out of favor and that comes and goes, right?
00:16:57:17 - 00:17:16:13
Todd Sullivan
This is not the first time that SPACs have burned, you know, a lot of investors. So it sounds like that it's similar, right? Yeah, they had the opportunity to do a ton of due diligence on you, at least one of the entities, right, that you decided to move forward with because you were ready to be sold. And that's that's amazing, right?
00:17:16:13 - 00:17:37:10
Todd Sullivan
To have your house in order like that puts you way ahead. I'm sure they're looking at 1020 other opportunities and you're rising to the top because of this, right? You are easily digestible. They understand what they're getting. They can financially model. So I won't go further, but why don't you take it from there? Right. Have they given you a purchase price that you're happy with?
00:17:37:10 - 00:17:39:13
Todd Sullivan
You're running your own personal ROIC? Yeah.
00:17:39:15 - 00:18:10:17
Peter Bray
So the entity we went with, they were our favorite because for a few reasons, I that board was very attractive to us. I had a former premier of Victoria, so one of the states of Australia, a guy who's extremely famous, was on their board, talked to him a few times. So that was attractive. We also thought their chairman seemed like a great guy and they were also talking to some other agencies.
00:18:10:17 - 00:18:38:21
Peter Bray
The way you happen to know. So they acquired us and two other agencies and the email company at the same time. And so, you know, we knew the others as well. So that was also attracted to us that we weren't alone. We got and I remember the guy who was sort of the to I say in this investment vehicle, wonderful guy, still have incredible respect for him to this day, highly competent.
00:18:39:19 - 00:19:04:01
Peter Bray
He was a generally good person, knew his stuff which again I mean I would give advice and make sure that whoever's doing the acquiring really understands your business and has demonstrated that before the acquisition. You need people who are from the industry, in the industry, on the board of the companies doing the acquiring not have just learned about industry.
00:19:04:01 - 00:19:05:05
Peter Bray
This is really key.
00:19:05:19 - 00:19:30:19
Todd Sullivan
That's great advice. Peter. I mean, you're talking about doing due diligence on your buyer and I know in hindsight you think, Oh, maybe I could have done more, but you're really impressed with the people. You're impressed that you're not the only one, right? It's it is clearly an industry. They have a vision for it. I'm sure they've shared that with you and they've got industry people on the board and all of that, that understanding of what you're getting into.
00:19:31:05 - 00:19:37:06
Todd Sullivan
I'm not sure there is much more that you can do to feel good about who you're going with.
00:19:37:18 - 00:20:01:04
Peter Bray
Especially, I mean, you know, when it was happening, I was 32 years old. I'd never been in that world before M&A. So didn't you know, I'd also I should say I also hired a consultant to help. So when we were with and he took a percentage of the sale, there's a learning from that, a percentage of the sale at the time and there's a learning in that.
00:20:01:10 - 00:20:17:21
Peter Bray
And so I felt in good hands like I done the right things, you know, hire someone who did understand that world. It was, you know, both a friend and, you know, extremely competent, extremely professional. So I thought that had been I'd been doing all the right things and that didn't end up being the case. Yeah.
00:20:17:21 - 00:20:37:07
Todd Sullivan
So the fact that you surrounded yourself with people that have been through it before, I was going to say that's the only really other thing I would have mentioned is that typically when you you're building an M&A team, right. To take you to market, they've already transacted with the majority of the buyers that you're going to see. So they know how these players play.
00:20:37:18 - 00:20:51:17
Todd Sullivan
And you know, in your case, you did hire somebody, but you're also selling to a rather new entity. So I'm not sure there's much more of that that that could have been done. So let's tell the story now. Right. This is for you. Make sure you get it.
00:20:51:17 - 00:21:14:08
Peter Bray
So I'm happy to mention the edit takes I don't exist anymore. So now called Pty Ltd as in led to Q the stock a code ticker code was Q actually like Q So Q Ltd we did a deal. My agency had been successful. We've been growing well now we were profitable at this stage. You know, I was paying myself as well, which is good.
00:21:14:16 - 00:21:38:03
Peter Bray
I mean by myself for four or so years and we really like Q Ltd now were acquiring to other companies, to other agencies and another one that we respected greatly as well, like, Hey, this is all good. So the one thing I did well, I did many things wrong. I think in hindsight I did not take any cash in the acquisition deal.
