E: 27 Top M&A Entrepreneurs: Andrew Pierno - Acquiring Micro SaaS Companies

The Last name? Pear now, now, OK, yes sir. All right, great. Uh, here we go. Welcome to the top M&A's uh entrepreneurs podcast. I got, uh, Andrew Pirno today. How are you doing, Andrew? Doing all right, John, how are you? Yeah, good. So, uh, you and I reached out because I saw you did a podcast with somebody else, uh, but you're doing some micro acquires, you got a and then a company called XOXO Capital too, so. Tell me about that. Where did this all start from? I mean, why did you just, just like, I, I don't wanna work for anybody else, I wanna, I wanna do it myself. Uh, so I'll start midway through the past 10 years or so. I worked at a venture studio for a number of years. I was their head of engineering, so venture studio is a little bit different than traditional venture capitals, right? So instead of just kind of investing. Um, you are actively building. So like, we may come up with an idea, uh, and we may choose to build that and fund that ourselves, right, with the ultimate goal of spinning it out, raising outside capital and and creating a proper company. It's supposed to be like a startup incubator type deal. Um, we got a couple million bucks to do 3 companies and um, What ended up happening, and I, I, there were, there were a ton of lessons learned, and I draw a lot from what we're doing now and how we're thinking about setting things up from the venture studio cause I don't think we, I don't think we got it right. I mean, well, we definitely didn't get it right, um, because what ended up happening is one of those companies, uh, ended up being kind of the, the leader, right? Like in any, in any given portfolio of companies, right? You have some winners and some losers, right? It it is, it is kind of a a power laws thing. Um, one of those companies, uh, you know, we ended up taking in a lot more investment, and at a certain point those investors said like, you guys gotta stop messing around with the studio stuff and just go focus here. So I, I became CTO of that company. It was, it was, we raised about 8 million bucks. Um, we were on the full venture train, and, uh, we, we fell off at some point, and, uh, well, we didn't, we didn't hit our numbers to get a Series A, and we were just kind of, we found ourselves in, in no man's land. So what happens when a venture company falls off the venture wagon? Well, they generally they die. And, and it baffled me that we spent however many years, 45, however many millions of dollars, 8. And uh the the the value reflected in the market for when we went to go do kind of an asset sale, um wasn't commensurate with the effort that we put into it or where the business was, and it occurred to me that a I could go out and acquire a company like this that somebody has invested $8 million into for a couple $100 or I don't know, maybe a million bucks, skip the 4 or 5 years of the pain in the ass that was building that product and figuring out what, you know, how it should work, what it should do. Um, and so when that company spun down, that's when I, I put this group together to start kind of buying small sass companies, just pure software companies. Um, and skipping that year, 2 or 3 or 5 of guesswork and just getting right to kind of growth, product improvements, um, and, and potentially potentially scale. Yeah, I, I, uh, just had a conversation earlier this week with a company that was growing at 40% per month. And uh they took $2.4 million from VCs and The way the industry was trending was, I mean, it was a hosting solution, so, uh, Amazon and Microsoft are now its biggest competitors and the uh VC says that we're out, we're done. Um, so he had to figure out how to get out of the investment. He, he bought them out, uh, and took a lot of debt on that, and it's still a mildly profitable operation, but that's what happens. I mean, if they said. If it's not gonna grow 40%, we're up, we're out. Yeah, just to be clear, I, I'm not anti-VC. I have a bunch of friends that are in VC like really great people, super value added people. I just think the type of deal that is a venture deal is not what, uh, the, the dogma coming out of Silicon Valley says that it is. So dogma coming out of Silicon Valley says for Any ambitious, uh, human on planet Earth that wants to go start a company, thou shalt raise a fuck ton of money and thou shalt grow or die, right? Like that is kind of the ethos. And I actually think for a first-time entrepreneur, the, the, the, the goal should be cash flow, right? It should, it should be like financial independence. Um, and, and you should try and, and build a business, uh, that is a proper business, right? It's not based on these kind of like crazy evaluations, it just makes proper money. Um, and don't get yourself in some of these sticky positions. So I, you know, venture is amazing for creating markets, but I think for most businesses, they're not trying to create a new market, right? They're, they're trying to just build a profitable software company, and it may not be venture scale, and there's absolutely nothing wrong with that, but the, the, um, again, like the, the, the kind of framing that's coming out of of. Silicon