#83 How Soria Hay Built a 27-Year Independent Investment Bank (Bravura) From a Single Bonus

TRANSCRIPT: THE bizval PODCAST
Guest: Soria Hay, Head of Corporate Finance and Co-Founder – Bravura
Host: Graham Stephen, CEO and Co-Founder, bizval
LinkedIn: https://www.linkedin.com/in/soria-hay-8228/
Company: https://bravura.net

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[00:00:13] Graham Stephen: Welcome back to the bizval Podcast. I’m Graham Stephen, the CEO and co-founder of bizval, and our mission is simple. We want to enable and empower every business owner to know what their business is worth, and what they can do to make it worth more tomorrow.

[00:00:29] Graham Stephen: My guest today is a remarkable woman. She started Bravura in 1999, at the tender age of 29, and she used her first ever corporate bonus as the founding capital. Now, 26 years on, Bravura is one of the leading independent investment banks in Southern Africa, with offices across three countries, a wall full of Best Independent Advisor awards. She is a qualified lawyer, an LSE alumna, and a Beacon of Africa Role Model winner. Soria, welcome to the show.

[00:01:06] Soria Hay: Hi, Graham, thank you so much, and it is a pleasure to be here.

[00:01:10] Graham Stephen: Fantastic. Well, Soria, as you know, our podcasts are very conversational, and we always like to start at the beginning. Our audience is from South Africa to London to New York. So for those who do not know, Soria started a journey in a small town called Empangeni, which is in KwaZulu-Natal in South Africa. That journey took her through to Pretoria Law School, where she funded her studies through a variety of jobs, starting as a teller at Pick and Pay, working at a vet, and various other things along the way. Looking back at those early experiences, the hard work, the entrepreneurship, talk to us a little bit about that background and how it shaped who you are today, Soria.

[00:02:02] Soria Hay: I was born in Empangeni, but we lived in Mthuba, which did not have a hospital. My dad was a church minister, still is actually a church minister. So from Mthuba, we went literally where the Spirit led him, as he always said. From there, we went to Middelburg, which is just outside of Middelburg, then to Pretoria, and then I grew up in Rustenburg in my high school years, and then studied at Pretoria, as you say. I think what that really assisted with was adaptability. Changing and moving many times in my life, meeting new people, not being scared of new situations. So yes, that is, in short, how I grew up.

[00:02:53] Graham Stephen: Yeah, I mean, we see it with a lot of people, having that adaptability, that resilience, and also just taking what life throws at you and taking those opportunities. I want to talk a little bit about those early days, you know, as a teller in Pick and Pay. We often talk to owners, and those that started at a grassroots level often have a real appreciation for every job in the value chain. What was that like?

[00:03:28] Soria Hay: Yeah, so I studied LLB, that was 5 years, so many years to be funded. My dad signed surety for me so I could get through that. But I was very afraid of debt in those days, so I worked during my university years. I actually worked at the commercial department as a junior clerk. And then every holiday I worked. From De Bruyn Shoe Store, for those who can still remember them, to United Building Society, to Pick and Pay on the till. And again, I think what it did was, number one, give me appreciation for hard work and how hard people really work to make a living. But number two, just seeing different businesses, different circumstances, and most especially that money does not grow on trees. You need to work hard and really aim for where you want to get to.

[00:04:31] Graham Stephen: Absolutely. I think nowadays people think all you have to do is become a YouTube star and the money falls off the trees. But I think it was a different era we grew up in, and you had to really work hard to get anywhere. Okay, so you did all of that, and you did not go straight into corporate finance. You qualified as a lawyer. You did your articles, but how did you go from that, ending up at Mettle in the late 90s doing corporate finance? And how did you discover that this was what you were really passionate about?

[00:05:12] Soria Hay: So what frustrated me about law was it felt very reactive. Contracts, you wrote up the deals that other people had already agreed. Litigation, you cleaned up the fights they had already entered into. And that was really a grudge purchase. I wanted to be where the decisions were made and where I felt the action happened. And I must say, at the time I was not entirely sure what corporate finance was, but I knew that even if I achieved the most senior position in the law firm I was in, I was not going to be happy. So I applied for a corporate finance position at Mettle, which was then a group of entrepreneurs two years out of what was then Andersen, and they had started this business. I was fortunate enough for them to give me a job.

[00:06:05] Graham Stephen: You know, sometimes it is a huge privilege to be part of a startup business, because you are doing a little bit of everything and learning on the fly. You obviously had that legal background in terms of process and discipline, but it must have been wild in those early days, right? Probably doing everything from drafting deals through to carrying the tea.

