Jay Jung is the Founder and Managing Partner of Embarc Advisors, a corporate finance advisory firm based in San Francisco that specializes in M&A, capital raise, outsourced corporate development, and strategic CFO services for startups, SMBs, and middle-market firms. A Wharton School alumnus, Jay’s career includes significant roles in investment banking at Goldman Sachs and at McKinsey & Company as a consultant, where he completed over $50 billion in transactions, including notable sales such as Yahoo, MuleSoft, and SanDisk. Beyond his leadership role, Jay actively engages with startups and middle-market firms as a trusted M&A, capital raise, and growth strategy advisor. His insights and achievements have been featured in major publications like Fortune, Entrepreneur, and Forbes.
Here’s a glimpse of what you’ll learn:
- Jay Jung shares how his parents inspired him to start small businesses as a kid
- How Jay’s early work experience inspired him to start his own advisory firm
- Challenges of starting and growing a remote investment banking firm
- Negotiating deals and handling clients who change their minds
- Jay’s process for analyzing offers in M&A deals
- The emotional and psychological elements of the M&A process
In this episode…
Navigating the complex world of mergers and acquisitions can be a daunting responsibility for small business owners. But what if there was a way to turn this challenge into a thriving opportunity for growth and success?
According to Jay Jung, an expert in transforming small businesses through strategic mergers and acquisitions, the key is to adopt a mindset focused on maximizing value and identifying the right opportunities at the right time. He highlights the importance of understanding the M&A landscape from both a buyer’s and seller’s perspective, enabling businesses to position themselves advantageously in negotiations. By meticulously crafting and narrating the company’s story, Jay illustrates how businesses can attract more compelling offers, ultimately leading to successful and lucrative exits or acquisitions.
In this episode of the Rising Entrepreneurs Podcast, John Corcoran sits down with Jay Jung, Founder and Managing Partner of Embarc Advisors, to explore the transformative power of mergers and acquisitions for small businesses. They discuss Jay’s journey from a childhood entrepreneur to an M&A advisory innovator, the art of enhancing company valuations for strategic exits, and Embarc Advisors’ approach to turning small businesses into M&A success stories.
Resources mentioned in this episode:
- EO San Francisco
- EO Accelerator
- Entrepreneurs’ Organization (EO)
- John Corcoran on LinkedIn
- Rise25
- Jay Jung on LinkedIn
- Embarc Advisors
- Goldman Sachs
- McKinsey & Company
Sponsor for this episode…
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Episode Transcript
Intro 0:03
Welcome to the Rising Entrepreneurs Podcast where we feature top founders and entrepreneurs and their journey. Now let’s get started with the show.
John Corcoran 0:13
Welcome, everyone. John Corcoran here, I am the co host of this show. And you know if you’ve listened to previous episodes that we feature smart CEOs, founders and entrepreneurs from all kinds of different companies on this show every week, and we’re always delighted to be able to share their stories with you. And this episode is brought to you by EO San Francisco. EO San Francisco is part of Entrepreneurs Organization, which is a global peer to peer network of more than 18,000 influential business owners across 200 chapters 60 plus countries and if you are the founder, co founder owner, or controlling shareholder of a company generating over $1 million a year in revenues, and you want to connect with other like minded successful entrepreneurs, eo is for you, you can go to eonetwork.org/sanfrancisco to learn more about EO San Francisco. And of course, this episode also brought to you by my company, Rise25, where we help b2b businesses to get clients referrals and strategic partnerships with done via podcast and content marketing. And my guest here today is Jay Jung. He is the Founder and Managing Partner for Embarc Advisors is an m&a and corporate finance advisory firm based out of San Francisco. And for about six years now, six, seven years now, Jay has and his company, of course, has carved out a niche in the financial advisory landscape by bringing fortune 500 level financial acumen to small and medium size businesses. He’s a graduate of the Wharton School. And he has had stops along the way in his career at Goldman Sachs and McKinsey and Company, and all over the globe, which we’re gonna get to in this story. But first, Jay, pleasure to have you here today. And you got an interesting background, you were born and spent a lot of time both in the United States and in Korea, your parents were studying for a doctorate. And so they came to the United States for that. But we were chatting beforehand, and I love to hear stories about how people were as a kid and entrepreneurial side hustles they had, and you figured out a way to go buy a pizza and sell, you get to eat one or two slices, and then pay for the rest by selling them off by the slice at the Boys and Girls Club. So tell us about that.
Jay Jung 2:20
Yeah, so you know, I would say, even though unit economics is at the crux of everything I do, and, you know, I what I remember was the Boys and Girls Club. And you know, I don’t come from an affluent family. So, and some of the Boys and Girls Club, I would always like to have another quarter to play the arcade games. And on the weekends, my my parents would let me buy a pint of pizza. And the reality is I can’t finish it. And I quickly realize there are a lot of people out there who actually can’t afford to, there was no place to buy pizza at the Boys and Girls Club. So they there was a good amount of demand. And I could sell them off at a pretty reasonable price. But as we all know, a slice of pizza, in aggregate is a lot is a lot more expensive than buying gold pan. So I would end up making my money back and then have some extra change for the play some arcade games.
