Private Equity to Entrepreneurship Through Acquisition with Niklas James

In this episode of the M&A Launchpad Podcast, hosts Feras Moussa and Casey Minshew welcome special guest Niklas James, who shares his journey from Norway to the U.S., where he began his career at Bain & Co., gaining valuable experience in the private equity due diligence process. After several years in finance, Niklas pursued his MBA at Harvard Business School, which sparked his interest in buying a small business. Inspired by friends in the Entrepreneurship Through Acquisition (ETA) community, Niklas became a self-funded searcher, and he dives into what it takes to succeed in this model. 

Niklas discusses his first acquisition, detailing the criteria he sought in the right business, the challenges of taking over a company, and his decision to keep the seller on as president. He also shares the strategies he used to achieve growth, both organically and by adding new elements to the company. 

Today, Niklas is the co-founder of Minds Capital, an investment firm that provides equity for independent sponsor-led and searcher-led acquisitions. Tune in to learn from Niklas’s experiences, from searching and acquiring to scaling and leading a successful business. 

In this podcast episode, we discuss:  

  • Acquiring a Home Service Business 
  • Seller Transition Strategies 
  • Organic Business Growth Tactics 
  • Private Equity Influence on Searching 

Time stamp:

0:00 – What We Talk About This Episode 

2:30 – Introducing Niklas James 

6:15 – The Decision Search for an Acquisition 

14:26 – The First Deal  

19:50 – Operating a Home Services Business 

27:10 – Niklas’s Goals Today 

30:05 – Rocket Round 

You can connect with Niklas James by LinkedIn or Email: nj@mindscapital.co 

Additional Resources:

