Beyond Consulting

26: From Consulting to Lower Middle Market Private Equity

In this episode of Beyond Consulting, sponsored by ECA Partners, we speak with Ariez Dustoor,  a former McKinsey Consultant and current Partner at NB Group Investors. Ariez joins us to discuss what it’s like to transition from consulting to lower middle market private equity.


The Beyond Consulting Podcast is hosted by Ken Kanara and co-hosted by Steven Haug. Ken leads this week’s episode.



Ken Kanara: I’m Ken Kanara and you’re listening to Beyond Consulting. Today we welcome Ariez Dustoor to the studio. Ariez is a partner at NB Group Investors and he’s al a former McKinsey consultant. Before we say hello to Ariez I just want to remind everyone that we are sponsored by ECA Partners, a specialized project staffing and executive search firm. Ariez, thanks  much for joining.


Ariez Dustoor: Hey Ken, thanks for having me on.


Ken Kanara: You bet. Ariez, before we hit record we were talking a little bit about your career history and where you started. Maybe you’d like to do the usual introduction to let everyone know  who you are and how you got to where you’re at today?


Ariez Dustoor: Yes, sure. I’ll try to keep it somewhat brief. I was born and raised in the Midwest. I spent most of my time before college in West Michigan and Grand Rapids and then I did my undergrad at the University of Michigan in Ann Arbor. I was a liberal arts major. I double majored in political science and history and I think throughout college I thought I would probably pursue a career in some fashion in public policy or politics but I had always had an interest in business and ended up going in that direction when I was trying to figure out what I wanted to do after college.

I started my career in consulting at McKinsey & Company in their Chicago office way back in 2006. I was there for about two years. I had a great experience but I think I had a sense that that wasn’t something that I wanted to pursue as a long term career and we can get into the reasons for that if you’d like, but I had always had interest in investing and it was a very common exit opportunity from McKinsey to go into private equity, so I joined a middle market private equity firm in Boston the summer before the financial crisis. Lehman Brothers collapsed in September of 2008 and I joined a couple months before that. It was really interesting perhaps terrible timing, but interesting timing to be joining a private equity firm. I did that for about a year and change. It was not a great time to be joining the industry and I’m not sure that was the place I was at was the best fit for me.

I ended up moving out from Boston to the West Coast and joining Yahoo doing corporate development, so M&A and investments in the consumer internet space. Technology and internet particularly was an area I was interested in and I did that for about two years. Then I ended up actually moving to Asia for two years where I initially started working on starting a company over there in the e-commerce space, and then I was working on launching other companies and doing some investing. After two years there I came back to the US and, along with a set of partners, started a software company. It was a SaaS company focused on the financial market data space. I was doing that for almost five years and that company ended up getting acquired by a strategic in 2017.

At that point in my career, I wanted to get back to investing with a focus on later stage control transactions. I had a close friend of mine who I’d met at the University of Michigan, we were actually in the same dorm freshman year and we had talked about working together before. We had relatively similar career paths and we decided to start our own firm focusing on private equity investments in a handful spaces that we know well and we got, we think, interesting investment theses. We’ve been doing that for about five years. We’ve closed three transactions now and have a very active pipeline trying to build out a select portfolio of high quality, growing assets.


Ken Kanara: Not many folks have gone from consulting, done investing, then went the entrepreneur route and then came back to investing. Usually they stick with the entrepreneur route if that’s where they’re going to go. What drew you back to investing?


Ariez Dustoor: I think the honest answer is probably a couple things. I think one is I don’t know that I’m a great company builder at that early stage. I’m not sure that it’s, I think, career-matching–what are you interested in along with what are you good at. I’m not sure that I enjoyed that early stage, company building process as much as I thought I would. I’m not sure I was as good at it as I wanted to be and I felt that the day-to-day type of work you do as an investor was a much better fit for me.

I also think, if I’m being honest, I’d gone a long time without making a lot of money and I wanted to do something where I had an opportunity to, and particularly where it was tied to performance and everything, and I had an opportunity that, economically, that was exciting for me. It was definitely more the former, just trying to think about what did I enjoy and what was I good at. I think what we’ve been able to do is also match that with an entrepreneurial way of doing private equity, versus trying to join an established firm and try to work your way up, we wanted to do something on our own and that’s what we did, we started our own firm.