[00:06:28] Soria Hay: Yeah, and I think that was one of the things that really allowed me to grow very fast. Mettle was quite an unstructured, very entrepreneurial environment, so you really could do anything literally that you liked, which is unheard of for somebody with a year or two of experience. But that allowed me to really feel the sky was the limit, and I felt like a fish in the water from day one. I loved the deals, loved the clients, loved the chase of the opportunities, and really loved the commercial part of it, which was very different to where I came from.

[00:07:07] Graham Stephen: 100%. Okay, so you had been there a couple of years, and in 1999, you got your first corporate bonus. You made the bold decision to basically start your own thing and invest in building what is now known as Bravura. At the time, what was your thought process? You had moved out of law and into corporate finance. And now, at 29 years old, you decided to do this on your own. Talk us through that decision, and what was the conversation going on in your head at the time, Soria.

[00:07:57] Soria Hay: So, Graham, I always wondered if I did something for myself, or had my own business, what would I do? And I came to the conclusion that, number one, I must do what I am good at, and number two, I must do what I really love. And fortunately, corporate finance was both of those things for me. I loved the corporate finance itself, and I was fortunate enough at the time to already have two clients who said, listen, if you go on your own, you can still do our work. They were quite big names. And one of those clients even sublet my first office for me at 6,000 rand a month. I remember thinking it was actually quite expensive. But I think it was a huge pull factor. And I always say to people, if you know where your first cash will come from, and who your first client will be, then you have a business plan. Then you can start the business.

[00:09:01] Graham Stephen: Yeah, I mean, that is so true. I think also a lot of people want to start a business and they do not have that. So you had already de-risked to an extent. And I think a lot of people in corporate think they have the safety of a big organisation, but the reality is you are three months away from a retrenchment if things change. So if you have runway for three months or six months, an idea, and a client, it is no more risky in some ways than sticking it out in corporate.

[00:09:33] Graham Stephen: Before we go further, where did the name Bravura come from when you started? What is the idea behind that?

[00:09:42] Soria Hay: So I love music, and I played lots of musical instruments when I grew up. The piano, the church organ, the guitar. I sang in many different choirs. Until today I sing in the Joburg Symphony Choir. And I wanted a name that symbolises what I really strived for every day, which was doing my absolute best, having huge technical excellence in the execution of what I do, and also having a bit of chutzpah, that daring. When I used the agency and they came up with a name, they said you would use the word bravura to describe an aria that was just beautifully sung, or a piece of music that has been played with great daring and great brilliance. And I loved it. I thought, this is exactly what I want to achieve. And until today, for me, Bravura is such a fitting name for our organisation. We are now 60 people, but if you ask anybody in Bravura, they will tell you our first value that we strive for is to achieve technical excellence.

[00:10:50] Graham Stephen: It is excellence and brilliance, you know, so it is aspirational. And I guess when you are dealing with clients in the kind of business you do, you want to be excellent. Nobody wants their advisor to be mediocre. You want the best of the best, and it starts with a name and with the mission you set.

[00:11:10] Soria Hay: I just want to add to that. It is also important to know in the market who your competition is. And if your competition are big brand names with business cards and being very well known, then the only reason people will hire you is because you bring something else. And I think we always say we bring that technical excellence and the personal service. And for those things, people would hire Bravura for work which many of the banks would love to do.

[00:11:47] Graham Stephen: Yeah, absolutely. You have to find your niche, what makes you different. You cannot just tick the box. I am going to go back to those early days now. For our international listeners, they might not appreciate that in the late 90s in Pretoria, in the legal and finance worlds, there was a very specific culture. Partners were addressed as Meneer, which means Mr in Afrikaans. It was a very strong, older, paternalistic culture. You walk into the room in a corporate finance and investment banking house, which was male-dominated, as a young female bringing something different. What was it actually like to navigate at the time? Was it something you consciously thought about, or was it something you took in your stride?

[00:12:58] Soria Hay: Graham, it is very interesting. I found that culture almost like shackles. But Johannesburg is very different. I think in Joburg, most of the people are very open. It is not hierarchical, it is flat structures. If you have interesting ideas to discuss with people, they are always happy to listen to you. I think here and there, you will have some seasoned businessmen who would think you are the secretary and have just brought the coffee. But they see the mistake very quickly and apologise, and we all laugh and move on. For me, that is one of the wonderful things about Johannesburg specifically, but South Africa too. It is not old school. People are willing to see people with ideas, who are entrepreneurial and want to add value. So Joburg suited me perfectly.

