In this episode of the M&A Launchpad Podcast, hosts Casey Minshew and Feras Moussa engage in a comprehensive discussion with Kevin Bibelhausen about his journey into business acquisition and entrepreneurship. Kevin shares his transition from a corporate job to entrepreneurship, driven by the desire for autonomy and the challenge of running his own business.
Kevin delves into the process of acquiring a textile business, emphasizing the importance of assembling the right support team and leveraging expertise in finance and operations. He highlights the significance of teamwork, citing the proverb, “If you want to go fast, go alone; if you want to go far, go together.” Kevin shares his experience of raising capital for the acquisition, initially feeling intimidated but ultimately securing $800,000 in just five weeks through platforms like Twitter.
Reflecting on entrepreneurship, Kevin stresses the importance of trust and relationships in business transactions, advocating for a people-centric approach. As the conversation progresses, Kevin shares insights into managing working capital effectively post-acquisition and the importance of nurturing relationships with staff members.
Looking ahead, Kevin expresses commitment to operational excellence and mentorship, balancing hands-on involvement with strategic investment opportunities. Overall, Kevin’s journey underscores the transformative power of entrepreneurship, emphasizing trust, relationships, and continuous learning in navigating the challenges of business ownership.
In this podcast episode, we discuss:
- Team Collaboration and Support
- Strategically Raising Net Working Capital
- Prioritizing People in Business
- Adaptation and Growth Strategies
- You can connect with Kevin Bibelhausen by email: kevin@bibelhausen.com
Additional Resources:
- Access our archive of video interviews on YouTube
- Checkout our upcoming Conference – https://malaunchpad.com/
- Get in touch with show hosts Casey Minshew and Feras Moussa at – info@equitylaunchpad.com
- Looking to invest in M&A opportunities or partner with an advisor to acquire, scale or sell your business? Visit Equity Launchpad
Transcript
00:00 all right on today’s episode we talked
00:02 with Kevin and man Kevin you know he’s
00:04 been around the block a few times right
00:05 he kind of came from Corporate America
00:07 went and did his own search fund when
00:09 failed right then went back to Corporate
00:11 America then did another search fund and
00:14 successfully bought a textile business
00:15 which we’ll hop into here in a second
00:17 and then ultimately now focused on
00:19 really building a fun and helping deploy
00:20 Equity into other people’s deals and so
00:22 lots of information unpack on this one
00:24 Casey have you ever seen that Jim KY
00:26 movie where the guy he’s like you know
00:28 what he wakes up he was Fe he was scared
00:30 of Li
01:30 and he wakes up and he says yes to
01:32 everything right it’s called yes man and
01:35 I’m telling you right now it it it just
01:38 it’s like the epiphany of people that I
01:39 continue to meet through these podcast
01:41 and in life the successful ones seem to
01:43 say yes at things right so like out of
01:46 the blue what Kevin had a had a trauma
01:48 event he woke up and said I want to buy
01:50 a company like this is what I want to do
01:53 said yes went to work said a date yes
01:56 and then somebody calls him about
01:58 joining a fund he’s never done that
01:59 before but does he say yes like what we
01:02 said in previous episode right stumbling
01:04 forward a little bit and you know and
01:05 it’s not about luck I think people think
01:07 it’s always about luck but it’s sitting
01:08 yourself up to be able to accept and say
01:11 Yes whenever those opportunities present
01:13 themselves right was he lucky that
01:14 someone offered him to do a search fund
01:17 n not really lucky set himself up to do
01:19 that and so again people it’s about
01:21 getting out there putting you know
01:23 basically taking on risk but manageable
01:25 risk and solving and moving things
01:27 forward yeah I think being open to
01:29 saying yes pretty powerful so anyways
02:31 this guy um man he went out and did it
02:33 yeah know similar to us he knew nothing
02:35 about textiles and lo and behold bought
02:36 a textile business has been happy with
02:38 it continuing on and so lots of
02:40 information unpack on this one yeah I
02:42 would definitely say if you are
02:43 searching and you’re considering about
02:45 it this one is a mustat yeah we do talk
02:47 about the pros and cons of search
02:49 funding and what that looks like and
02:50 some of the the things to kind of be on
02:52 the lookout for yeah what attorneys to
02:54 work with and why building a great
02:56 acquisition team even though it’s all
02:57 third party is very important in buying
02:00 business Perfect all right let’s get
02:02 right into
02:06 it on today’s episode we have Kevin B
02:08 bullous he’s an accredited investor and
02:10 business owner based in High Point North
02:12 Carolina he frequently consults on
02:13 digital strategy and operations and is
02:15 sought after a conference speaker
02:16 frequent podcast guest and wannabe
02:18 writer Kevin successfully conducted a
02:19 self-funded search and purchased a
02:21 textile business in the heart of North
02:23 Carolina after his Equity partner fell
02:24 to honor the contract Kevin successfully
02:26 raised $800,000 in equity for his
02:28 acquisition in 5 weeks without any
03:30 Capital using experience Kevin used his
03:32 fundraising skills he developed to help
03:34 launch fuan capital a fund dedicated to
03:37 closing the equity gap for self-funded
03:38 Acquisitions Kevin welcome to the show
03:41 thanks guys good to be here yeah great
03:43 to have you yeah so what do we miss on
03:44 the bio anything else you want to share
03:45 about
03:46 yourself uh besides being born in a log
03:49 cabin you know 200 years ago no it’s you
03:52 know that’s that’s really the story man
03:53 like I I came into this uh I came into
03:57 this in 2018 um that was when and maybe
03:00 some of your listeners have have read
03:02 this book I’d be surprised if they
03:03 hadn’t but the Harvard Business review
03:05 guide to buying small businesses was
03:07 published in 2017 that was the I think
03:09 that was the only book available at that
03:11 time so like Walker’s book wasn’t out
03:13 yet or now there’s all kinds of
03:15 resources but at that point you know
03:16 that was kind of it and I think I heard
03:18 about it on the the Harvard uh like hbr
03:21 idea cast or whatever their their
03:23 podcast feed was called and they had the
03:25 the authors on and this is really
03:27 interesting Sor I one and got a copy of
03:28 the book and the the story I always tell
04:31 is that I was immediately attracted to
04:33 this guy who bought a porta potty
04:35 business like that’s what I want to do I
04:37 want to own a porta poty bit like I want
04:39 to own something so boring uh that just
04:42 kicks off cash and like I was I I wasn’t
04:45 attracted to the sexy you know I’m gonna
04:47 go build a dating app and I’m G to raise
04:48 Venture Capital money and I’m gonna go
04:50 do you know I’m GNA try and build the
04:51 next unicorn I couldn’t care less didn’t
04:53 feel like that was my personality um but
04:56 spending a decade Plus in Corporate
04:58 America I felt pretty good about my
04:01 operating jobs uh and so what did you do
04:03 in Corporate America so I I worked in
04:05 mainly in the healthcare sector for for
04:07 my career and then primarily technology
04:09 focused so I did my last job was
04:12 basically Deputy Chief Information
04:14 officer for a large Public Health System
