45 Acquisitions & Global Citizen Sebastian Amieva Top M&A Entrepreneur E:45

Welcome to the top M&A entrepreneurs. This episode is brought to you by Duilio, D U E D I L I O. It's a M&A due diligence marketplace for service providers. It's for online, offline businesses. It's free to use, search, find, due diligence service provider. You only pay when you engage with the right person. It is a modern way to evaluate businesses, especially to establish assets, liabilities, and evaluate the commercial potential. No deal, better than a bad deal. Today, my guest is Sebastian Amoeba. He's an investor, mentor, M&A expert, global citizen. I mean, he travels the world. If you follow his Facebook, he's in a new spot every day. And a Harvard Law grant. Sebastian has spent 12 years personally implementing M&A strategies, investing into startups and traveling around the world. Welcome to the show, Sebastian. Thank you very much, John. Yeah, I'm very excited about this interview. Thank you very much for inviting me and yes, let's have fun. Let's uh talk about the M&A, which I guess is the topic that everybody is enjoying. I, I, I love it. So where are you answering or doing the interview from today? Cause that looks like, uh, I don't know, a hotel room or something. Correct. Yes. So right now I'm in Montevideo, Uruguay. It's a little country beside Argentina, Uruguay, so I'm in Montevideo, which is the capital. It's a small country, 4 million people. So I came here, I'm coming every every every year I came here for spend some holiday. Days they have a nice, a nice beach here. So it's called Punta del Este, so I recommend to anybody to spend some time in, in South America and Uruguay. It's uh, it's one of the safest countries in Latin America. So and it's very wonderful, yeah, yeah. So do you do any deals in, uh, your, uh, Uruguay or Latin America, and I'm probably sure you do, but the reason I ask this is I got a guy reached out to me LinkedIn. He's got a nice little, I don't know, almost a $2 million dollar business, very profitable, uh, and he wants to sell. Yes, in terms of buying deals in Latin America, which I exploring more and more every, every year, I'm getting a lot of requests from this sellers that they want to exit. The only issue here is the, the funding, right? So the banks, the banks won't give you anything to do an LVO transaction, right? A leverage buyout. So I discovered that you can do the wholeing subsidiary strategy, which I did in Brazil, right? I bought the biggest LED factory in Brazil. In Sao Pablo, it was 700+ employees, €22 million in assets. What we did in that case with Latin American market is setting up the holding company in a first world economy. It can be in Canada, US, UK, or Australia, right? So. Setting up the holding company in a first world economy like UK like I did, it, it's allowed me to, to access to funding solution, right? So a lot of lending facilities. So we set up the holding company there. Then the Brazilian company became a subsidiary one and then we were able to raise funds from the UK and bring down to the Brazil for restructure the company. So that way I was able to buy this 700+ employees company, right? The biggest LED factory in Brazil. So, and then I start to explore more and it's plenty of deals in Mexico, Brazil, big, big economies, right, in the world, right? Mexico, 200 million people, Brazil, the same 200 million people, big economy. So I think it's plenty of deals, but the, the sellers, they don't know how to exit, right? Because sometimes it's difficult for Latin Americas to have 20 million, 30 million to purchase a business. So you can structure this holding strategy. You know, strategy, no, so holding, holding subsidiarity. So I recommend to people to get into Latin American markets to try because you expand, you know, you can become a global dealmaker, not just doing deals in the US, doing the SBA, which most of. Uh, which does deals globally too, so it's not just like, hey, United States, uh, UK, so, uh, I, I love Richard Ronson and he's also very global, right? So I I realized if you, if you're a global dealmaker you have more opportunities, right? You are open to. So you know, different opportunities, but the best way to do it is setting up the holding in a first world economy. What do you have how long does that take and how much does that cost? I, because I did get to that point where I found somebody, uh, that was a citizen of Peru, now lives in Miami and said, well, there's the process is it could take 6 months to 1 year because you got to move all your there and then to move the assets under the holding company. Yeah, correct. So in terms of uh the time frame and how long it takes, it normally takes 34 months, 5 months maximum. It depends on the, the law firm that you have, the tax planner, right? The, the CPA that you're working with, uh, sometimes it's not your fault. You can do everything fast and then the lawyer is slow response. The, the, the CPA also is very slow. So normally you need to, you need to transfer all the shares from the subsidiary from the Latin American companies say, to the holding company in UK. So it takes sometimes, you know, 23 weeks to set up everything, but you need to do a preliminary work, which is putting all the numbers in order, getting all the balance sheets audited, the profit and loss, and also the tax return. The last two tax return, the last two profit and loss, and the last two balance sheets. Once you have a data room built, then you can start doing. In this holding subsidiary and transferring all the shares to Latin America to, to the UK for example, or US can be any first world economy. The only thing is, for example, in the case of Brazil, we, we transfer 99% of the shares because if you transfer 100% of the full package, then you need to pay more tax, right? It's more taxable. So if you Only 99% to to UK and you leave 1% in Brazil is not considered as a sale, right? It's not a sale, right? So we have some interesting loophole, I guess, yeah, correct, this is all trick, right? So you don't need to, to transfer 100% because it's gonna be considered as a sale and you need to pay tax, a lot of taxes, so. It's better to leave 1% in a country that, that is becoming subsidiary. So you can, you can, you can, you can do this and also if you have the holding in UK or US the investors are likely to invest, right? Because they are investing through a UK legal entity or US legal entity. That is, that's, that way you're offering safety to the investors to put the funds through that holding company and then you bring down the funds to. Brazil, you pay to the, you pay to the, to the seller, right? Or you in shape capital for growth. And another thing very important to do this, this model, which I'm very keen to do it, you know, every, every week we analyze in Latin America is the asset, the asset must be, must be, you know, done by a top 10 accounting firm like Deloyds K BAG, you know, BDO, ES and John, all the, all the big firms because. If you do the evaluation, the appraisals with a regular film, then in the UK, nobody knows that kind of film and they may think it's not real, right? It's no real numbers. So it's better to do it with KPMG, Deloitte's or any of this kind of film the company pays that or uh that comes out of the acquirer's box, yeah, no, no, no, the company targets pay, right? The company targets sometimes you can pay the whole process. On such a speed basis, right, so after you, you take over the company, you pay to Deloitte or or KPMG. These films are of