Ken Kanara: That’s interesting. NB Group, that’s your firm, tell us about your focus, what you invest in, all the interesting bits.


Ariez Dustoor: Yes, we’re looking to be the first institutional money or capital into founder or family-owned businesses in three main sectors. One is multi-unit, with a focus on consumer services. The second sector is healthcare and wellness. That spans hardcore healthcare services where you have reimbursement issues, you have major regulatory issues that you need to work through. Then also what we call wellness, which might be services that are more cash pay and could be more cosmetic, things like that. The third area is technology, which is really a focus on technology or IT services, as well as software. From a size perspective, we’re really focused on the lower middle market, which for us typically means businesses with anywhere from ten to one hundred million dollars of revenue and three to twenty million dollars of EBITDA or cash flow. We tend to focus probably a little more on the cash flow metric than necessarily on revenue. I think overall we tend to be growth-oriented investors. We don’t do turnarounds. We’re really looking for businesses that have exhibited pretty strong historic growth, in some cases quite rapidly, and we’re looking to either continue that or inflect it upwards. We’ll be both the control  majority investor as well as do significant minority investments.

We like to be fairly…I’d say on the spectrum, of being hands-off versus hands-on, we don’t run the companies that we invest in, we’re not operators, but we have a small portfolio–we intentionally keep it small so that we can be more involved and helpful to the companies that we invest in. We’re doing a lot of things at those companies to try to help them.


Ken Kanara: Talk to us a little more about that because I think that’s a widely misunderstood decision that investors can make. I’ve seen everything from calling portfolio companies that they own “partners,” literally, they call them their “partners…” to “Hey, you’re going to do this and you’re going to like it.” I’m curious to hear a bit more about your thoughts on the way you interact with your portfolio companies.


Ariez Dustoor: Yes, it’s a huge topic. I think from the outside, if you’re not in the private equity industry…for example, if you’re a business owner and you’ve got a strong company you’re probably getting–we talk to business owners that are getting calls, emails, LinkedIn requests, one, two, three times a week from investors. I think from the outside they all generally look the same. The websites look the same, it’s the same bromides about value creation, and everyone’s got the same backgrounds–investment banking, consulting and they went to the same ten schools, that sort of thing. I think it’s very hard from the outside-in to parse through what are the differences between these firms. The reality is that each firm has a very different, potentially, approach to how they work with a company. That approach may be what you’re looking for or not. It may be what your business needs or not, and I think there’s a real spectrum. Some investors have the approach that what we’re going to spend all our time on is selecting the right company…the right company, right management team, and that’s where we’re creating value. Then, we’re going to attend a quarterly board meeting and be relatively hands off. They’re thinking is that “because we chose the right industry, we chose the right company in that industry, a strong management team,” those sorts of things, “that’s where the value is going to be created.”

I think we’re probably a little more on the other end where, I think, fundamentally that security selection is probably the most important part of what we do or really, what any investor does, but I think we strongly believe that there are very tangible things we can do at the companies that we invest in. We’re usually identifying a bunch of those before we even close the transaction that we think can, to use an overused term, can add value to that business. I think we’re looking for business owners that hopefully are seeking that kind of help. When you have a business owner that’s open to that help and and you can match that with an investor that knows how to do that, it can really create a strong situation.

Having said that, we do not run companies day-to-day. We’re not looking to get involved in day-to-day decisions and I think we have to, of course, be mindful of, ultimately, you have a CEO who’s running that business and he or she is making decisions. There may be decisions they’re making that we don’t necessarily agree with, but you have to give them the runway to make decisions as they see fit. Usually, where we’re getting more involved is on the strategic or higher level areas for the business.


Ken Kanara: How did you develop that muscle, going from consulting, where maybe you have a team of insecure overachievers, or you say, “Go do that. Jump.,” and they all say, “How high?,” to starting your own software business and running it. Was it a challenge for you to   shift into that, “Hey, here’s a lot of rope, here’s some tools. Let me step back.” How was that transition?


