#98 Small Business Acquisitions with Travis Jamison
Alt Funds Network
[{'start': '11.220', 'end': '14.479', 'text': '[Music]'}, {'start': '19.359', 'end': '23.600', 'text': "You'd mentioned you traveled. You spent"}, {'start': '20.800', 'end': '27.439', 'text': 'a decade traveling the world. Yeah.'}, {'start': '23.600', 'end': '29.119', 'text': "Yeah. Um is that like where'd you go? I"}, {'start': '27.439', 'end': '30.560', 'text': 'started off very much like trying to'}, {'start': '29.119', 'end': '33.120', 'text': 'live like the four-h hour work week'}, {'start': '30.560', 'end': '34.800', 'text': 'dream. This was like Yeah. This was, you'}, {'start': '33.120', 'end': '37.040', 'text': "know, everything's remote everywhere"}, {'start': '34.800', 'end': '39.680', 'text': 'now, but like at the time this was, you'}, {'start': '37.040', 'end': '41.520', 'text': 'know, Yeah. Tim Ferris revolutionary.'}, {'start': '39.680', 'end': '42.960', 'text': 'Yeah. Yeah. This like 16 years ago or'}, {'start': '41.520', 'end': '45.760', 'text': 'something like that. Um it was pretty'}, {'start': '42.960', 'end': '47.280', 'text': 'revolutionary. And so I did like I built'}, {'start': '45.760', 'end': '48.320', 'text': 'a first little teeny tiny business and'}, {'start': '47.280', 'end': '49.760', 'text': 'went and like lived on this little'}, {'start': '48.320', 'end': '52.160', 'text': 'island in Thailand for a while. I was'}, {'start': '49.760', 'end': '54.320', 'text': "like I'm going to retire at like 24 and"}, {'start': '52.160', 'end': '55.840', 'text': 'just like dive every day. And like I did'}, {'start': '54.320', 'end': '57.800', 'text': 'that for a year.'}, {'start': '55.840', 'end': '60.000', 'text': "um realized like that wasn't the life I"}, {'start': '57.800', 'end': '63.920', 'text': "wanted. But I'm glad I experienced it."}, {'start': '60.000', 'end': '65.760', 'text': "Right? It's better to realize young like"}, {'start': '63.920', 'end': '68.320', 'text': "that's not the thing than to work until"}, {'start': '65.760', 'end': '69.680', 'text': "you're like 65 then retired like oh crap"}, {'start': '68.320', 'end': '72.080', 'text': "this isn't what I wanted all along and"}, {'start': '69.680', 'end': '74.000', 'text': "I've been like putting it off. Yeah. Um"}, {'start': '72.080', 'end': '75.560', 'text': 'and so then I just kind of like Yeah. I'}, {'start': '74.000', 'end': '78.479', 'text': 'backpacked around'}, {'start': '75.560', 'end': '80.560', 'text': "for I don't know four years or something"}, {'start': '78.479', 'end': '83.520', 'text': "like that. Give us some picture. What's"}, {'start': '80.560', 'end': '85.360', 'text': 'like your favorite country location that'}, {'start': '83.520', 'end': '88.320', 'text': "you went to? There's really not one."}, {'start': '85.360', 'end': '89.600', 'text': 'There were um so for context, I'}, {'start': '88.320', 'end': '91.920', 'text': 'backpacked around for a few years and'}, {'start': '89.600', 'end': '93.240', 'text': 'then I would like live in hubs for long'}, {'start': '91.920', 'end': '96.560', 'text': 'periods of time, like sometimes like'}, {'start': '93.240', 'end': '98.640', 'text': 'multi-year. And I felt like each hub was'}, {'start': '96.560', 'end': '101.200', 'text': 'really right for me at that time in my'}, {'start': '98.640', 'end': '104.159', 'text': 'life. Um and they were great. And so'}, {'start': '101.200', 'end': '106.079', 'text': 'like the hubs were um Bangkok, well'}, {'start': '104.159', 'end': '107.439', 'text': 'actually the island called Kottow at'}, {'start': '106.079', 'end': '109.680', 'text': 'first, but that was you know I was a'}, {'start': '107.439', 'end': '111.759', 'text': 'young kid. Yeah. Then Bangkok, uh, Ho'}, {'start': '109.680', 'end': '113.680', 'text': "Chi Min City, Saigon's like an"}, {'start': '111.759', 'end': '115.680', 'text': 'incredibly vibrant city, like very'}, {'start': '113.680', 'end': '118.079', 'text': 'bullish on those people long term. Um,'}, {'start': '115.680', 'end': '119.520', 'text': "Taipei, Taipei's amazing, like, but"}, {'start': '118.079', 'end': '122.159', 'text': "again, if I'm like a 24-y old kid,"}, {'start': '119.520', 'end': '124.880', 'text': 'probably not as much fun. Prague and'}, {'start': '122.159', 'end': '126.960', 'text': 'Barcelona, like those are the the hubs.'}, {'start': '124.880', 'end': '129.679', 'text': 'A little bit of Bali in there, too. Um,'}, {'start': '126.960', 'end': '134.000', 'text': 'again, it was it was great at the time.'}, {'start': '129.679', 'end': '135.360', 'text': 'Um uh now now not as much but um so I'}, {'start': '134.000', 'end': '136.720', 'text': "can't really pick a favorite cuz all of"}, {'start': '135.360', 'end': '137.840', 'text': 'them like really scratched the itch that'}, {'start': '136.720', 'end': '138.959', 'text': 'I needed at the What was like the'}, {'start': '137.840', 'end': '140.640', 'text': 'deciding once you like were there for'}, {'start': '138.959', 'end': '141.920', 'text': "about a year you're like I'm kind of"}, {'start': '140.640', 'end': '144.319', 'text': "want I'm kind of done with this. Is that"}, {'start': '141.920', 'end': '148.480', 'text': 'kind of how how it went down or each'}, {'start': '144.319', 'end': '150.959', 'text': 'place has its own friction? Yeah. Um so'}, {'start': '148.480', 'end': '152.800', 'text': "like like let's take Barcelona. Um you"}, {'start': '150.959', 'end': '155.040', 'text': 'know good chance that you guys or a lot'}, {'start': '152.800', 'end': '157.440', 'text': "of others have been to Barcelona. It's"}, {'start': '155.040', 'end': '161.040', 'text': "the quality of life is fantastic. It's"}, {'start': '157.440', 'end': '164.000', 'text': "slow. Um, it's beautiful, it's great"}, {'start': '161.040', 'end': '166.400', 'text': "weather, but there's also this like"}, {'start': '164.000', 'end': '168.480', 'text': 'bureaucracy is not the right word, but'}, {'start': '166.400', 'end': '170.720', 'text': "like everything's difficult to do."}, {'start': '168.480', 'end': '174.239', 'text': "There's a total lack of hustle, which is"}, {'start': '170.720', 'end': '176.800', 'text': 'both, you know, good and bad. Yeah. Um,'}, {'start': '174.239', 'end': '180.599', 'text': 'and so it just kind of like gnaws at you'}, {'start': '176.800', 'end': '183.120', 'text': 'over time. Um, Bangkok on the other hand'}, {'start': '180.599', 'end': '185.840', 'text': "has anything you'd ever want to do. It's"}, {'start': '183.120', 'end': '188.560', 'text': "it's it's amazing. Uh, it's got plenty"}, {'start': '185.840', 'end': '190.000', 'text': "of hustle. It's got um worldclass"}, {'start': '188.560', 'end': '192.480', 'text': "everything. It's incredibly affordable"}, {'start': '190.000', 'end': '194.239', 'text': 'for like what you get. Um but then at'}, {'start': '192.480', 'end': '196.239', 'text': "the same time like the climate's kind of"}, {'start': '194.239', 'end': '198.239', 'text': "rough. There's kind of pollution."}, {'start': '196.239', 'end': '200.640', 'text': 'Getting around is like traffic and stuff'}, {'start': '198.239', 'end': '203.280', 'text': 'like that is is very cumbersome. So you'}, {'start': '200.640', 'end': '205.840', 'text': 'have to and so like each each place has'}, {'start': '203.280', 'end': '208.640', 'text': 'its own little thing that kind of rubs'}, {'start': '205.840', 'end': '210.400', 'text': "on you. Taipei is amazing. It's it's the"}, {'start': '208.640', 'end': '212.080', 'text': 'probably the safest place in the world.'}, {'start': '210.400', 'end': '213.840', 'text': "Maybe Singapore is safer, but it's right"}, {'start': '212.080', 'end': '215.360', 'text': "up there. It's the nicest people. you"}, {'start': '213.840', 'end': '216.879', 'text': 'could like leave your laptop in the'}, {'start': '215.360', 'end': '218.959', 'text': "sidewalk, come back 2 hours later, it's"}, {'start': '216.879', 'end': '221.519', 'text': "going to be there. It's also a place"}, {'start': '218.959', 'end': '223.120', 'text': "like English isn't enough. You know,"}, {'start': '221.519', 'end': '225.360', 'text': 'most places English is fine, but like'}, {'start': '223.120', 'end': '228.560', 'text': 'Taipei, like you need to speak Mandarin'}, {'start': '225.360', 'end': '230.239', 'text': "and and I don't. Yeah. Um so, everywhere"}, {'start': '228.560', 'end': '231.599', 'text': 'has this thing. Yeah, for sure. What'}, {'start': '230.239', 'end': '234.879', 'text': 'What business were you running while you'}, {'start': '231.599', 'end': '237.120', 'text': 'were doing all this? Many of them. Uh'}, {'start': '234.879', 'end': '238.799', 'text': "so, I kind of used like Yeah, let's use"}, {'start': '237.120', 'end': '241.519', 'text': 'this to dive into your background. Yeah.'}, {'start': '238.799', 'end': '243.280', 'text': 'Yeah. Rob Bowling is the uh Uber'}, {'start': '241.519', 'end': '244.439', 'text': "founder. He's the founder of TinyC, like"}, {'start': '243.280', 'end': '247.920', 'text': 'a kind of like'}, {'start': '244.439', 'end': '250.400', 'text': 'um think uh a fund that invests in like'}, {'start': '247.920', 'end': '252.720', 'text': "tiny SAS businesses that aren't trying"}, {'start': '250.400', 'end': '253.920', 'text': 'to become billion dollar outcomes um on'}, {'start': '252.720', 'end': '255.920', 'text': "purpose. And then they've done they've"}, {'start': '253.920', 'end': '257.359', 'text': "done very very well. I'm an LP. Uh"}, {'start': '255.920', 'end': '259.440', 'text': "anyway, but he's talked about the idea"}, {'start': '257.359', 'end': '262.079', 'text': 'of like stairstepping. So you build a'}, {'start': '259.440', 'end': '264.639', 'text': "business and it's small because you know"}, {'start': '262.079', 'end': '266.240', 'text': 'going big is hard at first and then you'}, {'start': '264.639', 'end': '268.880', 'text': 'use the cash flows from that. You know'}, {'start': '266.240', 'end': '271.040', 'text': "it's a profit focused type thing, not um"}, {'start': '268.880', 'end': '272.560', 'text': 'venture pie in the sky stuff. uh use'}, {'start': '271.040', 'end': '274.720', 'text': 'those profits to build something bigger'}, {'start': '272.560', 'end': '276.160', 'text': 'or you sell it and use those proceeds to'}, {'start': '274.720', 'end': '278.280', 'text': "build something bigger. And so that's"}, {'start': '276.160', 'end': '282.080', 'text': 'kind of what I did like'}, {'start': '278.280', 'end': '285.919', 'text': 'over 10 years maybe 12 something like'}, {'start': '282.080', 'end': '288.560', 'text': 'that. I had e-commerce companies so a'}, {'start': '285.919', 'end': '290.520', 'text': 'marketing agency uh couple of different'}, {'start': '288.560', 'end': '294.720', 'text': 'SAS products'}, {'start': '290.520', 'end': '297.360', 'text': 'uh newsletters, info sites, physical'}, {'start': '294.720', 'end': '299.680', 'text': 'goods, health stuff. Um just absolutely'}, {'start': '297.360', 'end': '302.479', 'text': 'anything. No rhyme or reason. Uh, I'}, {'start': '299.680', 'end': '303.680', 'text': "think I'm just one of those like founder"}, {'start': '302.479', 'end': '305.440', 'text': 'personality types. Like I think of'}, {'start': '303.680', 'end': '307.280', 'text': 'something and I get initial traction on'}, {'start': '305.440', 'end': '308.960', 'text': "it and then I'm not really the best"}, {'start': '307.280', 'end': '310.400', 'text': 'person to take it from there. So I'}, {'start': '308.960', 'end': '312.000', 'text': 'either need to like put like a great'}, {'start': '310.400', 'end': '313.840', 'text': 'management team in place which is very'}, {'start': '312.000', 'end': '315.600', 'text': "difficult. It's easier said than done or"}, {'start': '313.840', 'end': '318.000', 'text': 'sell it. And so I sold about half my'}, {'start': '315.600', 'end': '319.440', 'text': 'companies. Uh, the other half that I'}, {'start': '318.000', 'end': '321.600', 'text': 'still have, I have like really good'}, {'start': '319.440', 'end': '323.280', 'text': 'management teams in place that kind of'}, {'start': '321.600', 'end': '324.400', 'text': 'like operate the dayto-day and stuff'}, {'start': '323.280', 'end': '325.919', 'text': 'like that. And I just kind of like'}, {'start': '324.400', 'end': '327.440', 'text': "oversee it, although they don't really"}, {'start': '325.919', 'end': '330.080', 'text': "need me to be honest. So I don't oversee"}, {'start': '327.440', 'end': '332.759', 'text': 'that much. Yeah. Yeah. Okay. Very cool.'}, {'start': '330.080', 'end': '335.360', 'text': 'So, you had you you had these multiple'}, {'start': '332.759', 'end': '337.120', 'text': 'businesses and so take us through that.'}, {'start': '335.360', 'end': '339.199', 'text': 'So, uh the ones that you sold, I guess,'}, {'start': '337.120', 'end': '341.600', 'text': 'how did uh you know, what did that'}, {'start': '339.199', 'end': '343.000', 'text': "process look like for you? So, it's very"}, {'start': '341.600', 'end': '345.600', 'text': 'different. Like, I mean, the first one I'}, {'start': '343.000', 'end': '348.960', 'text': 'sold again, I was I was a much younger'}, {'start': '345.600', 'end': '350.560', 'text': "kid. It was for like I don't know 55,000"}, {'start': '348.960', 'end': '352.160', 'text': 'or something like that, which to be very'}, {'start': '350.560', 'end': '354.240', 'text': 'clear at the time was a very meaningful'}, {'start': '352.160', 'end': '356.960', 'text': 'amount of money to me. I did not come'}, {'start': '354.240', 'end': '359.840', 'text': 'from a privileged background. Um then'}, {'start': '356.960', 'end': '361.680', 'text': 'the next one was like 150,000 and then'}, {'start': '359.840', 'end': '363.440', 'text': 'we had one that topped a million and'}, {'start': '361.680', 'end': '365.840', 'text': 'then they you know kept getting a little'}, {'start': '363.440', 'end': '367.280', 'text': 'bigger from there. Uh so the processes'}, {'start': '365.840', 'end': '368.639', 'text': 'were very different like on the small'}, {'start': '367.280', 'end': '370.000', 'text': "scale it's just going to a broker and be"}, {'start': '368.639', 'end': '372.240', 'text': "like I don't want this thing anymore."}, {'start': '370.000', 'end': '375.440', 'text': 'Can you sell it? And they do. um the'}, {'start': '372.240', 'end': '379.039', 'text': 'larger scale like a private equityish'}, {'start': '375.440', 'end': '381.280', 'text': 'fund out of um mainland China like'}, {'start': '379.039', 'end': '384.880', 'text': 'acquired the SAS company and with that'}, {'start': '381.280', 'end': '387.440', 'text': 'and that was um to be fair that was'}, {'start': '384.880', 'end': '391.160', 'text': 'probably way easier and weirder than it'}, {'start': '387.440', 'end': '393.440', 'text': 'should have been. Um say more I mean'}, {'start': '391.160', 'end': '395.759', 'text': "it's one it's just China and"}, {'start': '393.440', 'end': '397.440', 'text': "everything's different and uh I actually"}, {'start': '395.759', 'end': '398.639', 'text': "bet it's more buttoned up now than it"}, {'start': '397.440', 'end': '400.240', 'text': 'was the time but it was a little more'}, {'start': '398.639', 'end': '402.960', 'text': 'wild west. Uh this was, you know, a'}, {'start': '400.240', 'end': '405.199', 'text': 'decade ago. Yeah. Um and the people that'}, {'start': '402.960', 'end': '408.080', 'text': 'acquired it, they were really good at'}, {'start': '405.199', 'end': '410.560', 'text': 'kind of like selling the dream to LPs.'}, {'start': '408.080', 'end': '412.000', 'text': 'Um so they raised the money and uh man,'}, {'start': '410.560', 'end': '413.039', 'text': 'what they said sounded really good and'}, {'start': '412.000', 'end': '415.120', 'text': 'so they acquired us. They were doing'}, {'start': '413.039', 'end': '417.759', 'text': 'like a kind of a rollup in the Amazon'}, {'start': '415.120', 'end': '419.199', 'text': 'space and we had an Amazon um software'}, {'start': '417.759', 'end': '424.319', 'text': 'for like sellers and stuff like that. It'}, {'start': '419.199', 'end': '426.960', 'text': 'was um wildly popular and they it was'}, {'start': '424.319', 'end': '428.479', 'text': 'just like kind of a massive lack of due'}, {'start': '426.960', 'end': '429.440', 'text': "diligence. It's like in retrospect, I"}, {'start': '428.479', 'end': '430.319', 'text': "didn't realize this at the time cuz I"}, {'start': '429.440', 'end': '431.680', 'text': "didn't know any better, but in"}, {'start': '430.319', 'end': '433.199', 'text': 'retrospect, I\'m like, "What? How did'}, {'start': '431.680', 'end': '434.479', 'text': 'this happen?" They just like cold called'}, {'start': '433.199', 'end': '435.840', 'text': 'me. Then like I think I was living in'}, {'start': '434.479', 'end': '437.840', 'text': 'Bangkok at the time. They just flew over'}, {'start': '435.840', 'end': '441.039', 'text': 'to Bangkok and like hung out. We had'}, {'start': '437.840', 'end': '444.639', 'text': 'offers within like a day. Um we stayed'}, {'start': '441.039', 'end': '446.639', 'text': 'on for a bit. Um it was it was weird and'}, {'start': '444.639', 'end': '449.120', 'text': 'it was also really sad because it was a'}, {'start': '446.639', 'end': '450.720', 'text': 'product that was um doing really really'}, {'start': '449.120', 'end': '451.840', 'text': 'well. The growth rate was like Silicon'}, {'start': '450.720', 'end': '454.000', 'text': "Valley style growth rate. I didn't"}, {'start': '451.840', 'end': '456.800', 'text': 'realize how good it was at the time. Um,'}, {'start': '454.000', 'end': '460.080', 'text': 'and then they acquired it and they just'}, {'start': '456.800', 'end': '461.120', 'text': 'did not have any skills. Um, they were'}, {'start': '460.080', 'end': '462.960', 'text': 'storytellers and they were great'}, {'start': '461.120', 'end': '464.560', 'text': "storytellers, uh, but they didn't have"}, {'start': '462.960', 'end': '465.840', 'text': 'the operational skills to keep it going.'