In this episode of Careers in Finance on FinPod, we sit down with Zane Tarence, Partner and Managing Director at the investment banking firm, Founders Advisors. Zane has over 20 years of experience guiding businesses through high-stakes deals and has built a high-performing firm known for its sector specialization and strategic expertise. Starting his career as a software engineer at IBM, Zane took an unconventional path to finance, eventually becoming a trusted advisor to founders and companies navigating complex capital markets.

Zane shares his journey from tech to investment banking, revealing how deep industry knowledge and relational equity can be the keys to success. He also dispels the myth that there’s only one path into investment banking, offering actionable insights for those looking to break into the industry. You won’t want to miss this featured episode that provides an insider’s look at what it takes to thrive in finance.

Transcript

Anna Talerico (00:13)
Welcome back to Careers in Finance. for joining us today. And Zane Tarence, thank you so much for joining us.

Zane Tarence (00:20)
Thank you, Anna. I’m excited to be here.

Anna Talerico (00:22)
I’m excited about this one because this is a different kind of careers in finance conversation. Zane Tarence is the Partner and Managing Director at Founders Advisors, an investment banking firm that has had just incredible growth over the last, you know, probably almost 10 years now that I’ve known Zane and an interesting path into investment banking.

So that’s what I’m excited to share about and just sort of, you know, all of the finance professionals that you work with and hire and interns and aspiring professionals. Zane is an incredible speaker on top of this. runs an incredible, well, his firm and him run an incredible event every year, Silicon Yaw, which is really hard to get into, but a fantastic event. And Zane is an author. So I’ve also known Zane for probably about 10 years now,

because he was my investment banker at one of the firms that I had founded. So Zane, thank you, thank you, thank you.

Zane Tarence (01:21)
And it is so good to spend this time with you and just thinking back over our time together that we’ve known each other. so this is exciting. I really appreciate this.

Anna Talerico (01:31)
Thank you. Well, I want to start, you I talked to so many aspiring professionals and also people that are working in finance roles today who have aspirations to get into investment banking. think many people know it’s a very, you know, it’s the Holy Grail in many ways and there’s lots of paths in and you have an unusual path in because you don’t have a background in finance or banking You were an entrepreneur and an operator.

So tell us a little bit if you can, just maybe like the two or three minute version of how do you go from founding a business, you having some exits to running, you know, founding an investment banking firm. How did that happen?

Zane Tarence (02:13)
Yeah. And Anna, thank you for asking that because I talked to a lot of young people that want to be in this space and the people that work with us. And I’m very grateful for my path, but I’m not sure I’ve ever heard of many people that got here this way. So very quickly, I’m getting older now. Okay. Just to give context, I’m older. I’m 58 years old, but I started my career with IBM. So I was very grateful. I started as an intern in college and I worked for 12 years with IBM. I had four different jobs because IBM stood for I’ve Been Moved,

ended up building, when I was head of a consulting practice at IBM Global Services, a product for Federal Express. I covered the Southeast, as people can tell by my voice, I’m from the South. And during this time in IBM’s history, we had a lot of intrapreneuring. Long story short, IBM ended up funding my business, gave me the intellectual property that we had developed for Federal Express, and it was an online testing product. Back then in 1990,

Seven is like, what’s that? But we ended up getting a patent on any kind of online assessment. And IBM funded my business. So I became an entrepreneur within IBM. And then we broke out. They funded me. got VC investors and ended up having private equity. And then ultimately, we sold to a strategic buyer. And at that time, I was basically a software engineer running a practice. But I got an education on

the world of finance, what I call beyond the bank capital. I didn’t understand all the types of capital in the markets and how entrepreneurs could leverage that capital. So that experience as an owner and then when my investors came in one day and said, Zane, you’re not that really good of an operator. We think you’ve got an interesting product. We now had a patent. had about 50 engineers, about 70 employees. We got a patent on web-based testing. But they said, we want to introduce you

Anna Talerico (04:02)
Yeah.

Zane Tarence (04:12)
to Chip Porter. He was an investment banker from New Orleans. And I thought, I didn’t know what investment bankers were. I thought they made a lot of money, but I was like, okay, I’ve got an investment banker now. And then the next six months, Chip led our company on one of the most amazing journeys I’d ever imagined. And we went to market, ended up getting several offers from private equity groups and public companies. And we sold to Houghton Mifflin, a public company out of Boston

Anna Talerico (04:41)
Incredible.