Ariez Dustoor: I think it’s always hard to go from being an operator to an investor because there’s usually a natural tendency to want to involve yourself perhaps in the decisions. For me, honestly, I think it was, in some ways, liberating because I may not be the best person to execute a sales strategy or execute a marketing plan or run a finance department. I think I’m much better as an advisor or getting involved in pieces of those functions necessarily, rather than trying to own one. Actually being able to step away from the day-to-day was something I wanted to do. I didn’t not want to be running a function at an operating company. It was pretty easy for me to do. I think, probably where investors have a harder time is, and you see this more in the earlier stage investing, so in the venture capital space it’s very common for an ex-operator to move into an investing role. I’d say in the private equity world that’s much less common. Typically as the CEO, if it’s someone who’s a veteran CEO, and they move to private equity firm, their core focus is still on operations, typically. It’s less on the investing side and I think that’s probably an easier transition versus, say, in the venture world where you have someone who started a startup and now they’re an investor at a VC firm and they have to make that transition really, more fully.


Ken Kanara: Okay, that’s helpful. If you think about your playbook and why, maybe, an owner/operator would get excited about working with you, what are some of the things that you guys are doing usually, post-acquisition.


Ariez Dustoor: It really varies by company. We don’t have a template or a list, a checklist for every investment. We don’t go through that. It’s really highly dependent on the company and there are companies that need less help than others. An ideal situation as a company that’s firing on all cylinders and you’ve got a great management team. There may be select areas where they want or need help, but for the most part they’re running with the business and you gotta run alongside them, and that’s great.

Then you may have other management teams that really want help. They want these strategic resources and they welcome it. It’s situational, but I think the areas where we spend a lot of time, typically in every investment, we will do a long range, strategic planning exercise. We think about, where is the business today? Where do we want it to be three to four years from now in terms of revenue? In terms of profitability? Are there other aspects of the business that we want to look differently in a couple years from now, maybe to maximize value as we think about eventually exiting, and then working back from that. Between now and there, what are the things that need to get done? What are the timelines? What are the resources we need to do that? I think that’s one element of it.

I think a second element that’s related is that oftentimes, I would say more often than not, the business needs additional resources in terms of people. There may be positions that are lacking on the team today. A very common examples is in the finance function. A business may not even have an internal finance function. They may not have a CFO and so helping them recruit and put someone in place in that position. Then we’re thinking about the rest of the organization. In every board meeting we’re asking, “Do we have the right resources? Do we need to hire more people? Do we have the right person in this seat?” I think that’s another piece.

There’s also a bunch of blocking and tackling stuff we’re doing, typically. Oftentimes companies don’t have regular reporting cadence. They may not have a full, monthly reporting package and  so we’re helping put that in place and develop metrics that everyone in the business is looking at. Usually companies don’t have a board or in place, so we will always put in place a board. We usually try to bring in an outside board member who has super relevant experience from maybe an adjacent space or in a specific function that they can bring to bear. I think those are some of the examples, and I can go through a bunch more if we were talking about a specific company for example.


Ken Kanara: Okay, cool. Obviously with NB you’re drawing on experiences from various aspects of your career, Ariez. You’ve done everything from corporate development in a more traditional sense, you’ve done consulting, you worked with a private equity firm previously. Could you walk through some of the things you learned from each of those different careers, starting with Yahoo, because I think one career that a lot of former consultants consider is that  that first corporate development role, but maybe they’re a little bit hesitant. Perhaps you could walk through each one? I think that would be really interesting.


Ariez Dustoor: Yes, I think there’s a couple core skillsets that come from different places. I think one is industry and strategic analysis. To be able to look at a company or industry and identify: what are the key trends?, What does the competitive landscape?, how is the industry evolving? Or, if you have a specific business and they have a certain goal, for example, they’re trying to double their size in four years and trying to create a very detailed bottoms-up plan for how you do that, those are all skills that I think I got, to some extent at least, from consulting. That structured thinking and then putting analysis behind it, I think that’s been very helpful.

