What does it cost to work with the wrong person, not just in dollars, but in peace? Raaz Ali, founder and CEO of Raivax M&A Advisory Firm, has built one of the most successful sell-side M&A practices in North America by doing nearly everything the opposite of how the industry typically operates. While only 18–20% of businesses that go to market actually sell, Raaz's firm maintains a 95% success rate, and the secret isn't a clever tactic. It's integrity, preparation, and the discipline to turn away business when the fit isn't right.
From his childhood dreams of catching passes like Jerry Rice to running a lean team of five "stallion" advisors who cap their deal loads at four to six each, Raaz shares how choosing quality over quantity, using the buyer's playbook against them, and protecting his team's peace have become the foundation of a firm that consistently delivers multiples 1.5 to 2x above market averages. This is a conversation about what happens when you draw a direct line between your values and your business decisions.
0:00 — Intro
2:29 — Why Service Matters in M&A
3:55 — Childhood Dream NFL
6:41 — From Banking to Raivax
10:00 — Mission of Business Exits
13:21 — Integrity First Process
16:09 — 95 Percent Success Formula
21:55 — Scaling Without Sacrifice
22:41 — Lean Team Capacity Limits
26:34 — Avoiding Difficult Clients
29:52 — The Cost of Peace
30:35 — Pattern Recognition Story
32:33 — When Deals Fall Apart
35:01 — Brand Before Marketing
36:39 — Contrarian M&A Process
44:43 — Controlling Buyer Narrative
46:42 — Grassroots Referral Marketing
52:17 — Future of Lower Middle Market
55:59 — Behind the Brand Questions
1:01:39 — Defining Success and Next Steps
There's a tension every leader of a B2B service has to navigate: How do you scale without compromising the quality of your services - or the values that drive them? The CEO's Heart for Service is where accomplished B2B leaders share hard-won insights on walking that tightrope.
The CEO’s Heart for Service is a production of Brand3. If you’re a B2B service provider who delivers exceptional service but struggles to get your marketing to connect with the right people, find us at brand3.net. And sign up for our Brand3 Newsletter that only sends marketing insights worthy of your inbox - genuinely helpful stuff for the road ahead.
The CEO’s Heart for Service is also supported by Forge Podcast Company, a turnkey production solution for using podcasts to reach a wider audience, win new clients, and grow. Find them at forgepodcast.co
Matt Wolfe, Brand3: Hi, everybody. Welcome back to The CEO's Heart for Service. My name is Matt Wolfe. I'm a partner at Brand3, and I'm your host today. I'm flying solo again. A lot of times we have some wonderful other friends from Brand3, but today I get Raaz Ali all to myself.
And I've had a great time. Raaz Ali is the founder and CEO of Raivax M&A Advisory Firm. If you know anything about the M&A advisory space or the business exit planning space, don't miss this because he is doing things that no one else is doing. They are getting results that are phenomenally uncommon in the market.
But to the point that we always talk about: what does it take to scale with integrity? What does it take to scale and grow your company and be true to your values?
Boy, if you're struggling with any of those decisions right now or if you're wondering how to get there, it's not always that we have a conversation that draws such a direct line from sticking to your values, sticking to your guns, and making some key business decisions about how you serve people and seeing those pay off.
There is a direct line in Raaz's story from the integrity of the choices that he has made to the success that he is winning for his clients and for his team, and as he'll say later, for his own sense of peace internally and for his team.
He's just a remarkable person, and I can't wait for you to learn more about Raaz Ali's heart for service.
Let's go meet him now.
Hi, Raaz. Welcome to the show today. How are you?
Raaz Ali: I am doing fantastic, Matt. Thank you so much for having me.
Matt Wolfe, Brand3: You're very welcome. We're excited to have you. You and I are meeting for the first time.
Raaz Ali: Right.
Matt Wolfe, Brand3: I've really been looking forward to this because I've heard so many great things about you.
Matt Wolfe, Brand3: Especially, I mean, I think the reason you're here is we call this The CEO's Heart for Service, and from all that I've heard, you clearly have that and care deeply about the people you serve.
We like to get to know people on a human level as well as a business. We've got all sorts of business strategy stuff to talk about. But most of the folks that we talk to here and that we work with at Brand 3 are B2B service providers who offer really what we would call high-trust, high-stakes services.
And M&A and business exit strategy- all of those things- I mean, that is about as high-stakes as it gets for any individual, you know, looking at all of that work that they poured into things.
And so we know that those things don't move forward until there's an encounter with the human, you know, the real person behind the brand.
We're trying to figure that out on the marketing side. How do we not just share good information in the world? How do we not just put good marketing out there, but give people an experience of the human behind the brand?
Because in the space that we're both in of high-level consulting, that's what we have to do.
So, that chord runs through everything we're talking about today, but we like to start with just a simple human question, which is, when you were growing up, you probably didn't see yourself becoming the founder of an M&A advisory firm that's very successful.
So what did you wanna be when you were a kid? Where did you think things were going back then?
Raaz Ali: You know, that's such a good question, and this may shock some folks, but I wanted to be a wide receiver for the San Francisco 49ers. Jerry Rice was my guy.
I read his biography. He grew up, I think, in Mississippi, in an impoverished background. His dad was a player who used to toss him bricks up on the scaffold, and he said that contributed to his catching skills.
And then I would find myself in the yard trying to catch very odd objects and to try to make my hands good as Jerry's.
So, of course, I did not make the NFL or become a superstar wide receiver, but I idolized Jerry Rice, and I still love him to this day, you know?
Matt Wolfe, Brand3: That's so cool. Wait, what kind of objects were you trying to catch? How do you do that? How does that training work?
Raaz Ali: Well, makeshift stones, bricks, anything that I could get my hands on that was unique, you know. That was... Well, that was hard, right? That was also very heavy, right?
Matt Wolfe, Brand3: Yeah.
Raaz Ali: So it was—
Matt Wolfe, Brand3: That's a cool idea. It's kinda like a Rocky-style training, you know? It's like—
Raaz Ali: Yeah, yeah, it was.
And I loved football. Like, I loved it. And that was the only position I played was, you know, wide receiver.
I started freshman year. I started freshman year, and then, you know, over the summer, everybody just got juiced up, and I couldn't really keep up.
But, you know, I just love football, and I think Jerry Rice and the San Francisco 49ers had everything to do with it.
Yeah.