Transcript

00:00 all right on today’s episode we
00:02 interviewed Nicholas James where we
00:03 talked about basically you know moving
00:05 from Norway to the US right getting jobs
00:07 in that private Equity space and then
00:09 really shifting focus and starting to go
00:11 off doing your first fund and realizing
00:14 hey you know what maybe a self-funded
00:16 deal is maybe better for me than kind of
00:17 raising money from people and ultimately
00:19 buying a home services business and
00:21 really some of the pros and cons around
00:22 that space right What attracted him to
00:24 that space and then ultimately kind of
00:26 how did he start to grow that business
00:28 and then where he’s at today which is
00:29 focused on invest ing you know making LP
01:31 Investments with other Searchers and
01:33 other businesses so Casey what was some
01:35 of your big takeaways you know getting a
01:37 chance as a somebody from Norway then to
01:40 join over at Bane at a young age right
01:43 to just Bane Capital we all know massive
01:45 right Mitt Romney the whole group and to
01:48 be a part of that due diligence side
01:49 right and to understand some of those
01:51 things but then that career path
01:53 inspired you to go out and buy a small
01:55 to mediumsized business what it tells
01:57 you is is that these you can do very
01:59 well in industry you can make a lot of
01:02 money on just one good solid acquisition
01:05 right and uh you know I see these things
01:07 where uh you know a couple guys to talk
01:09 about just takes one yep and it’s that’s
01:11 what’s exciting about our space yeah the
01:12 other thing too I was kind of you know
01:14 surprised that he most people wouldn’t
01:15 make that jump right you know if you’re
01:17 in that world there’s a lot of career
01:19 growth there too and so yeah kind of he
01:20 got the exposure to a friend right he
01:22 happened to do an NBA got that exposure
01:24 to that space and decided to go into it
01:26 and not only went into it then backed
01:27 out of it and said you know what I’m
01:28 going to shift this a little bit and go
02:30 do my own deal right and a lot of people
02:32 again don’t have that wherewithal and
02:34 like we ultimately end up talking about
02:35 on this podcast I mean there’s a
02:36 Playbook to execute but none of it’s
02:38 really that hard right A lot of it is
02:40 very much almost simple things that we
02:42 all know we need to do but it’s about
02:44 getting there and executing them and
02:46 pushing them along and maturing that
02:48 organization yeah 100% this guy’s
02:50 focused uh love Nicholas and he’s got a
02:53 he’s got a great you know opportunity
02:54 for you know our listeners that might
02:56 want somebody to participate in one of
02:58 their their Investments so dive in on
02:01 this podcast excellent absolutely lots
02:03 of information so listen
02:08 in hey everybody it’s Ferris and we’d
02:10 love to see you at our upcoming m&a
02:12 Launchpad conference in Chicago October
02:14 26th at a conference we talk about what
02:16 it looks like to value a business how to
02:18 buy a business how do you manage a team
02:20 right and ultimately we’re big Believers
02:22 in the buy then build concept so we’re
02:23 going to have one of our friends Walker
02:25 D the author of B and build there as
02:27 well as one of our Keynotes and many
02:28 more so we love to see there to kind of
02:29 get exp to the space and network hey
03:32 Nicholas welcome to the show hey guys
03:33 thank you yeah great to have you today
03:35 all right I’m excited to be here so
03:37 you’re joining us from uh what part what
03:39 part of the country you in you’re in
03:40 Texas correct I live in St Pete Florida
03:44 oh you live in Florida okay all right so
03:46 maybe for those listeners I mean you
03:48 know let’s just kind of hop right into
03:49 it right what did you previously do
03:52 right before kind of hopping into where
03:54 you are today yeah so my background is
03:56 uh first of all you’ll hear I have an
03:57 accent I’m from Norway originally so I
03:00 grew up there on the west coast of
03:02 Norway where you have your screen saver
03:05 that’s kind of where I grew up um and uh
03:07 I used to work at my yourself know
03:08 exactly what you’re talking
03:09 about that’s right um I went to college
03:13 in London and then after that I started
03:15 my career at Bon company uh at Bay now
03:17 was mostly under private Equity due
03:19 diligence group um so did a lot of
03:22 Middle Market private equity in the
03:24 Nordic um after ban I had a quick stint
03:27 working inventure capital before I moved
03:29 to the states where did my MBA at HBS uh
04:32 I graduated from there in
04:35 2013 uh I spent a couple of years in
04:37 Corporate America um until I got my
04:40 green card and then ever since then I’ve
04:42 been in the Searcher SLS sponsor world
04:45 uh so this was late
04:47 2015 all right let’s dissect that really
04:50 quick right so clearly you kind of came
04:52 up really that private Equity pedigree
04:53 right you know not just anybody gets
04:55 exposure to Bane into those that world
04:57 and I guess you know you mentioned OB
04:60 making the pivot into the Searcher space
04:02 and my question is ultimately what led
04:04 you to make that jump right especially
04:07 kind of with the previous roles you had
04:09 right A lot of people basically double
04:11 down and start to grow and become a vice
04:13 president in those ecosystems and you
04:15 know build their their their career that
04:17 way and maybe my question is how do you
04:19 get exposure to that Searcher world and
04:21 what made you decide you know what I
04:22 want to actually hop in and kind of roll
04:24 my sleeves up and get my hands a little
04:26 dirty yeah I found a training that I had
04:28 from a place like Bane was was
04:30 incredible and also it gives you a stamp
05:32 of approval for everything else you do