}, {'start': '464.560', 'end': '468.160', 'text': 'So, they bought a couple other things'}, {'start': '465.840', 'end': '470.039', 'text': 'too and they just killed everything. Um,'}, {'start': '468.160', 'end': '476.080', 'text': 'there was there was a very big'}, {'start': '470.039', 'end': '477.280', 'text': 'like cultural like gap and um, between'}, {'start': '476.080', 'end': '478.800', 'text': 'like what they could think. So, like,'}, {'start': '477.280', 'end': '480.879', 'text': 'you know, in mainland China, you have'}, {'start': '478.800', 'end': '483.199', 'text': 'WeChat and you just, you know, if you'}, {'start': '480.879', 'end': '484.639', 'text': 'just want to spam all of your users like'}, {'start': '483.199', 'end': '486.240', 'text': "five times a day with messages, that's"}, {'start': '484.639', 'end': '487.680', 'text': "just what you do and it's normal and"}, {'start': '486.240', 'end': '488.639', 'text': "it's cool. And they got the business."}, {'start': '487.680', 'end': '490.000', 'text': "They're like, oh, we're going to email"}, {'start': '488.639', 'end': '492.319', 'text': "our email list five times a day. I'm"}, {'start': '490.000', 'end': '494.240', 'text': "like, no, no, you are. No, like I can't"}, {'start': '492.319', 'end': '495.919', 'text': 'do this. And they they just do all these'}, {'start': '494.240', 'end': '497.599', 'text': 'things that just like, oh, we can do'}, {'start': '495.919', 'end': '498.960', 'text': 'this like kind of sneaky thing to'}, {'start': '497.599', 'end': '501.240', 'text': "extract more money. I'm like, you're"}, {'start': '498.960', 'end': '504.879', 'text': 'going to kill the trust. Like, trust is'}, {'start': '501.240', 'end': '506.479', 'text': 'everything with this. Um, also the the'}, {'start': '504.879', 'end': '509.120', 'text': 'team. I learned so much with this. This'}, {'start': '506.479', 'end': '512.159', 'text': 'is this was a painful lesson. Um you'}, {'start': '509.120', 'end': '513.440', 'text': 'know the team went along with it and'}, {'start': '512.159', 'end': '517.120', 'text': 'everything was fine. It was a remote'}, {'start': '513.440', 'end': '518.640', 'text': 'first team. Um it was mostly a bunch of'}, {'start': '517.120', 'end': '520.240', 'text': 'expats that I had like brought to'}, {'start': '518.640', 'end': '522.320', 'text': 'Bangkok just to have a central hub for a'}, {'start': '520.240', 'end': '524.000', 'text': 'while and everybody stayed but it was it'}, {'start': '522.320', 'end': '526.000', 'text': 'was remote before remote was really a'}, {'start': '524.000', 'end': '527.360', 'text': 'thing. Yeah. And then like a few months'}, {'start': '526.000', 'end': '528.640', 'text': "into it they hit a speed bump. They're"}, {'start': '527.360', 'end': '532.480', 'text': 'like, "Oh yeah, everybody\'s got to move'}, {'start': '528.640', 'end': '534.640', 'text': 'to Shenzhen within like a a month." Like'}, {'start': '532.480', 'end': '536.080', 'text': 'what? And obviously, you know, most of'}, {'start': '534.640', 'end': '537.360', 'text': 'the team basically like lost their jobs'}, {'start': '536.080', 'end': '539.440', 'text': "because they're not moving to mainland"}, {'start': '537.360', 'end': '541.839', 'text': 'China if they even could. A couple'}, {'start': '539.440', 'end': '544.320', 'text': 'people did. And like that was pretty'}, {'start': '541.839', 'end': '546.160', 'text': 'crappy to see. So yeah, learned a lesson'}, {'start': '544.320', 'end': '547.519', 'text': 'from that. Yeah. Is there a happy'}, {'start': '546.160', 'end': '550.480', 'text': 'ending? Did you did you at least get'}, {'start': '547.519', 'end': '552.240', 'text': 'paid from it or Oh yeah. I mean'}, {'start': '550.480', 'end': '553.519', 'text': 'financial is a great thing for me and'}, {'start': '552.240', 'end': '557.320', 'text': "that's why I like invest in stuff is"}, {'start': '553.519', 'end': '560.440', 'text': "because of of that sale. Um so here's"}, {'start': '557.320', 'end': '563.440', 'text': "the here's the interesting thing. So, if"}, {'start': '560.440', 'end': '565.880', 'text': 'um they came to us with an offer and the'}, {'start': '563.440', 'end': '569.640', 'text': "offer was for we'll just say like"}, {'start': '565.880', 'end': '572.959', 'text': 'life-changing money and'}, {'start': '569.640', 'end': '575.440', 'text': 'um it we kind of thought about this'}, {'start': '572.959', 'end': '578.800', 'text': 'because our growth rate was absolutely'}, {'start': '575.440', 'end': '582.080', 'text': 'bonkers. And we knew if we could hold on'}, {'start': '578.800', 'end': '583.760', 'text': 'to the business for a little bit longer,'}, {'start': '582.080', 'end': '585.920', 'text': 'the amount of like money we would get'}, {'start': '583.760', 'end': '587.360', 'text': 'for this would be like way way more'}, {'start': '585.920', 'end': '589.040', 'text': 'multiples more because just because of'}, {'start': '587.360', 'end': '591.680', 'text': 'its growth rate. But we also knew the'}, {'start': '589.040', 'end': '593.040', 'text': 'business had some risk in it, right? Um'}, {'start': '591.680', 'end': '594.800', 'text': 'like Amazon could have changed their'}, {'start': '593.040', 'end': '596.000', 'text': 'terms of service in one snap or like one'}, {'start': '594.800', 'end': '598.880', 'text': 'thing and like the whole business would'}, {'start': '596.000', 'end': '599.920', 'text': 'be done. And so we thought about this'}, {'start': '598.880', 'end': '603.839', 'text': 'like do we accept this like'}, {'start': '599.920', 'end': '606.000', 'text': 'life-changing money or do we wait and'}, {'start': '603.839', 'end': '608.240', 'text': 'like risk it and try to get multiples of'}, {'start': '606.000', 'end': '609.839', 'text': 'this life-changing money. Um and so we'}, {'start': '608.240', 'end': '611.360', 'text': 'started like basically thought about'}, {'start': '609.839', 'end': '613.519', 'text': 'this like if you chart it out and you'}, {'start': '611.360', 'end': '614.720', 'text': "look at like the utility of money. It's"}, {'start': '613.519', 'end': '617.839', 'text': "kind of I don't know which way to do"}, {'start': '614.720', 'end': '619.920', 'text': "this on a camera, but like um say you're"}, {'start': '617.839', 'end': '622.240', 'text': "you know you're just starting and you"}, {'start': '619.920', 'end': '624.640', 'text': 'have like oh you can now buy a car, oh'}, {'start': '622.240', 'end': '626.160', 'text': "you can you know don't look prices at"}, {'start': '624.640', 'end': '627.519', 'text': 'restaurants, you can buy a house and'}, {'start': '626.160', 'end': '629.760', 'text': 'then you reach this like freedom line'}, {'start': '627.519', 'end': '631.040', 'text': 'and the utility of money shoots up and'}, {'start': '629.760', 'end': '632.480', 'text': "it's like you know where like you don't"}, {'start': '631.040', 'end': '634.360', 'text': "have to like work anymore if you don't"}, {'start': '632.480', 'end': '637.519', 'text': 'want to. But then after you cross that'}, {'start': '634.360', 'end': '638.959', 'text': 'line the it kind of slows back down. The'}, {'start': '637.519', 'end': '640.480', 'text': 'utility of money still increases. You'}, {'start': '638.959', 'end': '642.240', 'text': "know there's a big difference between"}, {'start': '640.480', 'end': '643.360', 'text': 'not having to work and like private jet'}, {'start': '642.240', 'end': '646.240', 'text': "money. Like that's a really big"}, {'start': '643.360', 'end': '648.560', 'text': "difference, but it doesn't change like"}, {'start': '646.240', 'end': '651.120', 'text': 'your life that that much. That like'}, {'start': '648.560', 'end': '652.640', 'text': "freedom line is the thing. That's right."}, {'start': '651.120', 'end': '656.160', 'text': "And so that's where we kind of thought"}, {'start': '652.640', 'end': '658.240', 'text': 'like well I guess we sell and we did and'}, {'start': '656.160', 'end': '660.880', 'text': 'that was actually the wrong decision in'}, {'start': '658.240', 'end': '662.160', 'text': 'in retrospect. Um like yeah if we had'}, {'start': '660.880', 'end': '663.519', 'text': 'held on to it we would have made so much'}, {'start': '662.160', 'end': '664.560', 'text': "more and actually we also wouldn't have"}, {'start': '663.519', 'end': '667.920', 'text': 'killed the product and it would have'}, {'start': '664.560', 'end': '670.480', 'text': 'been um you know like probably 10x maybe'}, {'start': '667.920', 'end': '673.040', 'text': '20x bigger than we did. But I still'}, {'start': '670.480', 'end': '675.440', 'text': 'think the actual decision was correct at'}, {'start': '673.040', 'end': '677.600', 'text': "the time. Even though you don't want to"}, {'start': '675.440', 'end': '678.480', 'text': 'base like was this a right or wrong'}, {'start': '677.600', 'end': '679.600', 'text': "decision, you don't you don't"}, {'start': '678.480', 'end': '681.120', 'text': 'necessarily need to base on the outcome.'}, {'start': '679.600', 'end': '682.320', 'text': 'You base it on like the information you'}, {'start': '681.120', 'end': '685.120', 'text': 'had and the decision that was made. And'}, {'start': '682.320', 'end': '686.480', 'text': 'I think the decision was correct even if'}, {'start': '685.120', 'end': '688.399', 'text': 'in retrospect the outcome would have'}, {'start': '686.480', 'end': '689.760', 'text': 'been way better. Yeah. Yeah. It sounds'}, {'start': '688.399', 'end': '692.560', 'text': 'like a great learning experience though'}, {'start': '689.760', 'end': '695.360', 'text': "from what you went through and it's a"}, {'start': '692.560', 'end': '697.200', 'text': 'stepping stone, right? Yeah. Oh yeah. I'}, {'start': '695.360', 'end': '698.480', 'text': 'thought I thought I was hot [\xa0__\xa0] I'}, {'start': '697.200', 'end': '700.959', 'text': 'thought I knew everything. I knew'}, {'start': '698.480', 'end': '702.880', 'text': 'nothing. I knew nothing in retrospect.'}, {'start': '700.959', 'end': '705.360', 'text': 'And I hope I say that about myself now'}, {'start': '702.880', 'end': '708.959', 'text': 'in a few years. But what was the uh what'}, {'start': '705.360', 'end': '710.560', 'text': 'year is what was this that happened?'}, {'start': '708.959', 'end': '712.399', 'text': 'Roughly a decade ago, something like'}, {'start': '710.560', 'end': '713.760', 'text': 'that. I was just curious. Amazon I'}, {'start': '712.399', 'end': '714.959', 'text': 'actually had an Amazon business back in'}, {'start': '713.760', 'end': '716.320', 'text': "the day, too. And there's a lot of"}, {'start': '714.959', 'end': '717.839', 'text': 'things that change over time just with'}, {'start': '716.320', 'end': '721.200', 'text': 'analytics and how you track stuff with'}, {'start': '717.839', 'end': '725.040', 'text': 'Amazon. Maybe you used AMZ tracker. Yes,'}, {'start': '721.200', 'end': '726.399', 'text': 'I did actually. Yeah, I did. Yeah. I had'}, {'start': '725.040', 'end': '729.120', 'text': 'a supplement business. We were selling'}, {'start': '726.399', 'end': '731.440', 'text': 'on Amazon. we just exploded and uh to'}, {'start': '729.120', 'end': '732.560', 'text': 'your point and then we just find ways to'}, {'start': '731.440', 'end': '734.639', 'text': 'track it. So yeah, that was actually a'}, {'start': '732.560', 'end': '736.800', 'text': 'really great system, man. Yeah, it was'}, {'start': '734.639', 'end': '739.360', 'text': 'it was amazing. We we hacked the system'}, {'start': '736.800', 'end': '741.680', 'text': 'big time there. Um'}, {'start': '739.360', 'end': '743.120', 'text': 'yeah, but you know, so I mean at that'}, {'start': '741.680', 'end': '744.800', 'text': "time that's when like the Amazon kind of"}, {'start': '743.120', 'end': '746.480', 'text': 'FBA seller space was really exploding'}, {'start': '744.800', 'end': '749.120', 'text': 'and it was the wild west. Oh, it was you'}, {'start': '746.480', 'end': '750.800', 'text': 'think you think of like a a I mean it'}, {'start': '749.120', 'end': '752.399', 'text': 'started with just like a spatula or a'}, {'start': '750.800', 'end': '753.600', 'text': 'garlic press. It was like the meme and'}, {'start': '752.399', 'end': '755.920', 'text': 'you just throw it up there and become a'}, {'start': '753.600', 'end': '757.040', 'text': 'millionaire. But then it came, you know,'}, {'start': '755.920', 'end': '758.320', 'text': "you just you're just finding these"}, {'start': '757.040', 'end': '760.079', 'text': 'little industries and niches.'}, {'start': '758.320', 'end': '762.959', 'text': 'Supplements was a great one. I I was'}, {'start': '760.079', 'end': '765.040', 'text': 'involved in that as well. Um all kinds'}, {'start': '762.959', 'end': '767.519', 'text': 'of ways to just meant money. Um and and'}, {'start': '765.040', 'end': '769.519', 'text': "now it's really competitive. You got to"}, {'start': '767.519', 'end': '770.800', 'text': 'be really spatulas now. 10 different'}, {'start': '769.519', 'end': '773.040', 'text': 'companies with 10 different spatulas,'}, {'start': '770.800', 'end': '774.800', 'text': "right? Yeah. I mean, there's probably"}, {'start': '773.040', 'end': '776.160', 'text': 'what, a thousand spatula companies? No.'}, {'start': '774.800', 'end': '779.040', 'text': 'Now you just got people buying stuff on'}, {'start': '776.160', 'end': '780.800', 'text': "Teeu and just reselling on Amazon. It's"}, {'start': '779.040', 'end': '782.160', 'text': "I think it's I think it's even more than"}, {'start': '780.800', 'end': '783.760', 'text': "that. So that's what happened. First it"}, {'start': '782.160', 'end': '786.240', 'text': 'was just us, then it was people buying'}, {'start': '783.760', 'end': '789.040', 'text': 'on Teemo and whatever and Alibaba and'}, {'start': '786.240', 'end': '791.279', 'text': 'selling it. And then eventually the'}, {'start': '789.040', 'end': '793.200', 'text': 'Chinese manufacturers themselves figured'}, {'start': '791.279', 'end': '795.040', 'text': "it out. Yeah. Right. Um and now they're"}, {'start': '793.200', 'end': '797.440', 'text': 'going direct because like the gap was'}, {'start': '795.040', 'end': '799.760', 'text': 'just cultural and marketing and language'}, {'start': '797.440', 'end': '801.440', 'text': 'and stuff like that. And you know enough'}, {'start': '799.760', 'end': '803.360', 'text': 'people have filled the space to like'}, {'start': '801.440', 'end': '806.959', 'text': 'close that gap and now AI is completely'}, {'start': '803.360', 'end': '809.360', 'text': 'closing that gap 100%. Yeah. Um, and now'}, {'start': '806.959', 'end': '810.639', 'text': 'if they could just fix the names of'}, {'start': '809.360', 'end': '813.760', 'text': 'their companies in the Amazon'}, {'start': '810.639', 'end': '814.959', 'text': "descriptions, it's like crazy long. If"}, {'start': '813.760', 'end': '818.320', 'text': "they do that, like it's done. Like you"}, {'start': '814.959', 'end': '820.959', 'text': "have no idea what's Yeah. Like just get"}, {'start': '818.320', 'end': '821.920', 'text': "a Wyoming LLC and you're done. Nobody"}, {'start': '820.959', 'end': '826.079', 'text': "knows the difference. Right. That's"}, {'start': '821.920', 'end': '828.639', 'text': "right. That's right. Yeah. No kidding."}, {'start': '826.079', 'end': '830.320', 'text': 'No kidding. Well, cool. Well, uh, this'}, {'start': '828.639', 'end': '832.000', 'text': 'is this is a great intro, Travis. Talk'}, {'start': '830.320', 'end': '834.079', 'text': "to us about what you're doing, uh,"}, {'start': '832.000', 'end': '837.680', 'text': 'today. Talk to us about your current'}, {'start': '834.079', 'end': '839.320', 'text': 'company. All right. So, um, now I I'}, {'start': '837.680', 'end': '843.680', 'text': 'basically just invest'}, {'start': '839.320', 'end': '845.920', 'text': 'in small business acquisitions, um, to'}, {'start': '843.680', 'end': '847.279', 'text': 'kind of like give probably a little'}, {'start': '845.920', 'end': '850.880', 'text': 'background of how we got here I think is'}, {'start': '847.279', 'end': '852.000', 'text': 'is pretty relevant. Um, so post exit, so'}, {'start': '850.880', 'end': '855.440', 'text': 'like the software exit we talked about'}, {'start': '852.000', 'end': '857.199', 'text': 'was one I had a few others as well. Um,'}, {'start': '855.440', 'end': '858.880', 'text': 'you know, you got to get cashed up and'}, {'start': '857.199', 'end': '861.399', 'text': 'like the next logical step that everyone'}, {'start': '858.880', 'end': '863.279', 'text': 'does is they go from entrepreneur to'}, {'start': '861.399', 'end': '865.920', 'text': "investor. If you're listening, that's in"}, {'start': '863.279', 'end': '867.680', 'text': "quotes. Um it's it's generally probably"}, {'start': '865.920', 'end': '869.639', 'text': 'a bad idea, but like I did it. And so'}, {'start': '867.680', 'end': '872.480', 'text': 'like I played in like every asset class'}, {'start': '869.639', 'end': '874.000', 'text': 'imaginable and kind of circle back'}, {'start': '872.480', 'end': '876.120', 'text': 'around to like you know what like'}, {'start': '874.000', 'end': '878.959', 'text': 'actually these small businesses'}, {'start': '876.120', 'end': '881.680', 'text': "are printing machines um if they're"}, {'start': '878.959', 'end': '883.120', 'text': 'good, right? I think they have like'}, {'start': '881.680', 'end': '884.720', 'text': 'small businesses have the best returns'}, {'start': '883.120', 'end': '886.079', 'text': "out of like any asset class that's"}, {'start': '884.720', 'end': '887.839', 'text': 'around. But they have a lot of'}, {'start': '886.079', 'end': '889.760', 'text': 'drawbacks. And those drawbacks are one,'}, {'start': '887.839', 'end': '892.480', 'text': "you've got to run them. Pretty big"}, {'start': '889.760', 'end': '894.720', 'text': "drawback. Uh two, it's almost impossible"}, {'start': '892.480', 'end': '896.480', 'text': "to diversify. Like I've kind of"}, {'start': '894.720', 'end': '898.000', 'text': 'diversified like my personal holdings'}, {'start': '896.480', 'end': '901.920', 'text': 'that I started with management teams,'}, {'start': '898.000', 'end': '903.519', 'text': 'but that is a long decade long process'}, {'start': '901.920', 'end': '905.680', 'text': "and very difficult. It doesn't work a"}, {'start': '903.519', 'end': '906.880', 'text': "lot of times. Um and then it's risky"}, {'start': '905.680', 'end': '910.079', 'text': 'like you know if you just have one small'}, {'start': '906.880', 'end': '911.839', 'text': 'business yeah it can you know make if'}, {'start': '910.079', 'end': '914.560', 'text': "you're looking at like yield purposes"}, {'start': '911.839', 'end': '916.959', 'text': 'like you know 30% a year yield but it'}, {'start': '914.560', 'end': '919.120', 'text': 'can also fail and it can go to zero'}, {'start': '916.959', 'end': '921.519', 'text': 'where like you know your S&P index fund'}, {'start': '919.120', 'end': '923.839', 'text': 'is not really going to do that. Yeah.'