00:21:38:11 - 00:22:00:17
Peter Bray
I took zero because I had no debts. You know, I was good. I was all about building. I want to build. And I thought, you know, I can wait six months, I can wait a year for us. So I took an all scrip deal. So, you know, I had yeah, I didn't take a red cent sure my AC day was a bit smarter than me.
00:22:00:17 - 00:22:07:07
Peter Bray
He took some cash and my client service director who I gave her some equity, she took some cash as well, but I took.
00:22:07:07 - 00:22:21:22
Todd Sullivan
Me Because you were planning on the future, was was your outcome in the form of an earnout? Was it going to be more exciting? Right. I think at some point you were eight figures. Yeah. Eight figure deal. If you were to leave it on the table and roll with the equity. Okay.
00:22:23:02 - 00:22:43:00
Peter Bray
Correct. Correct. So that was, you know, that was attracted to me. And if I'm going to be in with something, I mean, I'm all in what was my thinking? So we do the deal. And I remember, you know, when when we signed that all we had a glass of champagne. And, you know, as you do, you feel like, you know, kings of the.
00:22:43:00 - 00:23:10:21
Peter Bray
Well, right. We all know that feeling. You know, if you think you're you're invincible, you can do anything. This is just the start rise. And my one my only outlay that I made was a deposit iron. Nice car. Okay. Right. But it was. It was a nice car. So it was a significant deposit. And then we got to work.
00:23:10:21 - 00:23:35:21
Peter Bray
So, you know, I, you know, it was industry news obviously in our media that we'd sold and then it was dealing with their board, which was I was fine with doing you know it was different right now reporting doing your board reports every month and justifying why you're making these decisions, not those, but that's fine. I signed up for I've never had an issue with that.
00:23:37:13 - 00:23:58:22
Peter Bray
And of course, you start watching the share price rise because the share price is really, really significant when you when you've done this kind of a deal. And so, you know, and which we then all the clients stayed with us. We didn't lose any clients. I think, you know, you've got to make sure the clients are part of the journey and they were really happy for us.
00:23:59:13 - 00:24:37:04
Peter Bray
Like our we didn't lose anybody, you know, it was one of those things where they'd say, Oh, you're not too big for us or too busy for us. No, we business as usual. And we had supportive clients and so we're chugging along month after month and watching the share price. And the share price keeps going down and down and down dramatically to within three months it had gone down over 50%.
00:24:39:02 - 00:25:12:04
Peter Bray
Within six months it had gone down over 90%. So this was interesting because I now realized that I was working for someone else with very little value at the end of it. But I was stuck. I was in a bind. Right. And it didn't make any sense. Like we're looking at the volumes. It just we couldn't work it out.
00:25:12:04 - 00:25:53:18
Peter Bray
Like, why had we gone down 95% when, you know the end, it's the overall entity A Q Ltd was looking stronger, right? They'd been good acquisitions had been great growth. It made no sense. And so I'm now in a situation where I'm going, what have I done? Yeah, right. Because suddenly I'm working as hard as ever with now a tiny payout on the horizon and then the share price went down further.
00:25:55:02 - 00:26:01:15
Peter Bray
So it had then went down, you know, I think month seven it was now down 97%.
00:26:01:20 - 00:26:02:15
Todd Sullivan
So painful.
00:26:05:09 - 00:26:38:13
Peter Bray
And it made no sense and I had to get out because I was looking at it going there doesn't this makes this is now wasting time wasting my time. And I was never I'm not a bitter kind of person, just not my style. But I then negotiated. Well, when I say negotiated, I said I've got I told KM I want out because I didn't want to be part of their sort of management structure either.
00:26:40:01 - 00:27:06:20
Peter Bray
And I didn't understand. Also what clearly they was in that they saw the numbers in the spreadsheet, but they acted like we were making widgets and they want us to cut staff, cut staff again, and why spending so much time on this, etc.. Whereas advertising, especially clients, we're in the business of relationships, we're very human business and I didn't understand that.
00:27:07:08 - 00:27:31:00
Peter Bray
So then end up being a culture clash. Plus I'm working for next to nothing. So myself and my head of client services told me one ad out, they put us in a room, the two of us that wasn't even in my building, it was in their building. They put us in the room, just the two of us, with nothing to do for three months.
00:27:32:06 - 00:27:50:23
Peter Bray
Of course, we often left the room, mate. We weren't going to stick in or stay in the room. You know, they wanted because they knew we were planning to leave. They wanted to be the ones who would manage our team that end up destroying the agency. I basically I was out of there a little over a year after we sold.