05:33 in life um and so so that’s also super
05:36 valuable as far as how did I get into
05:38 the Searcher world I was exposed to it
05:41 while at HBS um it wasn’t a big thing
05:44 back in that time period 2011 to 2013 uh
05:48 but there was a small class on it at HPS
05:51 I didn’t actually take that class but
05:53 after we graduated I had a few
05:55 classmates who had gone on to become
05:57 Searchers and that’s not so sighing
05:00 right out of the Gat so when we had our
05:02 one-year reunion there wasn’t a whole
05:04 lot to report back on but uh in the year
05:07 that followed after that I saw several
05:10 of them acquire companies and I went to
05:12 visit a couple of them and I got to see
05:15 you know their their new or the
05:16 facilities and see the small business in
05:19 in operation and uh that was super
05:22 inspiring I looked at them and
05:24 essentially thought if they can do it I
05:27 can probably do it too and from there on
05:29 I just had to
06:30 as I said resolve my Visa issues before
06:32 I could jump into the entrepreneurial
06:34 path that’s pretty incredible because we
06:36 we love that uh the the Harvard Business
06:39 School we like we like to go up there
06:40 and go to their ETA conference we’ll be
06:42 up there in October so yeah and uh you
06:45 know we go just to be around the the
06:47 ideas and and and meet cool people and
06:49 hear good stories and stuff and it’s
06:51 also good for us to get away from the
06:52 office and and be a part of it that’s a
06:54 pretty cool little ecosystem up there
06:56 and and what they’ve built maybe you
06:58 know the funny thing with your story
06:59 right it’s it’s almost like the
06:00 entrepreneur’s constant dilemma it’s
06:02 like well if that person can do it I can
06:04 definitely do what that person
06:05 accomplished right absolutely so you
06:08 know I guess that that gave you the
06:09 Insight of hey you know what maybe I
06:11 want to go have my own business right
06:13 and gave you that confidence that you
06:14 could do it and so how did you progress
06:15 from there yeah there was a this is a
06:18 long time ago now but let me recollect
06:20 as best I can there was a probably a
06:22 six-month period between when I more or
06:24 less decided that’s what I want to do
06:26 and I actually quit my job and so that
06:29 six-month period perod I filled with a
07:31 lot of calls calling people who were in
07:33 that world doing that just educating
07:36 myself um and then as I was ramping up
07:39 my exit from my job I I was traveling
07:42 around I took a few holidays here and
07:44 there to to travel and meet the
07:45 prospective investors in Boston and San
07:49 Francisco um and so forth and um I
07:52 initially raised actually a traditional
07:54 search fund out of that um so when I
07:57 quit that was my intention um so I raced
07:59 them half million or whatever it was in
07:01 order to have a two-year Runway to cover
07:04 my costs and have a small salary um but
07:07 I actually never deposited those checks
07:10 so what I did I went back to them it
07:13 must have been like September October
07:14 and I said look I really want you guys
07:16 to be my investors when I find a deal
07:19 but I do not want to lock myself into
07:22 this two-year track of traditional
07:23 search funds um first of all I don’t
07:26 really well I have optionality around
07:28 needing that salary because I have a
08:31 wife who’s working and she she supported
08:33 that and also I I like the idea of being
08:35 more flexible I was actually being head
08:37 hunted for an opportunity at that time
08:39 that seemed pretty cool and then I also
08:42 didn’t like the whole aspect of your
08:45 traditional investors own your deal flow
08:48 uh I wanted to own my deal flow because
08:50 there are so many ways you can be
08:52 creative about putting together a deal
08:53 and structuring structuring it and also
08:57 your own economics so I said to them I
08:00 would I need Capital when I’m going to
08:02 close the deal but I don’t really need
08:04 it for the search pH itself so that’s
08:06 how I became a self-funded Searcher
08:08 actually in late 2015 which was a term
08:11 that wasn’t even coined at the time oh
08:13 it’s funny you say that because I mean
08:15 yeah whenever we were at one of the
08:16 events one of the traditional search
08:18 funds at fund Searchers kind of straight
08:20 up told us it’s like hey don’t break the
08:22 model right because it works very well
08:24 the funds can do very well on the
08:27 Searchers right but again to your point
08:28 it doesn’t always makes sense right it’s
09:30 not the best economically or even just
09:32 being able to get more creative in a
09:33 deal structure right some funds are not
09:35 going to accept that and just being able
09:37 what I love about the m&a space is it’s
09:39 all about deal structuring right having
09:41 done a lot on the real estate side it’s
09:43 very much one size fits all like the
09:44 boxes are very very con strained versus
09:47 an m&a you can make a deal work in a
09:49 situation that it may not have worked if
09:51 you didn’t have the ability to get very
09:54 flexible I really agree with that
09:56 actually it’s one of the things I often
09:57 say is that the buy box for a searcher
09:60 can be pretty big um because you can be
09:02 flexible the moment you teder yourself
09:06 to the traditional funds or any kind of
09:08 institutional partner your buy box
09:11 mirrors their buy box and it’s funny
09:13 they say to you that you shouldn’t break
09:15 the model when in fact it is them who
09:17 have uh developed the model in a way
09:20 where it’s pretty narrow if you go back
09:23 15 20 years in time these search fund
09:26 investors traditional search fund
09:28 investors wanted to invest in the that
09:30 could give them three or four times uh
10:32 your money these could be boring old
10:36 businesses um they could be towing
