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Viraj Gandhi Contact: 

LinkedIn: https://www.linkedin.com/in/virajvgandhi/

Email: jarivgandhi@gmail.com

Elizabeth Shea (00:44)

Hello everybody and welcome to Branching Out. We are joined in the studio today by Viraj Gandhi. Viraj is the former CEO of Paradyme Inc. Hello, Viraj, it's so good to see you.

Viraj Gandhi (00:56)

It’s so good to see you too. Thank you for having me on the show.

Elizabeth Shea (00:58)

Yeah, this is great. Viraj and I go way back, probably 10 or 15 years almost. We were both in the Entrepreneur Organization together. I think that's a really great forum. And you are also in YPO, I believe. Great forum for business owners to share some of their experiences. But let's start from the beginning. Tell me a little bit more about Paradyme Inc. and what made you start the business and what made you think about growing it to sell it.

Viraj Gandhi (01:22)

So, I founded the business in 2003 and it was founded not on a whim. I just never thought that we would grow it to scale it. I was not happy with the company that I was with, so I went out on my own and I started in local and state government. It was me contracting out for myself, but I did not want to do it under the guise of Viraj Gandhi the LLC. So, Paradyme Management was what I came up with. And we quickly became the contractor of choice within the local and state government, specifically in DC. We branched out to Virginia, to Maryland, and to New York state.

It wasn't until 2009 that we started to look at how we were doing things and what we were doing and realized the amount of money and time we were putting in for the contracts that we were getting at the local and state level. It was just a lot of work. So, we started to look into doing work with the federal government. And I would compare that to doing things like minor league to major league. It's a big, big difference doing federal government contracting versus state and local contract room. So it took us, I would say a couple of years to get our feet under us.

From 2009 to 2012 is when we really were starting to build, whether it was past performance, we were starting to build a bench of people. We were starting to really build out our capabilities. In terms of capabilities back then and even when we sold, we pretty much did the same type of work. We were an IT shop that focused on software development, data integration, data analytics, and then the last piece was AI. I'll touch on that more later in the show. But I think when we started to do some federal government contracting in 2012 was also about the time that we decided that we did not want to be a lifestyle business. We really, really wanted to scale the business to grow. And at that point, of course, we were all like, yeah, yeah, we could exit one day, but I think we knew that we had a lot of work to do. But it was intentional — let's build this to grow it and really build it to not be a lifestyle business.

Elizabeth Shea (03:36)

That's fabulous, and I believe you grew quite quickly because I remember seeing you in a bunch of award banquets and such receiving fastest growing company type of recognition. Did you purposely seek out an exit at that point or at what point did you decide that you wanted to find a suitor?

Viraj Gandhi (03:52)

Yeah, so, we actually did not. We had in 2023, we had intentionally as a management team had decided that we were going to double down on growing our business and really, really making sure that the next three to five years was something that we focused on growing the business, increasing sort of the pot of customers that we had with the capabilities that we were strong in.

In early 2024, we had been working with an AI company, C3AI. That company had put out a specific proposal for a go-to market partner in the services side and we said, you know what, we'll go after it. We had no chance of winning is what we thought, and in early 2024, we actually won that RFP to become C3 AI's go-to market federal partner. So, our AI practice was close to 22 people before we won that and that grew to 120 people within two or three months.

Once that press release went out and once that news was out, we had a lot of inbound activity in terms of people looking to partner and those discussions became, well, would you guys be right for an acquisition? So, it was one of those things that wasn't planned, but I think the contract that we had won really sort of propelled us into the state of being a good acquisition target.

Elizabeth Shea (05:23)

So the news got out, you had some interest come in. Was it a mix of strategic and financial buyers? Did you get approached by investment bankers?

Viraj Gandhi (05:34)

So, we actually did not get approached by investment bankers just yet, but I think the inbound activity was from strategic private equity and then there was an interesting A.I. roll up that that was going on. That was very, very intriguing but I don't think the foundation for that was set yet. But again, it was really interesting to kind of play that one out. We had about five suitors. So, we actually there was a couple of different banks that we had been close to throughout the Paradyme history, especially when we started to get bigger.

