Thomas J. Young had no intention of selling his business, Oshkosh-based Arrowhead Systems.
"In fact, I'd accumulated a lot of cash to make some more acquisitions to grow it further," Young says. "But I sold the company because of Joe Biden. I love that guy. When Joe and the tax and spend crew came into power, one of his early initiatives, about to be revisited, he was about changing the tax law on capital gains from 15-20 percent, back up to regular income tax levels — let's say 40 percent. And I just said, 'No. Under no circumstances will I do that. I'll burn it down first.'"
With strong accounting practices and a tight organization with good credentials, he took his company to market and a sale process began and ended very quickly — it was sold to Regal Rexnord over about 120 days.
Young, formerly the principal and owner of the provider of industrial process automation systems, said during the Milwaukee Smart Business Dealmakers Conference that while he had virtually no thought of retiring or selling, anybody that's successful reacts to stimuli and circumstances.
"You can write strategic plans all day long. But if opportunities don't present themselves, there's no plan," he says. "You react to the cards you're dealt. Play 'em. And most successful people do that."
Though Young has three daughters who theoretically could have joined and possibly taken over the business, he says statistically the chances of continued success of a family venture as the generations progress is rare.
"If you look at the history of things and legacies, sadly, the great names that you'd all know — Carnegies, etc. — illustrative of my point, the Carnegie's had a family reunion about 10 years ago. There were some 150 heirs of Andrew Carnegie. There were no millionaires in that line — it was gone," Young says. "And statistically, it's right out of a textbook. The old man — the bull moose — gets it done. He's got children. They have children. But in a third generation, it's gone. And being aware of that, I just said, Look, this is what I did. Y'all grew up. I raised you. So, you know what I do and how I do it. But this is not the end of the world for you. You keep doing what you're doing — you be somebody, you do something, you contribute. And there'll be no 'trust fund babies,' because I've come across them in my lifetime, and I was repulsed by them. You get out, you work, you break your ass, you make it happen, you be a good person. And then you give back. So, they know that though. So, there was no surprise to the family."
Young does, however, have a legacy trust. But he's clear that there will be conditions to receive its benefits.
"You have to meet certain criteria to get the benefit of anything. And so will your children,' Young says. "This is not going to be gone in generation three."
He says there will be a meeting with the people managing the trust and the family members where a candi discussion will be had about what's there, where it's deployed, how it's dispensed and how it's managed.
"And you can be part of that, but there are conditions," he says.