So You've Been Acquired By A Private Equity Firm. Now What? (Catherine Vergara Pt. 2)

[ 00:00:05 ] Welcome to Home Care U! We're going to go ahead and get started I hope everyone's having a great week so far. Welcome back for those of you that have joined us before and welcome for all of you joining us for the first time. I'm Miriam Allred, Head of Partnerships at Careswitch and this is Home Care U; a weekly podcast series for home care owners, operators, executives and really anyone in a home care agency that could benefit from these conversations. Quick housekeeping—this is a live event so if any of you that are here in in our live Zoom webinar right now; know that you can interact with us in the chat or the Q&A box. If you've got questions for our guests today, feel free to ask them and we'll make sure we get to those for any of you listening to the recording.

[ 00:00:54 ] go to careswitch.com to subscribe to join our email list to get the weekly podcast to your inbox. We ask that we get a lot of requests from people that want uh, to get these straight to their inbox every week, so that's uh, careswitch.com/subscribe to get these. Without further ado, we're going to jump right back into it. I've got our guest Catherine Vergara on for week two. Last week, we did a deep dive on care management. Her business, CareFor, in Austin, Texas is a care management company that also provides home care, so a little bit more information about what's going on in the home care industry and integrated care model that we wanted to dissect and talk about how care management influences home care and vice versa.

[ 00:01:36 ] Today, we're going to shift gears and talk about private equity, a little bit more of a controversial maybe hot topic or buzzy topic the last few years in home care. Katherine has a really unique background at her agency and working with private equity and I'm going to pick her brain; I've got her in the hot seat today to talk about maybe some of the uncomfortable or uh controversial topics surrounding private equity um again anyone that's here live feel free to ask questions as well um but we hope this can be a really insightful and a positive conversation for everyone that's listening in today so Catherine, I know you introduced yourself last week but just really quickly um will you give us just a quick background on yourself and on your business and then we'll dive right in sure thanks for having me back good to be with y'all my name is Catherine Vergara. I’m currently the CEO of

[ 00:02:29 ] CareFor. I'm a nurse by education. I came to home care and care management through—I started out as a pediatric oncology nurse was introduced to home care through an operating partner doing due diligence on a privately held founder-led care management business and had uh interest in growing and scaling this this company and so my entry into home care and care management was through a private equity transaction and I was brought in to grow and scale it. In the episode we recorded last week I get into a little more detail of that journey for me, but that's high level how I got here. Awesome, awesome! Well, we're going to dissect that story and that beginning and then kind of work through the evolution so before we um dive into your like specifics tell me a little bit about like private equity holistically in home care I know you have kind of like a lens that you see that through but over the last few years you've been kind of like a lens that you've been kind of

[ 00:03:29 ] like a lens that you've been kind of like a lens that you've been kind of like a lens that you see years private equity has become more prevalent in the space so if you don't mind just kind of quick overview of how private equity fits into home care today yeah so you know private equity is going to come into play when someone's looking For some sort of exit or partnership, there's a lot of 'you know' individuals that are starting the home care start in the home care space and have a business that they grow you know organically and then they're looking to for an exit or want to scale and grow. So, I'm going to talk a little bit about that, and then I'm going to talk a little bit about that, and then I'm going to talk a little bit about that, and then I'm going to talk a little bit, so you know. The PE firm engages; they do due diligence; they're looking at financials; they're looking at operations; they're looking at revenue streams; uh, they're certainly doing risk Mitigation and understanding liability, and you know all of those pieces.

[ 00:04:15 ] And then you know there's some sort of negotiation between the owner and the firm; they accept an offer. There's a change in ownership, and then there's this period of integration and change management. And either a new management team comes in or the founder takes continues in that role, depending on just the dynamics and the agreement. Then the new operations begin, and you've got this partner now that didn't exist prior to the transaction, that's financially invested and has a huge interest in the growth and success of the organization. Certainly, changes the dynamics but it also creates a lot of potential awesome. So, you spoke to I think the most traditional um experience we see with private equity and home care, which is at the exit, which I think that's like the most common instance, and that's what we've seen a lot of and continue to see a lot of.

[ 00:05:10 ] I think what we're about to talk about is your experience, which is where you came in with private equity, so it's kind of like your beginning was their beginning. Um, so I think that's another instance I would say there's even a third, which is like in in the process or in the growth stage of a business, which is you know we see a lot of you know we see a lot of agencies kind of plateau or hit that two million in revenue and they don't know where to go or how to go or you know if they start to dive should start to diversify payer sources and that's another instance where we see private equity come in and like

[ 00:05:43 ] you said bring in you know some executives bring in some coaches leadership to help kind of drive that growth forward so I just want to if that's okay kind of my experience is there's kind of the three different instances where private equity can come in um and I would say yours is probably the least common which is coming in from the start with Private equity, and so that's part of why you're here because it's so unique and I want to kind of dissect how it went and what happened and how it's going and kind of all of those nuances because it is such a unique thing. So um let's start from the beginning, I want you to kind of debrief a little bit more in more depth um how they came to be and how you came to be, and you know the founder story kind of just like circle around like you know the founder story kind of just like circle around, like you know the founder story kind of just like that beginning and how it even came to fruition.