Zane Tarence (04:41)
our business, I worked with them a year and this gets into the story. Seeing this investment banking process from an owner’s perspective, I was like, my goodness, how they underwrote our business, how they told our financial story of risk adjusted future cashflow, how they demonstrated through data and God we trust all others bring data that we absolutely had, you know, the ability to make risk adjusted future cash flow.

I said, this is unbelievable. I loved it. I worked with him for a year. We made our earn out. And then I said, you know, I might want to go do something else. And I thought I was going to be a VC, right? As an operator, I’m going to invest in little software companies. Wasn’t great at that, but we were blessed. I did that for six years. I was able to get our investors their money back. We didn’t have a huge return. But in 2007, we got all our investors their money back, a little return. And for the VC, small microcap VC firms back then, that was pretty good.

But I was on the board of this bank that I’m on now with my partner called Founders Advisors. And still loving watching what they were doing, mainly for industrial companies and oil field services companies, watching what they were doing thinking, man, it would be so cool to be a river guide for entrepreneurs like I was. But as you said, I don’t have the background for that. I didn’t go to Yale or Harvard. I went to Stanford.

Anna Talerico (05:43)
and

Zane Tarence (06:08)
I went to Auburn, you know, I’m a business development math major and software guy. And so really, you know, didn’t think that would ever be in the cards and that was fine. I was just going to be an investor. But anyway, as it happened in 2007, my now business partner said, Hey, you know, I think you’d be really good because you’re an operator helping these software entrepreneurs navigate this capital continuum will bring the

know, smart bankers in that have all the modeling experience. But you go out there from the softer side of this. And I said, dude, that could be fun. was 40 years old then, joined with my partner. We had like six employees. now, and I think we got like 50, 55 employees, 45 bankers. And I’ve been able to get in this role and I love it. And basically,

I’m here as an operator. And so like you were one of our clients. I don’t come in and say, Hey, you know, I’m a, you know, Wall Street banker. We have those people. Thank goodness you can grow up smart, amazing bankers, but I sit more on the softer side and it’s just been, it’s been the joy of my life. so sorry to go on that long story, but that kind of, that’s the way I got into this world. And I’ll tell you, I absolutely love it. And I tell young people,

to get to do what I get to do, seeing businesses, seeing individuals build amazing businesses that have a reason to exist because they’re delivering such value to their ideal customer profile. And then, sorry, but it has to do with enterprise value. They’re able to build incredible value for their stakeholders, their families, and to help them navigate those seasons of their journey.

It’s fascinating. So sorry I went too long, that was a…

Anna Talerico (08:03)
No, and I love it. There’s a couple things I want to touch on that you hit. Your passion for businesses and startups and founders is so apparent. I mean, that’s why you were our banker. We had so many banks pitching for our business. You and founders were the only ones who took time to learn about the business before having real conversations with us. So when we had conversations about what our outcomes could be or what the

good and the not-so-great stuff about the business where they were not coming from like a surface level. They were coming from that like understanding of our business, know, you and Brad Johnson, right? Yes. Yeah. And yeah, I love it. And so I think that that love for business and for founders and founding teams really just shines through and it’s something that separates you. So it’s funny though, you said something about, you know, just

everything that you learn, like all these navigating capital markets and these things you didn’t know as an operator. I tell people all the time, and I’m curious if you think this is true, going through any type of capital market, know, just, you know, event, whether it’s raising, exiting, whatever, you know, working through a merger, an acquisition, I feel like you get an entire crash course that is worth a college degree. Like I look back to the things I didn’t know and through every acquisition I’ve lived through,

I learned so much, right? It’s, yeah.

Zane Tarence (09:31)
100% and Anna, I’ll look at, you know, what you’re doing now and Justin and how y ‘all, you know, have become, you know, amazing stewards of businesses and understanding how to invest, how to grow businesses, how to run them. And it’s this education that I don’t know another industry where you get this level of concentrated knowledge of actually what drives economic value.

And I think even whatever size business you’re working with, whether it’s a public company or a smaller business, these, these core ingredients, it just makes sense. And so, I love it. And that’s when I was exposed to this. And I remember as a software guy, was like, dog gone and I miss my calling. You know, if I could have ever gotten in one of those,

solid schools that, that I felt like at that time you had to go to in order to break into this career Which this is changing a little bit and I’ll talk a little bit about that if you want me to but But anyway, I love it and and the learning and every day I learned something. I’m still very involved In our deals. I mean, I’m running the firm for my partners, but because it’s just so intellectually stimulating.

