Most investors are laser-focused on the exit. StoicLane Co-founder and President Matt Foran is playing a completely different game: acquiring fragmented, founder-led businesses in finance, insurance, and real estate, and turning them into best-in-class organizations they intend to own indefinitely.
In this episode, Neal sits down with Matt to explain the philosophy behind StoicLane’s permanent capital model, from $300M+ deployed across 87 acquisitions to their accounting firm roll-up, Archer Lewis, and an AI strategy built on 100% leadership adoption.
Listen in as Matt shares what it really takes to build a professional services portfolio, why they scrapped their sales team, and how they move leaders across platforms in ways most PE firms would never consider.
What You’ll Learn:
- Why StoicLane chose buy-and-build and what their tech background made possible.
- What separates a permanent capital vehicle from a traditional PE fund.
- How StoicLane built 87 acquisitions across 5 platforms targeting $550M in revenue.
- Why Archer Lewis disbanded its sales team and what that reveals about demand.
- How AI is augmenting professional services teams.
- Why industry experience isn’t always the prerequisite for leading a portfolio company.
- Why the seller-doer “unicorn” is the hardest hire in professional services.
Ideas Worth Sharing:
- “We should go out and simply get the client base, and then apply our technological skills in a way that optimizes these organizations.” – Matt Foran
- “Ultimately, our responsibility is to operate these in a way in which we would own them forever.” – Matt Foran
- “In other areas of the world where there are these statements of AI creating significant disruption, significant concern, we’re excited about it.” – Matt Foran
Resources:
- Matt Foran: Website | LinkedIn
- Archer Lewis
- Neal McNamara: Website | LinkedIn
- Email: nmcnamara@virtaspartners.com
About Matt:
Matt Foran is the Co-Founder and President of StoicLane, Inc., a private equity holding company based in Chicago, Illinois. He brings extensive experience in insurance technology and investment, having previously served as Head of Alternative Distribution at The Hartford Insurance Group, and as a leader at Applied Systems where he ran IVANS Marketplace. Earlier, he founded EvoSure, LLC, an InsurTech firm that was acquired by Applied Systems. Matt also serves as a Trustee of the American College of Financial Services. He holds a degree in Economics from the University of Illinois.
Connect with Neal:
If you lead a consulting, finance, or professional services team and want to stay close to how investors and private equity are really thinking about growth and value creation, connect with Neal on LinkedIn to keep the conversation going and share your perspective.
To learn more about how Virtas Partners helps clients navigate major financial transitions from acquisitions and carve‑outs to IPOs, restructurings, and other complex changes, visit the Virtas Partners website.
Read the Transcript:
Matt Foran: We should go out and simply get the client base, and then apply our technological skills in a way that optimizes these organizations and really enables the teams, the leaders, the sellers to outperform the peer set versus going and building from scratch and taking a decade or two to get the organic scale that we’re excited about.
Welcome to Consulting Uncensored, the podcast that pulls back the curtain on the good, the bad, and the ugly of the consulting world.
This is where real conversations happen about leadership, strategy, culture, and careers in consulting. Hosted by industry veteran Neal McNamara, each episode features candid discussions with consultants, executives, and firm leaders who are building, challenging, and reshaping the industry from the inside.
No filters. No fluff. Just honest insight into what actually works and what needs to change.
This is Consulting Uncensored. Here’s Neal.
Neal McNamara: Matt, thank you for joining me here on Consulting Uncensored. As we talked about, I’ll just have you go ahead and introduce yourself and your current role with StoicLane.
Matt Foran: Sure, pleasure. Thank you for having me. So, Matt Foran, president of StoicLane, co-founder. Stoic was started five years ago with three of us: Al Goldstein, Jake Nice, and I. Al and I went to college together. We’ve been talking about starting a business for at least 15 years, if not more. He went the fintech route; I mostly went insurtech. And ultimately, we were trying to find the intersection of where those two have opportunity or some sort of pattern that matched one direction or the other, and despite many efforts, couldn’t find one.