[ 00:06:31 ] So our founder, you know started the business in 2000. Operated as a solo practice care management firm with this direct-to-consumer home care side for 13 years, and she was getting to a point in her life where she wanted a little more flexibility with her family, and um, she had you know quite a sizable business that was depending solely upon her, but should something happen to her there was no succession plan, and she was looking to add options to solve for that while she was wanting operational support and a succession plan; she was not looking to truly exit herself. And so, she got connected through just networking essentially in this space with a newly formed PE firm that Was looking for acquisitions, and they started spending some time together and felt like they aligned on core values and there was some interest there.

[ 00:07:31 ] And then the PE firm started to do due diligence, during that operational due diligence. I was approached about the opportunity, and to learn more about this organization, I talked a little bit about it last week. We were sort of mutually disinterested in each other at the beginning, but the opportunity to grow and scale what I would come to know and love um was really unique and interesting to me. So, um, you know, I started about three weeks after the transaction, and um, the PE firm took the majority ownership and the owner, the founder, retained a minority ownership in the organization, and then I came on as Director of Operations to help us grow and scale the business. So, I don't know this business without this structure, and um, we're 10 and a half years in.

[ 00:08:28 ] Tell me a little bit about the background of the firm. Did they know anything about home care? I know it sounded like there was just like kind of networking, mutual connections that led the founder and the PE firm together. Did they know anything about home care from the start? No, their acquisitions had never been in this space. And you know, care for has evolved. over the years and we have um a pas side of the business but what they purchased was actually a care management business that had a direct-to-consumer piece, but they had a direct-to-consumer business that had a they did not have a um care management or home care background they did have some acquisitions in the behavioral health space and in the urgent care space originally and so you know

[ 00:09:12 ] loosely very adjacent but by no means a depth of knowledge in the industry okay the reason the reason I ask is that's usually one of the primary concerns with private equity is you know they know nothing about this very intimate human business you know how are they going to how are they going to yeah kind of get into the mindset of this industry and then thrive in it um rather than just you know seeing it as you know just kind of like a business venture and a money venture so that that's why I ask and it sounds like they didn't know a whole lot um but you coming in at that time with a nursing background and with his founder who had built up this business you know I’m sure there was a uh a level of education you know and learning that took place and I’m sure there was a level of education

[ 00:09:58 ] for everyone do you want to just speak to some of like kind of the early days or Early months and how that went so, in their due diligence process, the nature of the business that existed. The only real access to the founder was to ride along with her and see her day. She didn't have the time and bandwidth to spend two days in a boardroom, and so, uh, she invited one of the operating partners doing the due diligence to come right along with her. And we kind of joke now because she had very strict rules about if I'm on the phone with her, and she's like, 'I'm on the phone, you can't talk to me,' uh, 'you need to sit.

[ 00:10:30 ] there and be quiet and you know listen and absorb.' And so that's what he did, and he Just he just you know was a sponge and was fascinated by what was there, um, and you know I came from I have a clinical background and I'm a nurse but my background is pediatric oncology so I didn't know anything about this space I didn't know anything about home care I didn't know anything about care management and so you know I referenced that I took a caseload for two years but you know that's what I did I didn't know anything, those first three months were just an immersive deep dive, you know, elbow to elbow with the founder, you know, learning everything I can, observing everything I can, and the operating partner.

[ 00:11:12 ] at the time uh came on as the coo and so he was getting an education to together and so our model our situation was unique um in that you know through him back into the pe firm there was a lot of learning and a lot of learning and a lot of learning and a lot of learning and a lot of learning and transfer of knowledge going on but that was top priority because they the pe firm knew what they didn't know and the only person that knew was the founder and so this transfer of knowledge was paramount for the success of the organization ongoing because if we could not transfer that knowledge we were not going to be successful at scaling And building sustainability, and so that was certainly a big part of the process. I think that's what I'm trying to, and we were all aligned, you know. Founder, I, board you know, P.E. Group.

[ 00:12:05 ] We have to transfer this knowledge, then dissect it, and figure out how to how to grow and scale it, or we're not going to be successful at delivering what this business has become successful doing. And you know, aligning ourselves on core values – the firm's core values, CARE Force core values – was really important at the beginning when we embarked on this business. And we were able to do it, and we worked on what we felt like was possible. but going to take a lot of work what were some of the strengths that the pe firm brought you know if you can go back and imagine had you just been brought in with the founder and it was just you two and they

[ 00:12:47 ] weren't there like what influence you said like kind of they know what they know and they don't know what they don't know what were what were the things that they brought to the table what are the things that you know care for wouldn't have today if they weren't there from the beginning what were the what were the things that they brought sure so I think you know what they brought 10 years ago and what they bring today there are certainly common things but themes but that has also evolved over time you know first and foremost it cannot be understated the level of financial sophistication and business knowledge that a firm like this brings

[ 00:13:22 ] to an organization that would not have it otherwise and the way that we've been able to do that is we've been able to do it in a way that is what we received now still we could not afford to have in-house the level of you know financial models and strategic financial thought projections and that type of thing that they provide for us and so that has always been there and has always been of tremendous value Alignment on core values is something that they've brought from day one, and that has allowed us to have a common language because we value the same things while they are their wishes in Matterport until now, but definitely as we're seeing on the map, you know, in those sustainability goals that we've set aside, and that's the lessons that are there that has helped us do that for us of them to, for us to share that as we've navigated, which hasn't always been just like the yellow brick road of, you know, rainbows and unicorns.