John Corcoran 3:08
I love that. That’s so great. And and so you say your parents were kind of academics, I guess they were they were getting their doctorate. So no entrepreneurs in the family that you had that you were looking up to? Or what was that like?
Jay Jung 3:21
Well, my dad was an academic, in kind of like molecular biology. And then in the late 90s, he actually left his role in academia to start a biotech startup. So I did have some inspiration from him. Yeah.
John Corcoran 3:38
And another thing you did as a kid is on in Korea, on the weekends, you would go to a wholesale market and buy things and resell them.
Jay Jung 3:46
Yeah, so I loved kind of going to the wholesale market, you can see all kinds of things that you don’t get to see it, kind of your local retail stores, I love going there. And then there was this one incident where I brought something back that you just we didn’t have access to. And bear in mind, this is really long time ago. So it’s not like you just go on eBay and buy something. And my classmates like, Oh, where’d you get that, and they were ankle weights. And we don’t, we’re all young, and we’re trying to be athletic. And so I sold it to him at a decent premium. And then I just went back next time and bought a few more, figuring that there is there’s a demand for that. And I ended up just having a small merchant business in that sense. And one day was ankle weights next next it would be something different like collector’s cards and, and so forth. So I have a little trading business.
John Corcoran 4:34
That’s great. I want to get we’ll get into your story you and you know spending time at McKinsey and Company and working at Goldman Sachs. But looking back on it now, now that you are an entrepreneur for the last six or seven years now. Was there a part of you that kind of knew that you would one day be a business owner? You’d be an entrepreneur? That seems like they were the Inklings, at least from your younger years?
Jay Jung 4:56
Yeah, so you know, actually, I did us tech startup in the early 2000s. Before I started Embarc way before I started Embarc, so I was interning at Bain and Company I hated it. So midway when a high school friend rang me up and said he literally built something in his dorm room and needed someone to help raise capital and then sell it to this to the sales and marketing of it. I joined I quit my internship, I joined, we did that for a few years, raised money from Softbank, some other VCs, lost a lot of money from all the investors returned a little bit back, but ultimately liquidated and I realized, oh, you know what, I have no idea how to run a company. And so who knows how to run a company, supposedly McKinsey does. So I went back to consulting, I joined their corporate finance practice, I learned a ton there. And I found that as a non engineer, m&a is a big way to drive value for a business large and small. So from from McKinsey, I went to business school, and upon graduation, I want to really dive into the whole m&a and capital market side of finance, which is why I joined Goldman in their investment banking division.
John Corcoran 6:06
Hmm. I want to I want to get into kind of the story around what it was like starting Embarc and everything. But first, I know when you were, I think it was when you were working for Goldman was that when you were doing over 300 days of travel a year.
Jay Jung 6:26
It wasn’t McKinsey, because I was at McKinsey Asia corporate finance office was in Hong Kong. So I technically relocated to Hong Kong. But I don’t speak Cantonese. And most of the local clients prefer to speak Cantonese. So I ended up being stabbed everywhere from Singapore to New York, everywhere, but Hong Kong and as a result, I really travelled over 300 days. per year, I was I was, you know, the top tier on multiple airlines, multiple hotel hotel chains. And at some point, I actually got rid of my apartment in Hong Kong, because I just didn’t need one. And I was stay at a hotel even when I was back in Hong Kong.
John Corcoran 7:01
Wow. And do you think back on that period of time fondly? Or was that? Was it burning you out? What? What’s your thought on that period of time in your life?
Jay Jung 7:11
No, it was definitely fun being doing having that life in their mid 20s, I think was was fun. It was interesting to kind of go to different places around the world, you know, all kind of expense paid. But coming out of the business school, as I was kind of thinking about settling down and building a family. I didn’t think it was sustainable. And I know they travel less than the US. But you know, I think three years was sufficient for that for that.
John Corcoran 7:36
Yeah. Yeah. And, you know, I’ve heard from some people saying that Goldman can be a great training and education. But then other people say that sometimes it’s just, it’s, it’s a difficult place to work, because it’s so competitive. And there’s very intelligent people there working long hours. What was that? You know, was that a similar experience to you?
Jay Jung 7:58
Yeah, I would say all that’s true. I think it’s a, it’s a great place to learn and get trained, I wouldn’t be doing what I’m doing right now, if I didn’t spend those years at Goldman, I think is very competitive and tough. But if you think about it, so so is everything else, right? If you want to become like a professional athlete, if you want to become like the best into like a SEAL Team Six in the military, or, you know, if you want to become the best lawyer, I think everything’s competitive, and you kind of have to put in that effort to be at the top tier. And I think those two go hand in hand.