So Al had called me after he and Jake had come up with this idea of truly creating a permanent capital vehicle, which a lot of people talk about. They discuss all of the greats: Berkshire, IAC, Hearst, and many others. And when you really look into those firms, outside of a few, many like Danaher are somewhat the result of a series of actions that weren’t predicted. And Stoic from the beginning has been very intentional, very focused on investing in predominantly professional services firms focusing on finance, insurance, and real estate.
And as a part of that, our goal is to acquire highly fragmented, generally founder-led businesses that we roll up and build into a best-in-class organization. And one of the unique distinctions about it is these are not hub-and-spoke deals. These are organizations that tend to be small from the beginning. After a few deals—call it three or four—we start to build the management team. And ultimately, our responsibility is to operate these in a way in which we would own them forever. Our commitment to our investors is we’re going to compound their capital by not only creating a really phenomenal business, best in class in operations and technology, but also reap the benefits from that year after year, and do it in a way that’s highly tax-advantageous to them.
But we made that commitment five years ago. We’ve raised a couple hundred million dollars, and as a part of that, deployed, call it, just short of three hundred million dollars of equity capital, another two hundred million dollars of debt, acquiring roughly eighty-seven businesses across five different platforms. And today, we’re targeting about five hundred and fifty million dollars in revenue this year and just north of eighty million dollars in EBITDA.
Neal McNamara: So you mentioned the buy-and-build mentality. In thinking about that just conceptually as an investor in this industry, how did you get to that being the investment strategy versus the organic? And again, even within that, where does organic growth come within the investment thesis for you guys as well?
Matt Foran: Absolutely. The basic answer is most of our backgrounds are focused on technology. And if you look between the three of us and many people on our team, we have gone out and built technology from scratch. We’ve identified opportunities, we’ve found market fit, and we’ve done it more than once. And what you realize after doing that a few times is really you’re building core infrastructure that finds a way of getting a large client base, and then you optimize.
Our idea behind buy and build was we should go out and simply get the client base, and then apply our technological skills in a way that optimizes these organizations and really enables the teams, the leaders, the sellers to outperform the peer set versus going and building from scratch and taking a decade or two to get the organic scale that we’re excited about. And when you have really good technology, when you have really great operational leaders, and when you have incredible business leaders, which are the sellers of the businesses that we’ve acquired, you’re able to get significant gains faster because you’re building from a base of strength versus building towards a position of strength.
Neal McNamara: Okay. As you’re saying that, I was thinking about your original point as well on owning these forever. Because, I mean, I guess in my experience in looking at more traditional private equity investing that are doing roll-ups—
Matt Foran: Yep.
Neal McNamara: —it’s always building for the flip.
Matt Foran: Yes.
Neal McNamara: Which I think is… this is unique, I would think that you guys are doing these roll-up strategies but to hold forever.
Matt Foran: Yeah, I would suggest it’s initially masochistic because it’s obvious to us that some of our businesses are incredibly valuable relative to where we’ve purchased them, and the hard work that we’ve done has created an opportunity that would give us great returns. So it’s hard to be aware of the fact that similarly positioned private equity firms would do handsomely well right now. We’re aware of that. It’s a painful experience to go through, but the reality is we’ve also been on the other side of this, which is we’ve seen the moments where private equity has had a for-sale period. And it’s generally in moments where you’ve done all of the hard work, where you can see the opportunity, where you know that the technology is in fact working as you had stated for three, four, five years.
And at that point, you have a foundation that is incredibly unique, and that’s generally the time at which an organization trades hands. And the team that’s best positioned to execute on that opportunity, on that advantage with the team that we’ve built, is the one that’s holding the asset. So we’re well aware of the advantages of private equity, and we are big fans of that model. But we’ve also built firms, identified when you’ve created a ton of value, know the future upside, and have had to depart with the asset at that point in time.
And the easy one to watch is Al, as an example, had built a company in his early 20s. They sold that firm for a really great return, and let’s say at that time they sold it for $250 million, give or take. Today that company is generating $450 million of EBITDA. It’s not lost on him that there was a lot of upside available in that firm, and had he just held, it would’ve been an incredible return even from that point to today. And for us, I think we see that as the opportunity.