[ 00:14:31 ] Uh, this business is not for the faint of heart. And, um, but they, I think another thing that they've brought that's been so helpful is they have always been in it for the long game. It is certainly unique that they've held us for as long as they have. Um, but they have appreciated from day one what it takes to succeed in this business and, um, that it's a, often a windy road. It's just not linear, you know, when you're dealing with people and, you know, they appreciate, we call it the 'leaky bucket' of the way, you know, business leaves, um, you know, inevitably people are going to improve. People are going to decline. People are going to pass away. Uh, and so you're constantly filling what we call a leaky bucket, and they do understand; they have, they've always understood that.

[ 00:15:23 ] Yeah. I'm glad, I'm glad you mentioned that before I do ask about the flip side, you know, what, what hasn't gone well, or what are some of the challenges that you've seen? Something that just stuck out to me of what you said was their pressure or mindset of like core values, like having, being very mission-driven and then like backing that up with a vision and core values. I think that's great. And I think, um, you know, home care already does that really well; this is kind of like a mission-driven industry. And so, that's usually natural, but it's cool to hear you talk about like how important that was to them, and how that's led to your success.

[ 00:15:58 ] I am curious, did they come in, you know, with an agenda, you know, the founder had probably a vision and a mission and core values, maybe to some extent, like already spelled out, but did they come in wanting to like to manipulate that or change that? Or were they really just like building upon what was already in existence? I would use the word 'opportunity.' And that they were very opportunistic and saw what this could become more than an agenda because there was no scripted roadmap on how we were going to get there. In our organization, we talk a lot about sculpting fog. Like you have a vision loosely of what this could be. They knew that there was significant revenue growth potential, but how we were going to get there was something that we did together.

[ 00:16:51 ] And their strategic support, their thought partnership, um, their conviction and belief in what this business could be, uh, was and has, and will always be something that I will never take for granted and so grateful for. Um, but I would never think about that relationship in terms of an agenda or a manipulated approach. Transparency, communication, clarity have all been important. I don't even like to call them sides, but all parties involved have valued. Therefore, when we think about strategic opportunity, um, in the business we have today looks very different than the business that was acquired. And so there have been a lot of big decisions along the way. And so, when we've reached those, we call them burning platforms, you know, you've got to jump and change and do something and pivot, you know, they've joined us on that metaphorically and have also, you know, been a part of that.

[ 00:17:51 ] So I would say that that's a really important thing to do. Provided a lot of insight and direction, and have been patient as well, because uh, you know, I think about like if they had exited three years in or five years in, man, like what a missed opportunity, uh, and you know, they have the business savvy and forethought and the vision to see like, you know, what this can become and what it will continue to become. But it takes time, it all this, these are people, these are lives, you know, this is deep work that we do, and we and especially care for our relationships, are just super deep with our patients and our referral sources, and when you think about growing that to replicate that service, it takes time. I can't just hire 10 more care managers.

[ 00:18:38 ] Tomorrow and expect that the service is going to be the same. Mm-hmm, yeah, I think caregiver shortage and all that - like, that's not just going to like you replicate, you know, end over end constantly. I think it's amazing that everything was architected together, you know, that everyone was flexible, everyone was willing, everyone was in it for the right reasons. And that's one of the underlying tones we want to have on this call is just alignment you know, there can be bad instances of private equity, good instances of private equity; it's all just about like alignment and mission and vision, alignment, making sure everyone's On the same page and in it for the right reasons, and it sounds like in this instance, in your instance, everyone was there for the right reasons, and everyone was willing to build and architect a foundation together, which I think is incredible.

[ 00:19:32 ] I do want to talk about you know, the flip side, you referenced what you were then and where you are now. What were some of the challenges, burning platforms, you know, the roadblocks or like the hard lessons learned that you've experienced over the last 10 years? Um, yeah, I spent a little bit of time thinking about that. You know, operationally, I think I underappreciated at the beginning. Um, you know the value of a common language and learning to speak the language that they value. Uh, and so as much as I'm you know can speak in clinical terms and tell patients' stories, I'm not going to be able to do that because I'm not going to be able to do that and help them understand the power of the caregiver and equipping them well those are all wonderful things.

[ 00:20:25 ] And also, we need to be able to talk in data and metrics and understand the value they put on revenue growth and profitability. And I say both because they don't have to be either-or, but for me, for them to trust me, I need to be able to deliver first and foremost on what They value to then be able to build the bigger story around, um, more of the day-to-day operations that I live in, and so I, I underappreciated that at the time, and I'm grateful for the mentor, you know, early on, and I'm grateful for the mentors I've had along the way, um, that have helped me think differently, uh. It is a different, it is a different world to interact with, um, the private equity space, and because the folks in the private equity space that's all they operate in, and that's just a very different world than operating a home care management firm, um.

