We had the good fortune of connecting with Kevin Berson and we’ve shared our conversation below.
Hi Kevin, can you talk to us a bit about the social impact of your business?
We help business owners transition into the next phase of their life. Commonly, these are Baby Boomers looking to retire. Baby Boomers own 12 million businesses in the U.S., collectively valued at over $10 trillion, that will be sold or passed to family members in the upcoming decades. Most of these business owners would like to exit their businesses on their terms, but are unsure how much their businesses are worth, what options they have to exit, or how to run a sales process to ensure they optimize transaction value.
This is the role that we play—we provide an end-to-end service, serving as “deal quarterback,” overseeing all details required to prepare for and successfully close transactions. We dive deep into the presale planning process, often getting involved and guiding entrepreneurs several years ahead of the sale. We utilize a diverse, cross-functional team to address a variety of business issues to meet the client’s unique needs. We only take on a select number of clients that we believe in, which is why we have an 84% close rate, much higher than the industry average of 30 to 40%.
Most business owners are unprepared, as less than 25% of them have gone through any kind of exit planning process to prepare their businesses and themselves financially and psychologically for a potential exit. Far too often, we see business owners rush into a sale process triggered by one of the four Ds—Death, Divorce, Disability, and Disagreement. We help business owners be proactive so we can structure a deal and position the business to allow them to exit on advantageous terms instead of under conditions they have no choice but to accept.
The Kinected team brings a level of expertise not typically found in the lower middle market. We each have extensive experience working on very large (several hundred million dollar) deals for multinational corporations. We combine this deep experience with a premium level of service and professionalism to help our clients achieve fantastic results. We love what we do and are tremendously fulfilled when we help our clients sell their businesses on their terms.
We recently had the pleasure of closing a sell-side transaction for a family-owned plumbing services business. The deal was especially fulfilling because we were able to sell the business to a premium private equity firm for 25% above the seller’s expectation, helping the owners secure their legacy and transition into an early retirement.
Can you give our readers an introduction to your business? Maybe you can share a bit about what you do and what sets you apart from others?
What was the thought process behind starting your own business?
Like most people’s, my career path has been far from a straight line, but now that I have over 25 years of professional experience, it looks much clearer in retrospect. Each experience, starting with interning as a law clerk while I was an undergrad at UCLA, opened doors for me. Law clerking, ironically, led me away from law and into consulting (the attorneys I worked for were excellent lawyers, but not great businesspeople, which opened my eyes up to world of consulting). In turn, consulting exposed me to a wide array of industries and various strategic challenges that business owners face. After my consulting firm Arthur Andersen imploded in the wake of the Enron scandal in 2001, my network exploded and went in a hundred different directions, which led me to Technicolor. I then had the chance to simultaneously get my MBA at USC and join Technicolor’s Corporate Development Group (M&A), which collectively gave me the skills, confidence, and professional network to go out on my own in 2014 and start Kinected. Now I leverage my extensive experience to help business owners sell their businesses for maximum value.
Fortunately, I had some savings built up and an amazingly supportive wife, who was 100% willing to bet on me. I knew that my worst-case scenario would be that if I couldn’t make things work after two years, I could always go back to the corporate world. Now, eight years in, things have gone far better than expected!
I never could have predicted that over the course of 25 years I would have gone from graduating UCLA with a Political Science major into Big Six consulting, then onto senior roles with a Global 1000 corporation, and ultimately to founding my own M&A firm. I feel fortunate for all the opportunities I’ve had along the way and for the many mentors, bosses, colleagues, and of course my amazing wife, Jennifer, who all believed in me.
When you think about risk, what role has taking risks played in your career?
I don’t consider myself an extraordinary risk taker in my career, but I have taken a few calculated risks that have paid tremendous benefits.
When I was first starting out, I jumped into consulting without really understanding what that entailed. What I thought would be strategy consulting turned into technology implementation. Had I known ahead of time, I probably wouldn’t have been interested! However, I stuck with that path and soaked up all the training I was offered. I was incredibly fortunate that that my new SAP implementation skills were extremely in demand in the mid-’90s.