Oddly enough, my brother is actually an investment banker as well. He owns his own firm on the health IT side named Kevil Health. We actually retained him. So, it was one of the coolest experiences to go through with my brother in terms of selling the company that I had started using the firm that he had started. So, it was something that we had put some guidelines in place to make sure that the relationship between him and I did not get ruined. And we did it. And you know what? We are closer now than we were before, which is amazing because we've always been pretty close.

Elizabeth Shea (06:44)

Yeah, that's so cool. So, you have a natural trust instinct right there from that standpoint. Did you do anything else to prepare yourself? Did you, in terms of research or understanding the process, or did you feel pretty well protected because your brother was guiding you along the way?

Viraj Gandhi (06:59)

Yeah, so we had a great law firm, had a great investment banker, and then we had a great accounting firm. So, I felt like I surrounded myself with a great team. I think the preparation that we did in searching and getting the team that we had was probably a good preparatory step.

In terms of having my brother and being able to talk to him at all hours of the night and the weekends and things like that, there was a lot of things that he had prepared both me and my partners for in terms of what's to come during due diligence. So, that was really nice because I think before we had signed the letter of intent with the company that actually acquired us, we did have a good understanding of what was coming. It's kind of like parenting or anything like that. People can tell you, but you don't know until you are in it. And that's sort of the piece. We had several conversations and several documents to look at what to prepare ourselves for. But I think once we were in it was really when we kind of felt like, wow, this is it. Always a little bit different.

Elizabeth Shea (08:03)

Right, right. And so there's certainly a role that an investment banker plays. We had an investment banker at SpeakerBox who supported us with the process. Until you go through it, it's really hard to understand what it really feels like. And due diligence, it sounds like due diligence. It sounds like eating glass or something like that. But the reality is, you know, you have to go through it. So, you go through it, you celebrate, you close the deal. How long did it take from start to finish from when you started entertaining suitors to when you closed?

Viraj Gandhi (08:32)

We signed the LOI right before Labor Day and then we closed on December 5th. So was actually, it was not a lot of time given the time period that most companies go through. We were fortunate, but I think there was a lot of push to get things done before the new administration came in and just, you know, potential rule changes and law changes with that. So, there was definitely a big push to get it done before the end of the calendar year.

Elizabeth Shea (09:05)

And was it a competitive process? Did you drive a competitive process between multiple suitors?

Viraj Gandhi (09:10)

So, we did through the LOI process. I mean, we had negotiated with four out of the five that came to us. They all stayed in, and it was really to get us to the LOI process. So, it was super competitive until then. And I feel like we negotiated every single part that we wanted to negotiate, and we did a good job doing it. And I think at the end of the day, we had four very, very good options to look at and we chose a strategic and we chose it because obviously there was the value that we were getting, but also we thought that there was going to be a great cultural fit and a great sort of visionary and mission fit of who Paradyme was and where we were trying to go. It felt like it was going to be a good fit that way. So, that was also a driving decision factor.

Elizabeth Shea (09:59)

Okay, so post transaction, you all celebrate and you move into the new year 2025. How would you say that experience went moving forward? What experiences did you go through?

Viraj Gandhi (10:13)

So, I don't know that anybody can ever prepare somebody properly for going through something like that. I founded Paradyme. It was 21 years — we were 20 years and 360 days right before we sold. So, that 21-year anniversary was shortly after we sold. It was a big part of who I am. It was a big part of my life. It was a big part of my family's life. As us entrepreneurs know, everything kind of blurs together. So, I think the feeling of excitement and joy of accomplishing something that very few business owners get to accomplish was awesome. But I think the feeling of letting something go that has been a big part of your life was really hard. Because I knew that that was going to be the case, I'm a big legacy person, so I had negotiated myself to stay with the company. So, I had a job as the president of Paradyme post transaction, which I was really excited about. I thought that being a part of the legacy and being able to see my company join forces with another company. And, you know, the target was to get to a quarter of a billion dollars in the next two to four years. So, I was really excited about having that opportunity.