Valley or TechCrunch or all these companies, I think really pushes people into this scenario where they're trying to build a venture scale company and frankly, the idea was never venture scale, right? And they would be perfectly happy with a $10 million a year business. Yeah. I mean, you look at micro acquire, I mean, it's got so many businesses, they only charge is $300. Uh, per company to list on there and all the companies that those are companies that will never get DC back, but it was, they think a lot of them think they are, but that's just not gonna happen. I don't think it's going to happen for them, but from, uh, and, and just for, for clarity, I know Andrew Microchoir a little bit, they charge uh us as buyers an annual subscription fee. So they don't take any money on the transaction. So it's it's really kind of the Robin Hood of of acquisition marketplaces, which is, which is great, um. I it's not so much that the companies that we see are, you know, whether they're venture scale or not, to be honest with you, it's mostly younger, uh, well, age age isn't really into it. It's, it's mostly entrepreneurs that just don't know how to build a proper business. So we have one deal right now under LOI that is um Two gentlemen midway through their careers, maybe 3/4 of the way through their careers, they spotted an opportunity, they built something. They have no intention of going full time on it, and, and they hit a scale, they hit a point at which they saw that they themselves were hampering the business's growth. And so for us to go by that and put some capital behind it and some some more resources and dedicate some full-time staff to it, that's gonna be our alpha on that deal. The other kind of category of deal that we see is that uh there's kind of two maybe first time entrepreneurs, generally software developers for the things that we're looking at, and they don't know what marketing is, right? They, they couldn't, they couldn't sell me, you know, they couldn't sell me a million bucks if, if it was free, or I don't know, there's some better analogy there, but like they, they're not sales people, right? They're just. Engineers and they, they hit a market. They got some traction in that market, but to say that they could scale it up 10x, uh, I think would be, uh, false, like that they're probably not the right people to do it. Yeah, I agree with that. I've had a couple conversations with sellers there, like, you know, the software engineering goes, I don't know anything about marketing. I mean, I know how to build something, and if it's not taken off by himself, it's just not gonna. Uh, he, he's gonna have to hand it to somebody else or bring somebody else on, yeah. Yes. And those are the opportunities we're we're looking for. We've, we've bought 3, done pretty well with the, the 1st 3 so far. Yeah, so let's rewind now. The, the VC company, they, uh, say, hey, look, we're gonna debut ourselves from this or shut it down, whatever the case was. And then you were CTO and you just said at some point, you know, I, I, I, I've got a different thesis. I, I want cash flow companies and I want companies that are already in orbit where I'm not. You know, working so hard to get them to orbit. Uh, where was that? I mean, how long did that take and you figured that out, and so this is what I'm gonna do. Well, I mean, it took up to, you know, last year for me to really kind of sink my teeth into the idea that going from 0 to 1 sucks. It's really hard. I've done it twice. I've built like 2, I currently have 2 6-figure businesses. One's just a straight services business, which is kind of interesting for me. The other there's a soft. Our company. Um, and, and it's really tough. It's really tough. There's a lot of luck involved. But for going from 0 to 1 is, is hard. Going from 3 to 10, that's when you can start thinking about like a playbook. There's a lot more of a straightforward path and, and a well worn trail for going from 3 to 10 than there is from going to 0 to 1.0 to 1 is, sometimes it's a lightning strike, sometimes it's. It's, it's, it's, it's magic. Sometimes it's the owners, uh, founders pissing on each other's couch. It's just ways to die in the west. Yeah, that's right. And, and so, yeah, out of frustration really, I said, you know, why don't, why don't I put a group together? We'll just do some with our own cash to start, to see how this goes. This is the thesis that going from 3 to 10 is, is easier, at least more, um, logical than going from 0 to 1. And so far it's been right to the point where now we're we're looking at doing deals where we're bringing in outside investors and trying to move up stack a little bit. Yeah. So the first company you bought, was that listed on micro choir, or was it somebody in another network? No, so we've only bought, so we bought uh one on micro choir, and we sold that same one on micro choir. So we did that one, the full micro choir 360. The other two we uh uh we sourced, uh, they were off market. Uh, that's been um uh an area of focus for us is to find off market deals because frankly a lot of the evaluations on um. On these, these marketplaces are just uh not based in reality. Uh. That's so true. 10x time