Episode 88: Part 1 – From small town to big time business. Sam Strausbaugh

Making it big with Sam Strausbaugh

SHOW NOTES

In this episode, I’m joined by Sam Strausbaugh to talk about how he went from small-town boy to owning his own investment firm and being the President of a 30 million dollar fund…

 

Sam Strausbaugh holds the position of President at Foundry Mezzanine Opportunity Fund LP

which is a private equity, 30 million dollar fund.

 

He is also the CEO of his own investment firm and is making very good money.

 

But it wasn’t always this way for Sam, not too long ago he was studying at a liberal arts college and wanted to go pro in basketball.

 

So how did he make this pivot into big-time business? How did he find his passion for acquisitions and get enough experience to make him credible?

 

He’s here with us today to answer all these questions and more..

 

“Hard work does pay off, no doubt, but I look back on my life and I have been really lucky.” – Sam Strausbaugh

 

“I was crushed, I’d never been fired before.” – Sam Strausbaugh


Time Stamps:

02:45 – What Sam was like in high school and the difficulties he had growing up.

11:08 – How Sam pivoted from liberal arts and basketball to becoming an accountant. 

13:12 – Why Sam decided to become an accountant and why he hated selling life insurance.

15:42 – The benefits of working in a small firm.

19:18 – The different businesses we audited and what you learn as a CFO.

22:20 – How Sam found his interest in mergers and acquisitions.

28:38 – How getting fired from Defiance Metal Products became a positive turning point for Sam.

 

Resources:

Defiance Metal Products

 

Connect with Sam Strausbaugh:

LinkedIn

 

Connect with Ben Jones:

TRANSCRIPT

BEN: Hello and welcome back to Money With Mak And G. We have a special guest with us here today. His name is Sam Strausbaugh. Now he’s a real family man out there. But when we talk about money, he is the president of Foundry Mezzanine Opportunity Fund here in Indianapolis, which is a private equity $30 million fund. He’s the CEO of his own investment firm called Confluence Investments, which invests in micro caps and is approximately $5 million. And lastly, he has his own personal private equity investing portfolio which has six equity holdings and three commercial real estate holdings. We’d like to welcome today, Sam Strausbaugh, how are you doing Sam?

SAM: I’m doing great. Alright, so it’s going to be fun looking forward to it.

BEN: Good. And we have our sidekick we have Ed McMahon over here. Tony Petrucciani.

TONY: You forgot to tell one of his biggest holdings. He has like 17 peloton bikes.

SAM: We just talked about this today. I have four. I have two bikes and two treads.

BEN: Do you have to pay like $60 a month for each one of those subscriptions?

SAM: Nope. One subscription for all four.

BEN: So now is that true, like when you’re riding, do you get to see like different landscapes that you actually ride on, or is it only the instructor?

SAM: No. Peloton it’s only the instructor. I think they have an app or a section where you can go and look at landscapes but doesn’t interest me.

BEN: The attractive younger people interest you? Well, good to know, good to know. Well, we always start out these things with a little question out in the magic fishbowl. You want to grab the magic fishbowl, you can hold it up in front of the camera, if you want to say hey, and reach in there and let’s see what you got. Because we had seen him first or no, you can read it out loud. You’re actually kind of put it back. Stop that. So Tony had a great one. Kobe had a great one. If it’s a really bad one, I think Tony and I can veto and we can start over what is it?

SAM: What were you like in high school?

BEN: I think Inquiring minds want to know that one. Because I think this goes to your story. First of all, I think you probably better tell where you’re from, because one of the things that we talk about here is the fact that you don’t have to be born into money, to be good at managing money and to grow wealthy. And so I think your story is very unique in that respect and we’ve talked about it a number of times. So I would love to hear just a little bit more about.

SAM: So do you want me to go back to the beginning, from highschool?

TONY: From black and white TV.

SAM: I’m from Northwest Ohio originally, grew up in a little town Deshler Ohio, the corn city. Write that down both of you.

TONY: That’s the only city in America known is the corn city probably not. You test to see if he’s really from Ohio. How’s that? Oh, H.

BEN: I O, yeah, you do. You are. We know when to stay away from Sam in the office, don’t we? That happens.

SAM: That’s right. Okay, what was that like in high school? I grew up in Northwest Ohio in a little town called Deshler. We moved when I was in high school to a very small town called Arcadia, Ohio. I graduated with I think 40 or 42 other kids. I think my class rank was 38.