Elizabeth Shea (11:33)

Okay, so what happened?

Viraj Gandhi (11:38)

So, it's really interesting when you have decision-making authority and you have the ability to do certain things and carry out certain initiatives the way you want to do it. And these are all things that we had talked about during diligence, but when the deal was signed and I went to work as the president of Paradyme, that wasn't necessarily the case. And I can't blame anybody for it. Things are dynamic and things change, but I think I could have been a little bit more cognizant of the fact that somebody else is buying my firm and after the transaction, it is theirs and they can kind of do what they want with it. That was really hard. So, I tried to find a way to be relevant in different avenues, whether it was providing advice, providing experience shares, providing my expertise in how we ran the business and how certain teams and projects were formed. It was clear as the time went on that my advice, my thoughts were, I mean, they were always welcomed, but I don't know that they were necessarily taken on board. And I think that was really hard for me personally to kind of see that the value-add piece that I was so used to doing for 21 years was something that I wasn't able to do in the way and format that I thought I would be able to.

Elizabeth Shea (13:03)

So, if you go back and you could talk to your former self in 2024, what would you tell yourself? What advice would you give that person who might be going through the process, even if you know that you can't change? Because your story is not inconsistent with other things we've heard on this podcast. But to the extent that you could say, at least you go in your eyes wide open, what would you tell your former self?

Viraj Gandhi (13:31)

I think I would tell my former self that the day the deal was done is probably the day that you should have wrapped it up and emotionally sort of disconnected from the company and wished it well and wished all the people well, wished it on its way. I think that is probably the biggest, I'm not going to call it regret, but the biggest thing that I think about and it's taken me eight months, nine months to figure that out. But I don't necessarily look at the last eight or nine months as wasted time or anything like that. I look at it as a learning experience, but I think the biggest piece for me would have been that, on the day that you have decided to sell your company, sell your company and let it go. Move on or start the process of moving on, versus what I did which was trying to hang on to something that I probably deep down inside knew that it was not going to be the way it was— it couldn't be— but I still hung on because I was so attached to the idea of being part of Paradyme.

Elizabeth Shea (14:27)

What was it that attracted you to this suitor? Were there certain things that you felt like would enhance your service offering or were there complimentary services? What attracted you to this one out of all the other opportunities?

Viraj Gandhi (14:49)

So, this one was very different. Our acquirer had no technology, past performance, or experience. They were more of a management consulting sort of company. They did a lot of audit, they did a lot of training, and they did a lot of project management. So it was, it was nice to know that we had something that they don't have. That was also very intriguing to say, well now we can combine forces, come up with a holistic sort of process in what we were able to offer our customers and clients. And they had a different set of clients, so that was really nice as well. The vision, the way they treated their people, this is all things that we had conversations about but looking back, we probably should have done more diligence on them as a company and how they treat people and what their values were and things like that. Obviously, we took a lot of things at face value because there were so many other items that we were doing diligence on, particularly their financials, their contract backlog, and the way their contracts operated. I think that was a big deciding factor where we did not do enough diligence, but from what we saw and from the surface, it looked very, very similar to the way we managed our company, the way we treated our people, and the culture that we had. That was a big, big factor for us in making sure that, you know, we wanted our folks to be able to land in a place that was very similar to what we had created at Paradyme.

Elizabeth Shea (16:19)

So that was a deciding factor for you, the potential alignment of cultures, which it sounds like perhaps you could have done a little bit more due diligence around. It's not inconsistent from other things that we’ve heard on this podcast. I think that what would be really helpful for our listeners to hear is how you might have gone about that process. Would you have spent more time with leadership? Would you have attended more meetings? Is there anything that you any advice you can give to the listeners of this show who are planning on looking to go through an exit?