Matt Wolfe, Brand3: That's awesome. So we're—
Raaz Ali: Yeah.
Matt Wolfe, Brand3: —cheering on the 49ers?
Raaz Ali: We are to this day. That is absolutely, yeah. Yeah, diehard.
Matt Wolfe, Brand3: Awesome.
Raaz Ali: We're still doing the quest for six. We haven't... We've gone close, uh, but we've lost a few Super Bowls in the last few years, but we're still trying to get that sixth ring.
Matt Wolfe, Brand3: That's awesome. That's great.
You know, I think that's the first time someone has actually claimed that they wanted to be in sports, which is shocking to me. I can't believe that hasn't come up yet.
You know? Like, that's a pretty common dream for a lot of kids.
Raaz Ali: Yeah, it is.
Matt Wolfe, Brand3: I was different. I was, I was, like, watching The Muppets and, like, thinking, "Oh, what would it be like to be in theater?"
And then that's where I went before I—
Raaz Ali: Right. Okay. Okay. Yeah. It was pretty early on as a kid, you know. I... It was just that, you know, when I was growing up, it happened to be that San Francisco was on a really hot streak, and that's just, you know, lived in my mind, and it's etched in my mind that, you know, I was like, I was never gonna be a bandwagon fan.
So I just kept up with them. We had some... We've had a stretch of not great years, but, you know, it's been fun just to root for them over the few decades.
Matt Wolfe, Brand3: That's awesome.
Matt Wolfe, Brand3: Get to... I wanna hear a little bit about Raivax, your M&A advisory firm, and how do we get there from dreams of football to Raivax?
Raaz Ali: You know, Raivax, I started my career in investment banking, but I was just number crunching. I was just doing financial modeling for a mid-market firm.
And I just felt like I was gonna be pushing paper in a stuffy corporate W-2 job. Nothing wrong with W-2 jobs, but I think what really got me was that I love the aspect of selling businesses and helping business owners.
But I felt like the business owners were, you know, they were mid-market, right? So these were companies $200 million-plus going to a billion dollars, so you were never really interacting with them.
I felt like I wanted to work with the heartbeat of our country, which was the lower middle-market business owners that are actually the engine that is moving our country forward, and which is also gonna be the greatest generation of wealth in the next eight years, right?
There's the baby boomers that are gonna be retiring.
So I felt like I couldn't do that behind a spreadsheet, and I couldn't do that with a career that I felt at that time had no mobility to really climb.
So we live in a great country. I would say the greatest country in the world. When you see any type of resistance, you gotta carve your way around it, and that's exactly what I did.
I took a huge leap of faith and started Raivax Group.
And the focus was always helping lower middle-market businesses on the sell side.
So we define lower middle market as $5 million in revenue, going up to $200 million in revenue. These are all privately held businesses.
So think of your local HVAC business in your county or state, or multi-store franchises.
As a firm, we are industry agnostic and geographically agnostic. We're very proud to say that we've transacted in all 50 states of our country and also all provinces in Canada.
And you name the industry, we have exited in it.
We cautiously stay away from any vice-related businesses, cannabis, adult entertainment, booze—
Matt Wolfe, Brand3: Mm.
Raaz Ali: —anything like that. Anything else, you know, if you throw it at us, chances are we've represented it.
Matt Wolfe, Brand3: That's amazing. Yeah, I think I saw on your website it was, and I'm not sure when the website was done, in excess of 850 successful exits at this point. That's phenomenal.
Raaz Ali: Yeah. 872 to date.
Matt Wolfe, Brand3: How do you handle the... So we've been talking, actually, to several people on this podcast and just through our business in the M&A space, the business exit strategy space.
We've been talking to a lot of people around that, and to me it feels, sitting on the outside of it, like a very unique burden to hold on someone's behalf, and also a mission.
I get you could look at it two different ways, right? There's a very important thing that you're holding for somebody, but a real sense of mission around it, too.
I mean, when I think of these lower middle-market businesses, and so many of them are family-owned, so many of them with decades of their life invested in hoping to make this successful exit for themselves and their family.
I don't know. What are your thoughts around that? This... It's very special what you do, and I'm just curious how you think about the sense of mission and purpose with that?
Raaz Ali: It's immense pride that we take in it. You know, we have the unique opportunity to take somebody's life worth and allow them to reap the benefits from it.
You know, most of the business owners that we work with, their net worth is tied into their business. They've been surviving and, you know, I wouldn't say surviving, but even thriving off cash flow.
But they never truly know how independently wealthy they are until they have a liquidity event, a majority recapitalization, or a full-on sale, for that matter.
And to just be a part of that, to change somebody's financial life and to know that for some folks, this is the last act before their retirement, and this sets them up for their nest egg, for them and their family, and for their generations to come.
And for others, it's a stepping stone for what they really wanna do, right? This may be a... They were just an entrepreneur. This was a job they took on or a business they took on and grew beautifully, but they really wanted to do something more self-fulfilling, whether it's mission work or whether it's a hobby that they wanted to pursue.
To be that, to be that stepping stone for them, is very, very special, and there is a lot of weight that comes with that.
You know, you're dealing... This is, I would say, equivalent to somebody's child, right? Their name is on the building. They're associated with... Everybody knows them in town for, you know, being this infrastructure company and for one day having to let that go.
There is a sense of mourning to it.
And, um, we oftentimes spend a lot of time less in the numbers and more in the counseling side of it, right? On what life looks like afterwards and how this next stepping stone is gonna be great for them, right? How it will help them achieve their goals.
And for some, it's not that they're leaving; it's that they're growing, right?
Now, for some, it's that they are seeking a liquidity event because they feel like they have grown it to a plateau, and there's an inflection point where they feel like, "You know what? We need a strategic partner that can take us to the next level. We ourselves aren't doing justice to this company. We're just standing in the way."
So what do they do?
Well, they built a beautiful business, and they're willing to roll over 20, 30% of their equity and bring on a really robust, qualified private equity firm or family office or just a strategic partner that can help them realize that next level of growth that they're seeking.
And they still own and run the company and will have their day at a second liquidity event. We call it the second bite of the apple.
So, uh, the gravity of it is immense, but the pride in helping somebody achieve that is even greater.
Matt Wolfe, Brand3: Yeah. That's wonderful. I haven't heard anyone speak yet to the counseling side of it that you're mentioning, which is so important.