10:38 companies that’s the big one of course
10:40 that was such a big success but over
10:42 time they evolved into becoming much
10:45 more in favor of tech enabled very
10:48 scalable deals that first of all are
10:51 more expensive on the front end secondly
10:53 they’re harder to you know find and
10:56 obtain because they’re extremely
10:58 competitive um and uh thirdly there’s a
10:01 lot more risk because if a software
10:03 company doesn’t scale um it quickly runs
10:06 out of steam versus a home service
10:09 business it kind of is a little bit more
10:11 like a steady Edie but traditional
10:12 search fund investors don’t like steady
10:15 Edie as much as they used to so their
10:17 model evolved and with that also the
10:19 ecosystem very very well said that’s
10:22 because that’s how we looked at it I’ve
10:23 I’ve read you know all the different
10:24 books and search models and I did a solo
10:27 by myself with I didn’t even know that’s
10:29 what it was I just bought a company in
11:30 2019 I didn’t have a definition of it
11:32 right and uh and so as we get kind of
11:35 further into the into the world you sort
11:37 oh that’s what I did it was a solo and
11:39 you know now we’re doing kind of an
11:41 independent sponsor structure you know
11:42 but ultimately we’re all just trying to
11:44 buy a business and you either Syndicate
11:46 your Capital you have the money you know
11:48 all of these different things but but
11:50 it’s nice for our listeners to hear
11:52 these different definitions because it’s
11:54 it’s important right because those when
11:56 those guys go out and do a search
11:58 traditional search is what you’re saying
11:59 right right I’m going to go out and I’m
11:00 going to raise money to to get my two
11:03 years to find that business and if I
11:06 find that business and those investors
11:07 have to really Cash Call they put in
11:09 additional Capital to follow on
11:10 investment right but the buy box if you
11:13 follow like the Harvard you know how to
11:15 buy a business Harvard book it’s I mean
11:18 my God that’s like the perfect business
11:20 that you have to find I mean that’s what
11:21 it seems like it’s like it has to hit
11:23 this exact box and then when you go out
11:26 and you say hey I don’t want to fit just
11:27 that box I’m open to anything you kind
11:29 of Pop out and you become a different
12:31 type of you’re not really the
12:32 traditional Searcher anymore you’re now
12:34 either a solo Searcher or you’re an
12:36 independent sponsor model is that
12:37 correct how you kind of see all the the
12:39 verbiage yeah I I still think
12:41 traditional search is a really good
12:44 asset class the institutional investors
12:46 are still getting very good returns if
12:48 you happen to be one of those Searchers
12:50 and you do close a deal um there’s a
12:53 high chance of success um because
12:57 they’ve been filtered and screened and
12:59 perfected with the model so if you
12:01 actually found something that fits it’s
12:02 going to probably be a high chance of
12:04 likelihood a success um but the as you
12:07 see more and more Searchers flood into
12:09 the space it it had to become more
12:12 flexible in order to absorb all the
12:14 demand is ENT I feel like it’s almost
12:16 disheartening sometimes to go to these
12:18 events and these people are looking for
12:19 very specific deals and you know I’m of
12:21 the opinion you know and Casey and I
12:23 think have a simil thesis to you we like
12:24 boring bluecollar businesses right I
12:26 want the business that is not going to
12:29 you know give me the chance to 100x my
13:31 money I don’t I don’t need that right
13:33 instead I instead of taking you know 20%
13:35 chance to 100x I’d rather take 75%
13:38 chance to Forex right and it’s just
13:40 consistent steady edti to your point and
13:42 so you know some of these people really
13:44 hype and my background is software so I
13:45 came from that ecosystem I understand
13:47 what software can do but some of these
13:49 guys have very limited narrow focuses
13:52 and they’re buying these at 10 20x
13:54 premiums that if they did nothing I mean
13:56 it’s only going to cash flow 5% you know
13:59 cost of cap but I mean it just it’s
13:00 crazy out there and so it’s interesting
13:03 and I understand how the ecosystem and
13:04 why it kind of Consolidated right to get
13:06 to where it is today but again I think
13:08 people just need to really be
13:09 open-minded right look at other
13:11 opportunities and you know ask yourself
13:13 does this risk tolerance make sense for
13:14 me today right versus what my investors
13:17 are looking for I think I like
13:21 specialization um so if you’re an
13:23 investor you can be more Savvy if you
13:25 invest in a narrow area and you can then
13:29 become better and you’re able to provide
14:30 more inbound deal flow because you
14:32 specialize on something so it makes
14:34 sense from the Investor’s perspective I
14:37 also like it from the sponsor
14:38 perspective as as an investor in the
14:40 space myself now I love it when a
14:43 sponsor comes to me and says hey I’ve
14:45 been doing this for 10 years this all I
14:46 do it’s all I know and here’s another
14:48 deal that I really like and this is why
14:49 I like it um that’s very compelling but
14:53 if you’re a generalist Searcher trying
14:54 to get into this world yeah you you
14:57 don’t necess the traditional search f
14:59 just to use that as as kind of the
14:01 opposition here it’s a it’s a narrow
14:04 investor so if you’re not aligned with
14:06 that then you’re probably not going to
14:08 be a fit for a mutual fit uh the world
14:11 is much bigger than the traditional
14:12 search uh I like what Casey said about
14:15 how at the end of the day it’s just you
14:17 know someone buying a company um and uh
14:22 that’s all you do and then you need to
14:23 Syndicate the capital for that if you
