E:30 Top M&A Entrepreneurs - Michael Bereslavsky - over 300 Deals /on his 3rd investment fund

Welcome to the top M&A Entrepreneurs podcast. I have a guest, Michael Bereslavsky. And the reason I ask him, I had a friend recommend Michael to me, uh, but the reason I ask him is, a lot of us are in the M&A world. We are fairly new to it, and then we hear something and then we're stuck on those rules. Like, that's the only way we can buy a business. Michael has taken a completely different approach on this and buying. Micro or nano revenue businesses and then basically flipping them. So, He's done over 300 over the last, uh, what, 89 years now? 10, almost 10 years. So welcome, Michael. Welcome to the podcast. Hi, John. Yeah, it's been about 16 years in in this industry and starting smaller and going bigger and buying bigger and bigger deals. Yeah, so you. Uh, I did a little research on you, you know, on LinkedIn. I listened to some of, uh, your podcast interviews. Uh, you, first business you bought was in 2004 for $120. Is that right? Yeah, that's, that's about right, yeah. Yeah, and then you did what? What kind of site was that? Yeah, I don't know if you could call it a business. It was a small website about Blackjack. Yeah, I think it was back in 2004, 2005. And it was just a website that had, I think, like 5 pages of content, and it had this unique game, uh, blackjack game that was uniquely coded in In Java Singh. And Uh, I, I bought it for $12,020. It wasn't really making, it was making maybe a few dollars per month through, through Google AdSense. And I remember when I bought it, my plan was just to grow it a little more, promote it, add some back links, add some content. To make more money and so I did that, and it still didn't work very well because the revenue only increased a little bit, still not enough to really make my money back, so I just, Uh, let it sit there and continued working on some other projects. And then suddenly, maybe a year after I acquired it, I got an email from this uh gambling affiliate company, a really big company that were interested in the website. And they didn't ask for any details like revenue or traffic or anything. They just asked if I wanted to sell it. So of course I responded with maybe. And asked them to make me an offer and they offered me $2500. So I just took it and I thought, well, that's pretty nice. I spent $120 for it. I got $2500 and that basically start my career in flipping websites and online businesses. 20X invested on capital, yeah. Yeah, absolutely. And, uh, so, so at first I didn't have any money. I was, uh, um, you know, a poor average student. And gradually as I accumulated some more capital, I was able to buy bigger and bigger deals. And now also we work more with investors. So for example, right now, uh, this week we are acquiring a business for about $700,000 with several investors and, and the plan is pretty similar actually surprisingly, the plan is just to grow it and then resell it after a year or two. So the plan hasn't changed in this past 16 years, but the, the methods have improved and the range has increased. Yeah, I, I wanna kind of try to narrow in on how you came upon this business model, because a lot of entrepreneurs they go, they look at it and go, well, gosh, if I did this on a small scale, I could probably do the same thing on a larger scale. You know, I could go nano cap, micro cap, small cap, and then midcap. Keep going up. What? I mean, you've done 300 successful deals. I mean, where, where was it at the point you said? No, let's just stay below a million. Yeah, that's a good question. So, a couple of things. First of all, uh, people often ask why, why flipping? Why not just buy something good and hold it like forever, like Warren Buffett does. Yeah, you buy a good company and you hold it. And, uh, one big reason is because this is a, a rapidly growing emerging market. And in markets like that, there is a lot of opportunities. There is a lot of, uh, a lot of really good opportunities with high margin. So my strategy is to really find those opportunities and, and then maximize the returns by. By, by acquiring it and uh and improving the things that you can improve quickly, resell it and then go on to the next and the next and the next. Because if you stay, if you acquire one business and just stay with it or acquire several businesses, stay with them for a long time. The opportunity loss is that you cannot acquire more businesses because you have your capital, your time, your efforts tied up. Uh, so that's one thing to keep in mind. Regarding the, the model, basically for the first maybe 3 or 5 years in business, um, There was, and, and, and at that time, there was really no, uh, no way to learn. Like, you just had to figure everything by yourself back in like mid-2000s. Now you have courses, you want to learn how to build an e-commerce business. You, you go and, and, and, and use a course, you wanna learn how to build a successful blog. Um, you, you go to something like income school, by the way, we just had the, the founder of our podcast, and it's very exciting. They actually have Like a 2-year plan that the members just go through in order to build a successful business and it works. And back then, I was studying, there was nothing like that. No one shared anything about how to build a successful business. So for me, it was all just trial and error. I, I start many different things. I bought many different businesses. I owned, at some point, I, I had some gambling sites. I had some adult sites. I had lots of different affiliate sites. I was like in finance, like I was in all the different niches. I had some YouTube channels. I was doing everything. And so after a certain period of, of a few years, I really looked at all the different projects I was doing. And, and, and I thought to myself, well, it's time to really look at everything and understand what's working and what what what's not working so I can really scale and do it properly. And what I've realized that all of the different projects that I've had in these past years, uh, the ones that were profitable, the ones that did the best, but the, the ones