Buyers and Builders

Not too many folks are willing to quit their job at Goldman Sachs to start a holding company.

It gets even better…

He even decided to move from the US to Hong Kong.

That’s the story of Alex Schultz who grew a live lobster business to $11m a year; growing 20-30% per year.

- Convincing the Hong Kong government to grant him a Visa to build a business

- Printing out Google Maps to find the first suppliers (IT WORKED!!)

- Bootstrapped business, selling $11m worth of live lobster per year in Hong Kong

My conversation with Alex Schultz of Turnbury Group.

Enjoy.

Show notes:

00:00:00 - Intro

00:00:24 - Early days after Goldman Sachs

00:02:22 - Finding the right company

00:07:37 - Moving to Hong Kong and not knowing anyone

00:14:31 - The story of founders who lived in China for $1 a day

00:17:40 - Printing out Google Maps to find suppliers

00:22:00 - Initial investment  $25,000

00:31:55 - The first 12 months and all challenges

00:37:34 - Cash flow is what keeps you in or out of business

00:44:50 - Building relationships with 2nd and 3rd generation business owners in Hong Kong

00:49:50 - Stay in Hong Kong or go back to the US?

Follow Mikk/PrivatEquityGuy on Twitter: ⁠⁠⁠https://x.com/PrivatEquityGuy⁠⁠⁠

Alex on Twitter: ⁠⁠⁠https://x.com/mrturnbury

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Meet Dan Tamkin, co-founder of Resurgent Capital Partners:

- Portfolio of 4 companies in different industries

- $60M in revenue

- $8M EBITDA

- No LPs

- Happy, excited about life, spends tons of time teaching kids to play hockey

This is a must listen for someone who’s extremely good at growing and building a single company but feels that they aren’t happiest and need more moving parts on their life:

“When I started to understand who I am – I get really bored if I do one thing for over 3 years. After realizing that about myself, my dream has always been owning four businesses because I thought it would keep me curious and interested – and it has! I’m the happiest right now.”

I hope you enjoy listening as much as I enjoyed talking to Dan Tamkin from Resurgent Capital Partners.

Show notes:

00:00:00 - Intro

00:00:40 - Rejected by PE and “You have to start somewhere”

00:04:45 - Lessons for growing businesses from losing money to break even in 30 days

00:08:45 - I get really bored if I focus on one company only

00:13:12 - The structure of the first deal which took almost 24 months

00:20:41 - Post acquisition

00:24:34 - How to incentivize CEOs

00:33:58 - Organic growth vs. through M&A

00:42:50 - How they find the best deals and people to run portfolio businesses

00:52:59 - No PE firm wanted him, so he wasted a few years of his life trying to get a permission to succeed

01:00:30 - Taking LPs money in the future (maybe...)

Follow Mikk/PrivatEquityGuy on Twitter: ⁠⁠⁠https://x.com/PrivatEquityGuy⁠⁠⁠

Dan on Twitter: ⁠⁠⁠https://x.com/Dan_Tamkin

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Graham Duncan from East Rock Capital is so generous that wrote a letter to his friend who was considering starting an investment company.

Why listen to Graham:

- Started his fund at 31 years old

- Today $2B in aum

- Manages the capital of five families

"Letter to a friend who may start a new investment platform"

Show notes:

00:00:00 - Intro

00:04:50 - When everything is uncertain, are you okay with it?

00:06:41 - Building a fund can even lead to divorce as risks compound

00:08:12 - Life is too short to be paralyzed by the threat of a mixed reference

00:12:48 - Make sure the older members of the team are capable of truly believing in you

00:19:14 - A concept of “going into the cave” — spending time alone for several weeks with a blank sheet of paper

00:23:48 - Make sure to call me: my partners and I would love to provide the “gas”

Follow Mikk/PrivatEquityGuy on Twitter: ⁠⁠⁠https://x.com/PrivatEquityGuy⁠⁠⁠

Graham on Twitter: ⁠⁠⁠https://x.com/GrahamDuncanNYC

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

James started and built a financial media holdco to the point where it was acquired for $31 million.

