Elizabeth Shea sits down with Sue Keith, co-founder of Ceres Talent, to share the story of building a specialized recruiting firm and navigating an unexpected path to exit. Sue discusses her unconventional career journey, how she and her partner grew the business organically by reaching key inflection points, and how a chance meeting at a conference led to a successful acquisition by Landrum HR. She offers candid insights into the realities of the deal process — from timelines and negotiations to identifying non-negotiables and protecting employees. Sue also reflects on life after the sale and the importance of cultural fit and shared values in choosing the right partner. This episode is for founders who may not have a defined exit plan and want to understand how opportunity, preparation, and instinct can come together at the right moment.
Connect with Sue on LinkedIn here.
Elizabeth Shea (00:43)
Hello everybody and welcome to Branching Out. I am so excited to have Sue Keith in our office today, who was the co-founder of Ceres Talent and exited her business with her business partner successfully to Landrum HR in 2022. Welcome Sue, I'm so glad to have you here.
Sue Keith (01:01)
Well, thanks for having me. I'm excited to talk with you.
Elizabeth Shea (01:04)
Well, you have a fascinating story. I saw you as you went through your journey with Cathy, your business partner. So, I'd love to hear a little bit more. Let's hear your story. Tell us how you got started and how you got into the business and what your experience was like.
Sue Keith (01:18)
Sure, well I have a bit of an unorthodox career path, if you will. I have an accounting degree, and I started at Deloitte and Audit for about four years. From there I truly stumbled into a long-time marketing career, mostly with telecom and tech companies. I eventually turned to running Ceres Talent, which is a search recruiting firm specializing in marketing communications products and design roles. The reason that all came to be is, my business partner, Kathy McCollum and I met when we were both in marketing at Nextel. At some point we said, “what if we launch this recruiting firm and specialize in the stuff we know how to do?” And that's how it started.
At that time, each of us had monogamous clients. What I mean by that is, each of us was doing staff augmentation work for our respective clients. We didn’t ditch it all and start a business from scratch. We continued working with our clients as we built Ceres Talent until we reached the point we were hoping to reach where we couldn't keep doing each well. So, we effectively divorced our clients and then went all in on building the business.
Elizabeth Shea (02:28)
That's so cool. And it was basically a talent recruitment for marketing folks, right?
Sue Keith (02:33)
Exactly. It started as purely contract, meaning staff augmentation. Let's say you have someone going on maternity leave or the CMO has put another project on your plate that you don't have enough bodies on your team to handle. So, you to bring someone in on a temporary basis to kind of serve as what we call a relief valve. And then that grew into also doing direct placements.
Elizabeth Shea (02:55)
Well, I do know that you created quite a brand for yourself, for you and your business. So, congratulations on that. What was really amazing to watch is how you really infiltrated the tech community within the DC area. And I imagine probably even outside of the DC area. So why did you suddenly decide then that you might want to sell the business? What drove that decision?
Sue Keith (03:01)
One of your previous guests on your podcast called it an “accidental exit.” I think I'm going to call ours a “premature exit.” And the reason I'm saying that is we had just started thinking about what that could look like. We were about eight or nine years into the business. We had been growing well. We were at four and a half employees at that point. And a friend of mine who also had successfully sold another recruiting firm and had started up another one asked me one day, “so is this a lifestyle business or are you building this to sell?” And honestly, I don't think either Cathy or I had really seriously thought about what the end game was here.
So that really started the wheels turning. Kind of a funny story. So, when we first kicked things off, Cathy and I hired a small business consultant who we had known had successfully exited her business in a similar field. She was hired to help us with what was supposed to be our five-year plan. This is quite a while ago, so things were still being printed on paper. So, picture giant spreadsheets of five-year plans all over her office, the consultant's office. “You're going to hire another BD person, and then you're going to be upside down cashflow for a while, and then you're going to write the ship and...” After a couple of months of this, Kathy and I just looked at each other and thought, “this is stressing us out.” Let's grow this thing organically. And the idea of being upside down cashflow-wise was scary to both of us. So we shredded all that and just started running the business.
And you talk about inflection points in the work that you do. That's very much how we kind of approached it. If we look back on our 10 years before we sold the business, building the business was about reaching certain inflection points. And what I mean by that is kind of reaching a point where the status quo is too painful to continue. So that could mean, “okay, it's time to hire an employee.” That's a really scary proposition when it’s the first time you ever hire an employee, because now you're really responsible for someone's livelihood. It was committing to an office lease, where we were meeting candidates in Starbucks. And at some point, Cathy said to me, “we really need to look more professional in this.” We also had to bring in a newer and more robust CRM. Again, these are pretty expensive investments, but the status quo was not working anymore, and we had to make that investment to kind of grow the business even further.