[ 00:21:36 ] It's not good or bad; it's just very different, and I underappreciated. early on those differences and I think I missed out on some opportunity to get aligned quicker I mean we've always gotten aligned um but I think I missed out on that early on and over time I certainly have grown to appreciate um the value that those that the data and the metrics and the numbers bring and the story that they tell while also they have grown in appreciation for the numbers don't tell the whole story so what else is there um and I think growing in that together and I think that's a great way to get aligned quicker and I think and I hate to say like that really went wrong that's just the reality of learning each other And growing in a relationship, but it's also the value of having the time to do that, because over time those relationships build trust and credibility, and you have the opportunity to go deeper.

[ 00:22:35 ] Um, and really, you know, they understand the business tremendously well; they don't deal in the day-to-day operations, uh, but when you look at the numbers, they mean a whole lot more to them now than they did 10 years ago, and they can sort of predictor kind of understand the ebbs and the flows of the business and what might be causing that particular trend now because they've seen it before. My team also just has a much greater appreciation. for it uh because we've seen the value of it, and they've helped us you know they've educated us on you know what all what all this means and how we can use these as tools to inform our audience and our clients and our clients and our clients and us.

[ 00:23:17 ] operating decisions around you know headcount growth new market strategic opportunity those types of things the thing that's coming to mind for me is I love how you've spoken about this like this is the level of sophistication that we're striving for as an industry for so long it was all about compassion and care and like you said there's nothing wrong with that you know that is like the lifeblood of this industry is compassion and care now we need to you know to be part of the ecosystem to you know go toe to toe with our larger like healthcare professionals we need the we need to know the numbers we need to know the metrics we

[ 00:23:56 ] need to know the data we need to be able to talk the talk on the spreadsheet side and you've had that from the beginning and I love how you've talked about like you took it for granted at first and you probably like you know we're like butting heads of like no this is important but this is important but now you know I wish I knew you 10 years ago because I would love to see like your Evolution because right now I see this like polished, eloquent that can talk the talk and walk the walk, but you may not have been quite like that 10 years ago. I can guarantee you I was not. But it shows in how sophisticated Care4 is as a business.

[ 00:24:30 ] You've both and you've developed that over the last 10 years, and that's made you as strong as you are, and you've come together to reach that conclusion. And I love what you said about the private equity side - they better understand the full picture, which isn't just numbers and metrics. It's the people and the numbers, and what those paint at the end of the day. Yeah. And I think it's on us to build, I guess, operators; it's on us to build the level of credibility to speak into that in a way that's meaningful. And I think we have a big responsibility in that space. And, you know, everyone plays a part here. And I think what I'm so proud of is that we have a lot of people that are in that space.

[ 00:25:16 ] And I think that's and grateful for is how, you know, the role our founder has played, the role the PE firm has played, the role that our operating leadership team has played in the success of the scalability and sustainability of the business. Absolutely. I want to let you run on this a little bit more. Other challenges or obstacles that you overcame over the last 10 years in working with them? Um, sure. So, you know, I think it's also been just like a huge lesson in leadership and what that looks like to, to lead well, to earn trust. And I know I'm saying a lot of the same types of things. Um, but I think, you know, when I think about the early days, I would have, I have had a phenomenal mentor that has, has guided me and it's been, um, a sounding board and someone to talk to and someone to coach me, uh, in interfacing with.

[ 00:26:16 ] Um, the board and making sure that I'm, you know, looking at things appropriately and through, through the right lenses. Um, but I, I wish I would have over time. I've gathered sort of different, a diversified group of mentors. And I wish I had thought about that early on, um, because I think through the networking and being coached, uh, it just gives us more of an opportunity to have a diverse perspective, to present a holistic picture of the business, when you are working with the PE firm, especially when you're thinking about strategic opportunities and growth and what's next. Um, I have found so much value in connecting with other folks, then bringing that knowledge back to the board, back to the firm, to, to present new ideas, to think of new, new things, because while they have a huge interest in the growth of the business, you know, the, the group that I'm with is not just exclusively invested in this space.

[ 00:27:20 ] And so there's a huge opportunity for me to gain knowledge and they've given me the freedom to go do that. I wish I had thought about that sooner. Um, because I think it would have potentially, you know, I don't regret anything we've done and I think we've had a wonderful journey, but I think it would have given me sort of maybe more confidence to talk about other opportunities and to pursue, um, thought partners in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in more of a diversified space with when we operate to thinking, to think about the growth, uh, because where they're good, they're phenomenal, but they're not thinking about this space that really in my role as the leader of the organization, I should be. Yeah. I think, I think that's another great learning and example of the value and the benefits that they've brought.

[ 00:28:10 ] I want to put you on the spot a little bit and dial up the heat, maybe a hair, um, not, not to expose you or to expose, but was there ever a moment where it got ugly or it got really hard because, because of opposing opinions or perspectives or whatever, like the root of it was like, have, have there been, has there been a moment or moments where it got really tough and maybe even got ugly? I would say never, it has never gotten ugly. And I think it's because of what I talked about at the beginning, as far as aligning on core values and believing in what we can all do together. Has it been hard? Have there been hard conversations? Absolutely. Number one, this business, this industry is hard period.

[ 00:28:56 ] Um, the past three years with COVID caregiver shortage, the cost of wages impacting the cost of care that has all changed very quickly. And in, in ways that are, uh, very hard for businesses exclusively in the private pay space. Um, and so, um, you know, I would say one of my harder conversations has happened in, in, in the last quarter, not because, um, because of just a culmination of us wanting to, like me wanting to grow as a CEO, me wanting to grow the business and, you know, believing in what this business has done. Probably could become and has become. And you know, the, the board chair said to me, just a couple months ago, you know, we had a really long intense conversation.

