Lightning Rounds

Get ready for a dynamic, fast-paced session where thought leaders in private equity and capital funding take the stage to share their perspectives on its role in accounting. Each speaker will have just 6 minutes to present, ensuring focused, high-energy discussions. This is your chance to hear from industry experts and learn how different firms are navigating the intersection of private equity and accounting. Don't miss this opportunity to gain valuable insights and actionable takeaways.

Transcription: 
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record. 

Daniel Hood (00:08):
One of the things you gather from listing women, even within the realm of PE, is those variances—there are different flavors. You can talk about flavors. And I would say one of the best things that private equity has done for the profession as a whole is two things. One, it's expanded accounting firms' ideas of who they can partner with, and it's expanded the universe of people who are willing and interested in partnering with the profession. It's not just PE firms. We see wealth management firms, family offices, and all kinds of other potential strategic investors. Coming from all over the place, a lot of it is looking at what PE is doing and saying, "Hey, this is a hot market, this is a valuable market, this has a lot of potential, a lot of future growth. Let's look into it." And so that's what this next session is about.

(00:54):
So we're rearranging the stage as we talk. Our lightning round, the notion being that there are all these different groups of people who are interested in working with accounting firms, partnering with accounting firms, and investing in accounting firms. And the goal here is to take a couple of minutes to introduce you to a selection of them that all have come with different models, different approaches, different thoughts about accounting, different CTs, I think is a word that we hear a lot, from other people as well. We're going to give each of the four of them six minutes to talk about themselves, how they work with accounting firms, what their goals are, what they like about accounting, and all that. And I think if we're ready, we're all right. Come on up. So we're going to start with our first one.

(01:42):
So I'm going to call to the stage the CEO of Motive.

(01:50):
Thank you John. Ruth. Thank you. Let's start off. Tell us a little bit about your organization.

Arush Jain (01:59):
I'm Arush. I'm the CEO and co-founder of Motive. And our ambition is to be the world's best auditor. Over the last few years, you've seen a lot of change happen in public accounting where you've had private equity come in, the EY breakup trial. And broadly, I think there's two things missing in audit. First, I think there's a need for a really high-quality auditor. And second, there's a need to care about customer experience. If you look at every CFO today, they walk out of their audit cycle miserable. No CFO enjoys getting audited. It's like getting a colonoscopy on your business. And so how do you deliver a customer experience where you're in and out in two weeks, they learn something about their business, and they walk away happy?

(02:44):
The second part is I think you need a really high-quality audit. Audit serves a really important purpose in the capital markets where you're a source of trust for a lot of different investors. And you've seen what can happen when it doesn't work. So how do you deliver a really high-quality piece of paper? And I think that's uniquely possible today with AI. So how do you partner with accounting firms, bring the latest and greatest AI, and use that to deliver a really high-quality audit?

Daniel Hood (03:13):
So when you look at accounting firms, what do you think are the biggest opportunities?

Arush Jain (03:20):
I'd say firms need a competitive advantage today. There are 45,000 plus firms out there and firm number 70 versus 71 doesn't actually look that different. And so how do you gain a competitive advantage over your peers?

(03:34):
The biggest bottleneck in our eyes is partner capacity. Private equity comes in and they've done a great job outsourcing the offshore work, but all of that is focused on the lower layer of talent. The true bottleneck in firms is the partners themselves, where you can't out-hire partners. Partners not only sell the work, but they also do the work. And if you have a partner that is a great sales rep, they'll get you a two-million-dollar book of business and they're done. So how do you enable them to get more capacity in their system and get them back selling? That's how I think firms grow.

Daniel Hood (04:08):
All right. So what's your model for working with them?

Arush Jain (04:11):
Upfront we invest capital, like everyone else does. We acquire a majority stake in firms. And more interestingly, what we do is we bring a team of world-class engineers that are dedicated to your business free of charge.