I think the second part is we’re well aware of the tax effects of flipping, or we’re very well aware of the time that it takes to redeploy capital. We’re very aware of just the frictional nature of raising a fund every two to three years, and we want to concentrate on building businesses. So again, we’re big fans of the private equity structure and approach and outcomes, similarly with venture capital. But for us specifically, and for the types of businesses we’re pursuing, this model is what we believe to be most advantageous.
Neal McNamara: So one of those businesses is an accounting firm roll-up, Archer Lewis, right? So how did you choose that rolling out local accounting firms was the right move for one of the platforms?
Matt Foran: Yeah. I think the early identified opportunity was, one, it was an area that had not been consolidated for a few different reasons. It was a business that no longer required a CPA to be leading, which was interesting. You can see that now with law firms as well in certain states. And the business generally: high recurring revenues, sticky clients, lack of resource in terms of new young professionals going into the space. We also witnessed in the Big Four a challenge in terms of younger talent feeling they didn’t have the same upside that they once did.
And lastly, it was a really good conduit in terms of—we see the client base as a really good starting point of creating a lot of value for their organizations. You start with tax, you look at bookkeeping. We have a tremendous payroll business. There are many tentacles to this sector that we think are very valuable. It’s a trusted advisor to the client base, and it’s also an area when you start to look at these local businesses where there are many firms without a successor. And even when they do have a successor, the transition period is usually a five-year revenue-share split where the seller kind of works themselves out of the business.
Someone who’s worked at a Big Four, worked in, someone who is younger looking to take ownership of a business, is able to go in over that five-year period, transition the client base, and take over the leadership of the firm. Whereas, we saw an opportunity to provide greater clarity on liquidity to the seller, to give them an opportunity to quickly get time back sooner than a five-year transition. There are things that we do that are quite a bit different than a single owner coming in. We’re incredibly good at all the back-office areas that most leaders are not excited about. We love handling the finance side. Surprisingly, some accountants don’t really like doing the accounting of their own firm. They certainly don’t like the legal side. They don’t—yeah, exactly that. Exactly right.
We’ve seen that compliance matters, HR matters, development, technology. All areas that sellers are really not excited to spend their time on, we’re great at. So we don’t just offer a more effective path to liquidity, we also offer an acceleration for them getting time back to, one, spend more time doing what they really enjoy, which is spending time with clients, executing taxes, developing talent, doing reviews. And secondarily, they have a quicker path to retirement if they so choose. Though we’re generally really excited to have our sellers and leaders around for a long period of time. We’re buying their firms because we think they’re best in class. We’re buying their firms because they have incredible reputations, they build great teams, and ultimately, we have found ways of keeping sellers involved in our businesses across the board longer than a traditional private equity acquisition.
Neal McNamara: I was thinking about how every accounting firm right now is dealing with thinking through at least how this is going to impact the current and future state, how it impacts offshoring models and the like, very specifically with more of the tax and accounting—
Matt Foran: Sure.
Neal McNamara: —as well. So where is your guys’ head with that in the Archer Lewis business?
Matt Foran: I think the most enjoyable part of my answer is it is obvious that there is no lack of demand for the services that Archer Lewis provides, which is unique. What that provides for is an opportunity to create productivity where we expect it only improves, one, the number of clients that we can support, but two, the quality of the deliverables to our clients. And we don’t have a concern around disruption that this may create to our teams, to our clients, and to our business.
Many of the businesses that we enter into have a trusted advisor relationship, whereby if you think of appraisal, if you think of taxes, if you think of our PEO that handles benefits and payroll, they are trusting that you execute something that, if it does not happen correctly, it’s an issue. So in other areas of the world where there are these statements of AI creating significant disruption, significant concern, we’re excited about it. And I think our teams are excited about it, and we’re approaching it in a very productive, aggressive manner with our teams in a very transparent manner such that in our last investor discussion, we advised them that across our leadership team we have 100% AI adoption. We have a strong AI use policy. We have incredible lawyers who are supporting our efforts. We have an internal dev team with PhDs in AI that are guiding how we behave and the guardrails we have in place.