}, {'start': '921.519', 'end': '925.199', 'text': 'And so I was for years I kind of like'}, {'start': '923.839', 'end': '927.040', 'text': 'tinkered around like how can I solve'}, {'start': '925.199', 'end': '929.839', 'text': 'this? And I kind of just stumbled into'}, {'start': '927.040', 'end': '932.560', 'text': "this space of specifically it's kind of"}, {'start': '929.839', 'end': '934.720', 'text': 'like search funds um self-funded search'}, {'start': '932.560', 'end': '936.880', 'text': 'funds and independent sponsors. This is'}, {'start': '934.720', 'end': '939.839', 'text': 'kind of the the terms that they use to'}, {'start': '936.880', 'end': '941.279', 'text': "describe it. Uh it's essentially people"}, {'start': '939.839', 'end': '944.519', 'text': 'sometimes individuals sometimes small'}, {'start': '941.279', 'end': '947.440', 'text': 'teams that are acquiring uh'}, {'start': '944.519', 'end': '949.600', 'text': 'legacy profitable um small businesses.'}, {'start': '947.440', 'end': '953.560', 'text': 'And I say small businesses, the smallest'}, {'start': '949.600', 'end': '957.519', 'text': 'might be 500k a year ibida up to maybe'}, {'start': '953.560', 'end': '959.600', 'text': 'like 5 million a year.'}, {'start': '957.519', 'end': '962.639', 'text': "Um that's this is kind of the range"}, {'start': '959.600', 'end': '966.720', 'text': 'depending on the different models. Uh'}, {'start': '962.639', 'end': '969.759', 'text': "but these are they're not startups. They"}, {'start': '966.720', 'end': '971.440', 'text': 'are think of a you know some boring'}, {'start': '969.759', 'end': '973.920', 'text': "company that's maybe been around for 30"}, {'start': '971.440', 'end': '975.680', 'text': 'years historically profitable. uh and'}, {'start': '973.920', 'end': '978.560', 'text': "maybe the owner's retiring. Like this is"}, {'start': '975.680', 'end': '980.399', 'text': 'kind of the the profile that you hear'}, {'start': '978.560', 'end': '982.959', 'text': "mentioned a lot and it's true a lot of"}, {'start': '980.399', 'end': '984.880', 'text': 'times. Um this happens and you somebody'}, {'start': '982.959', 'end': '988.079', 'text': 'comes in there and buys them buys this'}, {'start': '984.880', 'end': '990.160', 'text': 'company and they use a mix of debt um'}, {'start': '988.079', 'end': '992.160', 'text': 'from banks and then or private credit'}, {'start': '990.160', 'end': '995.199', 'text': 'and then a mix of investors from people'}, {'start': '992.160', 'end': '997.839', 'text': 'like myself. Uh and what that ends up'}, {'start': '995.199', 'end': '1000.560', 'text': 'doing is at the end we just become a'}, {'start': '997.839', 'end': '1002.000', 'text': 'passive owner of these small businesses'}, {'start': '1000.560', 'end': '1003.759', 'text': "that are profitable. Again, it's it's"}, {'start': '1002.000', 'end': '1005.440', 'text': "nothing like a startup. It's not they're"}, {'start': '1003.759', 'end': '1007.279', 'text': 'not getting money to like grow to the'}, {'start': '1005.440', 'end': '1009.839', 'text': "next level. It's just they own this"}, {'start': '1007.279', 'end': '1012.480', 'text': "profitable business. And that's kind of"}, {'start': '1009.839', 'end': '1013.920', 'text': "like how I h I'm going to say hack the"}, {'start': '1012.480', 'end': '1015.920', 'text': 'system. I just kind of discovered like'}, {'start': '1013.920', 'end': '1018.320', 'text': 'oh this is how I can have the returns of'}, {'start': '1015.920', 'end': '1020.560', 'text': 'small business which are incredible. I'}, {'start': '1018.320', 'end': '1022.880', 'text': "can diversify. I can have other it's"}, {'start': '1020.560', 'end': '1024.400', 'text': 'passive have other people run it. Um'}, {'start': '1022.880', 'end': '1026.720', 'text': 'yeah and diversify. So it kind of like'}, {'start': '1024.400', 'end': '1030.079', 'text': 'checked all the boxes and um the space'}, {'start': '1026.720', 'end': '1031.760', 'text': 'is kind of incredible. Um, and I think'}, {'start': '1030.079', 'end': '1034.160', 'text': 'the returns are so good for like several'}, {'start': '1031.760', 'end': '1036.400', 'text': 'reasons, but one of the big ones is you'}, {'start': '1034.160', 'end': '1038.720', 'text': "can't have large institutional capital"}, {'start': '1036.400', 'end': '1040.880', 'text': "enter the space because it's too small."}, {'start': '1038.720', 'end': '1042.640', 'text': "You can't have endowments with billions"}, {'start': '1040.880', 'end': '1044.400', 'text': 'of dollars come and dilute stuff like'}, {'start': '1042.640', 'end': '1046.400', 'text': 'happening in venture right now. Yeah,'}, {'start': '1044.400', 'end': '1047.600', 'text': "100%. And as you're as you're talking"}, {'start': '1046.400', 'end': '1049.520', 'text': 'about this, I mean, the first thing that'}, {'start': '1047.600', 'end': '1052.320', 'text': "comes to my mind, she's pretty well"}, {'start': '1049.520', 'end': '1053.919', 'text': 'known now, Cody Sanchez, like small'}, {'start': '1052.320', 'end': '1055.520', 'text': "business guru. She's saying by the car"}, {'start': '1053.919', 'end': '1058.320', 'text': 'washes, by the dry match, you know,'}, {'start': '1055.520', 'end': '1059.679', 'text': 'laundry match, by the those boring'}, {'start': '1058.320', 'end': '1064.480', 'text': 'businesses. Is that that kind of'}, {'start': '1059.679', 'end': '1066.799', 'text': 'resonate with you all? Yes. Um I mean,'}, {'start': '1064.480', 'end': '1067.640', 'text': "you know, she's a social media figure"}, {'start': '1066.799', 'end': '1069.919', 'text': 'and'}, {'start': '1067.640', 'end': '1071.760', 'text': 'so everything she says is with a little'}, {'start': '1069.919', 'end': '1075.679', 'text': 'bit of a grain of salt, but like a lot'}, {'start': '1071.760', 'end': '1079.440', 'text': 'of that basic premise is is roughly is'}, {'start': '1075.679', 'end': '1081.120', 'text': 'roughly true. Yeah. Um like I mean'}, {'start': '1079.440', 'end': '1084.240', 'text': "there's like an actual real world"}, {'start': '1081.120', 'end': '1086.960', 'text': "example. I'm not too interested in like"}, {'start': '1084.240', 'end': '1089.360', 'text': 'a coin laundry mat, right, as she talks'}, {'start': '1086.960', 'end': '1092.160', 'text': "about, but I'm definitely interested in"}, {'start': '1089.360', 'end': '1094.240', 'text': 'like a luxury dry cleaner in Miami,'}, {'start': '1092.160', 'end': '1097.360', 'text': 'which is a very real deal that I did.'}, {'start': '1094.240', 'end': '1098.559', 'text': 'Um, like something like that, like so so'}, {'start': '1097.360', 'end': '1101.919', 'text': "yeah, there there's a there's a lot of"}, {'start': '1098.559', 'end': '1105.120', 'text': 'truth to that. Um, and the the whole'}, {'start': '1101.919', 'end': '1106.720', 'text': "system's really good. Um,"}, {'start': '1105.120', 'end': '1107.919', 'text': 'low failure rate, high returns. We go'}, {'start': '1106.720', 'end': '1108.880', 'text': 'into whatever direction you guys want to'}, {'start': '1107.919', 'end': '1110.240', 'text': "go. I haven't even talked about the"}, {'start': '1108.880', 'end': '1112.480', 'text': 'actual company yet. Talk about like the'}, {'start': '1110.240', 'end': '1113.840', 'text': "investing. It's all good. I want to ask"}, {'start': '1112.480', 'end': '1115.280', 'text': 'you Travis because you talked about this'}, {'start': '1113.840', 'end': '1117.360', 'text': 'earlier which is interesting. So you'}, {'start': '1115.280', 'end': '1118.480', 'text': 'kind of laid out how you started and'}, {'start': '1117.360', 'end': '1120.480', 'text': "obviously I'd love to hear how you kind"}, {'start': '1118.480', 'end': '1122.640', 'text': 'of got your first deal in this space as'}, {'start': '1120.480', 'end': '1124.160', 'text': 'an investor but your mindset you kind of'}, {'start': '1122.640', 'end': '1125.840', 'text': 'said you kind of mentioned to us more'}, {'start': '1124.160', 'end': '1127.280', 'text': 'about self-awareness. You like to start'}, {'start': '1125.840', 'end': '1128.120', 'text': "companies but you don't like to manage"}, {'start': '1127.280', 'end': '1130.080', 'text': 'them'}, {'start': '1128.120', 'end': '1131.760', 'text': 'right. This is actually an interesting'}, {'start': '1130.080', 'end': '1133.480', 'text': 'situation because now you are taking'}, {'start': '1131.760', 'end': '1136.000', 'text': 'legacy businesses have been run for'}, {'start': '1133.480', 'end': '1138.559', 'text': "decades and you're coming in and either"}, {'start': '1136.000', 'end': '1139.919', 'text': 'you know changing the management or you'}, {'start': '1138.559', 'end': '1142.160', 'text': "know making it more efficient. I'd love"}, {'start': '1139.919', 'end': '1145.080', 'text': "to hear kind of that process too. That's"}, {'start': '1142.160', 'end': '1146.919', 'text': "that's a really great point um or"}, {'start': '1145.080', 'end': '1150.480', 'text': 'question.'}, {'start': '1146.919', 'end': '1153.440', 'text': 'So to be very clear, I am not coming in'}, {'start': '1150.480', 'end': '1155.440', 'text': "as the operator or I'm I'm just a"}, {'start': '1153.440', 'end': '1158.240', 'text': 'passive owner, right? Like the the way'}, {'start': '1155.440', 'end': '1159.440', 'text': "the system works is let's take the I"}, {'start': '1158.240', 'end': '1161.919', 'text': "mean there's there's different types we"}, {'start': '1159.440', 'end': '1165.520', 'text': "talked about, but let's take the"}, {'start': '1161.919', 'end': '1169.720', 'text': 'self-funded search fund. That is'}, {'start': '1165.520', 'end': '1172.960', 'text': 'generally one person, sometimes two. Um,'}, {'start': '1169.720', 'end': '1174.559', 'text': 'maybe a lot of like MBA types, a lot of'}, {'start': '1172.960', 'end': '1176.720', 'text': 'like former special forces that then go'}, {'start': '1174.559', 'end': '1178.320', 'text': 'get their MBA, do a few years of real'}, {'start': '1176.720', 'end': '1181.440', 'text': 'world experience, sometimes former'}, {'start': '1178.320', 'end': '1183.520', 'text': 'private equity people. They decide to go'}, {'start': '1181.440', 'end': '1186.559', 'text': 'and buy the business. So, they they'}, {'start': '1183.520', 'end': '1188.160', 'text': 'search for a couple years um on average,'}, {'start': '1186.559', 'end': '1190.480', 'text': "maybe a year if they're lucky, six"}, {'start': '1188.160', 'end': '1192.400', 'text': 'months. They find this business, they'}, {'start': '1190.480', 'end': '1194.480', 'text': 'diligence it, they put in the offers,'}, {'start': '1192.400', 'end': '1196.320', 'text': 'they get it accepted, and then they come'}, {'start': '1194.480', 'end': '1199.520', 'text': 'and like round up the debt and investors'}, {'start': '1196.320', 'end': '1204.240', 'text': 'from people like me. um postacquisition'}, {'start': '1199.520', 'end': '1206.720', 'text': "they run it. Um got it. So it's not me"}, {'start': '1204.240', 'end': '1208.720', 'text': 'making the calls. Now I am an adviser.'}, {'start': '1206.720', 'end': '1210.880', 'text': 'Uh I have a lot of sway but at the end'}, {'start': '1208.720', 'end': '1212.880', 'text': 'of the day like the point is not for me'}, {'start': '1210.880', 'end': '1215.520', 'text': "to run it, right? It's kind of like I'm"}, {'start': '1212.880', 'end': '1216.799', 'text': "on a board of adviserss. Um it's not a"}, {'start': '1215.520', 'end': '1218.480', 'text': 'technical board because because the'}, {'start': '1216.799', 'end': '1220.240', 'text': "situation we can't actually fire the CEO"}, {'start': '1218.480', 'end': '1222.480', 'text': 'if we wanted to uh because the debt'}, {'start': '1220.240', 'end': '1225.280', 'text': "covenants, but um yeah, that that's kind"}, {'start': '1222.480', 'end': '1227.799', 'text': 'of how it works. Uh, and I think this'}, {'start': '1225.280', 'end': '1230.240', 'text': 'this is a really good fit because'}, {'start': '1227.799', 'end': '1232.480', 'text': "there's there's all kinds of there's a"}, {'start': '1230.240', 'end': '1234.799', 'text': 'huge band of like different types of'}, {'start': '1232.480', 'end': '1237.360', 'text': 'entrepreneurs. I am very much a zero to'}, {'start': '1234.799', 'end': '1240.400', 'text': "one entrepreneur, 100%. But then there's"}, {'start': '1237.360', 'end': '1241.840', 'text': 'like, you know, one to 100 entrepreneurs'}, {'start': '1240.400', 'end': '1244.240', 'text': 'and the people buying these businesses'}, {'start': '1241.840', 'end': '1245.520', 'text': 'are people like that. um on average'}, {'start': '1244.240', 'end': '1246.720', 'text': "they're not the best people to start"}, {'start': '1245.520', 'end': '1248.240', 'text': 'from scratch. But they can take'}, {'start': '1246.720', 'end': '1250.799', 'text': 'something that already exists and'}, {'start': '1248.240', 'end': '1251.840', 'text': 'improve it forever because a lot of'}, {'start': '1250.799', 'end': '1254.320', 'text': "these businesses, you know, if it's"}, {'start': '1251.840', 'end': '1255.280', 'text': "decades old, they've been doing a lot of"}, {'start': '1254.320', 'end': '1257.039', 'text': "things really well because it's"}, {'start': '1255.280', 'end': '1258.480', 'text': 'obviously survived that long. But a lot'}, {'start': '1257.039', 'end': '1260.559', 'text': 'of things people get blind to, founders'}, {'start': '1258.480', 'end': '1263.360', 'text': "get blind to or they just don't care."}, {'start': '1260.559', 'end': '1265.440', 'text': 'You know, like again that Miami dry'}, {'start': '1263.360', 'end': '1266.799', 'text': 'cleaner deal we talked about, that was a'}, {'start': '1265.440', 'end': '1270.880', 'text': 'hard one to get the deal done because'}, {'start': '1266.799', 'end': '1273.039', 'text': 'the owner was always out on his boat.'}, {'start': '1270.880', 'end': '1274.640', 'text': "I'm dead serious. in Miami, she's always"}, {'start': '1273.039', 'end': '1277.039', 'text': "on this boat and so we just we couldn't"}, {'start': '1274.640', 'end': '1278.640', 'text': 'it took like an extra two months. Um'}, {'start': '1277.039', 'end': '1281.200', 'text': 'like a business like that has a lot of'}, {'start': '1278.640', 'end': '1283.600', 'text': 'lowhanging fruit surprisingly.'}, {'start': '1281.200', 'end': '1284.799', 'text': 'Right. Yeah. Um or this business that we'}, {'start': '1283.600', 'end': '1286.799', 'text': "just closed, it's like in New Jersey"}, {'start': '1284.799', 'end': '1288.960', 'text': "like home improvement one. Um I'm"}, {'start': '1286.799', 'end': '1290.559', 'text': "looking uh again because I'm I'm an"}, {'start': '1288.960', 'end': '1292.320', 'text': 'adviser and I have a lot of like, you'}, {'start': '1290.559', 'end': '1293.679', 'text': 'know, technical marketing backgrounds.'}, {'start': '1292.320', 'end': '1295.760', 'text': "I'm like going through their agency"}, {'start': '1293.679', 'end': '1297.120', 'text': "stuff and I see this agency that they've"}, {'start': '1295.760', 'end': '1298.480', 'text': "historically the company's been paying"}, {'start': '1297.120', 'end': '1300.880', 'text': 'like several thousand dollars a month'}, {'start': '1298.480', 'end': '1302.000', 'text': 'and they do nothing. Wow. In fact, they'}, {'start': '1300.880', 'end': '1303.679', 'text': "do worse than nothing. I think they're"}, {'start': '1302.000', 'end': '1305.520', 'text': 'harming the business. Not intentionally.'}, {'start': '1303.679', 'end': '1307.280', 'text': "They just don't know any better with"}, {'start': '1305.520', 'end': '1309.600', 'text': "like terrible, terrible SEO. And so, I'm"}, {'start': '1307.280', 'end': '1311.200', 'text': "like, well, instantly we're saving, you"}, {'start': '1309.600', 'end': '1312.880', 'text': 'know, thousands a month from this and we'}, {'start': '1311.200', 'end': '1314.320', 'text': 'can actually do good stuff afterwards.'}, {'start': '1312.880', 'end': '1316.640', 'text': "Like, there's a lot of living and fruit"}, {'start': '1314.320', 'end': '1318.720', 'text': 'with stuff like this. Yeah. Yeah. So, g'}, {'start': '1316.640', 'end': '1322.000', 'text': 'give us in a nutshell. So, uh, Capital'}, {'start': '1318.720', 'end': '1325.919', 'text': 'Pad. Yeah. All right. So, yeah, let me'}, {'start': '1322.000', 'end': '1328.000', 'text': 'pitch myself. Uh so from getting into'}, {'start': '1325.919', 'end': '1330.320', 'text': 'the space I kind of discovered the'}, {'start': '1328.000', 'end': '1331.840', 'text': "hardships with it too. Um and there's"}, {'start': '1330.320', 'end': '1333.679', 'text': 'two sides. From the investor point of'}, {'start': '1331.840', 'end': '1335.360', 'text': "view it's really hard to find these"}, {'start': '1333.679', 'end': '1336.720', 'text': 'deals. Like I mean you know probably'}, {'start': '1335.360', 'end': '1338.960', 'text': 'most people listening probably you guys'}, {'start': '1336.720', 'end': '1340.799', 'text': 'as well. Like you hear this oh yeah find'}, {'start': '1338.960', 'end': '1342.799', 'text': 'a great profitable dry cleaner trading'}, {'start': '1340.799', 'end': '1344.960', 'text': "for like 3x earnings. That's amazing."