course very expensive, right? So it's better to, to be very straightforward with them from day one. And then you just do all the legal accounting, do a dilation. You do all the, all the transitions of becoming a holding subsidiary. Actually, I, I copy from this film, right? I copy from Deloitte's, this holding subsidiary, but the thing is they do with plus 100 million deals and I'm doing with 5 million, 20 million companies, right. So, but they do with the bigger deals because they are very expensive, right? So they, they, their fee are more expensive to do it, but we can do it for 50,000 to 75,000. It can cost, right, to set up the holding with the bank account, with all the legals, all the do edition. You're gonna spend $500 75K, but you can buy a $20 million company, right, doing this, this methodology. And then after you, you do this set up, then you, then you need to do a fundraising campaign, right? Bringing investors on board for investing in this uh international or multinational company now is becoming. And then, yeah, the fundraising side also is important to me because you need to pay something to the seller for is it 10% down, 5% down or something, right? Yeah, yeah, the other part of it's the LBO that yeah, yeah, yeah. So this, this one I really like it because I am a, a global dealmaker. I like to travel to do on site to do a deletion with my team with a CPA with a lawyer with a technical person. Also it's important to do a do a deletion. And then um yeah, it fits my, my acquisition methodology, right? So going out there and I tried Mexico. Mexico is a lot of hotels for sale, right? And they, it's like a 100 million hotels, 50 million hotels all over Cancun and Toulon, all these places, but they don't know how to exit. So I start planning to do some takeovers out there with my Some partners are setting up the holding in Miami because Miami is very relevant for Latin American markets. Miami, Florida is the bridge between Latin America and Miami. And, and Latin, Latin America is uh 21 countries, right? And then you set up the holding in Miami, everybody gets comfortable and then you can do this kind of transaction right between Latin America and the US so. Yeah, let me ask you a question, cause I asked uh uh my buddy from Peru about this. He said that, so if I was to give you, I already sent him the income statement 2 to 3 years in the balance sheet and the cash flow statement, how much credibility, how much do you trust that? And he goes, none. It's like, OK, what's the next thing you do? I mean, uh, what's the kind of next due diligence do you do? I mean, what, what is it on a uh Latin American country? Yes, so they do edition must to be done, of course, but the top, top tier film like uh Deloitte, K, KPMG and, and also it depends the industry that you're doing, right? Sometimes mining industry can be a bit uh suspicious, you know, some industries doesn't fit this criteria because it's difficult to To, you know, to do a do a deletion on site. So it's better to, to do with asset-heavy deals, no asset light deals, asset heavy deals, asset heavy deal. So something that you can verify easily like a property, like a McQueary, like equipment. So asset heavy deals only, that works like at the factory I bought, it was a LED factory with €2 million equipment, you know, with a lot of stock, with a lot of properties, so easy to leverage, but if it's only uh services software it's like uh just like backed away goes like John, it's the IPs and the people, so we don't have any way to verify that. Yeah, right, a bunch of computers and a software. This is very difficult to leverage, but But I say always but because one client from London, Rebecca, she bought a 5 million pounds uh cybersecurity company. But the thing is, there is no asset, but the asset was the contracts. They have a contract with the, with the government, with the army, right? So they have 10 years contract and it's very easy to leverage this kind of contract, right? Because it's uh Is cash coming in all the time put the contract down with the was it the Royal Marines or uh army correct. This is a big credibility. So yeah, this kind of contract also can be used as an as an asset. The same with digital marketing with software companies. If you have a, if you have a big brand like a client, then that this kind of contract, the receivables can be used as. Uh, you know, it's a collateral to bring funds. You can use revenue lender, cash flow lenders, or, or invoice lenders. The alternative files are, uh, it's, it's all right. I'm gonna run that deal by you. I, I mean, it's kind of a little bit smaller, but, uh, you know, take a look at it because they've got some great clients. Microsoft's a client, Santander's a client, um, you know, there's some big high profile customers. OK, OK, yeah, if you have any, any deal, we can, we can discuss, you know, if it's, uh, normally people when they want to get started into the space as a dealmaker, I recommend to do uh one single acquisition between 500K to 5 million, right? Because some people want to do more complex acquisition like IPO, SAs, or rollups which take more time because you need to convince 5 people to roll up with you to marshal. And then to do an IPO, but it's better to prove the system, right? To have everything in place, close a deal, and then you have kind of a credibility, you will feel more confidence, and then you can do bigger deals. It doesn't matter if it's small, small, big in the beginning, you need just to close one deal to, to prove that you can do it. Then you can do, you know, global or you can do bigger deals. So I recommend to people to become, if they want to start into the space, if they want to buy, became a, a business buyer. I recommend to became a qualified buyer, right? Because I can, I'm seeing all the time people who is starting on this space and they don't have an acquisition criteria set up. They don't have an acquisition strategy, you know, properly set up. Also they, they don't know how to build a data room. They don't have a proof of funds, you know. They don't know how to prepare for the negotiations. So for me, it's very important to become a qualified buyer so you don't get blacklisted. Into the broker network, right, as soon as the broker realize you are not a serious buyer, they, they are all interconnected, right? So if you are, I don't have any time waste on you, yeah, yeah, yeah, you're gonna be a time waster. They're gonna blacklist you and then you, you can access to more deals, at least through brokers. You can find. Of market deals of course using different lead generations that we use in in our M&A deal making program but uh yeah, so through brokers are important out there, you know, 20% of the deal are are sold by a broker. So let me, let me rewind a little bit. I mean, I'm gonna go back to the harbor. Uh, law grad. So like you got a law grad from Harvard and like I, I didn't want to do this. I started doing it and I hated it. What is like this one is like a, it was like a, a business program, no, not a degree, right? So I went two years in a row. To study negotiation because I realized it's a negotiation. It's called program on negotiation, right? I met a lot of CEOs and very important people. They go every year to study this kind of program because uh negotiation for M&A is very important, right? So I have a very nice negotiation preparation checklist. I will send you for free. If you want, I, I got that from Harvard. So I realized that being a dealmaker also is very important to have a negotiation