BEN: And your family was like crazy wealthy, right? No. They weren’t. Was it like were you on the poor, or met just right in the middle, where were you?

SAM: Well, it’s a long story. I don’t want to get into too much of it. But my dad and my mom got married when they were young. They had four kids. I was the fourth of those four children. And my dad died when he was very young. He was 32 years old. I was not yet two years old. He was an attorney. But he’d only practice for a couple years. So my mom then was set up with four children, no training, no job. So we were not wealthy, did not have money. She then remarried. I forget what it was. He died in 65. I think she remarried in 68 or 69. So three or four years later.

BEN: So kind of a challenging, you know, childhood, if you will, but you don’t know because you’re too but yeah, you’ve got a mother that doesn’t really have the skills to really lead the family to where it needs to go. Go ahead.

SAM: That’s right. Yeah. But she did go out and she got a job in an insurance company. Actually, I think. Let me back up. She did not get a job in insurance company, my dad had an insurance company in his law firm. And she took that over and ran it to keep us in clothing and food and shelter. Then she remarried a man. Then they had one child, my younger brother. Gotcha. So there were five of us. And he was a corporate pilot. So we weren’t poor. We were poor after my dad died for a number of years. But we weren’t poor, middle class.

BEN: But educated and you’re probably being taught some really good Midwestern values, work hard and some stuff like that. Right? That’s right. Okay. That’s right. So then you get into high school and what were you like in high school?

SAM: I was a jock. I was a basketball player, football player. Probably way, way too arrogant for my own good and for no real good reason.

BEN: You were the best person in the town of 100. That’s right.

SAM: And I was 38 in the class rank of 42 if you remember.

BEN: I will hold that over you. 38 is your new name.

TONY: Almost in the top 90%. I mean if we are rounding.

SAM: I’d like to consider it the bottom decile.

BEN: The bottom decile. Well, it sounds big. People don’t necessarily understand this. This is where Tony usually says when Ben left Purdue, he went to IU and the IQs went up in both places.

TONY: You’re ruining it.

BEN: I know. I tried to cut it out. So you’re you’re a jock. Are you kind of well liked?

SAM: I don’t know. You’d have to ask the other kids in my class. Again, remember, I was arrogant. So I probably thought everybody liked me. And they didn’t. I was basketball player, loved to play basketball. Football player. But again, small school.

BEN: And what small school you said 42. So what about 150 people?

SAM: Less than 200 in the whole high school. Just really small town. So I was just a regular kid. We grew up on a farm so it was farm kind of work. Did I tell you the story? It was glorious.

BEN: I’ve never heard the word use glorious with a mullet.

SAM: It was glorious. Short on top, party in the back, business and party in the back. And I had a farm in the back.  Yes, it was awesome. I want to go back to those days. My wife has said absolutely no chance.

TONY: I had an afro in high school but it wasn’t a farm, It was natural.

SAM: Mine was not natural at all.

BEN: But my wife remembers there was a time that I was working out a lot. So I was kind of buff and I had my hair down to my shoulder. And I had spray in bleach. So I was doing it. It was so nasty. And the more people complain the more I just ignored them. And then the more bleach exactly and the day that they like stopped, you know harassing me is like, like two days later, I just cut it off. And it was just like great. I got a Hurley, I was doing all kinds of crazy stuff. I love that. I think it’s brilliant. Yeah, I have to show you the picture. I have to bring it in. So you get through high school, you’re doing your sport and your mullet people are digging. Yeah, you’re doing really good. You’re putting up three points a game but your basketball game.

SAM: A lot more than, about 24 a game in my senior year.

TONY: Were you in this height in high school?

BEN: Wow. Okay. 24 game that isn’t bad, small school.

SAM: My wife and I have this argument let me interrupt. I had 39 point game. And she was also a high school basketball player and I think she had no excuse me, I had a 36 point game and she had a 39 point game.

BEN: Well you’ve probably never heard this story. So my sister was so impressed that she what only missed what two points on the SAT and math. Yeah, and she was poking Tony hey, you think you’re so smart? I did so great on the SAT and Tony just kept his mouth shut. And as the story goes, she kept pushing and pushing because that’s my sister. And then as the story went, Tony went into the back office, pulled out his score and do you have any idea what his score was?

SAM: Obviously I do not.

BEN: He got perfect on math.

SAM: No way I don’t know if we’re allowed to have fistbump in here.