[ 00:29:57 ] At the end of it, he said, 'You know, Min hasn't explained why', I never going to tell you what you want to hear. I'm going to tell you what you need to hear. And that's, you know, he has earned the right to say that to me after working together for 10 years. And he's right. I mean, and the things that he, I took away, um, were invaluable. And they provided a tremendous amount of clarity for me as I think about this, the next, you know, 12, 18, 24 months for the business. And I think it provided a lot of clarity for him. But we hung in there and it was two and a half hours. And I think if we'd both ended it after the first hour, we would have had a much different perspective on how the, how the conversation went.

[ 00:30:39 ] But our willingness to hang in there and to be clear and kind, but to be also very candid, allowed us to really understand where each other's coming from and also get aligned on, you know, where the organization is heading and, you know, what's expected out of me. And I think being clear on expectations is so incredible. It's incredibly important as someone operating a firm that you do not own. If you know what is expected out of you, you know, you can choose to do it or you can choose to not do it or you can attempt to do it and you may succeed and you may not base on, you know, ABC, but clear expectations, you know, you cannot argue with the value of that.

[ 00:31:38 ] And so I think where it's gotten hard, that's like, you know, it's like a recent thing where it was just a, you know, we got to both show up. We need to be willing to be honest. We need to be willing to be, to listen. And we also need to be willing to be, you know, vulnerable to the degree that we need to, to, to be able to, to move forward. And because this partnership was built on a foundation of an alignment around core values and trust and credibility, conversations like that are productive. And psychologically safe, for someone that's like a type, a competitive achiever, energizing in some ways, as hard as it was, I am extremely clear on what's expected out of me, but he also knows that about me.

[ 00:32:34 ] So, you know, he also knows that he can interface and engage with me in a, in that way. And frankly, it is his job to motivate and incentivize me to go meet those expectations. And he does not take that job lightly. So, you know, there is a, I've talked a lot about what they do financially, but as far as the leader of the organization reporting to that firm, they have not taken their job lightly and their responsibility to play the part that they're supposed to play, and the majority owners of a business. I think that was amazing. I believe everyone can relate to what you just said, just said, about setting expectations, you know, whether it's, you know, you working with a private equity firm, you know, we have like operators and managers and administrators on this call, you know, them and their expectation setting with the CEO or the founder of the business, like everyone in business can, can relate and benefit from what you just shared about getting really clear on expectations.

[ 00:33:38 ] And it becomes, because it's so important, You would think it would be easier and we'd all be good at it, but it's, it's something that we just have to kind of reiterate and, and build up like that habit of like setting expectations so that everyone's aligned and then putting metrics in place to make sure everyone's like achieving those expectations, et cetera. So, I, I think that was, that was fantastic. A few times you've referenced the board. You've mentioned like this, him, who is, I think this like managing partner, we talked a little bit about the org chart on the last call. I want to do that a little bit again.

[ 00:34:16 ] Can you talk about, can you do a little bit of like an evolution of the, like how you got brought in and where you sat and where they sat? And then if that looks differently today, you know where the board, where the managing partner, where you sit, so people can understand the breakdown of roles. I'll start with the board because that has stayed the same. And then I'll get into kind of the way my role in reporting structures has evolved. Has evolved a bit. The founder has, has always retained a board seat. The PE firm has the majority of the seats. I believe they have three, and there's me. We have a couple other people that attend the board meetings due to just effectiveness of communication, clarity, and alignment.

[ 00:35:02 ] But that's how the board has been structured from the beginning. When I came on as director of operations, the operating partner, uh, from the firm took CEO as title and in, you know, function. And that's who I reported directly to three or four years in, I became the president, and the COO title was transitioned to, uh, an individual that had been doing operations in our organization. I believe maybe when I became president, she became director of ops and then it, you know, she became COO. And then that chief operating officer moved over into the chief strategy officer, which has been a tremendous value to the business. Uh, him in that seat as a member of the CareFor team, not an extension of the PE firm, which, you know,

[ 00:35:49 ] I think can sound fuzzy to people that aren't involved in it, but truly from an operating standpoint, he functions as a, as a strategy officer with the organization, his knowledge and his insight in his mentorship around the PE firm and, and, and helping us navigate that well has been helpful tremendously, but his role as chief, as a chief strategy officer really is as a member of the Care For Team, he does, uh, you know, operations consulting and leadership development with other members of the portfolio company and does not hold a, A position that's more of a consulting relationship he has with them. When he moved over into the Chief Strategy Officer role, I then began reporting to the managing partner, you know, generally speaking. So, um, and that was, I don't know, six-ish years ago.

[ 00:36:36 ] Um, and, um, my, you know, frequency in communicating with them has varied over the years, uh, as the business has grown and the, and the structure has changed a little bit, um, very just functionally. We meet with, um, the PE firm every other month. Formally, I touch base with the managing partner, um, formally, you know, as in, in the sense of a, a long, longer meeting, in addition to every other month, couple times a year. Um, and we send weekly Matt metrics and dashboard email goes out every Friday. Uh, so, and it, that's just the regular cadence that we're in. Transparently, I think if we hadn't had the relationship that we had with the operating partner, being a part of the organization, that would have been way more frequent.

