Most founders assume an exit only happens after years of preparation, bankers, and a formal sale process. This episode challenges that assumption. Darren Smith built his firm by going deep with a strategic partner, never intending to sell, until that partner decided they needed what he had built. His story reframes how exits actually happen in boutique professional services and why alignment, trust, and long-term value creation often matter more than perfect financial optics.
What you’ll get from this session:
• How deep partnerships can quietly create acquisition optionality
• Why some exits are driven by strategic value, not EBITDA multiples
• How to evaluate an unexpected acquisition offer without rushing or regret
Why it matters:
• Many founders over-optimize for a hypothetical buyer instead of real partners
• Strategic exits often reward positioning and relevance more than timing
• Understanding this path expands how founders think about building toward an exit
TRANSCRIPT
Greg Alexander: Hey everybody, this is Greg Alexander. You’re listening to the Pro Serv Podcast, brought to you by Collective 54. If you’re new to this show, this show is for founders of boutique professional services firms. And on this show, we aim to do 3 things. We want to help you make more money, make scaling easier, and make an exit achievable.
And on that last one, making an exit achievable, let me introduce this week’s guest, who just exited his firm. Proof point that exits are achievable for a boutique pro surf firm. His name is Darren Smith. He formally ran Smith Consulting Group, which is now part of the great corporation, Fiserv. And on today’s call, we’re gonna hear from Darren about his exit story, what he learned, and what we might take away from that. So, Darren, it’s good to see you again. Thank you for making the time for us. For those that have yet to meet you, would you please provide a formal introduction?
Darren Smith: Of course, and great to see you as well, Greg. So, my name is Darren Smith, I should say, I joined Collective 54 about a year and a half ago. Was thrilled to be part of an organization that helped me sharpen and tune my organization as a consulting group. So it was exactly what I needed. My company has been in business, or was in business, for about… 16 and a half years, scaled greatly in the last 5 years, almost quadrupled in size. Due to a number of different things, which perhaps we’ll talk about. And the fun part is I was acquired by the organization that I worked for 20 years ago as a partner of theirs, so I think we, we proved out true value in us as a consulting entity. But excited to be part of this podcast, Greg.
Greg Alexander: Yeah, so let’s talk about this, because your exit is unique in that sense, so let me just tell the audience what happened. So, Darren sold his business to one of his partners. Fiserv. Darren’s company built a practice on implementing Fiserv’s technology. And… Fiserv came to him and said, hey. We would like to acquire you. This is a very different type of exit. Different in the sense of, you know, Darren did not put his business up for sale, he didn’t hire an investment banking firm and run a process. It was a strategic partner approaching him with an opportunity. And… that should happen more often, and I think it does happen more often… more often, excuse me. And I think how you handle that conversation is probably the first place to start. So, Darren, I’d love to hear, kind of, how it came together, like. There you were, operating with your partner. You know, in the trenches, delivering for clients. And then all of a sudden, this conversation comes out of left field, like. What triggered it, and then how did you process it?
Darren Smith: So, maybe a little bit of history of Fiserv and SCG as a relationship. We started doing consulting, obviously, 16 and a half years ago, but as we continued to build our competency, our practices, and winning quite a bit of business, we recognized the importance of our partnership with Fiserv. We were building it on the backbone of their technology, their solutions. Having the history of having been a leader with Fiserv was of value to customers as they were making a journey into, you know, Pfizer products and solutions for their bank or their credit union.
As I committed our organization to the partnership with Fiserv, we started getting highly recognized, because we were bringing value to their customers in more of a consultative form, and one of our big messages, you know, those that are providing services from Fiserv are wearing orange. When we’re in there delivering Fiserv, we’re wearing the client’s jersey, right? We’re doing work for them in a consulting role.