sales, really, dude, you only got $70,000 a year in income. Yeah, but that is, that is, that's kind of what I'm talking about. So if you, I mean, if you Google this right now, that's what like that's what Silicon Valley will tell you is that you can take, you should expect 10X top line ARR that's your, that's your company's valuation, and that's true for a strategic acquisition. Yeah, it it's price value. If you're a big company and you could tuck this in and Get your IRR, your investment of uh MOIC back in one month because you just plug in the technology to your channel. Yeah, sure. I'll give you 10 X. I, I'll give you 20X. Yeah, exactly, exactly, exactly. But for, for these other little businesses where it's not a strategic acquisition, we have to base it on cash flow. Yeah, yeah, and you like, and you're starting off with the micro cap company is really small, and below a million or where are you at? So we're just roaching a million now with these deals that we're doing on a deal by deal basis. That's where our target is currently, uh, but the ones we did just with our own cash were were below that. Yeah. And they were profitable, or did you or some are nonprofitable. They were all profitable and we ran them all profitably. So whenever we did any kind of engineering work or marketing work, we took it out of the um The cash flow that came in from from the revenue. Did you use your cash to purchase it or any kind of creative financing like, you know, I'll put uh 20%, 30% cash down, 30% seller financing, maybe some. Nothing, pure cash. Yeah, right. What's the price? Here's the wire. Yeah, that was it. Uh. Yeah, and, and then you, you're a marketing guy, well, you're a CTO guy, but you have a marketing team and you take this, like, let's take the one that you bought from micro acquire, you bought it, and then you just put marketing to it, or you put people process products to it, or what what did you do to just turn around and So that one was cool because it was uh an XY combinator company, um. The real story for that is that we had a a kind of falling out with one of our one of our partners, but um that's kind of secondary. The what we did when we bought it is, is a, we saw that it was underpriced, so we got it for a great deal. Um, B, when we got it, the technology had not been touched in about 2 years. So there were some really quick wins that we could do by just um modernizing the, the, the technology a little bit, um, making it a little bit more robust, making the product a little bit more stable, right? So the We were not bleeding out, uh, on our conversion rates, which is exactly what was happening. Uh, and these guys, and this is, this, again, kind of is part of the reason we bought it is, uh, their investors told them that this, uh, product they had was not venture scale. So they either had to switch, uh, products or, you know, their investors were out. Yeah. And so we took that business and we ran it profitably and, you know, patched it up, like put it in a, in a lot better position for somebody else to take it on and then Um, ended up selling it to another group that's gonna do just that. Did you, how was your IRR or your return on that? Did you 3 exit or 5 Xit or? Oh, for that one I haven't, I'm generally like if you follow me on Twitter, I'm super open with all these numbers, but this one I just haven't asked the sellers yet if I can share it. So that one I consider it was not the win was in kind of knowledge gains about how we do diligence and all these things about how we kind of Um, patch some of these things up, uh, but it was not necessarily a financial win. The other, uh, two that I can talk more freely about just cause we own them, we have 5 X1, uh, since we bought it in November, we've 3x another one since we bought it in. Mid-January, uh. So those numbers are, are, are the numbers are across the board are looking pretty good, but those two that we still have are are looking pretty good. Yeah, so I have two questions in my mind. Uh, now, did you have to deal with any of the, uh, venture capitalists that own part of it, or did they just say this guy can sell it on microcore? Uh, that's always a, that's always the first guy. I got a partner that's does a lot of deals and it's always like, hey, we took VC money, and the first question we ask is where are the VCs at with that because they could They're stakeholder, they could veto it anything. Yeah, the I think in in absolute terms, or well, in relative terms for these VCs that dollar amount that it was sold for just wasn't like didn't matter to them. So they were like, great, you guys can go sell this it was like, you know, selling shit at a garage sale basically you're like, oh I got $100 like sweet, extra $100. That's how they thought that's how it felt like they were treating it. So it's already written off. Yes, that's exactly right, yeah. Yeah, and these, uh, I, I'm really curious about uh You know, I had a, I worked on a startup called Hemp Exchange, and they um they had, it was a marketplace and they had uh $2 million in revenue in about 9 months, and then $650 million in merchandise, and the two owners, one was 60%, 1 was 40%, well, it was less than that because I owned 5, but uh they