[ 00:37:33 ] A lot earlier on and, you know, even probably to this day, a lot more frequent, just our structure, just been a little bit unique. Geographically speaking, the firm happens to be local, and so we're all here in town. So that structure makes it possible because, you know, we're not remote. Most of the, I think the rest of the portfolio, I think is, isn't, you know, not in town. Uh, so that isn't necessarily, uh, a common structure, but it happens to be, happens to be ours. I want to clarify. So is the, the, you're referencing the managing partner and then also this like, uh, director of strategy or the strategy person. These are two separate individuals, correct? Okay. And are, are they still in the same positions today?

[ 00:38:17 ] Or did you highlight like where they sit today? Is there still a director of strategy and where does the managing partner fit in today? Managing partner sits on the board and that's who I report to. And then the operating partner is our chief strategy officer. Got it. Okay. I just wanted to make sure I got that right. And you just talked about, like, meeting cadence. That was great. I wanted to kind of highlight like what that looks like. Um, and, and yeah, the, the, the circumstances are a little bit unique because there is that like director of strategy that like has ties to both. I was going to ask, does the rest of your administrative team like interface with the board or you are really kind of like the mouthpiece to both?

[ 00:38:57 ] So, because of the financial functioning capability that the firm, uh, is able to execute for us, we have, you know, we have accounts payable, accounts receivable, and payroll, and all of that. But the higher-level finance role, we're just now beginning to recruit for internally. So, the PE firm has done a lot of that for us with us. As a result, our COO interfaces with them quite regularly. Um, not so much the managing partner, but the, the folks that are, you know, that work directly with our company, that, that are part of that PE firm. Um, sort of serendipitously, one of the main guys over at the firm, he and I started the same day. His first task was to, you know, do some financial stuff for us, and build some balance sheets and stuff.

[ 00:39:49 ] And so he's, he has, you know, we've all grown up together; uh, and he's been a part of the business from day one, which has been, been nice, uh, to have that institutional knowledge because, you know, as their firm has grown, um, their team has grown as well. Uh, and, and, you know, folks come in and out, but to have that continuity has been not necessarily something anyone planned, but has been a nice, uh, value add to have his, um, involvement, you know, from the beginning. And he has a high level of appreciation for how we've grown too. Yeah, absolutely. I can only imagine. Let's talk about decision-making. Um, some of this may seem like basic to you, but not to others of who make decisions, how does the board influence decision-making, et cetera.

[ 00:40:35 ] So, so what does that look like today? You know, who, who makes decisions? How do decisions get made? Essentially. Sure. So day-to-day operations, that's myself and my team. Annually, you know, we have a board meeting and going into that board meeting, I write a letter, uh, and granted we've all, we have that annual cadence or that every other month cadence that I've kind of always already talked about. But in that letter, I summarize, you know, both my thoughts and feelings about the past year. And I'm, I'm reflecting on goals and, and, you know, highlighting what we did really well, highlighting things that didn't go as planned. And then, you know, the bulk of that letter is spent on things that keep me up at night and, and problems I'm trying, trying to solve, and wanting their thought partnership on.

[ 00:41:22 ] And that's what we spend our time, um, talking about at the board meeting and their, uh, you know, involvement in that, uh, has been super helpful. And so, we get aligned on the next year and the strategic opportunities and what we're going to go after. Um, and once we do that, you know, they're pretty clear on what we're going to go do. Um, but like, just as much as I don't like surprises within my own organization, they don't like surprises either. And so, if something happens where there's a fire, that needs to be put out or something that we weren't expecting happens, um, for example, uh, you know, there's a new story that's going to have your business in it for whatever reason. That's, that's a phone call.

[ 00:42:15 ] Hey, I want to give you a heads up. This is kind of going down. This is how we're going about it. That's a very public example, but there's also internal examples with key employees or various things about within the business that are helpful for us to communicate with them. Um, so there are things that are communicated to them. You know, I firmly believe in the absence of information, people make it up and it's usually not positive. And so, the more we can be proactive in providing context about what's going on or why a metric wasn't met, or why AR looks a particular way, um, to be proactive in those measures, um, the less involvement you're going to have because you've continued to add to the credibility and trust that you are, you know, you've got your eyes on the business and you understand what's happening, therefore they trust you.

[ 00:43:04 ] And it becomes more of a conversation, not in the weeds of, 'Hey, I'm going to go do this with you for you,' or 'I've got serious concern about, you know, this particular thing.' What does, what does that mean for the business? Um, so it's very, very strategic in conversation, not at all in the day-to-day operations. Um, and, you know, they're, I, I trust them. I want their opinion. I, I want to know how they think about it. They're looking at it through a different lens. And so, I welcome there, you know, their involvement in, in their conversation, but our business, nor their business is set up for them to operate our business. Mm-hmm. Mm-hmm. I think that's really, really well said.

[ 00:43:50 ] You mentioned earlier, you know, referencing your mentor, but just like a sounding board, you know, I think every business owner can and would benefit from that. I think you; the most important thing is that you take that from having a strategic partner, you know, that is quite literally a sounding board. Like you said, I love what you said of like writing that letter that quite literally like vocalizes the things that keep you up at night and they take that, and they take it to heart. Okay. How do we go about solving what can be really. Like conceptual, but like really complex problems? Like, usually the things that keep us up at night, there's not like a quick fix. It's like, these are complex problems. We're going to have to like lean in and figure out together. And I like that you can be that transparent with them.