00:27:51:23 - 00:28:08:13
Peter Bray
I can say for the agency that I built up to be successful doing financially well, great reputation. I got $30,000. The irony is I paid the consultant $90,000, so I actually lost $60,000 and had no agency.
00:28:09:06 - 00:28:31:19
Todd Sullivan
Well, it's as painful as that is. I really appreciate you sharing it. I think that these things really happen and we're in transactions, I would say, weekly now, where we're trying to think through giving the right advice to our founders in how much risk do you want to take? How well do we know the buyers playbook?
00:28:32:08 - 00:29:12:05
Peter Bray
Yeah, and Todd, here's the thing. I complaint mistake mine to not take majority cash. At least 50% off the table, complete mistake and would never do that again. But B, the twist in the tail. You know, we're wondering why the share price has gone down so dramatically. It ends up that the chairman of the group, not the to I say, who we we love the chairman had a number of offshore entities and he was manipulating the share price incredibly to do this squeeze and then he'd purchase more a low price.
00:29:13:04 - 00:29:44:03
Peter Bray
He ended up being taken to court by the Australian Government. So we had the Isaac, which is the Australian Securities and Investments Commission, which is lot like the SSA. It's the same thing. They end up taking him to court over this. So we were victims of this. He got off because he pleaded mental incompetent and he was barred as a director of an Australian company, but he didn't go to jail.
00:29:44:16 - 00:30:06:10
Peter Bray
So, you know, that's the key Ltd. You can look up I, ASIC and Q Ltd, you can read all about it online. It makes for good rating. I don't know if you've heard of a guy called Time.com who's a New Zealander as well, but he's wrapped up in things as well that have to do with that. I think what Opes Prime But yeah, so what, what could I have done.
00:30:06:10 - 00:30:18:22
Peter Bray
Yeah. Rod But we were just know unfortunately there was someone who was being very unscrupulous and doing some illegal stuff and we were just a number on a spreadsheet.
00:30:19:12 - 00:30:38:08
Todd Sullivan
So I mean it's amazing story in hindsight. Peter do you think that they were interested in you having an all stock deal because the chairman had plans of doing this and didn't want to lay out more cash or was it really totally at your discretion?
00:30:39:12 - 00:31:03:17
Peter Bray
It's a great question. In hindsight, you know, the chairman was absolutely talking up the prospects of the group and how we'd be encouraged to grow and putting the data in front of me that made me taking stock extremely attractive. I certainly no no one ever said, oh, you might want to take some cash now or those sorts of things.
00:31:04:07 - 00:31:25:21
Peter Bray
You know, the reason my, my AC day and my client serves some cash at the time they asked for it because there were certain things I want to take care of. Right. Housing or whatever, mortgages, whatever it may be. But I think that it was I should have been captain of the ship more in terms of my immediate needs.
00:31:25:21 - 00:31:40:08
Peter Bray
I think I was looking so far in the horizon that I was ignoring the waves that were right in front of me or, you know, or maybe I was looking at the horizon and so confident in seeing the horizon, but I wasn't checking the weather report 30 days out.
00:31:40:12 - 00:31:54:02
Todd Sullivan
Yeah. Honestly, I think you're being hard on yourself. Everything you've said to me is I don't know how you could have prepared for, you know, essentially criminal activity. Right? There's there's just there's no way to to avoid that.
00:31:54:13 - 00:32:22:05
Peter Bray
Yeah. And look, you know, I'm sure my story isn't unique. I'm sure there are plenty of people who are in similar situations that have way worse things, whose reality I always regarded just as a piece of paper with a number on it. I never regard it as money that I had never, not once, you know, yes, there was the the deposits going to car that I did not end up getting, that I did not end up getting sorry that was gone.
00:32:23:03 - 00:32:43:20
Peter Bray
But you know, I was always very realistic. I was you know, I came from very, very humble beginnings. So, you know, I didn't have expectation or know what I would do with the money or things like that or not. I wasn't spending in my head or anything. It was a piece of paper until the money's in the account, until the money's in the account.
00:32:43:20 - 00:33:05:02
Todd Sullivan
That's all it is. Well, again, thank you for for sharing that. It sounds it sounds like it was incredibly painful because, you know, you had a legacy as well, right? You built this entity, you had a brand. You were you were well known in the market. Your clients were kind of counting on you moving forward. And so this isn't just kind of a financial slap in the face, right?