(04:23):
These guys are from Palantir, Google, Facebook, Microsoft, etc. All those guys were previously making a million dollars a year. And what they do is they move to your city, they sit with your staff and your partners, and they watch you work. You tell them, "Hey, here's something that is a huge pain for me. Here's my bottleneck." They'll come in and they'll develop a very unique bespoke technology that helps automate that process and that enables you to get your audits going faster. And more importantly, with higher quality.

Daniel Hood (04:55):
Obviously, auditing is going to be a part of the kind of firms you're looking at, but are there specific types of accounting firms, sizes, or models?

Arush Jain (05:04):
We partner with firms of various sizes. They could be as small as 10 million in revenue or as big as 250 million in revenue. And really what's most important to us is not size or geography, it's the people. This is fundamentally a people business. And so how do you partner with folks that are A, really ambitious, B, technology forward—they believe in what AI can do—and C, they can leverage the technology advantage that we give them to drive a commercial advantage. Like I said, firm number 75 is not that different than firm number 76. We need leaders that can grasp the opportunity and use that to scale.

Daniel Hood (05:37):
Excellent. All right, finally, the big tip, why should accounting firms work with your organization?

Arush Jain (05:43):
Running an accounting firm is really hard. You're tasked with managing a lot of people with turnover, and people telling you constantly that AI is going to come replace your job. And really what we want to do is help make life easier. We want to come in and say, "Hey, you shouldn't have to work 100 hours a week during the busy season. You should be able to go home at six." You should be able to not be at capacity and go sell more. So how do you leverage AI with frontier tech and not have to figure it out yourself or have a partner that comes and does it with you?

Daniel Hood (06:16):
All right. Thank you so much.

Danielle Lee (06:23):
I'll take it from here. I'm here with Sanjay Agarwal. He is the CEO and managing partner at Elevate. First, tell us a little bit about your organization.

Sanjay Agarwal (06:31):
I'd be happy to. Elevate launched earlier this year. We're a family office-backed platform. We make majority investments in CPA firms nationwide. Our focus is really on value creation for CPA firms. So we focus heavily on technology integration, global delivery capabilities, and working collectively to increase the enterprise value of the firm. So far we've closed four investments. We're well on pace to be a top 100 firm by the end of Q1 of 2026. So things are working very well. And we've also built a very nice management team that's from the industry. Our entire management team is from top 25 CPA firms and really understands the business day to day, including all the headaches, pain points, and successes that CPA firms face.

Danielle Lee (07:23):
Great. And what do you see as the biggest opportunity for Elevate?

Sanjay Agarwal (07:26):
The biggest opportunity is really the biggest obstacle of talent, which is capacity. If you listen to what Alan was mentioning yesterday, there really is a time for all CPA firms to reset and look at the operating model because, believe it or not, today there are actually a lot of solutions out there other than just hiring additional people. And I think when you look at capacity, it's a science. It requires a lot of know-how in order to really effectuate it and get it to where you want it to be. Start from the bottom: look at what the staff are doing, what the admin are doing, what can be spent offshore, what can be licensed with respect to technology, and what can be built with developers that we have on board.

(08:08):
And then you look up a level for the managers and what can be shifted there. I think when you couple AI automation and global delivery, you'll be able to solve a lot of the capacity problems. You won't hear anybody say, "Hey, we can't take on any more work." There should be plenty of capacity to take on work. Like I said, that requires capital, but it also requires know-how. That's part of the reason why we built a management team from the industry; we want to be able to execute this quickly.

Danielle Lee (08:40):
What is your model for working with accounting firms?

Sanjay Agarwal (08:42):
So we don't just acquire firms; we're a partner—a capital and strategic partner. We make investments. I see Charlie Weinstein sitting over there, and everybody thinks that the model that first hit the industry was only for large platforms, but it also works really well for a rollout like Elevate.