If you think about executing private equity investments successfully, there’s a lot of different things that go into that. I think a big thing that we always think about on the front end of an investment, before we have even invested, is trying to think through what are the industry trends that we’re investing behind? What are the dynamics in that industry and with that specific company? I think that skillset is then super helpful with that.

I think there’s another skill set which is really around finance. I think people that start their careers in investment banking, for example, I think you’re really getting this and you don’t get it as a consultant. That’s one of the, I think it’s a gap. Most consultants do not get this, that’s a gap. I think some of those harder finance skills like financial modeling or LVL modelling, specifically, building comp sets, so looking at comparable companies. A lot of this stuff you’re, frankly, you’re doing in Excel. There’s a lot of detail, financial analysis and work that goes into an investment, particularly into a later stage private equity deal. I think I certainly got some of those skills at the private equity firm I was at and I think a lot of that, those aren’t really transferable skills. It’s a very specific, specialized skill set, honestly. It’s no other real space for this. There’s probably some hedge fund activity where you need to be able to build a leverage buyout model or you need to be able to model out a detailed debt schedule. There’s some other areas where I think it would be useful, but it’s highly specialized and there’s the process-oriented items. There’s a whole process around a private equity deal, around buying a company: the legal aspect to it, the financial diligence, insurance diligence, HR diligence, all of that. I think learning that at a larger firm it’s very helpful and that’s also something that I was doing at Yahoo, in a slightly different context, but a lot of the mechanics are the same. If you think about the legal negotiation whenever you’re buying a company, or investing in a company, you don’t have to be buying it, but you’re investing in a company and there’s a purchase agreement. That’s could be a 30-to-100 plus page legal document. It’s a highly specialized legal document. We pay a lot of money to lawyers who help you produce that, to be able to read through that, to be able to provide helpful feedback to know what are the business points to push on. That was a skill that I got, both Yahoo and in private equity, but I think there’s the M&A function at a large corporation that’s different than private equity–the way you look at businesses. You’re part of a larger organization, so there’s a lot more that has to go into purchasing the business than purely it being an investment decision. I think there are some positives and some negatives to that, but that part of it is not necessarily transferable.


Ken Kanara: I think that’s interesting, especially the point you bring up about the finance gap in consulting. We get it from a very high level, but you can’t really appreciate it from a very specialized transaction point of view. I think that’s often missed and, by the way, just speaking more broadly as it relates to some of your investments, usually the finance function is the first thing that needs a little bit of TLC and that’s something that, at least, we see a lot with our clients.


Ariez Dustoor:  I think as an investor, you need to be able to run the spectrum from getting really into the weeds when you need to, so getting into the details of a model or very detailed aspects of the transaction documents, but you also need to be able to step back and see the big picture and have a broader, big picture thesis around a company. I think investors who are able to match the big picture with also being able to go super deep into certain areas of the deal on the investment, I think those are the best investors.

I do think that some of these skills, you may not learn in consulting how to do “XYZ,” but I think all of these skills, if you have the will, interest and the aptitude, I think you can teach yourself. I don’t think there’s anything magic about financial modeling, for example. I do think it’s very hard to just do it yourself without getting those repetitions of being an analyst at a bank or spending a couple years in a private equity firm, but I think you can. There’s a lot of stuff you can do now to self-teach yourself things with how much content there is on YouTube, for example, or other areas. I think perhaps more importantly than just those hard skills, I think you can self-teach yourself in a lot of ways how to be an investor. There are thousands upon thousands of hours of content, podcasts, books and videos from other world class investors and I think you can always be, I certainly do this, I think you can always be trying to teach yourself to be a better investor. You don’t need to go to business school or spend ten years at Goldman Sachs, or something like that to pick that stuff up.


Ken Kanara: I think that’s a really good point and, on this show we’ve talked a bit about “the how,” but I think it would be interesting to get your perspective on, not necessarily how one might go from consulting to say, private equity, but what would you share as far as advice if someone thought they were interested in moving into private equity? What are some of the things that you found to be interesting or surprising and why someone might like it, maybe that’s the question I’m trying to ask.


