Buyers and Builders

Imagine this...

• First acquisition March 2023
• Today a portfolio of 10 companies
• $7.5M in EBITDA
• Average acquisition multiple so far 2.5x (!!!)
• Last deal: $550k EBITDA business acquired for $850k

Craziest part, doing all that with ZERO personal investment and still making 50% of the carry

Show me a better salesman!

When asked how you did it?

“There are no rules. Literally.”

This conversation with Nigell Lee of RBO Group has everything. I hope you enjoy listening to it as much as we enjoyed recording it.

Show notes:

00:00:00 - Intro

00:00:53 - An unconventional path lead to entrepreneurship & building a company in NYC

00:07:27 - Mixed emotions and growth while growing business in the US

00:09:51 - First days of RBO Group: 9 months of market research and search of the first deal

00:12:34 - Financial structure and financing of the first deal

00:19:32 - Acquiring a company in an industry you don’t know much about

00:20:35 - The biggest secret revealed: How to find the absolute best deals

00:25:44 - Getting in the game vs spending years looking for a perfect deal

00:28:57 - Size and structure of the holding company

00:36:39 - 2-5-10 year strategy post acquisition

00:42:40 - 10 deals with 2.5x average acquisition multiple

00:46:19 - 90-day integration post acquisition

00:57:55 - Focusing on one business/platform vs wide range of companies

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

Nigell on Twitter: ⁠⁠⁠https://x.com/nigelllee1

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

Imagine this…

You help grow the home care and hospice company from $20 million to $150 million and then they fire you.

Then you think whether you should start your own thing or not, “I always knew I wanted to be an entrepreneur but I wasn’t ready for it…”

Voila…

You still decide to do it…

Today, at 38, Nikolas runs a diversified portfolio of 5 companies. ("A small portfolio of a few companies,”, as he put it.) What a humble man.

Fantastic and very open conversation with Nikolas Hulewsky from the holding company called CoFounders.

Show notes:

00:00:00 - Intro

00:02:36 - Lessons learned from growing a home care business to $150 million

00:09:51 - Getting fired and starting your own business

00:11:58 - Starting a brand new company and making $10 million in revenue in 3 months00:19:55 - 4 criteria before buying a company

00:24:50 - Preparing for interest rate changes and what if they don't change

00:27:41 - All deals they’ve done are off-market, never using brokers

00:36:21 - “You do it because you want to have fun,” but what about financial goals?

00:40:30 - Building a business with your best friend

00:45:13 - Time management 101: 4 kids, a wife, and a goal of $100m in revenue

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

Nikolas on Twitter: ⁠⁠⁠https://x.com/CoFoundersNik

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

Even when every 3rd and 4th person in finance dreams of starting their own private equity fund…

Only 0.01% give it a chance and far fewer succeed…Here is my conversation with John Caple of Hidden Harbor Capital Partners who just went and did all that...

$260m fund I

$465m fund II

$800m fund III (just announced fundraising)

They invest in lower middle market industrial and business services companies, paying 4-8x EBITDA per deal, making them a true value shop.

“I don’t want to pay 5 times for 5 times business. I want to pay 5 times for a business that one day can trade for 8, 10, 12 times. Well, that’s what everyone wants to do… But how we do it is by buying founder and family owned businesses. We never buy from another private equity firm.”

We had a blast. Enjoy!

Show Notes:

00:00:00 - Intro

00:00:37 - We just raised $800m, but the real work is just beginning

00:01:42 - Early days as an investment banker and consultant

00:05:12 - Doing it with his best friends and raising the first 260m fund

00:12:39 - Straightforward fundraising advice

00:17:45 - Why we're starting to see many private equity funds disappear

00:23:40 - Sourcing, selecting, servicing

00:25:45 - Investment preferences

00:32:00 - Lessons learned after one portfolio company ended in zero

00:38:21 - Processes they can't live without

00:44:02 - Advice for founders considering selling their business

00:52:39 - Is this life what you expected it to be?

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

John on Twitter: ⁠⁠⁠https://x.com/BigJohn043

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

My research of Chris Rolls, the founder of PieLAB Capital, who went through the journey of building and selling his business, then starting a private equity fund, and then starting a permanent holding company.

Their most successful portfolio company, Detector Inspector, have grown from $6.5 million in revenue to $84 million.

Chris is a big fan of acquisition led compounders and serial acquirers.

When comparing serial acquirers and private equity:

“We got the end of the fund and we had to sell some really great companies. And being an operator, if you have a great company which is growing, and generating cash – you don’t want to sell such companies.”

Fascinating lessons, I hope you enjoy listening as much as I enjoyed doing the research.

Show Notes:

00:00 - Intro

01:10 - Growing Detector Inspector from $6.5 million to $84 million

02:40 - The early years of learning private equity

04:01 - 3 reasons why private market investing generates better returns?