That said, we’re going aggressive. So, the areas where you see this having an effect on our business is we can make better decisions. We can better assess information. We can ingest information more efficiently. These are all areas that I’m sure when you talk about offshoring, there are general concerns around. You also have tools that have been in the industry for a very long time that handle a lot of these tasks as well. So you have great tools out of CCH, you have SafeSend, you have all of these advancements that have been made over the past twenty years that in some ways AI can displace. But the reality is you have a bunch of core systems that work very well together, so it’s an augmentation, not a replacement.
Neal McNamara: Yeah. My personal prediction on this is that near-ish term, so the next couple of years, maybe even longer, in this industry broadly, in professional services broadly, the biggest disruption is really going to be we are going to figure out ways to do things with AI that you generally used a big offshore team. I think that’s gonna be the most significant impact operationally for professional services firms in the United States. And whether that actually impacts margins and/or how it impacts, I don’t know, right? I mean, development costs versus labor, it could end up just being a push. You just might have fewer people you’re paying, and then your margins might not necessarily change when you get to a normalized level of how, when you figure out actually how you’re going to execute this.
I do think that the countries that are heavy offshore being labor are going to get crushed economically. There’s gonna be, I think, a band of the middle class in India in particular that… it could be really ugly there. That’s my personal view is I think that, like I say, it’s gonna make us more efficient over here, it’s gonna make our people more efficient. But I think from a disruption in FTEs and whatnot, I think that the real FTE impact is gonna be, in the nearest term, is gonna be FTEs that you offshore today. I don’t think that all of a sudden we’re not gonna have analysts in public accounting firms, nor that there are gonna be half of them. I don’t think that’s what’s gonna happen.
And like you guys, we are looking at it in a similar way, is that it’s really a productivity gain and an ability… it could actually allow us to scale faster because if you can have technology do more of this and you are taking on more business, you just take on more and not have to worry about, “Oh, we don’t have enough people to do this work,” right? There’s, again, a scalability aspect to it that’s exciting. And with our model, which is different in terms of labor pool, not having a traditional pyramid where you’re jamming tons and tons of hours for these activities that you could automate through technology, and we’re very happy that we did it this way.
Matt Foran: Do you think that all of the best degrees of execution are currently happening on behalf of clients by their accountants?
Neal McNamara: Oh gosh, no.
Matt Foran: I actually… I think it’s so easy to fall prey to what gets displaced, but I think people like you, people like the members on your team who seek to deliver the best-in-class answer are only going to be enabled to do more of that. And I think there will be more companies, more people who are going to receive better and higher quality advice that today they are not receiving. They’re not getting just-in-time intelligence around the most recent Build Back Better Act or whatever it may be to make the best judgments on how to operate their business or achieve the most efficient tax position, or how to most effectively configure benefits and payments to their employees in a way that generates the highest incentive structures.
So, I think for people who are incredibly intelligent, business-savvy, in pursuit of delivering best-in-class services, this only amplifies their ability to generate value on behalf of others. And I think if you start with that as your nucleus, it just means that you can deliver more value.
I think the challenges of offshoring and tech displacement and other areas where AI can be highly disruptive… we’re fortunate in that we don’t have a high degree of offshore talent today.
Neal McNamara: Yeah.
Matt Foran: We’ve gone after local businesses where nearly all of them have done the work within a 25-mile radius. So for us, our slate is a little different than larger, more sophisticated firms, which I think is a massive advantage. So we’re very excited about that part of the market that we’ve pursued. It doesn’t go without other challenges—smaller businesses, local challenges, just a number of things that a larger firm doesn’t have to concern themselves with. But we’re pretty excited by the fact that we don’t have to have an answer to India or BPOs or other types of service providers that may or may not go through some pretty unique challenges over the next few years.
Neal McNamara: So you mentioned on the Archer side that you’ve got, and I would imagine that the sellers of these businesses are primarily the business developers—
Matt Foran: Yep.