started pissing on each other couch and blew it up. I mean, how do you find somebody to Uh, get to that point where you're, you know, like we have to depart with this guy, it's not working out. I mean, it's like, how do you find the right contractor, how do you find the right people to work with, knowing what you want to do with this fund and acquire companies. There's two levels to that. One is kind of the GP level just for us as partners. Obviously, the more aligned we are, the the smoother the companies can run. Um, and then, you know, contractors and employees I think are are a little bit more straightforward in the sense that You know, you do your best to hire the right person, and if you make a mistake, you know, you just communicate along the way about what your expectation is, and if that expectation is not met, then that person doesn't work out. I just think I've always tried to be as communicative as possible in those kinds of delicate, sometimes delicate situations, um, and, and that's about it. Sometimes it just doesn't work. Right, yeah, just they're just not into you, yeah, it happens all the time. Or or they suck at their job. Like that happens too. So these other two, yeah, you bought without cash, um, now I understand you're starting a fund also, right? You have a thesis for that fund or how how's that going? So I I don't like to use the word thesis because I think that generally that's it's uh it's like a bunch of kind of fluffy bullshit that doesn't actually have any real meaning to anybody, but I, I will say that what we're trying to do right now is I don't have uh the ability to go out and raise a $10 million fund, which I think is, is the point at which a fund starts to become realistic just with all the setup fees and All the shit that comes with a fund, right? Like doing a million dollar fund is not, you know, you're losing money. Like you can't put food on the table with a million dollars fund. Yeah it's a defeating purpose. It's just like almost a waste of time. So I would so much rather start to get um really strong investors. And on these one-off deals and build the network that way. And once we've done 5, 10 of those, then I can come around and say, listen, we've done a bunch of these deals, we're doing a fund that has like, I, I wouldn't say a thesis, but I would probably describe it as picking a market segment. Um, and for example, we would go and buy anything for this particular fund that would be a developer tool, or we could do one for blockchain or or, you know, climate or all these other kinds of market segments, um, and, and do it that way. But at the moment we're just doing. Uh, deal by deal, we're just investing along our investors. It doesn't hurt to start something like a syndicate angel list where you just have a group of, you know, 100 investors you go to and say, hey, I, I, I'm looking, I, we're looking for $50,000 a little help to purchase this. Yeah, yeah. So Angel List actually I reached out to them because I mean we have effectively the same back office requirements as a fund, and Angel List won't let you uh use their back office for buying companies. It has to be, it has to be acquisitions. Um, I, it wasn't clear to me exactly why that was, but they said it was something legally on their side where they couldn't do, uh, they couldn't do that for us, but. Yeah. Yeah, you're right. Tell me a little bit about uh your outreach. I mean, there's, you know, very distinct parts of the business, you know, uh, searching for the business, resources, sourcing deals, and that's very challenging to find somebody that's, you know, software business and they're motivated seller. How, how are you doing that? Two things we have 4 partners, myself included, so there's 4 of us total. That's like kind of a lot of firepower. If you come from the small startup world like I do, 4 people is not, that's not that small, right? That's a lot of you quadruple of your efforts possibly. That's right, yeah, so we can spread it around and then The pitch that I've been making, and I should probably keep this closer to the vest than I do, but when I approach somebody, I, I just say like, look, and this tends to be true, you probably haven't thought about selling, um. And you're probably not ready to sell, but when you are, like, I would love to just introduce myself and have a chat because this is our little startup. and and that kind of um leveling with another founder it says like, look, your, your big idea was this little company, right? You've built it, made it profitable, you know, we're a bunch of, we're a bunch of guys similar to you and this is our big idea, right? But like, we're just kind of a startup just like you, and we really want to see this cool thing that you've built succeed. Um, all of that happens to be true, which is helpful, but I think that that pitch and just leveling with them and not showing up like, um, in a suit, right, and like this isn't some big private equity firm, right? We're just like, you know, I'm, I'm intentionally wearing like this sweatshirt, right? Like I show up just to look just like these guys cause I am just like these guys, right? Like I've had, I've been on the other side of the table before