Serent Snapshot: Mike Keegan, Lead Director of KEV Group

Serent Snapshot: Mike Keegan, Lead Director of KEV Group

Mike's Perspective on How Founders and CEOs Can Leverage Their Board

September 24, 2020



Serent Snapshot: Mike Keegan, Lead Director of KEV Group

Meet Mike Keegan, Lead Director of KEV Group and previous Director of Diamond Mind, a payment solutions provider for independent schools. Serent Capital successfully exited Diamond Mind in 2016 after growing revenue and increasing its client base by over 400 schools.

We sat down with Mike to capture some of his experiences as a board director with Serent Capital.

“I met one of the Partners at Serent Capital, through one of the founders of Diamond Mind. We had breakfast and I really liked him as a person before I worked with him as a professional. He’s open, honest, direct, and really follows the vision that he puts forward, especially from a partnership perspective. So overall, I got to know him and ultimately decided that Diamond Mind was a business where I could make a difference. And most importantly, the people at Serent and Diamond Mind were people that I really wanted to work with.”

“A lot of entrepreneurs who become CEOs have not had the experience of seeing a business grow from $10 million to $50 to $100 million. My job is to help them along that journey.”

As a seasoned executive who has experience working with two private equity-owned companies, companies who have done numerous debt offerings, and a public company, Mike knows a lot about financial markets. “A lot of the firms that I’ve worked with view the interaction with management only as an investment. This was really different from the perspective of the Serent team. They view it as an investment—but more importantly, as a partnership. That makes a difference because a lot of investment firms will come to you and say, ‘Hey look, we’re going to build a partnership.’ But it’s lip service. They’re really just focused on numbers and the exit.”

“Obviously it’s about making money in the end, but the way you get through that process is important, and Serent’s approach is very different from the other firms I’ve worked with. Serent’s focus on, and dedication to, establishing a partnership is unique.”

 

The Value of a Board of Directors

As a CEO himself, Mike knows the types of decisions and challenges a management team handles on a daily basis. This influences the way he directs the board for KEV Group. “My job as a director is to help the management team get through the challenges of running and growing a business. I spend a lot of my time working with the CEO, understanding the challenges they face.”

“A lot of entrepreneurs who become CEOs have not had the experience of seeing a business grow from $10 million to $50 million to $100 million. My job is to help them along that journey. It’s to give them some insights into how to build an effective sales team, make the right investments in product, prioritize development work—and, ultimately, deliver from an operational perspective on their tactical and long-term strategies.”

Mike helps CEOs constantly focus on keeping the customer first with every decision. “Customers pay the bills.  They’re the ones who you’re ultimately building the business for. So how do you build a stronger customer base as well as customer loyalty?”

“Sometimes board members can be very pedantic about how they want to approach things: ‘This is the way it is; this is the way you should do it.’ Serent hasn’t been like that. When you come in as a board member, Serent wants you to use your expertise and experience to help the CEO—not actually talk to the CEO but talk with the CEO—to build them into an effective leader of the organization.”

 

Overcoming Industry-Specific Challenges

Building Executive Management Teams

Investments all have an inherent risk associated with them. With that risk comes a lot of ups and downs—every portfolio company goes through them. “When we had revenue challenges, a Serent Capital team came in and helped us focus on what was important. The team presented a number of different options for moving forward on a pricing strategy. They met with the company’s leadership team to understand the strengths and weaknesses, and then partnered with that team to build out a comprehensive sales and revenue plan.”

“Just as important, they realized that we didn’t have all the executives necessary to execute the plan. So Serent’s Human Capital team helped us build out those teams by leveraging their network of executives, which is referred to as the Serent Executive Network. We’re starting to see the benefits of that process now.  It’s not necessarily always about monthly numbers. Of course, monthly numbers are extremely important, but as I said before, the journey’s just as important. Serent really works to understand the markets in which the company operates as well as the company’s strengths and weaknesses, and provides a team of experienced professionals that utilizes those understandings in a targeted way to help build the business and achieve a successful exit. This comprehensive and no-nonsense approach has been very refreshing from my perspective.”

 

Solving Diamond Mind’s Challenge with Processors

Mike has directed the board of two Serent Capital portfolio companies in the payments space. “I’ve been in the payments business my whole life. There’s a lot of expertise and knowledge I can bring, but more importantly, I can use my network to solve problems.”

“From my perspective, as a CEO and a member of the network, the Serent Executive Network serves two purposes:

  1. Find board members who are qualified for positions that Serent is looking to fill.
  2. Use the network to help identify and solve problems that companies might have.”

“For instance, at the last company that I worked with, Diamond Mind, we had an issue with a credit card processor. I knew the executives in charge of the issue at the credit card processor, so we were able to walk in, talk with them, and ultimately solve the issue much more expeditiously than the executives at Diamond Mind would have been able to do on their own. I’m not saying that can happen all the time, but I do think that the executive network that Serent has put in place is full of people that have different capabilities and experiences which allow us to creatively and directly solve certain problems that a company might be struggling with.”

“What differentiates Serent in the marketplace is their commitment to the partnership approach.”

Forming a Serent Capital Partnership

“What differentiates Serent in the marketplace is their commitment to the partnership approach,” says Mike.

“First, they don’t only focus on the outcome. They’re focused on building a true partnership. That approach includes solving a lot of problems. Entrepreneurs today are constantly driving to build their businesses. Serent provides the infrastructure that supports this drive.  Most importantly, the infrastructure is always directed at solving actual problems in coordination with the entrepreneur. . When they partner with you, they mean it.”

“From my perspective, I’ve seen is a lot of entrepreneurs/CEOs initially be nervous about the investment. They ask questions like ‘What is this investment ultimately going to entail? How are they going to treat me? How are we going to get to the outcome?’”

“What I have experienced is the entrepreneur/CEO over time comes to include Serent as part of its family because Serent treated them as a member of the Serent family, which is extremely important because families fight, families make up, and families move together forward. It’s a different approach than I’ve seen from most private equity firms that I’ve worked with.  Serent listens, is engaged and works constructively and in partnership with the company and its leaders to build great businesses. ”

“What I love about Serent is the team is focused, smart, fun to be around, and takes care of the people that work with them. When they invest, they’ve done their due diligence, and they’ve figured out, in partnership with the entrepreneur, who and what they think is needed to help build the business and achieve a successful exit.  They know there will be successes and challenges during the investment cycle.   But they’re dedicated to the journey and understand that their job is to help the management team navigate those successes and challenges.  For Serent, in the end, it is about supporting the individuals they work with and building strong and lasting relationships with those individuals.  If they can do that, they are confident a successful exit, and some fun along the way, will be the result. It’s a family-oriented approach that I think really plays well in the marketplace today.”

Serent Capital invests in growing businesses that have developed compelling solutions that address their customers' needs. As those businesses grow and evolve, the opportunities and challenges that they face change with them. Principals at Serent Capital have firsthand experience at capturing those opportunities and navigating these difficulties through their experiences as CEOs, strategic advisors, and board members to successful growing businesses. By bringing its expertise and capital to bear, Serent seeks to help growing businesses thrive. Learn more about our portfolio companies.

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Nothing presented herein is intended to constitute investment advice, nor sales material, and no investment decision should be made based on any information provided herein. Information provided reflects Serent's views as of a particular time and are subject to change without notice. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. While Serent has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third party information presented herein. Past performance is not indicative of future results. There can be no guarantee that any investment strategy employed by Serent will be successful. A full list of portfolio holdings is available on Serent's website.