I mean, that's, um, your identity is shifting just as a human after having so much poured into that. You and I both know what it's like, also, you know, to run a business, and you have so much poured into that.
I just love that you're acknowledging that. The grief, the loss of it, and the potential.
Raaz Ali: Yeah.
Raaz Ali: And the human side of it is that, you know, it's a very simple philosophy that we live by at Raivax: transact in the way you would want to be transacted, right?
As if it were your own business, how would you wanna be treated? How would you wanna be guided?
If we wouldn't take the business to market if it was our own business, right? That we're representing, knowing the knowledge base that we have, we wouldn't advise our client to.
If we had a great letter of intent, but there were wrinkles in it that we wouldn't be able to get around, if we were the ones on the other side selling the business, we're not gonna advise our client to.
So, you know, it's really about being forthright.
I will also say that this is a... A lot of firms, I would say, maybe, for lack of a better word, inflate numbers or tell business owners what they really wanna hear to get that nice retainer and take them to market.
We tell them, "Hey, don't give us that retainer. Take that money and put it... Invest in yourself."
And what we do is bring them a third-party accounting firm to do what's called a quality of earnings. It's a forensic audit to look at their revenue, look at their EBITDA, and only then do we provide an evaluation of that.
So we don't want it to be the one that's standing in the way saying, "Hey, don't take our word for it. This is what your numbers came back at. We're not the ones that even did this financial analysis."
So when that comes back, that tells us a lot. It tells us the financial health of the business. It tells us how big those gaps are, whether the business is ready to take to market, the timing and optics of everything in M&A.
So this allows us to either say, "You know what? It's not that your baby isn't cute. It... What it needs is, we need to go into exit planning mode and work out some wrinkles to take your business to market maybe at a later time, maybe 18 months after we fix certain things."
Whether it's customer concentration, whether it's lack of infrastructure in your management, or maybe to diversify the supplier base that you have.
Whatever it may be, we only take businesses to market when it's the right time.
And sometimes it's knowing that you can take it to market, you could possibly sell it, but you know that you're not doing right by the client you're representing.
Matt Wolfe, Brand3: Mm-hmm. That's incredible. That's great.
You actually just answered my next question, which is usually, you know, how do you know you've treated people well, provided good service?
And this idea of transacting only as if it was your own business is clearly at the heart of it.
Raaz Ali: 100%.
Matt Wolfe, Brand3: I'm really stunned by... There was something else that really stood out to me on your website, which was your 95% success rate, because everything we've been learning about the space, that is not the norm. That is not the norm in the industry at all, but it's clearly coming from these values, these ethics, and the way that you're treating people, right?
It's leading directly to that kind of success rate, clearly.
Raaz Ali: Yeah. I would further expand on that. I would say 18 to 20% of businesses that go to market actually sell. So the rest, 78 to 80%, do not sell.
Matt Wolfe, Brand3: Yeah, yeah.
Raaz Ali: And the reason why our success rate is high is that we actually do the prep work in the beginning.
We don't take on engagement agreements. We actually do the sell-side quality of earnings that an accounting firm does. And that tells us a lot. That tells us how big those gaps are, whether we can actually close them through a solid narrative.
And we have, you know, some things under our belt, whether it be backlog or new work that's coming or new projects that are on the horizon that can assist with the volatility in the business that they may be having.
But, you know, those are really telling, and we base our valuation off what a third party did. And those third parties aren't just any CPA firms. They're CohnReznicks of the world. They're Baker Tillys of the world. We use them for a reason.
And a lot of firms provide this quality of earnings as a service within their own firm, which is a conflict of interest, of course, right?
And why we're also doing this is because we want to use the buyer's playbook against them. This is what the buyer is gonna do during due diligence. They're gonna hire this third-party accounting firm, whether it's CohnReznick, whether it's Baker Tilly, and they're gonna use the results of that artifact to negotiate a lower, or retrade at a lower multiple, right? To have a lower enterprise value.
So we're doing that ahead of time on behalf of our client for a few reasons.
One, we want to give them an actual sense of what their business is gonna trade for, where 90% of the offers we feel are gonna fall under. And that's the first litmus test. They don't like that number, then we know that we have some work to do to get to where we want to be, right?
If we feel that we're already getting pushback from them through this early quality of earnings that we did, because it is kinda like a root canal, it's kinda like, you know, in it, you know... And if we feel that they're already feeling a little taxed by this, then we feel like they're not mature enough right now to take this business to market because the fun hasn't even started yet.
So it tells us a lot about the temperament of our client. It tells us a lot about what their expectations are, right?
But it also allows us to see: is this business gonna actually transact in the market?
If we don't think it's gonna transact due to customer concentration, due to some regulatory issues that are coming in the market in this specific industry, or due to supplier concentration, or lack of infrastructure and management, we'll be the first to tell them, "Hey, we don't think we're gonna be able to make the splash that you're seeking, but we think if we fix X, X, and X, which will take 15 to 18 months, we'll be able to get to where you wanna be."
Right. So we're only taking businesses that we know are gonna actually exit.
Matt Wolfe, Brand3: That's fantastic. I love the idea of using the buyer's playbook against them.
Raaz Ali: Yeah.
Matt Wolfe, Brand3: The marketer in me wants to see that somewhere. Like, as a business owner, that lights me up. I'm like, "Yes." Now we're playing a game we can win.
But most of all, it's incredible to hear you talk about finding that good fit.
We, we, from the marketing side, we talk about that a lot. We've got this new workshop we do called Scale Beyond Referrals for B2B business providers in spaces much like you are in, finance, tech. Again, high stakes.
And oftentimes we find that they have not really yet defined who their ideal client is. And that's really... An ideal client isn't about... It gets reduced a lot of times into bullet points and demographics and sort of a fictional exercise of a person somebody wants to work with.
And what we say is, "No, it's who are the people you really know you can work with, and where there is alignment in all the different ways that you're talking about."
You're looking at alignment and just their potential to make a successful sale, but we're, you're also talking about values, right? And are you on the same page with the values driving this, the decisions being made, the process that's moving forward, all of that?
And I just, I wanna applaud you for making those choices because not every business owner has let themselves do that yet and acknowledge that they're gonna do better work if they do that.
But the proof is in the pudding of your success rate and what you've been able to accomplish.
Raaz Ali: Thank you. Thank you. I appreciate that.