}, {'start': '1342.799', 'end': '1347.039', 'text': "But where do you go to get that? Um it's"}, {'start': '1344.960', 'end': '1349.280', 'text': 'not commonly available. you have it took'}, {'start': '1347.039', 'end': '1350.480', 'text': 'me years to build up like deal flow to'}, {'start': '1349.280', 'end': '1352.559', 'text': 'get these things because again with deal'}, {'start': '1350.480', 'end': '1354.159', 'text': "flow you're not saying yes to every one"}, {'start': '1352.559', 'end': '1356.080', 'text': 'you need to say yes to like 1% of them'}, {'start': '1354.159', 'end': '1357.760', 'text': 'right so you got to see a ton of them uh'}, {'start': '1356.080', 'end': '1359.840', 'text': 'so that was one of the problems the'}, {'start': '1357.760', 'end': '1362.480', 'text': 'check size minimums were quite large'}, {'start': '1359.840', 'end': '1364.320', 'text': 'these um like the deal rooms and'}, {'start': '1362.480', 'end': '1367.440', 'text': 'presentations were all over the place'}, {'start': '1364.320', 'end': '1369.360', 'text': 'there was nothing standardized uh and I'}, {'start': '1367.440', 'end': '1370.880', 'text': 'had a lot of people asking to co-invest'}, {'start': '1369.360', 'end': '1372.159', 'text': 'with me like friends like oh man this'}, {'start': '1370.880', 'end': '1374.080', 'text': 'deal is awesome can I like invest with'}, {'start': '1372.159', 'end': '1376.080', 'text': "you I'm like yeah eventually I was like"}, {'start': '1374.080', 'end': '1378.799', 'text': 'I think we can like make a platform form'}, {'start': '1376.080', 'end': '1380.000', 'text': 'off of this. Um, and on the other side,'}, {'start': '1378.799', 'end': '1382.000', 'text': 'the people who are buying these'}, {'start': '1380.000', 'end': '1384.640', 'text': "companies, it's really difficult for"}, {'start': '1382.000', 'end': '1386.640', 'text': 'them. You know, they they find the'}, {'start': '1384.640', 'end': '1388.080', 'text': 'company, which is, God bless them,'}, {'start': '1386.640', 'end': '1389.520', 'text': "that's a very difficult thing. They"}, {'start': '1388.080', 'end': '1391.440', 'text': 'diligent, they find a good deal, and'}, {'start': '1389.520', 'end': '1394.720', 'text': 'then they got to start cold emailing'}, {'start': '1391.440', 'end': '1396.080', 'text': 'like hundreds of investors, right? Um,'}, {'start': '1394.720', 'end': '1397.760', 'text': 'saying, "Hey, here\'s this thing. Oh, you'}, {'start': '1396.080', 'end': '1399.200', 'text': 'got to sign this NDA before I can even'}, {'start': '1397.760', 'end': '1400.720', 'text': 'show it to you." Like, you know, because'}, {'start': '1399.200', 'end': '1402.640', 'text': 'of like broker stuff, like all these'}, {'start': '1400.720', 'end': '1405.360', 'text': 'things. And then they got to get tons of'}, {'start': '1402.640', 'end': '1406.559', 'text': 'different um wires and signatures all'}, {'start': '1405.360', 'end': '1408.640', 'text': "over the place. It's like I think we can"}, {'start': '1406.559', 'end': '1411.200', 'text': 'make a platform to fix this. And so we'}, {'start': '1408.640', 'end': '1413.120', 'text': "did and uh it's named it's Capital Pad"}, {'start': '1411.200', 'end': '1414.880', 'text': "and Capital Pad is like it's a platform"}, {'start': '1413.120', 'end': '1416.320', 'text': 'where the sponsors bring the deals and'}, {'start': '1414.880', 'end': '1418.159', 'text': 'they present them to accredited'}, {'start': '1416.320', 'end': '1419.840', 'text': 'investors only. Uh and accredited'}, {'start': '1418.159', 'end': '1421.919', 'text': 'investors can choose to invest on a'}, {'start': '1419.840', 'end': '1423.919', 'text': "dealbydeal basis and essentially that's"}, {'start': '1421.919', 'end': '1426.159', 'text': 'they can passively become an owner of'}, {'start': '1423.919', 'end': '1427.520', 'text': 'like a profitable small business. Um'}, {'start': '1426.159', 'end': '1428.880', 'text': "just like I'm doing myself. That's"}, {'start': '1427.520', 'end': '1430.559', 'text': "right. And I've invested every deal"}, {'start': '1428.880', 'end': '1433.360', 'text': 'myself. Yeah. Yeah. What were the'}, {'start': '1430.559', 'end': '1435.840', 'text': 'typical ticket sizes on on the platform?'}, {'start': '1433.360', 'end': '1438.559', 'text': 'So, we we set the minimum right now at'}, {'start': '1435.840', 'end': '1440.240', 'text': '$10,000 per deal. Um, and ticket sizes'}, {'start': '1438.559', 'end': '1442.240', 'text': 'are us like the check sizes are usually'}, {'start': '1440.240', 'end': '1445.320', 'text': 'larger than that. We might have to raise'}, {'start': '1442.240', 'end': '1448.640', 'text': 'that um just for'}, {'start': '1445.320', 'end': '1451.279', 'text': 'like, you know, the low check sizes can'}, {'start': '1448.640', 'end': '1453.600', 'text': 'sometimes be difficult. Yeah. Um where'}, {'start': '1451.279', 'end': '1455.120', 'text': 'the larger ones are not, which is kind'}, {'start': '1453.600', 'end': '1456.880', 'text': "of crazy. It's all it's always that way,"}, {'start': '1455.120', 'end': '1459.440', 'text': "though. Um but right now, that that's"}, {'start': '1456.880', 'end': '1461.440', 'text': "the that's the idea. But, you know, say"}, {'start': '1459.440', 'end': '1462.840', 'text': "if they're, you know, deals raising, I"}, {'start': '1461.440', 'end': '1465.120', 'text': 'think the last deal raised like what'}, {'start': '1462.840', 'end': '1467.120', 'text': '740,000 or something like that. So, you'}, {'start': '1465.120', 'end': '1468.799', 'text': "know, there's room to split it up and"}, {'start': '1467.120', 'end': '1472.720', 'text': 'whatnot. How are you guys setting this'}, {'start': '1468.799', 'end': '1474.640', 'text': 'up? Are these like debt equity? And'}, {'start': '1472.720', 'end': '1476.640', 'text': 'yeah, I was going to get SUVs, too. Oh,'}, {'start': '1474.640', 'end': '1478.320', 'text': 'yeah. We only do equity. They ask us for'}, {'start': '1476.640', 'end': '1480.080', 'text': "debt sometimes, and I'm just honest like"}, {'start': '1478.320', 'end': '1483.760', 'text': "I don't know how to I don't know how to"}, {'start': '1480.080', 'end': '1485.279', 'text': 'price this debt. Okay. Yeah.'}, {'start': '1483.760', 'end': '1486.559', 'text': 'These are equity deals. So, what what'}, {'start': '1485.279', 'end': '1489.760', 'text': 'type of stake are you guys looking to'}, {'start': '1486.559', 'end': '1493.200', 'text': 'get in these businesses? It depends on'}, {'start': '1489.760', 'end': '1495.360', 'text': 'the type of deal. So, with the deals'}, {'start': '1493.200', 'end': '1498.799', 'text': 'that are probably'}, {'start': '1495.360', 'end': '1503.120', 'text': "$7 million and under, uh they're usually"}, {'start': '1498.799', 'end': '1506.400', 'text': 'in using an SBA loan, uh SBA 7A loan.'}, {'start': '1503.120', 'end': '1508.720', 'text': 'And with that, we will never own over'}, {'start': '1506.400', 'end': '1510.960', 'text': '20% of the business. We will own up to'}, {'start': '1508.720', 'end': '1512.480', 'text': "19.9%. Because if we go over 20%, we've"}, {'start': '1510.960', 'end': '1513.679', 'text': 'got to personally guarantee that debt,'}, {'start': '1512.480', 'end': '1515.679', 'text': "right? And we're obviously not going to"}, {'start': '1513.679', 'end': '1516.960', 'text': "do that. that's the the searcher, the"}, {'start': '1515.679', 'end': '1518.720', 'text': "people doing that. That's that's what"}, {'start': '1516.960', 'end': '1520.880', 'text': "they're doing. Um and they're being"}, {'start': '1518.720', 'end': '1523.440', 'text': 'rewarded handsomely for that. Um to be'}, {'start': '1520.880', 'end': '1525.840', 'text': 'clear, so these are great great returns'}, {'start': '1523.440', 'end': '1528.159', 'text': 'for investors. Um historically, I think'}, {'start': '1525.840', 'end': '1530.480', 'text': 'I got to say, but these the searchers'}, {'start': '1528.159', 'end': '1532.320', 'text': 'and people doing these deals, they come'}, {'start': '1530.480', 'end': '1534.799', 'text': "out like bandits, too. So, it's really a"}, {'start': '1532.320', 'end': '1536.640', 'text': 'win-win if it goes well. And if it goes'}, {'start': '1534.799', 'end': '1537.840', 'text': 'badly, well, obviously we lose our'}, {'start': '1536.640', 'end': '1538.799', 'text': 'money, but they lose a lot more because'}, {'start': '1537.840', 'end': '1540.320', 'text': "they're personally guaranteeing this"}, {'start': '1538.799', 'end': '1542.159', 'text': "with the SBA. Like, you can't just walk"}, {'start': '1540.320', 'end': '1544.080', 'text': 'away from government guaranteed debt,'}, {'start': '1542.159', 'end': '1546.080', 'text': 'right? Yeah.'}, {'start': '1544.080', 'end': '1547.440', 'text': 'Yeah. Very cool. Okay. So, the you and'}, {'start': '1546.080', 'end': '1551.120', 'text': 'and you guys are structuring these as'}, {'start': '1547.440', 'end': '1552.720', 'text': 'SPVS to make these Yeah. Uh 20% or less'}, {'start': '1551.120', 'end': '1555.120', 'text': 'investments or less I should say less'}, {'start': '1552.720', 'end': '1556.640', 'text': 'than 20%. Yeah. I I I assume most people'}, {'start': '1555.120', 'end': '1559.440', 'text': 'know what that is, but you know, just in'}, {'start': '1556.640', 'end': '1561.279', 'text': 'case we essentially we use a um a'}, {'start': '1559.440', 'end': '1563.360', 'text': 'specific company for this, but we spin'}, {'start': '1561.279', 'end': '1565.279', 'text': 'up a LLC with dedicated bank account and'}, {'start': '1563.360', 'end': '1567.440', 'text': 'all this stuff and pull all investors'}, {'start': '1565.279', 'end': '1569.279', 'text': 'into one SPV, one of those um and then'}, {'start': '1567.440', 'end': '1571.679', 'text': 'invested like one entity on the cap'}, {'start': '1569.279', 'end': '1574.240', 'text': 'table. It all goes through there. um'}, {'start': '1571.679', 'end': '1575.760', 'text': 'like to simplify it all. Okay. And then'}, {'start': '1574.240', 'end': '1578.000', 'text': 'so and then the folks that are coming to'}, {'start': '1575.760', 'end': '1581.600', 'text': "you guys for these loans. So I'll just"}, {'start': '1578.000', 'end': '1584.080', 'text': 'try to make this investments. Sorry. Uh'}, {'start': '1581.600', 'end': '1588.799', 'text': "so to like kind of let let's say so I'm"}, {'start': '1584.080', 'end': '1592.720', 'text': "I'm here. I find a uh you know gorgeous"}, {'start': '1588.799', 'end': '1594.159', 'text': 'uh laundromat in Miami and I need to you'}, {'start': '1592.720', 'end': '1596.159', 'text': "know get some capital for it. So, I'm"}, {'start': '1594.159', 'end': '1597.440', 'text': "taking out an SBA loan and then I'm"}, {'start': '1596.159', 'end': '1600.320', 'text': 'working with you guys and you guys are'}, {'start': '1597.440', 'end': '1603.039', 'text': 'giving me 20% or less than 20% equity'}, {'start': '1600.320', 'end': '1604.600', 'text': 'stake in this company. Is that correct?'}, {'start': '1603.039', 'end': '1607.120', 'text': "All right. So, let's"}, {'start': '1604.600', 'end': '1610.080', 'text': "say just for simplicity sake, let's say"}, {'start': '1607.120', 'end': '1611.720', 'text': "it's a $5 million um total enterprise"}, {'start': '1610.080', 'end': '1615.559', 'text': 'value deal.'}, {'start': '1611.720', 'end': '1620.000', 'text': 'Um the with the SBA'}, {'start': '1615.559', 'end': '1621.760', 'text': 'loan you can get, you know, the'}, {'start': '1620.000', 'end': '1626.400', 'text': "specifics vary per deal, but we'll just"}, {'start': '1621.760', 'end': '1628.240', 'text': 'say 80% might be SBA, right? Um 10%'}, {'start': '1626.400', 'end': '1631.279', 'text': 'might be a seller note. So the seller is'}, {'start': '1628.240', 'end': '1633.679', 'text': 'kind of giving them some debt, uh pretty'}, {'start': '1631.279', 'end': '1635.200', 'text': 'cheap debt generally. And then that also'}, {'start': '1633.679', 'end': '1636.640', 'text': 'helps keep like skin in the game for the'}, {'start': '1635.200', 'end': '1637.840', 'text': "seller. So if like something doesn't go"}, {'start': '1636.640', 'end': '1638.960', 'text': "well, they like, you know, don't have to"}, {'start': '1637.840', 'end': '1641.440', 'text': 'pay off the seller note or something'}, {'start': '1638.960', 'end': '1642.960', 'text': 'like that. And then the last 10% comes'}, {'start': '1641.440', 'end': '1644.799', 'text': 'from investors. So in that $5 million'}, {'start': '1642.960', 'end': '1647.360', 'text': "deal, we'd be putting in half a million."}, {'start': '1644.799', 'end': '1649.679', 'text': 'So the 500,000 and we would own well'}, {'start': '1647.360', 'end': '1651.600', 'text': "we'd put in something like $490,000. So"}, {'start': '1649.679', 'end': '1652.919', 'text': "at the end of that, we'd own, you know,"}, {'start': '1651.600', 'end': '1655.919', 'text': 'right at like the'}, {'start': '1652.919', 'end': '1657.279', 'text': '19.9% or something like that of Oh. Oh.'}, {'start': '1655.919', 'end': '1659.039', 'text': "So here's here's the thing though,"}, {'start': '1657.279', 'end': '1660.080', 'text': 'because you you just might have heard my'}, {'start': '1659.039', 'end': '1662.000', 'text': 'math and be like, "Wait a minute,'}, {'start': '1660.080', 'end': '1663.760', 'text': "Travis, that's 10%. How did you get to"}, {'start': '1662.000', 'end': '1665.919', 'text': '20%." So if we, you know, $5 million'}, {'start': '1663.760', 'end': '1667.600', 'text': "deal, we'd put in half a million. We"}, {'start': '1665.919', 'end': '1670.080', 'text': "essentially own that's 10% of the"}, {'start': '1667.600', 'end': '1672.320', 'text': 'equity, but we essentially own like 20%'}, {'start': '1670.080', 'end': '1673.840', 'text': "of the company at the end. There's"}, {'start': '1672.320', 'end': '1675.760', 'text': "there's something called a it's a step"}, {'start': '1673.840', 'end': '1678.080', 'text': "up and it's a"}, {'start': '1675.760', 'end': '1679.360', 'text': 'terribly explained convoluted term that'}, {'start': '1678.080', 'end': '1681.760', 'text': "doesn't really make sense but"}, {'start': '1679.360', 'end': '1684.000', 'text': "essentially it's a multiple of the money"}, {'start': '1681.760', 'end': '1686.799', 'text': 'you put in to the equity that you get'}, {'start': '1684.000', 'end': '1689.120', 'text': 'out uh from the company at the end. So'}, {'start': '1686.799', 'end': '1691.520', 'text': 'they yeah they they like just multiply'}, {'start': '1689.120', 'end': '1693.279', 'text': "it um from there. So it's a 2x step up"}, {'start': '1691.520', 'end': '1695.200', 'text': 'in that case and just pretty standard'}, {'start': '1693.279', 'end': '1698.399', 'text': 'terms and you get a you know in that'}, {'start': '1695.200', 'end': '1700.640', 'text': "case it' be like a 10% preferred return"}, {'start': '1698.399', 'end': '1703.600', 'text': 'um 1x liquidation preference and then'}, {'start': '1700.640', 'end': '1706.880', 'text': 'the 2x step up and in that case the'}, {'start': '1703.600', 'end': '1708.159', 'text': 'models um you know we work out like'}, {'start': '1706.880', 'end': '1709.760', 'text': 'models for all these like you know a'}, {'start': '1708.159', 'end': '1711.600', 'text': 'model in like venture is completely'}, {'start': '1709.760', 'end': '1713.120', 'text': 'useless. It means nothing but a model in'}, {'start': '1711.600', 'end': '1714.640', 'text': 'these types of companies are far more'}, {'start': '1713.120', 'end': '1717.279', 'text': 'realistic because you can you can'}, {'start': '1714.640', 'end': '1720.000', 'text': "historically see what they've done. Uh,"}, {'start': '1717.279', 'end': '1721.520', 'text': 'and these sponsors, they love to give us'}, {'start': '1720.000', 'end': '1723.440', 'text': 'models with all kinds of growth and'}, {'start': '1721.520', 'end': '1725.360', 'text': 'stuff baked in. And I discount all of'}, {'start': '1723.440', 'end': '1726.480', 'text': 'that. Like, you know, some of these'}, {'start': '1725.360', 'end': '1727.600', 'text': 'companies like this one talked about'}, {'start': '1726.480', 'end': '1730.080', 'text': "like, yeah, there's a lot of growth"}, {'start': '1727.600', 'end': '1733.120', 'text': "levers, but um, I don't want to like"}, {'start': '1730.080', 'end': '1734.559', 'text': 'bank on that. And so we kind of put it'}, {'start': '1733.120', 'end': '1736.960', 'text': "in the model like all right let's if we"}, {'start': '1734.559', 'end': '1739.120', 'text': 'just increased like revenue at like the'}, {'start': '1736.960', 'end': '1741.799', 'text': 'pace of inflation so basically like 5% a'}, {'start': '1739.120', 'end': '1744.360', 'text': 'year type of thing with no growth no'}, {'start': '1741.799', 'end': '1747.120', 'text': 'like improvement in'}, {'start': '1744.360', 'end': '1749.039', 'text': 'um no increase in like the exit multiple'}, {'start': '1747.120', 'end': '1752.320', 'text': 'or anything like that do we still come'}, {'start': '1749.039', 'end': '1754.480', 'text': 'out at like over 30% a year irr with our'}, {'start': '1752.320', 'end': '1756.240', 'text': "investment and that's what we have to do"}, {'start': '1754.480', 'end': '1758.000', 'text': 'in order to invest in these things. Okay'}, {'start': '1756.240', 'end': '1760.000', 'text': "that's really we'll definitely get into"}, {'start': '1758.000', 'end': '1761.679', 'text': 'that a little bit more. Uh, one thing'}, {'start': '1760.000', 'end': '1763.279', 'text': 'before we move on, I I just want to dive'}, {'start': '1761.679', 'end': '1766.720', 'text': 'into like the SBA loan. Could you kind'}, {'start': '1763.279', 'end': '1768.159', 'text': 'of just talk about kind of just give us'}, {'start': '1766.720', 'end': '1769.840', 'text': 'a little bit more clarity on it. What is'}, {'start': '1768.159', 'end': '1773.279', 'text': 'it? Uh, you know, obviously you'}, {'start': '1769.840', 'end': '1775.559', 'text': 'mentioned like government loan. Is it uh'}, {'start': '1773.279', 'end': '1777.760', 'text': "Yeah, I'll let you take it away. Yeah."