TONY: This is a secret room here you can do this.

BEN: You can pull out all the viruses so yeah, so that was funny.

TONY: When I met her mother, his mother, she goes, so you’re the boy that beat her on the math. It sounds like mom and I said, the man that beat her on math. I never said that.

BEN: Anybody could 650 or below is a boy.

TONY: And like, you know, I graduated high school. I was five, eight, and 125.

SAM: Yeah, you’ve grown a little.

TONY: They wouldn’t even let me be the ball boy on any of the sports teams because I was too small.

BEN: You got the ball down? Or the boy down? Sorry. That’s what I meant to say. Yes. So you’re coming from the small town and you’re doing pretty good in sports. And you’re a pretty what’d he call it proud of yourself. But then you’re like, you’re moving through and I know that you get into doing the accounting thing. Right. So where to go to college?

SAM: Went to a small liberal arts school in Defiance, Ohio called Defiance College.

BEN: And liberal arts? Yes. The wonderful type of school that we talked about today. Yeah.

SAM: But went there actually to play basketball? Okay. That was really the primary reason.

BEN: So how far away is it is like 10 miles from where you live or? An hour. Okay.

SAM: An hour away. I got a quick, quick recruitment story of me being recruited in high school. You guys know Bob Huggins? Yeah, I remember, at University of Cincinnati, and now at West Virginia. Okay. Big Ohio name, recruited me in high school, sent me a letter said he was coaching at the time at Walsh College in Youngstown, Ohio, or Canton, Ohio. He calls me, I go for a visit, we play. Because I average just so many points. And I never heard from him again after he saw me play. So there you go. Really? Yes. Oh, wow. Not like what he saw.

TONY: You know, back then they didn’t have computer systems. So maybe they just got your name switched?

SAM: Well, and what they did was they read the paper and said, this kid scores a lot got him in and said, not as good as I thought he would be. Anyway, so I go to Defiance College. Did you play? No, no, I went to play and didn’t make the team because I wasn’t good enough.

BEN: Wow. Okay. So I don’t think they go. But I think that’s something learned because we keep talking about the fact that you think you’re going down one path and the reality is you got to pivot. And you got to pivot, whether it’s in business or in life. And so you made this change. And now you’re at Defiance College.

SAM: Went to play basketball, and then scholarship, no, Division Three, NCAA Division Three, but then went to go on and get my accounting degree.

BEN: And why accounting by the way? Just just kind of fell into it maybe?

SAM: Actually my mother taught bookkeeping and accounting in high school, I took the class and liked it. And I was like, I don’t know. I don’t know what I want to do. How about accounting?

BEN: Because my mom said, you can be five things, right? And literally an accountant, a doctor, a lawyer and an engineer, a nurse, because you could be certified in all of those. Yeah, so her whole deal is you get a job and then you’re off the payroll and I have nothing more to do but I thought, you’re talking about money? All right. Language of business. I’m digging this. So this is cool. But you just kind of rolled with it from your mom a little bit.

SAM: And it was kind of natural for me. It’s kind of in my DNA. You find out later, but I liked it. Graduated college, went to a CPA firm. Actually, there was a little stop in between I sold life insurance for a while, hated it. Hated it, could not have been worse.

BEN: Why not? You just had to talk to people.

TONY: Oh no, he was sold on products they didn’t ever want to use.

SAM: That’s right. I hated the product. I hated selling life insurance. And here’s how much money I made. $0. We lived off of credit cards. It was terrible. And my wife, bless her heart, every Sunday afternoon, she says, have you, have you made your calls for this week yet to set up my points. Yeah, it was painful. 

BEN: Tony I didn’t know anybody made less than you their first year after college because he made, do you know how much he made in the prior podcast? Go ahead.

TONY: My first year in business, I knew I was going to smoke everybody and make $50 grand and at the end of the year, we tallied it up. I made $8,000. Yeah.

SAM: I would have killed for it.

TONY: I could have loaned you money.

BEN: And as we joked, it’s like, for all intents and purposes, you were a complete failure.

TONY: I thought I was. Now I know for sure. Yeah, no kidding.

BEN: So this show just goes to show that if you’re a complete absolute disaster failure, the more successful in life you’ll become. So I made a lot of money. I mean, $28,500, my first year. So that’s why I’m behind both of you guys. So I can kill both of you, and nobody would actually hear it. So it’s like, you go and you get your accounting degree, you probably get your CPA. Yep. Shortly after paid insurance. So that’s good. It’s good to know what you like and don’t like and then what happens?

