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 who 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)

Yes, well, you have a fascinating story and 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. So I started as an, 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. And then eventually turned into running Ceres Talent, which is a search for and 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. And at some point we said, what if we launch this recruiting firm and specializing in the stuff we know how to do? And that's how it started. We did each at that time have, we had monogamous clients. What I mean by that, 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 did continue working with our clients as we built Cirrus Town until we reached what the point at which we were hoping we reached 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. So let's say you have someone going on maternity leave or you have, the CMO has put another project on your plate that you don't have enough bodies on your team to handle. So 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)

Okay, well, I do know that you created quite a brand for yourself, for you and your business. So congratulations on that. I do think 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)

you.

So, ⁓ you one of your previous guests on your podcast called an accidental exit. I think I'm going to call ours a premature exit. And the reason I'm saying that is we had started thinking about what that could look like. So we were about eight or nine years into the business. We had been growing, 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 and said to me one day, so is this a lifestyle business or are you building this to sell? And I honestly, I don't think either Cathy or I had really seriously thought about what was, you know, and what's the end game here. So that really started the wheels turning. Kind of a funny story. So when we first kicked things off, Cathy and I,

We hired a small business consultant who we had known who had successfully exited her business in a similar field to what was supposed to be our five-year plan. So picture, this is quite a while ago, so was still things being printed on paper. So picture giant spreadsheets of five-year plans all over her office, the consultant's office, where, okay, you're gonna be doing okay, and then you're gonna hire another BD person, and then you're gonna be upside down cashflow for a while, and then you're gonna write the ship and...

Elizabeth Shea (04:29)

Mm-hmm.

Sue Keith (04:37)

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, cash for the wise was scary to both of us. So we kind of recycle, you we shredded all that and just started running the business. And, you you talk about inflection points in the work that you do. And that's very much how we kind of, you look, if we look back on our 10 years before we sold the business, ⁓

Elizabeth Shea (05:00)

Yes.

Sue Keith (05:06)

It was really 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 be meaning, okay, it's time to hire an employee. That's a really scary proposition when 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, you know, where we were meeting candidates in Starbucks. And at some point, Cathy said to me, we really need to look.

Elizabeth Shea (05:26)

Totally.

Sue Keith (05:36)

more professional in this. had to bring in twice, we brought in a newer and more robust CRM. Again, these are pretty expensive investments, just 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. And so 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 speaker box got us really thinking about what could this look like? And really the question was how big do we need to be in order to be attractive to a buyer? And 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.

Elizabeth Shea (06:20)

So true.

Mm.

Sue Keith (06:33)

And 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. So 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 also offered, served more as a strategic growth advisor to really help with their growth strategy. And 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. And 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. And I said, quote, we're too small at this point. And he said, I'm not so sure about that. And that's what kicked things off.

Elizabeth Shea (07:34)

Wow. it 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, this suitor? Well, I'm curious what you found was attractive about the company that did acquire you. I mean, how did you continue the conversation? Did it start, did it start out financially or did it start out in terms of like how you're to be managing this or can you tell us a little bit about that journey?

Sue Keith (07:36)

haha

We did not, we did not, no fee was ever paid.

Sure.

it started with, 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, all of the combined company. They have three divisions. And I think that was initially it. And it just, the conversation was so comfortable and they just felt like our people. And so...

Elizabeth Shea (08:29)

Mm-hmm.

Sue Keith (08:31)

I think that moved to the next step. And 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, was...

The offer was better than we were expecting. The multiple was better than we had anticipated.

Elizabeth Shea (09:03)

Wow, well, 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. There was, you know, 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, whatever, whatever negotiating point we were dealing with. But I think it was that, but it was a lot of gut. They're a, 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, you know, looking at 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, that's, 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 and...

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. How could this be that with, you know, 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 I would give advice is this is usually going to take longer than you think.

I think one of your previous guests also talked about thinking 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 can't,

thought I'd be done by the end of this last one, but I'm here. I am opening another one. So it definitely takes longer than you think.