}, {'start': '1775.559', 'end': '1778.559', 'text': "Um, don't exactly know where you want to"}, {'start': '1777.760', 'end': '1781.520', 'text': "go with it, but I'll just kind of"}, {'start': '1778.559', 'end': '1783.279', 'text': 'ramble. Uh, the the SBA has a really'}, {'start': '1781.520', 'end': '1785.200', 'text': "nice program. Um, you know, there's SBA"}, {'start': '1783.279', 'end': '1788.399', 'text': 'loans for all kinds of different assets,'}, {'start': '1785.200', 'end': '1792.399', 'text': "but in this case, it's the 7A"}, {'start': '1788.399', 'end': '1796.159', 'text': 'acquisition loan, what they say. And it'}, {'start': '1792.399', 'end': '1798.159', 'text': "it's kind of put in place to help um to"}, {'start': '1796.159', 'end': '1800.880', 'text': 'help people acquire companies, but not'}, {'start': '1798.159', 'end': '1802.320', 'text': "necessarily it's not to like help fund"}, {'start': '1800.880', 'end': '1803.919', 'text': "private equity. It's to help"}, {'start': '1802.320', 'end': '1805.520', 'text': "transitions. You know, somebody's owned"}, {'start': '1803.919', 'end': '1807.279', 'text': "a company for they found it, they've"}, {'start': '1805.520', 'end': '1808.960', 'text': 'owned it for 20, 30 years. Like, they'}, {'start': '1807.279', 'end': '1810.799', 'text': "just don't Sure. I've been I've been"}, {'start': '1808.960', 'end': '1813.200', 'text': 'working for some HVAC company for 20'}, {'start': '1810.799', 'end': '1814.880', 'text': "years. I don't have a half a million"}, {'start': '1813.200', 'end': '1816.320', 'text': 'dollar, so I I I take out this type of'}, {'start': '1814.880', 'end': '1819.039', 'text': 'loan. Is that Is that kind of right?'}, {'start': '1816.320', 'end': '1820.640', 'text': "Yeah. Yeah. And it's um And it's to be"}, {'start': '1819.039', 'end': '1821.840', 'text': "clear, it's a governmentbacked loan."}, {'start': '1820.640', 'end': '1824.320', 'text': "It's not like the government's doing"}, {'start': '1821.840', 'end': '1827.279', 'text': "this. Um these there's tons of"}, {'start': '1824.320', 'end': '1831.120', 'text': 'individual banks that are making these'}, {'start': '1827.279', 'end': '1834.320', 'text': "loans. And uh it's government backs"}, {'start': '1831.120', 'end': '1836.159', 'text': 'stopped. So, if the loans go bad, um,'}, {'start': '1834.320', 'end': '1838.480', 'text': 'and the bank has followed the rules that'}, {'start': '1836.159', 'end': '1840.960', 'text': 'the SBA has set, which are pretty rigid,'}, {'start': '1838.480', 'end': '1842.880', 'text': 'I have to say, um, if the loans go bad,'}, {'start': '1840.960', 'end': '1846.080', 'text': 'then the banks can get like 90% of the'}, {'start': '1842.880', 'end': '1848.640', 'text': 'money back from the SBA. Uh, the good'}, {'start': '1846.080', 'end': '1851.440', 'text': 'thing about this program is it'}, {'start': '1848.640', 'end': '1853.919', 'text': 'essentially costs taxpayers nothing. Um,'}, {'start': '1851.440', 'end': '1855.279', 'text': 'so because the SBA, they charge fees for'}, {'start': '1853.919', 'end': '1859.120', 'text': 'people taking out these loans to like'}, {'start': '1855.279', 'end': '1860.799', 'text': 'pay for this and they re-evaluate this'}, {'start': '1859.120', 'end': '1863.360', 'text': "every, I don't know, year or two. I"}, {'start': '1860.799', 'end': '1865.279', 'text': "don't know exactly how often it is, but"}, {'start': '1863.360', 'end': '1866.559', 'text': "so there's been some like more defaults"}, {'start': '1865.279', 'end': '1868.399', 'text': 'over the last couple years because of'}, {'start': '1866.559', 'end': '1870.640', 'text': 'like crazy COVID money and valuations'}, {'start': '1868.399', 'end': '1871.919', 'text': 'and interest rates going up. And so the'}, {'start': '1870.640', 'end': '1873.520', 'text': 'SBA said, "All right, well, we\'re going'}, {'start': '1871.919', 'end': '1874.720', 'text': "to charge more for our fee because we're"}, {'start': '1873.520', 'end': '1876.559', 'text': "not going this isn't going to be a"}, {'start': '1874.720', 'end': '1878.720', 'text': 'taxpayer subsidized thing. The whole'}, {'start': '1876.559', 'end': '1880.960', 'text': 'point is to like backs stop it to like'}, {'start': '1878.720', 'end': '1882.960', 'text': 'kind of help facilitate the market,'}, {'start': '1880.960', 'end': '1886.720', 'text': "right? Um, and so that's what they're"}, {'start': '1882.960', 'end': '1888.480', 'text': 'doing. And essentially a an individual'}, {'start': '1886.720', 'end': '1891.760', 'text': 'can get one of these loans to help buy'}, {'start': '1888.480', 'end': '1893.919', 'text': 'the business. uh they have to, you know,'}, {'start': '1891.760', 'end': '1896.000', 'text': 'they have to have decent credit. Uh the'}, {'start': '1893.919', 'end': '1898.159', 'text': 'banks are underwriting them, too. Like'}, {'start': '1896.000', 'end': '1899.360', 'text': 'just because, you know, Uncle Sam says,'}, {'start': '1898.159', 'end': '1900.880', 'text': '"We\'ll give you your money back if it'}, {'start': '1899.360', 'end': '1904.080', 'text': 'goes bad," doesn\'t mean these banks want'}, {'start': '1900.880', 'end': '1906.559', 'text': 'to make bad loans. Um it looks bad.'}, {'start': '1904.080', 'end': '1908.399', 'text': "Yeah. Pisses off the SBA. And so they're"}, {'start': '1906.559', 'end': '1910.480', 'text': 'looking like, "Is the the sponsor, the'}, {'start': '1908.399', 'end': '1911.840', 'text': 'searcher using this? Are they qualified?'}, {'start': '1910.480', 'end': '1914.080', 'text': 'Do they have a good background? They'}, {'start': '1911.840', 'end': '1917.360', 'text': 'understand it. Um is it a good is it a'}, {'start': '1914.080', 'end': '1918.720', 'text': 'good business? Um can the cash flow'}, {'start': '1917.360', 'end': '1920.720', 'text': 'support the debt?" That\'s that\'s'}, {'start': '1918.720', 'end': '1922.320', 'text': 'probably the biggest one. And then they'}, {'start': '1920.720', 'end': '1923.519', 'text': 'have to personally guarantee it. So they'}, {'start': '1922.320', 'end': '1926.000', 'text': 'have to pledge all their assets. They'}, {'start': '1923.519', 'end': '1928.640', 'text': 'have to pledge their home. Like all'}, {'start': '1926.000', 'end': '1931.600', 'text': "everything absolutely everything they've"}, {'start': '1928.640', 'end': '1934.880', 'text': "got to pledge. And so really they're"}, {'start': '1931.600', 'end': '1936.039', 'text': "they're nuts on the line. Yeah. Uh"}, {'start': '1934.880', 'end': '1939.679', 'text': 'and'}, {'start': '1936.039', 'end': '1942.159', 'text': "it's that is good and bad. It's"}, {'start': '1939.679', 'end': '1943.519', 'text': 'heartbreaking when it goes bad. And to'}, {'start': '1942.159', 'end': '1946.240', 'text': "be clear, the failure rate's not that"}, {'start': '1943.519', 'end': '1947.919', 'text': "high. But um it's nothing like bench."}, {'start': '1946.240', 'end': '1949.840', 'text': 'these are, you know, these are boring,'}, {'start': '1947.919', 'end': '1953.279', 'text': "profitful businesses, but it's still"}, {'start': '1949.840', 'end': '1957.360', 'text': 'real. Uh, but it also really aligns'}, {'start': '1953.279', 'end': '1959.600', 'text': 'incentives. Um, so they know that if'}, {'start': '1957.360', 'end': '1964.000', 'text': 'they just keep one of these companies'}, {'start': '1959.600', 'end': '1965.760', 'text': "alive 5 to 10 years, they're, you know,"}, {'start': '1964.000', 'end': '1967.360', 'text': 'rich. Maybe not, you know, 100 million'}, {'start': '1965.760', 'end': '1968.480', 'text': 'rich, but they they got a lot of money.'}, {'start': '1967.360', 'end': '1969.840', 'text': "They're multi. They're a"}, {'start': '1968.480', 'end': '1971.440', 'text': 'multi-millionaire if they just, you'}, {'start': '1969.840', 'end': '1974.480', 'text': 'know, just keep it alive, pay off the'}, {'start': '1971.440', 'end': '1976.960', 'text': 'debt, all that type of thing. Yeah. Um'}, {'start': '1974.480', 'end': '1978.720', 'text': 'and from the investor point of view, you'}, {'start': '1976.960', 'end': '1981.919', 'text': "have you've invested with someone who"}, {'start': '1978.720', 'end': '1984.640', 'text': 'has ultimate skin in the game. Um the'}, {'start': '1981.919', 'end': '1986.559', 'text': 'incentives are very very much aligned.'}, {'start': '1984.640', 'end': '1987.840', 'text': "Um and to go even further, let's let's"}, {'start': '1986.559', 'end': '1989.600', 'text': 'not even take about the business going'}, {'start': '1987.840', 'end': '1991.519', 'text': 'bad. Like the business is going well,'}, {'start': '1989.600', 'end': '1993.519', 'text': "they're also very aligned because they"}, {'start': '1991.519', 'end': '1994.960', 'text': 'want to pay off these searchers want to'}, {'start': '1993.519', 'end': '1997.279', 'text': "pay off the investor's initial"}, {'start': '1994.960', 'end': '1999.919', 'text': 'investment and the preferred return so'}, {'start': '1997.279', 'end': '2001.840', 'text': 'they can then convert to common equity.'}, {'start': '1999.919', 'end': '2003.120', 'text': 'Uh because the investors are really'}, {'start': '2001.840', 'end': '2004.640', 'text': 'expensive during this time. Then once'}, {'start': '2003.120', 'end': '2006.159', 'text': 'they convert equity, they just become'}, {'start': '2004.640', 'end': '2010.080', 'text': "passive shareholders. They don't get the"}, {'start': '2006.159', 'end': '2011.919', 'text': 'special 10% prep on top of it. Yeah.'}, {'start': '2010.080', 'end': '2014.720', 'text': 'Yeah. Yeah. Thank you for clearing that'}, {'start': '2011.919', 'end': '2018.480', 'text': 'up. Great.'}, {'start': '2014.720', 'end': '2020.240', 'text': "Yeah. Let's uh so I got I I got a lot of"}, {'start': '2018.480', 'end': '2022.039', 'text': 'questions on on these businesses. So So'}, {'start': '2020.240', 'end': '2025.039', 'text': 'the businesses you guys uh are'}, {'start': '2022.039', 'end': '2026.240', 'text': "purchasing um I guess uh let's start"}, {'start': '2025.039', 'end': '2027.919', 'text': 'with like the due diligence side of'}, {'start': '2026.240', 'end': '2030.880', 'text': 'things. So how do how do you and your'}, {'start': '2027.919', 'end': '2032.760', 'text': 'team or or the investors go about uh you'}, {'start': '2030.880', 'end': '2035.679', 'text': 'know due'}, {'start': '2032.760', 'end': '2037.120', 'text': 'diligencing these investments? The first'}, {'start': '2035.679', 'end': '2038.559', 'text': 'part is like you know a really common'}, {'start': '2037.120', 'end': '2042.080', 'text': 'question is like well what are you'}, {'start': '2038.559', 'end': '2044.720', 'text': 'looking to invest in? And I think I'}, {'start': '2042.080', 'end': '2046.960', 'text': 'would actually you know as Munger always'}, {'start': '2044.720', 'end': '2050.000', 'text': "said like you know invert it. We're"}, {'start': '2046.960', 'end': '2051.760', 'text': 'looking first at like what not to invest'}, {'start': '2050.000', 'end': '2054.679', 'text': 'in. Yeah. And so you know we look at'}, {'start': '2051.760', 'end': '2057.280', 'text': 'deals like every day all day long.'}, {'start': '2054.679', 'end': '2059.599', 'text': "Um, and so it's really more about"}, {'start': '2057.280', 'end': '2061.599', 'text': 'disqualifying things than qualifying'}, {'start': '2059.599', 'end': '2065.040', 'text': "them at first. Uh, because we're very"}, {'start': '2061.599', 'end': '2066.800', 'text': "agnostic. Like we don't have like an"}, {'start': '2065.040', 'end': '2068.879', 'text': "industry or a niche that we're looking"}, {'start': '2066.800', 'end': '2070.720', 'text': "at. In fact, we don't want that. Like I"}, {'start': '2068.879', 'end': '2072.320', 'text': 'personally just want a very diverse'}, {'start': '2070.720', 'end': '2074.240', 'text': "portfolio of these. There's no like"}, {'start': '2072.320', 'end': '2075.599', 'text': "concentration risk. And so we're we're"}, {'start': '2074.240', 'end': '2079.119', 'text': 'looking at the things to say no to. And'}, {'start': '2075.599', 'end': '2081.399', 'text': "so we can like what's the things to say"}, {'start': '2079.119', 'end': '2084.560', 'text': 'no? Is it like highly cyclical, right?'}, {'start': '2081.399', 'end': '2086.560', 'text': 'Um, is there a lack of developed'}, {'start': '2084.560', 'end': '2088.079', 'text': 'infrastructure? Meaning, is it like a'}, {'start': '2086.560', 'end': '2090.320', 'text': 'team of like three people or is there'}, {'start': '2088.079', 'end': '2092.480', 'text': 'like a nice management team in place?'}, {'start': '2090.320', 'end': '2094.000', 'text': 'Um, how sophisticated is the sponsor?'}, {'start': '2092.480', 'end': '2095.679', 'text': 'Will they understand the financials and'}, {'start': '2094.000', 'end': '2097.119', 'text': 'how to run this type of thing? Or are'}, {'start': '2095.679', 'end': '2099.119', 'text': 'they just somebody kind of, you know,'}, {'start': '2097.119', 'end': '2102.040', 'text': "yoloing with an SBA loan? That's pretty"}, {'start': '2099.119', 'end': '2104.880', 'text': 'terrifying for them and for us.'}, {'start': '2102.040', 'end': '2106.720', 'text': 'Um, how easy is it to disrupt the'}, {'start': '2104.880', 'end': '2109.359', 'text': "company? You know, the the thing we've"}, {'start': '2106.720', 'end': '2111.520', 'text': 'used is like, can it be disrupted with a'}, {'start': '2109.359', 'end': '2114.079', 'text': 'website and $100,000 of marketing? Yeah.'}, {'start': '2111.520', 'end': '2117.440', 'text': 'Um, you know, they I gave this example'}, {'start': '2114.079', 'end': '2118.720', 'text': 'in a forum recently. Um, because I'}, {'start': '2117.440', 'end': '2119.839', 'text': 'mentioned this on another podcast and'}, {'start': '2118.720', 'end': '2121.040', 'text': 'somebody was asking like, well, what'}, {'start': '2119.839', 'end': '2122.800', 'text': 'specifically like, how can I think about'}, {'start': '2121.040', 'end': '2125.520', 'text': "this? It's like, so imagine a roofing"}, {'start': '2122.800', 'end': '2127.440', 'text': 'company and this roofing company is just'}, {'start': '2125.520', 'end': '2130.640', 'text': 'really good at SEO. And so they get all'}, {'start': '2127.440', 'end': '2132.000', 'text': 'these SEO leads coming in and then they'}, {'start': '2130.640', 'end': '2133.520', 'text': 'take all the leads and they just kind of'}, {'start': '2132.000', 'end': '2135.280', 'text': 'like distribute them out to'}, {'start': '2133.520', 'end': '2136.560', 'text': "subcontractors who, you know, don't"}, {'start': '2135.280', 'end': '2138.320', 'text': 'really work mostly for this company,'}, {'start': '2136.560', 'end': '2139.760', 'text': "just just whoever, subcontractors. Let's"}, {'start': '2138.320', 'end': '2142.560', 'text': "say this company's making a million"}, {'start': '2139.760', 'end': '2144.000', 'text': "bucks a year. Um, that's awesome. And,"}, {'start': '2142.560', 'end': '2145.680', 'text': 'you know, maybe they can try to sell the'}, {'start': '2144.000', 'end': '2147.920', 'text': 'company for like three million bucks,'}, {'start': '2145.680', 'end': '2151.280', 'text': '3.5 million bucks. Should somebody buy'}, {'start': '2147.920', 'end': '2152.720', 'text': 'that? No. They should instead build a'}, {'start': '2151.280', 'end': '2155.440', 'text': 'really nice website and spend a h 100red'}, {'start': '2152.720', 'end': '2156.960', 'text': 'grand on really good SEO. Yeah. and and'}, {'start': '2155.440', 'end': '2158.560', 'text': "do this exact same thing. Now, I'm"}, {'start': '2156.960', 'end': '2160.240', 'text': "simplifying it harder than that. That's"}, {'start': '2158.560', 'end': '2161.839', 'text': 'actually really that really resonates'}, {'start': '2160.240', 'end': '2163.839', 'text': 'with me though when you say that because'}, {'start': '2161.839', 'end': '2165.040', 'text': 'when I am looking for I have a couple'}, {'start': '2163.839', 'end': '2168.000', 'text': "properties when I'm looking for a"}, {'start': '2165.040', 'end': '2170.000', 'text': 'contract job. Hey, I need a HVAC person.'}, {'start': '2168.000', 'end': '2171.680', 'text': "I'm calling it's all companies like"}, {'start': '2170.000', 'end': '2173.200', 'text': "you're describing where it's somebody"}, {'start': '2171.680', 'end': '2174.640', 'text': 'trying to connect to the HVAC person'}, {'start': '2173.200', 'end': '2176.800', 'text': "where it's like, no, I actually just"}, {'start': '2174.640', 'end': '2178.160', 'text': "need the person that's doing the job to"}, {'start': '2176.800', 'end': '2180.480', 'text': 'to answer the phone. By the way, the'}, {'start': '2178.160', 'end': '2183.200', 'text': 'example is exactly I had an SEO agency'}, {'start': '2180.480', 'end': '2186.480', 'text': 'back in the day. exactly what I would do'}, {'start': '2183.200', 'end': '2188.640', 'text': 'with a lot of companies. Great example.'}, {'start': '2186.480', 'end': '2190.000', 'text': "I also I still own an SEO agency. That's"}, {'start': '2188.640', 'end': '2191.599', 'text': 'one of my wholly owned companies. Great.'}, {'start': '2190.000', 'end': '2194.400', 'text': "And so I know it and I'm like all the"}, {'start': '2191.599', 'end': '2197.599', 'text': "time like no no like you don't want to"}, {'start': '2194.400', 'end': '2199.119', 'text': 'pay 3.5x earnings on that. You want to'}, {'start': '2197.599', 'end': '2200.800', 'text': 'you just want to replicate it and and'}, {'start': '2199.119', 'end': '2202.960', 'text': "and again maybe you don't get to as big"}, {'start': '2200.800', 'end': '2206.000', 'text': "as they're doing but if you get halfway"}, {'start': '2202.960', 'end': '2208.800', 'text': 'there and spend 30x less capital like'}, {'start': '2206.000', 'end': '2210.640', 'text': "that's that's what you want to do. Um so"}, {'start': '2208.800', 'end': '2213.760', 'text': "there's that there's a concentration"}, {'start': '2210.640', 'end': '2216.000', 'text': 'risk. Um you know does like one client'}, {'start': '2213.760', 'end': '2219.119', 'text': 'make up a huge portion of the revenue?'}, {'start': '2216.000', 'end': '2222.000', 'text': "Uh and in some cases that's okay. Let's"}, {'start': '2219.119', 'end': '2223.119', 'text': 'say a client is like really integrated'}, {'start': '2222.000', 'end': '2224.640', 'text': 'with the company and has been there for'}, {'start': '2223.119', 'end': '2227.200', 'text': 'like 15 years. We get comfortable with'}, {'start': '2224.640', 'end': '2228.720', 'text': 'it. But um or maybe like um you know'}, {'start': '2227.200', 'end': '2231.200', 'text': "there's certain industries that are just"}, {'start': '2228.720', 'end': '2233.520', 'text': 'like by nature highly concentrated.'