I mean, it's been a lot of trial and error over the years, but in the end of the day, I think what we say is pre-market preparation, coupled with in-market tension, what we call yields out-of-market multiples, right?
So it's the work that you do beforehand, and the sense of urgency and tension you create in the market will get, you know, above-average multiples in the industry.
But it's a process, and you gotta follow that process.
Matt Wolfe, Brand3: Mm-hmm.
Matt Wolfe, Brand3: Well, let's talk about that piece you just mentioned. Through the years, you've, you know, you've learned; obviously you've grown. You've built a very successful firm. You've won a lot of awards. Anyone can see that on the website. You know, a lot of recognition for the very good work you're doing.
But what has it been like to get here?
So this is what we like to get to at the guts of the conversation. We meet people like you who, as you've clearly laid out, care deeply about the people they serve, feel a great responsibility to that, and as you scale, it gets harder to deliver the same level of service and stay true to these values that we're talking about.
So where have you seen the bumps in the road? Where has it been hard? Where have you seen the challenges that you had to overcome to keep moving forward and keep delivering great service to your clients?
Raaz Ali: Yeah, I think the hallmark of any business owner, or even specifically in sell-side M&A, that runs a successful boutique M&A practice is that you learn through trials, and you learn through tribulations.
And at one point I had 15 M&A advisors, and I could not have been more miserable.
It was a good-sized team. We had the flow for it, but I realized that some things had to give and that we could not compromise quality, right?
And quality is not compromised on how we're treating our clients and what we're able to do for them. But it's bringing on folks that we feel actually have what it takes to be successful in this business, right?
This is one of the hardest businesses to cast for, right? It really is. It's a very rare set of skills that you need. You're part psychologist, talking both your client off the ledge or a buyer to, you know, that this is the right opportunity for you, in all honesty.
And you have to have adept accounting skills, negotiating skills, project management skills. You have to be a marketer. You have to know how to sell.
It is very hard to really pinpoint and find the right resource for this. And that's why they come from varying walks of life.
But I rather have five stallions than 15 regular horses.
And right now we run an exceptionally well, you know, sell-side operation, but it's very lean, right?
We only have five M&A advisors, and none of those M&A advisors work on more than four to six deals. You can't. You can't give that high touch and communication that our clients, the sellers, deserve. And you can't feel the activity from the buyers, which is very much needed, right?
If you go over six deals per person, you're just gonna lose that, and I'd rather not sacrifice reputation.
Matt Wolfe, Brand3: Mm-hmm. That makes a lot of sense. Was that a number you sort of found by experience then as you were growing, that—
Raaz Ali: Yeah.
Matt Wolfe, Brand3: —that capacity—
Raaz Ali: Yeah.
Matt Wolfe, Brand3: —for people?
Raaz Ali: Yeah, the capacity level, yeah, because you gotta do it yourself first, right?
Right?
Matt Wolfe, Brand3: Yeah.
Raaz Ali: You gotta live through it yourself as a sell-side M&A advisor. You know what your capacity is. You can't put more than what you can handle on your team, okay?
But, yeah, I think that four to six is very... That's a lot, still, of deals to do per person at any given time.
So we're working on 20, 30 engagements at any given time amongst the team.
But more importantly, it's, you know, you have to run this very lean. You can't have too many businesses out there. Then that separates you, right? You're not a boutique firm anymore. You're a volume shop.
And there's a lot of volume shops in M&A, and there's a reason why that 18 to 20% success rate exists, right?
It's because the goal is to take as many listings as possible, collect as many retainers as possible, and throw the businesses to market.
If they stick, they stick. If they don't, they don't. They still made their money off the retainer.
We wanna sell every single business we take to market.
In order to do that, you know, we have to pick the winning horses, and the stallions have to be the ones that are, you know, at the helm of the operation.
Matt Wolfe, Brand3: Yeah. What... Are there any other... That's fantastic. Are there any other challenges that you've noticed throughout the years where, in terms of scaling and growth, puzzles you had to solve?
Raaz Ali: Yeah.
Raaz Ali: You know, and this comes with experience, you may have the best client. Uh, I'm sorry. You may have the best business that you want to take to market. It is $40, $50 million in revenue. It's that sweet spot where it's doing $6 to $7 million in EBITDA. It has low customer concentration.
It has a high recurring revenue component to it. It's gonna trade very well on the market.
But pattern recognition is very important. When you see... One of the hardest things that I've had to do is to train my guys, and also tell myself at the same time, is there's no price to work with difficult personalities, right?
Even when the monetary aspect is there, two things that happen when you work with... When you see certain red flags in people, is they're gonna sabotage their own deal. At some point, it's not gonna close.
Or if it does close, it would have been at the cost of your peace, okay? And that's something you can't get back.
We have worked with a lot of difficult personalities that, you know, not only negotiated with us along the way, but then just made it very hard through the information they were giving us, which was very slow-walking it.
They would go incommunicado. They would say one thing, do another, every step of the way with the buyer they were negotiating.
Every turn of a letter of intent was contested. When you went to the purchase agreement, it was contested.
So there was a lot of things where, you know, deal fatigue is real in M&A, right?
I will tell you, we always famously say that, one, M&A is not for the faint of heart, but second is time kills deals.
Every day the business is not closed, it's a day that is closer to dying, right?
And sometimes you have to control what's in your capacity.
We don't know who the buyer is gonna be, who the counsel they're gonna hire, or the CPA firm they're gonna hire. But we have a choice on who we take to market.
We have a choice on who we decide to work with.
And the most difficult thing in growth has been working with people that are good, that are actually transaction-ready, and that are gonna be easy to work with and that are coachable.
It's very hard. Till this day, it's very hard.
Matt Wolfe, Brand3: Wow.
Raaz Ali: I don't know how to answer that question.
Matt Wolfe, Brand3: No, that was... No, that was great.
You know, we find in these conversations there are really strong central themes that tend to emerge pretty quickly.
Capacity is no small thing, right? It's linked to so many other ideas of how we serve and the success with which we can do that. It's kind of a cold-sounding word, but it's linked to important things.
And then the quality, the stallions, the people that you work with, right? And choosing quality over quantity.
Those are easy things to lose sight of when you think about scaling and growth. A lot of times you're staring at a number, you're staring at a goal that somebody wrote on paper, right?
And it's so easy to sacrifice so much on the way to get to that number, or to lose sight of things, as opposed to winning the day by sticking to your values.
But that's clearly the train that you've been on.