Anna Talerico (10:29)
Yeah. Yeah.

Yeah.

Yeah, well, it really is. So let’s talk about this. You mentioned it, the path in, because one of the things that I love about doing this podcast is revealing all the paths in, know, because we, you know, traditionally, and I think there’s a reason that this is what we perceive is that there’s one path in. You go to a target school, you do these internships, you get recruited, and there’s just the only one path. But there are different paths in. So I’m curious.

There’s a lot of questions I have for you that’s both like what you see, you hire interns, you bring interns into the firm that stay. So let’s start with just like, what are some of those changes? How much of a myth is it that there’s just this one?

Zane Tarence (11:28)
Okay, it’s starting to change. And I’ll tell you, now that I’ve been in this space building this company for 20 years, I’ve seen it change. First of all, traditionally, there’s still a framework that you know and your listeners know and your courses, prepare them for this traditional framework that you have to understand. You need to try to get an amazing internship. Okay? And that starts your sophomore year of college to figure that out between your junior and senior year of undergraduate. Do that. Get prepared.

Take courses like yours to understand what is this? How do I read a balance sheet? I don’t read an income statement. What is a banking process? What is an operating model versus a financial model? So all that knowledge is key. You get the right internship in the past. If you get selected, it’s, it’s, it’s very competitive, but then, you know, you have an internship, then you become an analyst, senior analyst, associate in our world. These paths, whether you’re the Wall Street firm, Goldman,

or you’re with a boutique bank like us, the password is the same, then the associate, then you have a senior associate, then a VP, then a director, then an MD. Okay, so that’s the traditional path, but here’s what we’re seeing change. We’re seeing, if you have, and this is my soapbox now, that I wanna encourage everybody that loves this industry, get a sector specialty. You want, you have to have all the fundamentals being a financial person

think finance, have attention to detail and obviously be very bright. mean, smart matters. I mean, it just, it just matters. You can get things quicker. You have systems, knowledge that matters. But let me tell you, if you are a sector specialist, I’m seeing more and more people like me, come in from an operational model and banks like ours are now starting to bring operational people in

that understand their subject matter experts in a certain niche. And then you couple them like I was as a software guy, coupled with true bankers. It makes this amazing team for your ultimate client. And so I would say, the big thing I’m seeing change is if you have deep sector expertise as an operator or you understand it, you can actually come in and now be a part of the team.

But your specialty is not so much the financial engineering, it is being a subject matter expert in that space.

Anna Talerico (13:56)
Well, first of all, I always love a Zane soapbox, so thank you. But what’s interesting about you saying that is it rings true. had actually one of our trainers at CFI has had a long career doing lots of things, but the way he got into finance, he has a degree in electrical engineering, was working in the mining industry, decided he wanted to go look at private equity and asset management and just make this total leap.

Zane Tarence (14:00)
Mm

Anna Talerico (14:23)
And that’s how he got in with a firm that was focused on mining. But they asked him to do his first financial model. He literally didn’t know what it was. know, and just like, so that’s so interesting. It does ring true that it’s different kind of path in. Yeah.

Zane Tarence (14:26)
Yeah, I tried!

It is, and Anna, guess what? You can learn the financial piece. You can learn that. If you’re an engineer, if we walk back to my bullpen right now, we call it bullpen, you’re your analyst, associates, the really smart folks that made unbelievable scores on their SAT and ACT. I’ve got several engineers back there. Now I’m gonna be very vulnerable here. I love chemical engineers. They are so bright.

Anna Talerico (14:48)
Mm-hmm.

Zane Tarence (15:05)
They can figure this out. Now guess what? Our industrial’s practice, I’m a tech guy, run the tech team. Our industrial practice, how do you think an ultimate client that has an industrial’s company, very process oriented, manufacturing, technical, how do you think they feel when one of their bankers is a chemical engineer? They feel like they can communicate and talk. So sector coverage, young people, older people, if you love a certain industry, have that vein. And in our space,

Anna Talerico (15:24)
Yeah.

Zane Tarence (15:34)
you don’t win mandates now without sector specialty. So you’ve got to have both skills, but if you’re an operating partner, sector specialist, you’re going to do well.

Anna Talerico (15:39)
That’s great.