They had a regime change, a new CEO came in. One moved out, one came in. It was earlier this year. He was doing his road shows out to clients to basically meet them, say hello, welcome, you know, be welcomed into the new Feiser family, but with a completely different view and approach on customer service, customer satisfaction. It’s… let’s shift from product to service. And as he talked with these customers, I think I was just very fortunate and ironic that, you know, 50%, maybe plus, of the customers that he ran into for the first 3 or 4 months all said, you got a great partner with SCG, we had a great experience with them. So he looked at his leadership and said. Look, this is our vision, to really grow consulting services and to create more value in the way that customers look at Fiserv solutions, what… why don’t we go get them?
Greg Alexander: So it was a pursuit of us.
Darren Smith: And one of the things that I had to do was really understand the leadership, the new regime, the new CEO, and it turns out he’s awesome. He is everything that he’s talked about, and we are positioned to be… and deliver exactly what he wants out of this, so… it’s exciting.
Greg Alexander: Yeah. Okay, so I want to double-click on that. So, I remember when you and I first met, we were introduced by our mutual friend, Michael Ivey, and we played golf together while I was down in Florida. And at that time, you weren’t thinking about selling your firm. You were growing it, you were enjoying what you were doing, clients were happy, employees were happy, you were making a good living. You knew eventually you probably would, but it wasn’t like a tomorrow thing. So, all of a sudden, this call comes out of the blue, and they say, hey, would you be interested in selling your firm to us? How did you process that, and why did you change your timeline? And why did you just say no? Instead you said, yes, like, tell me about that thought process.
Darren Smith: Well, it’s an interesting question, and it was one that… was challenging for me, because I… you know, for… for me to be part of the Collective 54 group, and to recognize that it’s to… it’s to recognize back-end processes, sharpening up from a financial perspective, creating higher value for larger margins, right? Increase your EBITDA, but… the prescriptiveness of learning and everything that I was getting out of Collective 54, and now, all of a sudden, the value is being recognized for something completely different than financial. Right? So, all of the math that you and I had been doing together, and all the relationships that I had with Joe and Mike and everyone else, and being part of the group, and thinking about, okay, where do we tune? What do we focus on? How do we focus on ourselves, and… it now wasn’t part of the math, and I think you recall our first conversations is well, then, how the heck do we… through some formula, create the price of value. Right? And I still remember, you know, even our initial conversations, which is stick to the model. When they made their first offer, you know, we can go up and down, but stay in the structure, stay in the way that they’re presenting, the way that they want to buy you, and that’s exactly what we did.
So, it was relearning everything that you and I had been working on together, and we landed it. But it’s ironic that, I guess, the passion and the drive to keep doing bigger and better things as a consulting group, and as a boutique consulting organization, it wasn’t 100% of the value of everything we’ve been talking about, but really the drive that I got out of being part of Collective 54 to say, this is why I’m doing it. It might be a different driver. But this is why I’m doing it, and it has put Laura and I in a spectacular place. I could retire tomorrow. But they bought me. Which is kind of exciting in itself.
Greg Alexander: Yeah, so for members that are listening to this, let me explain a little bit. So normally, boutique professional services firms are valued, the price for them is determined on a multiple of EBITDA. That was not the case here for Darren. And the learning is, is there’s many ways to value a firm. The value of Smith Consulting Group to Fiserv was what the potential of the combination would look like. How much value could be created. And if Fiserv owned SEG, and brought SEG into all of their clients, what is the totality of that value? And it was many things. Yes, they could grow Darren’s firm just by access and resources, but also, Fiserv had some interest in this, and that, you know, they wanted people to continue to use their software and upgrade and renew and all those kinds of things. And that value was part of the equation as well.
And the lesson here is, is that when you’re selling to a large strategic, and Fiserv is a member of the S&P 500, they’re the definition of a large strategic, broaden your perspective on what the value is, and get the conversation focused around 1 plus 1 equals 5. It’s, let’s look at the future, not the past. Okay, so with that, now… now you’re going through an exit for the first time. So you’ve decided to engage in the dialogue, and you’re like, holy cow, like, what happens? And I was very fortunate to be on your hip during that process, and you had to do everything from hire an attorney, and you know, talk to a wealth management firm, and get your accounting together, and etc, etc. What was that like for you, going through that for the first time?