11:55 - Not wanting to sell great companies

17:02 - Characteristics of PieLAB Capital’s portfolio

20:39 - Becoming a long-term buyer and holder of businesses

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

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

My conversation with Eugen Benedikt Russ.

A gentleman in his 30s who runs a $200 million a year holding company.

Since starting in 2018, they have achieved an IRR of 39% over the past 6 years.

A portfolio of 10+ companies (all majority owned)

They specialize in acquiring, managing, and operating profitable niche businesses in Online Marketplaces, Consumer Apps and SaaS

The smallest portco earns about $2-3m in EBIT, while the largest earns $19.2m in EBIT.

“These days you can run and operate profitably and successfully in these niches with a team of under 20 people nowadays. Sometimes even under 15 people. You can build a company that does $5 to $10m in revenue at a 40, 50, even 60% EBITDA margin. ”

If you care about running extremely profitable niche companies, a must listen!

Show Notes:

00:00:00 - Intro

00:05:48 - Haven’t raised a single dollar of outside capital

00:07:25 - Investment strategy (revenue, profit, location)

00:15:02 - A niche with 30% YoY growth

00:17:28 - A recent successful investment and how they think about the opportunities

00:21:38 - Finding the best talent

00:26:51 - Diversified portfolio

00:38:03 - The famous five

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

Join HoldCo Builders weekly newsletter on finding deals, raising capital, and growing small profitable niche businesses: ⁠⁠⁠⁠⁠https://privatequityguy.beehiiv.com/⁠⁠

Eugen on Twitter: ⁠⁠https://x.com/eugen_russ

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

My conversation with Kashyap Chanchani, managing partner of The Rainmaker Group, an Indian firm that works with traditional family businesses and VC-backed companies.

"I started the Rainmaker Group because I didn't want to sleepwalk through life."

Kashyap runs a growth equity advisory firm which does $500 to 700 million worth of transactions annually.

We discuss:

– 30 of India's 50 largest companies are still family-owned

– 30% of family owned businesses are open / attracted to raising private equity funding

– Why and how should one invest in private companies in India

– A message for people who want to invest in private companies in India

– Putting all your money in Indian equities

Show Notes:

00:00:00 - Intro

00:00:23 - “I didn’t want to sleepwalk through life”

00:03:07 - Private family owned businesses in India

00:08:45 - Succession planning in India

00:17:20 - The opportunity of building a holdco of small traditional businesses

00:27:29 - Key-man-risk in family owned traditional businesses

00:36:41 - “Don’t be a tourist investor”

00:39:10 - 10-15% growth on average per year

00:42:09 - Organic growth vs M&A

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

Join HoldCo Builders weekly newsletter on finding deals, raising capital, and growing small profitable niche businesses: ⁠⁠⁠⁠⁠https://privatequityguy.beehiiv.com/⁠⁠

Kashyap on Twitter: ⁠⁠https://x.com/KChanchani

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

My conversation with Daniel Priestley about how to become a "key person of influence" in the world of private equity, investing or small business acquisition.

Being known in your own little world makes three things possible:

- Finding better deals

- Attract more capital on better terms

- Have more talent wanting to partner with your companies

Daniel manages a portfolio of internet companies and has a team of 150 people.

We discuss:

– The biggest leverage is not capital, its enterprise - the ability to run a business

– Becoming a key person of influence niche industry (hint: Buffett’s annual letters)

– Growing portfolio companies using cold calling and email

– Raising millions for your company by using cold outreach to content strategy

Show Notes:

00:00:00 - Intro00:01:07 - Growing the first company to $10 million in revenue in 3 years

00:02:23 - Building a personal brand in the M&A, PE or small business acquisition world

00:10:10 - Sending 150 messages per day to test the product, build the relationships

00:13:39 - Cold outreach to content

00:15:11 - Use waiting lists when raising capital; making transactions

00:23:01 - Providing immense value to your peers

00:31:03 - Going from online to offline to ACTUALLY raise capital and do the deals

00:47:52 - The biggest lever is not capital, its enterprise - to run the business

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

Join HoldCo Builders weekly newsletter on finding deals, raising capital, and growing small profitable niche businesses: ⁠⁠⁠⁠https://privatequityguy.beehiiv.com/⁠

Daniel on Twitter: ⁠https://x.com/DanielPriestley

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

“Don’t stop trying…”

Eran used to work as an airport security to pay the bills.

Today, VerDiesel Group does $1 billion in revenue…

Turns out that KFC and McDonald's used cooking oil can be VERY big business.

Add biodiesel, biogas, feedstock… it gets HUGE.

Everything we touched in the first 2-3 years failed. Everything. We tried to touch everything but we had no experience.

Every time I did not have the money, I said I would find the money. I then went and found the money.