}, {'start': '2231.200', 'end': '2235.440', 'text': "Yeah. But it's a good point. Is there"}, {'start': '2233.520', 'end': '2236.880', 'text': 'when it comes to concentration is there'}, {'start': '2235.440', 'end': '2238.720', 'text': 'kind of a benchmark that you guys use?'}, {'start': '2236.880', 'end': '2242.480', 'text': "like we don't want one client to be more"}, {'start': '2238.720', 'end': '2244.560', 'text': "than 25% generally or that's you know"}, {'start': '2242.480', 'end': '2246.079', 'text': "we've looked at making like checklists"}, {'start': '2244.560', 'end': '2248.960', 'text': 'with this but I think you really just'}, {'start': '2246.079', 'end': '2250.640', 'text': 'have to use judgment on each of these I'}, {'start': '2248.960', 'end': '2253.119', 'text': 'think have their own individual mandate'}, {'start': '2250.640', 'end': '2255.359', 'text': 'too right and their concentration level'}, {'start': '2253.119', 'end': '2256.880', 'text': "so I guess everything's different yeah"}, {'start': '2255.359', 'end': '2258.400', 'text': 'yeah I guess stepping back I mean I tend'}, {'start': '2256.880', 'end': '2260.000', 'text': "to look at as a funnel right you don't"}, {'start': '2258.400', 'end': '2261.200', 'text': 'you say no you bet through this process'}, {'start': '2260.000', 'end': '2263.680', 'text': "till they get to the bottom and that's"}, {'start': '2261.200', 'end': '2265.359', 'text': 'when you really do your due diligence on'}, {'start': '2263.680', 'end': '2268.520', 'text': 'whatever criteria of companies that'}, {'start': '2265.359', 'end': '2270.240', 'text': "you're looking to make a decision. Yeah."}, {'start': '2268.520', 'end': '2274.560', 'text': "Yeah. There's bunch more. I mean,"}, {'start': '2270.240', 'end': '2277.520', 'text': "there's like we look at how challenging"}, {'start': '2274.560', 'end': '2279.119', 'text': 'is the industry like how and how'}, {'start': '2277.520', 'end': '2280.160', 'text': 'challenging is it to understand? You'}, {'start': '2279.119', 'end': '2281.440', 'text': "know, some things like they're trying to"}, {'start': '2280.160', 'end': '2282.480', 'text': "explain it to us and we're like 30"}, {'start': '2281.440', 'end': '2283.920', 'text': "minutes in, we still don't completely"}, {'start': '2282.480', 'end': '2286.160', 'text': "understand. We're like, no, this goes in"}, {'start': '2283.920', 'end': '2288.240', 'text': 'the too hard pile. Um sometimes the'}, {'start': '2286.160', 'end': '2289.640', 'text': 'valuations are just too high. Yeah. uh'}, {'start': '2288.240', 'end': '2293.200', 'text': 'you know with this space'}, {'start': '2289.640', 'end': '2296.320', 'text': 'like if if we find a decent company'}, {'start': '2293.200', 'end': '2297.680', 'text': 'under like 5x multiple like it can'}, {'start': '2296.320', 'end': '2300.160', 'text': 'pencil out really nicely. You start'}, {'start': '2297.680', 'end': '2301.359', 'text': "getting above that and it doesn't. Um"}, {'start': '2300.160', 'end': '2302.880', 'text': "it's not doesn't mean it's a bad deal."}, {'start': '2301.359', 'end': '2305.280', 'text': "It just means it's it's less of a"}, {'start': '2302.880', 'end': '2307.040', 'text': 'no-brainer. Um and then we look at you'}, {'start': '2305.280', 'end': '2309.440', 'text': 'know like is there too much leverage? Is'}, {'start': '2307.040', 'end': '2311.680', 'text': 'like the governance or the terms weird?'}, {'start': '2309.440', 'end': '2313.920', 'text': 'Are the weird economics with the are'}, {'start': '2311.680', 'end': '2315.040', 'text': 'they asking for too much? You know'}, {'start': '2313.920', 'end': '2316.720', 'text': "there's all kinds of stuff. We can go on"}, {'start': '2315.040', 'end': '2318.400', 'text': 'for days with that stuff. Yeah. So, so'}, {'start': '2316.720', 'end': '2320.000', 'text': 'going back to you created Capital Pad'}, {'start': '2318.400', 'end': '2321.839', 'text': "this platform. You're getting deals"}, {'start': '2320.000', 'end': '2324.480', 'text': 'based on your experience. Is that just'}, {'start': '2321.839', 'end': '2326.480', 'text': 'kind of created this deal flow mechanism'}, {'start': '2324.480', 'end': '2328.880', 'text': 'through this platform? Yeah, the way we'}, {'start': '2326.480', 'end': '2331.599', 'text': "think about it is it's like basically"}, {'start': '2328.880', 'end': '2333.920', 'text': 'angel list for like cash flowing small'}, {'start': '2331.599', 'end': '2336.800', 'text': "businesses. Um, so it's a way for people"}, {'start': '2333.920', 'end': '2340.720', 'text': 'to fractionally invest in these things.'}, {'start': '2336.800', 'end': '2343.040', 'text': 'And the like what value are we adding'}, {'start': '2340.720', 'end': '2345.599', 'text': 'besides just like streamlining it is the'}, {'start': '2343.040', 'end': '2346.800', 'text': 'big one is curation. So we we started it'}, {'start': '2345.599', 'end': '2348.240', 'text': 'like oh is this going to be like an open'}, {'start': '2346.800', 'end': '2349.920', 'text': 'marketplace or we going to curate it and'}, {'start': '2348.240', 'end': '2352.079', 'text': "within the first week we're like oh no"}, {'start': '2349.920', 'end': '2355.520', 'text': "we're going to curate it heavily right"}, {'start': '2352.079', 'end': '2356.720', 'text': "and so that's what we do. So we we all"}, {'start': '2355.520', 'end': '2358.400', 'text': 'those things I just talked about of like'}, {'start': '2356.720', 'end': '2361.040', 'text': 'things to say no to these are like my'}, {'start': '2358.400', 'end': '2362.400', 'text': 'personal criteria for investing and if'}, {'start': '2361.040', 'end': '2363.680', 'text': "I'm not personally going to invest in it"}, {'start': '2362.400', 'end': '2365.440', 'text': "it's not going to go on the platform."}, {'start': '2363.680', 'end': '2367.359', 'text': "And so that's that's kind of like how"}, {'start': '2365.440', 'end': '2369.599', 'text': "we're doing it. Yeah. Um there's no"}, {'start': '2367.359', 'end': '2371.359', 'text': "right or wrong way. Like there's, you"}, {'start': '2369.599', 'end': '2373.280', 'text': 'know, other people doing just like a'}, {'start': '2371.359', 'end': '2376.079', 'text': "here's all the things you've invested in"}, {'start': '2373.280', 'end': '2377.000', 'text': "whatever. And I think maybe somebody's"}, {'start': '2376.079', 'end': '2379.520', 'text': 'really'}, {'start': '2377.000', 'end': '2381.599', 'text': 'sophisticated in the space that might be'}, {'start': '2379.520', 'end': '2383.440', 'text': "okay, but there'd be a lot more noise to"}, {'start': '2381.599', 'end': '2385.200', 'text': 'sift through. But, you know, a lot of'}, {'start': '2383.440', 'end': '2386.880', 'text': 'people are maybe like sophisticated'}, {'start': '2385.200', 'end': '2388.320', 'text': 'finance people or sophisticated business'}, {'start': '2386.880', 'end': '2390.320', 'text': 'people and understand it, but maybe'}, {'start': '2388.320', 'end': '2392.079', 'text': "don't understand the little intricacies"}, {'start': '2390.320', 'end': '2393.839', 'text': 'around this space that make a really big'}, {'start': '2392.079', 'end': '2395.520', 'text': 'difference. And so we feel more'}, {'start': '2393.839', 'end': '2397.040', 'text': 'comfortable with like the highly curated'}, {'start': '2395.520', 'end': '2398.400', 'text': "model. Let's talk a little bit about"}, {'start': '2397.040', 'end': '2399.920', 'text': 'your models. So you mentioned you guys'}, {'start': '2398.400', 'end': '2401.920', 'text': 'have uh you know these kind of models'}, {'start': '2399.920', 'end': '2404.240', 'text': "that you're using for uh maybe looking"}, {'start': '2401.920', 'end': '2406.320', 'text': 'at things like you know Evida different'}, {'start': '2404.240', 'end': '2408.960', 'text': 'things like that. Uh what do you guys'}, {'start': '2406.320', 'end': '2411.280', 'text': 'models look like when it comes to uh the'}, {'start': '2408.960', 'end': '2413.280', 'text': "investment side of this? Well I'm not"}, {'start': '2411.280', 'end': '2416.079', 'text': 'completely sure how to answer that one'}, {'start': '2413.280', 'end': '2419.880', 'text': "for like what you're looking for. Um, I"}, {'start': '2416.079', 'end': '2419.880', 'text': 'can tell you the things like'}, {'start': '2420.960', 'end': '2425.200', 'text': 'we want'}, {'start': '2422.040', 'end': '2428.079', 'text': 'to it needs a pencil for us with the'}, {'start': '2425.200', 'end': '2431.839', 'text': 'models at like low growth scenarios and'}, {'start': '2428.079', 'end': '2434.520', 'text': 'where we come out at over 30% irr'}, {'start': '2431.839', 'end': '2437.520', 'text': 'basically. Um'}, {'start': '2434.520', 'end': '2439.520', 'text': "and there there's irr gets kind of met"}, {'start': '2437.520', 'end': '2442.320', 'text': 'like you know that the more you extend'}, {'start': '2439.520', 'end': '2444.079', 'text': 'out the timeline like it changes that um'}, {'start': '2442.320', 'end': '2446.400', 'text': "type of thing and and so that's kind of"}, {'start': '2444.079', 'end': '2448.400', 'text': "a rough gauge that we use and it's also"}, {'start': '2446.400', 'end': '2449.839', 'text': 'not you know maybe we see a company that'}, {'start': '2448.400', 'end': '2451.599', 'text': 'we think is completely bulletproof and'}, {'start': '2449.839', 'end': '2454.320', 'text': "it's a little bit lower than that and"}, {'start': '2451.599', 'end': '2456.720', 'text': "we'll kind of think differently but for"}, {'start': '2454.320', 'end': '2459.359', 'text': "most of these we don't get out of bed if"}, {'start': '2456.720', 'end': '2462.720', 'text': "we're not making over 30% a year. Um but"}, {'start': '2459.359', 'end': '2464.079', 'text': 'also like you know on average the'}, {'start': '2462.720', 'end': '2466.160', 'text': "there's there's a lot of studies like"}, {'start': '2464.079', 'end': '2469.520', 'text': 'Stanford does a a search fund study.'}, {'start': '2466.160', 'end': '2473.200', 'text': "There's a couple others. Um roughly 10%"}, {'start': '2469.520', 'end': '2474.640', 'text': 'of these are failing it looks like. Um'}, {'start': '2473.200', 'end': '2476.880', 'text': "that's that's the ones with the SBA"}, {'start': '2474.640', 'end': '2479.119', 'text': 'loans. Um the Stanford one shows a'}, {'start': '2476.880', 'end': '2480.640', 'text': "little bit different data but it's it's"}, {'start': '2479.119', 'end': '2482.480', 'text': "it's used differently so it's hard to"}, {'start': '2480.640', 'end': '2484.400', 'text': 'say. Yeah. Um you kind of kind of model'}, {'start': '2482.480', 'end': '2487.119', 'text': "that too. So if we're looking at you"}, {'start': '2484.400', 'end': '2489.440', 'text': 'know 35% IRRa, we got a couple failures'}, {'start': '2487.119', 'end': '2490.880', 'text': 'in there. uh we do 10 of these, you'}, {'start': '2489.440', 'end': '2492.720', 'text': "know, we're still in the high 20s,"}, {'start': '2490.880', 'end': '2494.720', 'text': 'low30s type of thing at the end of the'}, {'start': '2492.720', 'end': '2495.920', 'text': 'day. Yeah. Um makes sense. Yeah. So, I'}, {'start': '2494.720', 'end': '2497.680', 'text': "guess but you're not you're not gonna"}, {'start': '2495.920', 'end': '2499.839', 'text': 'get a thousandx return like you do with'}, {'start': '2497.680', 'end': '2502.079', 'text': 'venture. Yeah. Um you get some, you'}, {'start': '2499.839', 'end': '2503.599', 'text': "know, 10x's from time to time, but like"}, {'start': '2502.079', 'end': '2505.760', 'text': "that's it's different from the venture"}, {'start': '2503.599', 'end': '2507.760', 'text': 'model, right? Um as far as the just the'}, {'start': '2505.760', 'end': '2509.839', 'text': 'exit process, I mean, how long are you'}, {'start': '2507.760', 'end': '2514.359', 'text': 'guys in a deal and what does that look'}, {'start': '2509.839', 'end': '2516.960', 'text': 'like? It really varies. Uh'}, {'start': '2514.359', 'end': '2520.400', 'text': "they're a lot of deals are trying to get"}, {'start': '2516.960', 'end': '2522.079', 'text': 'like in and out in five years. Yeah. Um'}, {'start': '2520.400', 'end': '2524.800', 'text': 'they they identify the companies, they'}, {'start': '2522.079', 'end': '2526.319', 'text': 'identify all the levers to pull. Um and'}, {'start': '2524.800', 'end': '2530.000', 'text': "so they're just going to try and do that"}, {'start': '2526.319', 'end': '2531.440', 'text': 'and then resell it in five years. Um I'}, {'start': '2530.000', 'end': '2532.880', 'text': 'definitely like the deals that are like'}, {'start': '2531.440', 'end': '2534.800', 'text': "we're going to attempt to sell in five"}, {'start': '2532.880', 'end': '2536.079', 'text': "years, but if like market dynamics don't"}, {'start': '2534.800', 'end': '2537.520', 'text': "allow for that, we'll just keep running"}, {'start': '2536.079', 'end': '2540.079', 'text': "it longer because again it's profitable."}, {'start': '2537.520', 'end': '2543.040', 'text': 'You got you got runway, right? Um, some'}, {'start': '2540.079', 'end': '2545.760', 'text': 'of the companies people are aiming to'}, {'start': '2543.040', 'end': '2547.920', 'text': 'just run for the long long term. And'}, {'start': '2545.760', 'end': '2549.440', 'text': 'personally, as an investor with a very'}, {'start': '2547.920', 'end': '2551.680', 'text': "long time horizon, that's what I would"}, {'start': '2549.440', 'end': '2552.800', 'text': "like. Like I I I love it if somebody's"}, {'start': '2551.680', 'end': '2554.079', 'text': 'like, "Oh, I want to run this business'}, {'start': '2552.800', 'end': '2555.760', 'text': 'for 30 years and just make'}, {'start': '2554.079', 'end': '2557.760', 'text': 'distributions." I\'m like, "Yes, that\'s'}, {'start': '2555.760', 'end': '2560.480', 'text': 'great. Sign me up." Like I just want a'}, {'start': '2557.760', 'end': '2563.520', 'text': 'collection of those. Um, and with those'}, {'start': '2560.480', 'end': '2567.440', 'text': 'deals, they usually give a option to'}, {'start': '2563.520', 'end': '2568.880', 'text': 'investors like a year five. um like'}, {'start': '2567.440', 'end': '2572.160', 'text': 'sometimes a little bit longer. Like they'}, {'start': '2568.880', 'end': '2575.200', 'text': 'will offer to buy out investors. Um'}, {'start': '2572.160', 'end': '2576.800', 'text': 'which is better for them because'}, {'start': '2575.200', 'end': '2578.079', 'text': 'investors are expensive. You know, if'}, {'start': '2576.800', 'end': '2580.319', 'text': 'you look at, you know, the returns of'}, {'start': '2578.079', 'end': '2582.560', 'text': 'these companies and how much the'}, {'start': '2580.319', 'end': '2584.079', 'text': "investor owns, like it's it if it's a"}, {'start': '2582.560', 'end': '2585.920', 'text': 'stable company and they can replace the'}, {'start': '2584.079', 'end': '2589.920', 'text': "investors with like debt, like it's much"}, {'start': '2585.920', 'end': '2591.440', 'text': "cheaper actually. Yeah. Um but I'll only"}, {'start': '2589.920', 'end': '2593.040', 'text': "invest in deals where that's an option"}, {'start': '2591.440', 'end': '2594.720', 'text': "for investors, not forced. I don't want"}, {'start': '2593.040', 'end': '2596.160', 'text': "a forced put option. like I don't want"}, {'start': '2594.720', 'end': '2598.560', 'text': 'okay the business is getting good now'}, {'start': '2596.160', 'end': '2600.599', 'text': "let's buy me out for you don't want so"}, {'start': '2598.560', 'end': '2603.520', 'text': 'they bring me you know like a'}, {'start': '2600.599', 'end': '2605.760', 'text': 'predetermined like uh valuation multiple'}, {'start': '2603.520', 'end': '2607.520', 'text': 'or like a third party um valuation'}, {'start': '2605.760', 'end': '2609.760', 'text': 'person to come in and they offer to buy'}, {'start': '2607.520', 'end': '2611.599', 'text': 'investors um so those are different ways'}, {'start': '2609.760', 'end': '2613.599', 'text': "for it um there's there's no one way"}, {'start': '2611.599', 'end': '2616.800', 'text': "there's no right way uh just kind of"}, {'start': '2613.599', 'end': '2619.520', 'text': 'whatever and with like capital pad'}, {'start': '2616.800', 'end': '2620.880', 'text': 'itself we have different deals of'}, {'start': '2619.520', 'end': '2622.400', 'text': 'different structures so people can like'}, {'start': '2620.880', 'end': '2624.640', 'text': 'pick what they want you know a lot of'}, {'start': '2622.400', 'end': '2627.200', 'text': 'these deals pay about quarterly cash'}, {'start': '2624.640', 'end': '2628.960', 'text': "flow. Some of these deals don't pay"}, {'start': '2627.200', 'end': '2630.240', 'text': "anything. They're just going to, you"}, {'start': '2628.960', 'end': '2632.000', 'text': "know, they're doing a rollup, for"}, {'start': '2630.240', 'end': '2632.960', 'text': 'example, to buy like lots of business in'}, {'start': '2632.000', 'end': '2634.960', 'text': "the same industry and they're going to"}, {'start': '2632.960', 'end': '2636.720', 'text': 'try and resell in like five years. Um,'}, {'start': '2634.960', 'end': '2638.400', 'text': "so they're going to use that cow. Like"}, {'start': '2636.720', 'end': '2639.680', 'text': "there's there's different um deal"}, {'start': '2638.400', 'end': '2642.480', 'text': "structures for like whatever somebody's"}, {'start': '2639.680', 'end': '2644.400', 'text': 'looking for essentially. Very cool. Are'}, {'start': '2642.480', 'end': '2646.000', 'text': 'there any particular business niches'}, {'start': '2644.400', 'end': '2648.079', 'text': 'that you found to be the best or like'}, {'start': '2646.000', 'end': '2649.440', 'text': 'you know, any type of, you know, this'}, {'start': '2648.079', 'end': '2651.640', 'text': 'type of company comes in and you get'}, {'start': '2649.440', 'end': '2654.000', 'text': 'real excited about it? I get excited'}, {'start': '2651.640', 'end': '2657.200', 'text': 'about like all these different word. I'}, {'start': '2654.000', 'end': '2658.880', 'text': "don't think due to SEC regulations I can"}, {'start': '2657.200', 'end': '2660.720', 'text': "talk about our two live deals, but I'm"}, {'start': '2658.880', 'end': '2662.640', 'text': 'looking at like the the past ones and'}, {'start': '2660.720', 'end': '2665.680', 'text': 'yeah, you know, like a New Jersey home'}, {'start': '2662.640', 'end': '2668.720', 'text': 'repair, like the pool servicing roll up.'