00:33:05:03 - 00:33:34:03
Todd Sullivan
There's an element of something that you built going away, which has to be really very painful. When we coach clients through this decision process in rolling equity, we feel pretty comfortable with private equity firms that have a real track record that you can look to. Right. And you want to understand when you're being purchased. If you're not the platform, if you're an add on, where is that private equity firm in its lifecycle of building up something to be sold?
00:33:34:03 - 00:33:53:19
Todd Sullivan
Right. Is it three years away? Is it five years away? And oftentimes you can see that they know how to rinse and repeat and it can make a lot of sense to roll significant equity. And in many cases, you hear about that being the second bite of the apple being larger than the first check. So I don't want this to really scare people away from that decision.
00:33:54:02 - 00:34:16:19
Todd Sullivan
You just really need to go in eyes wide open. And like you said, until it's in your account, you cannot count on it. Everything you take at closing has to be enough to make you do the deal, frankly. Do you think we could jump now? Because you've made some points to me offline about in building your business. It's one thing to kind of build internally.
00:34:17:00 - 00:34:44:09
Todd Sullivan
You have clients, you have a team, but what you did was build an extraordinary reputation of your company and in your industry. And then when this becomes public news, you're now elevated professionally to, you know, a status that is is enviable. Can you talk to me about how you leverage that in a professional growth into the next stage in working with some of the you know, top agencies in the world?
00:34:46:05 - 00:35:22:07
Peter Bray
Yeah, sure. I was very aware that you want to leverage your commercial business and try and have that fade into a I don't want to use I don't really like the word person personal brand. I think it's more your reputation, a personal reputation that the proof point is the business you've grown, right? Proof point for reputation is the business you've grown.
00:35:22:19 - 00:35:55:16
Peter Bray
But I certainly might show you now as the president of national president, the main digital body back in Australia, I did a lot speaking to various companies, etc. So the proof point was the business and the awards, the wine, etc. etc. But at the same time I was always developing my own stream, which was reputation. And so I think that it's really important, especially, you know, I have a dear friend of mine who had a large exit last year.
00:35:56:05 - 00:36:28:17
Peter Bray
He's, you know, 50 years old and he's wondering what next because a lot of what he he was very his business was him. Right. He didn't have the profile outside the business in the clients. So it's not a listed company, a good one. And now I feel he feels a little bit rudderless. What is next? I think it's really important that the professional development you do outside your commercial entity continues because that's the bridge.
00:36:29:10 - 00:37:01:08
Peter Bray
That's the bridge. So even when clearly with I was sold, my reputation was enhanced because of a sale, even not went completely haywire. Right. But because I had all these other involvements in the industry, it made it really seamless. And so I was also really aware that I came from a very digital marketing background. And, you know, in our industry, digital agencies rarely get a seat at the big table.
00:37:01:08 - 00:37:35:04
Peter Bray
The CEOs and the CMO's is very much the lead advertising agency. So, you know, I transitioned to originally as director of digital and became a series events CEO of a branding agency owned by one of the whole another, one of the big global holding companies. WPP ended up being CEO of that and then went from there and was a C-suite out in New York of Scotch and Saatchi so as global head of digital across that.
00:37:35:15 - 00:38:21:10
Peter Bray
But that was all because of reputation, right? You know I always I was effectively poached by Saatchi Saatchi. I'd said no to the job three times, by the way. But the CEO knew of me purely by reputation. I didn't really know him very well, but he knew what I did. And so it was reputation and I would made a seamlessly transfer into now the holding company side of things that the big 6000 person agencies and so yeah again it was it was also interesting that my stories are unique in that, you know, I sold an agency that was effectively just in Australia and, you know, in the US they tend not to care as much.
00:38:21:13 - 00:38:52:22
Peter Bray
You guys don't care as much about what happens overseas. It sort of didn't happen if it didn't happen to us. So that was interesting. But look forward. I also had through my involvement with the Webby Awards and International Academy, Digital Arts and Sciences, I knew a lot of people who knew my reputation as well in various countries. So I think that, you know, when you have an income coming in from your startup or your agency or whatever it might be, use the time to not just work on that business.
00:38:53:20 - 00:39:16:22
Peter Bray
Use the time to establish a reputation industry wide. I mean, that made it really seamless for me. Look, the reality is there are certain people out there who are scared of founders. They're scared of founders, or they're too entrepreneurial for us. You know, they won't be able to handle being part of a different organization.