Love it, love it. Okay, so let’s take a step back and talk about those interns. So I know you’re not probably handpicking those interns, but it’s very competitive. You get a ton of candidates. You only put a few through. What sets an intern apart? How do you go from 1 ,000 applicants to seven, for example?

Zane Tarence (16:05)
Right. Yeah. And again, we’re a boutique firm, relatively small firm. And I I not told you, I think we had 1100, 1200 applications to our summer intern program. It’s up to us to have a reputation, to have a great intern program, right? We want to add value to those interns. We want them fighting to get in with us because we’re competing with other firms. The interesting thing is, my partners and I, we don’t meet these candidates.

And guess who’s deciding who our interns are, our current analysts. And we have a couple of senior associates that know the path. They’ve been analysts for two or three years and associate made for two or three years. They’re setting this up. Now, candidly, I’m just going to speak the truth. One of the ways we, mean, schools matter. Let me tell you what’s starting to matter as much or more to us. Schools are leveling out a little bit. If you’re a certain tier of schools,

Anna Talerico (16:40)
Hmm.

Zane Tarence (17:02)
But we know if you get in those schools, that’s the first vetting process. You’re something special if you got in that school. But then we look at some test scores that you took in high school, college entrance exams, just to say, do you have the motor to where you’re going to enjoy this? So that’s good. But at that time, we’re not looking for perfect scores, but that matters. Then we start saying, OK, could this person be a business triathlete? Can they communicate?

Do they have an emotional IQ? And then we really lean into that. So everybody that gets very deep in the process has very good recommendations from the school, good school. The professors were very close to a lot of the professors we hire people from. They’re very good with their test scores, because that’s just a test for us of their intellectual motor. And then it turns very quickly into emotional IQ and communication skills.

Anna Talerico (18:03)
Triathlon, I business triathlete sounds like a Zane-ism. That is a lot. love that.

Zane Tarence (18:06)
Hey, I think I made that up and I wrote it one time. I wrote a little paper and really at that time it was subject matter expertise. I mean a domain. So industry expertise. You love an industry. You’re intelligent. You’re curious about it. You read about it. You’re a great communicator in the written word because emails matter. Subject lines of emails matter. And then you are technical. If you’ve got those three things, Anna,

Anna Talerico (18:17)
Yeah.

Yeah.

Zane Tarence (18:34)
You can really go the whole route through investment banking because the higher you get up in banking, just like as a lawyer or any technical deal, it’s more of the soft skills, the higher you get up. I don’t know. well, I’ll tell it to God. Just a minute ago, I was getting a cup of coffee. said, this is some of our young team that’s coming in a girl and a guy said, you know, ask them how they’re liking this because they’re now analysts. They started June the first. And I said, I could never

qualify to be an analyst. Never. I’m not smart enough. I don’t have the temperament. I’ve got ADD. But in my level, where I’m at now in investment banking, my skills translate pretty well now as an operator of that. So anyway, business triathlete will help. And guess what? Guess what the stereotypical view of an analyst is in investment banking? The stereotypical view

Anna Talerico (19:21)
Yeah.

Not a triathlete, not a triathlete to technical skills, technical skills. Yeah.

Zane Tarence (19:32)
Exactly. I’m going to be at my computer all day, 90 hours I’m going to live under my desk. No. People that own farms like me, I’m looking for the one that can do that. And it’s willing to say at this stage of my career, I’ve got a motor, I’ll get it done. But at the end of the day, I want to invest our time and energy and culture in somebody that can go the whole curve of investment banking. And I really think that’s the only way to be moral.

Anna Talerico (19:39)
Yeah. Yeah.

Zane Tarence (20:00)
You don’t want to just, you know, wear people out. Now there’s this transaction thing in investment banks with strong analysts. We’re going to help you out. You’re going to help us out. We’re going to work hard together. We’re going to train you. We’re going to give you up. And if you want to go into the private equity side, the buy side, we will help you get there. And there’s no better way than starting at a bank,

where you get to underwrite a lot of businesses and see it. So we will help you get to private equity, but we also want folks that we believe would be exciting about going the whole route, you know, to a managing director.

Anna Talerico (20:36)
Yeah, yeah. you know, no matter what, it is true. The associates work a lot of hours. It’s just the reality.

Yeah.