Elizabeth Shea (05:53)
Yeah, good counsel. So you continue to grow the business, and I think you had a pretty good role. When did you decide that it wasn't a lifestyle business and that it could be something more?
Sue Keith (06:05)
So actually, in talking with you and your success in selling SpeakerBox got us really thinking about “what could this look like?” The question was: how big do we need to be in order to be attractive to a buyer? We didn't think we were at the time. So we talked to one broker and honestly it felt like a used car experience. It felt like “I'll sell your business for an 8 % fee!”
It really didn't feel as though that person really cared about who we sold to, what the post-exit experience would be like . . . just collect their fee and move on. That just didn't feel right, so we walked away from that. And we were in the midst of talking to a couple other brokers who served more as a strategic growth advisor to really help with growth strategy. We thought we still had at least another five years ahead of us to get to whatever that “magic number” was going to be. And then I serendipitously went to a staffing conference in Austin, where I met the CEO of the company who eventually bought us. We met by joking about our bad box lunches that we're eating at lunch in this hotel ballroom. We started talking about his business, our business. And I actually said the words to him, “one of the reasons I'm here at this conference is because I want to understand how big we need to be in order to be attractive. We're too small at this point.” He said, “I'm not so sure about that.” And that's what kicked things off.
Elizabeth Shea (07:34)
Wow, that gives me the goosebumps. That's really interesting. I don't think I'd heard that story. So, you start having conversations. Did you ever enlist a broker after that point, or did you just pursue this suitor?
Sue Keith (07:36)
We did not, no fee was ever paid.
Elizabeth Shea (07:39)
I'm also curious what you found attractive about the company that did acquire you. I mean, how did you continue the conversation? Did it start out financially or did it start out in terms of how you're to be managing this or can you tell us a little bit about that journey?
Sue Keith (08:04)
So, that first conversation over a bad box lunch turned into a Zoom meeting with that same CEO plus their COO, who is now the president of the combined company. They have three divisions. And I think that was initially it. The conversation was so comfortable, and they just felt like our people. And so I think that moved to the next step. Then I think it was a conversation with the COO and the CFO at which point it ended with, “we'll be sending you an LOI.” And Kathy and I looked at each other and said, “what's going to be in that? Seriously, are they going to make the offer in this thing?” And sure enough, they did. And in the end, the offer was better than we were expecting. The multiple was better than we had anticipated.
Elizabeth Shea (09:03)
Wow, good for you. Congratulations. Can you tell us about the preparation that went into this? Did you feel prepared when they sent you this LOI? Did you feel like you needed to do more research or did you just trust your instinct and say, “this is going to be a good thing?” Tell us about that preparation.
Sue Keith (09:22)
Good question. I think it's a combination of trusting our instincts and hiring a really good lawyer. We hired a bulldog and she was fantastic. She looked at everything with ice cold eyes, all in our interest to the point where sometimes we had to say, “okay, we need to soften our stance a little bit on this point” for whatever negotiating point we were dealing with. I think it was that, but it was also a lot of gut. They're a family-owned business. There was no outside funding involved. They'd been around for 50 years. The CEO was the son of the founder. It just felt like good people.
Elizabeth Shea (10:00)
Yeah. Interesting. So, from the standpoint of financial terms and buyouts and earnouts and whatever the case might be, did that meet your satisfaction? Was that what you were looking for or did you have to negotiate hard on those points?
Sue Keith (10:15)
Well, I think the most ironic part of this . . . or maybe surprising is a better word . . . was the deal terms themselves were probably the easiest part. Because we were happy with the multiplier. We did a little bit tweaking on the upfront offer. But beyond that, the upfront plus the earn out were pretty much acceptable to us. What we didn't expect were some other things. When they first put a timeline in front of us, I think it was about six months out, we were expecting the close and I thought, “what could possibly take six months? We're a four-and-a-half-person company. We have rent and we really don't have any capital assets. We don't produce anything. You know, we're a professional services business. What could be complicated? No inventory. . .” But one of the things I would give advice on is this is usually going to take longer than you think. I think one of your previous guests also talked about going through another can of shaving cream.
Elizabeth Shea (11:12)
Yes, that was Sean Griffey. That's a great story.
