Invest and Scale

Invest and Scale

By Gabo MurilloBusinessEntrepreneurship
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Invest and Scale episodes

  • EP29 Lessons from the Front Line: Buying Businesses in Guatemala with Diego Cerezo

    Welcome to Episode 29 of the Invest & Scale, "Masters of the Deal: Acquisition Strategies and Growth Insights." Today's episode features a gripping dialogue with Diego Cerezo, an entrepreneur who transitioned from running a Guatemalan craft brewery to mastering the art of business acquisitions in Latin America.

    Diego tells us about the influences that triggered his shift towards acquiring businesses and shares his personal experiences navigating the unique challenges of Latin America's acquisition landscape. We’ll also explore creative financing arrangements, the significance of partnerships and mentorship, and the critical role of strategy in managing a diverse portfolio of companies.

    Get ready to dive into a world where deal-making meets strategic foresight, and introspection becomes a cornerstone of success in business acquisitions. Whether you’re a budding entrepreneur or an experienced professional, this episode is brimming with valuable takeaways.

    Now, let's roll the intro music and get ready for an enlightening session on "Investment Scale" with Diego Cerezo. Stay tuned!


    00:00 Diego Cerezo shares journey of buying business.

    05:43 Dad's guidance made the first acquisition successful.

    07:41 Latin American business culture differs from the US.

    11:17 Tough negotiations led to creative payment terms.

    15:35 Discipline and commitment lead to business rewards.

    18:50 Delegate operations, focus on strategy, oversee projects.

    20:28 Admitting humility unlocks greatness in building teams.

    24:38 Podcast discusses different ways to acquire businesses.

    27:20 Guatemala partner sets up meetings, revenue share.

    30:51 Innovative approach to niche ecommerce advertising strategy.

    34:43 Considering acquisitions beyond Guatemala: b-to-b, low capex.

    37:37 Tips for business: introspection, focus on cash flow, collaboration.

    41:10 Excitement and possibility lead to big dreams.

    - Entrepreneurial shift from craft brewery to acquisitions.

    - Influence of personal and educational background on decision to enter acquisitions.

    - Comparison to US acquisition culture.

    - Challenges of a more relationship-driven market.

    - Diego's personalized approach to sourcing deals.

    - The intensive 15-month journey to acquire a tech company.

    - Creative revenue-share agreements and company acquisition options.

    - Learning resources for acquisition skills.

    - Essential tips for first major acquisitions.

    - Importance of cash management with profit first methodology.

    - Focus on long-term growth and the strategic role.

    - The significance of mentors and partnerships.

    - Benefits of collaboration for business success.

    - Diego's commitment to investing in education and tourism.

    - Anticipation of future in-person meetings and continued exchanges.

    - Diego oversees strategy for multiple companies with varied industries.

    - Long-term investment vision for portfolio businesses.

    - Acquiring businesses to facilitate regional growth.

    - New methods beyond traditional SBA loans for business acquisitions.

    - Real-life example of a revenue-sharing deal with an option for investment or income.

    Diego Cerezo's Linkedin:

    https://www.linkedin.com/in/diegocerezo/?originalSubdomain=gt

    44 min
  • EP28 Beyond Corporate: The Strategic Acquisition of a Marketing Digital Agency

    Welcome to the I&S podcast, where we delve into the world of entrepreneurship, business acquisition, and personal development. In today's episode titled "Oscar Jaramillo," our host Gabriel Murillo welcomes the inspiring entrepreneur and business owner, Oscar Jaramillo. Oscar shares his journey from a corporate career at Nestle Waters North America to becoming a successful business acquirer. He takes us through the proactive and meticulous process of acquiring a suitable business, emphasizing the impact of personal skills, the importance of human capital, and the need for a balanced approach to entrepreneurship. Join us as we explore Oscar's insights, personal challenges, and the unexpected surprises of business ownership, all while gaining valuable advice and lessons learned from his inspiring entrepreneurial journey.

    45 min
  • EP27 The Agency Model vs. Ecommerce Companies and over 5 acquisitions

    00:01:34 First acquisition at 22: a restaurant mistake.

    00:06:00 Understanding buyer psychology is crucial for success. Empathy is a CEO's biggest tool. Acquisition mistakes can be costly and avoidable.

    00:10:32 Cut salespeople, focus on strengths, avoid management.