14:24 don’t have it yourself yeah so then I
14:27 guess speaking of so Nicholas I mean
14:28 what was that first deal right how’ you
14:30 come across it you know were you
15:31 focusing in a niche or were you just
15:33 stumbled into something else and you
15:35 like hey this made sense I had a little
15:37 bit of a journey uh my first deal was a
15:39 software company uh that I acquired
15:42 about 18 months after starting my search
15:45 um it was a small SAS business with uh
15:49 12 employees 13 employees something like
15:51 that and um I took the reign of that
15:55 company as CEO it was in the model of
15:57 self-funded search my economics were
15:59 were similar to self-funded search um
15:02 the deal went a little sideways so it
15:04 didn’t become the Home Run we were
15:07 hoping for uh but it was a great
15:08 learning experience and one of the good
15:10 things about it was that it it uh it
15:13 took up a couple of years of my time but
15:15 by 2019 I was on to my next project and
15:19 um my next project then there were a
15:22 couple of things I didn’t love about SAS
15:25 and Technology I’m even though I had
15:27 been in VC before one of the things I
15:29 decided when I was in BC and why I
16:31 didn’t continue down that path is that I
16:33 don’t have a computer science background
16:35 I’m a business guy and that means you
16:39 you have a lack of control essentially
16:41 on the product side uh because I I
16:44 couldn’t even understand you know I can
16:46 understand product road map where we’re
16:47 going but I have no understanding on how
16:49 we’re going to get there how fast it’ll
16:50 go or how we can improve that process
16:53 and so it was just didn’t feel like a
16:55 great fit for me so for various reasons
16:57 as a sponsor I decided to
16:60 um go back to uh businesses that are a
16:02 little more intuitive to understand um
16:06 and uh specifically at that time my wife
16:08 was working at Lennox International in
16:10 uh in Texas uh which is a big
16:13 manufacturing company for that
16:15 manufacturers HVAC equipment so she kind
16:18 of had a had a front row seat to this
16:21 industry from a OEM perspective and I
16:24 saw a you know service side of that
16:28 business that is high highly fragmented
16:30 and not very sophisticated this was
17:32 before covid so private Equity hadn’t
17:35 yet jumped all over Home Service yep um
17:38 and so I I took an interest in in that
17:40 and then started to connect with
17:42 business owners in in the HVAC space
17:44 specifically and eventually closed the
17:46 deal um in 2019 2020 in the Home
17:49 Services space which is a deal that I
17:51 still oversee as an independent sponsor
17:54 awesome very exciting yeah sounds like
17:57 you know first one went up the bat
17:59 didn’t really quite work out and dusted
17:01 your kind of dusted yourself off and
17:03 went into the next one and so I think a
17:04 lot of people you know you have to
17:06 realize there is a lot of learning that
17:08 happens across the board right and and I
17:10 tell people don’t get analysis paralysis
17:12 to where you you know you give yourself
17:14 a million reasons to say no and you
17:16 never do a deal right it’s about going
17:18 into a deal knowing enough to where once
17:20 you hit other roadblocks you have the
17:23 wherewithal to solve them and keep
17:24 moving forward right and ultimately you
17:25 build this Rolodex and this Archive of
17:27 information and knowledge right that way
17:29 even if it doesn’t work on the first one
18:30 the next one you are that much further
18:32 ahead in life in the business I I
18:34 literally so I’m sure we all have a
18:36 conversations with our wives right they
18:38 seem to be our sounding boards even
18:40 though they may not be the best ones but
18:41 sometimes they they give it so I was
18:43 literally having this conversation with
18:44 my wife like five days ago and I and
18:46 we’re working on our my would be my
18:48 third acquisition but it’d be our second
18:50 acquisition here at Equity Launchpad and
18:53 I was telling her I was like hey these
18:54 are all the things that I wish I would
18:56 have done on our last acquisition and
18:58 she’s like well hold on do you really
18:01 know what you’re doing and I was like
18:03 well I think I do but I’m still learning
18:06 at every deal like I I made some
18:08 mistakes in this deal that I’m now
18:10 trying to cover up in the next deal and
18:12 I’m talking about the negotiations right
18:13 on how I papered it or asking I mean on
18:16 this current deal that we’re looking at
18:17 you know we asked for the entire seller
18:19 carry to be deferred 12 months well the
18:21 broker’s like we’ve never seen that
18:22 before I’m like well I know that that
18:24 first 12 months is so important on cash
18:26 flow we’re buying a very cash flow
18:28 Centric business that I need to ask for
18:30 that would have been heck of a thing to
19:31 ask for in the first deal you know it’s
19:33 like you learn these things and
19:35 sometimes you know if you’re not always
19:36 learning and looking back and reflecting
19:39 on these businesses going like what did
19:40 I do wrong what could I have done better
19:43 how else do we get better at the game
19:44 you know absolutely I mean you know I
19:47 was coincidentally just prior to this
19:49 call this this podcast I was you know in
19:50 a room and talking to our managers and
19:52 you know really talking about how we got
19:54 from there to here is different how
19:55 we’re get from here to there right and
19:57 I’m giving a presentation in a couple
19:58 weeks and it’s titled to go from zero to
19:60 200 employees right and what that looks
19:01 like in every step of the way the way a
19:04 five person company functions is very
19:06 different than a 10 then then a 50 then
19:08 a 100 you know and it’s there’s a lot of
19:10 learnings and again you continue to
