Serent Snapshot: Garret Gray, Founder and CEO of Next Gear Solutions

Serent Snapshot: Garret Gray, Founder and CEO of Next Gear Solutions

Garret's Story on Creating Value Through M&A

June 26, 2020

Serent Snapshot: Garret Gray, Founder and CEO of Next Gear Solutions


Meet Garret Gray, Founder and CEO of Next Gear Solutions. We sat down with him to learn more about how he founded the leading workflow management system for restoration contractors. More recently, Next Gear has also expanded to also help streamline billing between contractors and insurance companies.

“I was inspired to start this business after joining a restoration company in Los Angeles. One day, I walked into the back office and found paper everywhere. I thought, ‘There has to be a better way to do this.’ So, I decided to figure it out.”

When Garret founded the company in 2009, he had no funding partners or investors. He bootstrapped by starting a consulting practice that eventually earned enough revenue to fund his software infrastructure.

“While the process of bootstrapping was fun, it was also really difficult because we didn’t have any help along the way. As we got bigger, we started to realize that we were going to need help to get where we wanted to go. And that’s when we started considering bringing on a private equity partner.”

Taking the Next Step to Scale

Garret wasn’t sure about private equity going into his search for a partner. “I resisted private equity for the longest time. When I got to the point where I felt like we needed it, I was pretty nervous. I had heard horror stories from friends that started businesses and got involved with private equity.”

“While I was going through the process of considering different private equity partners, I found they talk about a lot of the same things: their operating or growth teams, their culture, etc. But it isn’t until you spend more time with them that they start to become different.”

Across a nine-month courtship, Garret and the Serent Capital team met together to see if their values and style were a match for an ongoing partnership. “One thing I noticed about Serent is that as terms came up and things got complicated, they would slow down and work through it with me. But when we talked to other private equity companies, they’d speed up. I always thought that was really unique because they were willing to move at my pace, which not everyone is willing to do.”

“Once I signed with Serent, I kept waiting for them to show their true colors. But after three and a half years, even though we’ve gone through ups and downs, they’ve stayed completely true to who they said they were. That’s important to a founder. You’re transferring your business—really your baby—into somebody else’s hands in some ways.”

“For us, M&A has been a huge value creator. We’ve been able to grow really fast and create even more value for Next Gear and its customers. M&A is a big lever that we’ve used to do that.”

How Has This Partnership Benefitted Next Gear?

Building a Dynamic M&A Roadmap

When Serent Capital first closed the deal with Next Gear, the Serent team started to present several promising opportunities for mergers and acquisitions (M&A). At first, Garret wasn’t over the moon. “I think I replied, ‘I don’t want to do any M&A, I just want to earn the business.’ It took some time for them to bring me along. They were really gentle about that process. They let me come to a conclusion on my own.”

To date, Next Gear Solutions has executed five acquisitions. “For us, M&A has been a huge value creator. We’ve been able to grow really fast and create even more value for Next Gear and its customers. M&A is a big lever that we’ve used to do that.”

Garret has started to see the utility of having a team behind the scenes to help facilitate M&A. “There’s so much work involved. What’s great about it from a management team perspective, is if you have Serent team on your side, they do most of the heavy lifting for you. You’re able to continue to run the business and figure out how you want to integrate the new companies while they handle the rest. We’ve done five acquisitions in three years, which would be almost impossible to do if we didn’t have that team.”

Now Garret has access to an acquisition roadmap that is continually updated with new potential targets in the market. “We had an initial set of M&A targets, but we also have a new set that’s cropped up over the last couple of years as well. They continuously survey the territory, look at what options are out there for us, and find what’s most strategic for the type of growth that we need to achieve. They not only help us keep those relationships warm, but also think through how to leverage them. This allows the management team to execute on the day-to-day while we build relationships and figure out how to integrate the companies.”


On-Demand Support for Management Teams

Garret was skeptical of the Growth Team until he started to see Serent Capital’s approach to integrating them into Next Gear. “They’re available when we want to pull them in. One of the biggest things a CEO worries about is: ‘Is this team going to be forced on us?’ At Serent, that’s not the case. It’s definitely a value driver that you get to choose to lever. It’s a tool at your disposal.”

Garret doesn’t have to worry about consulting fees in order to access the full backing of the Growth Team. “What’s potentially unique, at least when I’ve talked to other private equity companies in my evaluation process, is that Serent Capital doesn’t charge any consulting fees for the Growth Team, which is great for us.”


Building an Industry-Specific Board & Executive Team

While Serent Capital invests in several high-growth service and technology sectors, our focus is to add maximum value and connections within those niche verticals. “If you look at the board that they were able to help me build, I would never have been able to get such amazing leaders in the workflow management/insurance tech space as we have.”

“If you look at Serent Capital’s ability to have pattern recognition in our space—bringing in not only board members but also a lot of my executive team—it’s all from people in their network. It’s been an amazing transformation for us: that talent and knowledge base we’ve been able to acquire that helps us make really good decisions.”

“Regardless of what kind of deal you strike…you’re giving up some level of control. It’s important that you trust who you give it to. Three and half years in, I still trust them and there’s no shoe that’s been dropped.”


Unlocking Growth Through Collaboration 

“Regardless of what kind of deal you strike, whether it’s minority or majority, you’re giving up some level of control. It’s important that you trust who you give it to. Three and half years in, I still trust them and there’s no shoe that’s been dropped.”

“The relationship with Serent is really personal to me. It’s an emotional thing when you’re trying to sell your business whether to someone you’re going to continue to work with or completely exiting. Serent has been really true to their values and how they’ve dealt with me and my business. It’s been a phenomenal partnership for me.”

Serent Capital invests in growing businesses that have developed compelling solutions that address their customers' needs. As those businesses grow and evolve, the opportunities and challenges that they face change with them. Principals at Serent Capital have firsthand experience at capturing those opportunities and navigating these difficulties through their experiences as CEOs, strategic advisors, and board members to successful growing businesses. By bringing its expertise and capital to bear, Serent seeks to help growing businesses thrive. Learn more about our portfolio companies.


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