04:16 uh in Dallas and then uh ran technology
04:19 strategy and operations so when you’re
04:21 coming into these you know uh uh Legacy
04:24 businesses or these old economy
04:26 businesses um technology digital
04:29 transformation is quite important uh for
05:31 for a lot of these businesses that have
05:32 been relying on pen and paper our
05:34 financials are done manually you know
05:36 all that kind me just a ton of meat on
05:37 the bone to increase you know
05:39 operational efficiency so anyway so my
05:42 experience you know uh led me to to be
05:44 interested in this vehicle for for
05:47 entrepreneurship um had a deal under Loi
05:50 kind of got to the altar uh to get
05:52 married and in uh in 2018 deal fell
05:55 apart small deal I think I think the
05:57 total purchase price is like
05:58 $600,000 and was it a porta potty
05:01 business like you were wanting it wasn’t
05:02 a porta potty business e-commerce which
05:05 is uh you know a whole other a whole
05:07 other thing but um anyway it uh so I had
05:10 it under contract and went through
05:12 underwriting Bank came back we’re like
05:14 actually we’re goingon to need you to
05:15 double your Equity amount and I said
05:17 well that’s every nickel I have uh I was
05:19 putting into this deal I don’t have
05:21 anymore so I knocked on a couple doors
05:23 tried to figure out if I could raise
05:25 money for something like this didn’t end
05:26 up working out um so I kind of licked my
05:28 wounds and went back to my job um fast
06:32 forward a couple years I I did the whole
06:33 career path thing and ended up moving
06:35 into a more senior role um and then Co
06:39 hit so I if if if you were paying
06:42 attention you realized that I was
06:44 working in healthcare in a public health
06:46 system while while Co was happening in a
06:50 technology role so uh technology became
06:53 very important during covid all of a
06:55 sudden uh everybody was learning how to
06:57 do video uh video meetings and
06:59 conference calls and all the you know uh
06:01 uh tella health and all these things
06:03 that became you know now was just build
06:05 it on the fly so all of that was uh
06:08 incredibly stressful and I I definitely
06:09 burned out a little bit from health care
06:11 but I also got Co myself and I was one
06:14 of the unfortunate few that had you know
06:16 uh a physical impact so my heart was
06:19 impacted and um it basically I mean I
06:22 was I had no history of any heart issues
06:25 but what ended up happening was that
06:27 they my my function was basically at a
06:29 point where they said you we going to
06:30 need a heart transplant uh I went into
07:32 the the emergency department yeah and I
07:35 I didn’t I mean who who knew that that
07:37 was going to be the the case long story
07:39 short there um I was able to recover uh
07:43 enough so I had like an infusion uh for
07:46 over a year um and I was on the oral
07:49 medications so that my heart was able to
07:51 recover and all that but the reason I
07:53 tell you all this is because that was
07:55 that was sort of the uh clarifying
07:57 moment or experience that I I apparently
07:00 I had to go through it to realize what I
07:03 actually wanted to do with my time and
07:04 my career and I just kept coming back to
07:08 I want to work for myself I want to own
07:10 my own business this is still the
07:12 vehicle I want to do it through I still
07:14 want to go do a self-funded search and
07:17 so this was all in
07:19 2021 uh January 2022 I kicked off my my
07:23 second search in Earnest and uh ended up
07:27 acquiring Heritage back my I mean my
07:29 goal was like I was hellbent on buying
08:31 before the end of the year like I will
08:32 buy something or die trying before the
08:34 end of the year and I I I missed it by
08:37 two weeks I closed uh January 13
08:40 2023 uh so uh you know a minus uh you
08:44 know no no not full points but but
08:46 pretty darn close um yeah I mean it’s
08:49 it’s it’s kind of been a whirlwind and
08:50 from that experience started fishing
08:52 capital and now it’s talking to you guys
08:55 so yeah let’s disect that little yeah
08:56 yeah so I’ve got a few questions so okay
08:58 so I went to the Harvard uh their their
08:02 ETA conference in in 21 and um I met
08:06 Royce and I went up to him I shook his
08:08 hand and I said hey I should have read
08:09 your book before I bought my first
08:10 business he loved it he laughed it was
08:12 funny and it was very true though um but
08:14 one of the things that gets in there is
08:17 um the search process right which we
08:20 interviewed a gentleman a couple weeks
08:21 ago here and one of his things he calls
08:23 he says the search process is is just
08:25 terrible right it’s the hardest part of
08:28 everything you do and so many of our
09:30 listeners are are Searchers right
09:32 they’re two years in three years in
09:35 they’ve been looking for it what do you
09:37 feel you did now that you’ve read the
09:39 Harvard kind of box right what did you
09:41 do in your search that was different
09:43 than than what most people are looking
09:45 what what keeps them from finding that
09:47 business right yeah uh it’s interesting
09:50 because like as you guys know there’s
09:51 sort of two sides of the house when it
09:52 comes to search there’s the traditional
09:54 type of search and then there’s
09:55 self-funded I’ve had conversations with
09:57 people where you know why does why does
09:58 a traditional searcher take you know two
09:01 plus years or uh to to find a business
09:03 well it’s because there’s not really any
09:05 sense of urgency they’re drawing a
09:06 salary for a couple years that’s a a
09:08 healthy salary to live on um and I think
09:11 if you go self-funded like youve you’ve
09:13 either got a pile of savings that you’re
09:15 drawing on or you’re you’re
09:17 bootstrapping it like I did and I I
09:19 still worked while I was doing my search
09:21 and did a lot of nights and weekends and
09:23 I worked remote so I was able to to you
09:26 know squeeze some things in during the
09:27 day and um I I think those people are
10:30 the ones that end up being successful is
10:33 that are you willing to grind through it
10:35 are you willing to put the work in even
10:36 on the off hours um and I know that
10:39 sounds cliche but it really is true it h
10:41 it has to do with with uh setting goals
10:45 for yourself like my my goal was I will
10:47 buy before the end of the year like that
10:49 is what’s going to happen so in order to
10:51 do that I have to submit a certain
10:52 number of Lois in order for one to
10:53 convert right I think I had two or three
10:55 accepted Lois before I got the one that
10:57 actually closed just in 2022
10:00 so you know I had a few at bats there
10:03 you know and just just firing them off
10:05 like well if it’s if it’s 80% good
10:07 enough then I’m gonna put an Loi in on
10:09 it all right for really quick those list
10:12 just to kind of get some of the verbiage
10:13 in right so whenever we’re talking about
10:14 a search fund right you’re basically
10:16 getting soft commits from investors to
10:18 raise money that if you buy a business
10:20 right they’ll obviously participate and
10:21 that’ll kind of fund you loi’s letter of
10:23 intent right it’s what you’re making
10:25 offers with um and my question for you
10:27 is how big was that fund that you put
10:29 together right and was it all soft
11:30 commits did you get hard commits what
11:32 you know what was the Target too did you
11:34 tell investors I’m going to go buy a
11:36 textile business or did you just kind of
11:39 stumbled into that yeah so actually so I
11:41 didn’t raise I didn’t raise any money