[00:14:08] Soria Hay: And I think the other thing in Johannesburg is, if you do not think of yourself as a woman in a specific scenario, very quickly other people also do not see you as one. Unfortunately, in many meetings, I look around the table and there will be ten people, and there will be one or two, maybe maximum three women. And I think it is partly the industry, but there is also a part where women think you cannot have it all. That you cannot have a stimulating, very interesting, very challenging and dynamic career and a healthy family life, be a good mother, and so forth. And I do not believe that. I believe you can have it all. You must just be very structured and very disciplined.

[00:15:06] Graham Stephen: Yeah, and I think, as I say, it is easy to look back now 25 years later. But I think you are right. Joburg had a very progressive culture, and at the end of the day it is about excellence. And I think you have proven that it is possible to have it all.

[00:15:24] Graham Stephen: Let us talk a little about that. You have been 26 years in the chair, so to speak. Bravura is now multi-country. You have anchor shareholders that include some of the biggest names in South Africa in the investment community. You have been named best independent advisor multiple years in a row. Tell us about what you actually love about corporate finance. What is the thing that has kept you in the seat for almost three decades?

[00:16:00] Soria Hay: I think it is the fact that it is so interesting and so multidisciplinary. Every transaction that you get involved with, the client is different, the requirements for the transaction and what the client needs is different, the industry is different, the circumstances are different. Corporate finance in itself is so multidisciplinary in terms of its numbers, accounting, valuations, tax, legal, exchange control, different regulatory elements. So from that perspective, it really allows you to be very widely trained and informed. That is in addition to how markets play into it, how what happens worldwide plays into what we are doing here in Southern and sub-Saharan Africa. So it is just that continuous change, that continuous stimulation that keeps me going. I love my work.

[00:16:57] Graham Stephen: Okay, so it is that variety, and also some of the people that you meet and the problems that you are solving. But I want to take the other side of that, because the world of corporate finance and investment banking is famously brutal. Long hours, deal cycles. I am sure you have had a deal close at one minute to midnight on Christmas Eve. And a lot of talented people in this industry burn out by the time they are 35 or 40. How have you stayed on top of your game for so long, Soria?

[00:17:43] Soria Hay: So I always say to myself and to my team, there is no such thing as work-life balance, because what is that? It does not exist. What does that mean? Is it 50-50, 60-40? I say to my team and to myself, you have to get to your priorities. When it is somebody’s birthday, when your child is playing in a concert, if your mum is sick, a Father’s Day event. For me, it is not about this hairy, woolly concept of work-life balance. It is being disciplined enough to get to your priorities.

[00:18:29] Soria Hay: The second thing I say is, corporate finance is a marathon, not a race. If you do not pace yourself, if you are not very disciplined and structured and ensure that you get to your priorities, you will burn out. It is not a 100-metre sprint. And therefore I say to the people who work at Bravura, you have to exercise, you have to do all of those things that one can so easily say, next year when things are better I will get to it. Because then your health, your emotional life and your relationships will suffer. And I say to the team, if you get a heart attack, that is our problem as well. If you get divorced, that is my problem too. So you might just as well tackle your life, do it properly, and do it in a structured way. And then what hangs with that is we really encourage people to take leave. Rather work early in the morning and again late in the afternoon, but take your leave, see interesting places, reward yourself, travel, do amazing things with your loved ones. Than to sit behind your desk and think you are going to do it next year, or in five years when you have time, because that time will never come.

[00:20:08] Graham Stephen: Yeah, I think there is so much wisdom in that, Soria. You know, another deal will come. At the time, that deal is important and you give it your all, but at the end of the day, that is one deal in a marathon. And I think also maybe it is a misguided notion that you have to work hard so that you can retire at 55 or 60. Look at the world’s most successful people. They are working into their 70s and 80s. Work is a blessing. Find something you are passionate about, triangulate it with the life you want, and build it into your life. Do not use it as an excuse to miss out on everything along the way. And I love that perspective that you bring to it.

[00:21:38] Soria Hay: In our industry, it is actually frowned upon to leave early. And that is where I say to my team members, we do this differently. You can deliver the output. I do not care about the input. I do not care where you do it from or when you do it. But yes, it is very important to stay human and remember what is important in the middle of all of this.

[00:22:07] Graham Stephen: Absolutely, it is about relationships at the end of the day. Let us move on to a little bit about Bravura. You have advised on hundreds of transactions over the last quarter of a century, across mergers and acquisitions, capital raising, listings, empowerment structures. I want to ask you about that experience. What is maybe one deal or transaction that you are really proud of, where you created some lasting value you look back on? And versus maybe a transaction that did not go the way you wanted and what you learned from that?