This skill set landed me a Senior Manager role at Technicolor, where I had the chance to lead a global technology implementation. Technicolor made me an incredible offer: Commit to spending a year in Guadalajara, Mexico, leading a $5M technology implementation for the world’s largest DVD manufacturing facility. The deal was that if I managed the project on time and on budget, Technicolor would pay a substantial portion of my MBA tuition at the Marshall School at USC. I bet on myself, and this project became the company’s model for how to implement technology projects.
Enrolling in USC’s MBA program provided my initial exposure to finance and strategy classes, which I immediately fell in love with. Simultaneously, Technicolor hired a former investment banker as their new CEO, who sought to reposition the company through mergers and acquisitions. I initially worked with the Corporate Development (M&A) team as the IT person evaluating target company IT portfolios and was later asked to join the M&A team full time as an entry-level business analyst. In truth, this was a giant step backwards in my career. I was leaving behind a senior-level IT role for a very junior role with an unclear path forward, which would require me to work 80 to 90 hours a week on top of my MBA schoolwork. I decided to do it!
I dove into my new M&A job headfirst and was fortunate to have colleagues and a boss who were incredibly patient with me, as I had a tremendous learning curve to overcome. It was an incredibly high-stress environment, where we commonly worked until midnight every night. Literally nothing could wait for the next day. I struggled initially, having several full-blown panic attacks. But I stuck with it and was encouraged by feedback from my superiors, who considered me a fast learner. I’m proud to say I played an important role in the acquisition and sale of several companies collectively valued at over one billion dollars.
With this new M&A experience and a background in consulting, I took the leap and founded Kinected in 2014. I wasn’t exactly sure of my path or precisely how my skills would translate to income. My goal was to replace my corporate salary within two years. Eight years in, I have now far exceeded that goal and have also built a far more balanced life, working less than I did in the corporate world, generating more income, and having more time to spend with family, friends, and hobbies. The risks I took have certainly paid off!
What is the most important factor behind your success?
I would say there have been two critical drivers behind my success.
One quote that has always resonated with me is “90% of success in life is just showing up.” I have interpreted this as trying to do my best in everything I commit to, personally or professionally. Whenever I have truly committed to giving something my best effort and having a great attitude, I have been successful, whether it involves taking on a client in a new industry or helping my kids learn to ride bikes. This philosophy has guided me throughout my career, whether I was a brand-new analyst at Arthur Andersen showing up at a client site in an industry I had zero experience in or having to work 90+ hour weeks in a corporate M&A role while attending business school at night. In each case, having a great attitude and truly doing my absolute best has helped me persevere.
The other critical factor is that I have been able to develop meaningful, long-term relationships with clients and colleagues. I pride myself on having had unusually diverse professional experiences, and on each deal or project I come away with lifelong relationships. These trusted connections have become a huge driver of the amazing referrals I now receive to quality business owners looking to sell their businesses.
How do you define success?
I define success as having a sense of harmony between my professional and personal life.
Professionally, this means continuing to learn and grow, taking on projects that resonate with me and clients I genuinely want to work with, whom I know I can help, and who will appreciate the value I bring. At this point in my career, I’m more interested in working with the right clients and helping them succeed than making a specific amount of money.
Personally, I am fulfilled by spending time with my wife, sons (ages 12 and 10), and close friends; spending time in nature (we’re taking a family trip to Jackson Hole and Yellowstone next week); traveling to new countries (I’ve been to 35 thus far); and taking steps to improve my tennis game (my volleys need work). Over the past five years, and especially since COVID, tennis has become my passion. I was very proud to win my club’s 3.5 Singles Championship this year.
Based on your experience, can you share with our readers the “Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit”? Please give a story or example for each.