skills. This reason I was investigating and doing my, my research were to study negotiation, right, in a professional way. So I went to, to Boston, you know, 2 years in a row to study this topic. I met the professor. Deal Majotra, you know, Francesca Casino. So I met the, I made very good friends with her and then, uh, yeah, I bought her book and I did the training, and it was amazing. I think I recommend to any dealmaker to go there to, to Boston. They do it 3 times per year this program, right? So you can enroll to any of, of them. And then you're gonna meet amazing people, right? Global CEOs, they, they fly over Boston to do this kind of training. Um, yeah, and the professors are, are, are amazing, right? So have a professor, they have a good great still teach a course, uh, never split the difference guy, yeah, yeah, yeah. So this, no, this guy is, uh. This never split the difference. There, there is, uh, there's a nice book, right, from, from this guy. He's from LA, right? He's a great negotiator. I love, I love this book, yeah, so it's one of my favorite, yeah, yeah. So how did you get started in your first acquisition and just say, I I'm gonna acquire a company and yeah, yeah, so I, I bought the first company when I was 24 with uh 4, yeah, when my M&A lawyer, right? My M&A lawyer bought it for me kind of. So I was, I was working in a law firm in back in Argentina in Buenos Aires, and then they were telling me that they are buying distressed companies, no money down. And in the beginning, I thought this is like a scam. How you can buy a business is no money down and distressed company, that can be not possible. And then I start to see, to, to watch them how they close deals on the, on the negotiation table, right, with the, with the sellers. Dressed companies made, they were buying. But uh I don't recommend to anybody to hire this company because I personally bought it and then it's uh it's very stressful to restructure a company, right? It's very stressful and very stressful to deal with the creditors, with the banks. Everybody is calling you to, hey, can you pay me, can you pay me my invoice? Can you give me money? So it's very stressful. So this was, uh, you know, almost 200 employees, trucking company, transportation company in the In the, in Argentina, it was a, yeah, pretty big deal. I was very excited. Next day I got the Mercedes Benz from the CEO. I, I wanted to do everything at once. I wanted to be the CEO. I wanted to be the sales manager. I wanted to do branding, marketing, being the dealmaker all at once. So after 6 months, 5 months, the company bankrupt, so I bankrupt with that, that's your first last year, you know, Berkshire. The we went bankrupt too, so I'm not, I'm not ashamed to say that because, uh, yeah, it was a nice experience. I felt very excited about the M and war and buying deals, my money down, but this was this stress company was crazy, the transportation company, and then you feel a bit sad when the company go bankrupt and you know the jobs, and people lose their job and, you know, so it was uh. It was a very difficult time, you know, I don't recommend it either unless you love doing it. I mean, you're starting from a hole. I bought a distress company. It was an e-commerce company and after 34 months, uh, people that didn't get their refunds that they got. didn't tell me we're putting it onto that site where it's like, uh, it's like it's not hijacking, but it's like the worst STO in the world. All you're hey, this guy didn't pay my Fremon like, wait a minute, I, I didn't negotiate that. Like I like it, it sucks. I went through uh uh this was my first lesson, so don't buy any distress company. I know some people out there are saying buy your distress company for $1 consideration. But this is a very bad advice for somebody who is starting like me when I was 24 years old because you need to be an expert at, at restructuring companies, right? You need to know how to drive sales, how to increase the profitability of the company, how to have an exit strategy, who can be the potential buyer after I purchased the business, you know, how can I grow by M&A? You need to have more, you need to be more knowledgeable about this topic to start doing distress company, but of course, you wanna feel very tempted if some Somebody tell you I'm gonna give you my my $10 million company for $1 consideration, but you have $10 million asset and $11 million debt. So that company worth is minus 1, right? So you're paying your dollar that you're paying is more than what it is worth, and then you wanna have a a lot of issues with the dealing this kind with the creators. Yeah, I know a guy that's pretty good at it now, but because he's got a platform company and he just looks at it and goes, you know, I could just. You know, uh, uh, plug it into my platform company and it makes sense, but you know, not now. Then I, then I realized, you know, OK, I was in Argentina, I was making a lot of millions of pesos, you know, so the, the currency is very, is, uh, is very, uh, weak right now. So I would say, what if I do the same but with a, with a solid currency like British pounds, for example. So then I decided to To move to the UK, you know, when I was 2029. So I decided to move there. I got, I got my Italian passport. I have the true nationality. So with that, I was entitled to live in the UK. I set down my company there. I bought a football club in Spain, the LED factory in Brazil. So I start, I started doing deals in in euros in another currencies, and it was very exciting journey, right? So I rented my office in the Gherkin in London. I was getting a bit popular. Everybody want to sell to me because of course, if you have a nice office, if you have a couple of deals in your pipeline, and if you close some deals, then people will start to reach out, oh this guy, he's buying businesses. So I was in the newspaper in Spain because also Spanish is my first language. So when I bought the football club in Spain, I became a bit popular. Of course, no Barcelona, no, no big brand, but it was a 3rd division football club. And then I was, uh, yeah, I got in the interview with the television radio and then I started getting famous and A lot of Spanish, you know, business owners start reaching me out to, to sell their companies and then I start analyzing deals there, but of course, Spain is not the same of UK, right? You sell the, the, the LBO strategies are a harder, so you always need to set up the holding in the UK, right? Always playing safe from a first world economy, right? And then you can absorb companies from third world countries or second world countries, right? So like Latin America, for example. So, but right now, I recommend people, you know, after I moved to the UK so to continue with this story, I, I've been living there 5 years and a half years in London. And then I decided that the London is, uh, you know, a bit, the, the weather, the weather. The British weather is not what I wanted, so I decided, I decided to, really, yeah, no, I decided to, to do 3 months, 3 months in Georgia, the country Georgia. I, I know, I don't know if you know that country besides, uh, Turkey, you know, not, not the Georgia, United States, but Georgia and UK. I lived in, uh, Turkey for a year. My dad was stationed there and I, uh, lived in Germany for 3. Nice, nice. So we moved, I moved with my wife to Georgia, you know, we bought our house there and we're doing some business from there and then we spent the summer time, only 3 months there, 3 months in Europe, 3 months in