00:39:17:07 - 00:39:19:23
Todd Sullivan
They don't know how to requisition staplers.
00:39:20:15 - 00:39:36:16
Peter Bray
Yeah, exactly. I mean, if you come across that you don't want to work for them anyway. You don't want to work because they all want to be more entrepreneurial. This is the thing, right? They all want to act like a startup and be nimble and agile and swift. This that's what they're selling to their clients. Yeah, they're not.
00:39:36:23 - 00:40:06:01
Peter Bray
They can't do that If all of smart people are structurally, they can't do that. And I always tell people that, especially when I've been brought into some agencies, turn them around now, inject digital, inject modernity. What people don't understand is I hired you to change the company, but it requires them to change themselves as well. This is what they don't think about the thing.
00:40:06:02 - 00:40:25:21
Peter Bray
Oh, no, We just need to change the company. No, they need to change as well. And that's confronting for a lot of people, you know, and it's threatening for a lot of people as well. You know, when I look at potential hires, you know, I love seeing an entrepreneur strike. I love seeing the bravery. I love seeing the general actual lack of ego.
00:40:26:18 - 00:40:42:20
Peter Bray
I love seeing the fact that people are prepared to go for it. That's interesting to me. I suppose that they all have been in the same agency for 20 years. Well, I know that they're probably going to know or someone asked him what the first question to ask me is. I know how much annual leave do we get?
00:40:43:14 - 00:41:08:11
Peter Bray
That's the first question. You've got this beautiful opportunity in front, and that's the first question you're asking me. Well, that's unfortunately what you get with a lot of people coming from large agencies is the comp package as opposed to what's the work? How do you make me fulfilled how he helped my career development. So it's really interesting. So again, going back to my point, people don't realize when you bring an agent of change you have to change yourself as well, and that's threatening.
00:41:08:19 - 00:41:21:07
Peter Bray
But also, look, you know, there's there's a lot of organizations that can't handle an entrepreneur mindset, and that's okay. And you just want to steer clear of them because not fun. You want to have fun.
00:41:22:13 - 00:41:41:16
Todd Sullivan
Let me jump back a little bit, Peter, because I think the point I was trying to bring out and maybe it's not, you know, dead on, is that we tell a lot of founders, you've got a business, you're thinking about selling and what you don't want to just think about is purchase price. Yes, dollars can be life changing.
00:41:41:16 - 00:42:11:03
Todd Sullivan
They can enable certain amounts of security and options, but an exit can really elevate you professionally. And I take your point, right? Maybe here in the US you get an exit and you put that kind of on the resume. The industry knows about it and you're going to have opportunities, a push towards you, and maybe those opportunities are like yours where you're elevating yourself within the corporate environment of that industry, which for you only last so long.
00:42:11:03 - 00:42:30:18
Todd Sullivan
I think for a lot of natural entrepreneurs it's only going to last so long. But you built more reputation, you built more credibility, and so now you've jumped and started your the company that I said at the beginning, it feels like this is the company you were meant to start and built. So can you tell us a little bit about Branko now?
00:42:31:22 - 00:42:59:18
Peter Bray
Sure. So I had been, you know, C-suite of big agencies in New York. And I think when you've gone through the building, an agency selling it, that whole process, it can take a while to recover. In my in my case. Right. You know, again, I think I was lucky in that this really bad thing happened, you know, when I was in my early thirties.
00:43:00:10 - 00:43:36:23
Peter Bray
But if it happened to me at 62, you know, I'd be bitter old man Frost you. Yeah. But I think that it might sound cliched, but I never thought of myself as an entrepreneur. But clearly I have the entrepreneurial spirit and it's just kind of who I am, right? Because it's interesting. And so about five years ago, I left the agency land and thought I'd just consult for a while.
00:43:38:05 - 00:44:09:07
Peter Bray
And then a year into that, an old client of mine tied, in fact, sort me out and which was great for my ego. And they wanted agency services. And I thought, you know, it's been about ten years since I left. Clearly die. Right? I think I'm ready to do this again. I think I'm ready to go through this and create an agency again.
00:44:09:07 - 00:44:40:14
Peter Bray
But do it completely differently with a completely different mindset. So the nice thing was I could start and build an agency actually taking the learnings of the past. As an example, I didn't pay myself the first four years of clearly, I guess what? Guess who gets paid first now? Maybe so from day one. Yeah, right. It was gonna be me.