11:43 for my search so I bootstrapped the
11:44 whole thing so typically in a
11:46 traditional search you would go out to
11:47 your an investor base and you would say
11:50 Hey you know I’m I’m starting this
11:52 search fund will you will you basically
11:54 invest money with me to capitalize my
11:56 search so I can draw a salary and then
11:58 you get preferential terms when I find a
11:60 deal I didn’t do any of that I I and and
11:03 there’s a reason I wanted to keep the
11:04 majority of the equity because you give
11:06 away a lot of the equity when you do
11:07 something like that right um so I didn’t
11:10 I didn’t go out there and socialize this
11:12 with investors at all because I was
11:13 doing it all on my own um and so that I
11:17 mean and I was and talking about
11:19 timeline too right like how did you get
11:21 it done in a year I also looked at only
11:23 broker deal I didn’t do any proprietary
11:25 search proprietary me proprietary
11:27 meaning go out to business owners that
11:29 are off market and see if you could
12:31 convince them to sell you their business
12:34 um I didn’t have time for that if I
12:36 needed to buy before the end of the year
12:37 I needed to I needed the the seller to
12:39 have already made the I’m selling
12:41 decision and be represented by a broker
12:44 um so does that eliminate you know the
12:47 potential diamond in the rough that you
12:48 could pick up in proprietary yep no
12:51 question but it got me in the game
12:53 faster and even even if a lot of people
12:56 passed on the deal that that was on
12:57 Market it just may not fit their buy box
12:59 doesn’t mean it’s a bad deal it just it
12:01 may be the right deal for me and the
12:02 wrong deal for them so and maybe I’ll
12:05 add one quick thing I mean it’s
12:06 conviction right I mean ultimately like
12:08 people we see this even in you know real
12:10 people have analysis paralysis right and
12:12 so what if you’re not getting the best
12:14 deal possible Right ultimately you know
12:16 if the deal and you’re buying it at a 5x
12:18 and it should be a 4X like yeah there’s
12:19 a premium there but again if the stack
12:22 makes sense and the return profile
12:24 matches what you have and the equity
12:25 check M so what right it’s better to get
12:27 into the deal than wait another three
12:28 years and not do a deal and then maybe
12:29 find the deal that you can get at that
13:31 4X instead of the 5x that you paid up
13:33 for right or whatever it is and you know
13:34 it’s about having a real plan and
13:37 executing versus waiting for that
13:39 perfect opportunity that doesn’t show up
13:40 and you see that time and time again and
13:42 I think Casey you were about to add
13:43 something to that yeah I was goingon to
13:44 say that that the search process you
13:46 know using the Brokers it definitely at
13:49 least through that process helps you
13:51 define your thesis what you like and
13:52 don’t like yeah right yeah and and
13:54 that’s when I talk to people that are
13:55 starting the process and I’m like look
13:58 use the Brokers until you find something
13:00 you go man I I really like that and you
13:02 go okay put that up there now if you’re
13:04 fortunate enough to be able to have the
13:06 time to go to do the privity search you
13:08 know go out and look for that um man
13:11 that is going to be one of the best
13:12 places to find the best deal but it’s
13:14 going to take time right it’s gonna take
13:16 a lot of time yeah of course I and it
13:19 just it just makes sense right because
13:20 the these Brokers have been usually like
13:23 uh nurturing these leads for a while and
13:26 then they get to the point where they’re
13:27 ready to sell well there’s there’s
13:28 that’s a lot of time that they invest in
14:31 in these a fulltime job yeah yeah guess
14:34 what somebody somebody makes their
14:36 full-time living doing that so yeah for
14:38 you to think that you can kind of do it
14:39 part-time for a bunch of different it’s
14:41 you know it’s it’s hard it’s hard to
14:43 develop those relationships yeah and and
14:46 that book The Harvard Review Book it
14:47 talks about using Brokers it does it
14:49 says to accelerate it and to find it and
14:51 use those Brokers so you followed the
14:54 rule book and what was your thesis was
14:56 it specifically you know anything that
14:58 was it software I mean you have a kind
14:60 of a industry agnostic or a specific
14:02 industry that you targeted yeah so I I
14:05 and this is this is something I would I
14:06 would recommend to just about anybody
14:08 listening like be H have have an idea
14:11 have a have a thesis for lack of a
14:12 better word but be flexible be willing
14:15 to change be willing to adapt because
14:17 you know life happens and and you and
14:19 you learn a lot through this whole
14:21 process so I came in I came in thinking
14:23 I was like I’m going to buy a healthcare
14:24 business or an IT service business that
14:27 was my background that’s what I did for
14:28 10 years plus you know in corporate and
15:31 so well what I found was guess it was
15:34 right after covid so all the healthcare
15:36 businesses had record years and they all
15:38 wanted to trade on 2020 2021 numbers
15:41 which weren’t sustainable without a
15:43 global pandemic every year right so that
15:46 kind of got you know I was like no I’m
15:47 not I’m not overpaying for this crappy
15:49 healthc care company uh it service
15:51 businesses like managed service
15:53 providers all that kind of stuff um
15:55 that’s really hot in private Equity as
15:57 as it should be I mean they’re great
15:58 businesses they’re very sticky um very
15:01 sticky clientele uh and I just couldn’t
15:03 pay the multiples that they were asking
15:05 I’ve seen some msps that trade you know
15:08 somebody was asking 13x for an MSP I
15:10 remember it was crazy crazy uh like
15:13 higher than public market
15:15 value um so I had to get creative and I
15:18 said okay so here’s my skill set I
15:19 thought mostly in the technology and in
15:21 the operations um aspect and I said how
15:24 what industry or maybe I should just be
15:27 industry agnostic and look for a way to
15:29 kind of plug in my skill set to that
16:32 business and so you know make a long
16:35 story short when I found this textile
16:37 business like okay well the joke and now
16:40 in this in this uh in this industry now
16:42 is like okay well it’s like the second
16:43 oldest profession in the world right
16:44 textiles have been around forever not a
16:46 lot of not a lot of things have changed
16:48 about the weaving process weaving the
16:50 original Brookshire hathway was a tech
16:52 stle company oh okay so yeah side note
16:54 on that because I I use this to raise
16:57 Capital um as a joke because if you if
16:60 anybody is familiar with with the
16:01 Burkshire letters you know Warren
16:03 Buffett famously you know says that that
16:05 he bought Burkshire halfway was like the
16:07 worst investment he made was a textile
16:10 mill so I would always say like you know
16:12 oh well it’s a textile company as I’m
16:13 raising Capital like it was good enough
16:14 for Warren Buffett it’s good enough for
16:16 me and they be like have you read the
16:18 letters I’m like yeah that’s the
16:20 joke at least you’re not weaving though
16:22 you know anyway so so yeah it’s um but
16:25 but it’s a it’s a very What attracted me
16:27 to the business was the fact that it was
16:29 an old economy business I could apply
17:32 you know digital transformation
17:33 principles I could apply you know
17:35 process Improvement some uh I did a lot
17:37 of lean6 Sigma stuff uh back in my
17:39 career so a lot of this is just