Sue Keith (11:13)
Yeah, I remember that. He said, “I thought I'd be done by the end of this last one, but I'm here. I’m opening another one.” So, it definitely takes longer than you think.
And I don't think we did this very proactively, but it came super clear throughout the deal. . . Well, let me step back for a sec. So, Kathy's husband Dave is a long-time sales exec. And he said, quote, “a deal dies three times before it closes” at the beginning of this. And that was super helpful to keep in the back of our minds because the deal almost did die three times over three different things. And it was exactly three. I think something helpful when you’re going in, before you even get too far, is identifying your non-negotiables. Like for example, in our case, we wanted to make sure our employees were protected from day one.
I say that became a bit of a sticking point, not in that the acquiring company was planning on getting rid of them immediately, but we just wanted some protections written into the document they had not traditionally done. So that was a really important part for us. It was both altruistically because we really cared about these people who had helped us grow the business, but also for our own benefit, because we needed this business to succeed post close. So, we wanted those people who were fantastic recruiters and really just our business partners to still be there.
I'd say some of the other harder parts beyond the deal terms were non-compete language, severance terms, and like I said, ensuring our people are protected. But in looking back on this, I kind of chuckled at myself because I'm like, “wow, the easiest part of this were the actual numbers.”
Elizabeth Shea (12:48)
Totally. I have said before that it's not necessarily the price or the multiple or the terms. It's all the other things that go outside of the actual financial transaction. So, the culture, the environment, what it's going to feel like after the transaction takes place. So, I'm assuming you popped some champagne or something along those lines when you closed the deal and celebrated.
Sue Keith (13:13)
We did, in fact. When Cathy calls me, the picture on her profile is us with our bottle of champagne, which had nicely been sent to me by a candidate I think I placed, just as a thank you. So that was kind of a cool way to open that bottle for a different reason. But yeah, we celebrated.
And one of the things I'd also say too is the timeline had six months. It took us nine. I thought it was going to be three. I've said to a lot of people after those nine months and the deal was done and we were able to publicly announce the deal . . . that if you still like the people you've just spent nine months negotiating with, that's saying something.
Elizabeth Shea (13:38)
Wow. And so that was the case it sounds like. That's excellent. Well, you're very fortunate. So, tell me about post-transaction life. What was that like?
Sue Keith (13:53)
Yeah, it was three years. They went really quickly. If you say like, “what do you wish you'd known then that you know now?” This was a strategic acquisition. Like I said, they had three business divisions, and they had purchased another specialized recruiting firm in the HR space and they were adding in our marketing communication specialized firm into that division to create a Landrum Talent division. So very much a strategic acquisition. One of the things I wish we had asked more about is: what was the buyer's vision for how our services would be integrated into their existing product or services portfolio? How would our services be integrated into their sales strategy? Who would be doing the selling? How would our services be incorporated into their comp plans?
So that was definitely something that we should have asked about because we kind of inherited a group of senior salespeople who are very comfortable selling the services they'd been selling for the last 10-15 years and struggled a little bit with adding ours in. We were reliant on that BD team to do that. I think the other thing I'd say too is if you look at lessons learned, the bottom line is this isn't your company anymore. They wrote us a check. So, they get final decision on things, and you are absolutely there to help the combined company be successful. That was something Cathy and I felt really strongly about. But, at some point your vision for the company may not completely align with the buyer's vision and you have to be ready to accept that.
Elizabeth Shea (15:42)
Yes, yes. And it's very consistent with a lot of the other messages that we've heard from other guests on the show that, it's not your company and there's a time when you need to walk away. What do you think was the secret sauce for the fact that you stayed for the three years? What do you think went well?
Sue Keith (16:00)
Like I said, if after negotiating on some pretty tough things for nine months, you still like the people across the table from you, that says a lot. It was really fun to kind of meet this other half of our team who became the Combined Landrum Talent. Everyone was good people. Everyone really approached recruiting from a human perspective. I oftentimes say the “human” in HR gets forgotten, especially when it comes to hiring. We had the same values when it came to treating people the right way.
Because Kathy and I were both former marketers, we were heavily involved in the rebrand from Ceres Talent to Landrum Talent since the HR side of the house had a different brand. So that was fun to bring that together. Again, I think it was everybody having the same commitment to the business and also not only having the same commitment to the business but also having the same values on how we're going to execute against that.
Elizabeth Shea (17:08)
So important. That is so important. I applaud you for managing through that process. Now you've exited from Landrum Talent. So, what drove that decision and what are you doing now? Tell us a little more about that.