Zane Tarence (20:43)
They work a lot of hours. People say, ‘all hey, listen, they get paid well. And guess what? I tell people, you know, you’re collapsing timeframes. Once you go to a bank and do this work, you’re going to get, I mean, they get recruited like crazy. I mean, we’re going straight up. You’re going to get 30 emails a day, depending on where the macro economic market is, 30 emails a day trying to recruit you. So our job, we’re going to pour into you. We’re going to hold our alumni like this, but

Anna Talerico (20:47)
Yeah.

Yeah.

Yeah.

Zane Tarence (21:12)
you’re gonna work hard. You’re gonna give us value while you’re here and we’re gonna give you value to your career forever whether you’re here or not. And I think most banks are like that because it’s a transaction that we all know. You work for us hard in the early days, we’ll help you in your finance career. Even if you wanna go be a CFO, we’ll help you there. Or a private equity, run a family office, or become an operator. More and more of our alumni, Anna, are becoming operators. They’re going and

Anna Talerico (21:24)
Thank you.

Interesting.

Zane Tarence (21:42)
buying, they’re buying a company from an old person like me. And by the way, that’s funny. I’m writing a new book and it’s called, Don’t Start a Business. Buy one and make it better. So anyway, I want to give your listeners that because the career path here, pretty much private equity, stay in investment banking, be an operator, but now we’re seeing a lot more go out and actually buy a company.

Anna Talerico (21:57)
Love that.

Yeah, actually I know somebody who’s doing that. That’s so interesting. was in, started at Goldman, know, has kind of had six or seven years into his career, has done some different things and now he’s looking to buy a business. So that rings true. Yeah, so it’s so interesting. So all of the analysts that you hire, do they all come through the intern program? Is that really the way to get in?

Zane Tarence (22:32)
Great question. Okay. This is a religious argument in banking. That’s our preferred way. But let me tell you, at the associate level, we bring some people in sometimes. So we look at them on Wall Street or maybe what’s happened the last four years. Some people were living on the East Coast, West Coast and decided, you know, I don’t know, maybe, and again, I’m very vulnerable. You know, we’re a Dallas Birmingham-based bank.

And let’s say somebody’s from the South, loves college football, their family’s here. They say, you know what? I want to be world-class banker, but I’m just not sure San Francisco is for me or New York, or maybe they’re getting into the season of their life. They want to do other stuff. We are hiring a good many professional hires at the senior associate level. That’s good. And then also we’re opportunistic when there’s a wonderful sector banker that might be a VP or director

Anna Talerico (23:20)
Mm, yeah.

Zane Tarence (23:31)
at one of the bigger banks, but they’re getting ready to be a little more of an entrepreneur and feel like that bigger bank might be a little too structured. we’re bringing people in at the MD and director level, opportunistically, and a pretty good many associates, but we’re always, to be a healthy firm, we’re always gonna have those six or seven analysts a year coming through our intern program. And I would say,

Anna Talerico (23:39)
Yeah.

Yeah.

Yeah. Yeah.

Zane Tarence (23:57)
98% of our analyst hires come through our internship.

Anna Talerico (24:03)
Okay, yeah, that’s the way, that is the way. And to your point about the analyst getting recruited, you know, I think a lot of people don’t realize they’re getting recruited for a role two or three years out from the time they start as an analyst. Like, I think people don’t realize that. Like, that recruiting doesn’t just happen when you’re kind of winding down your two years as an analyst. It starts day one.

Zane Tarence (24:24)
100% and you know we’re on the right side of that sometimes in our industry and on the wrong side, so we try to hit it straight up and say the good news is we’re gonna hold you like this people say some of our competitors don’t put their analyst on their website because you know and we’re like listen there’s the reality we’re proud of you we’re so excited you’re on our team we’re here to help you, shame on us. If you want to be in banking and you go to another bank, shame on us.

Anna Talerico (24:29)
Yeah.

Zane Tarence (24:51)
If you want to go to private equity or be an operator, we’re going to help you. So it’s a very highly recruited area. But when you are an analyst, they are recruiting you for that seat, that first year associate, because they know you’ve been an intern, you were picked. Now you’ve been an analyst for three years. You are, you’re unbelievable pick as an associate.

Anna Talerico (25:17)
Yeah. So you, you talked a little bit about what makes somebody stand out through the intern process and then those early hires and who you’re hiring senior, you know, when somebody’s then got the role, now they’re in seat, what makes people stand out and you say, I want them to stay here, you know, if they want to be in investment banking, like what are the things that really make people stand out?