    00:14:58 Switching companies, need familiar people; limit reports. Avoid unnecessary meetings, prioritize scaling. Care for team individually but not in meetings. Working on a 100 million EBITDA opportunity. Acquisition potential in 100-200 million range. It's a game; changing lives; exciting.

    00:19:09 Thinking win-win, building wealth for all.

    00:23:10 Ecommerce companies struggle with cash flow, unlike agencies.

    00:26:30 Avoiding bosses, expanding outdoor brands, supporting struggling founders.

    00:28:51 Synergy is crucial, bankruptcies are imminent.

    00:35:29 No money down deals, money out of pocket, misconceptions, contracts, trust.

    00:38:20 Busy meetings, focused on valuable content.

    00:40:42 "Great people and collaboration bring success."

    43 min
  • EP25 Investing in Online Businesses: A Glimpse into the Journey and Vision of Black Book Investments

    In today's digital age, online businesses are thriving, offering investors a unique opportunity to tap into this growing market. In a recent podcast episode, the founder of Black Book Investments discussed their journey in starting and growing a micro private equity company that buys and operates a portfolio of online businesses. This article will explore the key insights shared in the podcast, from the importance of due diligence to investing with Empire Flippers Capital and the future vision of Black Book Investments.


    The Journey to Black Book Investments

    The founder of Black Book Investments started working at a startup before experimenting with blogging. While blogging did not bring immediate financial success, it helped develop essential skills in building websites and writing content. This experience eventually led to the first successful venture of buying and selling online businesses. The founder emphasized the importance of learning from scams and focusing on evergreen niches when purchasing businesses.


    Investing with Empire Flippers Capital

    The podcast also discussed working with Empire Flippers Capital, a fractional investing platform that bridges the gap between investors and experienced operators. The founder shared an example of one deal where a website's income doubled in just six to eight months by implementing on-page SEO, technical SEO, and other improvements. This success story highlights the potential of investing in online businesses through platforms like Empire Flippers Capital.


    Blackbook's One-on-One and Group Investment Strategies

    Black Book Investments works with investors through one-on-one or group buys, helping them find the right business to invest in. They handle the entire deal process, including negotiation, escrow, and business transfer. Black Book charges a 10% finder's fee and provides monthly management services for a retainer starting at $1,500 per month.


    Investing in Online Businesses: Risks and Rewards

    The podcast also touched on the historical return on investment (ROI) provided by Black Book Investments, ranging from 20% to 30% annually over the past seven to eight years. First, however, it is essential to understand the risks associated with investing in websites, such as Google updates and Amazon commission cuts. Despite this asset class's high-risk, high-reward nature, the founder envisions Black Book Investments becoming a New Age media company owning multiple high-value brands.


    Conclusion

    Investing in online businesses offers a unique opportunity for investors to tap into the growing digital market. Black Book Investments provides a platform for investors to invest in a diverse range of online businesses while benefiting from their expertise in managing and growing these ventures. As the digital landscape continues to evolve, investors looking to participate in and capitalize on the growth of online businesses should consider exploring opportunities with companies like Black Book Investments.


    Disclaimer: The content presented on the Invest and Scale podcast website is for informational purposes only and should not be considered legal or financial advice. The hosts and guests of the show are not attorneys or financial advisors and do not provide legal or financial advice. The information provided on this website is not intended to create an attorney-client or advisor-client relationship and should not be relied upon as legal or financial advice. Please consult with a licensed attorney or financial advisor in your jurisdiction for legal or financial advice specific to your situation.

    50 min
  • EP24 From Facebook Employee to 7 million in revenue: Hunter Durham's Journey

    In this episode, we have Hunter Durham, who was a Facebook employee who turned into an acquisition entrepreneur. During the interview, he shares his journey from consulting, to join a marketing agency, to buying his first business, to being presented with the opportunity to buy two companies simultaneously. It's a great story, and it's a great mindset about buying a business. In addition, we'll discuss the worst thing that could happen when buying a business.


    Podcast Highlights:

    • Hunter manages over 7 million in revenue per year and has over 3.6 million in business loans.

    • He talks about how his background led him into eCommerce and digital marketing.

    • He shares the story behind his first business, theylaugh.com, and explains what they offer.

