Brent Beshore – Update on Small Business and Private Equity

**Patrick O'Shaughnessy** (0:04)
Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com.

**SPEAKER_1** (0:24)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (0:49)
My conversation today is with my close friend, Brent Beshore. Brent is a private equity investor who owns and interacts with many small businesses which have been hit especially hard by Covid. We discussed the various impacts that Covid has had and may have on small businesses and on the private equity investment community.
Brent also proposes some policy actions which he thinks may help those most in need. Please enjoy this conversation.
Brent, thank you so much, my friend, for doing this with me. I thought you would be a perfect person to check in with this week on today is March 19th. Because of your proximity to what I would call real American business, small business, not only as an investor, but just the number of relationships you have with business owners who obviously are facing a dire situation. So I appreciate your time. And I figured a fun place to start would just be to get sort of a subjective lay of the land from you. How are you feeling? What are you seeing out there? How has this evolved so far for you?

**Brent Beshore** (1:43)
First, thanks for having me on. We chat at least once a day.

**Patrick O'Shaughnessy** (1:48)
Three times a day?

**Brent Beshore** (1:50)
Three times a day.

**Patrick O'Shaughnessy** (1:50)
Yeah.

**Brent Beshore** (1:51)
Are we up to three times a day now? It's gotten that bad?

**Patrick O'Shaughnessy** (1:53)
That's the crisis count.

**Brent Beshore** (1:54)
Yeah, exactly. No, I mean, I'd say subjectively, look, there's a new normal. And I think that the new normal is no one knows how long it's going to be, and it's going to start trickling out.
Just to be completely frank, I mean, I think we'll talk about maybe some bright spots and some things that could happen, some good stuff a little bit later. But I mean, just the frank thing is I'm sad. I mean, just to be completely honest, I'm sad of all the people that are going to be losing their jobs, who already lost their jobs.
I'm sad that it's upended a lot of people's lives. And look, mine and yours included. I mean, I'm with my family at home. We've been practicing doing our social isolation part since Friday of last week. It's completely changed life. I mean, I'm sure, you know, I've got three kids under six that are in the house here. So it'd be an absolute miracle if during our discussion, one of them doesn't come bang on the door or barge in and start singing in the background, which is, which is awesome.

**Patrick O'Shaughnessy** (2:41)
It's part of the game.

**Brent Beshore** (2:42)
Yeah. I mean, it's awesome in some ways. So yeah, I mean, I would say that the lay the land is small business. I mean, I'm only going to speak to what I know and what I'm seeing personally. It's tough. And I think that the shorter your feedback loops are for your customers, right? So that if you're selling stuff daily and you can sort of see the feedback was coming, I mean, there's been a dramatic drop in revenue, which is unmistakable.
If you've got longer feedback loops, you know, B2B contracts, longer sales cycles, things like that, you can start to see the KPIs are going off a cliff. But you know, the revenue is still there and you're still doing work and at least for the most part, unless you're shut down, which we've had offices, some of our portfolio companies are in no commerce zones basically and the only essential services provided. So you literally can't work. So it's tough.

**Patrick O'Shaughnessy** (3:25)
What do you think is going to happen near term in terms of policy response? Maybe asked a different way. What do you think should happen? You came out this morning. I know we were talking about it last night. I think you're up all night writing this memo, which as somebody that's an investor in but also an operator of a small business, you're in a uniquely good position to sort of communicate what you think actually might make a dent in this problem as the country has come sort of to an economic standstill. Walk us through some of what you think are the highest potential impact things that the federal government or other government entities could do for small business owners.