Latin America, and 3 months in the US. So I'm doing, following the sun, you know, and enjoying a, a better weather. And I realized all these dealmaking lifestyle, I can do it from the computer. So yeah it's very helpful to to so how how many deals have you been involved in in acquiring? Yeah, yeah, 45, approximately 45, 45, 45 with my clients that's yeah, with, with, with my clients cell 4 only myself, that's my cell 4, but with my client 45, approximately between 20 and 30% of my clients they close the deals when they hire me to help. Them to became a qualified buyer and helping them to close their first deal. These kind of clients, you know, we have about 20, between 20 and 30% successful rates, so it's pretty decent with uh on my side. And then uh we, I have clients who they hired me to, to, to help them to grow by M&A, right? So this is companies making at least 1 million sales per year. They want to grow by M&A. Do a couple of single acquisitions and then we do an SA or IPO, you know, in Sweden maybe, you know, I, I, I have to tell you that many of the people that reach out to me are first time M&A and it's their first acquisition that's toughest. What do you look for in a client to help them get over that first one? Yeah, so. First of all, uh, it's not all about the money. Of course, I, I'll charge money to work with myself, but also I get equity, right? Because I believe, uh, I'm gonna get involved and I wanna make sure my clients buy the right deal. I know the, the wrong ones. So I get the 5% equity normally between 5 and 10% equity on the first deal that I close with my client. And also I charge a fee for 12 months, right? So, service. But uh what I'm looking for is somebody who can commit 4 hours at least per week, who have a business experience. Who have a good credit score, who also want to get involved in an industry that they know, right? Mainly. And also some, somebody willing to, to learn new things, right? More curious person because a lot of people reach out to me with all the answers and they came to me with a deal on the table. Most, a lot of people came to me 50%, say, Sebastian, I got this $30 million deal. I want you to help me to close. I want to enroll your program and, and all this kind of approach. And I, and I can tell this kind of people they are not gonna close it because when I start asking 3 or 4 questions like, do you have proof of funds? Do you have uh two investors line up because Lenders will give you up to 90% of the asking price. That is not the problem, right? We have lenders network. I have very good lenders that provide me up to 90%. But the lenders normally will ask you, OK, do you, are you willing to put a personal guarantee? Normally they will say no. Are you willing to put some skin in the game, 100K, 200K? Well, I don't have it. So you will need at least one or two investors line up to put 200K, 300K, 100K as a skin in the game. The lenders can give you the money. And then you need to have a, you know, a strategy. Why are you buying this business? What do you want to do? How do you want to increase the sale? How do you wanna pay the debt repayment plan, right? How, how you want to pay the lenders, how you want to share the dividends with the investors, right? So you need to have a, you know, a big idea before you do the deal hunting. This reason I have 7 steps until you buy your, your, your deal. So deal hunting is the last part, you know. Deal hunting, you cannot start hunting for deals until You are ready, you are prepared for the opportunity. This reason for me is very important to become a qualified buyer. So I prepare people to become a qualified buyer. I provide, I provide to them a $5 million commitment letter from my trusted lender. So if I give you a commitment letter of $5 million you can pass the question when somebody asks you, can you show me proof of funds? You have something. Instead of you showing your bank statement, I can provide you with a commitment letter from a lender who had the lies and everything in the US, UK. So I, I help people to, to, to, to become a qualified by this is mainly my, my job. I think that you spend the most time on is like prepping these. Yeah, I don't, I don't, I don't, I don't, uh, I don't want to spend much time on this. I just did a promotion on, on, uh, on December on 61 people applying, right? I tend to keep it boutique 50 people per year only because I get to know them, you know, personally, sometimes we meet personally because at the end of the day, they're gonna be my partners. I'm gonna get 5% equity, they're gonna get 95%. So it's more handons guidance. I don't provide any online training, any info products. Money challenge. I don't do any of these marketing tactics. What I do is more hand on guidance. I take 50 people and I fully spend time with them. We have weekly calls one on one. I provide you with the commitment letter with all the documents that you need to become a qualified buyer, and then together we analyze the deal and we fly over to do the site viewing. We do different things like acting as a real partner because I realized that way, the probability to you to close a deal is higher, right? I A lot of people reach out to me and they say, I bought this online course X X X course and then they're a bit disappointed because they don't know how to start, how to purchase the seller, how to build an investor network, how to develop the lender's network, right? How to show credibility in front of the seller or the broker or the investment banker or the family office or the property with the firm. So they, the information is great. You can watch a YouTube video, you can, you can buy an online course, but then you wanna feel lonely because being a dealmaker is a, is a lonely journey, right? If you don't know where to start. So I realized I want to focus on providing Hannon's guidance during 12 months because I don't sell magic, right? I think it's very important to have a time frame of 12 months. Some people can close a deal in 3 months if they're very, you know, hardworking. Some people can do it in 5 months, 6 months. 7 months, 9 months, it depends, right? So I believe, uh, in long term relationships this reason I, I want to, to do it in a 12 month program like, uh, the service I'm providing in, you know, who's your best, uh, student? I mean how many deals have they done? you know, you always see somebody break out. Yes, I have one from Canada. Damian. Damian is from Canada. He bought a commercial lending company for 3.5 million. And now he's doing uh e-commerce, e-commerce acquisition. He's buying the 2nd acquisition. So I, I get very excited when one of my clients is is making a good, good money per year and they, they're buying the 2nd acquisition, right? And we still keep the relationship. We started together 3 years ago. I flew to Canada to Vancouver to meet him. You know, we spent one week together developing a, you know, acquisition strategy, meeting a few private equity investors in Vancouver and then, uh, yeah, it's nice when you build a relationship with people. I'm a people person. I'm very richable, so I like to, to spend time with them and I think this kind of uh methodology that I'm applying to, to teach people, if you wanna call it or to partner with people about how to buy their first or second company. It's, uh, it's working, uh, yeah, it's working very well, so I'm very, I'm very happy with this, that, that 5%, is that just equity or you're getting like, uh, profit first or dividends or something? Well I get sometimes I get the, yeah, I get the equity. 