17:41 operations uh and getting things off of
17:43 pencil and paper out of manual routines
17:45 automate some of this stuff um and uh
17:50 and frankly like the business was really
17:52 well run like I I don’t know how often
17:54 you guys see this but I don’t I don’t
17:56 see very many businesses that have a
17:58 decade of review financials that’s what
17:00 I had it’s impressive a decade of
17:02 reviewed financials so I knew exactly
17:04 what I was buying you know that’s I mean
17:07 that’s that’s great most of these
17:08 financials are done like on the back of
17:10 a napkin um so for something like for
17:12 something like this business so yeah I
17:14 mean and I was able also to buy assets
17:16 with the business so this is a very
17:18 inventory heavy business um so I with my
17:21 acquisition I was able to get you know
17:24 $4 million in inventory and a million
17:27 plus an AR with the deal so I basically
17:30 had my SBA loan fully collateralized on
18:32 day one so walk us through the deal I
18:34 mean what did it look like right what
18:36 was the purchase price what did the
18:37 equity stack look like be it had to be
18:40 reti yeah what was the reason for the
18:42 sell I guess that’s another good
18:43 question yeah yeah you hit the nail in
18:45 the head was a retiring owner uh so he
18:47 bought the it’s interesting so my
18:49 business was started back in the early
18:52 2000ish 1999 is um depending on who you
18:56 ask and uh the founder ended up selling
18:59 the business around 2012 he was sick um
18:01 and I think he had cancer and and and
18:04 passed away shortly after that so he
18:05 sold it to uh the second owner who
18:08 bought the business when he was 58 okay
18:10 and he told everybody when he came in he
18:12 was like look this is like a 10year plan
18:14 I’m gonna do this and he bought it with
18:16 his you know there his whole group
18:17 bought with their retirement accounts um
18:20 so there was there was a much different
18:21 focus in buying this company you know
18:24 when you’re 58 when you’re doing
18:25 retirement money it’s much much safer
18:28 more uh you Steady Eddy type of business
19:30 like they’re not going to they’re not
19:31 going to you know try and rock the boat
19:33 too much um and that’s exactly what
19:35 happened so the business kind of just
19:36 was stagnant um understandably so it was
19:39 a lifestyle business um and so when I
19:42 when I kind of came along uh the the
19:44 owner he wanted to hang on for another
19:46 couple years but his his wife was having
19:48 some health issues and he felt like he
19:50 needed to be there for her which you
19:52 know was great um and obviously true um
19:56 and so he was he was ready to retire and
19:59 uh he didn’t want the business to be
19:01 sold to a larger company where this
19:04 would become just a division of uh he
19:07 didn’t want to sell the private Equity
19:08 because private Equity famously has a
19:10 has multiple blunders in this industry
19:12 and has just tanked companies um he
19:14 wanted to sell to an individual and I
19:16 happened to fit that bill even though I
19:18 didn’t come from industry I was the kind
19:20 of guy that he was looking for um
19:23 somebody you know obviously I was you
19:25 know I’m I’m I’m in my mid early to
19:27 mid-30s um and and would this is the
20:30 business I’m going to run probably until
20:32 I die uh and so he wanted somebody with
20:34 that with that kind of longevity that
20:36 long-term Legacy Legacy was critical
20:39 been a big part of you know business
20:41 long-term business owners Reon for
20:43 selling so yeah yeah yeah it’s that’s
20:46 not BS right like that people genuinely
20:48 care about that because the people out
20:49 there working they become like family
20:51 after a decade now yeah um you there’s
20:53 the people you see every day and and you
20:55 don’t want their jobs to be moved to you
20:57 know another area or the business to be
20:59 closed down or what have you like that
20:01 means something to a lot of these people
20:03 the good ones the businesses you want to
20:05 buy that matters to them you know I I
20:07 literally I just recently sat down with
20:09 a business owner he’d been he’s been
20:11 working there for since he was 14 years
20:13 old and that obviously for father we had
20:17 a great conversation you know his saying
20:20 it was almost Verbatim what you’re
20:22 saying right which is hey I’m talking to
20:24 a private Equity Group he goes the
20:26 question I always ask myself is I love
20:28 the guy that I’m working with but six
21:30 months later the suits are going to show
21:32 up right and he goes and I’ve seen time
21:34 and time again when the suits show up
21:36 they they destroy our Legacy right and
21:39 he was like so I’m talking to you
21:41 because you guys are Legacy focused so
21:44 it’s pretty powerful you know that that
21:45 is actually a big point you made is like
21:48 if I’m out searching for a business and
21:50 my mentality is hey I’m gonna buy this
21:52 business bolt it onto something else
21:54 scale it and grow it and all that stuff
21:55 and you share that with the seller it’s
21:57 probably going to Spook him a little bit
21:59 right he wants to know that you’re going
21:60 to take care of his baby and keep the
21:02 family Legacy rolling so yeah anyway now
21:05 High approach sellers is huge and you
21:06 got to understand what are their pain
21:07 points what are the things they’re
21:08 looking for and you know do you have a
21:09 way to solve them or not yeah because
21:12 you you could probably you’re probably
21:13 not going to compete on price so much I
21:15 mean like depending on how you structure
21:16 the deal they may get more cash up front
21:18 but they have usually a higher uh higher
21:21 Enterprise Value from coming from
21:23 private Equity but there’s a lot of
21:24 strings attached to that money um so you
21:27 know you can position yourself as yeah
21:29 I’m the guy that’s going to make sure
22:30 that you know the people stay employed
22:32 and that the business stays right here
22:33 and you know you’re going to get some
22:35 cash up front and you’re not you’re not
22:36 going to have to be in the business for
22:38 an additional five years and you have
22:40 all these earnout criteria and
22:42 everything that private Equity likes to
22:43 put in there so even though they
22:45 structur the deal yeah how did how did
22:47 how did I structure that what was your
22:49 structure what was the capital stack so
22:51 Capital stack was about uh so I used an
22:53 SBA loan uh small business
22:55 administration loan uh 7A program and it
22:58 was is about 70% debt 20% seller
22:04 financing and 10% Equity um the seller
22:07 financing also has a standby period so
22:09 like there’s no payments for a couple
22:11 years so it makes cash flow easier in
22:12 the first couple years and your dollar
22:14 for Dollar on collateral right yeah no
22:17 earnout though right it’s it’s noout no
22:20 actually the SBA doesn’t allow an
22:21 earnout right so yeah you can do a
22:24 reverse earnout but anyway that’s you
22:26 know that’s for another and what was the
22:28 total dollar kind of for the whole thing
22:30 it was like seven and a halfish once
23:33 you yeah so I mean the purchase price is
23:36 about seven million got it and what was
23:39 the yeah the multiple and uh what was
23:41 the multiple you traded on kind of what
23:42 was the iida uh iida was about 1.8 uh go
23:47 4X multiple is cool yeah all right so
23:51 you got the business closed day one
23:53 what’ you do and then you know how have
23:54 you felt about it since then hold on
23:56 before you jump to that one hold on you