Neal McNamara: —of they kind of own the customer. How do you see that going forward? Or maybe said another way, going forward, do you see that being that kind of seller-doer, owner-seller of their business? The model, do you see yourself scaling a more centralized business development function, sales function there? Because this is one that I have strong opinions on. This is really hard to do at scale. To scale this development in a professional service organization, any professional service organization, is very hard. So I’d be interested in where you guys see Archer going as you continue to grow.
Matt Foran: I’ll tell you, this has been quite iterative. So again, I think you can tell by our actions that we may not have assigned as much confidence in the early guidance we were provided, stating that there is in fact a list of available clients that these firms simply could not accept because they didn’t have the resources. And because of that, we actually built a centralized sales team, an incredible team, great people. And ultimately they went out and started to generate success, and they’d bring those clients to our offices and they would tell them, “We weren’t kidding. We don’t have the resources. We already have a list. We don’t need more.” And ultimately we parted ways with that sales team—again, an incredible group of people—because it truly was a function of too much demand, too little supply.
Neal McNamara: Yeah, you don’t really need a sales team if that’s the case.
Matt Foran: We don’t right now. I certainly think there will be a place and time where we’ll have to have a real answer to that question. The current answer is we seek out organizations that have the best reputation in the market they participate in. And the reality is that reputation carries with it a tremendous amount of business development velocity that I think goes underappreciated. And over the course of transitioning some of these organizations to the brand name of Archer Lewis, the natural experience of employee attrition or leadership that does retire, there will be a moment where that will be insufficient.
And I think the reality is for us, the replacement of those roles will include a leader who will need to continue to do business development. The idea that we’ll do that centrally versus locally—my gut is it will continue to be a local effort, but as with all things that we do in technology and other places, the practices that we develop will likely have consistency. And the efforts around marketing, around SEO, around getting ahead of AI search, these will all be things that I expect we will need an answer to that is consistent across the organization, which means some degree of centralization or expertise.
Neal McNamara: And the expertise is gonna be my next point or my next question. What’s your view in this industry on the person selling the work needing to have done it him or herself previously?
Matt Foran: My sense is, as we have talked about the development of leadership, we have very consistently stated that those leaders will have deep expertise in their craft. And whether that’s an intentional decision around a salesperson must have depth or have done the work, I’m not sure that we’ve explicitly stated it in that manner, but I think by simple design and the way in which we describe the future of this organization, it’s likely how we think about the problem.
Neal McNamara: It’s so hard. It’s so hard to sell if you haven’t done it. I think it’s not impossible. I think if you’ve got great relationships, people just really not just like you, but respect you and will have trusted, real trusted relationships—
Matt Foran: Yep.
Neal McNamara: —where if you say, “Hey, this guy is awesome at this, so you should buy from us.” But man, you better have a lot of those.
Matt Foran: I think as you described that, you actually partially answered the question, which is sales becomes a lot easier if your client base is advocating for you as being a trusted advisor. And that will be our goal.
I do think when we talk about sales, having experienced this personally, it is arguably one of the hardest jobs on Earth. The rejection, the discipline, waking up every morning, putting on the face, going out, spending time at a booth, that’s something that most people shy away from. Having the energy to do it, having the charisma… those are skills and those are behaviors that not everybody has.
Neal McNamara: Right. And then to have those, but also be technically great at your craft, now you’re unicorn hunting. It’s very difficult. It’s really difficult.
Matt Foran: Yep. So I think the answer will be we will seek out companies and leaders and recruit talent that, by the quality of their work, give us an opportunity of building the business through some version of word of mouth. That’s some portion of the business.
The other side will be perhaps some amalgamation of people who have the skill, the expertise, the craft, but at some point, at some size, I’m guessing most organizations have to bring in some degree of professional sales talent because there is a scale at which that expertise only gets you so far, and you don’t have enough skill to get that many unicorns. And I’m not sure where that level is. We’re certainly not there, but I’m sure there are larger organizations that are incapable of getting that many unicorns. Or at that size, being able to incentivize them correctly.