5% equity. So I, I, I became a shareholder, silent one, you know, silent shareholder. I just get the, my, my portion of the dividends every quarter or every 6 months, right? So I get some equity in different companies. So that way it, it allowed me. Yeah, I know a guy that does that and I ask, he'll ask for 5% of the gross profits, uh, at the top cash flow out say hey, you know, it's kind of a, uh. Shark Tank guy where he goes, hey, you're gonna pay me back until my original investment's back, and then I still own 1% or something. Yeah, yeah, it's a good idea also, you know, maybe I will consider it. Yeah. I, I was thinking which is the best way and the fair way to work with people, right? I want to be fair. I want to, you know, uh, provide, uh, a good value, right? Because I'm here for the, for the long. Long run, right? If you do something like uh very abusive, if you want to take 50%. I know people out there that they take 50% of the company just to teach you, you know, how to buy companies or stuff. That is too aggressive. I, I recommend to do it very, you know, 5% for me is enough, right? And then, but if I, if I have 5% of 50 people, then it's gonna be a good uh. Portfolio of companies for myself, right? You know what I mean? So you can get a small piece of the cake and you can help people to become first-time business owners and also this year I'm taking a bigger clients, right, with plus 10 million revenue, so we're trying to plan 2 or 3 acquisitions and then do an IPO in Sweden, right? For example, which is the fastest and, and uh it's a very good stock exchange out there and then um it's not too expensive. So, yes, I'm planning to do bigger, bigger deals this year. I'm very excited. I think the M&A last year was big, you know, so many transactions. And this year, you know, after all this pandemic and COVID, a lot of companies, they are recovering, you know, and then, uh, now you can tell which company is good, which company survive on this pandemic, and then you can pick. You know, the, the, the best deals, right? I, I always recommend to buy asset heavy deals just because it's easier to, to leverage, right, because you have the equipment, the real estate, and the, and the maque to use it as a collateral. Of course, you can try asset like this, like a digital marketing companies, but if you want to close a deal in 3 months, 6 months, or as fast as possible, is, is, I recommend to do it with asset heavy deals and mainly manufacturing. healthcare, you know, warehousing, trucking companies, something that you can use as a collate. And also, for me, deal flow is not uh is not a big deal. It's not the, some people think building your, increasing your deal flow, increasing your pipeline is the, is very important. For me, it's not important. And some people even pay 3, is paying 3000 per month, 4000 to deal finders, to deal sources, find their fees, right, to some companies. I know this industry very well. Well, right, I don't recommend to do that because these are out there. Opportunities are out there all the time, everywhere. But if you are not a qualified buyer, there is my point. If you are not qualified buyer, then you want to start watching opportunities pass by like a, like a buses, and then you cannot do anything. You're gonna spend 2 or 3 years to close a deal maybe if you like, if you're lucky, if you find a highly motivated seller. But if you know what you're doing, if you have a proper acquisition criteria, if you have a proper. You know, uh, exit the strategy if you know what you're doing, if you have proof of funds, if you have somebody who can take you there, right, it's easier, you know, it's easier to go the that you judge somebody that says, hey, I want to buy this manufacturing plant, they, they make X widgets and, uh, like how do you say, well, you know, you're, you're, you're a doctor, you know, you came from, uh, some other medical field, right, like you don't know anything about. Out to, you know, B2C products. Yeah, when they have 00 industry knowledge, what they recommend is to, to hire or to put on the board somebody with 10+ years of experience, right, in the industry that you're targeting, right? If you don't have uh somebody on your, on your, on your board, for me, when I was 24 years old, I didn't have any board, just me and the lawyer who was my boss. So I don't believe, I don't believe that you need to build a A solid board to buy a deal. I think anybody can do it if they have all the pieces in place, like, but if you're a doctor and you want to buy a trucking deal, for example, you need somebody who understand at least the industry 5 years' experience, right? So maybe you can hire an external consultant and pay a success fee after the completion or you can give equity, small equity after also the the completion. Different ways you can pay equity or or consulting fee. So you can bring somebody. this is like the Warren Buffett Charlie. They don't know anything about se candy. I mean, but they like eating it, but they don't know anything about manufacturing and building it, so, yeah, yeah, they surround the right people with the right people with the right people, yeah, as Richard Branson say that with the right people, everything is possible, right? Yeah, I've listened to, I've got Andrew Wilkinson from Tiny Capital on my list, uh, in my rotation, and he's just like, hey, my number one job is to hire and fire CEOs. Yeah, yeah, because you can find somebody also in the UK it's called a non-executive directors, right? You have an association with people who is retired already, but they would like to participate on this still and get paid a, a quarterly fee or a year fee for annual general meetings, right? So you can hire people who've been managing plus 1000 employees, right, and put them on, on your board and doing a very, you know, very Nice, uh, you know, building your nice pitch steak with you, right, for a very cheap price. non executive director, the same in the US and in Australia or Canada. You can, you can bring on board this kind of people who is retired already and they will like to get into the this space M&A or they believe in you or they really know the industry that you're targeting. I just like keep busy, you know, they're, yeah, another, another thing, another thing, John, I recommend is uh. The that expert 5+ years of experience in the industry that you're targeting and also you can buy a market research, market report about the industry, right, for $100 on statista.com, for example, any of these providers to to have a better understanding of the industry that you are entering, right? So if you are in the negotiation table and if you know the top 10 players in the trucking industry, how much is this industry perform? And you, you know, the main numbers and the main players, then you will sound more knowledgeable. And that is uh when I give you more credibility to negotiate. It's like, uh, oh, OK, he's a doctor, but he really understands the markets, you know. He really know the top 10 players. He understands the main numbers of this, of the trucking industry. He got somebody with 5+ years of experience, so it must make sense, the acquisition strategy. And also the criteria that you're setting, right? So yeah, so what do you have any uh students that are doing multiple roll-ups? I know you said that uh a guy that, uh, lending company then, and then start buying e-commerce, do they have kind of an exit plan like 3 to 5 years or Yes, some of them are, yeah, yes, some, some, uh, sometimes we, uh, um, our