He did it in 5 short years…

We discuss:

- Founding HoldCo with the most financially creative person he knew – a former commodities trader

- Organic growth vs growth through mergers and acquisitions

- Looking for stable year-over-year growth opportunities. “I’m not the dude who wants to do turnarounds”

- The importance of distribution and surfing the right wave

- The best deals have always been off-market

- How to win deals over the guys who take potential sellers to Lakers games

- Sales and marketing lessons from friends who run $100 mm business

- Why he's betting heavily on social: Short and long-form content

- Why and how ego holds too many entrepreneurs back

My conversation with James Camp, co-founder of DMO Holdings.

Enjoy.

Show notes:

00:00:00 - Intro

00:00:44 - Life before DMO Holdings

00:06:10 - Launch and growth of DMO Holdings

00:15:35 - Finding the best talent through your network and community

00:28:35 - The importance of distribution and surfing the right wave

00:33:28 - Buy and build success tory: Growing a company 6x in 11 months

00:41:03 - Looking for $2-5mm EBITDA businesses

00:55:55 - Ego holds so many entrepreneurs back

01:03:30 - Attracting the right LPs

Follow Mikk/PrivatEquityGuy on Twitter: ⁠⁠⁠https://x.com/PrivatEquityGuy⁠⁠⁠

James on Twitter: ⁠⁠⁠https://x.com/JamesonCamp

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Organic growth is great, but if you want to grow through M&A while beating almost every private equity firm in deal competition. Learn from Jesse.

He became so good at it that he built the company to $200mm

- 8 acquisitions and counting

- 100% bootstrapped

- Being 35 years old; hungrier than ever

A couple of notes:

1. I am a forced entrepreneur, I dropped out of school and then I couldn't find a job so I was forced to start my first company Job Mobz

2. Entrepreneurs give up too quickly; had I sold too early I would never have built a $200M company

3. Recruiting companies must transform into SaaS companies or they will be replaced

4. We've helped build teams for Coinbase, 23andME, Stellar, and Scale AI when they were very small companies

5. The way you get big WHALE-like clients: figure out what their problem is. Then do an insane amount of research and sort it out for them. No one does this and you can stand out very easily

6. Being in one industry for 10+ years gives you insane “market knowledge” that allows you to acquire companies many times cheaper than newer competitors and private equity firms that “know” less about the industry.

7. Having a huge pipeline just because of a great reputation in space – the niche focus has been incredibly beneficial

8. You can make your business 2x as valuable by reviewing your contracts and making sure you're pricing correctly

9. You can't just work 40 hours a week and win.

I hope you enjoy listening as much as I enjoyed talking to Jesse Tinsley from Recruiter.com

Show notes:

00:00:00 - Intro

00:00:29 - Being a firefighter and the early days of starting a business

00:04:31 - Being a part-time entrepreneur for the first 4 years

00:05:58 - Moving away from the traditional recruiting business model to recurring annual contracts

00:09:34 - How he managed to get Coinbase, 23andMe, Scale AI as clients

00:13:37 - Being frugal allowed to acquire 8 companies

00:17:00 - Having the “market knowledge” allows you to acquire companies many times cheaper than your competitors simply because they know less

00:19:00 - Deal structure

00:23:20 - Turning 3x multiples to 30x EBITDA multiplies

00:31:00 - Post-acquisition

00:35:39 - How to make your company 2x more valuable: review and fix your pricing contracts

00:43:19 - The benefits of focusing on one specific industry

00:48:32 - The cyclical market provides an additional opportunity

00:51:53 - Focusing on recruiting and recruiting only

00:54:48 - Continuing to build a business instead of saying yes to a life-changing amount of cash

00:59:27 - Is Jesse easy or hard to work with

01:01:47 - How to run a $200 million company? Schedule wise

Follow Mikk/PrivatEquityGuy on Twitter: ⁠⁠⁠https://x.com/PrivatEquityGuy⁠⁠⁠

Jesse on Twitter: ⁠⁠⁠https://x.com/JesseTinsley

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Imagine that for a moment…

You are 24 years old and want to acquire a business…

You pick up the phone and make your first cold call to the founder who owns two companies in the $1-2mm EBITDA range

The founder says, "yes, I would be interested in selling my company," four months later you are the new owner of a small holding company with two traditional businesses (First Fleet Maintenance and Northern Diesel, both located in Northern Alberta, Canada) and a combined EBITDA of $4 million.