This is a question I receive often. From my perspective, buyers place the highest emphasis on the following five characteristics when considering businesses to purchase:
1. Recurring Revenue—The more revenue generated from subscriptions and other forms of automatically recurring payments, the more attractive your business will be to buyers, which will also manifest in a higher multiple.
2. Business Stability—If your company can demonstrate stable or increasing revenues and earnings over the past 3+ years, your business will likely command a premium, as buyers will perceive less risk.
3. Favorable Macro Environment—Buyers take a long-term view on potential acquisitions. They will therefore want to feel confident that the external environment will be favorable to the ongoing success of the business.
4. Diversified Customer Base—Buyers will pay more for companies that hedge against the loss of a single customer. Ensure no client generates more than 20% of your annual revenue.
5. Clean Books—Companies that invest in reviewed/audited financials are seen as more trustworthy. Have your books professionally managed and prepared.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
Yes, I made several mistakes when I was first starting out, and I continue to make mistakes to this day. It’s a part of learning and growing. One mistake I made was obsessing over my website and marketing materials. Sure, the materials needed to convey what I do and how I do it, but I literally obsessed over fonts, colors, and graphics for weeks! It would have been better for me to get out there and start talking to people, realizing that my marketing materials would evolve over time. I quickly learned that doing great work for clients is far more important than having pixel-perfect marketing materials.
Another mistake I made was thinking I could run my business hopping from Starbucks to Starbucks. I soon realized that I was constantly having highly confidential calls and needed a private office to take meetings. I eventually joined a co-working space, which helped me expand my network and find projects. While I certainly enjoy working from home from time to time, I have found that having my own office has helped me clearly delineate my home life and business life and has helped me bring my business to the next level.
If you had a friend visiting you, what are some of the local spots you’d want to take them around to?
Fun question! Being born, raised, and living in LA my whole life, I am extremely qualified to answer this one. Our week would start with a day spent in the South Bay. I live in Hermosa Beach in my 20’s and have incredibly fond memories of biking the strand all the way from Redondo Beach to Santa Monica. This is a must do activity, after breakfast at Uncle Bill’s in Manhattan Beach.
Another day would be spent in the Valley, having breakfast at Blu Jam in Sherman Oaks, (highly recommend the Migas or the Chilaquiles) and the hiking Runyon Canyon, which features panoramic views from downtown to the sea. This evening would be spent catching a concert at the iconic and now 100-year-old Hollywood Bowl, my favorite venue to see a show.
A favorite restaurant in LA is Jon & Vinny on Fairfax, which is objectively, the best Italian food in LA. The spicy fusilli pasta, Ham & Yeezy pizza and marinara braised meat balls are all incredible! You must go with a group of at least of four so you can justify ordering just about everything.
Mid-week, we would head to the Rooftop by JG in Beverly Hills for lunch. This beautiful outdoor restaurant features an incredible lobster burger. The setting on top of the brand-new Waldorf Astoria hotel is both beautiful and relaxing. In the evening, we would head to see some world-class comedy at either the Comedy Store, the mecca of Stand-Up or the Groundlings Theater on Melrose, where you can see the Saturday Night Live stars of tomorrow.
Another must-do activity would be catching a ball game at Dodger Stadium, which is now surprisingly the 3rd oldest ballpark in Major League Baseball. The new owners have spent lavishly on upgrading the stadium and have added great food options including Shake Shack, CPK, Dunkin Donuts and my favorite Nashville Hot chicken sandwich from Sweet Chick.
The more I travel, the more I appreciate LA. I don’t see myself ever leaving SoCal.
Who else deserves some credit and recognition?
Shoutout to my amazing wife Jennifer, who pushed me to leave the corporate would and start my own business. She has always supported me 100 and believes in me unconditionally. She’s a fantastic entrepreneur, who runs two successful businesses, where she helps other find their true passion and finds time to be an incredibly supportive wife, and dedicated mother to our two sons (12 and 10.). I certainly would not have taken the leap without her. Thank you Jen!