00:44:41:04 - 00:45:07:22
Peter Bray
I'd be doing everything I personally could. And so I really need to hire someone else, take some workload, and then be two of us, and they'll be doing everything they could, etc., etc.. That's much more fun. It's nice to pay yourself from day one. Secondly, you know, I mentioned having a huge wage bill every month. Well, no, Bryan CO has a core team of only eight people.
00:45:09:18 - 00:45:34:00
Peter Bray
Everyone else is contract based on the work. So we keep our IP, we keep the core team, but the majority of people contract on a needs basis that's taken. I don't worry about the wage bill every month. We're all good now. We have you know, we don't we've never had an office, so we've been around four and a half years.
00:45:34:14 - 00:45:53:21
Peter Bray
So the first one and a half years was pre-COVID. Right. And it was kind of novel for you. An advertising agency did not have an office. It also meant that there were some brands that didn't take it seriously. I didn't think we were really a company. Kind of. It comes along and now all the traditional agencies are talking about how fragile they are because they're not working in an office anymore.
00:45:54:12 - 00:46:21:15
Peter Bray
Okay, guys, I'm doing thought pieces about it. So Cobe came along and gave us legitimacy as well. So, you know, I've also I've you know, from day one, our books have been perfect. Right. As well. Contracts as a perfect. We're not a bank for anybody. So clients pay us in advance of all work being done, any media being bought.
00:46:22:10 - 00:46:51:16
Peter Bray
And I've also got the benefit of more experience. We do a better job. We're a pure advertising agency that's very strong in digital. But, you know, we haven't lost a client in the last two and a half years. We resigned three clients. We haven't lost a client. And so it's been highly profitable where the fastest growing small agency, according to Adweek in the U.S., I saw the well, I think we're going to be the fastest growing again when they announced it again this year.
00:46:52:13 - 00:47:18:10
Peter Bray
And it's been it's honestly been the agency I always want to build. We've built it and we have a great staff loyal to client loyalty. It's been very, very stress free. And honestly, the question for me now, Todd, is, you know, do we acquire other agencies? And we become a lead agency that helps other agencies get their foot in the door, or is this something else?
00:47:18:21 - 00:47:35:08
Peter Bray
Right? I've certainly taken the learnings of the first experience and, you know, really maximized that. Learning to create an agency that I think is is not perfect, but it's close.
00:47:36:10 - 00:47:42:12
Todd Sullivan
It's fantastic. Peter So yeah, people want to learn about it. It's Brey and Darko, right?
00:47:42:12 - 00:47:44:20
Peter Bray
Yeah. Bly And Dot SEO, dot SEO.
00:47:45:08 - 00:48:13:19
Todd Sullivan
So, you know, I really appreciate you taking the time to do this. I think there, you know, there's a lot of learnings from it, really trying to understand your buyer that buyer's history, to know how you structure a deal and and then also for me putting a win on the board it's it's very evident and may come in kind of subtleties along your career but putting that win on the board by selling a business you helped build that reputation that got you to where where you are.
00:48:14:06 - 00:48:48:12
Peter Bray
It's I'm not pleased that we got unlucky with a chairman that we sold to, but it certainly gave me a lot of learnings. Yeah, and I certainly want to make sure that no other agency is ever put in that place. I think that, you know, my advice around it, we got to that and acquisition is I do your reverse due diligence like as an agency you had the scarcity or as a company a start up.
00:48:48:19 - 00:49:00:15
Peter Bray
You're the scarcity. Yeah, there's plenty of money around your the scarcity, your knowledge, your clients, your company. That's the scarcity. It's actually not the dollars, the money.
00:49:00:18 - 00:49:19:22
Todd Sullivan
Right. It's a great point. I think that as founders, when we go into an M&A process and we sign a letter of intent to sell to a specific business, you know, you're an amateur. This is going to be life changing. And it's hard to kind of dig in and be really critical. And I think you really have to lean on the professionals around you to help guide that.
00:49:20:13 - 00:49:28:23
Todd Sullivan
Doing that due diligence, it's it's very difficult. I don't think there would be a way to uncover what happened to you, frankly, regardless of the decisions that you make.
00:49:29:05 - 00:49:47:09
Peter Bray
Yeah. I think also also just making sure that whatever people you get involved, whether it's the acquirer, whether it's consultants, advisors, make sure the all them really understand where the value is in your business.
00:49:47:09 - 00:49:47:18
Todd Sullivan
Yeah.