Darren Smith: I’m very fortunate to have a team of individuals that were very, very strong in a lot of the things that needed to get done. And, you know, obviously another big part of this is that your network of people is just power. Right, so I… I think I… you know, I brought on two of your… two of your best. I love Joe. So, but as we… as we started to go through it, what I started to hear was that, most organizations aren’t as ready to do this kind of stuff. Fiserv has been an organization that’s grown through acquisitions. They’ve bought a lot of companies. As we were providing due diligence reports, responding in the way out of your council on how to respond to a bid or an offer, but then all the legal things and the contractual things, we were more ready than most. Fiserv continued to say, you guys are making this really easy, and you know I have a Rusty, right? Rusty, as my controller, is just a crazy level of detail, so… As you know, it… it was not a really hard… aggressive, tough lift.
The other thing that I would say is, as we were looking at what Viserve was trying to accomplish is that it was a date-driven transaction. They had their annual conference in the beginning of October. We started having this conversation in August. And it… the deal had to get done by October, so they could put me on a stage in Vegas in front of 5,000 customers, and say, here’s our commitment to new customer service, let me welcome SCG and all these years of experience. And… so it drove us through… a very aggressive decision-making that in some cases, leaned in our favor. Might have been negotiated a little bit more, probably would spend a little bit more time on certain items than what we actually did. So, call it utopia.
Greg Alexander: Yeah.
Darren Smith: And the partnership that we’ve got right now with them, and I’m saying it again, right? It’s… we are doing exactly what the intent was. We’re growing, we’re showing value to customers, but… it was a… it was a great exercise, but again, very unique in… in kind of this whole M&A space. It was pushed with a date. And it… it made us move through things, you know, not quite as methodically as we might see, historically. So…
Greg Alexander: Again, lucky us. You know, this is one of the uniquenesses of your story. Sometimes when I talk to members of Collective, they get nervous about going through due diligence, rightfully so. When you sell to one of your top partners, and when you sell to a firm that you worked for years ago, due diligence is a lot easier. Why? They already know the clients. It’s not like they’re checking out whether you’re legit. I mean, the clients were telling the new CEO, hey, you know, SEG brought us a ton of value. Like, the due diligence is just so much easier, you know, when that happens.
You mentioned, excuse me, you mentioned Joseph Kai, your attorney, who’s a member of Collective 54 as well. And I can remember him telling me that this deal is easier than most, for that reason. Those are all the positives of selling to a strategic partner. Are there any negatives that you would tell people to watch out for?
Darren Smith: Wow, I’m not sure that I’d really even thought about that. I guess… I guess the first thing, and I… and I don’t say… I don’t say this as a negative, right? Let’s… let’s look at this as… an owner and or partner within an organization that has the vision of getting to the point where they can exit, right? there’s a picture in everyone’s mind as to what does that mean, right? It’s an endpoint and the beginning of a new life journey to retire, to take a backseat, to… maybe you’re helping in the transition and assimilation of the organization. That was never the vision, right?
What I did was I took an organization that I built for 16 years. When I was working for this organization, for Pfizer 20 years ago, I was head of development and architecture, so I was on the tech side. I wasn’t running a business, right? So, I would just say… have the conversations with Greg and the other individuals that have done this before. Understand what your goals are to get out of it. Because once you do the transaction, you’re in and you have to just understand what that means. So… and I would say I’m realizing a lot more of what it takes to now run the business, and now there are, you know, month-end targets and quarter-end targets and year-end targets, so I’m having to re-gear my leadership to say, you know, it is a numbers game now. So… that’s the only recommendation that I would make, is that there’s a vision in their mind as to what an exit means. Think it all the way through. Think it all the way through.