}, {'start': '2665.680', 'end': '2670.319', 'text': 'Um, or I guess any any specific market'}, {'start': '2668.720', 'end': '2673.920', 'text': "dynamics or trends right now that you're"}, {'start': '2670.319', 'end': '2676.560', 'text': 'seeing? I tend to avoid some of the hot'}, {'start': '2673.920', 'end': '2678.240', 'text': 'stuff. So like you know HVAC companies,'}, {'start': '2676.560', 'end': '2679.520', 'text': 'everybody wants to buy an HVAC company'}, {'start': '2678.240', 'end': '2681.760', 'text': "and they're good companies but they're"}, {'start': '2679.520', 'end': '2684.960', 'text': "also really hard and they're valued"}, {'start': '2681.760', 'end': '2688.160', 'text': 'fairly. Yeah, I would say if not high.'}, {'start': '2684.960', 'end': '2689.680', 'text': "Um so that that's that's difficult. Um"}, {'start': '2688.160', 'end': '2695.359', 'text': "I'm"}, {'start': '2689.680', 'end': '2698.640', 'text': "I'm not against um software companies or"}, {'start': '2695.359', 'end': '2702.000', 'text': "agency type of things, but I'm more"}, {'start': '2698.640', 'end': '2703.920', 'text': 'weary of those due to like disruption,'}, {'start': '2702.000', 'end': '2706.000', 'text': 'right? Um, so you know, if you look at'}, {'start': '2703.920', 'end': '2708.640', 'text': 'like AI could change all kinds of stuff'}, {'start': '2706.000', 'end': '2710.400', 'text': 'right now, but AI is go back to like our'}, {'start': '2708.640', 'end': '2714.400', 'text': "roofing analogy, like it's not going to"}, {'start': '2710.400', 'end': '2716.000', 'text': 'change roofing really. So, um, like that'}, {'start': '2714.400', 'end': '2717.119', 'text': 'that you know plumbers are still going'}, {'start': '2716.000', 'end': '2718.480', 'text': 'to have to get down there and like'}, {'start': '2717.119', 'end': '2719.680', 'text': 'change the pipes themselves. So that'}, {'start': '2718.480', 'end': '2722.319', 'text': 'type of thing I feel more comfortable'}, {'start': '2719.680', 'end': '2724.319', 'text': 'with where like an agency even though I'}, {'start': '2722.319', 'end': '2727.040', 'text': 'own an agency myself and know how'}, {'start': '2724.319', 'end': '2729.119', 'text': 'profitable it can be like I do you want'}, {'start': '2727.040', 'end': '2731.599', 'text': 'to like buy that put debt on it like'}, {'start': '2729.119', 'end': '2733.119', 'text': 'that that type of disruption kind of it'}, {'start': '2731.599', 'end': '2735.839', 'text': 'makes me nervous and same thing with'}, {'start': '2733.119', 'end': '2737.599', 'text': 'software I think software is easier to'}, {'start': '2735.839', 'end': '2740.160', 'text': 'build now can be disrupted a little bit'}, {'start': '2737.599', 'end': '2742.640', 'text': 'easier and I think forever we thought'}, {'start': '2740.160', 'end': '2744.240', 'text': 'you know software is so sticky and it is'}, {'start': '2742.640', 'end': '2747.119', 'text': "but I'm not sure it will stay like that"}, {'start': '2744.240', 'end': '2748.960', 'text': "so I'm more hesitant to do those deals"}, {'start': '2747.119', 'end': '2751.119', 'text': "not saying No, we're open to it. Just"}, {'start': '2748.960', 'end': '2752.880', 'text': 'just more heads. Yeah, absolutely. Yeah,'}, {'start': '2751.119', 'end': '2755.680', 'text': "we like boring stuff. That's that's kind"}, {'start': '2752.880', 'end': '2759.640', 'text': 'of the the thing. Um and if if I was to'}, {'start': '2755.680', 'end': '2762.240', 'text': 'pick Well, this is actually what I do.'}, {'start': '2759.640', 'end': '2764.400', 'text': "Um obviously I'm I'm building Capital"}, {'start': '2762.240', 'end': '2768.760', 'text': 'Pad, but I still have other companies. I'}, {'start': '2764.400', 'end': '2771.280', 'text': 'like to build in things that are less'}, {'start': '2768.760', 'end': '2773.920', 'text': 'boring and I like to invest in things'}, {'start': '2771.280', 'end': '2778.200', 'text': 'that are more boring, right? Because I'}, {'start': '2773.920', 'end': '2781.599', 'text': "think if I'm building something in"}, {'start': '2778.200', 'end': '2783.200', 'text': 'a more exciting industry or exciting or'}, {'start': '2781.599', 'end': '2784.000', 'text': 'an industry with like high growth,'}, {'start': '2783.200', 'end': '2784.880', 'text': "there's just all kinds of different"}, {'start': '2784.000', 'end': '2786.640', 'text': "things. If you're just building"}, {'start': '2784.880', 'end': '2789.359', 'text': 'something, you can create a lot of'}, {'start': '2786.640', 'end': '2791.520', 'text': 'value. But when it goes to investing, I'}, {'start': '2789.359', 'end': '2793.119', 'text': 'see when people try to go to like those'}, {'start': '2791.520', 'end': '2796.240', 'text': 'huge reaches, they just tend to lose'}, {'start': '2793.119', 'end': '2798.079', 'text': 'their money more. And I want to'}, {'start': '2796.240', 'end': '2799.920', 'text': "like I know my skill set's really good"}, {'start': '2798.079', 'end': '2801.040', 'text': 'for building this type of company. We'}, {'start': '2799.920', 'end': '2802.720', 'text': 'talked about the SAS companies, the'}, {'start': '2801.040', 'end': '2805.119', 'text': 'marketing agencies, whatever. Will that'}, {'start': '2802.720', 'end': '2808.960', 'text': 'skill set still be around in 10 years? I'}, {'start': '2805.119', 'end': '2810.319', 'text': "don't know. Um, and so I'd much rather"}, {'start': '2808.960', 'end': '2812.560', 'text': 'take all my capital and put it into'}, {'start': '2810.319', 'end': '2813.839', 'text': 'things that I know will be there. Um, so'}, {'start': '2812.560', 'end': '2815.520', 'text': "I'm kind of like barbelling it"}, {'start': '2813.839', 'end': '2818.160', 'text': 'essentially. Make money in this one'}, {'start': '2815.520', 'end': '2819.599', 'text': 'thing and then like sleep in peace'}, {'start': '2818.160', 'end': '2820.800', 'text': 'knowing that my capital is in these'}, {'start': '2819.599', 'end': '2821.839', 'text': "boring things. Yeah, that's an"}, {'start': '2820.800', 'end': '2824.880', 'text': 'interesting thought process. You'}, {'start': '2821.839', 'end': '2827.520', 'text': 'obviously consistent boring returns that'}, {'start': '2824.880', 'end': '2829.359', 'text': "you know that that great, right? there's"}, {'start': '2827.520', 'end': '2831.119', 'text': "no craziness that's going to happen. But"}, {'start': '2829.359', 'end': '2832.400', 'text': 'on the other side, you are swinging for'}, {'start': '2831.119', 'end': '2833.640', 'text': 'the fences and do different things'}, {'start': '2832.400', 'end': '2838.319', 'text': 'looking at the'}, {'start': '2833.640', 'end': '2840.800', 'text': 'upside. Uh yeah. Yeah. And again, the'}, {'start': '2838.319', 'end': '2843.200', 'text': "the historical return, it's it's kind of"}, {'start': '2840.800', 'end': '2844.960', 'text': 'an anomaly. The historical returns for'}, {'start': '2843.200', 'end': '2847.440', 'text': 'these like the search the Stanford'}, {'start': '2844.960', 'end': '2849.280', 'text': 'search fund study, I think the the'}, {'start': '2847.440', 'end': '2851.400', 'text': 'average IRRa that they talk about for'}, {'start': '2849.280', 'end': '2855.440', 'text': 'all the participants is like'}, {'start': '2851.400', 'end': '2857.599', 'text': "35%. That's bonkers high. Um right. And"}, {'start': '2855.440', 'end': '2859.119', 'text': "this is this isn't, you know, me telling"}, {'start': '2857.599', 'end': '2861.440', 'text': 'you this. This is Stanford saying this.'}, {'start': '2859.119', 'end': '2864.560', 'text': "Yeah. Um, but it's also at the same time"}, {'start': '2861.440', 'end': '2866.800', 'text': 'boring companies. Like, come on.'}, {'start': '2864.560', 'end': '2867.920', 'text': "That's pretty that's it's kind of an"}, {'start': '2866.800', 'end': '2869.520', 'text': "anomaly. You don't really see that"}, {'start': '2867.920', 'end': '2872.640', 'text': 'anywhere else. And again, I attribute it'}, {'start': '2869.520', 'end': '2874.000', 'text': 'to being the space can only hold so much'}, {'start': '2872.640', 'end': '2876.240', 'text': "capital. It can't hold this"}, {'start': '2874.000', 'end': '2877.920', 'text': 'institutional billions to like dilute'}, {'start': '2876.240', 'end': '2881.560', 'text': 'the returns is kind of what it comes'}, {'start': '2877.920', 'end': '2883.160', 'text': "down to. Um, yeah, that's what makes"}, {'start': '2881.560', 'end': '2885.760', 'text': 'sense.'}, {'start': '2883.160', 'end': '2888.079', 'text': 'Um, with the companies you guys work'}, {'start': '2885.760', 'end': '2889.440', 'text': 'with, is there Yeah, I think you might'}, {'start': '2888.079', 'end': '2890.640', 'text': 'have touched on it a little bit earlier,'}, {'start': '2889.440', 'end': '2893.040', 'text': 'but is there like kind of like an'}, {'start': '2890.640', 'end': '2894.079', 'text': 'advising aspect? Like, you know, as you'}, {'start': '2893.040', 'end': '2896.000', 'text': 'guys are working with these companies,'}, {'start': '2894.079', 'end': '2897.839', 'text': 'is there things like, hey, like I think'}, {'start': '2896.000', 'end': '2899.760', 'text': 'you guys could do this better, do that'}, {'start': '2897.839', 'end': '2902.160', 'text': 'better? Yeah. And I think you even gave'}, {'start': '2899.760', 'end': '2906.800', 'text': 'us an example earlier about like SEO.'}, {'start': '2902.160', 'end': '2908.119', 'text': 'Yeah. Um, so we we definitely do. Um,'}, {'start': '2906.800', 'end': '2911.599', 'text': 'you know, our team'}, {'start': '2908.119', 'end': '2913.680', 'text': "is the Capital Bad team. We've got uh"}, {'start': '2911.599', 'end': '2915.359', 'text': 'some pretty interesting people on there.'}, {'start': '2913.680', 'end': '2919.160', 'text': 'So, I think everybody at this point'}, {'start': '2915.359', 'end': '2921.599', 'text': 'probably understands my skill set. Um my'}, {'start': '2919.160', 'end': '2925.520', 'text': 'co-founder is former private equity'}, {'start': '2921.599', 'end': '2929.440', 'text': 'principal of a $ 1.5 billion fund. Um'}, {'start': '2925.520', 'end': '2930.960', 'text': 'so, he is incredibly talented at so many'}, {'start': '2929.440', 'end': '2932.480', 'text': "things. He doesn't necessarily have this"}, {'start': '2930.960', 'end': '2933.920', 'text': 'like nitty-gritty hands-on small'}, {'start': '2932.480', 'end': '2935.359', 'text': 'business experience like I do, but'}, {'start': '2933.920', 'end': '2937.359', 'text': "that's a good thing because we pair"}, {'start': '2935.359', 'end': '2939.520', 'text': 'really well. Yeah. Um, our other'}, {'start': '2937.359', 'end': '2940.960', 'text': 'co-founder is the technical co-founder.'}, {'start': '2939.520', 'end': '2942.480', 'text': "So, he he's, you know, very technical to"}, {'start': '2940.960', 'end': '2944.160', 'text': 'help with that. And then we got a guy'}, {'start': '2942.480', 'end': '2946.400', 'text': "who's just a former investment banker,"}, {'start': '2944.160', 'end': '2947.760', 'text': "but just like a he's not an investment"}, {'start': '2946.400', 'end': '2950.079', 'text': "banker at heart. He's more of like a"}, {'start': '2947.760', 'end': '2952.480', 'text': 'startup like grit, like whatever it'}, {'start': '2950.079', 'end': '2953.839', 'text': 'takes, like very empathetic. You can see'}, {'start': '2952.480', 'end': '2956.240', 'text': 'through customers point of view. So,'}, {'start': '2953.839', 'end': '2958.800', 'text': 'with that and with our very much'}, {'start': '2956.240', 'end': '2960.559', 'text': 'extended network, we can kind of solve a'}, {'start': '2958.800', 'end': '2961.839', 'text': 'lot of problems for companies, whether'}, {'start': '2960.559', 'end': '2965.760', 'text': "it's finance, whether it's marketing,"}, {'start': '2961.839', 'end': '2967.280', 'text': "whether it's like operations. Um, and so"}, {'start': '2965.760', 'end': '2970.000', 'text': 'we can help them solve those problems'}, {'start': '2967.280', 'end': '2971.760', 'text': 'and we do because it it helps our'}, {'start': '2970.000', 'end': '2973.839', 'text': 'returns. It helps our investor returns.'}, {'start': '2971.760', 'end': '2975.280', 'text': "I'm investing these things myself too."}, {'start': '2973.839', 'end': '2976.720', 'text': 'Uh, so it really just makes a whole lot'}, {'start': '2975.280', 'end': '2978.559', 'text': 'of sense. And you know again that'}, {'start': '2976.720', 'end': '2981.440', 'text': 'example we just gave like you know that'}, {'start': '2978.559', 'end': '2983.280', 'text': 'agency is going to take over most of the'}, {'start': '2981.440', 'end': '2984.559', 'text': 'SEO for that company and like at cost'}, {'start': '2983.280', 'end': '2986.640', 'text': "like I'm not going to make profit from"}, {'start': '2984.559', 'end': '2988.000', 'text': "this. That doesn't really work. I don't"}, {'start': '2986.640', 'end': '2990.160', 'text': "think it's that related party"}, {'start': '2988.000', 'end': '2992.319', 'text': 'transaction type thing. Um but yeah, so'}, {'start': '2990.160', 'end': '2994.240', 'text': 'we can we can add a ton of value um even'}, {'start': '2992.319', 'end': '2996.400', 'text': 'postclosing or during the closing uh'}, {'start': '2994.240', 'end': '2998.240', 'text': 'with you know my co-founders um skill'}, {'start': '2996.400', 'end': '2999.680', 'text': "set. So that's kind of what aiming for"}, {'start': '2998.240', 'end': '3001.280', 'text': 'to make a difference these companies at'}, {'start': '2999.680', 'end': '3003.119', 'text': 'the same time we invest in them. Cool.'}, {'start': '3001.280', 'end': '3005.920', 'text': 'Yeah. Sounds like something be helpful'}, {'start': '3003.119', 'end': '3007.920', 'text': 'for the the sponsor for these deals.'}, {'start': '3005.920', 'end': '3010.559', 'text': 'Yeah. Yeah. It also helps us get the the'}, {'start': '3007.920', 'end': '3012.240', 'text': 'deals, you know. Yeah. Um we have a man'}, {'start': '3010.559', 'end': '3014.000', 'text': "a deal that I just love right now. It's"}, {'start': '3012.240', 'end': '3015.680', 'text': "it's so unique. Again, I can't talk"}, {'start': '3014.000', 'end': '3017.839', 'text': 'about it because the SC stuff and I wish'}, {'start': '3015.680', 'end': '3019.119', 'text': 'I could. You guys would love it. Um like'}, {'start': '3017.839', 'end': '3020.960', 'text': 'you two right here. you would you would'}, {'start': '3019.119', 'end': '3022.359', 'text': 'be like, "What? This doesn\'t like what?"'}, {'start': '3020.960', 'end': '3024.960', 'text': 'Um,'}, {'start': '3022.359', 'end': '3026.800', 'text': 'but it I forgot where I was even going'}, {'start': '3024.960', 'end': '3028.960', 'text': "with that, but like there's so much"}, {'start': '3026.800', 'end': '3030.400', 'text': 'lowhanging like marketing fruit with'}, {'start': '3028.960', 'end': '3031.760', 'text': "some of these that I just come in, I'm"}, {'start': '3030.400', 'end': '3032.880', 'text': 'like, "Oh, we\'re just going to just take'}, {'start': '3031.760', 'end': '3035.440', 'text': 'care of this." And I think that\'s why'}, {'start': '3032.880', 'end': '3037.359', 'text': "we're winning the deal because they want"}, {'start': '3035.440', 'end': '3039.119', 'text': "that, you know, if the sponsor, it's a"}, {'start': '3037.359', 'end': '3040.640', 'text': "big value ad. Yeah, it's a huge value"}, {'start': '3039.119', 'end': '3042.559', 'text': "ad. They want people who's really going"}, {'start': '3040.640', 'end': '3045.760', 'text': 'to like make a difference. um you hear'}, {'start': '3042.559', 'end': '3048.079', 'text': 'with like you know VCs all the time like'}, {'start': '3045.760', 'end': '3049.760', 'text': 'value add in venture and probably like'}, {'start': '3048.079', 'end': '3052.000', 'text': 'very few of them actually do well I'}, {'start': '3049.760', 'end': '3053.680', 'text': 'think we actually can with these um and'}, {'start': '3052.000', 'end': '3055.359', 'text': "it's way easier to add value with these"}, {'start': '3053.680', 'end': '3057.200', 'text': 'that than something in venture venture'}, {'start': '3055.359', 'end': '3059.200', 'text': "is like you know if you're building a"}, {'start': '3057.200', 'end': '3060.960', 'text': "starter from scratch man it's hard it's"}, {'start': '3059.200', 'end': '3062.000', 'text': "hard I don't know how to do all I mean I"}, {'start': '3060.960', 'end': '3063.680', 'text': "I've done it but I don't know how to"}, {'start': '3062.000', 'end': '3065.280', 'text': 'like tell somebody to do something but'}, {'start': '3063.680', 'end': '3067.440', 'text': 'with these established businesses like'}, {'start': '3065.280', 'end': '3069.200', 'text': 'oh I know exactly how to do that lever'}, {'start': '3067.440', 'end': '3071.680', 'text': "you just pull it's really simple stuff a"}, {'start': '3069.200', 'end': '3073.599', 'text': 'lot of times a lot of times yeah Um, and'}, {'start': '3071.680', 'end': '3076.880', 'text': 'things like you just have to know,'}, {'start': '3073.599', 'end': '3078.800', 'text': "right? It's not pocket science. Yeah,"}, {'start': '3076.880', 'end': '3082.839', 'text': "that's very interesting. Yeah. Very"}, {'start': '3078.800', 'end': '3085.119', 'text': "cool. Let's talk about uh bad deals."}, {'start': '3082.839', 'end': '3086.559', 'text': "Uh, this is one of my favorite. Let's"}, {'start': '3085.119', 'end': '3089.520', 'text': 'hear about some of your worst nightmare'}, {'start': '3086.559', 'end': '3092.880', 'text': "stories that you've had in the space."}, {'start': '3089.520', 'end': '3095.720', 'text': "So, luckily I haven't had too many."