00:49:48:02 - 00:50:14:18
Peter Bray
Right. What are you really in the business of doing? So your output may be you're selling cars, but what you're really doing is maybe in the case of Volvo, you're selling safety, right? So it's not just what the outputs are. You need people who are prepared to find the time to really understand what you're making or doing or selling and then how they supportive of that.
00:50:15:08 - 00:50:24:14
Peter Bray
If they're only supportive of the outcomes, which are the dollars, yes, we all want to be crazy profitable, but you need people are going to understand how you get to that points.
00:50:24:20 - 00:50:25:03
Todd Sullivan
Yeah.
00:50:25:05 - 00:50:44:00
Peter Bray
And also understand your company culture as well, because on the flip side, I saw Q Limited then destroyed my agency within two years, destroy it. And that was actually the harder bit to say, Yeah, right. And the money. So well, that work kind of went down the drain. Then you go, okay, but I did a lot of good stuff along the way, right?
00:50:44:01 - 00:50:52:22
Peter Bray
Not just the destination, but you're making sure that people really understand where the value lies in your company is incredibly popular.
00:50:52:22 - 00:51:22:16
Todd Sullivan
I'll riff on that just a second because you're speaking our language when you're building a team around you to help sell you that team. If they are very industry specific, meaning that they have sold your business essentially before multiple times, they really understand the nuance of your business and therefore can present it. And then now they're presenting it to known buyers, buyers that they've transacted with before they know how those buyers think about certain opportunities.
00:51:22:16 - 00:51:45:23
Todd Sullivan
And they may frame the value of your business slightly differently to each buyer. And when you create that understanding, you can create real value and also understanding what every buyer has as a corporate culture. If those two groups are going to come together and create kind of the happy marriage, you can have the best financial outcome, you can have the best professional outcome.
00:51:45:23 - 00:52:06:10
Todd Sullivan
But it really starts with, as you're saying, like real nuanced understanding of the value that you have in your business. So let's let's kind of jump. We typically ask, you know, what was that purchase that you made post-acquisition? And it was going to be a car. And I love to hear that. I love cars and particularly historical ones.
00:52:06:20 - 00:52:09:12
Todd Sullivan
Can I ask what was the car that you were going to purchase?
00:52:09:21 - 00:52:19:02
Peter Bray
It was a maserati, a little Maserati. Nice look. Now I have a couple of classic cars that are much, much more interesting. Yes.
00:52:20:08 - 00:52:35:08
Todd Sullivan
Good for you now and then. And we really like to finish with, you know, who would you like to thank who really contributed to your personal and professional success? And you mentioned a couple of people right off the bat. I just love kind of ending with kind of giving the gratitude.
00:52:35:16 - 00:53:02:16
Peter Bray
Yeah. Honestly, Tony Blackie and his wife, Jenny MacDonald, they ran the PR agency that was smart enough to create an interactive division really early on. Certainly credit them. And look, I think I'm very lucky to have now an amazing, amazing wife who, you know, convinced me to put my last name on the shingle of the current O'Brien Co, which I was completely didn't want to do.
00:53:03:18 - 00:53:20:01
Peter Bray
She said, No, Peter, they're buying you, though, you know, But look along the way. And it's also the clients, right? It's your clients, supportive clients who are with you through thick and thin. That's Yeah. Yeah. And the best that the numerous.
00:53:20:01 - 00:53:27:18
Todd Sullivan
Great. Peter, thank you again for doing this. I have to get your address and send you a stapler. I think that's a nice way to cap this off.
00:53:28:09 - 00:53:30:04
Peter Bray
No. Need any more lessons? You know, you.
00:53:30:04 - 00:53:30:22
Todd Sullivan
Got plenty to stay.
00:53:31:09 - 00:53:33:06
Peter Bray
Always take a fancy stay for good.
00:53:34:04 - 00:53:35:14
Todd Sullivan
Well, thank you. Thanks again, Peter.
00:53:36:04 - 00:53:36:16
Peter Bray
Thanks, Todd.
00:53:37:09 - 00:53:59:13
Todd Sullivan
Thanks again for listening to the Cashing Out podcast. For more founder exit stories, please subscribe to the Cashing Out podcast on Apple, iTunes, Spotify, or wherever you listen to your favorite podcasts. And please remember exercise dot com and the Cashing Out podcast are for entertainment purposes only. This should not be relied upon as the basis for investment decisions.