and this is the kind of seller that that I would want to have interacted with me. Right, right. Are you with the intent of purchasing a controlling interest of the company or? Cause I see that conversation happening goes, cause a lot of founders start businesses and goes, gosh, I got it to a million bucks, and I just can't figure out how to get to 15 or the next level, but I still want to go on for the ride, right? But I still want control, right? Yeah, yeah. We've had, so one deal right now we're looking at, uh, the founders are kind of, uh, they have full-time jobs and they don't want to go full time on this thing because I think, um, you know. Whatever. That's not for everybody, right? Not everybody wants to go do the whole startup thing where you leave your job and maybe your pension or whatever. Um, and there are other people like you just said, and we're looking at one deal like this now, where the founder does want to stay on. Um, and so we haven't structured a deal like that yet. What we're thinking roughly is that we'll buy it outright and then we will give the founder a salary and then the ability to earn back some equity over time, and that that equity will be uh vested. So they have, you know, significant upside if we can do what we say we can do by partnering together, but we'll be buying like 100% of the company at the beginning and then kind of dishing out. Um, equity like we would for any of our operators. Yeah. Interesting. And do you, when you bring a deal to the uh 4 or 3 other guys, is it, they each have like a percentage of say like one could veto it, even though 3 say great thumbs up. Um. We, we, we don't have still sounds like you're still trying to work that out. No, I don't think we're still trying to work it out. I think that I, so like technically speaking, I put this group together, but do I have any other rights that some other people in the group do not? Um, no. Uh, and, and so it hasn't come up where like. Three of us want to do a deal and one person does not, but there's a lot of like conventional stuff, particularly from the VC industry actually, around how like partners say yes or no to deals, right? It's like, um, strong convictions weekly held is a really great phrase to think about, right? So you come in with really strong convictions. Um, and then if you get new data points that, uh, uh, turn your opinion around, you just kind of, um, you just switch, you just switch your opinion. So I think for us right now, because it's so small, because we have so few deals, if we didn't have a 100% buy-in from everybody, that would be a bit of a red flag, um, because we all do different functions, right? I'm an engineer, we have another engineer, we have a finance guy, and we have an operations growth. Sales guy. So, if we're on all 4 not aligned on a particular deal, we're gonna be weak in that particular area because again, these, these businesses, even at low 7 figures, like, you know how expensive a software engineer in Los Angeles? Like, we can't afford, you know what I mean? We can't afford to staff all these guys. Like, we're actually doing a lot of the work so far, which of course is not the ultimate objective, but that just is kind of what it is right now. Yeah. Yeah, I mean, uh, there's no perfect deal that comes about and, you know, if everybody says no every time something comes up, you'll, you know, you're gonna die first. Yeah, and that's not what's happening. It's every it's been uh it's been good, but we're still we're still early. I think I, I'm eager to do 5 of these, 10 of these over the next year or so. Um, and really start just getting some more reps in, and um I think we'll know a lot more at the end of that. And I always just try and be transparent with anyone coming along for the ride with us that we're new and we're figuring a lot of this stuff out, but we will do it, uh, while communicating really clearly to everyone involved. Is your goal to grow it, say, specific level 3X 5X, sell it, or do you want to purchase a platform company and kind of build around to a to a get to a, you know, a much higher multiple. Yeah, that platform approach is a really cool idea. Um, I feel like that happens. By accident, right? If you're opportunistically buying stuff and the big winner in your portfolio of 10 becomes like an anchor that you want to then go grow by acquisition, I think that's a really cool concept that really only comes about kind of organically. I think it's really hard to shop around and say, hi, I'm looking for not only like all the other deal terms, but like this is gonna be the anchor for the fund for the next 10 years. I think that's a really difficult thing to predict, um, and go out and hunt for. Um, so, so it's a cool strategy. I don't, I think that right now again we're just focused on being a little bit more opportunistic and um seeing what comes. Yeah. And when you guys, the four of you, you said you each have different disciplines. Do you say, I mean, if you go to a house, I'm gonna rehab this house, he goes, hey, I need the the bathroom needs to be done, the kitchen needs to be done, and, you know, that'll add X amount to it. This if you don't have that, do you, if you in a section in the