[00:23:03] Soria Hay: So let me start with the one I am incredibly proud of, and so proud of the team that was involved. Myself and Ian Matthews, my co-shareholder in Bravura, together with ARC and Dr Kristo Vosser, we seed-funded SolarCover, which was a renewable energy business, in 2016. And that was at a time when, from a legislative perspective, you could not sell electricity, so they structured it as a lease. To make a very long story short, we also assisted them and they raised capital over the years. Around 40 million dollars from Pimboni Rimgrow Fund later, some from RMB Corvest. But then, by the end of last year, we implemented a transaction for them where Pimboni Rimgrow Fund exited and we raised a further 750 million rand or so in growth capital, so the total transaction was around 1.8 billion rand. And that allowed the founders to take some money off the table. It allowed the Pimboni Rimgrow structure fund to completely exit. And it gave them new growth capital with Inspired Evolution, a Swiss fund, and IFMO, the big international investors who came in on the back of that. For me, that was such a lovely transaction, because we backed Tim Franke, who was a Bravura alumnus at the time when he started the business. And we really walked a ten-year route with them to get to this point. That is a lovely success story.

[00:24:53] Soria Hay: I would say my biggest learning came very early in my career, within the first year after I started Bravura. I acted for IQ Business Group, and they were going to merge with Spescom. Those were the days when business deals were still on the front pages. It said the billion-rand merger, everybody was so excited. The due diligence failed. And I sat in that meeting with the executives where we shared all of the problems we had found with both teams. And the share price crashed before it was announced in the market. So I was really a babe in the woods, but I reported this to the FSB, because clearly there was insider trading there, and I had to later testify at the FSB, which was quite scary. But the learnings out of that were around the corporate finance discipline of having your minutes 100% up-to-date and ready, knowing who was in meetings, having paper trails of everything that has happened. The outcome was that the CEO of Spescom got a fine from the FSB, and of course the Spescom business completely disappeared and fell. That was actually a very sad outcome. But lots of learnings out of that one.

[00:26:34] Graham Stephen: Yeah, I mean, sometimes it is the tough stories that fire the clay, so to speak, and you do not forget them easily. You take those with you into every new deal. I want to expand on that a little. You have spoken about having a true north and steady value systems that have guided you through life and through business. Can you think of a story where you really had to live those values, where you had to stand up and it impacted on a deal, successful or not?

[00:27:39] Soria Hay: Yeah, I think it is so interesting. If you work in corporate finance, you often have huge success fees dependent on successful outcomes of transactions. And the successful outcome is not necessarily in the interest of the client. So, very recently, literally in the last six months, we acted for one of the big listed groups. They had a franchise business that we had a mandate to sell. We received an offer they were prepared to accept. We had worked with a party throughout the due diligence and the term sheet on terms which our client was also prepared to accept. But we started to become very worried, because we knew how important the franchisees were to this business. They would never want to let them down. And we did not feel that the values and the chemistry and the understanding of the incoming partners would really serve the business well. So in the end, and this was actually one of my team members, Craig Shaw, he sat with the client and said, you know what, think carefully before you proceed. And in that moment, the client was almost relieved to get this advice, because they knew they should walk, but they were also looking for an outcome where they could dispose of the business. And I think in that moment it is authenticity. The client knowing that what they see is what they get, and you will walk the extra mile with them, no matter how difficult it is, no matter whether it hurts you financially or not. And being a smaller business, it is also easier, because we do not serve big interests. We are completely independent. We are just here to serve the client.

[00:29:42] Soria Hay: And the second thing I say to the team is we must know we are worth it. If clients do not value what we bring, or they want to treat us as a commodity service, we will not do that work. In the end, we need to work our hardest, be our best selves, have the technical excellence, and know we are worth it.

[00:30:10] Graham Stephen: Absolutely. I mean, there is so much that resonates with the way we do business at bizval. We do valuations and we are independent by design. And sometimes you have to stick to those principles. We have a saying in our business that we will always tell the client what they need to hear, not what they want to hear. Everybody wants a dollar sign instead of a rand sign in front of their exit number, or they want an extra zero. But also, as you say, sometimes it is having the courage to say, you should walk away from the deal. And that is hard, especially when you are sitting on a nice success fee, potentially.

[00:31:16] Graham Stephen: Soria, before we wrap up, I just want to leave with a final thought. You started Bravura 26 years ago with 180,000 rand and a vision. Now you are sitting here as one of the top investment banks on the continent. You have made a point of bringing other women through the door behind you. On this platform today, what are the one or two lessons you would want every listener to take away from this conversation?