}, {'start': '3092.880', 'end': '3097.800', 'text': 'Yeah. Um, terrible deals,'}, {'start': '3095.720', 'end': '3100.640', 'text': 'but'}, {'start': '3097.800', 'end': '3101.760', 'text': 'if All right. So Jason Calacanis, I mean'}, {'start': '3100.640', 'end': '3103.200', 'text': 'everybody knows him now from the all in'}, {'start': '3101.760', 'end': '3105.760', 'text': 'podcast, but he wrote a book called'}, {'start': '3103.200', 'end': '3109.200', 'text': 'Angel about angel investing and he gave'}, {'start': '3105.760', 'end': '3110.559', 'text': 'some really good advice I think which is'}, {'start': '3109.200', 'end': '3113.280', 'text': "when you're starting angel investing"}, {'start': '3110.559', 'end': '3115.280', 'text': 'like go to angel list sign up and put'}, {'start': '3113.280', 'end': '3116.960', 'text': 'like the minimum which I think is $1,000'}, {'start': '3115.280', 'end': '3119.240', 'text': 'in each deal. Put it in like 10'}, {'start': '3116.960', 'end': '3122.480', 'text': 'different deals and then just wait and'}, {'start': '3119.240', 'end': '3124.640', 'text': 'learn because if you just start'}, {'start': '3122.480', 'end': '3127.599', 'text': "investing heavily from the start, you're"}, {'start': '3124.640', 'end': '3129.440', 'text': 'probably going to make bad deals. And um'}, {'start': '3127.599', 'end': '3130.800', 'text': "and I can speak from experience. That's"}, {'start': '3129.440', 'end': '3132.079', 'text': 'exactly what I did in angel investing.'}, {'start': '3130.800', 'end': '3134.160', 'text': "I've made like 50 or 60 angel"}, {'start': '3132.079', 'end': '3136.000', 'text': "investments. I'm like my first 10 were"}, {'start': '3134.160', 'end': '3137.599', 'text': 'garbage.'}, {'start': '3136.000', 'end': '3139.280', 'text': 'Maybe maybe more than 10. They were they'}, {'start': '3137.599', 'end': '3140.480', 'text': 'were garbage. And and not cuz they'}, {'start': '3139.280', 'end': '3142.319', 'text': "didn't work out, but because like the"}, {'start': '3140.480', 'end': '3144.880', 'text': 'the logic and reasoning behind making a'}, {'start': '3142.319', 'end': '3146.720', 'text': "decision was poor. Um and so it's it's"}, {'start': '3144.880', 'end': '3150.480', 'text': 'kind of the same thing in in this space'}, {'start': '3146.720', 'end': '3152.559', 'text': 'for me. Like my first first couple um'}, {'start': '3150.480', 'end': '3154.079', 'text': "weren't great. I mean they they haven't"}, {'start': '3152.559', 'end': '3155.640', 'text': "failed or anything like but they're not"}, {'start': '3154.079', 'end': '3158.640', 'text': 'doing it. One'}, {'start': '3155.640', 'end': '3159.599', 'text': "was it looked so good on paper and we're"}, {'start': '3158.640', 'end': '3161.920', 'text': 'like, "Oh, it\'s, you know, it\'s'}, {'start': '3159.599', 'end': '3164.319', 'text': 'diversified customer, no low customer'}, {'start': '3161.920', 'end': '3167.119', 'text': 'concentration." And then like an'}, {'start': '3164.319', 'end': '3169.280', 'text': 'industry shift that was kind of a bubble'}, {'start': '3167.119', 'end': '3170.640', 'text': 'happened like in the whole industry and'}, {'start': '3169.280', 'end': '3172.880', 'text': 'then it just like wiped out like half'}, {'start': '3170.640', 'end': '3175.640', 'text': 'the revenue. Um maybe not half but like'}, {'start': '3172.880', 'end': '3177.880', 'text': 'a huge chunk within like a year'}, {'start': '3175.640', 'end': '3180.800', 'text': 'postclosing. What we thought was'}, {'start': '3177.880', 'end': '3182.000', 'text': "diversified actually wasn't. Um, I would"}, {'start': '3180.800', 'end': '3184.400', 'text': 'love to give you more details, but I'}, {'start': '3182.000', 'end': '3186.000', 'text': 'think it might um I think it might like'}, {'start': '3184.400', 'end': '3188.920', 'text': 'expose the company a little bit more. I'}, {'start': '3186.000', 'end': '3191.400', 'text': "don't want to do that."}, {'start': '3188.920', 'end': '3194.680', 'text': "Um, let's see."}, {'start': '3191.400', 'end': '3198.000', 'text': "Uh, honestly, there haven't been"}, {'start': '3194.680', 'end': '3201.359', 'text': 'any major failures or anything. They'}, {'start': '3198.000', 'end': '3203.440', 'text': 'they do happen. um they definitely'}, {'start': '3201.359', 'end': '3206.000', 'text': 'happen in the space, but I think at this'}, {'start': '3203.440', 'end': '3208.720', 'text': 'point like pretty good at just saying no'}, {'start': '3206.000', 'end': '3210.720', 'text': "to things that don't look like, you"}, {'start': '3208.720', 'end': '3212.640', 'text': 'know, easy hits, easy swings or'}, {'start': '3210.720', 'end': '3215.720', 'text': 'whatever. Do you have any stats you'}, {'start': '3212.640', 'end': '3218.920', 'text': 'could share on like failure rate?'}, {'start': '3215.720', 'end': '3223.200', 'text': 'So Heather Andre, who is'}, {'start': '3218.920', 'end': '3225.520', 'text': 'a SBA loan broker for people search and'}, {'start': '3223.200', 'end': '3227.480', 'text': "she put out some stats. It's it's kind"}, {'start': '3225.520', 'end': '3231.119', 'text': 'of hard to get. So'}, {'start': '3227.480', 'end': '3235.920', 'text': 'the the SBA default rate on these 7A'}, {'start': '3231.119', 'end': '3237.359', 'text': 'loans is around 10%. Mhm. Um and again'}, {'start': '3235.920', 'end': '3238.880', 'text': 'this is this is for like the searcher'}, {'start': '3237.359', 'end': '3241.440', 'text': 'deals which are a little bit smaller'}, {'start': '3238.880', 'end': '3243.440', 'text': 'than like the the big ones and 10% but'}, {'start': '3241.440', 'end': '3244.800', 'text': "that doesn't necessarily mean it's just"}, {'start': '3243.440', 'end': '3246.640', 'text': "because it's not defaulting that the"}, {'start': '3244.800', 'end': '3248.079', 'text': 'investors are swimming in the money, you'}, {'start': '3246.640', 'end': '3249.920', 'text': "know, maybe it's just like surviving or"}, {'start': '3248.079', 'end': '3252.880', 'text': 'something like that. So but you could'}, {'start': '3249.920', 'end': '3255.760', 'text': 'say a 10% failure rate there. the the'}, {'start': '3252.880', 'end': '3258.480', 'text': 'Stanford study shows a little bit'}, {'start': '3255.760', 'end': '3260.559', 'text': "higher, but it's because a lot of the"}, {'start': '3258.480', 'end': '3262.880', 'text': "the funds like didn't actually find a"}, {'start': '3260.559', 'end': '3265.200', 'text': "business to buy and so it doesn't quite"}, {'start': '3262.880', 'end': '3269.359', 'text': "work out. So, it's kind of hard to to go"}, {'start': '3265.200', 'end': '3271.680', 'text': 'from that. I think um the personal'}, {'start': '3269.359', 'end': '3275.359', 'text': 'opinion, not related to Capital Pad, is'}, {'start': '3271.680', 'end': '3277.720', 'text': "probably like 10 to 15% of deals don't"}, {'start': '3275.359', 'end': '3280.160', 'text': 'work out on average.'}, {'start': '3277.720', 'end': '3281.280', 'text': 'Um, and we actually just recently looked'}, {'start': '3280.160', 'end': '3282.640', 'text': 'at some of the stats from the'}, {'start': '3281.280', 'end': '3284.079', 'text': 'independent sponsor deals. Independent'}, {'start': '3282.640', 'end': '3286.319', 'text': "sponsor deals we didn't really go into."}, {'start': '3284.079', 'end': '3287.599', 'text': 'These are just bigger deals. Uh, the'}, {'start': '3286.319', 'end': '3288.640', 'text': 'economics are a little bit different.'}, {'start': '3287.599', 'end': '3292.000', 'text': 'Actually, probably a little bit better'}, {'start': '3288.640', 'end': '3293.839', 'text': 'for investors. Um, but yeah, the failure'}, {'start': '3292.000', 'end': '3296.200', 'text': 'rates are are pretty low on those two.'}, {'start': '3293.839', 'end': '3301.760', 'text': 'And I think like'}, {'start': '3296.200', 'end': '3304.480', 'text': '74% of those deals returned like 3x or'}, {'start': '3301.760', 'end': '3306.480', 'text': 'more. Um, so pretty good stats with'}, {'start': '3304.480', 'end': '3307.599', 'text': "those things. the failure rate's not"}, {'start': '3306.480', 'end': '3310.160', 'text': "it's kind of wild. But again, you're"}, {'start': '3307.599', 'end': '3312.319', 'text': 'buying um boring stuff. Like the big'}, {'start': '3310.160', 'end': '3313.920', 'text': 'problem to watch out for is how much'}, {'start': '3312.319', 'end': '3315.520', 'text': 'debt are they throwing on there. You'}, {'start': '3313.920', 'end': '3317.359', 'text': 'know, leverage is great when it works'}, {'start': '3315.520', 'end': '3319.680', 'text': "well. If it doesn't, like you know, you"}, {'start': '3317.359', 'end': '3320.880', 'text': 'hand the keys back to the the lender. Um'}, {'start': '3319.680', 'end': '3324.160', 'text': "that's what you got to watch out for. We"}, {'start': '3320.880', 'end': '3327.680', 'text': 'just passed on a deal where it actually'}, {'start': '3324.160', 'end': '3330.800', 'text': 'broke my heart because the the sponsor'}, {'start': '3327.680', 'end': '3333.599', 'text': 'so talented. Um also just such a nice'}, {'start': '3330.800', 'end': '3335.040', 'text': 'guy. um his his like pedigree, his'}, {'start': '3333.599', 'end': '3336.480', 'text': "background, he's been to like every"}, {'start': '3335.040', 'end': '3337.839', 'text': "company you'd want, every private he's"}, {'start': '3336.480', 'end': '3340.599', 'text': "done everything. Like he's a private"}, {'start': '3337.839', 'end': '3344.559', 'text': 'equity guru and this company was really'}, {'start': '3340.599', 'end': '3347.040', 'text': "cool, but like we couldn't quite get"}, {'start': '3344.559', 'end': '3349.200', 'text': 'comfortable with the amount of like'}, {'start': '3347.040', 'end': '3351.400', 'text': 'upkeep some of the parts of the business'}, {'start': '3349.200', 'end': '3354.240', 'text': 'might get like you know the capex needs.'}, {'start': '3351.400', 'end': '3356.000', 'text': "And so with that, we're like, well, if"}, {'start': '3354.240', 'end': '3358.640', 'text': "there's adding this much leverage on the"}, {'start': '3356.000', 'end': '3360.160', 'text': 'company, what if a surprise comes now,'}, {'start': '3358.640', 'end': '3361.200', 'text': "you're underwater, your covenants, and"}, {'start': '3360.160', 'end': '3363.280', 'text': 'you got to hand the keys back and you'}, {'start': '3361.200', 'end': '3364.400', 'text': 'lose it. So, got to watch out for that'}, {'start': '3363.280', 'end': '3366.559', 'text': 'stuff. This was not a good answer for'}, {'start': '3364.400', 'end': '3368.079', 'text': 'you guys. This is great. I guess from a'}, {'start': '3366.559', 'end': '3370.160', 'text': 'as people come into the space, you know,'}, {'start': '3368.079', 'end': '3371.599', 'text': 'if they want to want to get into the the'}, {'start': '3370.160', 'end': '3372.640', 'text': 'capital pan and make an investment,'}, {'start': '3371.599', 'end': '3374.160', 'text': 'right? I mean, you gave some great'}, {'start': '3372.640', 'end': '3375.920', 'text': 'advice. What other advice would you give'}, {'start': '3374.160', 'end': '3378.160', 'text': 'somebody starting out? Angelist was a'}, {'start': '3375.920', 'end': '3379.680', 'text': 'great example, as you mentioned. Um, but'}, {'start': '3378.160', 'end': '3381.359', 'text': 'what other advice from your lens would'}, {'start': '3379.680', 'end': '3384.400', 'text': 'you give to someone looking to get into'}, {'start': '3381.359', 'end': '3386.480', 'text': "this? I'm all for again like starting"}, {'start': '3384.400', 'end': '3388.000', 'text': 'small on that. Um, even though I'}, {'start': '3386.480', 'end': '3389.920', 'text': "obviously benefit if you don't start"}, {'start': '3388.000', 'end': '3391.280', 'text': 'small because we we take Capital P, we'}, {'start': '3389.920', 'end': '3392.799', 'text': 'take a carry from investors. You know,'}, {'start': '3391.280', 'end': '3396.440', 'text': 'we once you get your money back like we'}, {'start': '3392.799', 'end': '3398.839', 'text': 'start sharing in the profits.'}, {'start': '3396.440', 'end': '3403.240', 'text': 'Um, I'}, {'start': '3398.839', 'end': '3406.680', 'text': "think don't be afraid to ask all the"}, {'start': '3403.240', 'end': '3408.880', 'text': 'questions. Um cuz'}, {'start': '3406.680', 'end': '3412.079', 'text': "there's even though so much of this"}, {'start': '3408.880', 'end': '3414.079', 'text': 'stuff is normal, not normal but is more'}, {'start': '3412.079', 'end': '3415.599', 'text': "like table stakes knowledge, there's a"}, {'start': '3414.079', 'end': '3418.079', 'text': "lot of little intricacies that aren't"}, {'start': '3415.599', 'end': '3420.640', 'text': 'like the step up example like most'}, {'start': '3418.079', 'end': '3422.559', 'text': "people don't know about that. Even like"}, {'start': '3420.640', 'end': '3425.040', 'text': "you know private equity people don't"}, {'start': '3422.559', 'end': '3426.480', 'text': 'understand that term all the time. Um'}, {'start': '3425.040', 'end': '3429.200', 'text': 'little terms like that like just just'}, {'start': '3426.480', 'end': '3432.880', 'text': 'ask. Um also like in in the platform'}, {'start': '3429.200', 'end': '3434.640', 'text': 'once people um so when an investor comes'}, {'start': '3432.880', 'end': '3437.599', 'text': 'in the again accredited investor comes'}, {'start': '3434.640', 'end': '3439.440', 'text': 'into the platform they get to see a'}, {'start': '3437.599', 'end': '3440.960', 'text': 'teaser for a deal and the teaser has a'}, {'start': '3439.440', 'end': '3442.960', 'text': 'little like you know three minute two'}, {'start': '3440.960', 'end': '3445.359', 'text': 'minute video clip of the sponsor talking'}, {'start': '3442.960', 'end': '3449.760', 'text': 'about it and you get to see a kind of'}, {'start': '3445.359', 'end': '3451.280', 'text': 'anonymized video of it uh of the deal.'}, {'start': '3449.760', 'end': '3453.119', 'text': 'And you get to see like the highlights.'}, {'start': '3451.280', 'end': '3454.720', 'text': 'You get to see, you know, the financials'}, {'start': '3453.119', 'end': '3458.400', 'text': 'for the last few years, the sources and'}, {'start': '3454.720', 'end': '3460.400', 'text': 'uses, um, that type of stuff, deal terms'}, {'start': '3458.400', 'end': '3462.480', 'text': 'and expected returns based on their'}, {'start': '3460.400', 'end': '3464.000', 'text': 'model. Then you got to sign an NDA like'}, {'start': '3462.480', 'end': '3466.319', 'text': 'on the platform. Once you sign it, you'}, {'start': '3464.000', 'end': '3468.799', 'text': 'get access to the full deal room. Um, so'}, {'start': '3466.319', 'end': '3471.200', 'text': 'you can see like the entire deal'}, {'start': '3468.799', 'end': '3472.880', 'text': 'project, all like past tax returns, like'}, {'start': '3471.200', 'end': '3475.520', 'text': 'all the stuff. And then you get'}, {'start': '3472.880', 'end': '3477.359', 'text': 'connected with the sponsor via DN. So'}, {'start': '3475.520', 'end': '3479.200', 'text': 'the searcher, the sponsor, and now you'}, {'start': '3477.359', 'end': '3481.280', 'text': 'can like actually talk to them. So ask'}, {'start': '3479.200', 'end': '3483.680', 'text': "them questions like um it's actually"}, {'start': '3481.280', 'end': '3485.680', 'text': 'good to challenge them too. Uh because'}, {'start': '3483.680', 'end': '3487.359', 'text': "the actual best case, this isn't the"}, {'start': '3485.680', 'end': '3489.359', 'text': 'best case scenario, but a great scenario'}, {'start': '3487.359', 'end': '3490.960', 'text': 'is if you ask them a question that they'}, {'start': '3489.359', 'end': '3492.720', 'text': "hadn't thought about and they back out"}, {'start': '3490.960', 'end': '3494.240', 'text': "the deal, right? Like that's actually a"}, {'start': '3492.720', 'end': '3496.480', 'text': "good thing. We haven't seen that happen,"}, {'start': '3494.240', 'end': '3497.839', 'text': 'but so like ask them tough questions. Uh'}, {'start': '3496.480', 'end': '3499.040', 'text': 'learn about this stuff. I think that'}, {'start': '3497.839', 'end': '3500.400', 'text': "that's a great for everybody. That's"}, {'start': '3499.040', 'end': '3501.520', 'text': "what we're doing. We're asking the tough"}, {'start': '3500.400', 'end': '3503.359', 'text': 'questions and we want everybody else to'}, {'start': '3501.520', 'end': '3505.680', 'text': "ask them, too. Um let's all learn"}, {'start': '3503.359', 'end': '3507.440', 'text': "together. Yeah, it's good advice. It's"}, {'start': '3505.680', 'end': '3509.920', 'text': 'uh helpful for the investor and the'}, {'start': '3507.440', 'end': '3513.440', 'text': 'sponsor, it sounds like. Yeah, I think'}, {'start': '3509.920', 'end': '3514.960', 'text': 'so. Yeah. Cool. Well, uh Travis, I think'}, {'start': '3513.440', 'end': '3516.480', 'text': 'this is a good spot to wrap up. Uh this'}, {'start': '3514.960', 'end': '3518.319', 'text': 'has been a lot of fun. Really appreciate'}, {'start': '3516.480', 'end': '3519.599', 'text': 'you taking the time to chat with us. Uh'}, {'start': '3518.319', 'end': '3521.920', 'text': 'where could people go to connect with'}, {'start': '3519.599', 'end': '3524.160', 'text': 'you and learn more about Capital Pad?'}, {'start': '3521.920', 'end': '3526.319', 'text': 'Just capitalpad.com. You can once you'}, {'start': '3524.160', 'end': '3528.079', 'text': 'land there, you get to choose your own'}, {'start': '3526.319', 'end': '3529.760', 'text': "journey, whether you're a searcher,"}, {'start': '3528.079', 'end': '3532.400', 'text': 'sponsor, or an investor, and then it'}, {'start': '3529.760', 'end': '3534.480', 'text': 'takes you down that rabbit hole for'}, {'start': '3532.400', 'end': '3535.520', 'text': "signing up. Um that's really it. You can"}, {'start': '3534.480', 'end': '3537.280', 'text': 'follow me in the socials, you know,'}, {'start': '3535.520', 'end': '3538.720', 'text': 'Twitter, LinkedIn, whatever. Okay. Other'}, {'start': '3537.280', 'end': '3540.160', 'text': "than that, Capital Pad's a spot."}, {'start': '3538.720', 'end': '3541.119', 'text': 'Awesome. This has been great, Travis.'}, {'start': '3540.160', 'end': '3544.440', 'text': "We'll make sure to include all that in"}, {'start': '3541.119', 'end': '3544.440', 'text': 'the show notes.'}, {'start': '3553.130', 'end': '3556.209', 'text': '[Music]'}]