business, do you say, would you go out and hire it or does The expertise needs to be in-house. Oh, we would definitely go out and hire it, but on the deal on the diligence side, right, if, if Henry, uh, who's running the financials, says like, this is funky, we're gonna have cash flow problems because of XYZ, even though we might say the engineer. might say this looks great and the our uh growth guy Danny might say I have a bunch of ideas on how I could do this, right? That's, that's gonna be a pass for us. Similarly, if they're excited but the engineering sucks or the product sucks, or it's gonna be a lot of work, then we'll pass on based on that. So Um, the conviction side is, is colored by the discipline that we are focused on at the moment. And again, that's kind of why it's so important that all of us are aligned, because if any one of those three engineering products or growth are misaligned, um, engineering, I would say growth and maybe financials, that's those are the three, then we're gonna have problems, right? And, and so, uh, if all four of us are aligned on each of those fronts, then maybe, maybe we'll make fewer mistakes. Yeah, yeah, um, have you ever considered purchasing a company that if you saw it come across your board, say, hey, it's not profitable, but you saw a clear way to make it profitability, would you add that into your deal flow sourcing? The way I've been thinking about doing, um, and then let me, let me, uh, let me interrupt you because because any, a lot of businesses between 0 and $1 million just haven't totally figured out their market fit yet. Uh, so that's a possibility, and I'm not saying you have to plug it into something a bigger channel. I mean, just, well jeez, there maybe the people weren't seeing the opportunity. We can make it profitable real quick. We would go first as GPs with our own cash before we brought outside investors in for an experiment that we haven't done before. I, I'm running this relatively conservatively. Could I go try and really blow out a fund at 5 to $10 million right now? I think maybe I could maybe do that, but I would so much rather just take it easy. Do 5 of these, be really conservative, really just, you know, I, I love pitching investors, to be honest, I don't know why, but it's so much easier when you can just post really great numbers. The conversation is just so much better, right? Like, right now I would have to go out and like, there's a lot of caveats like, OK, we've done 3 and the numbers are great, but the numbers are small. It was pure cash, we're kind of like cash flow. We're kind of cash poor relative, you know, most of the time. It it's gonna be so much easier in a year or so when we've done like 5 low 7 figure deals, we're still posting great numbers. That's all the slide deck needs to be is that one page. The rest of it is just context and, you know, them getting to know me a little bit more, right? Or or us as partners. Yeah, do you have a pretty good sense, you know, if you're rehab in a house, you say, oh, this is gonna take $300,000 to get to the market comps. Um, and we can buy it if we can buy it for $100,000 for $300,000 and we'll sell it at $600,000. You have a pretty good sense that you could take a look at a company, know what it's actually worth, the time that you need to put into it, and the resources you need to put into it to get to that. Yes, to all of that, except for the sale price, because I still think this this market where we sit is figuring out uh how to value these things, and frankly, in, in some cases I, I worry about who's above us. So in an ideal world, and we'll get there eventually, we buy below the current private equity infrastructure and we sell into it, right? So we, we buy these things lower, we put a team in place, right? We grow it up to where it's, it's a deal size that a private equity group could actually look at, right? Cause it's gonna be, I mean, it would be too expensive for them to do like a million dollars deal or $5 million dealer for some of these big companies, $100 million deal is too small. the annoying, yeah, yeah, yeah. So if we can take, if we can buy below that existing infrastructure and sell into it, then that's gonna be our huge alpha because we're gonna get like multiple expansion, all that kind of good stuff. So I don't know. I don't know when we're gonna get there. I think it's gonna be uh as we kind of move up stacks, so to speak, and and start buying slightly bigger companies. Um, but we do have a pretty good sense so far of, of what's missing, especially in the context of, and this is all we're focused on really like B2B sass, B2B software companies. Those look, smell and feel and taste relatively the same. And so doing this for 10 years, right, you just kind of pattern match and say, well, oh, the pricing sucks. This is the weirdest pricing I've ever seen. No wonder people aren't upgrading their packages. We just need to Do these like, you know, tweaking little things here and whatever, yeah, like show or whatever, yeah, yeah, we bought one and the price is one of them, the lowest package was like $7.90 and I'm like, what the hell is $7.90? Like, is this milk? Like do do it, like there's no reason we can't