[ 00:44:28 ] And then they are quite literally that sounding board to just help you like talk through, work through, and then establish, you know, expectations and goals of how we actually accomplish these things. I think that's, that's really powerful, and any owner would benefit from that type of influence and influence in big decision-making. Yeah. And you know, they look at; my eyes are on care for day in and day out. This is the business that I, you know, live, and breathe and operate in. And the reality is they bring a vast perspective because they're looking at so many different businesses and they see so many different ways to do it. It's, it's not a whole lot different than your position in talking with owners, operators, and experts in the field.

[ 00:45:15 ] You see so much more diverse, the diversity in the space than I do, because that's the position you're in. They're in a similar space. And so, I think to convey, you know, I value that expertise. I value what you bring, and I'm going to honor your time and give you a heads up on what I really want you to be thinking about so that when we are together, our time can be productive. If we want our time, thought, involvement to be appreciated and respected, we need to offer the same thing. And by valuing what they bring allows you to also demonstrate your own value and what you bring, because everyone's coming to that discussion with something to enhance the opportunity for the business. It's why you all entered into this venture to begin with.

[ 00:46:15 ] The hope is that you reach more people, the revenue grows, and you maintain or enhance profitability. That's why everyone's there. So how do we bring what we all know best? You know, we talk about like right person, right seat and, and make this a productive conversation for the benefit of ultimately the patients and the patient's benefit because the business is thriving. I know, you know, we've still got some time here and I've got a couple more questions. I want to kind of like take a minute here and you may be able to take a few more questions. So, I'm going to like a minute to think about this. Is there anything that I haven't asked about or that we haven't talked about that is like top of mind for you or that you want people to hear and get out of this conversation?

[ 00:47:02 ] Again, you know, just, just anything that we haven't talked about or like anything that's top of mind for you, that's relevant to this conversation that you want to make sure people hear. Yeah. I think as we're talking about a little bit, what you and I had talked about in a previous conversation, you know, there are folks that truly, you know, want an exit. And there are also folks that care a whole lot about the values, mission, vision that their company was created on and has lived in and like the viability of being able to actually continue that with a partner. And I think a lot of what we've talked about, you, conveys that I believe that you can. And I think I've shared some practical tips and tools about how I believe we've been effective.

[ 00:47:50 ] And I think there's a lot of folks that care a whole lot about in that, but I just want to be such a voice for like, it is possible to do this in a way that maintains the integrity of what your business was, was founded on while also incredibly enhancing it in tremendous ways. I mean, it is the biggest compliment of a lifetime, how proud our founder is of care for. Because she believes at the end of the day, who we are and what we deliver. While even that hasn't always been a linear, easy road, but we've both fought for it, and it still exists. And she's so incredibly proud as opposed to, you know, the alternative. So, I just want to, you know, express that; that you, you can do that.

[ 00:48:47 ] And prioritizing the things around communication and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and alignment and transparency and, you know, mutual respect and, and, and wanting, you know, the same thing ultimately is really, I think how you get there. You got here naturally, because this is part of like, kind of where I wanted to end was, you know, how have you preserved the founder's vision? And you you've explained that like throughout this whole conversation and you just got here naturally at the end. and you have care for quite literally has preserved and you would probably say like enhanced her, her initial mission and vision. And you were involved; the private equity involved, there was a lot of involved parties, but, but you did it, you know, and like, that's where like the, the pat on the back or like, you know, the accomplishment of a lifetime comes in is preserving something that was great from the start and preserving it, you know, a decade, decades later is, is really like the ultimate goal.

[ 00:49:48 ] And Care has done that. Uh, well, first of all, thank you for that. But I, I think, um, a lot of what set us up for success was done in the due diligence. And I don't think we can understate or over-appreciate the importance of the due diligence from both aspects. You know, the, the PE firm is doing their due diligence, but so is that owner and aligning on that core value, getting really clear. Um, we've had some strategic opportunities come up over the past, you know, eight, nine years. And, and one of those conversations, you know, the owner was very clear about what they wanted for their business. And I was very clear about what I felt like the potential was and what would need to change as a result of it.

[ 00:50:46 ] And we ultimately did not, pursue any level of partnership or strategic partnership. But what came out of that conversation was a clarity on was clarity, clarity, and largely on expectations. And I think, you know, while our founder could have never dreamed that the business was, would look like it is today, she was very clear on what she wanted and what she expected and what was a non-negotiable around the care in the service that we were going to deliver and also accept it. And I think that was something that she was very clear about. And so, it was kind of like, what was going to be an operational reality that she knew ultimately would benefit the growth of the business, but something that she didn't have a lot of interest in appetite for herself.

[ 00:51:35 ] A way that I think about that is as you, as what you want becomes clearer, what you don't want becomes clearer. You know, I think of like, like literally like a lens, you know, like getting clear as, as what you want becomes clear, what you don't want becomes clear. And you, and it sounds like you've learned that, you know, you learned that when you brought in the private equity firm and it sounds like there's been other opportunities that have arisen, but you, you see clear what you don't want and what you don't want to become your reality as you laser in on and clarify what you do want. Yeah. I was, uh, the managing partner and I traveled for a meeting that was going to, you know, be around a strategic opportunity and it was just a dumpster fire for me for a lot of reasons.