23:58 got jump to that because you know so
23:59 Kevin you’ve never been through
23:01 financing before you’d never in your
23:02 life gone through legal contracts at
23:04 that level before right or okay so
23:06 you’ve never purchased anything maybe
23:08 your home but or car but like this was
23:11 totally different so did you did so just
23:15 you don’t have to spend an hour on it
23:16 but but how was that part of the process
23:18 because one you find the deal you
23:19 structure the deal and now you got to
23:22 close the deal right yep so I can
23:24 imagine that was a whole learning
23:25 experience for you too so yeah I mean I
23:28 had a little bit of experience back from
23:30 back from my deal in 2018 but you know
24:32 like it it died on the vine so I only
24:33 had the experience I had right not not
24:35 not to actually close the deal um and
24:39 here’s what’s great about the space this
24:41 micro PE SMB whatever you want to call
24:43 it space right now is that all of these
24:45 there are so many service providers that
24:47 have now come down Market to help this
24:51 particular low lower Middle Market space
24:54 but they’ve done you know they worked at
24:55 Kirkland Dallas and Gibson D and all
24:57 these huge law firms uh that that just
24:60 eat m&a deals for launch um you know now
24:03 they’re they’re they were doing Billion
24:04 Dollar Deals and now they’re doing $10
24:06 million deals you know but they’re
24:07 bringing that level of expertise down to
24:10 our level um which is incredible you so
24:13 like I’ve got I’ve got some friends that
24:14 started a law firm called SB Law Group
24:17 they did a billion dollars in
24:18 transactions their first year wow that’s
24:21 how hot this space is to do a billion
24:24 dollars as a startup Law Firm is
24:27 unbelievable uh so having that kind of
25:30 experience the legal experience like oh
25:32 these guys have sat across the table
25:34 from you know they’ve negotiated uh you
25:36 know Tesla SpaceX Facebook and all these
25:39 different companies right so doing my
25:41 little textile deal is sort of like you
25:43 know
25:45 easy yeah wise counsel right you wise
25:50 counil there you go yeah wise Council
25:52 wise lenders the whole shebang right you
25:54 built the right back supporting team
25:56 yeah uh if you want to it’s like that
25:59 old proverb right if you want to go fast
25:00 go alone if you want to go far go
25:02 together he says that yeah all the time
25:05 it’s true like this is a team sport so
25:08 make sure you build your team uh knowing
25:10 that you got to rely on all these people
25:11 because you should just be the
25:12 quarterback of your of your deal because
25:15 you’re not going to be an expert in like
25:17 over half of this stuff right like you
25:18 might be a good Financial modeler you
25:20 may not be you might be you might oh I
25:22 know a ton of attorneys who were trying
25:23 to do this so like yeah could you do
25:25 your own legal docs should should you I
25:28 don’t know but a lot of rules around
25:29 raising money yeah yeah yeah exactly but
26:33 you know there’s there’s different areas
26:34 of expertise everybody brings in mine
26:35 happen to be operation so I wasn’t an
26:37 expert in any of this stuff I was like
26:39 let’s just get let’s just get this deal
26:40 closed and then once I actually get in
26:42 the chair that’s where my wheelhouse is
26:44 which is where it should be like as as
26:46 the person buying the business this
26:47 should be my area of of confidence like
26:50 I should be good at running a business
26:51 if I’m putting my we’ll talk about
26:53 running here in a second but quick
26:54 question did you raise money for this
26:57 yeah so raise it so I was terrified of
26:01 raising money uh because I hadn’t done
26:04 it before like I told you it came from
26:05 operations um so no and I don’t come
26:08 from a high Networth family I don’t have
26:10 high Networth friends I was a regular
26:12 dude in a corporate job Middle America
26:15 corporate job uh so I didn’t know I
26:19 didn’t know how to raise money I didn’t
26:21 know I didn’t know any I didn’t know the
26:23 first thing and so I found this firm an
26:27 equity provider that said hey we do it’s
27:30 a done for you raise uh all you have to
27:33 do is you you give us equity and we go
27:36 and help you do the race okay so I
27:39 signed up for that signed signed the
27:41 contracts uh did all that uh three days
27:44 before my Loi was signed of course they
27:46 knew about it as I was in communication
27:47 with them constantly they called me up
27:49 and they’re like you know we’re just
27:50 really busy so anyway good luck to you
27:54 we’re gonna tear up the so I had you
27:57 want to say their name
27:03 um yeah they um so so after I got that
27:07 call I called actually the guys that
27:09 that formed SMB logger who who had
27:11 become friends and I was like can I do
27:14 this on my what do you think do I need
27:16 to tell the broker do I need to like
27:18 because I told him I had an equity
27:20 commitment letter and you it’s like so
27:22 do I go do it on my own and like you can
27:24 do it okay so they they they basically
27:28 gave me you know a short list of people
27:29 it’s like start here ask for referrals
28:32 go find other investors here’s kind of
28:34 how you do it and that’s what I did so I
28:36 I ended up raising $800,000 on my own in
28:39 five weeks between Thanksgiving and
28:42 Christmas my first time raising Capital
28:45 didn’t know I I remember asking one of
28:47 the attorneys um at at one point I was
28:50 like so how do I call Capital like what
28:52 does that mean it’s like oh you just
28:53 send an email and you tell them that you
28:55 know you need to wire by this date kind
28:57 of thing oh okay okay like I didn’t know
28:60 anything man and so I I had to I yeah
28:03 well thank you I I was quite proud of of
28:06 the fact that I was able to get this
28:07 ball over over the line um and but this
28:11 whole like this whole uh you know do the
28:13 math right I I raised $800,000 $50,000
28:16 minimums so my cap my cap table is large
28:19 my cap table is 10 plus people because
28:21 that’s all that’s all I had really had
28:23 access to I had access to you know no
28:25 offense right small check investors to
28:27 me $50,000 a ton of money but for them
28:29 it’s you know retail retail
29:33 exactly exactly uh so from this whole
29:37 experience I thought well there got to
29:39 be a better way to do this like the real
29:40 estate guys have this figured out like
29:42 they do funds for everything there’s
29:44 like there’s no reason for this not to
29:46 exist in our space so what ended up
29:49 happening was I was over subscribed on
29:50 my raise there was there one investor or
29:53 a couple investors that wanted to be in
29:54 but but I just didn’t have room for them
29:56 in the cap table one of them was like oh
29:58 well we’ll keep in touch and maybe we
29:59 can work on something together okay so
29:02 what he he ended up contacting me like
29:04 four to six weeks after I closed them
29:06 ideal and he was like hey man do you
29:08 know of any other Searchers that are
29:10 looking for Capital my friend and I are
29:12 starting a fund and I said well
29:14 absolutely like I got a ton of friends
29:16 in in this space doing that and I’m
29:17 happy to send them your way but we
29:19 should also have a conversation because
29:20 I’m I’m interested in doing this because
29:22 I think it solves a lot of problems in
29:24 the space so long story short we ended
29:27 up having a conversation and um they
30:30 brought me on as a general partner in
30:32 the fund uh and what it turns out to