just triple this and we then we did. And like the product's worth that. It's, it's that good and lo and behold, like, you know, we we've tripled revenue. Yeah. Who do you look at for kind of a model that's going for? I mean, I like to talk uh about Tiny Cale and uh uh what's his name, Wilkinson over there. He's got a great little model purchasing, uh, you know, a little bit higher than yours, I think, but he had a lot more capital to work with. Well, yeah, I, I mean, Andrew Wilkinson's the man. I, I haven't met him yet, but I, I would, I would love to at some point. Um, and yeah, talk to him a podcast, but he's on the sabbatical right now. Oh, is he? OK. Um, yeah, I mean, it's, it's tiny capital and then above that, you know, I know Angie looks up to like Charlie Munger a lot too, and I, I, I read a lot about his, his thoughts and Um, yeah, I mean, tiny is like I think they're close to, or if not surpassed a billion in like assets under management, so to speak. Oh yeah, that's amazing. Oh yeah, yeah, he was, he was just doing it with his own cash. So I mean, even my service business, so Andrew started with a service business, right? He's doing design that kicked off excess cash flow that he then used to purchase businesses. Um, I, I have a service business, but like, I don't know how the guy got so much cash out of these little service businesses, man, cause it's just like, there's a little bit extra going around, but not, not much. Um, so, uh, you know, I think, uh, if I, the story was correct, his some piece of, uh, some technology wrote or did for people was purchased and he had some royalties from it. I correct me for, you know, I might be wrong about that, but That seems like his timeline there, that happened all of a sudden he started buying these, you know, 5 to $15 million sass business. Now he's got what, 1020 of them? Yeah, he's got a lot. Um, I think it is closer to 20, and some of them are like sizable, like public company size. Yeah, I, I like Charlie Munger. Have you ever read uh read his book on the Mungerisms? I mean, yeah, Charlie's an almanac. Yeah, he's a, it's, it's. It's nice to hear somebody so smart talking about uh avoiding mistakes. That was the kind of big uh the big insight I took from it. Here's a guy who's really, really smart and all he talks about is not making mistakes, right? That is gonna be what's what that's gonna be the secret to his success is not making mistakes. Yeah, what does he call it? So it's like, hey, if I wanted to do this. Uh, what's the opposite I would do to make sure it didn't happen. Right, figure out all those things and go, well, just do, don't do these. Yeah, he's a, he's a crass guy. I love it. It's great. Yeah, so what's uh what's next for you? Um, well, first of all, I have to admit I, I Love your transparency on your, the Twitter and the blog stuff. I mean, that has to help you with deal flow and people saying, great, I, I like what this guy's doing. I feel comfortable. I'd be interested in selling the business or partnering the business cause there's a lot of people, I'm in a mastermind, and there's a thousands of other people around the world, and they want to get involved in deal flow, but a lot of them don't know how to source it. So that's a really big challenge. Yeah, well, I mean, it may, it might look a lot sexier than it is, but like, I'm hustling people on Twitter all the time, right? Like, it's not, this isn't magic, it's not, it's not rocket science. I'm literally seeing tweets, reaching out to people immediately and just saying like, hey, you know, like at the pitch that I went through, hey, you know, you probably haven't thought about selling, maybe it's not ready, but I'd love to hop on a call and just introduce myself for when the time's right. That's it. And I just, you know, and sometimes 6 months later people reach out and say, here's my deal. I'm thinking about selling it. Um, and they go to us first. The transparency came first though, that was, that was, uh, um, you know, I've been, I've been doing this for a little bit now and I've had some uh like character building moments, right? And I just I'm a big fan of. Uh, just being honest, it's just so much fucking easier and, uh, you know, this business is a full contact sport, people are gonna get, you know, hurt and beat up and stuff, but the least you can do is just be, just be straightforward, yeah. You uh feel comfortable talking about a couple of those character building moments? I mean, the ones that really stand out and say gosh darn it, I, you know, that's a lesson to live with me for the rest of my life. Uh, no, I can, I can't. They're, they're, I mean it's, it's all active stuff, so it's, it's literally still, it's still going on. Uh, nothing that I'm directly involved in yet, but like it is, I, I can't, I can't chat about it. How the ego trips us up. Yeah, and it would also just really damage uh some people and I just said no, no, no, keep that close to your chest. That's interesting. So, but yeah, I've gotten, I've gotten kicked in the teeth for sure, yeah, yeah. I mean, uh, that's the point of like how, uh, trusting, have you ever had any issue with trusting the numbers or the financials with some of the people that