John Corcoran 8:31
What drew you at what point did you decide that, you know, I want to go out, I want to start my own advisory firm, and we want to be able to, you know, serve the smaller companies. I imagine many of those companies, you know, are not able to take advantage of you know, working with a, you know, a firm like a Goldman, which I imagine has much larger clientele generally.
Jay Jung 8:53
Yeah, so when I was a Goldman, last few years on my tenure there, I was working on great deals, I was working on the Yahoo deal to Verizon, I was I sold mule soft to sand this, but I also carved out about 10 50% of my time to meet startups. And back then, you know, a lot of these natural language processing startups chatbots blockchain startups were really hot, I got to meet a ton of them. You know, having that kind of Goldman name card gives you access.
John Corcoran 9:21
And by the way, by the way, any of those are they household names now that you talked to when they were tiny?
Jay Jung 9:29
I’d say most of them actually got acquired were early on even before we got to the current current kind of like large language model model boom. But yeah, so you know, I enjoy talking to those founders. And but at Goldman people will kind of have joke like, why why do you do that? Why are you spending time here? We’re not going to ever make any money there and that’s not what’s gonna get you promoted. And it was one of those things that kind of got me thinking well, maybe maybe I do something that I really do enjoy. Because it you know, it is a tough environment. It is a grind. And that kind of led me to think maybe there’s a opportunity to advise startups, leveraging the toolkit that I’ve learned that last, you know, decade plus working at some great rate firms. And that’s kind of what led to what eventually became Embarc.
John Corcoran 10:19
Yeah. And was the idea from the beginning that we would switch from a success fee model to an hourly fee model.
Jay Jung 10:27
In the beginning, I tried all different business models. I tried a project based model I did, I did look at some contingency models. I didn’t really like the hourly model, because I always thought, well, I’ve seen lawyers work hourly. And I always thought, Well, what keeps me from working slowly? What keeps me from just building more hours? Yeah. People would know anyway, long story short, after experimenting with a variety of different models. You know, lawyers are very smart. There’s a reason they maybe you were a lawyer before, but I am. Yeah. So yeah, there’s a reason those smart lawyers chose to build hourly. And so after a lot of experiment of reinventing the wheel, I went back to the tried and true model of billing hourly.
John Corcoran 11:10
Yeah, of course, it doesn’t always work out in your favor. Well, it depends on how you define favor, right. But I know that you had some clients, where had you had a success, the model, you would have walked away with a lot more money in your pockets, but talk a little bit about that, those types of results where that has happened?
Jay Jung 11:30
Yeah, you know, again, it kind of goes back to unit economics, I think if you bill hourly, you might not have like a huge home run like an investment bank does. But I think you can build a more consistent and stable business. And the big difference is, if you do only on contingency, you don’t know where you’re going to make a revenue. So that means a typical investment banker has to chase 1020 deals, and when one hits, that’s going to pay for the quarter or the half year to hit that pace of the year, but you don’t know where you’re gonna get your revenue. So you got to work on a whole bunch of deals. For us, it allows us to work on a handful of opportunities really give our best on those opportunities. Because we know we’re gonna get paid. So it’s a much more stable business. It’s the I would say like the tech analogy is instead of like selling big ERP projects, and mainframe computers, we’re gonna go for a SaaS model where, you know, it’s more consistent building consistent, consistent service, and not shooting for homeruns. And I think the flip side of that is also it helps with a team, the team doesn’t have to work at 100 hours per week, we have a much more balanced workload and consistent, that’s predictable. So for those reasons, I thought the hourly model worked better for the middle market and startups.
John Corcoran 12:52
What were some of the challenges for you starting it up in the early years of the business, you know, going from working at Goldman working at McKinsey to now running your own company?
Jay Jung 13:03
Yeah, I think, needless to say, business development and sales was hard. But I think that’s a problem that every entrepreneur faces, I say, aside from that obvious one, hiring was very hard because, you know, finance people in general, where we’re very risk averse. And people generally want to work at bigger investment banks, public companies, fortune 500 companies. And it’s very hard to hire for, you know, what wasn’t originally a one person shop. And then we were a remote even before COVID. So when I interview and say, well, we don’t have an office role remote, and you’re going to be employee number two, or employee number three, the look on their face was more like, Is this a real company? It was very hard to hire. In the beginning, and not not to mention we can’t pay like a traditional investment bank, or whatever.
John Corcoran 14:00
So was it harder? It sounds like it was harder to recruit people to come work for you than it was to get clients like did the clients have any hang ups about the fact that you were a remote advisory firm?
Jay Jung 14:15
I think in the beginning, there was a little bit of reticence, and some people would ask like oh, are you going to be on site for like at least two or three days a week and we would just say that that’s not what we do. But given that we work with smaller businesses, there was little bit more, more flexibility there.
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