Neal McNamara: Yeah, there aren’t enough of them. And then like you said, the main incentivization or the tie-ups they have… so it’s just, it’s really hard. It’s really hard. Okay, so let’s put on the buyer hat. So in your role at StoicLane, so now let’s talk about how you’re a customer of these services. So why don’t you tell me a bit about how you think about how you choose to work with firms?
Matt Foran: Sure. I think the easy starting point is if you look at the firms that we work with, as well as the people on our team, there is one consistent factor, which is people we rely on most are folks that we have experience with. So whether it’s legal, accounting, tech, you name it, it’s likely that that firm has a history with us that goes back 10, 20 years. And that may not be the firm specifically, but certainly individually.
Neal McNamara: Well, Stoic, you just mentioned, is five, five years old, so.
Matt Foran: Right. For sure, yeah.
Neal McNamara: By definition.
Matt Foran: Absolutely.
Neal McNamara: It would have to be person-to-person.
Matt Foran: And what you see there is, one, we’ve vetted people over years, and we trust that they can deliver. And we rely on them to handle many moments of our organizational development that are critical, that we clearly lack either the resources or the time to do. And there are not many things we’ve done in the last five years that were not hard.
So when we seek out partners, it’s people that we know we can accelerate into a spot where it’s probably an immediate need. It’s not simple. It requires, back to the point about craft, requires people who are incredibly good at what they do, and don’t look at any one challenge as a binary set of outcomes, because Stoic is not a standard setup.
Neal McNamara: You are not. Speaking as, you know—
Matt Foran: You know as well as anybody.
Neal McNamara: As a provider of services to StoicLane, I would agree. And I think that’s actually, again, with full disclosure, you are a client. And so I think it’d be interesting for this to talk about, because I never actually, I think, have asked you this. Sure, let’s go back to, like, why you guys originally hired us, right? Because that was the early days.And then, and I think as important is why do you continue to? Just as an example of how you guys operate.
Matt Foran: Yeah. I’m glad I gave the earlier explanation of we don’t do easy things.
Neal McNamara: Which is perfect. Yeah, I was thinking about that.
Matt Foran: Yes. So, I think the… there are a couple answers to your question. The starting point is you had a prior relationship with one of our CEOs—and a great relationship, a trusted relationship, and one where you had mentored that person in a way that he is an incredible leader today. So that’s a great starting point.
The earliest reason that we reached out was we were in the process of building our second platform, which was a vacation rental company. And as a part of the early acquisitions—in full disclosure, my background is not accounting; my background is very far from accounting. And as we started to accelerate the growth of that business, we were working with service providers who were providing us with QV support and some other items, and falling short on consolidating the financials and giving us what we needed to have the confidence that in five years, if we were so to choose to go public, that we felt we had the infrastructure to do it correctly. And at that moment, it was obvious that we needed a partner who could move faster, move with greater certainty, and give us the confidence that we needed that we were building that platform correctly from the onset—and that’s why we called you.
Why we continue to work with you is there are twenty-two employees at Stoic. There are now seventeen hundred total employees across Stoic, including all of our firms. The firms that we acquire across our five different platforms are founder-led. They don’t have the same level of rigor that we require in our financials. And as such, each new organization that we acquire, each new platform that we build, we are holding those organizations to a standard in a less than thirty-day time period that those sellers would never be interested in. And with a twenty-two person leadership group at Stoic, and generally very efficient teams in our platforms, there’s a set of opportunities that repeat themselves in terms of getting outside help to do our jobs well. And we only rely on so many firms to do that, and they are best-in-class organizations. They’re JonesSpross in Austin, Kirkland, Virtus, and a few others.
Neal McNamara: So why don’t we finish this with just talking about leadership? And I think because you—we’ve spoken about your perspective and philosophy on the leaders that you put in place in any StoicLane portfolio company, because I think it is definitely unique in the way you look at it. So I’d love to just give you the opportunity to kind of express how you guys have approached this here with your portfolio.