(09:02):
We are fully motivated to build enterprise value together and have meaningful equity for all of our partners so that we can go on this journey together, where every excess dollar of EBITDA is beneficial to every partner. We also bring employees into the ownership structure as well, so we take the ESOP model into our overall platform too. Back to the original point, we're focused on value creation. You hear the term value creation across private equity and every industry, but I don't feel like it's mentioned enough in accounting. Our focus is on centralized HR, centralized IT, and getting everybody on the same state-of-the-art tech stack. We bring resource management and global delivery centers to life. Then once you stabilize the business, the next focus is really on growth, client origination, digital marketing, and content strategies. We've created the capacity for you so you can take on that new work and successfully service those clients.

Danielle Lee (10:08):
And do you have a specific type of accounting firm that you're targeting?

Sanjay Agarwal (10:11):
Yes. We partner with high-performing firms that want to grow. We're not necessarily looking to invest in a succession planning exercise, or at least not 100% succession planning. A healthy firm for us has good senior partners, good young partners, a good bench in place, and a desire to aggressively grow the business once it is stabilized. There's a tremendous amount of upside in the roll-over equity that we offer. We look for firms heavy in tax, CAS, and audit, as well as advisory capabilities.

Danielle Lee (10:49):
And why should accounting firms consider working with an organization like yours?

Sanjay Agarwal (10:53):
There are a lot of options out there, and everybody brings success and capital. As Alan said yesterday, cash is no longer king because everybody's bringing cash. But I really think that our firm has it down because of our management and executive team. They've been in the trenches. When you look at overhead issues, administrative issues, and client service issues, we've lived it. It takes a while to build that up, so that's why I think it's a big differentiator for us.

Danielle Lee (11:28):
Thank you so much, Sanjay.

Daniel Hood (11:35):
All right, next up, we've got Noah Beery, who's the head of corporate development at Platform Accounting Group. Noah, thanks for joining us. Tell us a little bit about yourself and the platform.

Noah Beery (11:43):
Sure. It's a little hard to follow that up, so I'll try to do my best and provide some insight into Platform, who we are, and how we operate. Platform is an accounting firm that was founded in 2015 with the acquisition of Ray's father's firm. This is a firm that Ray really grew up inside, learned the business, and understood the operating model, client relationships, and staff interactions. As time went on, he left and did a couple of different things. In 2015, when his dad was starting to think about retirement, Ray came back to help sell the practice. They ran a full process and realized pretty quickly that at that time, there weren't a lot of great opportunities that would take care of the clients and staff and give them a long-term home.

(12:39):
Some potential partners wanted to take the top 20 clients or didn't really need any of the team members, and it didn't fit well with Ray and his father. These are multi-generational client relationships—people that he quite literally grew up with. So in 2015, he decided to purchase his father's practice. Fast forward to today, we've done over 60 acquisitions. We have over 50 offices in 14 states. One of our primary focuses is around preserving and protecting things like white-glove level service and that familial culture, while being able to bring enterprise-level capability and take the back-office and administrative burden off our local firms.

Daniel Hood (13:36):
Obviously you know a lot about firms. What do you think are some of the biggest challenges they face?

Noah Beery (13:43):
We've heard a lot about the challenges facing the industry today, and I don't think what I'm going to say is all that novel; everyone in this room could probably write the script. I think the point of differentiation is how you address those challenges. I think there are four primary challenges. One is talent: how do you attract and retain top talent and the brightest minds, especially in an era where the carrot of becoming a partner has largely been removed from the table. The second is technology: everything you hear and read is about AI and how that's going to disrupt the industry.

(14:29):
We think it is a dramatic change in the way that firms operate. Firms that have fallen behind historically are going to fall behind at a much more accelerated pace as AI continues to roll out. But when you're in the day-to-day of the business, servicing clients and managing your team, how do you find the time to evaluate every new technology tool? That's an area where we can really add value by being plugged into the landscape. The third is change: the industry is at an inflection point in terms of what the future of accounting looks like. Human nature is to resist change, and folks that are burying their heads in the sand are going to find it increasingly difficult.

(15:34):
The last challenge is actually private equity, which is interesting. I don't think private equity at large is a challenge; frankly, it's an opportunity. But much like accounting, there's a long tail of private equity firms, and some of the things we've seen have the potential to damage the reputation of private equity in the industry. It's challenging to find the right partner from an institutional capital standpoint.