Zane Tarence (25:39)
Wow. Wow. First thing, and you’re going to say thank you Captain Obvious for being from Alabama telling us this, but just, and a competency. People want to work with really, really good people that love what they do and are good at it. So first of all, I’m sorry, I love attitude, but I first of all love competency. So when you’re really, really good, that is so attractive. Now,

Anna Talerico (25:45)
Yeah.

Zane Tarence (26:09)
That’s just a given. You have to be that or you can’t stay in any business or any role. But once they’re competent, it’s the ability to mentor and coach the people underneath you. So, in our business, it’s a very rare professional business where when you’re a second-year analyst, you are managing the interns.

You’re managing first year analysts, you’re doing their quarterly conversations, you’re in their assessments, you’re determining bonuses with your team. If you are not a leader and understand, passionate about, I want to make the people underneath me better. We rate our people. say, you’re going to be rated based on how well your team grows and matures. And that pushes you up, gives you more capacity. So that’s tough for some people, Anna.

Anna Talerico (26:43)
Yeah.

Zane Tarence (27:06)
And they’re young. mean, they’re managing people at 25 years old, 26 years old, but you’ve got to be able to be a leader, a servant leader, truly cares about people and is patient enough and willing enough to invest over the shoulder with an analyst that’s struggling with a, you know, working capital model or any kind of model or a SIP and say, I’m going to really serve you because I care about you. But also I see the connection. I don’t mind making this connection

between your success and my success. So that’s huge. Had some real issues with people couldn’t go to the next level because of that. The other thing I would say is really, really empathetic. Somebody that can look at a client that’s struggling with the data that we need in order to build their case in the market. And they’re really struggling. the analysts, analysts or associate or bankers sitting there saying,

Anna Talerico (27:42)
and

Zane Tarence (28:02)
It’s not that hard to get a cohort amount. Can you just give me the raw data? But to be able to sit there and say, wait a second, this person’s built an amazing business. Their skillset was not CFO. Of course they don’t have all the attribution data I wish they had, but instead of making them, sorry, feel like an idiot or less than, have empathy to say, we can work with this. know, whatever you have, we’ll figure it out. So leadership team,

Anna Talerico (28:04)
Yes.

Yeah.

Zane Tarence (28:31)
Once you’re competent, and then empathy.

Anna Talerico (28:34)
Yeah. Well, you all make magic out of like, we can work with this. You know, I know you guys take limited what you get your hands on and have to make magic out of it. What it’s interesting, what you said about the leadership. think about this a lot because this is why finance and banking roles need to be in office because you need to turn to somebody and say, I need help. Or you need somebody looking over your shoulder to say, I think that you need help. And I think about this actually for CFI a lot

Zane Tarence (28:42)
Yeah.

Anna Talerico (29:04)
because there are people that are not in offices full of people that can help or it’s a hybrid back and forth between work and home. And I think about how can we provide some resources to fill that gap that you don’t have your coworker next to you going like, can you get over here and look at this with me? 100%

Zane Tarence (29:20)
Yes. 100% in that collaborative scenario-based training, I tell you, it’s critical. And in this world, you just learn from doing deals, getting in a hole, have somebody to help you get out of it. if you don’t like that, and some people are so bright or so gifted, but it frustrates them

Anna Talerico (29:28)
Yeah.

Yeah.

Zane Tarence (29:48)
to train and teach. It’s like, can just do this myself. Like we all get in that murder, right? But that is not servant leadership and it’s not the right model that works in banking. And here’s a dirty little secret. And I like it because I think it’s one of a competitive advantage that we could work on and have. There’s a lot of sharp elbows in, this industry and a lot of people that don’t suffer fools lightly, but they’re impatient and

Anna Talerico (29:49)
Yeah. Yeah.

Zane Tarence (30:13)
Basically the cultures, it’s very hard to build a large firm. People just leave and egos and all that. So if you can develop these manners, and I’m not saying we’re all just sitting around singing kumbaya, but it’s like have a side of you that really cares about growing people, maturing people, vesting in their career, even if they’re your alumni. I say it’s not selfish, but it sure is a healthy self interest to invest in others and

that our teammates that have moved on to private equity, you don’t think they, our connection with them, connection with like you, you know, I mean, there is a huge piece if you can build lasting relationships, you’re coachable, you can take candid feedback, your relational equity, used to be land, labor, and capital, now it’s relational equity. That will come back in a phone call, that’d be the difference in three or $4 million in a fee. I’m telling you.