Matt Foran: Sure. I think there are a few consistent behaviors, skills, and other attributes of our leaders that if anyone were to come and look from the outside in, they would probably recognize very quickly. The first is there is a lack of ego, which is pretty unique. I think that’s incredibly important. It’s paired with the fact that, outside of me, those folks are incredibly intelligent, and they’re able to make decisions, assess information, learn new information, change processes, understand tech, understand the financials in ways that are very unique.
And all of that is critically important because the types of businesses that we acquire, the way in which we treat sellers, their teams, how we behave in their community, our intent about the longevity of their business—the intersection of that duration, that behavior, plus the need to generate the types of returns that we’re excited about really lead you to only a few people who are going to be great at that role, and a team that has to be built around them, they’re very unique. These are people who have the best interests of others at heart. They understand we have a responsibility to the businesses that we’ve acquired. They generally are the first one at a party to make sure you have a drink. They rarely talk about themselves. And truly, if you look across the group of leaders that we have, they’re just wonderful human beings.
Neal McNamara: I agree. They’re great. I think the other thing that I found very unique… so it’s not uncommon that in private equity you’ve got leaders that will move from one portfolio exit, and then come back and do another turn at another platform again. But I’ve never heard of a PE firm that takes a CEO from this platform, moves him over there, and starts moving puzzle pieces in the existing portfolio.
Matt Foran: Yep.
Neal McNamara: And it’s nuts. You guys have done that, in just five years.
Matt Foran: Yep.
Neal McNamara: You guys have… I mean, how are you able to do that? How are you able to do that successfully? ‘Cause that is… I think I know, but I’d love your view on why you think that that’s worked.
Matt Foran: I think what’s really unique is, one, Stoic by design is a masochistic adventure. Stoicism is an appropriate mindset to do what we do, and we started this in the middle of a pandemic.
Neal McNamara: Yeah.
Matt Foran: We raised a couple hundred million dollars with the three of us not having private equity backgrounds. We began executing in a time period with a high degree of uncertainty, and the people who have self-selected into what we do equally share the mentality of wanting to do very difficult things. And I don’t think that’s unique to us, but what is unique is those leaders want to do it again and again. And they’re uniquely skilled at taking what they’ve learned in one platform at one stage of that development, and applying it to the next platform that we’re building.
So we’ve been incredibly fortunate to have… I’ll give you one example. We have a woman on our team, Mary, who started in our appraisal business. She moved to our vacation rental business, and part of our excitement was her incredible skill around not just capturing and managing data, but making sense of it in ways that gave us massive leaps forward, in a way that was contagious. She gets people excited about operating the businesses from a position of knowledge in a way that’s very unique.
And the measure of this is one of our leaders in the vacation business was adamantly against AI. Didn’t think it really contributed a ton of value. And if you go back six months, 12 months, it’s not a terrible argument for their type of business. Vacation rental is a function of getting guests to check in, making sure the homes are clean, checking them out correctly, resolving any issues that they may have while they’re staying. And overall, you want to guarantee that they had an incredible vacation, and it’s a memory that they’ll be excited about for the rest of their lives. That’s the business.
What we’re able to do now with information—fast-forward a year from a degree of skepticism appropriately to where we are today—that gentleman is making sense of task data, review data, whether or not someone completes a booking based on 24 different variations of our websites, and he’s doing all of it with a prompt that’s sitting in Slack, that’s sitting in Claude, that’s bouncing off of data that Mary had created, and it’s generating outputs that are completely mind-blowing. And it’s because we had a leader who started in one of our other businesses, who learned how to construct data with our incredible development team, carried that forward into a different business, and because of it, we’ll be able to provide a better outcome for every guest that comes through our doors.
And her unique skill means that our appraisal business is on solid footing, our vacation rental business is benefiting from that same mentality, and I wouldn’t be surprised if five years from now we built another large company if it’s not her who has her finger on that organization getting to information faster, better utilizing AI, and adopting tools in a way that differentiates the efficiency and the effectiveness of the organization.
And that’s only one example. We have that over and over again where certain people have demonstrated very unique skill sets. They’ve put their mark on a business. They’ve positioned that organization in a way that’s sustainable, durable, and it’s obvious that there’s an equal, if not larger or more challenging use case in one of our other organizations where they can have a very high impact and expand their degree of ownership, accountability, opportunity, leverage. It’s fantastic.
