#49 Edward Crawford and Ralph Manning, Coltala Holdings: $400M, 24 Deals

About the episode

Private equity principals do not say this out loud: “We need to sell this company before something bad happens.” Ralph Manning did it for years, not because the market was right, but because he could not see far enough into his own businesses to know what was hiding. Edward Crawford and Ralph Manning are co-founders and co-CEOs of Coltala Holdings, a permanent capital holding company in Fort Worth and Dallas. Since 2017, they have deployed more than $400 million across 24 transactions in aerospace, home health, water, and engineering. No fund sits behind it, so there is no seventh-year clock and no forced sale to raise the next one. What replaced the fear is the Coltala Enterprise System, a lean operating playbook from Danaher and Toyota, by way of Larry Culp, who took Danaher’s market cap from $3 billion to $30 billion and now chairs GE Aerospace. The proof is their aerospace business. Lead times sat at 164 days. Two weeks of kaizen on three bottlenecks, one an $80,000 paint shop, brought it to 32 days. Every employee at every Coltala company, forklift operator included, gets a quarterly check from 8 to 10 percent of after-tax profits. Crawford came to private equity from the Peace Corps, where he built a 300-farmer coffee cooperative, and from naval intelligence in Afghanistan, where he earned a Bronze Star with SEAL Teams 2 and 4, by way of Goldman Sachs. He is blunt about the fit: “If you want a guy from New York who has a Harvard MBA who’s going to tell you how great they are, then you can maybe go work with them. But if you want a real partner, we’re your guys.”Also in this episode: why mission and margin are not opposites, what mission critical means after the pandemic, how defense tech changed once Ash Carter stood up Unit X, the knower versus learner test they run on every founder, and why yellow lights never turn green.