Ariez Dustoor: I think there’s a lot of misconceptions about what private equity is. I think most people have a, and I was this way, I mean when I was at McKinsey, I really didn’t understand what private equity was, and I think most people tend to have a surface-level understanding which comes from the front page of the Wall Street Journal and it’s reading about big deals, and it gives a poor, for lack of a better word, it’s a sexy view of private equity and deal making.

The reality is, if you’re in your mid 20s and you’re starting at a private equity firm, whether it’s a huge private equity firms or small one, there’s a lot of really, I would say, painful grunt work that goes into making a deal happen, certainly at the junior levels, even at the senior levels, and that’s what you’re spending your time on. You’re not flying around on a private jet making deals. We certainly don’t do that now. Most of the private equity activity in the US is in the lower middle market, right? It’s not the Burger Kings and the…


Ken Kanara: …Toys R Us…


Ariez Dustoor: TXUs, and these huge deals you read about, or Dell. It’s small companies nobody’s ever heard about that are servicing your AC at your house, or it’s the gym you go to, or the local hamburger joint or industrial automation company that you’ve never even heard of that are owned by private equity firms. I think going in with the right expectation of what you’re doing…it’s highly detailed, highly analytical work. I don’t think word answering your question though, which is why would you want to do that? I think a couple things I enjoy about the job, one of the things I enjoy most is we get a look at a broad spectrum of businesses. I think, for me, that’s very intellectually interesting and stimulating. Unlike an operator, who may be spending years or even a lifetime on a single business in a single sector, in any given week we might be evaluating businesses in completely different parts of the market, and in some cases these are businesses I didn’t even know existed. I’m getting to learn about them and the dynamics and I think that provides a really rich experience. If you’re a person that gets stimulated by constant exposure to new information, that’s something that I really enjoy.

I think another aspect of what we do that I enjoy is, I think measuring success is very clear. In consulting, for example, you might be on a project and you have a deliverable, something you’re doing for a client, strategy work or it’s helping them with cost reduction in some function and you typically deliver a report. It’s highly intellectual and then you move on to the next project. When I was in consulting, at least, we never looked back and said, “Okay, what happened with what we’ve done?” In our world I think it’s very clear whether you’re successful or not. For every dollar you invest, at me point, if you’re doing this well, you should be generating multiples on that dollar. There are investors who are generating less than a dollar, but it’s very easy to keep score. Ultimately, are you returning an acceptable rate of return on that investment? I like that clarity in what we do and knowing whether what we’re doing is correct or not.

I’d say a third thing is, we tend to work with relatively small businesses and there’s a lot of things that we can help those businesses with that moves a business in tangible ways where you can see very specific and immediate benefits. Whereas I think when you’re working with much larger companies, it’s harder to move the needle. I think it’s even harder from the outside to do that.


Ken Kanara: I like all of those three things. After you make an investment, what are the things that you worry about most? What keeps you up at night as a lower middle market PE investor?


Ariez Dustoor:  I think it’s very investment specific. Every investment has a set of risks. I think examples of things that we’ve worried about in the past are, we have or have had investments where if you have a CEO who is really strong and they’re fundamental to the success of the business, and you worry about what happens if they get hit by a bus…what happens to that investment? It can take time to develop redundancy in an organization, particularly if it’s smaller, and we’ve worried about that. I think we always worry about competition. Sometimes you’re in businesses where every business is competition, it’s always changing and sometimes you worry about what happens if there’s a competitor that is executing better than you or, if it’s a consumer business, maybe what they’re providing is resonating more with consumers and that slowly causes deterioration in your business.

I think sometimes there’s other risks that you might not think of. We invested, for example, in a gym chain that has most of its locations in Florida and something, at least, that I’ve thought about is what happens if there’s some catastrophic, Katrina-like storms in one of those areas and their gyms are closed for a long time. I think there are individual risks on an investment like that you think about. I’d say, for the most part if your business is growing, growth solves a lot of problems and it certainly helps you sleep better at night, because it provides a cushion that, if there are hiccups, you can work through those. I think if you have a business that’s really challenged with growth and then you’re facing issues on top of that, like you’re losing key members of the team or some other event happens,  I think it makes it much harder to try to get over those.