19:11 evolve and the people that succeed are
19:13 the people that keep those lessons you
19:16 know that are probably hard learned and
19:18 apply them to the next one to keep them
19:19 further ahead and so I guess yeah yeah
19:22 one 100% and uh I think what you said
19:25 there about being in the game that’s the
19:27 key you you learn by doing and you can
20:30 listen to podcast and absorb some
20:33 nuggets here and there and it can be
20:34 inspirational but to truly learn um you
20:37 need to be out there and do it and so
20:39 that would be my biggest recommendation
20:41 or you go buy Home Services Company you
20:42 call Nicholas and say hey like you know
20:45 come invest in this but make sure I
20:46 don’t make any of these mistakes right
20:48 bringing Partners too that’s right
20:49 that’s right so so then I guess to maybe
20:51 tie that also you found the company you
20:54 bought it right I think you self-funded
20:56 the whole thing right what were the the
20:58 kind of the lwh hanging fre that you saw
20:59 that you immediately started to address
20:01 and you know what were the results that
20:02 you saw from that yeah talking about the
20:04 Home Services business now so I approach
20:06 that not like a Searcher but as an
20:08 independent sponsor I think as a sponsor
20:10 the big difference between the two
20:12 models is that your intention is not
20:15 necessarily to be the CEO your intention
20:17 is to be the Strategic governance who
20:19 oversees the deal and make sure that
20:21 there is good Management in place and
20:23 make sure that you’re doing the right
20:25 things to to improve the asset overall
20:28 and as in our case the seller has
21:32 remained as the CEO he’s done a
21:33 fantastic job as he also did before we
21:35 recapped him and he rolled quite a bit
21:37 of equity so there is a um you know skin
21:40 in the game for him as well and upside
21:42 as we perform well um what were the lwh
21:46 Hanging
21:47 fruits this was a business that um I
21:50 think was not very strong yet on back
21:53 office um so meaning accounting uh
21:57 organization mark an HR and as a sponsor
21:01 I’ve been extremely Hands-On in
21:03 developing all of those
21:05 departments um I think also there was no
21:08 m&a Outlook being a uh you know
21:11 familyowned family
21:14 entrepreneur situation the way they
21:16 approach m&a they don’t have the same
21:18 access to Capital or or KN how and how
21:20 to execute on that so uh we developed a
21:23 Playbook both around how to build out
21:25 the organic growth and the uh m& so we’
21:29 done a lot of add-on Acquisitions I
22:31 don’t know if these were lwh hanging
22:32 fruits but uh we have taken what was a
22:36 well performing but not very
22:38 sophisticated business to now being a
22:40 well performing pretty sophisticated
22:43 business that uh as we enter kind of in
22:46 over the next few years our own exit
22:48 territory a bigger buyer than us will
22:50 come and look at and say yeah checks all
22:52 the boxes uh that’s why we are willing
22:54 to pay a higher multiple because not
22:57 only has it grown in
22:59 but also it’s become a more secure and
22:02 safe and reliable asset that does all of
22:04 these things yeah maybe can you share
22:07 with the listeners just you know what
22:08 numbers what size are you’re talking
22:09 about how many employees was it you know
22:11 maybe revenues or multiples whatever
22:13 you’re comfortable sharing and then
22:14 where has it gone to today yeah when I
22:16 first came across the business it was
22:18 what 18 19 million of Revenue uh roughly
22:22 10%
22:23 IA um and uh today we we’ve surpassed
22:27 5050 million so Bel low 50 Millions on
22:30 Revenue now um a lot of that has been
23:32 organic some of it has been uh m&a as
23:35 well and um ewise our margins are
23:38 roughly the same as they were in the
23:40 beginning I wish they were a little bit
23:41 higher so we’re trying to address that
23:43 before we uh probably go to market but
23:46 uh we’re very happy about it we invested
23:48 a lot for growth and uh the market was
23:51 very much in our favor in 2021 and 2022
23:55 uh we sell Home Services right so home
23:57 owners were sitting at home they had a
23:59 lot of cash they wanted to upgrade their
23:01 homes a lot of people were transitioning
23:03 to new homes um and thereby upgrading
23:06 them before they moved in uh so there
23:08 was like a artificially much demand for
23:10 home services for a little while there
23:12 um 2023 2024 have not been quite as
23:16 exuberant but still steady markets
23:19 that’s the whole premise of Home
23:20 Services that it’s Mission critical um
23:24 and uh but it’s become it’s gone from
23:26 being a market growth situation where
23:29 the the rising tide lifts every bolt up
24:32 to being more of a how can we be better
24:34 than our competitors how can we uh have
24:38 operational excellence that make us more
24:40 lean and efficient and help us steal
24:42 market share and I think that’s in a way
24:45 a healthy Dynamic too because we are
24:47 improving the business enormously by
24:49 becoming better than our competitors uh
24:51 which in the early years we could focus
24:53 a lot on how do we do more marketing
24:55 spend more on that how can we buy
24:56 companies because every company will buy
24:58 a successful how can we hire more salese
24:01 because they’re going to go out there
24:02 and every lead is converting versus now
24:05 it’s much more about
24:08 training uh data um and being consistent
24:13 in our approach so how can we get all
24:15 the technicians to the same level all
24:17 the salespeople to the same level and
24:19 really trying to uh be a more robust
24:22 operation um so as the sponsor sitting
24:25 on top of this it’s been a phenomenal
24:26 Journey we talked about learning as your
24:28 D I mean imagine all the learning
25:30 through this four years we’ve been
25:31 through now where we have had a good