SAM: Yeah, I go to a local, small, regional, local firm in Defiance, Ohio, and just worked there for let’s see, that was late 80s through 92. And just really, I loved that business, I realized that it was just something new every day.

BEN: Different firm or company.

SAM: Different companies. I did tax work, I did accounting work, I did audit work. So we did a little bit of everything. So there was a bit of a variety. And the senior partner in our firm, this was a small firm, there were 10-15 total, and maybe only six or seven accounting people treated me great.

TONY: Were you in the lower decile?

SAM: No, I was in the top decile.

TONY: Turned it around.

BEN: Which just goes to show school doesn’t always indicate rags to riches. But you know, one of the things when I was with Ernst and Young CPA firm, that I loved is the fact that you do these audits and it was a little brutal, because you do so much grunt work. But I learned about just so many different things. Yeah. And in addition to that, the one thing that I kept telling people is, you’re right out of college, you know, nothing, you’re an idiot. And I had access to all of the high level executives at every company I went to, and when I talk in small companies, Eli Lilly in Indianapolis, the CFO guy named Arnie Hanish. If I needed to knock on his door and walk in, he would take me because as an auditor, they wanted to explain things to you to make sure that the audit goes well. So for me, I thought that was the fascinating part.

SAM: Yeah, and me too, I was going to say to the senior partner, put me on, you know, this is a small firm. So there was a lot of boredom type work, small business, just transactional, and really tough to learn a lot. Okay, but he put me on the biggest accounts, either liked you, or you’re smart, it did something well. And I learned a lot. He put me on big manufacturing clients, big construction clients. And I just soon grew into that.

BEN: So you’re really like earning your chops but in addition to that, you’re starting to find out probably, which is what I found out is that you can work with people that you can communicate well with them which starts to at least from my perspective, it started to let me know, wow, there’s more to this that I can do.

SAM: For sure. And I will say you know, accountants sometimes get a bad rap. Sometimes. Don’t laugh.

BEN: But they’re more CEOs or accountants or CPAs than any other.

SAM: If you have a personality as an accountant, you do get a bit of up.

TONY: That’s loose. That’s the punch line. And what’s the difference between an actuary and accountant? A CPA? Let’s hear it. The actuary just didn’t have the personality. Nice.

BEN: I thought the actuary looks at his own shoes when talking to you and an accountant looks at your shoes.

TONY: The introvert and extrovert programmer. How can you tell if a programmer is an introvert or extrovert? Extroverts, they’ll look at your shoes.

BEN: So you’re like learning just a ton because, I mean, when I was doing it, I audited an ethanol plant. I audited a what do you call it produce wholesale drug company? I mean, it was just fascinating insurance.

SAM: I loved the breadth of it too. This is a small town in America. But we had some pretty decently complex customers.

BEN: So what usually happens, as you know is you’re getting exposed to all these different companies, and then one of them says, man, I like that guy. And he understands our business inside and out.

TONY: And he knows that we’re keeping three sets of books. We have to keep you close.

BEN: We can’t let you go like the firm

SAM:  Hear my straight man, because that’s what happened.

BEN: But that does happen. I mean, I’m making it up. It happens a lot. Yeah.

SAM: And it did happen. In this case, our biggest customer, which was a company called Defiance Metal Products, family owned. At that time, the third generation business was on a growth path. And they needed a CFO, didn’t have one up to that point, okay. I mean, this business in 1992, was about $15 million in revenue and in 1998, when they hired me, they’re about $90 million in. 15 to 90, so six times bigger, okay, and they had a controller, but no CFO, and they really needed that strategic component for growth. But you were working there, I was doing the outside accounting or outside accounting work.

BEN: And then, you know, that’s a pretty big jump, because, you know, doing the transactional, like looking at the audit, or review or compilation or taxes is very different from, oh, my gosh, now I need to run this company, manage cash flow, set the direction.

SAM: And I tell everybody that I talked to about this, I got a Harvard education in this business, and I would 100% agree with you. From 1998 to 2011, we had every potential and possible business scenario play out that you could ever think of. We had rapid growth, we were near bankruptcy, we had a cliff event of the economy fall off, we had massive debt added onto the balance sheet. So I raise debt. Just everything.