system, the system that I'm applying, the M&A strategy that I have is buying a business, delegate the management, and get dividends. It's very simple. So you don't, you are not buying a job like most of the dealmakers are doing, they buy a job, they want to be the CEO, they want to be all, all. On, so when you delegate the management with somebody who's been running businesses in the same size, you can, uh, they can develop uh also um a growth plan for you, right? The CEO can develop a growth plan and then you just, you just always working with developing the network with family office, private equity firm to have an exit. Plan to be acquired by them or to buy one or two single acquisitions or sign she acquisition to then do an IPO or doing a, you know, a bigger exit. So yeah, exit plan, you know, we, I helped them to set up the exit plan, but the most important thing is before you buying a business, you must have the strategy, you know, after, you know, some people just buy a deal, you know, most of the people, they buy a deal and then they don't know how they're happy, you know, you know, they want their lifestyle business, and they're happy. I know, I know, yeah, so it's, uh, it really is a different story, right? Each people is a different story. So I really enjoy the diversity of this, uh, M&A world, right, because you have so many industries, so many personalities, and also so many, you know, cities to, to explore and, you know. So what do you see in the most of, I mean, I, I, I like the personality that comes to you, like 50 people come to you, he goes like, hey, they're all motivated, but you know, I, I, I've got a. You know, this is like the big question is like how to pick the superstars because you need the superstar in the acquisition. You need it in operations and you needed delivery and like picking that person that's gonna be, well, I, I, I, if I'm gonna put any time or money behind this guy, I know he's gonna do it. I think, I think for me it's very important that being being humble and coachable, right? For me it doesn't matter the money that you have. Some people came with me with 2100K. I say, Sebastian, I got the skin in the game. I got 200K. I know what they want. I want to buy, for example, logistic companies in Florida. Uh, let's do it, they work together. Find me a deal. Let's close it together. But then. These kind of people, they, they know all the answers. I declined them even if they want to pay me, you know, because they're gonna waste my time and they, they don't want to listen. They, they came with me with deals and money, but then they, they don't know the, the process, the entire process of M&A. You need to understand what you're doing, then setting up a proper acquisition criteria and then take action, right? No, the opposing around, taking action and then thinking about the strategy and then thinking what to do, you know. So it's not the money. It's a lot of people with money with 100K, half a million sitting in savings, but they, I don't, I don't take them, uh, you know, uh, on board if they are not coachable. So for me it's important being coachable, coachable, and, and, uh, and also, yeah, is there a story behind that where you started working with somebody, the guy was not humble and not coachable and it just blew up everything, yeah, I've been doing that. Uh, coaching for a while, you know, 4 years and a half and I met different personalities, right? So I can't tell how they, they work. The, the conversation I can tell if they are gonna be coachable or not and if they are a good listener because on negotiation and also in the M&A space, you need to listen, you know. Uh why are you selling? You should ask and then listen. Why are you selling the company, you know, how you, how you, did you start this company and you need to be good at listening, right? And the people who don't listen, I don't try, I try to don't take them on board, right? Because it's a It's a very, uh, how, how do you know they're not listening? How do you, are you on the call when they're, yeah, when, when I, yeah, when I interview them, I realized they are not the, they are not the right fit, and I say, listen, it's fine. You can, you can try buying a, uh, an online course and do it yourself. You don't need me. I should say that, you know, very politely in a most polite way because I don't feel comfortable with somebody that I want to explain. You need to do this and, and the week after they came with me with 3 deals. They found on Visitorsa.com, any of those websites. And I said, listen, you are not ready for this, right? You, you need to prepare yourself 2 months preparation, 45 days preparation, knowing the, the main terms, the main question to ask to the seller, to the broker, getting proof of funds. You need to have a lot of things in place, setting up the foundations, then go out and do the deal hunting. So if they came to me with this from day one and they are a bit arrogant or something and they say I've been closing this my whole life. I know how to close it and 45, yeah, it's uh yeah 45 now I became the, the M&A advisor of microadquire.com. I, I, I, I, I know, I saw that. Congratulations. I know, uh, I know Andrew. I, I'm gonna get him on, yeah, get, get him on the board, so I get him on the, on the interview and then. Yeah, we are 110 million company now, you know, evaluation, so it's uh it's great, and I I'm advising a lot of startups, owners there. I have like uh almost 7 clients, you know, they, they, they reach out to me. They want to sell the company and they list it on Microquire, so I also advising people. To, to how to exit their company, right? So I actually know another guy who's doing exactly what you're doing, yeah, OK, you know, yes, it's a lot of people teaching this. I got into the, the M&A coaching space as the, as people started reaching out to me in my office in London, right? I didn't want to. Also, English is not my first language, and I didn't want to be like a public figure, right? But then I realized how can I. Do this and get equity, right? It's not all about the money. Also the equity like a deal maker because I am a deal maker. I want to get involved. I want to get equity. I want to help people to also achieve their first or second acquisition, but I want to get equity, right? So I found this way very fair for everybody. It's a win-win situation. So yeah, it's, uh, yeah, your, your English is fine, I guess like after like 2 or 3 minutes, I mean, I don't have any problem understanding. Yeah, no, it's fine. Uh, doesn't matter. You, it's, it's, uh, it's no excuses. Uh, English, no excuse, uh, you know, no money, no excuse. People just put excuses for everything. You just need to take action, and I don't mind competing with anybody and uh you just need to get out there exposure in yourself more in the beginning. If nobody know you need to keep exposure in yourself, you know, getting out there, getting in the different interviews, getting in the, you know. Podcast getting and the sellers must to get to know you because if you want to buy deals doing the inbound marketing strategy that like they they contacting you, you need to keep posting and promoting and putting content out there attracting the right business seller, right, the motivator one but uh yeah, I, I gotta ask you a question about, um, yes, we're asking questions of the seller. I mean, what kind of questions do you ask and Like, what are you listening for to make sure he's, you know, actually does want to sell versus, uh, you know, just, you know, just