Jordan Hansell recently launched the mid-market private equity firm Tradepost, which focuses on businesses worth between $10 million and $100 million. The former NetJets CEO says he gained a great deal of operating experience with exposure to a complicated international business. Hansell also has time spent as President of Rockbridge as an investor. Now he's putting those two experiences together at Tradepost.
One way those past experiences present in this new role is that his operators are often asking for operating advice. They want to get his perspective on certain situations, whether he's seen them before, what he thinks, how he would prepare for a potential upcoming disruption or deal with personnel challenges.
"When you come out of an operating position and you now couple that with at least some of the technical capability to understand the investments, you start to ask different questions," he says. "You look at the teams differently. I care a whole lot about the trust, the integrity, the philosophy, their personality, their proclivities, in much more of a way, I think, than even people who've really spent their entire career in investments do. They can tend to think about investment like a black box — I do all this work in advance, I look at the characteristics of the industry, I look at the characteristics of the business, I'm heavily analytical, and once I structure the deal in such a fashion that I think it works, I'm kind of out of it. Then I hope — I'm going to help, but I hope people who are running it are going to do a good job. I tend to get much more deeply involved in the teams, in the philosophy, in the strategy then I think I would had I simply been an investor my entire career."
Given his experience as an operator, he says one thing he's looking to understand about a leader, one who could potentially run one of his portfolio companies, is their judgement. Because the CEO is often the last decision maker, they're usually making the most difficult decisions.
"What I'm looking for when I'm talking to those CEOs is just that — explain your judgment to me," he says. "How do you think of these things? What are your approaches? I use tricks we've stolen from something called behavioral based interviewing where you're asking, not just in a conversational way about them, but you're really saying, Give me an example of where you wrestled with something of this character. And what I'm trying to get a sense for is how they think and do I think their judgment is going to be more right than wrong? That's all coming out of that experience. And had I not done that, I don't think I would have even thought to consider it that way."
Hansell spoke on the Smart Business Dealmakers Podcast about launching and growing TradePost, how his experience is shaping his approach in the new venture, as well as a series of recent investments he's made in the real estate space, a sector he says is poised for disruption. Hit play to catch the full conversation.