    • In the early part of 2020, Hunter was introduced to search funds, the whole search fund movement, and the ETA movement, and spent basically January to February of 2020 putting together the documents, building the network, starting to reach out to people I thought might be investors, and building the broker list.

    • When e-commerce exploded, they launched an agency and it turned out to be their first successful business into entrepreneurship.  

    • For Hunter, business is about people in general.

    • He shares that he loves reading books and getting powerful information, and that's how it all started for him. Book : Buy then Build Walkers book. I got the buying a small business HBR guy

    • He describes how he acquired his first acquisition and where it came from.

    • As he talks about his first acquisition, he speaks about some challenges and obstacles he encountered.

    • The importance of emotional connection when talking to the seller in the acquisition process.  

    • Hunter believes that the personal guarantee part is what prevents most people from selling their business.

    • Hunter realized that in order to provide the best customer service, he needed home delivery furniture for his second acquisition..

    • He explained how one deal ended up turning into two.

    • His advice to entrepreneurs and researchers interested in acquisitions.


      • Tweetable Quote:

      “It's just about trusting that person to be able to do it.”

      “ I do business to try to impact others and impact people.”

      “The only unique thing that you have is you and your story and your vision and your goals for their business. And so I think if that's ultimately what's gonna win, you deal over somebody else, it's you.”


      Resources mentioned:

      https://theylaugh.com/

      https://mobile.twitter.com/huntercdurham

      https://buythenbuild.com/about/

      https://www.amazon.com/HBR-Guide-Buying-Small-Business-ebook/dp/B01KP33K4Y


      54 min
    • EP23 A look at the SearchFund Model with a Private Equity group Search Fund Partners Jim Edmunds

      Jim Edmunds worked in business development for a retailer before graduating from business school. He  holds an MBA from Stanford Graduate School of Business and an A.B. from Harvard. In 2004, he worked for a search fund with someone he had worked with on Wall Street after business school. Eventually, they bought a portrait studio business in the Midwest. A guy named Rich Kelly, who was the lead investor in his deal during the Lehman Brothers recession, asked him to join search fund partners in 2008. Since then, he has been working at SearchFund Partners.

      Search Fund Partners is a small private equity fund that invests exclusively in traditional search fund entrepreneurs. In the past 15 years, Jim has served on the boards of 15 or 20 companies, and has worked with awesome entrepreneurs and built some pretty exciting companies.

      Podcast Highlights:

      • Jim talks about how the search fund model world looked in 2018 when he was starting his career.
      • His explanation of why the model differs now from what it was a few years ago is insightful.
      • There was a time when CEOs were not required to have a Ph.D. in computer science to run a company.
      • He describes how their company differs from other search funds.
      • With a traditional search fund model, an entrepreneur has an opportunity to earn up to 25% if it's a single search of the upside and 30% if it's a pair.
      • The search fund business is pretty steady as it goes. Your survival is independent of getting a big new sale or making huge decisions.
      • The main thing they are looking for is a great product that could benefit from a little extra marketing and sales investment, which many very successful small business owners may be happy with what they have built and not want to invest all the time and energy in taking it to the next level of their company.
      • Taking people who have gone to business school and have learned about KPIs, metrics, and measurement is one of the reasons why search funds have been successful.
      • They want to build companies with an incredibly strong culture where employees feel appreciated, valued, and recognized for their performance. They've had a lot of success by paying close attention to culture, and it all starts at the top.
      • A search fund may be the right choice for you if you're willing to take the risk, and you're interested in building a small business, building teams, and helping people develop, and having wide control over your destiny.
      • The risk of search funds is real, but the skills you gain from doing it right will benefit you and your career, regardless of whether you are successful on your first deal.
      • They host an event for active searchers and CEOs every year where everyone they work with is invited.
      • Describes the difficulty of finding a company back in 2007 to 2008, then covid hits in 2020, his partners and he expected a repeat experience of 2009, but it turns out the opposite happened.
      • Jim explains how search funds work, which was hard to learn a while back but is much easier now since all the information is available online.
      • As for their three to five-year vision, they'll maintain the same playbook they have exemplified over the years in supporting good entrepreneurs and resilient businesses.  For as long as private equity is booming, there's gonna be a demand for small companies with great managers that reach a certain threshold.
      • His inspiration comes from his love of working with people. People who are willing to take a chance on themselves, who are open to taking the less conventional route. He finds these people very exciting and dynamic, and he just feels lucky that his life is filled with them.