Matt Wolfe, Brand3: The thing that really stood out to me that you just said was this idea that working with the wrong person could come at the cost of our peace.
I've... That phrase is gonna live rent-free in my head for quite a while.
Raaz Ali: It lives in mine.
Matt Wolfe, Brand3: Yeah. I've never heard anyone say it before. It's powerful.
Just to me, it speaks to your sense, uh, your sense of integrity because, like, you're clearly talking about the peace of the deal having gone well and served the client the best, but you're also thinking about...
What I hear in that is you're thinking about your team and their peace, you know, and their quality of life.
Is that a phrase you use often? Because it's a... I don't know if it just came out of nowhere or if it's something that you think about a lot. It's great.
Raaz Ali: I don't know if I pioneered it, but we've lived it so much in the last two decades that it did come from me through sheer experience.
And I will tell you, there's just been so many different instances that have brought this out.
I mean, just imagine running a nine-month process where you've probably spent $60,000 to $70,000 out of your own pocket to market a business.
You ran a stellar process, and you brought a lot of great suitors to the table, maybe drummed up nine letters of intent, narrowed down on a strategic buyer that you got maybe 2X higher in multiple, signed them up, ran due diligence, went successful, and you're at the verge of signing a purchase agreement and negotiating the fine terms of that agreement, and your client walks away.
Okay?
Nine months of your time. I don't know, 1,000-plus hours, man-hours put into it.
And it just didn't happen out of nowhere. If you actually listen to your gut and you understand that experience is very powerful, that there is pattern recognition, there are certain things, there are certain traits.
You gotta listen to every word your client says.
And it starts from the first meeting, right? You learn a lot about them, right? On how they sell you and what they supply you and what they actually supply you with versus what they said they would do, right?
And even through negotiating your own engagement agreement, you get to know who they are.
And you ignored those signs, and you didn't nip them right away because you really wanted the business.
You really knew that you could add value. You probably had a really nice buyer base for it. We typically know who the buyer is gonna be for most of our deals, right?
Raaz Ali: I don't know. We only go to 30 conferences a year, and we shake a lot of hands. And we always have a really nice, very fine-tuned buyer base that always manages to express interest and produce letters of intent.
But, you know, going back to our clients walking away, well, that to us is very... It's demoralizing at some times, right?
And it takes a lot out of you to know what happened. What could I have done better? How could I have avoided this?
I can't believe I was really looking forward to this deal closing more than the money... You know, for my own monetary aspect, but for my client. And I just started something that I couldn't finish.
Yeah.
So I think that it lives rent-free in our minds. And every time that's happened, you will never forget that for the rest of your life.
So dealing with good people, and understanding human psychology and emotional intelligence, and listening to every word they're saying, you can really come to a consensus on whether this person is ready to sell or not, or whether they're gonna sabotage their own deal, or whether they're gonna walk away.
They're just simply not ready, and this is some sort of experience for them.
Believe it or not, I've been told that, "Yeah, I just wanted the experience of knowing how it feels to try to go sell your business and what would happen."
That would've been nice to know, 'cause it wasn't an experience to me.
You know? It's trauma.
So—
Matt Wolfe, Brand3: Wow. Yeah, no, that's insane.
Wow. No, but yeah, so you've really built these instincts and this filter, you know, out of necessity.
But, again, I'm just... I don't always see people with it this well developed, and I'm always hoping and just yearning for clients to come to the point that you've gotten to where they are willing to say, "Choosing who we work with is just the best thing for everyone. Choosing who we market to, who we talk to, best thing for everyone involved, for their results, for the cost of our peace, you know, and our team, all of it."
That's a pretty good segue into the next thing we like to talk about, actually.
Matt Wolfe, Brand3: The little different way to look at growth comes through our lens of marketing.
So we started the Scale Beyond Referrals program because we run into B2B service providers all the time who gave up on marketing. They just... It has not worked. It has not clicked.
They've wasted tons of time and money on it, which is absolutely heartbreaking.
And one of the core reasons why that happens is because they haven't built their brand first, and brand is like a woozy concept for people. It's kinda wobbly for people.
I just describe it as you're telling the right story to the right people. You have that strategy in place and you know who your ideal client is. You understand who you are as a business in a lot of the ways that you're talking about now.
Who are we best built to serve? How many people can we serve? What are our realistic goals? What are our values, our mission? All the things that drive us.
'Cause ultimately, there's two characters in the story. There's the business and the ideal client, and in our space of service providers, it's all about relationship.
The amazing thing is when you get that story right, you can apply it to marketing, sales, client experience, and even building the culture of your team, all based off of that one story.
So we like to look at that client journey lens of brand story development and see how that's impacted people as they've grown.
And so I'm, the first thing I'm curious about is how is, how is the story you tell about that relationship between who you are and your ideal client changed over the years?
How has your understanding of that brand story and how it needs to be told matured?
Raaz Ali: Yeah.
Raaz Ali: I think that we wanted to make people's dreams come true.
I grew up in a lower socioeconomic background. I was raised by a single mother, and I never thought I would be an entrepreneur in my life. I thought that I would be one of those folks that was probably going to be working two or three jobs and getting a W-2 income.
The moment I became an entrepreneur and knew how that felt, I wanted to help entrepreneurs. That shaped our brand.
In the end of the day, what we wanted to do was make sure that we gave a liquidity event of a lifetime to change somebody's life and did it the right way.
And therefore, we wanted to make sure that everything was perfect when it came to their business. That they had the right size, they had the right industry that was in demand, that they were at a point that we understood why they wanted to sell.
Was it that they were truly at an inflection point? Were they truly ready to retire? Or were they just burned out?
So above all, we wanted to be known as a firm that yields exceptional results. And I would say that we can happily say that we give a multiple and a half or two times higher than any firm in taking listings to market.
And we're able to do that because we have done business in a very contrarian way.
I can count on my fingers how many firms actually do quality of earnings before going to market. Probably less than 10% of them do. And I can count on my fingers how many firms actually run what we call a blind auction process.
Because we put in the legwork upfront to get all the data we needed, we put a bow on it in a data room. So we are giving the buyer audience due diligence upfront, which is extremely different than what the industry does.
In the industry, they do not give due diligence upfront. What they do is let the buyer come to them and say, "Hey, this is our due diligence checklist now that we're under contract, and this is what we're gonna give."