Sue Keith (17:21)
So quite frankly, we had a three-year commitment, and we felt that it was really important to honor that. Cathy said once, “no matter what happens, we want to leave the place better than we found it.” So that was really important to us to make sure we gave everything we had over those three years of commitment we had made. But then it was really more of a personal decision for me. We sold on what was almost exactly the 10-year anniversary of the business. So it was a nice way to celebrate that.
I had then at that point been in recruiting and I never intended to be in recruiting — that was accidental — for 13 years. And I just decided it's time to hang up my recruiter hat and do something different.
Elizabeth Shea (18:00)
Yeah, so what are you doing now? I mean, did you did you purposely set out to find another role? I mean, you're with DCA live now, I believe.
Sue Keith (18:07)
I am. For those who don't know, DCA Live is an events and networking company that brings together executives at different levels for peer-to-peer networking and information sharing, insight sharing, et cetera. Doug Anderson runs DCA Live. I had actually been a sponsor of his. We had been putting on monthly virtual CMO roundtables since Covid started, so we had worked together for quite a while and become friends.
When I told him I was likely leaving Landrum, he said, “hey, you want to join me?” I said, “sure!” So now I’m helping him grow the business, but I also moderate roundtables with CFOs, controllers, founders, and investors. And I am loving it because the conversations are fascinating. I've actually relaunched the virtual CMO and CCO roundtables, because I missed the marketing conversations. So, I feel incredibly fortunate that Doug gave me a soft landing.
Elizabeth Shea (19:07)
That's great. So many people just aren't sure what to do next. It sounds like that was purposeful and with intent. Congratulations. So, for the listeners here who are probably founders who are looking to exit at some point, what advice would you want to leave to them as they pursue this journey? Whether it's from the perspective of how to prepare, what to think about . . . what are some best practices to follow? Can you give some little bit of advice on that point?
Sue Keith (19:39)
Sure, I think I would say don't do what we did. What I mean by that is . . . sure, did we build a good business? We did. One of the things Cathy and I also said is we need to be able to look ourselves in the mirror every day. So whatever decisions we make, it has to feel good. If we have to walk away from revenue or tell a candidate “we've decided this company is not a good place to work, we recommend you pull your candidacy out. . .” I feel like we did all the right things. I think we did right by our employees. We can feel really good about that. But the actual selling of the company was very serendipitous. And I think if we were to do it again and I hadn't happened to go to that conference and run into the CEO of the company, the buyer, I think we would have hired on that strategic advisor to help us redo our five-year plan that we jettisoned earlier on in the business and really figure out what that would look like. Because we did get lucky.
Elizabeth Shea (20:38)
Yes, yes. I mean, it's not every day that you run into someone and then it's actually a really good marriage.
Sue Keith (20:43)
Right, exactly, exactly. I would also say if you do look at brokers — and I know people have had really good experiences with brokers — but definitely find someone who feels like you're not just another widget and then they're just shopping you around. Find someone who really understands what matters to you, like the values of the prospective buyer, and make sure your people will be taken care of as well.
Elizabeth Shea (21:11)
Yeah, the culture is so important. So many of the guests have talked about that and how important it is to them that that is retained into the future. Well, thank you, Sue. This has been an amazing conversation. I really appreciate you being here. Any last pieces of wisdom to sprinkle down?
Sue Keith (21:28)
So, I went to JMU and I teach a class once a year — well, I really guess lecture, it's not teaching — for a group of graduating seniors. And one of the things I tell them is: look for the platters. And what I mean by that is an opportunity coming to you on a silver platter because you've done the right things and you've been a good employee and you're really good at building relationships with others.
When you do all those things, doors open or opportunities come on a “platter.” So I think about the fact that I went from an accounting career to a marketing career to a recruiting career to selling the business. I always joke that the accounting piece was the only thing that was intentional. Everything else was accidental, but it's because an opportunity came to me on a platter. So, look for those and grab them even when it feels maybe a little uncomfortable.
Elizabeth Shea (22:22)
I love that. That's a perfect way to end this episode. Thank you, Sue, so much. We appreciate it. Now, how can we get in touch with you? Are you on LinkedIn?
Sue Keith (22:30)
Yes, I'm on LinkedIn. It's Sue Keith, K-E-I-T-H, and I'd love to hear from anyone who wants to connect.
Elizabeth Shea (22:36)
Terrific, thank you so much.