We discuss:

– 4 years of market research with no success

– First serious breakthrough in 2012

– Forming a partnership with a BIG petrochemical company with no money or experience

– Importance of relationships

00:00 - Intro

00:42 - Company size, revenue, markets they serve with their products/services

02:29 - Studying law at the University of Bologna, army, a bartender, moved from Israel to Italy in 2004

05:05 - How they found opportunities in early days - wind turbines, equipment for bicycles

08:17 - Partnership. Relying on each other's strengthsand the job him and his partner did to cover bills in early days

14:07 - 100+ meetings with people with 30-40 years of industry experience is why I'm here today

22:09 - I know how to sell and solve problems with customers and suppliers

40:10 - Big money business means big and expensive mistakes

47:05 - The future of the VerDiesel Group

53:49 - Be willing to give equity if it keeps your business alive

56:06 - Much of my success is thanks to my wife

My full conversation with Eran Efran , the co-founder of VerDiesel Group — Stream now.

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

Join HoldCo Builders weekly newsletter on finding deals, raising capital, and growing small profitable niche businesses: ⁠⁠⁠https://privatequityguy.beehiiv.com/

⁠Eran on Twitter: https://x.com/Eran_Efrat

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

If you are ever considering buying or investing in a profitable small business…

Or you want to build a holding company where each company is run by a CEO...

Here's my talk with Xavier Helgesen (co-founder of Enduring Ventures), where he shares everything he knows about buying businesses after 20+ acquisitions and looking at 1000s

- Currently 17 companies in the portfolio

- Revenue $100 million+

- Spends plenty of time with family and children

"Pay for Quality of Earnings even on small deals."

"The best way to find a CEO for a business is to ask the seller who has asked about buying it in the past."

"Look for the smallest, weirdest niches. Less competition, greater margins."

We discuss:

– Everything he knows about buying businesses after 20+ acquisitions and looking at 1000s

– His MEMO to his 25-year-old self that he posted on his 45th birthday

– The biggest risks and rewards of buying small businesses

– What makes Nick Huber one of the best entrepreneurs he’s ever met

– Finding the best CEO for Portcos

00:00:00 - Intro

00:00:31 - Most “bad” things that happen to you are not as important as they feel at the time

00:04:29 - Selling Apple and Nvidia in 2011 and Google in 2008. “Don’t be me.”

00:08:27 - Consistency for physical activity matters more than maximal excursion

00:13:36 - Your most important mission in your 20s is to surround yourself with the most talented people in the world in your chosen craft and learn from them

00:20:27 - Owner operated businesses are super efficient. Owner does six jobs. You will probably spend more to professionalize

00:29:40 - Look for rich owners as there are a lot of small business owners who are not that rich

00:37:34 - Make sure management only gets paid bonuses when they distribute cash flow to owners

00:41:19 - The best way to find a CEO for a business is to ask the seller who has asked about buying it in the past

00:43:35 - Most CEOs and entrepreneurs have no idea how to build an audience that they can use to raise capital or sell products and services

00:56:46 - Don’t fall too in love with the business. You’ve always got to be ready to walk away.

Follow PrivatEquityGuy on Twitter: ⁠⁠https://twitter.com/PrivatEquityGuy⁠⁠

Join HoldCo Builders weekly newsletter on finding deals, raising capital, and growing small profitable niche businesses: ⁠⁠⁠https://privatequityguy.beehiiv.com/⁠

Xavier on Twitter: https://twitter.com/XavierHelgesen

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

Imagine being in your early 30s, starting a private equity fund and raising $450 million as your first fund.

All this with no prior track record and without your rich father or uncle.

Years later, you own 90 companies, have $152 billion in AUM, your EBITDA is growing at 15% year-over-year, and only Thoma Bravo has outperformed you…

True story, all the way from Switzerland…

1. "Stock and bonds are boring, so we went into private equity."

2. "The concept of thematic research helps us find the best companies with the strongest tailwinds (returns could 6-7 times invested capital)."

3. "Step-by-step on we they took a $38M EBITDA business to $110M in EBITDA in 4 years."

Here is my full research on a true king of private equity Mr. Urs Wietlisbach:

Show notes:

00:00:00 - Intro

00:01:05 - “Stock and bonds are boring, so we went into PE”

00:03:09 - When should one leave their job to start their business?00:04:10 - Being scammed by a crazy German $120,000 in the early days00:09:21 - Doing due diligence 582 days before the company is even for sale

00:14:03 - Better returns than Blackstone, Apollo, only Thoma Bravo have done better

00:15:24 - Thematic research allows them to find deals where they make 6-7 times their money

00:20:01 - CEOs are tied with shares and sometimes make triple-digit millions ($100m+ from a single investment)

Follow PrivatEquityGuy on Twitter: https://twitter.com/PrivatEquityGuy

Join HoldCo Builders weekly newsletter on finding deals, raising capital, and growing small profitable niche businesses: ⁠⁠https://privatequityguy.beehiiv.com/

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