30:35 turns out to be is that these guys also
30:38 had been burned by the same Equity Group
30:40 that I’d been burned by and so uh you
30:43 know we just kind of all uh we kind of
30:45 all banded together in order to uh to to
30:48 help change the space for good um so we
30:51 we just completed our first fund of $5
30:54 million um and have deployed uh we we’ve
30:57 made investments into eight deal
30:59 that’s still those and then that’s I
30:02 guess when did you join with them and
30:04 how long did it take you guys to find
30:05 those aals and get them
30:07 topl so I joined with them in like March
30:10 of 2023 which is just after I acquired
30:12 this business which was insane but it
30:14 was one of those things like am I gonna
30:17 am I gonna squander this opportunity or
30:18 am I gonna take this opportunity like
30:20 sees the day nobody no who’s going to
30:23 ask me to be a part of a fund I had just
30:25 you know I just sort of you know screwed
30:27 around and figured this out and all of a
30:29 sudden now I have the opportunity to to
31:31 to be with these guys who have been
31:33 alternative asset alternative asset
31:35 investors before done stuff in multif
31:37 family just like you guys and um yeah I
31:40 had to I had to just seize the
31:41 opportunity so like yes of course I’m
31:43 gonna be part of this and help you guys
31:44 raise and you know kind of be the poster
31:46 child and I was like this guy did it uh
31:49 and sort of I my deals in the buy box of
31:52 the fund and everything
31:54 um uh I I’m sorry I can’t remember did
31:57 you did you have a followup question did
31:59 I did I answer your question yeah I was
31:00 trying to understand how long it took to
31:01 to deploy the eight so a pretty oh we
31:04 did a rolling deployment so we we didn’t
31:06 we didn’t do so a lot of funds will
31:07 raise and then they’ll deploy the
31:09 capital after the raise called the
31:10 capital as you needed it yeah and then
31:13 over but it defined those a which sounds
31:14 like about a year yeah yeah about a year
31:18 and end to deploy the eight yeah yeah
31:20 and then so for the really for the
31:21 textile business what did you basically
31:23 split for that Equity like what did you
31:25 offer the investors for that I offered
31:27 great terms for for self-funded deal
31:29 again see above I had to raise in five
32:31 weeks and I
32:33 was so I I offered a a a are you guys
32:37 familiar with like step up and prep uh
32:39 okay so so if your audience doesn’t know
32:41 a step up is basically you know you put
32:43 in a dollar you get $2 worth of equity
32:46 on a um on a twox stepup I offered a two
32:49 and a half time step up which is very
32:51 healthy for this space and I offered a
32:53 12% pref rate um so they would get you
32:56 know that that uh that pref rate would
32:58 would acrew unless it was distributed um
32:00 every year and uh and that was enough to
32:04 get me across the finish line so all
32:05 told I I think I I own 76 75% of the
32:09 company and investors own the rest of it
32:11 got it great structure no not bad not
32:14 bad yeah I mean we you know pref is a
32:15 super powerful vehicle right so for
32:16 those that don’t understand pref
32:18 essentially is a way as an operator you
32:21 kind of you don’t want to promise
32:23 investors but essentially it’s a way you
32:24 give investors first place in line to
32:27 get paid right then you’re you’re
32:29 basically sharing in a promoe or split
33:30 and so I me on the deal that we Clos we
33:32 offered a 15 pre but ultimately we also
33:34 structured it to where we kept most of
33:35 the equity so a lot of different ways to
33:38 structure deals and like I said these
33:39 deals get done based on Creative
33:41 structuring so where are you at with the
33:43 business right now so is is the business
33:45 going were you able to come in bring all
33:47 your technology enhancements or did you
33:50 do the 90-day do nothing mentality where
33:52 you just learned I mean so because
33:54 you’re you’re you’re in your first year
33:56 we’re we’re we’re in the closing of our
33:58 first year at H&M and so we also know
33:01 that like everybody has a little bit of
33:03 it the first strategies of integration
33:05 right yep I’m smiling because uh it it
33:09 certainly I mean obviously never goes as
33:11 planned um but the I was sort of forced
33:14 to do nothing for 90 days or what felt
33:16 like nothing for 90 days uh because of a
33:20 lack of working capital so my my deal in
33:23 financing I was supposed to have a
33:25 Million Dollar Plus line of credit and
33:29 uh so I I told you before that I
34:31 received you know inventory and uh an AR
34:34 in the deal all told I probably received
34:36 about three and a half million dollars
34:38 worth of networking Capital but it was
34:40 all in inventory and but the bank looked
34:43 at it the bank looked at it and because
34:45 of the pay I had payables right yeah so
34:48 uh so the bank looked at it and they’re
34:49 like Kevin you’re gonna have three
34:51 million three and a half million dollars
34:52 in networking Capital you’re going to be
34:53 swimming in cash you don’t need a lot of
34:55 credit and you know uninformed at that
34:58 point was like okay fine whatever let’s
34:60 just get this deal across the Finish
34:01 Line well it turns out inventory is very
34:03 expensive especially when you release uh
34:06 twice a year and I started in the in my
34:09 uh in the bank with like
34:12 $125,000 uh and then have to pay for the
34:14 previous season’s inventory that’s
34:15 coming in so in other words uh cash is
34:18 tight in the first year and so you can
34:20 only do so much now I will say that we
34:23 maintained our our profitability like
34:25 our ebit D didn’t go down even the
34:26 revenue declined a little bit last year
34:28 year but now we’re up uh this this first
35:31 quarter we’re up um almost 20% uh over
35:34 last year so things are moving in the
35:36 right direction and we’re we’re I’m I’m
35:39 still looking for that working capital
35:40 by the way never did get my line of
35:42 credit working on it uh I’ve been saying
35:44 that literally for the last year like
35:45 you can go back to podcast that I did
35:48 last year this time and you’ll hear me
35:50 saying I should get this by the end of
35:52 the month like April of 2023 like I
35:55 think we’re getting this at the end of
35:56 the month now here we are April 2024 and
35:59 I’m saying call 100 get working capital
35:02 it’s been it’s been
35:03 unbelievable it’s it’s been unbelievable
35:06 but fortunately the business is healthy
35:08 enough and you how many employees really
35:10 quick I think we never really talked
35:11 about that number yeah about 15
35:13 full-time and uh I’ve got about 10
35:15 contractors including sales and um
35:19 designers and and things like that and
35:20 if you got tell you use any of your lean
35:24 background to be able to bring to the
35:25 business yet or is that another phase
35:27 you’re you’re totally totally because
35:29 you’re you were looking I mean it’s all
36:31 it’s all these processes are are manual
36:35 a lot of paper a lot of so you’re
36:37 basically looking at it’s it’s not only
36:39 lean but it’s like what tool can I put
36:41 in place to basically Force this lean
36:44 process so there’s you know you’re
36:45 you’re not you’re not dependent on a
36:47 human being to remember to do something
36:49 it’s like you this is your only option
36:51 you must comply with this process so
36:53 we’ve been doing a little bit of that um
36:55 nothing too major at this point uh I
36:57 don’t want to there’s a lot of change
36:59 that happens in the first year so you
36:01 don’t I mean that’s a whole other