Daniel Hood (16:06):
Talk a little bit about your model. What is your approach to working with accounting firms and why should they be interested in working with you?

Noah Beery (16:14):
Our model is a little bit unique. We take a bespoke approach to all the firms we work with. We think many firms are facing similar challenges, but the manner and order in which you address those challenges need to be tailor-made to the situation.

(16:32):
We really focus on preserving a high degree of local autonomy—things like culture, branding, and the client service delivery model—but pairing that with best-in-class technology tools, sophisticated processes, and deep sector expertise. As we think about the future of the firm and the industry, it's about bringing all of those things together with capital, technology, people, and process to ultimately deliver the services that our clients are increasingly demanding in a differentiated approach.

Daniel Hood (17:25):
And in a few seconds left, quick thoughts on how outside investing is going to change the public accounting profession?

Noah Beery (17:31):
You're seeing it already. It's driven a lot of interest in the space. It will continue to be a topic of conversation, but ultimately, outside investment will change the industry for the better. It will help us evolve to meet client needs and drive the next generation of opportunity for our people. Thank you so much.

Danielle Lee (18:03):
I'd like to welcome up Eddie Sidenstricker. He's the VP of Business Development at S3 Partners. Tell us a little bit about your organization.

Eddie Sidenstricker (18:15):
My name is Eddie and I'm VP of business development for S3 Partners. I have a unique background. Previously, I was a co-founder in a healthcare business that took outside capital and ultimately sold to private equity, so I really understand the emotional decision that you guys may be going through. For me, coming to S3 Partners was a breath of fresh air. S3 stands for "Families for Families." That was super important to me. We have several verticals, but I assume you want to talk about accounting. Rehmann is our platform. You heard Jason speak earlier; he's our CEO. We set out to invest in very specific, niche-focused accounting firms.

(19:04):
He started investing early last year. Ed is actually in the audience; he's one of the first partners that came on board. We were strategic about it—it wasn't "let's get as big as we can as fast as we can." It was about partnering with the right groups. Even with that, we've almost reached the 200-million mark in revenue. We're super excited about where we've come and where we're going.

Danielle Lee (19:26):
Great. And what do you see as the biggest opportunity for accounting firms?

Eddie Sidenstricker (19:30):
It's this. You guys are at the PE Summit for a reason. Private equity is in the space for a reason. There's a ton of opportunity. Obviously, the cash is there, the equity piece of being part of a bigger organization, and all the back-office stuff you've heard about over the last few days.

Danielle Lee (19:46):
And on the flip side of that, what do you see as the biggest challenge for accounting firms?

Eddie Sidenstricker (19:51):
It's the same. The opportunity is there to find a partner, but the challenge is finding the right partner. I think people get really tied to a multiple or cash at close. That's great upfront, but two, three, or five years down the road, you may find yourself not quite as happy as you should be. The challenge is finding the right partner, and the way to do it is to be here. Places like this provide an opportunity to have candid conversations. Talk to the partners who joined early and those who joined last week. The folks who put this summit on are some of the most knowledgeable people in the space. Figure out what your core values are and how they align with the right platform.

Danielle Lee (20:39):
Can you talk a little bit more about your model for working with accounting firms?

Eddie Sidenstricker (20:43):
As I said, specialty-focused and top-tier—that's our model. It's not like you have to be 100% in a niche like auto dealerships, but we like to see a portion of the business serving a specific client type. The way we've had such good organic growth is that when firms come on board, we focus on that niche and are able to expand it across the country.

Danielle Lee (21:07):
Great. And what should accounting firms consider when working with an organization like yours?

Eddie Sidenstricker (21:15):
We're not for everybody, but when we find a group that we really like and they like us—where the relationship and core values are aligned—we're going to do everything in our power to make that partnership happen and make it successful.

Danielle Lee (21:30):
Thank you, Eddie.