Ken Kanara: Awesome. Generally speaking, given your purview to the lower middle market, are there any interesting themes that you’re seeing as it relates to investing or the types of deals that are popping up, just in general?


Ariez Dustoor: There are probably a couple big themes that just seem to be accelerating in our industry. Every year, and you can look at the metrics to see how much capital has been raised by private markets and then, within the private market you can look at private equity specifically. I was just looking at something today, and you’ll see different sources of data, but they all show the same trend, I was looking at something today that I think the amount of total dry powder in US private equity it’s something like, doubled, in the last six years. If we’re looking at 2015 versus 2010, then 2010 versus 2000, and 2000 verses 1990, it’s the same trend. There’s been this exponential increase in the amount of capital and I think what that means is that you’re certainly seeing more private equity activity, some more types of companies that are being invested in into private equity, but I think the supply of capital has outpaced the supply of available companies. I think what that’s meant is that, for people like us, I think it’s two things. One is the environment every year is more competitive. There are more people, more private equity firms, more competitors to private equity like search funds or holding companies. The other is that I think what we’ve seen over time is that generally, returns have calmed down. All else equal, it was much easier to be a private equity investor in 1990 than it is today. It was much easier to generate returns because there’s less capital and less people doing this. Those are some big trends we see.

I think another is there are different ways to structure yourself as a private equity firm. We are what is called an independent sponsor. The way we’re configured right now is we raise capital on a deal-by-deal basis, versus what’s called a blind pool model where you raise a dedicated pool of capital, but your investors don’t know what companies that’s actually going into. I think you’ve seen a real trend in the last, call it five years, and I think that trend has accelerated towards our model of capital raising versus that blind pool model. There are a lot of advantages to both investors like us, as well as LP’s, or limited partners, which are causing that. I would expect that trend to accelerate. There are some others, but I don’t want to bore you.


Ken Kanara: No, no. I think that the second one is especially exciting for folks that have particular interest in a certain sector or something like that and then can prove success, because then the next time they go to raise capital for an investment, it’s that much easier. Thanks for sharing that. Excellent. This has been super informative.

The last thing I’m curious about is, a lot of our listeners are in consulting now or maybe they’ve taken that first job out of consulting and they want to move into private equity. Is there anything that you don’t particularly love about being an investor? I could rattle off three or four things that I don’t love about the executive search business, even though, on the whole, I love it. Is there anything that’s an unexpected downside of being an investor?


Ariez Dustoor: For sure. I think there’s a couple things. No jobs perfect, and there are certainly elements in my job that I don’t particularly like. I think one aspect of what we do is, and this is true for, I think any investor, is it’s a funnel with a very narrow bottom. We might look at probably close to 1000 deals a year, and out of that funnel, we might do one or two deals. It’s inherently a business where you’re saying “no” a lot and that can be frustrating where you’re putting a lot of time into diligencing and you’re trying to do an investment and it doesn’t happen. There may be lots of reasons why it doesn’t happen. In one case it may be that you decide to kill an investment because you learn something or it’s not meeting your risk profile, or whatever. It may also be that these deals are competitive. Most things we look at, if you’re a good company you have options on who you sell to. We may want to buy a company, but that doesn’t mean that we’re able to or that they want to sell to us. That aspect of it may not appeal to some people that you’re constantly churning through opportunities.

I’d say the second piece that can be tough is, this is not a lifestyle business. It’s very competitive by its nature. There are long hours, particularly when you’re working on a deal. There’s a timeline that you’re trying to get a deal done in and there’s a ton of work that needs to happen in a short period of time and it just doesn’t lend itself to necessarily having great hours. That may be another aspect that people don’t like. I’d say a third is, oftentimes there are aspects of an investment or even are running our own business, for example, oftentimes we have to get into detailed tax issues at a company or tax issues related to a deal structure or even doing our own firm taxes, which I don’t necessarily particularly enjoy, but that’s just an aspect of what we do that someone has to do it and you have to make sure it’s taken care of. I think there are some things like that.