Greg Alexander: He’s ill. Let me ask you a personal question, and this will be my last question, and we’ll save the rest of this for the role model session that you’ll have with us, which is a private member Q&A for those that are new to this. Obviously, the decision to sell your business is a big one. And, it affects your life in totality.
So, I’ll never forget you and I having a conversation, I believe it was a late Friday afternoon. In the middle of the summer. You were in Cape Cod with your wife. I was in Jackson Hole with my wife, and it was like… to put up a shut-up type conversation. It was close to the 11th hour, and it was decision time. Am I doing this, or am I not doing this? How did you make that decision?
Darren Smith: There’s, well, let me give you just a little bit of context, and this is hard to answer as a short, there’s no cliff note answer to this, but… I built my organization because we provided great service, and because I built a community of people, a culture of people. And that was very, very important. And, you know, it was… it was probably 9, 10 years ago that I even decided to turn it into a business, because I was still a senior consultant carrying a bag and doing all of that work.
One of the biggest decisions, ironically, wasn’t about the fact that it was going to put Laura and I in a position, you know, to retire and be secure and not have to think about money, you know, going forward. It was about the people, and the family that I had built, and all of the individuals, and… the fact that many of them used to be with Fiserv, so there was going to have to be a position by me to say. I’ve completely thought this through. This is the right thing for us. And 100% of the people came with me. And 100% of them would say, wow, this was a great decision. But prior to it occurring, it was going back to Fiserv. And the amount of… angst that it was going to create across the family that I had built, of a lot of people. That was the biggest part of the decision for me. Was, I gotta hold it together. I have to make sure they… recognize, understand, and see what I see.
Having the phone call with Mike Lyons, the new CEO, on a Saturday, both of us in a ball cap, him having come off the basketball court with his daughters. 20 minutes of the conversation being… talking about family and the things we do on Saturdays. And in 21 years, that was the second conversation I’ve ever had with a CEO at Fiserv. So, that was the biggest part for me, was that the people that I had built, they trusted me. they knew they were part of the SCG family, what I used to call they get the SCG tattoo. That was the biggest decision for me, and I think… and I think we were hugely successful. And the after effect is Laura and I now get to look at our account and go.
Yeah. Well, listen, it’s not a surprise to me that 100% of the people followed you.
Greg Alexander: You are a great leader, and that is a… an example, or a proof point. That they all followed you, you know, on the new journey. Building a firm, as you did, is a very personal thing. And relationships become much more than work relationships. So it’s a real testament to you that, at the end of the day, because the question I asked you was, you know, how did you ultimately decide the way that you process this, beyond the money, which I know is nice, but you process this through the lens of, you know, what happens to my team. what will life be like for them post-sale? And, I know it’s early, and you guys are still going through the integration process, but 100% is 100%. the facts speak for themselves.
So, on behalf of all your peers in Collective 54, let me just publicly congratulate you. I have privately congratulated you several times, but we’re so happy for you and for your team, and you know, good things happen to good people, and… and I’m sure this is gonna be a big success for everybody, so congrats, my man.
Darren Smith: I will tell you, just to, you’ve always been there for me, and you know, in my home office, I still have your white card that sits right under my monitor, and the first thing you ever said to me was, to scale your firm, scale your
And that is something that I have to continue to do every single day. Even though the transaction is done. You’re still sitting right in front of me, and I know everything that I’ve learned from you is applicable. Ongoing. Life and business. So…
Greg Alexander: Awesome. Well, thank you very much. So, we’re going to conclude it here and save the rest for the private Q&A. So, just a couple of calls to action for those that are listening. So, if you’re a member and you want to hear more of Darren’s story, look for the meeting invitation. You will have a private Q&A with him, and you can ask him all the intimate details that you want to ask him that would be more appropriate in a private setting. And if you’re not a member, and after listening to this, you think you might want to be, go to Collective54.com and fill out a form, and one of our people will get in contact with you. But until next time, I thank you for working me into your busy day, and for listening to Darren and I, and I wish you the best of success as you try to grow, scale, and someday exit your firm.