So the first time a buyer is seeing substantive data is after they've signed up, after they've signed a duly signed letter of intent.
We have given the who, what, when, where, why beforehand, along with the pseudo quality of earnings, the pseudo audit, for the buyers to be able to put a really well-thought-out and well-informed letter of intent.
As a result of us giving and doing so much work and giving of this, we say, "You know what? We're gonna ask you to put a letter of intent within 30 days. We're not gonna run an open-ended process."
What does the industry do? They leave it open-ended. It's because they don't have the paperwork done in advance. They didn't do the quality of earnings in advance.
I'm not saying the buyers aren't gonna do that. They still do quality of earnings, but maybe 10% of the time when they know that we've hired a firm like Baker Tilly or CohnReznick.
We wanna control the narrative. So 75%, 80% of the time, they take up our data book and start working off that.
Which is to our benefit. And what does that allow us to do?
It allows us to run a process that is telling them we do not, we will not give you a range in what we're looking for. We're gonna ask you to put your best foot forward.
So within those 30 days, we get multiple offers, and some of them are premium. And that's when we really add the magic and why folks use us is because we take those offers and leverage them against each other. We drive the price up, and we pride ourselves on two things: that we're gonna get them the highest monetary value that the North American market has to offer, with working with the buyer that has the best cultural fit for them.
Our brand is unique because we run an exceptional process.
I don't know any M&A firm that can say it takes six to eight months to get a deal done and can tell you what those six to eight months would look like.
We can tell you that.
The first month is that we prep all the marketing material, and we have an accounting firm that does the quality of earnings.
The second month is we run this blind auction process.
The third month is we get those offers, and we negotiate them to find one offer that we're gonna actually accept.
And when we get under contract, months four and five are spent on buyer's due diligence. That's five months that have gone by.
After due diligence, hypothetically speaking, is satisfactory, one month is spent on negotiating the fine terms of the purchase agreement.
That's six months in a perfect process.
The unforeseen circumstances are things we can't control, whether it's a sequestration, whether it's a furlough, whether it's, God forbid, some sort of attack on the country, whether it's geopolitical tensions, whether it's a regulatory requirement that has made the buyer spooked.
We don't know, but there are things that can delay the process, so we'll give it an extra two months.
But we can't expect an M&A process that typically takes 18 months to do on the market in six to eight months, and we can tell you exactly how we'll do it.
I think that is a brand that we've developed. It's not only systematically getting you results, but getting you results that are above average than what the market can give you.
Matt Wolfe, Brand3: Yeah. I think that's wonderful.
If I could reflect on everything you've just shared, what I hear in there is a brand, an identity as a business. And again, your business is like a character in a story, right? And it is you.
That's the thing a lot of people miss. A lot of people who are truly, in practice, the face of their business in the B2B space maybe haven't found the moment to celebrate that that's true and just say, "Yes, a huge part of who we are comes from me."
So you have a brand that was built on gratitude, for what you discovered was possible in life and for the opportunities of becoming an entrepreneur. You saw what an incredible thing that was, that you wanted to fight for other people to see the value in it.
You have a brand where you have been listening. That's how I would describe it. You were listening closely to what was going on in the industry and responding and saying, "No, we're not gonna do things that way. We're gonna do it better."
You know, like you said, that contrarian viewpoint where you've just said, "No, if we're gonna treat people well, we're gonna have to find another path."
There's a pioneering path around your brand and a value statement behind everything that you've said about how you do these things that's incredible.
And then at this point, which is not uncommon but not always the case, you have a brand that's built on confidence of this proven process. Proven, you know, the one thing that really stands out on your current site are all of the numbers and the stats that you... And those are hard won and hard earned, and I think anyone who's paying attention knows that.
So if you couple that understanding of who you are, that you've earned over quite a while now, with a target of an ideal client who you know is the right fit in values and size of business and all these things that make them who they are, that's when you really have power to tell a powerful story, build strong relationships.
Raaz Ali: Absolutely. Absolutely.
Raaz Ali: Yeah, M&A is all about analytics. It's all about the party that's gonna win being the party that controls the narrative.
And we realized, I realized really early in my career in sell-side M&A that buyers control the narrative. They dictate how they want the transaction to be.
You have to use their playbook against them. You have to put a process in place and put them in a box to abide by that process.
In M&A, nobody's testing them. Nobody is actually, and more importantly, nobody's coming prepared.
We famously say that we never wanna go to a gun battle with a knife.
And we really do that with having a full-on due diligence, high-investment, buyer-grade work of art inside a data room done before we go to market.
It's us saying, "Hey, we're gonna give you everything you need, but we're also not gonna be strung along by you. And we're gonna need results from you very quickly in the form of a letter of intent."
That's not to say that we don't give them time, but most of the time is spent on gathering the information.
Well, if we've gathered it and did our legwork upfront, you digest that information, and once you've had an opportunity to digest it, we'll allow you to speak with our client one time for one hour.
And after that, we're gonna say, "Hey, you have X amount of days to put a letter of intent. This is the due date."
It works like a charm.
But when you have been doing it for a long time, you've also made buyers aware of your process. They know in order to work with you, in order to work with Raivax, that there is gonna be a blind auction process.
But what they're getting in return is a quality packet that allows them to make a decision very quickly.
Matt Wolfe, Brand3: Mm-hmm. Mm-hmm. That's incredible.
Matt Wolfe, Brand3: What do you do in terms of marketing for the business right now? And how has that changed over the years?
Raaz Ali: I think marketing, Matt, has become more and more grassroots for us.
I would say the hallmark, I don't know about all M&A firms, but I think quality boutique M&A firms is that 90% of your business has to be referral-based. It just has to be.
I think our referrals, most of them, would come from former business owners who we've exited, whether it's their competitor that asks them who you used or other business owner friends that they have.
Quality knows quality, and that's how we're also able to avoid working with the wrong people. To my point earlier, working with difficult personalities, I'm not saying that we don't come across those, but I guess there's a layer of shame in knowing and being associated with somebody that you refer to, that they're gonna only refer good people to you.
Not to throw our tricks of the trade out there, but I would say an overwhelming amount of referrals come from wealth advisors for us.
We have incredible relationships with some of the best wealth advisors out there. And it's twofold.
One, when they actually want a liquidity event for their client, they know who to go to. And I'm not saying they're gonna exclusively choose us, but they're gonna put our hat in the ring with two or three other folks to make it a fair process.