This conversation is amazing. Ethan Macdonald from Macdonald Financial has a wild journey.

Show notes:

00:00:00 - Intro

00:00:43 - Background before these acquisitions

00:06:29 - The moment Ethan decided it was the right time to acquire the company

00:08:35 - Talking to brokers lead to not wanting to use their services

00:11:50 - Deal structure and conversations with the banks

00:19:41 - Very asset heavy businesses

00:23:30 - The whole transaction was financed by the bank

00:32:34 - Unexpected costs in making the deal as he couldn't afford both a lawyer and an accountant

00:34:07 - Post-acquisition

00:38:26 - "I would like to be an operator for the next transaction"

00:41:00 - Growth through M&A versus organic

00:44:02 - Challenges so far after less than half a year of business ownership

Follow Mikk/PrivatEquityGuy on Twitter: ⁠⁠⁠https://x.com/PrivatEquityGuy⁠⁠⁠

Contact Ethan: ethan at macdonaldfinancial dot net

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

"There is an ultimate way to build a group of software companies without having to follow the typical VC growth playbook."

Philippe Willi is building a SaaS holding company TrekkSoft in Switzerland.

He buys SaaS companies all day but never sells them.

Philippe's story is different:

He started a VC-backed SaaS, but wasn't able to grow it fast enough…

Then he pitched investors not to grow that one SaaS, but to acquire other SaaS companies instead.

The investors said it was a VERY stupid idea, but decided to do it anyway…

Today they have a team of 170+ employees and 6 portfolio companies.

The great story of TrekkSoft.

Important note: Philippe is a big fan of Mark Leonard, the founder of Constellation Software. They have met twice. Mark even visited Philippe and his family at their home in Switzerland.

Lots of great stories and lessons in this episode.

Enjoy!

Show notes:

00:00:00 - Intro

00:00:28 - Early days and life before Trekksoft

00:05:19 - First and second acquisition

00:09:54 - Investors: “Building a portfolio of software companies is a VERY stupid idea…”

00:15:34 - Diversified portfolio vs the circle of competence

00:21:22 - How do investors get their capital - IPO? A secondary transaction? Private equity?

00:23:05 - One business unit can save the whole group in difficult times

00:24:39 - Synergies around the portfolio and Philippe's beliefs about it

00:26:13 - First few steps post-acquisition while being an operational type founder

00:30:37 - The story and lessons learned from meeting (twice!) with Mark Leonard, founder of the $50B software behemoth

00:39:30 - Growing organically or through M&A

00:44:18 - Rule of 40

00:49:46 - Key-man-risk across the entire portfolio

Follow Mikk/PrivatEquityGuy on Twitter: ⁠⁠⁠⁠https://x.com/PrivatEquityGuy⁠⁠⁠⁠

Philippe on Twitter: ⁠⁠⁠⁠https://x.com/philippewilli

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Jeremy has bought and sold over 100 businesses, but never uses a broker.

1. Treat a company like a product. You buy one and then you sell it
2. Again, never use brokers!
3. Buy right and you’re gonna win
4. Do more of what works
5. Joint ventures and the beauty of it

Great story with Jeremy building a holding company in Dubai while the team is based in Singapore.

Important note: he does all that while traveling twice a month with the family.

Enjoy!