Another example would be, on every deal we do insurance diligence. You have to make sure that a company has the right insurance coverages and you’re covered for certain liabilities. I don’t particularly enjoy that work, but it’s something that just needs to get done.


Ken Kanara: Yes, especially if you compound the first and second example which you gave, which is it’s a funnel-based business and then there’s long hours. It’s inherent that you could also spend a lot of time and hours on something that, unfortunately, inevitably goes nowhere, but that’s the nature of the beast.


Ariez Dustoor: That’s right. I would also say that this is a highly analytical business. That’s an aspect of it that I enjoy, but it doesn’t necessarily lend itself to every person. We do a lot of detailed work, a lot of detailed analysis. We look at reams and reams of data from a company and process it and we’re trying to glean insights and compare it to other businesses, look for positive trends, look for negative trends and that may not lend itself to everyone’s personality. I think this is something, if you’re thinking about going into investing, you should think about the type of investing you want to do. One’s not better than the other, it’s really a question of, I think, how you want to spend your time. What do you enjoy and what are you good at?

On the one hand you have what we do, I would say it’s highly analytical, very detailed-oriented. We spend a lot of time looking at and thinking about data in very structured ways. On the other end of the spectrum you can look at something like seed stage investing in frontier technology, which is much more about high level trends in an industry and trying to place really long-term, really early stage bets. I think a lot of that too goes back to, not to get too much in the weeds, but  what’s the portfolio theory? The later stage you go, the less acceptable it is to have capital loss because it’s very hard to have 100 times return deal in a private equity portfolio. In a C-stage deal, where you’re investing a $1,000,000 check into a company that may not have revenue for years or doesn’t even have viable technology, you’re looking for those outsized returns and you’re going to accept a lot of zeros along the way. You should just think about what kind of investing do you want to do. There are other ways to cut it, not just stage, but sector, do you want to do public market, private market and then think about the type of firm you want to be at. There’s a lot to parse through, but it’s not all the same is the fundamental message.

Ken Kanara: Yes, I really like that message because it also resonates well with what I usually tell candidates. It’s have to first, know yourself and how you like to spend time your time and  what gives you energy, then match that to a job. I did this too, especially in consulting. I was like, “I want to do private equity,” basically because it sounded cool. The reality of it is that’s probably not how I truly enjoy spending my time. I get my energy from people, which is why I enjoy doing this podcast, but I think that’s right. Thanks for sharing that.


Ariez Dustoor: Yes and I would caution people too, and this goes more broadly to what you do as a career, but I think generally, at least, if you’re working on business items or you’re working in the business world, I think if you’re successful, the economic/money aspect of it will come. If you do good work, whether it’s being a technology entrepreneur, being an entrepreneur in another space, being an executive, being an investment banker, being a consultants, doing private equity…if you’re really good at what you do, that will show through and the money aspect of it will come eventually.

I do think a lot of people just get seduced by the idea that you make a lot of money in private equity, which isn’t actually the case, but probably generally overcompensated. If that’s your main reason for wanting to do it, I think you’re not going to last, let alone probably enjoy it. At some level you have to enjoy the work more than just making a certain amount of money, otherwise you’re not going to be able to put in the time and effort you need to start your own private equity business or move up the ranks or whatever it might be. I would just caution to not get seduced by those numbers.


Ken Kanara: I think that is excellent advice. Ariez, thanks so much for this. This has been super informative. If anybody wanted to learn more about yourself or more about NB Group, are there any websites or any information you’d like to share?


Ariez Dustoor: Our website, or you can Google it or Google my name. Feel free to reach out, I’m always happy to talk to people that are thinking about careers or, if you’re interested in what we do, a business opportunity or looking for something. Feel free to reach out. We’re responsive and generally an open book.


Ken Kanara: Excellent. Well thanks so much for joining us. For everybody else joining for the first time, make sure to subscribe on either Spotify, Apple or Amazon. If you’re interested in past episodes, you can always check out and then lastly, if you want to get in touch with anybody at my firm, it’s going to be Until next time, thanks so much.



Connect with Ariez on LinkedIn and visit for more information.



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