I think we have a 60 to 65% chance of winning that. And why they even select us to be in that process is because when that liquidity event happens, that could be 30, 40, 50 million dollars coming back into their fold to manage for them to perpetually benefit from.
So wealth advisors are a godsend for us, and we have exceptional relationships with them.
I would say the next is through associations like the one... You know, I've met Alex Kuhn, who was a fellow podcaster on your show, and I met him through a mastermind, right?
I met Orsi through a referral network. And I think that these are very powerful tools because they're human tools. You get to know people, and they refer you because they know you and they know how you will treat people in the end of the day.
I would say less than 10% of our business comes from any type of lead generation company or pay-per-click ads or Facebook ads or LinkedIn ads.
It's really hard because it's cold. It's not warm.
With the combination of former clients, with the combination of wealth advisors and mastermind associations where you meet great, exceptional people like Alex, who is a dear friend of mine and a great human being, and great human beings like Orsi through high-quality networking, that's where you really market.
You don't go there for market. You go there for relationships. But if business is a byproduct, which it tends to be sometimes, it works out really nicely.
Matt Wolfe, Brand3: Yeah, it's great that you know Alex. He is a great guy, and I agree. That's exactly what we saw.
That's, you know, in the Scale Beyond Referrals thing that we've set up, we're not saying referrals are bad. We know they're essential for growth.
What we're saying is that, where exactly what you just said, you actually did the pitch for me, that in a lot of marketing that's been developed for B2B businesses, it became transactional. It did become about running ads and trying to muscle leads through a lead form, and then the whole beginning of the relationship, the building of trust, the building of affinity and, "Can I trust this human with my future?" all gets postponed until the first sales conversation.
And then that's awkward, and everything, it's just a struggle.
Raaz Ali: You're selling all the time. Like, in these cold outreaches, yes, they're great. Somebody replied to an ad or somebody filled out an intake form, but they still don't know you from Adam. They're apprehensive, right?
They see your results. They see you won a lot of awards. They look on LinkedIn, and they know you're a top 1% sell-side M&A advisory firm, but they still haven't used you because you haven't come from a trusted resource.
It takes longer to peel back those onions than it does to have referrals coming from trusted sources.
So it's a grassroots effort, and it's becoming more and more that way.
Matt Wolfe, Brand3: Yeah, exactly.
On our end, we're trying to figure out how do we take all these technological tools that we have to facilitate and catalyze more experiences like what you're talking about. How do we get our clients to those networking events or, if they're equipped to do so, to teach in a workshop setting, in a webinar, to appear on a podcast?
But at the end of the day, it's how do we get them to experience the human behind the brand and have those warm connections and those moments to see somebody with real integrity and care and passion like you show.
So it's really reprioritizing the human experience over the digital, and that's a big exploration that we're in the middle of over here on this end that really mirrors what you're talking about there.
Matt Wolfe, Brand3: What's the future for Raivax? So we've talked about how you've learned that you need to grow carefully, cautiously, with the right people at the right capacity, and you care so much about the people you serve. What does the future look like in the next few years?
Raaz Ali: I think the future looks great, and I think the future looks very busy.
I think that the next eight years are gonna be probably the busiest years in lower middle market M&A with the boomers retiring. We were already expecting that to happen, but call it inflation, call it affordability, call it geopolitical tensions, whatever it may be, we're a little bit late.
But I think the next eight years, it's gonna be the largest transfer of wealth in our country, and we're happy to be on the forefront of that.
I think that it's good times ahead. Also a lot of competition, and it's just fun. It's never a dull day. And, you know, it's never a dull day in M&A, if I can rhyme, okay?
It really isn't. You're learning something new every single day. Multiples change, different industries get consolidated, new industries spring up. Businesses that nobody ever looked at, industries nobody ever looked at before are the hottest things on the market right now.
For example, construction. It was an industry that had one of the lowest multiples five years ago. Everybody hated it because it was project-based work, and so much of it was contingent upon new construction. You have to go out and get the business. There's really no backlog or anything like that for it, right?
It's not secure. You're not doing any type of recurring work. There's no contracts in place.
But now it's one of those last AI-resistant businesses. There's gonna be no robots or AI that's gonna come in and fix your water and sewage pipes, right?
You're still gonna need humans on blue-collar industries to do site demolition and prep work, or to do bridge maintenance and repair work, or to do paving and asphalt.
And it's really cool to see that some of these blue-collar industries, which are the heartbeat of our country, get the recognition they deserve. And to get the clout they're enjoying right now is because they are an industry that is really taking off.
Matt Wolfe, Brand3: Yeah, that is incredible.
Yeah, and we've met a lot of people in that space too, and people I've met truly have a heart for service. They really are. And, you know, and have maybe been misunderstood because they're in an industry where people don't understand what they do. They don't know how the plumbing, the electrical works, whatever. There's suspicion around that.
But they are some of the most... They know that they have to deliver with integrity and honesty, and exceptional work to continue and to survive. They just know that that's the right way to go.
Well, I've enjoyed this so much. You just have such a sense of integrity and clarity about the values that you're moving forward with and leading your team with, and it's just incredible to experience that and hear that.
Not everyone has the clarity that you have about those things. It's really wonderful to see a clear line drawn from standing your ground and your values to success. We need those stories. We need those examples to inspire us all to move forward that way.
So I'm grateful to have encountered your story today.
Raaz Ali: Thank you.
Matt Wolfe, Brand3: There's something we like to end with in the spirit of we've been talking about being human, being warm, building these relationships. We have a thing we like to end with. It's called the Behind the Brand Questionnaire, and it's just seven questions that, if anyone's thinking about working with you right now, which I hope they are, it'll just help them get to know you a little better as a person. You good?
Raaz Ali: Sure. I think so, depending on what you ask.
Matt Wolfe, Brand3: Yeah, you can take a pass on any of them, but they're pretty harmless.
First of all, what is your go-to karaoke song? Or if you've never done karaoke, what do you wish that you could sing?
Raaz Ali: My daughter, she's seven years old. She absolutely loves K-Pop Demon Hunters. So I feel like I know every single word of that movie these days. I think I could do a good job with that.
Matt Wolfe, Brand3: That would be...
Raaz Ali: Any song of theirs.
Matt Wolfe, Brand3: Yeah, absolutely.
Raaz Ali: Yeah.