25:33 Market a softer market and everything
25:35 you need to learn in between with m&a
25:37 activity and organic growth it’s it’s
25:39 been uh it’s so much fun every day and
25:41 and for me when I started on the
25:42 entrepreneurial Journey the the top goal
25:45 I had much more than financial was I
25:49 want to have fun every day um I want to
25:52 good goal energized I want to be
25:54 energized when I sit down at my desk and
25:57 that that has been 100% true since the
25:59 beginning um just having a lot of fun
25:03 that’s awesome so just before we jump
25:05 into talking about your your new capital
25:07 Venture that you guys are a part of um
25:10 now did some of these playbooks come
25:11 from Bane would you say that you know
25:13 these playbooks that you’ve came up with
25:15 over time did that did that those early
25:18 years in private Equity were you able to
25:19 pull from those to to really think about
25:21 these playbooks or did you you know
25:24 stumble across EOS or did you stum like
25:26 or you just constantly kind of jiggering
25:29 your own systems and
26:31 programs uh never had that question
26:33 before um I was on nban and Company
26:37 which is more on the Consulting side
26:39 than the direct investing side but we
26:41 would do the due diligence so I think a
26:42 lot of the mindset that we had there
26:44 where you know I screen things first for
26:47 what’s the downside protection and then
26:49 secondly can I believe in the upside
26:52 potential uh and then lastly what is our
26:54 value creation plan I think that
26:56 approach uh still persists with me today
26:59 uh the methodology and capacity you get
26:02 for working is still there um but of
26:05 course I’ve learned a lot in the last 10
26:08 15 years since then so so it’s a little
26:11 hard to explicitly say this and that is
26:13 from from my ban time um I forget the
26:17 second part of your question no it’s
26:19 just about where are your playbooks like
26:20 were these things that you that you
26:22 created yourself or are these things
26:24 that you kind of taken through different
26:26 things like using traction or EOS or any
26:28 of these programs that are out there I I
27:30 love EOS I haven’t applied it myself
27:33 necessarily in a disciplined fashion but
27:35 I’m a big fan of it I’ve heard many
27:37 success stories and I think what you’re
27:39 doing when you uh sign up for any such
27:42 system is that you’re taking something
27:44 that is proven and you are enhancing
27:47 accountability around what you’re doing
27:49 and you’re also covering all your bases
27:51 right it’s a comprehensive system where
27:53 if you follow the plan there shouldn’t
27:55 be any big gaps in how you operate your
27:58 company company and I think that’s as
27:00 much the key as the particular system
27:03 around EOS it’s that you’re covering all
27:06 the bases and you’re holding people
27:07 including yourself accountable for
27:09 Progress maybe fast forward I mean you
27:12 know so what are you focused on today
27:13 yeah still focused on service Star Home
27:16 Services platform I’m the chairman so I
27:19 oversee that company still today and
27:21 we’re still having a good time um we’re
27:24 we are four years in the average hold
27:26 period for a sponsor deal is five and
27:28 half year so we’re starting to position
28:30 ourselves for that um as a sponsor in
28:34 partnership with another sponsor I’m
28:36 hoping to close another deal here in
28:38 five four or five weeks time that I’m
28:40 very excited about based in Texas I’ll
28:42 tell you more about it after we close
28:44 cool um and then over the years as I’ve
28:47 been in the ecosystem for a long time
28:49 I’ve also invested in friends and other
28:53 sponsors and had good success with that
28:55 and learn a lot you can learn a lot by
28:58 doing but you also learn a lot by
28:59 investing when you put your money
28:01 somewhere you pay attention to it and uh
28:04 that’s been a good journey which in the
28:05 last six to 12 months uh we have
28:08 institutionalized with the formation of
28:10 mins capital and mines capital is a
28:14 investment firm we provide Equity
28:17 Investments to Independent sponsor Le
28:19 and Searcher Le Acquisitions and we are
28:22 minority Equity investor in in the deals
28:24 that we invest in right and then maybe
28:27 is there a a buy box that you’re looking
28:29 for or is it pretty broad even kind of
29:32 you know you have Partners in different
29:33 areas yeah thank you for asking I think
29:35 our our specialty is connecting with
29:38 sponsors understanding their pain points
29:41 understanding that they like to
29:42 Syndicate the capital from a pool of
29:44 investors as opposed to finding a
29:46 unitron player who then assumes control
29:49 um so we’ like to back the best horses
29:52 and that’s what we specialize on doing
29:54 and our buy box therefore largely
29:56 mirrors that of these sources so to
29:59 speak um and so if a sponsor if a good
29:02 sponsor is out there and they find a
29:03 deal that they think is bankable and
29:06 financeable yes we’ll take a look but
29:08 we’re not necessarily industry focused
29:11 at least not at this time all right
29:13 unless you have a sideways you know SAS
29:15 business maybe that one you’ll R awesome
29:19 okay um and then I guess maybe you know
29:22 have you guys done a deal on that yet or
29:24 you guys still out there looking for
29:25 sponsors and on that same vein how you
29:27 know if a sponsor is interested in maybe
29:29 you know get you guys to take a look how
30:31 can they reach out yes we have actively
30:33 started deploying that fund we started
30:35 here in Q2 deploying we’ve made Seven
30:39 commitments so far two have closed five
30:41 are pending I think one of them um I’m
30:45 not totally sure we’ll get there but
30:47 anyway our deployment pce is roughly one
30:49 deal per month maybe slightly more and
