Jon:

Hey everybody, welcome to this episode of Think Business Live. I’m looking forward to talking with Scott Weavil. Scott, it’s great to connect with you.

Scott:

I’m looking forward to it. Thanks for having me, Jon.

Jon:

You’re the Managing Director of Sierra Pacific Partners. You guys do M&A and investment banking. According to your website, you "make deals happen." I like that.

M&A and investment banking—when I was younger, not many people were going into those fields, but now they seem to be among the top choices in business schools across the country. People are doing everything they can to get into this space: private equity, investment banking, mergers, and acquisitions. Let’s start at the kindergarten level and work our way up. In layman’s terms, can you define mergers and acquisitions, and investment banking?

Scott:

Yeah, sure. Thanks so much for having me, Jon. Mergers and acquisitions, or M&A, are basically about buying and selling businesses. A merger is a legal structure where two entities come together, and one survives. Most of what we do, particularly at the non-billion-dollar level, involves stock purchases and asset purchases. Essentially, we’re talking about buying and selling businesses.

Investment banking also includes capital markets, debt and equity placements, and general financial analysis. At Sierra Pacific Partners, we’re almost exclusively focused on sell-side M&A, meaning we represent sellers. There are buy-side advisors, but we mainly work on the sell side.

Jon:

I was in commercial real estate for a long time, and the saying there was, “List to last.” You want to work with sellers.

Scott:

Yeah, exactly. Especially in the lower market, you won’t find too many buyers willing to pay for services. It’s the sellers who drive things.

Jon:

Let’s back up a little bit. I want to talk about skill sets, influence, and negotiation, which are important in your field. What other skills should someone develop to enter the M&A space?

Scott:

You definitely need fundamental finance skills—that’s clear. But in the lower market, soft skills matter a lot. You need to be passionate about your deal and advocate for your client, but not too zealous like a lawyer. It has to be a win-win situation. There are bumps in every transaction, and it’s your job to smooth them over. Sometimes, buyers and sellers just aren’t a good fit, and that’s okay, but you need to coach your clients on what’s normal and help them see things from the other side’s perspective.

Jon:

That’s the art of negotiation—getting people to see things from a new perspective. How do you do that in M&A?

Scott:

The data informs the art. Sometimes, I let the data deliver the bad news instead of doing it myself. For example, I was talking to a client yesterday about an earnout (money paid after closing if certain conditions are met). I gave him stats, showing that last year, 34% of deals had earnouts, with an average of 32% of the total value being deferred. That data helps clients understand what’s normal.

It’s also about balancing must-haves, nice-to-haves, and things we can give away. A common mistake is focusing on the top-line purchase price, which may never fully make it into your wallet.

Jon:

Greed kills deals. You need to make smart business decisions, which is why people need guidance from experts like you.

Let’s talk about business owners. When should they start thinking about selling their company? Should they be thinking about it from the start? And whether they sell or not, what fundamentals should be consistent to ensure their business can scale and grow?

Scott:

The best founders build businesses designed to sell from the start, even if they don’t plan to sell right away. The longer the runway, the better. Lessening owner dependency is crucial—buyers don’t want to hear that the owner is wearing every hat in the business. Strong historical financials and steady growth are also important.

Businesses are usually valued based on a multiple of earnings. You can influence that valuation by improving earnings and addressing qualitative factors like owner dependency and clean financials. These improvements don’t just help when selling; they also make it more pleasant to run the business.

Jon:

That’s great advice. When I sold my internet company years ago, I learned the importance of knowing when to leave and not being too emotionally attached. How can owners balance their passion for the business with making smart decisions about selling?

Scott:

As businesses grow, there’s usually a separation of ownership and management, which helps with objectivity. If you’re constantly on the front lines, it’s hard to separate yourself from the business. You also need to assess whether you have the skillset to take the company to the next level.

If you’re successful but don’t like your current role, that’s a sign it might be time to make a change. You can also bring in a CEO while staying in a technical or advisory role.

Jon:

When a company comes to you and says, "We’re ready to sell," what are some of the biggest mistakes you see?

Scott:

The biggest mistake is poor financials. As businesses grow, they need to move toward accrual accounting and GAAP standards. Another issue is disorganization. If you can’t provide the information I need to analyze and value your company, you definitely won’t survive a buyer’s due diligence process.

Customer concentration is another common deal killer. If most of your revenue comes from a few customers, that scares buyers.

Jon:

Many young people want to get into investment banking, but it’s competitive. What are you looking for in a candidate? And how do you differentiate between straight-A students and those with boldness and moxie?

Scott:

At top firms, they want candidates who have both the grades and the boldness. But in the middle market, personality matters a lot. You need to show passion and tell a coherent story about why you’re excited about the space. Soft skills like advocacy, negotiation, and relationship management are critical.

Jon:

Active listening, responding rather than reacting, and keeping the conversation going are important skills in any field, especially yours.

Scott:

Absolutely. Part of my role is managing emotions. For example, a seller might want to push for a higher price, but if I know that could damage the relationship, I help them understand the other side’s perspective without being overly blunt. Full transparency of every emotional reaction can be counterproductive.

Jon:

Tell me about your firm. What does Sierra Pacific Partners focus on?

Scott:

We focus on sell-side M&A, typically in the $5 to $100 million price range. We’re industry-agnostic and work across the U.S. We’re also success-fee only, which is rare in the middle market. We take on just a few deals each year so we can give each one full attention.

Jon:

That’s fantastic. Quick speed round: What book has had the biggest impact on you?

Scott:

Buy Then Build by Walker Deibel—it’s about entrepreneurship through acquisition.

Jon:

Best piece of wisdom you’ve ever received?

Scott:

"Everything works a little bit." It’s a marketing adage, but it’s true.

Jon:

Finish this sentence: One soft skill everyone needs in M&A is...?

Scott:

Perspective—being able to see things from the other party’s viewpoint and understand the big picture.

Jon:

Scott, this has been a great conversation. Thanks so much for your time!

Scott:

Thanks for having me, Jon.