Anna Talerico (30:49)
Yeah.

It is. Yeah.

Zane Tarence (31:12)
So, so we’re watching our people. Can you give, give, do you believe in the age old principle, whatever spiritual view you have, Buddhism, Hinduism, Christianity, Judaism, do you believe in sowing and reaping karma that it really does pay to do the right thing? And we believe that and we see it. The results of that can give you a differentiated advantage. And especially I’m not being ugly to our industry.

Anna Talerico (31:13)
Yeah.

Zane Tarence (31:41)
But our industry has sometimes been cold, clinical, maybe not as concerned about mental health. Maybe, we’ll just, hey, if you’re really a great banker, you’re gonna live under your desk. That’s just what you do for the first two years. I’m not sure that’s the smartest way to run a firm.

Anna Talerico (31:56)
Yeah, super transactional that way. Yeah. I love that too about just the relational equity because I say this to people all the time, know, care from the time you get into the workforce, carry your people with you, like keep your tribe all along for many years. Right? Like those things I just are so important. And I think I didn’t realize that until I was in my thirties. And I think back to the people I wish I had carried with me in my twenties, you know, I just like those relationships are so important. Yeah.

Zane Tarence (32:20)
They’re so important and you invest in it and they just, they keep giving more and more fruit. Like the one seed, the one acorn, you know, turns into, you know, a tree which produces thousands of other acorns. It’s this cumulative effect in natural law that is wonderful.

So be very careful in your career to maintain, to be a giver, not a taker. And I’ll tell you, it works. And especially, I think there’s a huge opportunity in our space because typically there’s been a lot of egos, a lot of me-ism, and in the end, that doesn’t work.

Anna Talerico (32:58)
Yeah, incredible advice. And what a great place to start to wrap it up because this has been chock-full of typical Zane-isms, fantastic. And so much advice and wisdom. So thank you. A couple of things before we wrap up, though. First, I know we don’t have a ton of operators listening, but tell us just the kinds of operators you guys wanna talk to you. Like the kinds of businesses, just like, you know, give us a little sense of founders

Zane Tarence (33:08)
Thank you.

Anna Talerico (33:27)
and the types of companies you want to work with.

Zane Tarence (33:30)
Thank you. Our sweet spot, Anna, is the lower middle market. Our average deal last year was about $65 million in enterprise value. We love, we can’t do a Subway sandwich shop, one, but when you get in that $30 million, what we call institutional grade, $30 million, we did $300 million last year, but our core is, man, just right in that space. About a million companies in that space in the US, we love it. About 20% of our deals are cross-border now.

In sectors, we only believe in sector bankers. I said that a little bit. We are doubling and tripling. We’re not generalists. We have to give a lot of people say, we’re not a great transportation banker. Here’s one we would say, but healthcare, technology, business services, industrials and consumer. That’s where we have MDs that are good. That’s where we play. We love it. We love Founders, the name of our company. I’ll get this to my business partner. I was on his board. He named it Founder’s Advisors.

He was a founder, too, much more successful than me. He felt like founders were at an information disadvantage. So we only work with founders. So we believe in working with those founders and we love it. So that’s kind of our target. So that’s great.

Anna Talerico (34:42)
Love it. All right, and so you have got a new book in the works that is Don’t Start a Business, Buy a Business. And then what’s your, and then your book about institutional readiness, what’s the title of that one?

Zane Tarence (34:55)
Yes. And people hate my title because I did, but I kind of did it for that reason. it’s the 17 reasons your company is not investment grade and what to do about it. So basically it’s just typical what institutional investors through their lens, how they’re going to put your business up on that medical table and that little gown and they’re going have all these tools and they’re going to search every crevice of your body and your circulation and

Anna Talerico (34:58)
I love it. Yeah, there we go.

Yes. Yes.

Yep.

Zane Tarence (35:23)
your blood, your X-rays, your PET scan, to determine, is this company worthy of investment that I could get a 3X return on my capital.

Anna Talerico (35:33)
Love it. Such a great book. I always say an inquisitor wants to tell you your baby’s ugly. That’s their job, right? And you’ve got to be ready. You’ve to have all those 17 things ready.

Zane, thank you. I cannot thank you enough. This has been an incredible conversation for Careers in Finance. I so appreciate you.

Zane Tarence (35:44)
Thank you.

Anna, thank you. It’s great reconnecting and congratulations on all you’re doing.

Anna Talerico (35:57)
Thank you.