testing. Yeah, so the first question is a very, uh, very nice one. So you say, what, what are you, what, what are you planning to do after you, we close a deal together, right? I'm very straightforward. I want to close on this. So what, what are your, what are your plans after, after we close a deal together, after you, after you exit? What is your plan? So if they don't have a plan, they, you know, if they don't have a plan, they don't have a plan, wasting your time. They're wasting your time. Asa. The second question or the first one is, is the understanding that why, why they're selling because they put excuses and maybe, you know, everybody want to retire, right? But this is the easiest answer. Yeah, so there's always a number of questions like, uh, and I gotta tell you, when I sold my business, you know, I, I, I wanted to sell my business. A lot of people didn't ask me like why I wanted to sell it, and, and then the truth was one of the biggest truths was, well, a competitor came in owned by UnitedHealthcare, and they owned the company that I was competing against with and I I couldn't compete them on like to acquire leads anymore. So yeah, that's one way I want reason why I get out. All right, yeah, yeah. So understanding that why is very relevant. So asking always why they're selling and just listening, right? and meeting the key people inside the company when you do a site visit and trying to listen what they think about. Sometimes it's a confidential thing. You can, you, they cannot introduce you as the buyer because they get panic, you know, all the employees get panicked about losing their job, but that's a good sign. Because if they're introducing your employees, they've already told them their self. They have to because those people will panic, but if they tell it's a confidential thing, nobody must know. Maybe they are not fully ready for an exit, right? So, uh, and then, uh, what, what else? Yeah, so some indicators that they are, they are time waster. Some business owners, they just want to know how much they, their business is worth, right. Just they want to know and they wanna make you waste time. You do the I visit, you make them for lunch, for dinner, you spend some time on doing a delusion on advice or I think. And they say, well, we are not, I'm not ready. I want to stay on board and they decline your letter of intent or they ask you for more money, then you realize they are not really motivated. So I recommend when you start doing deals, don't get emotionally attached with any deal. This reason you need to have in your pipeline fight and deals and send 50 letter of intent and wait until it's signed back, right? So I don't get emotionally attached with any deal. As because, uh, as on my own experience, you know, then, uh, you're losing if you get emotionally attached with deals, it's like a with person you need to be, you know, like, uh, hey, she's gonna call me back. She's gonna kind of, I'm gonna keep calling her until she calls me back, yeah. So these, these two questions, right? You need to realize what they're gonna do with their money after, after you purchase the business and understanding their why, you know. So if they don't have a plan, what they're gonna do next is because some people don't have a plan because, well, I'm gonna get this 10 million and then I'm gonna travel around the world. I want to buy an island, I want to do this. This can be, you know, at least they must have an answer, right? Yeah, how, how much I spend on valuation with, uh, the reason I ask is like as uh asset heavy business, it's gonna have a set type of valuation type of business, yeah, the, the business that done, we are analyzing must to have the appraisal done, must to have the audited balance sheet and profit and loss, must to be everything, the task then also everything. They must to build a data room before they sell. The problem is most of the brokers, they are, they are behind commission. They don't know how to sell a company. They just, they want a commission only, so they don't know how to prepare a proper data room, you know, with the marketing materials, with the tax return, with the balance sheets, with all the profitable. laws. If, if the business is not ready for an exit, then you, you need to understand that you will spend more time. But if everything is properly done in a virtual data room, then you can do it quicker, right? If it's, if it's the appraisal done from real estate, everything is done, then it's gonna be quicker. So I try to check out, you know, the memorandum information, checking out that everything is properly done and then I spend more time. But if it's, if it's a mess, right? Like in most of the deals, they are not organized. Then uh I try to decline, right? I, I want a deals where they are fully ready for an exit and they're selling for a 4 times multiple a bit maximum, right? Because my lenders, they don't like expensive deals and also the investors, they don't like expensive deals. Investing in something that is. Over, you know, over, yeah, well, just curious, what is the interest rate for an international company like this for loans you mean, yeah, yeah, so it's between 6% and 11% the most expensive one, right? It depends the lending facility that you applying. We're using the alternative finance market like asset-based lenders, cash flow lenders, revenue lenders, invoice lenders. So these kind of lenders, they have from 6% to 11% maximum. So the average 7%, let's say 7. So you have a 7 7% interest rate. The lenders I'm working with, so is there any industries you avoid like oil and gas or mining? You did mention mining earlier. Yeah, so, well, the, the ones that I avoid personally are the CBD marijuana related. They like uh oil and marijuana and I was like, hey, you can't move that money around the United States. So yeah, all what these drugs and weapons and casinos, I don't personally do because for ethic reason, so I don't want to get involved with like a. In any of these uh deals just for personal reasons. It's not, it's not profitable. Maybe some people are making a lot of money on this, but I don't want to profit on this kind of industry because my values, personal values, for example, this is, uh, I'm not taking, uh, you know, guns or weapons factories or casinos or, you know, gambling stuff. I don't do this, but, uh, yeah, I'm not saying it's no, no good deals, you know, you can find very good opportunities out there, but it depends, you know. Yeah, it's your choice. I mean, it's like a student comes to you one of your 15 and they say, I wanna work on this, uh, casino. You go, you know, I, I, uh, gonna find somebody else, or yeah, I pass, uh, I pass you to another and advisor, but I know, no problem, right. You can, uh, you know, and then I don't put that on my track record. If I help it in some way, I don't put that on my track record. I don't want to be recognized. I'm the guy who make money selling, uh, you know, casinos or weapons just for my, you know, my credibility, right? So yeah, no, I mean, it's up to you. I don't, I don't gamble either on that case. I think the risk is, uh, way too high on it, and it's just some, uh, some industries that I try to don't do is, uh. You know, uh, for example, um, you know, software as a service, test as a service, you know, all what is you don't do those software as a service. I do, I do advisory how you can sell this company, right? I, uh, do the, the, you know, the sell side advisory of, on these companies on microco, right? But then, uh, for a buyer perspective, if