BEN: And people don’t understand, like, Tony, when we spoke, the types of things you’re exposed to, you’re a programmer. You’re a great guy and everything, but you’re a programmer, and now you’re running this company, and the kinds of exposure that you’re getting is crazy. And for me, I did a lot of internal and external audits. And I was shocked at the things that I was exposed to, but when you’re on the inside and getting exposed to those, those are so crazy valuable, no doubt. HR issues, operational issues, debt issues, you know, it just keeps going on and on and on.

SAM: And that business is where my appetite was really wedded. Is that a word? With a H. W H? Whedded. That’s not an easy word for mergers and acquisitions, because the family wanted to expand. I got to use their money, their time.

BEN: Which is a huge lesson, right? Huge, because normally you don’t have the money but then actually using somebody else’s is fantastic. O. p. m. other people’s money.

SAM: Yes. That’s right. And we did lots of deals from 98.

BEN: But like, what kind of deals like you acquire another company?

SAM: Yeah. Yeah, we did. We acquired a manufacturing business in Dallas, Texas. We had acquired a business in Oshkosh, Wisconsin.

BEN: Now, just to be a little bit clear on this. You are a metals manufacturer and you had told me at one time that the metal that you were putting together was on what the Humvees is that right?

SAM: That was one of our larger customers. Yes. Okay. And we’re just doing bracketry and weldments and kidding, and those kinds of things. So not like high tech, per se. No, it was not a tech and it was not Class A surfaces. What the heck do those mean? Class A surface is you look at a car shiny, okay, exterior surface, we’re doing the brackets underneath.

BEN: They need to work well and they need to hang in there. They don’t look pretty.

SAM: That’s right. Gotcha. Functionality is more important than looks, and we were not.

TONY: So back to the accounting background.

SAM: Kinda like you. Functionality is much more important than looks.

BEN: Yeah. I love this guy.

TONY: I’m going to go hey, nice talking to you.

BEN: If the cameras are still working well, it’s broken. What was I saying? You were saying that it’s functionality. Oh, yeah. And you’re doing these acquisitions or you’re picking up different companies. And why are you picking up these companies all ran because you needed more capacity? Or did you just…

SAM: We wanted to grow? So if you did more, you could be you could sell more? Yeah. Okay. And, and our strategy really was breadth of capability. And geographic co-locating near big customers. Okay. And so we would follow cat. We followed cat to Arkansas. They were in Arkansas, I thought they were in Illinois, right? Well, yeah, they’re headquartered in Illinois, but they have the manufacturing site and they had some problems with some parts with some manufacturers down there some suppliers. So we went there and we went to Bedford, Pennsylvania, for all customers.

BEN: High what you call society because when I did audits, I was always the backwoods. Oh, you’re not in New York or four hours outside in New York. Exactly. Yeah. But that’s good, though, for me.

SAM: Hold on. So yeah, it was but with that strategy, so we were able to go from flat sheet steel all the way to kitted painted assembled parts. Gotcha. So we did everything.

BEN: So now you’re growing, and I think if I remember correctly, you went from what it was at $99 million to $230 million.

SAM: $90 million to $230 million during my tenure there.

BEN: So you go to college, he gets this accounting degree well, and you’re doing CPA work, and you’re just like, hey, whatever, you kind of fall into this job. You weren’t like college going, I will be a CFO of a metals manufacturer. Very true. You start getting out there, you’re interested in what’s going on, you start to acquire, you grow this company, almost, what three times, four times. And now you’re going wow, this is kind of interesting stuff.

SAM: I loved it. Like you said I didn’t know when I was at the CPA firm. I really thought that I hit it all my life, stay in Defiance, Ohio, raise my five kids, it was a great life and I loved it. But this came along and I just loved it more. The challenges were far greater.

BEN: And you were making a difference. You know, you’re growing a company, your profitability, changing people’s lives. You really were.

SAM: Yes. But I will say and you know, this is cliche, and blah, blah, blah, blah, blah. But it’s really the people around me saying get it. You know, it’s just my timing was just impeccable. And I had nothing to do with that. I just happened to be in Defiance Ohio, working at the CPA firm when they needed help, and I was there. So you know, it’s kind of like the Malcolm Gladwell book. What’s the one?

TONY: The 10,000 hours?

SAM: Yes. The 10,000 hour Book.

BEN: But you and I talked about it like the harder you work, the luckier you get. No question. Yeah. And you are a hard worker, because I see what you do.