[00:32:00] Soria Hay: I think the first one is you are only as good as the team that you work with. So hire the smartest people that you can find, smarter than you. That makes your business materially stronger. The second one is love what you do and have fun doing it. If we do not do that, there will not be a good outcome for the client, and definitely not for us. And the last one is, it is all about the client. You have to go the extra mile, you have to deliver that bespoke outcome that works for them. In the end, we are only as good as the last transaction that we have delivered to a client.

[00:32:39] Graham Stephen: You can never rest on your laurels. Your reputation precedes you, but you cannot rely on it.

[00:32:46] Soria Hay: Yeah. No. If you do one bad transaction, that will really cast a shadow over the ten good ones you implemented before. I believe that completely.

[00:32:56] Graham Stephen: As I say, trust takes a lifetime to build but it can be lost in a nanosecond. So, Soria, I am going to go into what we call our rapid fire, just five or six quick questions to allow our listeners to get to know you a little bit more. Let us start with, one book that you wish every entrepreneur could read.

[00:33:23] Soria Hay: It is a book on negotiation. Never Split the Difference. The name says it all.

[00:33:29] Graham Stephen: I have not read it, it is on my shelf. It was an FBI negotiator who wrote it. What is your take on it?

[00:33:39] Soria Hay: Well, it is just so easy for people to say, let us meet each other in the middle. But for example, if you manage a business on a 30% margin and a client is sticky about the fee that you want to put on a transaction, and you say, okay fine, I will meet you in the middle, then your margin all of a sudden is 15%. And then you cannot pay the salaries you need to pay to keep talented people, you cannot pay the bonuses you need to pay to keep talented people, which is a vicious circle, because very soon your business will not be excellent and you will not have great many clients who are happy.

[00:34:18] Graham Stephen: So both parties end up unhappy. You need to be confident enough to state what you want and not compromise, but find a way to create a win-win situation for both parties, rather than a half-baked compromise which suits nobody in the long term.

[00:34:40] Soria Hay: And Graham, explain where you come from. When I explain to clients the margin I protect and why I need to protect it, and why I need to price as I price, they understand it.

[00:34:52] Graham Stephen: Yeah, exactly. It is creating the context. What is the single best piece of advice that you have been given?

[00:35:02] Soria Hay: Do your absolute best, and be unattached to the outcome.

[00:35:08] Graham Stephen: Excellence and hard work, and what will be will be. If you could jump into a Back to the Future time machine, okay, and have coffee with a 29-year-old Soria who is about to use her bonus to start a business, what would you tell her?

[00:35:33] Soria Hay: Really just two things. Try hard, and know you are worth it.

[00:35:39] Graham Stephen: You would do nothing differently. You would go for it. Looking forward over the next ten years, what is the one sector that you would back the hardest?

[00:36:14] Soria Hay: It must be technology. I think the way that technology allows everything that touches the consumer, everything that touches payments, everything that touches even what we do as a business, and how that is currently evolving and moving forward, I am incredibly excited about what is to come.

[00:36:56] Graham Stephen: Absolutely. It is not just engineers in Silicon Valley who can do that. We have great skills in this country and we need to back ourselves. There are some fabulous businesses doing that already, but we just need to do more in that space.

[00:37:12] Graham Stephen: Last question. If you could change one thing about the South African corporate finance industry tomorrow, what would that be?

[00:37:25] Soria Hay: I would love to make it more accessible for women, generally, not just here at Bravura. And I want mothers and fathers and families to be able to have a very exciting career in this industry, and have healthy families and good values. Together with that, to use technology to work smarter and get more skilled.

[00:37:52] Graham Stephen: Absolutely. You do not have to sit in two hours of traffic to get to Sandton head office anymore. You can do a lot of the stuff from the comfort of a home office.

[00:38:05] Graham Stephen: Soria, it has been an absolute pleasure having you on the show. I think we have only just scratched the surface, so we might have to get you back for another conversation at some point. I really appreciate your honesty and your time. If anybody wants to get hold of you or connect with you, what is the easiest way to do that?

[00:38:24] Soria Hay: The Bravura website, so www.bravura.net, or on LinkedIn. You can look for me and I always respond.

[00:38:35] Graham Stephen: Fantastic. Well, to our listeners, I hope you have enjoyed this episode. Please reach out to Soria. And if you have never had a proper valuation done before, head over to bizvalglobal.com. Until next time, keep building, and we will see you soon. Thanks, Soria.

[00:38:59] Soria Hay: Thanks very much, Graham. It was a pleasure.

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