it's not a signerhetic acquisition, if you don't got the money to pay. 10 times multiple, 15 times, you know, a beta. So then uh it's difficult for a, for a buyer and for people that we know that they are doing LBO strategies, right, with IT companies. Because you don't have much to use as a leverage, right? You don't have uh enough collaterals, enough assets. Except they have, uh, you know, solid contract with big brands, right, but yeah, you gotta have a consistent earnings like 3 to 5+ years on that because I know the thing is 3 years like, whoa, whoa, whoa, how do I get my money back if you go I know I know the thing is very important is I don't know taking companies who are new, new companies no. If you want to buy a 2 year company, it's not enough track record, right? For the lenders, for the investors. So most of the IT companies, e-commerce companies, they are 2 years old, right? Yes, normally 25 years old guys who want to make their first million selling their e-commerce and I cannot, I understand that is fine, but then you don't have enough financials to do a cash flow projections. You don't have the lenders don't feel comfortable sometimes. Now you have a lot of e-commerce lending facilities, right? It is. Is becoming more, you know, popular because of course most of the companies became an e-commerce so they must do a lot of crazy numbers with Thoracio and those guys, yeah, yeah, yeah, but before, before, um, so one year ago was, uh, was a good idea to buy e-commerce up to $50 million because you have PayPal loans, you know, PayPal loans, so. You know, PayPal, yeah, you can apply for a PayPal loan loan through PayPal up to 50 million, and you can use the, the, the PayPal from the company target, right account and then you can apply for funding solution and pay that way so you don't use the money, right? You can, so you can leverage with PayPal, but now they changed the regulation. I think they could, they lower down to 100K only so too small. Yeah, some people make deals are you working at right now on your, yeah, trucking, ragging, raing a road, a road construction company in India. We have a $42 million road construction company. They buy stuff from Washington DC, right? So we're setting up the, the, the company and then let me ask you about that. So having the right people in the place, how have you done business in India before? No, no, no. This, this reason we need to, we need to have a, a top top tier films like the. De Lloyd, you know, working with these big firms that they can do the, yeah, from India because they are a global firm. They have a branches everywhere. So I'm working with Deloitte or KPNG only and sometime with BDO. So we have this kind of uh companies and, and we force them, we force the seller to work with them. If not, we are not interested. We cannot get the evaluation from a regular film it doesn't. It doesn't country was if you didn't have any knowledge of the country or somebody peed on the ground like that, right, yeah, no, no, I need to go to India maybe in March, so I'm going with my team, you know, my lawyers, so we're going there to do the site visit and reviewing everything, meet the key person. We, we've been chatting on Zoom all the time, but of course it's better to meet personally to do the. That everything is for real, right? And then uh we start the paperwork, right. So this kind of deals. Global lease, Africa, India, you know, Middle East, all these countries is better when you have uh this kind of feelings behind, right? So they are recognizing in the UK or US for the investors side and also for the, for the lenders, right? The lenders are not gonna lend you if you have a $1 million property in India and it's, it's not the evaluation and appraisal is not done by Deloitte, then maybe that house is worth 1000 only, right? You need somebody who Maybe I'm not saying uh always is uh some cheating people, but uh you need to working with the, you know, world-class films on this international deals, right? Yeah, and what do you do at the Deloitte? You have your contact in the UK and say, hey, do you have somebody in India? Yeah, correct. Yeah, so you can call the, the head M&A of Deloitte, for example, and say, hey, can you connect me with your partner in India? And do you know the M&A head, head office M&A, you know, the head of M&A, so they contact you with their. With the partner and then you start chatting and then they say, well, yes, if they want to become a client, they need to pay X amount of money and you know, or we can do a successful deal because we know you Sebastian. Sometimes they don't charge me up front because they, they know my methodology of the LBO. So sometimes we can avoid any contingency fees or, you know, upfront fees, which is good. Yeah, I was just curious like how, how do you, you know, Deloitte's gonna say, well. Oh, I, you know, I gotta pay my people. Well, so when I here's the 30 days, yeah, they have, uh, you know, they charge you by by hour, right? $300 700 dollars. You depend the professional tax planner, wealth, welfare, you know, planner, wealth management expert, they you have different professionals, you know, the, the legal do a diligent technical one, the accounting one, so they will charge you by hour, so. If they know you like they do with me sometimes they, I pay success fee. After we close a deal successfully. We pay whatever invoice they they start invoicing, you know, in milestones, you know, after we close the deal, but not not before. So if a deal takes 12 months, they're willing to wait that long and then no, no, no, no. The thing is, the thing is you must look up, you must look up again the data room organized, right? If it's a mess deal, I don't take it because I know I'm gonna make waste their time. I'm gonna. You know, uh, it's gonna be bad for my reputation if I send a bad deal to Deloitte, for example, right? Must be all bad stuff, yeah, not bad stuff, something, something that is ready to audit and can take you a couple of weeks, you know, a couple of maximum 2 months to organize everything and then start applying for funding solution, right? So did you take your attorneys with you on each deal to deal, um. Like the guy in India, he's got his own attorneys, or do you bring yours to cross? Yeah, yeah. So we, we have a bilingual attorneys, right? So we can, each time if he's in Brazil, we have somebody who speaks Portuguese, you know, for, for understanding what the lawyer is telling me, if he's in India, somebody who speak the language, right? And also English. So I fully understand what, what is going on, right? Of course, in India everything is in English, so it's not a problem, right? But we always bring a lawyer because the lawyers from both sides must be connected. The legal, the legal team from US for example with the legal team in, in India must to be interconnected, right? And sharing the same folder and everybody must to be on the same page. So far, avoid any misunderstanding. So yes, Sebastian, I got a, uh, like an hour's already gone by. I need to go. I need to go. Yeah, I thank you so much, man. Like, so everybody, this is Sebastian Eva, investor, mentor, M&A top M&A entrepreneur. I wanna thank you. So much for your time. Thank you very much, John. Yeah, yeah, let's, uh, publish this. I'm very excited and thank you very much and let's keep in touch. If you have any doubt about the M&A process or if you have any personal questions, just send me a direct message. Thank you so much. You're welcome. I appreciate that. OK, cheers. Bye, bye bye.