As the son of a cardiac surgeon and an entrepreneur, it’s no surprise that Patrick Lucchese made a career out of helping family businesses find the heart to grow stronger. It’s in his blood.
The founder and director of the Brazilian firm Urban Advisors helps small businesses go public. He works with families to shepherd their fledgling companies through a successful initial public offering that will help raise capital and expand their company.
The secret, he said, is understanding that small businesses are as much about family as they are about profit. To get them to reach new levels of success, he has to work with both sides of the operation.
“I help people,” he said. “I help entrepreneurs who always dreamed about having a public company. And these entrepreneurs, in a lot of cases, a lot of my clients, they started from zero. They were poor, and they changed their lives working, and now they have five, 10, 15,000 employees. And I believe that when I do an IPO or a merger and acquisition, the companies move to a different level. They get money to invest to hire more people.”
The process always starts out the same, Lucchese said.
“We do an X-ray of the company and then we start to help them,” he said. “Most of the family businesses, they don’t have a council, so we put together a council for them.
“We help to organize the organizational structure of the people, the executives. We help to show each individual line of business how much net revenue it brings to the company. In a lot of businesses, they have 10 different lines of products, but they don’t really know how much profit comes from each line. So we help them in order for them to focus on the future.”
Taking a company into the public sphere opens it up to investor scrutiny, which can be difficult for business owners to comprehend. Many stock owners are more risk-averse than entrepreneurs and demand a level of transparency that can feel uncomfortable.
Lucchese helps owners navigate these new business challenges. But just as important is the personal touch he brings. He builds trust with clients by never forgetting the company’s roots and keeping the future of the entire family in mind.
“When you have a family business, there are often people that are partners in business, and then some family members who are not,” he said. His business excels at helping companies organize so that everyone has a well-defined role and can be taken care of when the company goes public. “Every company has different needs,” says Lucchese. “Some companies don’t like to give dividends to the family, so the family outside the company is poor, while the company is very rich. So we try to demonstrate how other family companies that move into public companies, how they did it, how they organize their different policies, their recompensation packages for the executives and so on.”
Often, Patrick Lucchese continues working with clients after their IPO has been successful. “Since we’re very close to the company, we end up being the trusted adviser of the company. When they have problems, they call us, and we love to help them,” he said. “We like to be very, very close to the owners of the company and to the executives of the company. We like to do a lot of benchmarking because sometimes the owner of the company has never had an outside partner, so giving stock options is something new for them. They are afraid. They don’t understand why you have to do it. We like to make that entrepreneur talk with other entrepreneurs who have experienced the same type of doubt, the same type of insecurity about putting together a stock option plan.”
Lucchese creates closeness because of his history. He’s been on both sides of IPOs. He knows what it’s like to run a family company, and how strange it feels to take a business public.
“During my college years, I had to take over the family business, a real estate investment company,” he said. “Then I decided to get my master’s in engineering at George Washington University. When I finished, I decided to go back to Brazil to still take care of the family business, but also to pursue a very nice opportunity with Rossi Company. After, I believe two years, in Rossi we were able to do our IPO. I helped to put together the business plan, the land bank, and a lot of presentations. It was a great opportunity to see how it changes a company from private to our public company, how it changes in the day-to-day activities, how it changes in the mind of the executives—because it changes a lot.”
After Rossi, Patrick Lucchese took a role with the Brazilian banking giant Grupo Bozano. Once the company was sold to Santander, he founded a subsidiary, Bozano Realty, which allowed him to see another side of the business.
“There, I had the opportunity to understand how a banker thinks about business, which is different from the way an entrepreneur thinks about business,” he said. “A banker, the way they see business, the way they see the opportunities, it’s completely different. So it was fantastic learning.”