SAM: Yes, hard work does pay off no doubt. But I look back at my life and say, man, I haven’t really been lucky.

BEN: But the thing is, though, that I tell you my time is exactly you know, you came from a small town. You know, and you didn’t get this crazy big job out of school. You just kind of fell into it. Next thing you know, life insurance, remember? you almost took your own life selling life insurance

TONY: I mean, did you push term or whole life?

SAM: Yes, yes. Yes. Whatever you want to buy Sir, will talk afterward, I have the application in my briefcase. How about universal? Yes. Actually, the push was whole life because of course, the commission rate was way crazy.

BEN: If you stuck with it the first three years, you get the full commission, and then after that you didn’t care. Die for like air. It’s good. That’s right. So you’re seeing some success. And it’s kind of funny, because you and I talked about it a little bit. I started to see some success and people go, oh, my God, how did you do that? And I thought it was just kind of normal, you see a problem, you fix it, and you move on. And so you’re gaining this success and then your life starts to change a little bit.

SAM: Yeah. Again, being cliche, the best day of my life as far as my career goes, I don’t want my kids to hear this and think that the best day of my life did not have something to do with them or my wife. The truth hurts that sometimes. Those obviously were the best days of my life, but the best day of my life, and the worst day of my life and on my career were the same day. The day I got fired from Defiance Metal Products.

BEN: Okay, now, this is a great story, right? Can you tell the story? I think you can. Yeah, you’re driving wherever.

SAM: Yeah, we get called. This is a private equity owned business. Now it’s not the family.

SAM: Get ready. You’re not going to see this coming.

SAM: This is what’s so interesting and why I’m such an idiot. Because I should have seen it coming. Private equity guys call us to a meeting at Detroit metro airport.

BEN: Private equity owns your company. That’s correct, the family doesn’t own it anymore. So the family sold it, private equity bought it, you’re running it. You’re doing this fantastic job.

SAM: With another guy. He and I are kind of CO presidents. Yeah. Danny Weaver, great guy, great friend, great mentor, probably 15-20 years older than me. Gotcha. So the business, you know, we’ve had all this success through 2009 and then the economy took a crap, right? And our revenue dropped significantly.

BEN: Half? 20%?

TONY: Not disclosed.

SAM: We went from 230 to about 175, and then from 175, down to about 155.

BEN:  230 to 155. So you’re down 75 on to 30. So good 30%.

SAM: Yeah, it’s a third. And we don’t need to get into the specifics but that Humvee business we talked about, that went down by about 80%. And it was very profitable work, government work, blah, blah, blah, blah, you get the pictures.

TONY:  Is  that when they would switch into the M rap?

SAM: It was and we did a lot of work on the M rap as well. Good job.

BEN: I don’t know what the M rap is, is that some do name M who raps or what?

TONY: That was when that v whole kind of tried to deal with the IEDs blowing up and then what they’re the damage they were doing the Humvees I came up with a different design.

BEN: Because if it goes straight up and kills everybody, but if it’s split in it kind of ricochets off or whatever. Okay.

SAM: Tony did an excellent job. That’s exactly what it was. And there were two producers Navistar and Oshkosh and when he supplied both, okay. But anyway, it’s dropping off precipitously and significantly, we get sideways, private equity and me over time, but I still think we’re holding it together. So we get called up for a meeting. We never have a meeting in Detroit.

TONY: I’d like you to come up and maybe have dinner with us and just add a little bit about business, right? Yeah.

SAM: Yeah. All right. I told Ben this the other day, we were driving up and I’m thinking Danny’s going to get whacked. Danny’s going to get fired, my partner and he’s driving? He’s driving. I don’t care. I don’t even remember who was driving, but I don’t I don’t care. I’m just thinking, how am I going to handle this? What am I going to say? Because he’s my best friend. What am I going to say? So we went up there. We’re meeting. And they call him Danny first and tell him whatever they tell him and he comes out in his head hanging low and he goes on the way out. We just passed, he goes, I’m so sorry man. That was it. I was like, wait, wait. Exactly. Oh, no. I walk in and they sit down, they are sorry for letting you go. We’re going in a different direction. I was like, what?

TONY: Well, what about Danny? Yeah.

SAM: I did say, what are we doing with wheat? Are you changing the whole management team? Oh, so no, no, Danny stands on. All right.

BEN: It exploded, you did great, you did all these acquisitions that it started to turn. Yeah. And you’re going up there this guy feeling so bad for him because he’s going to get fired. Right? And you get whacked? Yes.