Viraj Gandhi (16:52)

I think time is always in question, right? And when we were in diligence, yes, we wanted to get things done by the end of the calendar year. We were so focused on the spreadsheets and getting them the information that they wanted, which again, is very important because they need to do their checks and make sure that we have the things that we say we have. But we did not spend time with their leaders. We did not attend meetings. We did not spend enough time at their offices to really get the vibe of what they were trying to do or how they operate. And I think that it may have shown some light on things or it may not have, but at least we would have known going in like, hey, this is the way they conduct their business. We did not do that.

So, my advice would be if the cultural fit is a strong piece of why you are deciding to sell to a particular company or entity, then that that cultural fit piece of just understanding how the organization is set up, how the organization is run, what values are important to that organization. I mean, those are all things that I would highly encourage business owners to do. And the interesting thing is it takes a lot of time, right? I think when you're in the crux of due diligence, sometimes that time is looked at as like, well, wait, we can't waste time doing that because you have to get all of your 401k reports to me and you have to get all of your bank statements and all of the things that are financially focused. And I think that is where the focus is for a lot of due diligence where the focus in my opinion needs to be or we should have done is the organization and how the organizations run. How do they run programs? How do they run projects? We did some reverse diligence on them in terms of financials. We looked at their financials.

So that was really important, but did we look at how their project teams are run? No, we didn't. Did we look at how their projects are run? Did we look at what KPIs and what metrics they use to measure their program managers and their account managers against each other? Did we look at how they did performance management? So those are things that obviously when we signed and when I was part of it and we were trying to integrate, those are things that came to light. A lot of those things were very different. The unfortunate part is we had an IT company and ran our company as an IT company. They had a management consulting company and ran their company as a management consulting company. Well, when you put the two together, there is a blend, but then you have to also blend some of the processes and some of the ways you do things, which they were not as open to. So, it was really hard for our folks to understand wait a minute, we've been managing this program and this initiative for 21 years this way. Now we're all of a sudden asked to change and that doesn't necessarily jive with not only our culture but the way we do things.

Elizabeth Shea (19:57)

Right, so things are very different and sometimes the best practices and business processes get in the way. I know we experienced that for certain when SpeakerBox sold to REQ. Can you talk a little bit about your employee communications and how that went pre, during and post? Did your team know ahead of time? Did your leadership know? What part of the process were they, and how did they accept it afterwards after the process went down?

Viraj Gandhi (20:33)

So, we had our executive committee, which was made up of five of us. That was me, my two partners, our CTO, and our COO. Those folks knew pretty early. We then, I would say the middle of diligence, we had to determine who some key leaders within the organization were so that the acquiring entity could do not only their diligence, but they wanted to interview those folks and get to know them a little bit. That was probably a circle of about ten folks. So, we did share with, I guess you could say our management team. We did share the process that we were going through and what we were trying to accomplish. That was taken on board very nicely and very positively. I think people looked at where we were going and how we were getting there. I think they knew that in the GovCon world, as you continue to grow, you’re always either you're a target for acquisition or you're going to start acquiring. So, I don't think it came as a surprise. I think that the folks that we told initially were very excited about the opportunity of being part of another entity and working towards a much larger goal.

About two or three weeks away from close, there was probably another ring of twenty people. I would call them senior to middle management that had been with the company for a long time, that we had a lot of respect for, and that were very, very integral in the roles that they were in, but also at the projects that they were at. We kind of divided and conquered and we called each of them up to make sure that they heard the news before the entire company. At that point we had three rings of people told. And then we signed on 12/5. The next day on 12/6, we had a town hall with everybody and that’s kind of how we shared the news.

So, we communicated it immediately after. And then we did a joint town hall— so, the CEO of the acquiring company and I did a town hall after I did my own town hall with the folks so that they got to meet him. They got to hear his perspective on why Paradyme, what they plan to do with the acquisition. So, I don't necessarily think that we missed a step. I think we handled that really well. And I think all the people that should have been told at the time they should have been told, we kind of checked that box.

Elizabeth Shea (23:06)

That's excellent. So, post transaction. You know, you're a few months in now. You have exited the company as of today. So, what decisions came into your decision to actually leave? And what's next?