Elizabeth Shea (11:19)

Yes

Sue Keith (11:22)

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 my business partner, 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 helpful would be 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.

Elizabeth Shea (11:37)

⁓ totally. Yep.

Sue Keith (12:02)

And that, and 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 for that, that was a really important part for us. And 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. So that, and I'd say some of the other harder parts beyond the deal terms were, know, non-compete language, severance terms, you know, 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, the numbers.

Elizabeth Shea (12:48)

Totally. mean, I think sometimes it's overlooked when, you 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 pop some champagne or something along those lines when you close the deal and celebrate it.

Sue Keith (13:13)

We did, in fact, when Cathy

calls me, the picture on her profile picture 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 was kind of a cool way to open that bottle for a different reason. But yeah, we celebrate it. 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. But I did say that 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.

True, 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? Because you stayed, for a year or two, I believe. What was that experience like? What did you expect? Three years.

Sue Keith (13:53)

yeah, absolutely.

Three, three years.

Yeah, it was three years. They went really quickly. if you say like,

What do you wish you'd known then that you don't know now? I think one of these things was this was a strategic acquisition. So they had purchased, 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.

Elizabeth Shea (14:13)

Yes.

Sue Keith (14:28)

division to create a Landrum talent division. So very much a strategic acquisition. one of the things I think we had asked more questions 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 it, 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. And we were reliant on that BD team to do that So, and I think other thing I'd say too is if you look at kind of lessons learned,

the bottom line is this isn't your company anymore. You know, as I say, like 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, you know, 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)

I think we definitely just felt initially, like I said, after negotiating on some pretty tough things for nine months and you still like the people across the table from you, that says a lot. the culture, 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. Everybody felt really, just, we've had it, like I said, 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 Cirrus Talent to Landrib Talent, because the other, the HR side of the house had a different brand. So that was fun to bring that together. And I think we had,

Elizabeth Shea (16:36)

Mm-hmm.

Sue Keith (16:55)

Again, 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 very, 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. I had been at that point doing, we sold on what was almost exactly the 10-year anniversary of the business. So was a nice way to celebrate that.

Elizabeth Shea (17:32)

⁓ here we go.

Hmm.

Sue Keith (17:49)

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, you know what, 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)

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. so Doug Anderson runs DCA Live. I know, you know, Doug, I had actually been a sponsor of his. had been putting on monthly virtual CMO roundtables since Covid started.

Elizabeth Shea (18:22)

Sure.

Sue Keith (18:30)

So we had worked together for quite a while, become friends. And when I told him I was thinking about leaving, I was likely leaving Landrum, he said, hey, you want to join me? So I said, sure. So now I am helping him, helping him grow the business, but also I moderate roundtables with CFOs, controllers, founders, investors, those sort of things. And I am loving it because the conversations are fascinating.

And so I still, and I've actually relaunched a 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. And so it sounds like that was purposeful and with intent. So congratulations. So for the listeners here who are probably founders who are potentially looking to exit at some point, what advice would you want to leave to them as they pursue this journey? mean, whether it's from the perspective of how to prepare, what to think about, what...

Sue Keith (19:15)

Yes, yes.

Elizabeth Shea (19:33)

are some best practices to follow? Can you give some little bit of advice on that point?

Sue Keith (19:39)

Sure, 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. So if we have to walk away from revenue or tell a candidate, you know what, 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 not, 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 figure out what, you know.

10 years later, 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)

Mm-hmm. Yes, yes. mean, it's not every day that you run into someone and then it's actually a really good marriage. so...

Sue Keith (20:43)

Right, exactly, exactly.

But 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. mean, so many people, so many of the guests have talked about that and how important it is to them that that is retained into the future. So, okay. Well, thank you, Sue. This has been an amazing conversation. I really appreciate being here. Any last, any last pieces of wisdom to sprinkle down?

Sue Keith (21:28)

Well, think I'd say, so I went to JMU and I teach a class once a year, well, I really guess lecture, it's not teaching 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 something, 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. And when those things...

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)

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? assume, Sue Keith?

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.