36:02 episode of you know how to oh man you
36:05 got to be delicate you got to be
36:06 delicate right especially with my staff
36:09 it’s been their original staff members
36:10 so they’ve been here for 20 years and
36:12 they’ve they’ve done so there’s no
36:14 documentation right like they’re the
36:16 only ones who’s ever done this job so
36:18 it’s a lot of you know uh they’ve
36:22 they’re protective it’s a lot of fun you
36:24 use the wrong word dude let me tell you
36:27 so
36:28 I have said to so many people uh it’s
37:32 been the hardest year but it’s been the
37:33 most fun I I couldn’t go back I love
37:36 what I’m doing uh I I I I just I can’t
37:40 imagine living another life at this
37:41 point like this this is what I want to
37:42 do for the rest of my life awesome
37:44 that’s a good segue to kind of my maybe
37:46 my last question before we wrap up yeah
37:48 is basically you know what’s next right
37:50 you see yourself buying another business
37:51 or you see yourself focusing on fruition
37:53 and kind of really being more of that
37:55 Mentor model deploying money into other
37:59 steals no I’m kind of like you guys like
37:01 I I kind of want to do I kind of want to
37:03 do the mentoring and the and the and the
37:05 fund and all of that but I also you know
37:07 I want to be a practitioner you know I
37:08 want I want to actually be good at this
37:11 and not just not just one of the you
37:13 know social media Talking Heads or
37:15 whatever you know actually actually put
37:17 your nose to the grindstone and figure
37:19 it out um I’m already looking at another
37:21 deal for know once you kind of get into
37:23 this you’re you’re kind of a junkie and
37:25 so every day yeah and buying a business
37:27 and in a weird Niche so now I get people
38:30 sending me listings all the time from
38:33 anything textile Furniture Home related
38:35 I see it all uh so I I kind of have uh
38:39 that’s nice that my network thinks of me
38:40 for a specific industry and then for
38:43 fruition you know we’re launching our
38:44 next Fund in in August um and you know
38:47 we’ll we’ll continue making investments
38:49 in the self-funded space and you know
38:51 probably some independent sponsors we’ve
38:52 looked at a few deals there uh but but I
38:56 why not both why not exactly that’s fair
38:59 that’s fair so we’re going to jump into
38:01 our rocket round Kevin thank you so much
38:03 for just being you know So forthgoing
38:05 for anybody that’s listening man that
38:07 was a wealth of knowledge and somebody
38:10 that actually executed all those things
38:11 so very fortunate to have you Kevin on
38:13 that so let’s jump into the rocket round
38:15 this is where we ask some questions some
38:17 personal questions just to get you know
38:19 to know you a little better so I’ll kick
38:21 off the first one so what do you like to
38:22 do in your free time Kevin yeah
38:25 I free time
39:30 yeah dude yeah look at deals yeah I mean
39:33 the truth is like I’m I’m in the office
39:35 way too much uh I’m in the office at
39:37 least six days a
39:39 week I just lied I’m usually in the
39:41 office seven days a week uh and
39:44 I I’ve been I’ve been solely focused on
39:47 that I’m I’m trying to do a better job
39:49 of of planning trips away so my wife and
39:53 I just did a uh we live in we live in
39:56 North Carolina Hilton head’s you know
39:58 about a few hours away from us we went
39:59 to the beach and I was like we need to
39:01 do something like this quarterly like
39:03 this is the I need to I need to do this
39:05 I need to take a break and remove myself
39:07 from the situation um other than that
39:10 I’m like I’m a really crappy golfer um
39:12 I’m trying to get better there um I just
39:14 bought a house on a golf course so um
39:16 I’m I’m GNA try and force myself into
39:18 actually you know getting better um but
39:21 yeah I’m I don’t know man like as far as
39:23 Hobbies go I feel like I’m still I just
39:25 love doing this like uh I great answer
39:30 yeah it’s a great answer yeah we had
40:33 little snow a broker kind of on on the
40:35 podcast previously and his whole thing
40:36 is if you’re gonna be an mmaa you have
40:38 to know how to golf so I have to go
40:40 figure out how to go golfing so we did a
40:42 we did a PGA event here in Houston for
40:44 the business we bought and we kind of
40:45 brought a bunch of the sales people and
40:46 kind of you know was really like a
40:47 customer appreciation event and first
40:49 time going to a golfing event so slowly
40:52 going to get more and more learn you
40:53 know I just today I learned what the
40:55 back back nine is is that what it’s
40:56 called what’s it the back so I’m slly
40:58 learning you know some of the the
40:60 verbiage of this whole thing next one
40:01 he’s going to learn is how to break a
40:02 club because everybody goes through that
40:04 experience yeah you got to have a
40:06 designated one you just beat the crap
40:07 out of yeah all right so let’s go to the
40:09 second question so what’s been the most
40:11 memorable moment on your business
40:13 Journey uh the most memorable moment on
40:16 my business Journey I’ll just talk about
40:18 you know being in be having acquired
40:20 this
40:22 business I can’t tell you how many
40:24 things could have gone wrong you know I
40:26 didn’t meet any of the staff before and
40:28 it’s not abnormal to not meet anybody um
41:32 but there’s a massive risk there so I
41:34 didn’t meet anybody I didn’t meet the
41:36 the vice president who really ran the
41:38 show here um and to a person they’ve
41:43 been just they’ve been all in on the
41:46 growth uh the growth plan I’ve put
41:48 together and like here’s how they
41:49 remember the time when the business was
41:51 doing twice the amount of sales it was
41:52 doing today so they they do want to get
41:55 back to it there’s a level of
41:56 Professional Pride there
41:58 the GM and I the the VP and I have a
41:00 great relationship he’s I mean he’s he’s
41:02 been so generous of of just teaching me
41:05 the industry and wanting the business to
41:07 succeed and to me like honestly that is
41:09 the most memorable piece is like the an
41:12 appreciation of like this could go so
41:14 poorly and the fact that it didn’t and
41:17 there’s good people involved just makes
41:20 all the difference and it really goes
41:21 back to like do you trust the seller
41:23 when you’re sitting across the table
41:25 like is this person going to screw you
41:28 and I’m I’m I’m very fortunate uh that
42:32 that I I I had a good sense of of them
42:35 as as people that they were good human
42:37 beings who cared about their staff they
42:40 they assembled a good team and that this
42:42 staff was ready to go to the next level
42:44 isn’t it amazing that when you want to
42:46 buy the business because you dream of
42:48 buying a business and the money and all
42:50 the freedom that you’re going to get and
42:52 then you realize that there’s people
42:54 attached to it and then you come to
42:56 every then you come in and you real
42:57 realize that you’re not just winning
42:59 because you want to make more money
42:00 you’re winning because people’s
42:03 livelihood depends on you making the
42:05 business successful it’s such a
42:07 transformation it’s powerful it’s uh I
42:10 I’ve told several people this that this
42:12 is if there’s there’s more and more
42:14 people who are getting interested in
42:15 buying businesses and that’s great but
42:17 there’s a lot of people who are
42:18 attracted to the potential Financial
42:21 returns you know they they they see
42:23 millions of dollars and they’re like
42:24 well this is my way to become a