Viraj Gandhi (23:21)

Yeah, so I left as of 8/1. So, it's been a little bit over a month and a half. I had some time over the summer to really just step away. My family and I spent a month in Europe away from everything. When I looked back at what was driving me and what was frustrating me, the drive was actually not there. It was hard to focus and be motivated about anything that had to do with the company because I don't think I was at the point where I was able to make decisions or I was really driving an initiative to be honest with you.

The points of frustration were plenty and that was starting to seep through into my personal life. I didn't like the person that I was becoming or I had become. I think a lot of that had to do with if you find value a certain way for 21 years or however long you've been at the company that you've started and then that quickly changes, and then you're trying to find value in a very different way. I found myself continually trying to add value where value wasn't necessarily either taken on board or appreciated. A friend of mine described it really well. He said, in your head from a one through ten, you're a nine or a ten, right? Because this is your business. You've been at the helm of it. You've obviously grown it and you've sold it. But to the other folks, you may be a one or a two. Not because you're not good at what you do, but because that was the way you ran your business. They are running their business in a very different way. You have to accept the fact that like they may not want the value that you are trying to add. So, I think when I had the time to really dissect that and come to the realization that I think it was time for both me to move on in my direction and for them to move on in whatever direction they decided to take. That was really what came to me. So, that's why I decided to move on.

Elizabeth Shea (25:30)

That's great. Well, what do you think is next for you? Have you thought about that when you went through this process? Have you thought through what's next?

Viraj Gandhi (25:38)

You know, I've always told myself that I wanted to advise, I wanted to consult, I want to help others. So, I don't know exactly what's next. I'm in a leadership role at YPO right now. I'm currently the chapter chair, which takes up some time. I'm sitting on a board of an AI medical company that I'm enjoying my time with, and I'm enjoying helping them operationally scale with some of the experiences that I had. And I'm teaching a class at Babson. Babson is where I went to school.

They were actually just named yesterday the number two college in the country again by Wall Street Journal. So, I'm back teaching with the professor that I had my freshman year. I'm going up there probably a couple times a semester to teach a couple classes. And so that's very rewarding and it's very fulfilling. For now, those are the kind of things that I'm involved with. I'm kind of letting things come to me versus going out and looking for them. And trying to spend a little bit more time with the family and a little bit more time doing the things that I didn't get to do when I was working.

Elizabeth Shea (26:44)

Right, right, working quite a bit, assuming of course. So, any parting notes? This has been just a fascinating conversation, Viraj. I really appreciate your transparency and frankly some of that advice and counsel that I think people will take away from this program. Any last pieces of advice that you feel like we didn't touch on or things that you would suggest people think about before they go through a deal?

Viraj Gandhi (27:05)

Yeah, I think it's always to the best that they can prepare themselves for the fact that life is very different on the other side. When you go from getting hundreds of emails a day and being “important” in the way that the corporate world deems us important, it is a big shift in life and mindset to go from that to going to not having that. I think for me, I underestimated that a lot.

Right now, I feel like I need to be productive all the time and productivity for me is being on calls and responding to emails. Productivity has not been reading the book or playing tennis or going for a walk. I think what I'm starting to really realize is I've earned the right to be productive in a different way. I think that's something that I am telling myself every single day. It’s not easy to change your mindset and think to yourself like, hey, if I don't have calls or I'm not on my phone or computer, I can still be productive because I'm doing something for myself.

Elizabeth Shea (28:17)

It's a different level of priority, different type of priority it sounds like, which is just fascinating. That's really interesting advice. And I think that just listening to your journey, it's been a great conversation. I really appreciate your time here today. And hopefully you can go out and help other people that are going through this process know what to expect and what to navigate.

Viraj Gandhi (28:36)

Yeah, thank you, Elizabeth. Thank you for having me on the show. I hope this can be taken as advice.

Elizabeth Shea (28:44)

Thank you so much. All right. Thank you, Viraj.