        • Resources mentioned:

        https://searchfunds.net/

        43 min
      • EP22 From U.S. Army to acquiring over four businesses in the past 10 years with Jeffrey Evenson

        Jeffrey Evenson attended West Point, a military academy in New York. And then he joined the army for just a short time after leaving West Point. After grad school, he earned an MBA, gained a lot of knowledge about finance, and ended up trading stocks as a job. Eventually, he moved from the trading business into investment management, working for a boutique investment manager. Then he became a pension fund manager for Anheuser Busch in St. Louis. While he was managing pension funds there he kind of thought he should probably learn how to sell beer and so he did and became involved in the sales operations side of that business. Then he ended up working in a mergers and acquisitions group. Basically, they were buying and selling distributors of beer and wholesalers of beer. For him, that was the first time he really understood what you learn about mergers and acquisitions in grad school.

        Podcast Highlights:

        • In 2008, he acquired his first business.
        • He talks about how having the option of actually being his own boss was very compelling.
        • Being in the army and having the leadership skills to build, motivate, and inspire teams has made Jeff's calling to cast a vision for a company.
        • He shares how his military background gave him important core values in his life whether it was leading a company or helping people to buy companies.
        • It is a process of working with a seller for Jeff in order to acquire a business. The person won't sell the business if you haven't built trust with them.
        • He discussed more about his first acquisition.
        • The acquisition process itself is all about building candor and building a relationship with the seller.
        • After the success of his first acquisition, Jeff narrowed down all the other companies they bought in different industries.
        • In order to acquire businesses or acquire equipment, Jeff used SBA loans.
        • For a partnership to work, it requires two adults to enter into a partnership and it requires knowing each other's strengths. Agreeing that we're not the same person and knowing where what holes were filling for the other person.
        • He talks about his day job in The Lion's pride and the organization he started: Thayer Gate Project.
        • Jeff shares his final advice and thoughts for people who want to acquire a business.

          • Resources Mentioned:

          https://acquisitionlab.com/

          https://www.thelionspride.com/

          https://www.thayergateproject.com/

          50 min
        • EP21 Intentional Business Acquisition with Russell Benaroya

          Russell Benaroya is an entrepreneur with a background in corporate finance and private equity. Prior to becoming a Partner at Stride, Russell was the Senior Vice President of Corporate Development for Higi, a population health enablement company that owns the largest national network of health screening stations. He was an investment professional for the private equity firms Kline Hawkes and Blue Point Capital, where he invested in healthcare, technology, and industrial-based enterprises. He is also an author, entrepreneur, coach and speaker focused on helping people achieve their highest and best use by staying in their genius zones.

          Podcast Highlights:

          • In the past three and a half years, he purchased a company with some business partners. Now, they own an outsourced back office, accounting, and bookkeeping firm. It's called Stride services.
          • Their desire to purchase the business was really a result of not wanting to enter a business where they didn't have to prove product market fit.
          • How they obtained the idea to find a business that was small enough for them to fund themselves and be able to own it without the involvement of a third-party investor.
          • How did Russell come to decide to purchase a small business?
          • In his book, One Life to Lead, he discusses some components of action.
          • Russell talks about what it is like to be an entrepreneur who wants to buy a business and how and who you surround yourself with.
          • Why he highly recommends organizations like EO for entrepreneurs.
          • Their target business size was one in which they could self-fund and not seek outside funding.
          • How he was open to the possibility of possibilities when he bought his business.
          • His business helps professional service companies with the services it provides:
          • For someone interested in buying a business, he clearly defines stories versus facts.
          • Stories vs. Facts show up in a lot of different ways: between partners, in interpersonal relationships, and among employees.
          • They have an agreed-upon set of principles that guide their business decisions.
          • Even after buying a business, personal principles are very important.
          • Russell talks about energy gains and energy drains.
          • Neutralizing or eliminating entropy in your life.
          • When it comes to goal setting, why does Russell believe it is best to work backwards?