Neal McNamara: Lastly, on this point, you were mentioning earlier how the direct industry experience of said executive leader isn’t that relevant to you. So talk about that.
Matt Foran: I think what is really important is collectively the organization has incredible depth in the business that they operate. And we are afforded a very unique degree of latitude in some of our senior ranks because we so heavily appreciate and rely upon the skill, the experience of our sellers, and the teams that operate our businesses such that we don’t need every leader in our company to have the same degree of expertise. And the reality is when you are building these organizations through 87 acquisitions, some part of the responsibility of the leadership team is the experience of creating a singular firm from 24, 25, 30 different businesses, which that skill is as important as having the depth in the sector that they participate in.
If you look at Jake, who runs Archer Lewis—back to the intelligence point—I’m pretty sure he knows almost every form in a 1040 or any tax filing that you can think of, or amortization table, or you name it. His memory and knowledge of areas of accounting that I think most accountants have either never learned or care to think about is extraordinary.
Neal McNamara: And that’s after taking the role, not before taking the role, right?
Matt Foran: No, he… in a very scary way, he knew more about accounting before he took the job than I would’ve ever guessed, and it’s actually what made it a relatively simple decision.
Neal McNamara: Okay. Absolutely, yeah.
Matt Foran: So his appreciation for accounting, his mastery of the profession, was higher than I think anybody would have ever guessed in looking
Neal McNamara: Yes, again, it is just looking at his CV.
Matt Foran: Sure.
Neal McNamara: You would’ve never guessed that. Yeah.
Matt Foran: Yeah, the fact that he was CFO of Stoic helps, but his depth is absolutely incredible, and his ability to learn is just amazing. But the fact of the matter is we needed him to be as good at the profession as we needed him to be as good at really shepherding these organizations to a singular firm with a tech stack that allows these different talents across the firm to provide greater service to our client base.
We have certain leaders across the country who are incredible at cost seg. We have leaders who have very specific expertise in R&D tax credits. What’s really unique about what we’ve done is—and what we’re working towards is—by consolidating the information layer and the processes and tools, it means that we can better serve our clients. It means that our experts are able to do more. But to pull that off is nothing short of challenging. And it means spending time with the local leaders, with the local teams, with a great understanding of what’s important to them to deliver the quality of service to our clients that they appropriately deserve without disrupting their day-to-day. It’s a hard job. Jake does that incredibly well.
But as a part of it, in his leadership team, you have Donata, who’s the COO, who has an incredible track record in public accounting. You have Morgan, he’s head of finance, who has an incredible background in accounting. If you go across the leadership team there, they have depth. And back to your point about moving folks around, Donata was our head of finance in our PEO. So the fact that we have people that we trust to take on different roles… and the story there was, at some point, she had put the finance function, the accounting function, and the compliance function of our PEO, which is a relatively complex business, under rails that we are very confident in, and she came to me and said, “I want the hardest ops role that you have available.”
Neal McNamara: That is awesome.
Matt Foran: That was her ask. Back to picking people who are excited, to go find the, yeah, challenging opportunities. That’s a great example of it, and it was at exactly the right time. And what it did was, one, it gave Jake, a great leader. It provided confidence to the sellers that we had someone in the seat who understood their job, who’s been in a very similar position, who even knows the exact tools that we’re using from her past. She can speak the speak, and she ultimately knows how to operate in that business. So we do have places where expertise matters, and collectively the team has to have it. But not every single individual necessarily needs to be an expert.
Neal McNamara: Makes sense. Makes sense. All right. Well, I think that’s a good thing to end on here. So, actually we should end with this. Cheers. Thank you again for coming and doing this.
And that’s it for this episode of Consulting Uncensored with Neal McNamara.
Want to join the conversation? Connect with Neal on LinkedIn to share your thoughts on today’s episode and join a community of consulting professionals who want to cut through the BS. Thanks for listening. There’s a new episode every other Wednesday.
We’ll see you then.