you purchase companies from? The reason I brought that up, but if you follow Warren Buffett. And Charles Munger, I mean, when they first started out, all the companies that buy now are mostly public, but when they first started purchasing companies or private, they, hey, just send me your financials, you've seen the letter, send me your financials, and uh and they don't even have a conversation on the phone. He'll look over the financials and they'll make an offer in 72 hours. Yeah, and trust them based upon knowing the industry so well and the numbers that correlate to that industry saying we know what a good valuation is on this. Well, by the time they were doing that, there was a lot of trusts on their side, right? And so it was him extending kind of the the golden branch first, but if that trust was betrayed, I don't think that that would be um. I, I don't think that that would have been taken too too kindly, right? Like that would have been a career ending move for whoever lied to Warren Buff one of those emails. I think it was a lot of trust. Warren was going first, Charlie was going first, which is great, um, but there was teeth behind that, right? Like they had some serious firepower to To back that up with, right, if somebody was not truthful. Also too, I mean that's the kind of shit that lands you in jail. It's just so easy to prove. Yeah, to the quality stuff, um, yeah, but for us, to be honest with you, I don't trust the numbers as much for the stuff that we are doing, but it's not because of of trust issues between humans, it's more so just like People make mistakes and like honestly finances, finance is hard, right? Like it's actually pretty annoying to get really solid books and like, oh are you doing it on a accrual basis or like, you know, we bought a company from the Netherlands, like how the hell do they do shit there, you know what I mean? Like what did these, how did these numbers line up? But uh for what we do, most of most of the time the payment processor has like the source of truth, right? Like real credit cards hitting and real dollars hitting real bank accounts. Um, and so we always get access to that and that's kind of where we base our source of truth on. It's not like a spreadsheet that somebody just sends to us. Yeah. And how do you check uh for expenses? I mean, from the bank statements, uh, yeah, yeah. Yeah, but, but again, um, it, it, it for some of these really small deals, like it doesn't um matter too much in the sense that like we're basing this on, on SDE and so if they want to put a bunch of expenses in there, like that's gonna come out in our offer, right? We're only gonna pay on the on the actual, you know, SDE and not uh and not, you know, after expenses and stuff like that. So, so we're, you know, if they want to fight to go add those back in, then they're gonna have to show it to us and prove to us like. That uh those wouldn't be there in, in the future, but it hasn't been that big of a deal so far. Yeah. Have you figured out the numbers on the top of the funnel where you say, hey, we need to be talking to this many people, we need to have this many LOIs in place, we and then we need to have this many to to make this happen. No, uh, it's just not big enough yet. I mean, I don't know that you would ever get there, right? I mean, imagine doing a couple $100 million dollar deals a year. What do you need to process for, right? Like you're sourcing a shit ton. There's not that many of them. There's not that many 100 million dollars. Yeah, but I mean it's not like we're going out to 100 companies at the moment with this message and um. You know, there's just not that. I don't think at any given time there's that many quality businesses we would, we would buy. Yeah. I'm just curious, do you guys use the same attorneys and tax people all the time and due diligence people, or? So we, I've been kind of a stickler on diligence. I don't, I could see why some people outsource it. We are not outsourcing it at the moment. Um, but yeah, same lawyer, same accountants, bookkeepers. Yeah, cool. Well, man, I, I, Andrew, I wish you best of luck at this, man. I love what you're doing here. I think you, I think you'll do well because the base. You know, following Charles Munger, these guys, Tiny Capital, Andrew, I mean, those are good, great role models. Yeah, they are, they are. Gotta get them on the board. I, I, uh, well, I got a pretty, uh, positive response from Andrew said, hey, I'd love to do it, but I'm on sabbatical. Let's check back when I come back in. So I'd love to get him on my podcast, yeah. Oh yeah, yeah, he's the, what, what do they call him the oracle of of Vancouver. So, yeah, yeah, just that's amazing. And uh do these companies are you do you have an incorporation and uh all these companies under a holding company like an LLC? Yeah, so we just have a GP that's an LLC and then each of the companies is in a manager managed LLC. It's like a super, super, it's like a poor man's fund, straightforward thing. Typical, very typical. That's great. Yeah. Andrew, man, I wanna thank you for being in the top entrepreneurs podcast today. Thanks so much for having me, John. I appreciate it. All right, take care. Cheers. Bye.