Matt Wolfe, Brand3: What's the last thing that made you laugh out loud?
Raaz Ali: Well, you know, I think when, you know, sometimes my daughter is reading or mimicking me in the car, and I tell her, "Hey, what does Baba sound like on the phone?"
And she just rambles off people that work with me, my M&A advisors, and how I talk.
"Hi, I'm Mark Shorts. Did you get the deal done?"
Words she knows. "No money. More money."
And it's just, I know it's a silly thing to say, but sometimes just her, in her little mind, on how she sees me talking out into the world is hilarious. And I'm like, "I hope I don't sound like that."
So it's also funny, her mentioning random people's names that she's probably heard me in the car saying.
Matt Wolfe, Brand3: Yeah.
Raaz Ali: It's a lot funnier than what I'm delivering, but it makes me laugh every single time.
Matt Wolfe, Brand3: No, that sounds pretty funny to me. And how old is she?
Raaz Ali: She's seven years old.
Matt Wolfe, Brand3: Seven? Yeah, yeah. We've got a three-year-old at home, and he's already picked up the idea. He'll get on a toy phone, and if we start talking, he'll say, "Quiet, I'm on a meeting."
Raaz Ali: Yeah, exactly. Yeah, yeah, yeah.
Matt Wolfe, Brand3: Yeah. The same thing. I'm like, "Ooh, I hope I didn't, you know, hope it wasn't too harsh somewhere."
Okay, next question: What's your favorite way to get away from it all?
Raaz Ali: I love traveling. I absolutely love traveling. I'm a bucket-list traveler. I have been to... My goal is to see every country in the world. I don't know if I'll ever get there, but traveling is my drug.
I feel like I love learning about different cultures. I love learning about different people.
I love that there's so many different ways to live. There's so many different ways to eat. There's so many different ways to speak. And I feel like that's the real knowledge right there.
I also love hiking. I've grown more and more to especially like scenic hikes. So whenever I'm traveling somewhere, I always manage to get a hike in and see the topography and the landscape of that country.
I think those two things are my favorite things to do.
Matt Wolfe, Brand3: That's incredible. I love that. Well, when you're out in the Pacific Northwest, look me up and I'll get you a couple of doozies for hikes.
Raaz Ali: Wow, you've got...
Matt Wolfe, Brand3: Hikes.
Raaz Ali: Beautiful hiking out there. The Northwest is gorgeous. Absolutely.
Matt Wolfe, Brand3: Yeah.
Raaz Ali: Any adventure you want is out here.
Matt Wolfe, Brand3: Yeah.
What smell reminds you of a specific time or place?
Raaz Ali: I'm from a first-generation American, from an Eastern background, and I think just the smell of naan, the smell of bread, the smell of a grill that's cooking kebabs. It's the smell of home to me.
Both of my parents are deceased, and it just, every time I smell that in a house or something, it just takes me back to the way I grew up and the foods that I grew up with.
So I think just the smell of wood fire that's making a certain type of bread and cooking certain types of food is what brings it home for me.
Matt Wolfe, Brand3: I love that.
Raaz Ali: Yeah.
Matt Wolfe, Brand3: Bread has come up quite a bit in our conversations with people.
Raaz Ali: Has it really? Okay.
Matt Wolfe, Brand3: Yeah, it's...
Raaz Ali: Yeah.
Matt Wolfe, Brand3: You know, it fills the whole house. It takes over everyone's senses. I don't know, it's powerful.
Raaz Ali: Absolutely.
Matt Wolfe, Brand3: What is one day in your life you would like to relive?
Raaz Ali: One day in my life I would like to relive. You know, I don't think life is meant to relive. I think days that are past you are past you. You have to live better days for the ones that are to come, right?
So I don't think there's any day that I would relive because they're gone. But I would love to see if I can relive the rest of my days better than the ones before.
Matt Wolfe, Brand3: Hmm. That's good.
What three words would your loved ones use to describe you?
Raaz Ali: Goofy, hardworking, and empathetic.
Matt Wolfe, Brand3: Awesome.
Matt Wolfe, Brand3: Finally, what would it mean to have truly succeeded in your work? So not Raivax, but you in particular and in your quest that you're on?
Raaz Ali: I feel that we have been successful because of the referrals we get and the fact that people never forget us. The fact that former clients invite us to different milestones in their life, whether it's their children getting married, whether it's bar mitzvahs they have for their children, or maybe it's them renewing their vows, or special milestones they have for themselves that will include us, or holiday parties.
I feel like that is a success: that people remember you in a really good light and you made an impact on them.
I think that's what I view success as, as it pertains to business.
Matt Wolfe, Brand3: Yeah. That sounds right.
Raaz Ali: I think with referrals, yeah, I think we're the biggest mouthpiece. I think that is the biggest. I mean, the fact that we survive off of referrals, I think there's no bigger metric of success than that.
Matt Wolfe, Brand3: Yeah. Yeah. That's wonderful.
Well, it's a true gift to get to know you today. I'm just so glad we've had this hour or so together.
Raaz Ali: Yeah.
Matt Wolfe, Brand3: I can see what Orsi and Alex and all the people we know see in you. It's just anyone would be lucky to work with you.
To that end, where should people go if they were interested, if they're lower middle market, they see an exit on the horizon, what's the best way to reach out to you?
Raaz Ali: Well, you could definitely go to our website, raivax.com, R-A-I-V-A-X.com. You can come to our LinkedIn page, or you could find myself on LinkedIn, Raaz Ali, R-A-A-Z, last name is Ali, A-L-I, and just give me a shout, shoot me a message.
If you decide to go the website route, just reference that you saw this podcast and wanted to chat.
I'd love to hear from anybody that is willing to take this journey on.
Matt Wolfe, Brand3: Yeah. Wonderful.
And from this side of things, here at Brand 3, if you heard us talking about Scale Beyond Referrals, you're a B2B service provider and you've been so frustrated with marketing and just want to know why it didn't work in the past, we will teach you in our Scale Beyond Referrals workshop a warm and relational and human way to approach it that does earn the kind of trust that we've been talking about today.
That's just scalebeyondreferrals.com, and we have a few workshops going on every month. We would love to see you there.
Other than that, this has been Matt Wolfe from Brand 3 for The CEO's Heart for Service, and we'll see you next time.
Raaz Ali: Thank you. Thank you, Matt. Appreciate it.
Matt Wolfe, Brand3: Thank you.
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