Show notes:

00:00:00 - Intro

00:02:29 - First acquisition

00:09:51 - Competition on $2-5m deals vs $10m deals

00:12:31 - Early days and growth from 25 employees to 135 employees

00:17:31 - Having a big income vs. selling the business and putting the profits into a new business

00:26:19 - Never use brokers: how to find the best companies and build a pipeline of 100 companies

00:35:37 - Characteristics of companies they acquire today

00:40:10 - Buy-and-sell vs building a huge holding company

00:42:55 - Post acquisition: "I delegate everything, I never show up, and they don't even know me"

00:45:22 - Portfolio company as of today

00:50:28 - Still terrible at fundraising

00:53:09 - Why not raise $200 million and go big

00:55:03 - Doing more of what works

00:56:32 - Joint ventures and the beauty of it

Follow Mikk/PrivatEquityGuy on Twitter: ⁠⁠⁠https://x.com/PrivatEquityGuy⁠⁠⁠

Jeremy on Twitter: ⁠⁠⁠https://x.com/JeremyJHarbour

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Swedish serial acquirers have cracked the code on how to compound their wealth (at a staggering rate!)

Their holding companies trade at 12-29 times EBITDA.

Here is the story from their founder and CEO Fredrik Karlsson who got so unhappy with his boss so he decided to leave…

Start the exact same business.

Following the exact same strategy.

Today, ONLY 6 years later, he and his team has done 26 acquisitions which does $600M in revenue and $100M+ in EBITA

Here's a 74-minute in-depth summary of two full interviews with Fredrik Karlsson, a true buy-and-build pioneer, and Johan Bladh, Röko's CFO.

(I often learn by reading and listening, so I decided to read these interviews out loud.)

Show notes:

00:00:00 - Intro

00:01:29 - 26 portfolio companies, all asset light businesses

00:10:14 - The benefits of being sector agnostic

00:20:20 - Offering a 10-year put call option to the founder

00:26:01 - The hurdle of 15% operating profit

00:30:03 - With 8 people in the HQ, we can grow our profit even to $400M EBITA

00:35:15 - Looking at 300-400 deals per year (which leads to 6-12 acquisitions per year)

00:37:42 - HoldCo model vs Private equity: Decentralization and reporting of portfolio companies

00:44:03 - Understanding the markets, knowing what to acquire

00:56:07 - Competition in transactions

01:00:03 - What type of companies are they acquiring

01:11:12 - Maximum number of deals per year: 7 platforms; 2 add-ons

Follow Mikk/PrivatEquityGuy on Twitter: ⁠⁠⁠⁠https://x.com/PrivatEquityGuy⁠⁠⁠⁠

Full interviews are free to read on In Practise website (huge thanks to their team for doing this):

Fredrik Karlsson, the CEO of Röko: https://inpractise.com/articles/roko-building-a-leading-serial-acquirer

Johan Bladh, the CFO and deputy CEO of Röko: https://inpractise.com/articles/roko-manda-strategy-transaction-structure-and-returns

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Dream for 1,000s of software investors: Build a portfolio of profitable B2B SaaS companies

The northstar being Constellation Software (which trades at a P/E ratio of 104 and has a market cap of $90B)

Reality: It’s hard, extremely hard!

Despite this, there are few people who actually go and try to do that…

Take Colin Keeley, co-founder of Verne, where they buy and build mission-critical B2B SaaS businesses.

“You can have a holdco plan, but do one great deal and then earn the right to do more deals.”

I hope you enjoy this short conversation.

Show notes:

00:00:00 - Intro

00:00:11 - First acquisition and early days of Verne

00:02:47 - Choosing the right partner to build your SaaS portfolio

00:03:45 - Returns of first acquisitions

00:07:40 - Current portfolio of companies

00:11:46 - Characteristics of perfect acquisition for Verne

00:15:23 - The harsh reality of delegation

00:21:51 - Capital Camp and lessons from Brent Beshore and Patrick O'shaughnessy

Follow Mikk/PrivatEquityGuy on Twitter: ⁠⁠⁠⁠https://x.com/PrivatEquityGuy⁠⁠⁠⁠

Colin on Twitter: https://x.com/ColinKeeley

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.