30:52 uh people can get in touch with me
30:54 either by finding me on LinkedIn um or
30:57 sending me an email to NJ for Nicholas
30:00 James Minds
30:04 capital. outstanding Perfect all right
30:06 well let’s jump into our rocket round we
30:08 want to learn a little bit more about
30:09 you Nicholas here we go all right so
30:12 first question what do you like to do in
30:14 your free time yeah absolutely so I live
30:16 in Florida we have uh three young kids
30:19 six three and uh less than one and um
30:23 they keep us pretty busy so free time
30:26 definitely means something else used to
30:28 10 10 years ago but uh uh some of our
31:31 favorite activities with them is to go
31:33 biking or or go swimming um and just
31:36 really trying to make the most of of
31:37 living here in Florida um in the Summers
31:40 when it’s too hot to be in Florida we
31:41 like to go back to Norway so we just had
31:44 a couple of months there this summer
31:45 which was uh amazing a lot of friends
31:47 and family time and a beautiful scenery
31:50 um and just hanging out over there so
31:53 that that’s my life right now it’s work
31:55 oriented and then three kids at home
31:57 well that’s where as a parent you
31:59 alone or personal time is whenever you
31:01 go on a trip for work and you have that
31:03 evening at the hotel you’re done the
31:05 business dinner you got of have two
31:06 three hours to yourself so we all know
31:08 how that goes all right next question so
31:10 what’s your most memorable moment in
31:12 your business Journey it’s hard not to
31:14 think back on the big milestones and
31:17 I’ve made a habit out of buying a uh pot
31:22 every time I have a major Milestone so
31:24 this can be of course closing a deal it
31:27 can be exiting a deal or it can be a
31:30 resolution of a major issue and uh some
32:33 of so closing the deals that I told you
32:35 about definitely were big Milestones um
32:38 there have been some you know business
32:40 issues both positive and negative you
32:42 know you want to recruit someone or you
32:43 want to resolve a legal issue that is
32:47 pending um some of these qualifies as
32:50 big enough for me to buy a pot and then
32:51 I put it right there in our living room
32:53 and uh each of them is a story for me um
32:56 and I buy like kind of like nice pots
32:57 from place have been a tourist um so
32:60 that they become memories both of the
32:01 Milestone and of the trip yeah make sure
32:05 understand it’s pot P right yeah yeah
32:07 like a clay pot so the first one I
32:09 bought was a a pot by the Navajo
32:12 Americans in New Mexico um we got
32:15 married in New Mexico it’s where my
32:17 in-laws live and uh they they paint
32:19 these like really beautiful hand painted
32:22 pots so I bought one of those and I mean
32:24 it’s not cheap it’s like 1,200 bucks to
32:26 buy a small pot that’s a really
32:28 expensive have the kids break that one
32:30 yeah the kids it’s on the top shelf so
33:34 so yeah and then I put inside it I put
33:36 like a little note that uh it’s like
33:38 here’s the Milestone that I celebrated
33:40 with that particular one and then I just
33:42 kept doing this uh so I have one from
33:44 Norway and one from Greece and one from
33:46 Peru um but yeah so so they’re beautiful
33:49 on the shelf and nice memories of the
33:51 various Milestones but but I would love
33:54 to say it’s the small everyday things
33:55 that you remember 5 years later but it
33:57 truly is the big Milestones that uh you
33:60 celebrate and and make a big difference
33:02 that stand out when you think about your
33:04 journey awesome all right and last but
33:07 not least what’s your favorite tool or
33:08 resource can I mention three go for it
33:12 um first of all I would mention LinkedIn
33:15 um I’ve actually evolved into viewing
33:18 LinkedIn as a very powerful marketing
33:20 Tool uh so for me it’s a great way to
33:22 both keep in touch with a lot of people
33:25 and have reach to people I don’t yet
33:27 know and to some to some extent it
33:30 generates opportunities like investor
34:32 flow or deal flow which has been
34:35 favorable um so that’s a cool tool and I
34:37 think a lot of people are too shy to use
34:40 it um a second tool would be chat gbt um
34:45 I find I’m still underutilizing it I
34:48 think most of us are it’s an incredible
34:50 tool in so many different ways um and
34:53 lastly I would say my CRM where I track
34:55 all the deals I look at and also have a
34:57 contact management system um I mean
34:59 that’s CRM all day every day and it just
34:02 keeps me on track very happy about it
34:05 absolutely if someone’s listen to this
34:06 and you don’t have a CRM you are behind
34:08 on life and you really need to step it
34:10 up I mean after this I mean after this
34:13 trust me you know Nicholas we we’re
34:15 putting you in the CRM with some key
34:16 things you especially where you’re
34:18 located because I’m really trying to
34:19 build the habit of I do a lot of
34:20 traveling and if I go to a city I want
34:22 to be able to see hey who are the people
34:23 there that I you know I want to catch up
34:25 with go meet or if people maybe I did an
34:26 interview and I haven’t met them face to
34:28 face and so Serum is definitely one of
34:30 those one1 things that people need to
35:32 get on top of I’d love that awesome well
35:35 you know Nicholas thank you very much
35:37 lots of information incredible
35:39 information thank you and so we’ll go
35:41 ahead and you know we’ll include all the
35:42 contact information in the show notes
35:44 and we’ll look forward to the next one
35:45 thank you for having me thank you for
35:47 listening to the m&a Launchpad podcast
35:50 if you’ve enjoyed today’s podcast and
35:51 would like to support us please leave us
35:53 a rating and a review after you listen
35:54 I’m Casey mchu and I look forward to
35:56 talking with you next week