            • Tweetable Quote:

            “We have a choice: We can either let fear drive us to retreat, or we can be courageous and take a leap knowing, you've always figured it out.” -Rusell Benaroyoa

            “Patience is a form of action and it's a form of discipline.” -Rusell Benaroyoa

            Resources Mentioned:

            https://russellbenaroya.com/

            https://stride.services/

            https://www.linkedin.com/in/russellbenaroya/
            https://www.thebenaroyagroup.com/about
            https://twitter.com/rbenaroya

            50 min
          • EP20 A new financing path for acquisition Entrepreneurs with Boopos Founder Juan Ignacio Garcia

            Juan was the CFO for a company called Cabify, like Uber in Spain and Latin America. He had previously worked as an engineer in private equity, investing in banking. He considered himself a tech and finance guy. He started his own company Boopos in May 2020 to provide financing to people who want to acquire businesses. He decided to start his own business. And learned about all these aggregators that were buying companies based on data that they were pulling from the Amazon market.

            The big pain he discovered was that many, many buyers lacked the cash or funding to acquire the businesses they were seeking. So there were a lot of talented people that would. Out of the market because they didn't have the right partners for funding. And that's why in late 2020, he started Boopos to help all these people acquire businesses by providing them M&A financing.

            Podcast Highlights:

            • Juan wanted to build a reliable source of funding for all those people who were looking to buy businesses and what's really interesting is that from those initial stages, they developed an underwriting model or an analysis model that served as the basis of their current analysis model.
            • He explained a little about his background before he started Boopos.
            • From working as a CFO at Cabify to starting his own company, Boopos.
            • What made him start looking at business acquisitions on Amazon Marketplace.
            • He shared what inspires him to build his Boopos company as a reliable source of funding for people that are looking to buy business.
            • Juan discusses the challenges that eCommerce space and consumption related niches face.
            • For Juan, it's important that you're cautious and selective, and make sure you're buying the right business.
            • In terms of how they work/partner with business brokers, they help them close deals afterward, and they also send buyers on their way.
            • He explains what size business they are considering at the moment.
            • Focusing on smaller deals because they can add the most value in the end.
            • Over time they anticipate dealing with around 5 million, but at the moment between 100k and 2 million.
            • How can they tell if the company is performing poorly/not doing well?
            • He explains their process of analyzing and approving the business in 48 hours.
            • He discusses revenue-based financing in more detail.
            • As he points out, the company's mission is to help as many businesses as possible.

              • Resources Mentioned:

              https://twitter.com/jgbraschi?lang=en

              https://www.boopos.com/

              26 min
            • EP19 Micro Private Equity Fund buys SAAS business with Ryan Kulp

              On this episode, we talk with Ryan Kulp about his artistic and creative journey, as well as some exciting news about this business portfolio. He is the founder of Fork Equity and MicroAcquisitions.com

              Podcast Highlights:

              • Ryan explains the meaning and concept of retirement to him.
              • He talks about how he started making money by listing his apartments on Airbnb, and how he saw the patterns and kinds of strategies he could implement to make money.
              • It's not having a boss and someone who depends on me not having big deadlines but being able to express myself creatively.
              • He believes that to be a creative person, you have to create good work that people consume.
              • Describes how he got into NFTs and how he was surrounded by NFTs artists.
              • Ryan's definition of art is something people want to consume.
              • His goal of believing in himself is because he thinks once he believes in himself, he can do anything.
              • To unlock your potential, you must set ambitious goals for yourself.
              • Ryan explains how he creates more leverage so that he can do less work while earning the same amount of money.
              • Over time, his goals have changed, and now he just wants to buy back his time.
              • Ryan discusses how Fork equity.com/Micro Equity Fund got started and how it works.
              • How they tried a lot of different strategies and how they improved this track record by putting all their efforts into improving that asset.
              • His other main distinction is how they have set up their fund with this on-demand - Choose your own adventure style.
              • Ryan shares details about the upcoming Fork 2.0 launch and how it is going to be different from what they are currently doing.
              • In this episode, Ryan announces big news for the first time.
              • He gives advice to people who want to learn more about what they do.

                • Tweetable Quote:

                "It's like playing Russian roulette." Warren Buffett

                Resources Mentioned:

                https://www.ryanckulp.com/

                https://fomo.com/

                https://www.forkequity.com/

                https://www.primary.vc/

                https://twitter.com/ryanckulp

                55 min

              About Invest and Scale

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              Invest and Scale Podcast is a show about entrepreneurial investors.