SAM: It’s terrible. And I felt so bad. Because I remember the story I told about being arrogant in high school that kind of never went away? And so I’m crushed. And I’ve never been fired before. Oh, it’s brutal. Yeah, it’s brutal. I feel like I let my family down, feel like I let the community down. This small town, right, you know, 15,000 people, and we’ve got 850 employees just undefined. Oh, my. 1500 company wide. So we’re the second largest employer in town. And everybody knows that you know, I’m one of the main guys there, very involved in the community. And everybody knows you get whacked too? Absolutely. And you know, in my head, I’m thinking the business will never survive. Two days later, people don’t even remember. Did you work here? It’s not part of their life. They don’t care who’s leading the ship. People liked me but they’re like, enough already.

BEN: So wait a minute, you’re saying that this was the worst and the best. So we got to the worst, what happened in the best part?

SAM: The best is it just created them this opportunity that I’ve been able to, you know, work myself into now. And that’s investing in small businesses.

BEN: Well, hold on, there was one thing and I just need to back up slightly. You and I talked about the fact that you were just getting paid and you’re just kind of going along and as you grew the company and the private equity and everything else, at one point, they said, hey, we want to make you a part owner in this thing. And you and I talked about the fact that hey, we’re just kind of stupid and happy and we’re just making a good amount of money and it’s all good. But then once you get some equity ownership, it started to open your eyes as to what was kind of possible.

SAM: Yeah. And really the ownership came in increments, but came from the initial purchase of the business from private equity. And then increments beyond that. But yeah, you begin to think differently. Yeah, for sure.

BEN: But my point is that you have started to think differently, right? So you’re the CPA, then you get in there, and you’re really working hard and changing things. Private equity buys it, you have some equity in it, and now you get fired. But over the last, like, let’s say, five or whatever, ten years, you’re working crazy hard, and your whole mind is opened up. So you come from a small town, you really don’t have these big plans, you kind of fell into it, you worked hard. Now, you know, this equity thing and your mind has just opened up.

SAM: It opened significantly. I mean, we had opened a plant in China, so I spent time in China. We spent a lot of time in Mexico, we had customers in Mexico. We looked at buying a business in Brazil, so I spent a lot of time in Brazil. We didn’t buy it.

BEN: A town for 15,000 to China and Mexico and Brazil.

SAM: It’s crazy. Because I lived less than a mile from where I graduated from college.

BEN: Did you marry your high school sweetheart?

SAM: No, my college sweetheart.

BEN: Oh, well, Defiance College of 400 people or whatever. But think about this and that’s the one thing we keep telling people is to open your mind and to the exposure and what money can do and how you can look at the world differently. And so now you just got fired and you’re just like, holy crap, how do they ever fire me?

SAM: I was devastated. And I drove home that day, a long drive. Danny and I didn’t talk.

BEN: You guys didn’t share secrets or recipes or anything like that?

SAM: He didn’t know what to say. He felt terrible. Of course he did. I felt worse.

TONY: I was asking who’s driving because my dad was telling me a story. One time I had a sales manager that had to deal with the salesman, sales rep out, I think it was on the West Coast. And he sent him out there he goes, I want you to work with him but if he doesn’t do this, this or this, you gotta get rid of him, fire him. So they’re going through the sales calls all day, driving around doctors offices and stuff. And then at the very last visit afterwards, he’s like, the guy’s driving the salesman. He was a byway you know, this isn’t working. We’re going to have to, you know, this can be your last day and I’m going to take your demonstration kit and blah, blah, blah. And the guy goes, pulls off the side of the road, just gets out. Well, he goes, if I don’t work here anymore, I don’t have to worry about you.

SAM: Scorched Earth. I love it. Get out.

TONY: So, he got out. You had to find that was back before cell phones. With this case, with the instruments, like, damn it. That’s why I was asking. I was wondering like, you know, Danny’s like, but then he’s happy. He kept his job and he’s happy that he got his job.

SAM: So we pulled into my driveway. My wife was calling me all the way home and I wasn’t answering because I wanted to tell her face to face. Pull in my driveway, she comes out of the house. What’s going on? She can tell on my face. Something may not be good. And I said I got fired. She goes Oh, come on. I said I got fired.

BEN: Make sure to come back next week as we finish our discussion and our limited series about successful individuals telling their stories in their own words.

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