[ 00:52:16 ] And I was just distraught and, you know, I was just, I was just, I was just, I was just, I was just, I was just, I was just, I was just, I was just, I was just, I was just, I was just, I was just, I was just, I was just, I was just, I was just, I felt like I hadn't done my job well. And why did we come all the way out here? And we, we walked out, and he just looked at me and kind of had a little pep in his step and was like, clarity. And I was like, wait, what? I'm like thinking about all these, all, all of the, this is just did not do what I thought it was going to do. And he was like, you know, I'm glad we know now this was, this meeting was, you know, was extremely clear on, you know, the next step for this organization. And I thought that was such a unique perspective.

[ 00:52:52 ] And I've always, you know, I've carried that with me forward, thinking about everything I go into and all the meetings that we have and all the opportunities that are presented to us, you know, we're not going to miss what's for us and everything, all those conversations leading up to what is or what isn't provide a whole lot of clarity. And, you know, I think you can apply that to lots of areas of the, of, of our work, but that's, that's something that has really been helpful for me. When we think about, you know, partnership and working with people, the more we can be clear on expectations and clear on outcomes, the more productive and successful, I think we're all going to be. I want to ask kind of this last question.

[ 00:53:40 ] There's been a lot of like positive, like tones here. Like, that's what we wanted to get out of this. Like you just said a couple of minutes ago, like you want to be an advocate and vocal in the industry about, you know, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, this positive experience that you've had. And, and you've highlighted like a lot of likes, like keywords here, I guess, like, I'm just like recounting the last 60 minutes in my head of like all these keywords that you've shared. And you just kind of ended there on clarity. What would you, what word, or what would you chalk the success of like this partnership between you and the private equity firm? What, what word or phrase comes to mind to chalk up like the success that you've had? Is it clarity?

[ 00:54:17 ] Is it something else? Like what, what maybe single-handedly, what would you chalk up the success of this partnership? What, what maybe single-handedly means the most and has led to the most success? I'd say trust and credibility. And why, why those? Because I think clarity is a really good one. Expectation. Like you've said all these good words. Like what, why, why trust and credibility? Why are those at the top for me? You know, I think when someone trusts me and finds me credible, I can be an effective leader and to lead the organization effectively is going to ultimately provide the outcomes that support me. And I think that's, that's, that's, that's, that's, that's, that's, that's, that's, the patients, the organization, and, and certainly, um, meet the metrics that the PE firm has set before us. Um, I will work for people that I can trust and believe are credible.

[ 00:55:05 ] And even if it's not the easy thing to hear, I can trust that what they're saying is in the best interest of the organization and myself and my team. And I think without being able to say that and believe it, it impacts your ability to have an effective relationship. That's great. I didn't know what you were going to say, and I didn't know where you're going to, where you were going to end, but that's what I wanted to get was like, what is single-handedly most important? You know, because you said all of these great things, but at the end of the day, it sounds like trust, trust and credibility. And like you said, trust goes so much deeper, you know, it's where you can like have those hard conversations, but you don't take them personally.

[ 00:55:47 ] It's like, this is in the best, best interest of the business. And we have to get clear in those hard conversations and that only exists and can go well if there's mutual trust and respect and credibility on both sides. So, I think that's better than what I imagined, you know, you are saying; and how we can kind of wrap up this conversation. Um, any kind of parting thoughts or words before we close? Um, you know, I, I think we've, we've covered, you know, the 30,000 feet, you have all of it and hopefully gone deeper in some, in some of the avenues to give some more context and hopefully some, some helpful pieces and things that I've learned. Um, and, uh, yeah, I don't have anything additional unless we have like another 30 minutes, which I don't think we do.

[ 00:56:36 ] So, um, no, I, I I'm hopeful that this has been a helpful and productive conversation and provided a perspective that I think probably isn't, um, heard much in this space. Yeah. I just want to say personally and like professionally on behalf of the industry, thank you for disclosing so much information last week and this week. Um, like you said, we don't talk a whole lot about care management, probably not enough. Um, private equity is just naturally making its way into our conversations, but to hear it from such a positive perspective, you know, a real success story, I would call it is, is unique and exciting and care for has done, you know, some amazing things over the last 10 years.

[ 00:57:19 ] And I'm excited to now know you for the next 10 years, because there's, there's so much on the horizon for this industry. And these are the types of conversations that we need to keep having more of about topics like this. So, thank you for being an advocate and an example and a leader in the space. I, you know, posted on LinkedIn that more people in the industry need to know you. And I, I quite literally think that, and so I don't want to overwhelm you or bombard you, but my, my, uh, you know, parting thoughts here, if you are on LinkedIn, you know, connect with Catherine, um, because it is a huge opportunity for you to learn and grow from her. So, um, we'll, we'll leave off there with a thank you for all that you're doing, and we'll continue to do. And I hope everyone has enjoyed these sessions and, uh, we'll look forward to having everyone join us again next week. Thanks, Miriam. I appreciate it. Okay. Take care, everyone. We'll see you again.