42:25 millionaire and that they’re not wrong
42:27 but that’s their focus like if you’re
43:30 not focused on the people or if you’re
43:32 not a people person or you don’t like
43:33 people or you have it this is not the
43:35 thing for you like go do something else
43:38 man like really because you’re gonna
43:39 have a bad time if you’re not people
43:42 oriented because business is all about
43:44 relationships and the relationships
43:45 you’ve got you know with your staff
43:47 that’s what’s the most important and at
43:49 these levels right it’s not about you
43:51 doing it it’s about getting success by
43:53 enabling other people right so you’re
43:55 since less of the doing even though
43:56 we’re all roll our sleeves up that’s why
43:57 year but it’s about you know I talk to
43:60 my partners about this all the time it’s
43:02 about managing people and setting them
43:03 up for success and getting results
43:05 through them right not you doing the
43:07 results right otherwise you’re never
43:08 gonna be able to scale it so right yeah
43:10 you got to leverage the staff all right
43:12 last question favorite tool or resource
43:15 business tool personal tool what you
43:17 like to
43:18 use so uh this might be a kind of a
43:22 boring answer but it really is for me
43:25 it’s it’s X or Twitter um because I was
43:29 able to fill out my cap
44:31 table through Twitter I had 300
44:33 followers I didn’t have a I told you I
44:36 didn’t have any sort of like investor
44:37 Network or anything I had a couple names
44:40 of people that were friends of friends
44:42 that I
44:43 contacted um but I did a lot of capital
44:46 raising on Twitter and just dming people
44:48 and seeing if they were interested in
44:49 seeing materials I remember one of the
44:51 guys who became who’s now on my board
44:53 but he was he’s like my second largest
44:55 investor I I saw him uh went up to to to
44:59 the Midwest where uh I was doing some
44:01 sales visits uh with my with my my
44:03 national sales manager and I met him for
44:06 dinner um separately and I we were we
44:09 were reminiscing about this but I I
44:11 remember he’s like do you remember when
44:12 I DMD you uh we were talking about this
44:14 deal and you’re like so what do I just
44:17 like wire you $100,000 now like what
44:19 what how does this work and I’m like
44:20 yeah it kind of feels like fraud doesn’t
44:22 it like you’re wiring you’re wiring
44:24 $100,000 to some dude you met on Twitter
44:26 like that’s insane but that’s what
44:29 happened that’s what happened and he’s
45:31 not the only one like they’re all like
45:33 it’s it’s it’s an unbelievable platform
45:36 for for what we do the the the
45:38 intellectual ability and the
45:40 intellectual prowess of people on this
45:43 platform the giving nature of people
45:46 everybody wants to help other people up
45:47 the ladder um I mean I I can’t say
45:50 enough about how that that platform has
45:52 changed my life awesome no and managing
45:54 investors is an important thing I tell
45:56 to our investor relations Team all the
45:57 time that most people don’t move
45:59 significant sums of money around for
45:60 anything besides maybe buying a house
45:02 yeah and so be conscious of that right
45:05 and you know there’s a level of comfort
45:07 that you build with them and then on top
45:08 of that right you only get a handful of
45:10 times to interact with those investors
45:12 right typically like it’s part of a
45:13 closing doing monthly updates you know
45:16 you’re maybe giving P ones and so you
45:18 only have a few times outside of maybe
45:20 you’re doing investor events that you
45:21 meet with those people and so you need
45:23 to be best in class at those points in
45:25 time right otherwise you’re going to
45:26 have that reflection on you right of not
45:28 being Best in Class and so no all famous
46:31 words device yeah I mean and that’s what
46:33 I think that’s what we’re both trying to
46:34 do is right professionalize the space so
46:36 it’s not the investor gives a check and
46:38 then never hears from that person again
46:40 because I’ve heard so many stories in
46:42 the lower Middle Market where that
46:44 happens and you know People Like Us come
46:47 in and we’re like yeah it’s not the way
46:48 that’s not the way we’re gonna operate
46:50 like you gotta you got to treat it like
46:51 it’s your money and like you know treat
46:54 other people the way you’d want to be
46:55 treated if it was your money at stake so
46:57 Kevin in closing what what would you
46:59 like to say to the the listeners uh just
46:01 kind of any words of encouragement
46:02 anything you want to leave them with um
46:04 and then also plug your fruition let
46:07 them know a little bit about that how
46:09 they can get a hold of you yeah um I
46:11 mean the thing that I would tell anybody
46:13 listening to this you know if if you’re
46:14 if you’re looking to buy a business or
46:16 this is in any way interesting to you
46:18 you know it’s you don’t need to be you
46:21 know you don’t need to be an NBA you
46:24 don’t need to have Finance experience
46:26 you don’t need in fact a lot of those
46:27 things might hurt you I have an NBA but
46:29 whatever who cares like it’s it’s more
47:31 about what do you want to do you want to
47:33 be in a community do you want to be in a
47:35 small business do you want to invest
47:37 back into the community that you buy in
47:39 uh and can you see yourself doing this
47:41 for the long term I I think if you’re
47:43 looking to buy a business and flip it
47:44 I’m not really I’m not that guy you know
47:46 I’m a long-term guy um and as far as
47:49 fruition goes like we’re the same like
47:51 we we want PE we’re not looking for
47:53 quick flips or anything like that we’re
47:54 looking for people who want to be in
47:55 these businesses for a while
47:58 um and and really make uh an effort in
47:01 the communities and and the and the
47:02 local economies that they’re in fruition
47:05 capital invests in businesses uh
47:07 between1 and2 million in NEP businesso
47:10 business only 10 plus years in business
47:12 not technology Centric all that means is
47:15 that we invest in boring sweaty
47:17 businesses you know Tire M or uh wire
47:21 manufacturers towing
47:23 companies uh commercial kitchen cleaning
47:26 companies like stuff that you know you
47:28 would never see on a billboard or
48:31 anything like that so those are the
48:32 things that we like and as far as
48:34 investors Go I mean I’m I’m happy to
48:36 hear from anybody uh if you’re
48:38 interested in in just kind of looking at
48:39 our at our stuff and seeing if you you
48:41 kind of want to come along for the ride
48:43 but um we’ve got a lot of LPS who are
48:45 also interested in buying companies so
48:47 they kind of want to double dip right
48:48 like I’ll give you Capital to to work
48:50 with and I just kind of want to see what
48:52 the process is like but then I’m also
48:54 going to want to buy a deal so you can
48:55 be an equity source for the deal we see
48:57 a lot of that so they they kind of get
48:58 to double dip frankly that’s my plan as
48:00 a GP so um we’re we’re open to a lot of
48:03 different things and and you know I just
48:05 I love talking to people in this space
48:06 and happy to hear from anybody likewise
48:08 Kevin thank you very much tons of
48:10 information for the audience and really
48:12 appreciate taking the time thanks guys
48:14 thank you for listening to the m&a
48:15 Launchpad podcast if you’ve enjoyed
48:17 today’s podcast and would like to
48:18 support us please leave us a rating and
48:20 a review after you listen I’m Casey menu
48:22 and I look forward to talking with you
48:23 next week