that had that in common, that I was buying something and then I improved it, and then I was selling it. And then I realized that that's a model, so I'll just keep doing that because there are also many projects where I build something from scratch. And uh that often didn't work as well. Yeah. Did you, when you look at all those other content sites, I know that you said in some of your previous podcasts with guests as a guest, you said, I, I just do content mostly than sass. And when you said you bought all these other affiliate sites and, or YouTube and try that, did you filter those off at some point and say, you know, I just want to get a content site where it's just putting more content up there, uh, getting traffic, getting ad, uh, ad spend, etc. and then different or what was the, the process there? Yeah, so we, so it's important to, to focus on areas where you, where you have a lot of expertise. Because that's, that's really what matters like the, the success rate will depend mainly on, on having the expertise to look at the business and just know right away I can do this, this and that, and I can double the revenue. And it's hard to do that if you are spread out over all the different uh types of businesses. So my main expertise are in content, in, in marketing and understanding deals. I know a little bit about everything because I've been doing it for so long, so you, you give me some random business, I would know uh some things about it, but I try to really stick to my main areas of expertise, so mostly it's content and sales businesses. And now we're also looking to branch out into services businesses or productized services businesses because I think this is something that's often very undervalued and has some really amazing opportunities for growth, like you buy a service business and you turn it into more of the SARS business, you add some. You add some code, you add some systems, and the value just skyrockets. For instance, like what kind of service business like uh exterminator or, or, uh, no, no, so yeah, so service would be, for example, uh, setting up a YouTube channel. Let's say there is a lot of potential, but a lot of people who want to start a podcast. OK. A lot of people want to start a podcast. They have no idea where to start. Like what, what do you do? What do you do first? How do you operate it. So there are many services that that provide that the service in the box. They set up a podcast for you, they run it, they do video audio editing, and all of those things can be automated, delegated, so you can turn it into a sales business potentially, maybe not the entire process, but most of that. And then this is the al business that sells for like a 5xation versus a services business that sells maybe 2 or 3 explanation. It's kind of a simple um. Is the 5X because it's in a trending industry versus the content business? Is that what's the difference in the arbitrage and the multiples? Um, yeah, so currently there are different multiples for different types of business. It's, it's based on a few factors, but, but for SA specifically, the multiples are higher because people believe it's growing. Uh, like it could be the next Facebook, you know, it could be the next Uber. Uh, all, all of the biggest companies that you look at right now, the biggest tech companies, the SARS businesses. They have software and they have like unlimited, uh, number of users. So when people look at the SARS business, they think, oh, this could be that, you know, I could get to a billion users and then it's, you know, and then go public. Yeah, yeah, I know, if you go to micro acquire and many of those businesses are below $2 million and those are businesses that people want to sell cause they can't figure out how to, you know, be a unicorn. So, and they still try to buy those and their multiples are out of this world. Yeah, and there is a huge gap between the multiples people are asking. And yeah, many of them are just completely crazy like how much you want for it? I want $2 million. Why? Um, and there is generally no, like no specific reason, just, oh, I thought, you know, I put enough effort into it that it's worth that much. There is no, yeah, no revenue, no profit bought anybody thing from a micro acquire. Um, not yet, but we've looked into it and there are some, some good deals. I like the structure of the model. But realistically, SARS businesses uh sell between generally between like 4 and 5X now. Sometimes you find them for 3 X. Of course, it depends um if it's a well established solid business. So in our podcast, we just interviewed someone who acquired the SARS business for 5X for $2.5 million. And he felt it was a very good deal, and he was able to get an SBA loan and some and some financing and some some extra investors to come in for the deal. And the the business was mostly organic traffic. And a really good sales platform, so there is a huge demand for this kind of deals now. Yeah, yeah. And a lot of demand. That's why they think they can get a, you know, 1015, multiple on these things. Yeah. Just not gonna buy that. Yeah. So, is there any sass businesses that you would avoid? I mean, you know, people, high engagement, uh, you know, diet stuff or politics or military stuff, you know, that's very high engagement. You just It's a boring industry or just I won't get into it. Uh, yeah, so we have, in general, we have some criteria of things we avoid, so we avoid businesses that are, uh, questionable legally. Because we, we raise capital, we work with investors, we can't really put our investors in some legal risks. We avoid businesses that are questionable morally because we don't wanna like get into something that's, uh, uh, or stuff like that. Yeah, well, the the morally questionable things are, are debatable, I guess, but what, what. What, what I mean is more like businesses that promote some hate or violence, um. Which, which covers a lot of politics. Yeah, yeah, yeah. Yeah, we, we don't usually, we don't usually do adult businesses, but it's not like, uh, strict now. It's just, uh, we rarely find anything that's worthwhile in that space. Yeah. And all of these deals in 16 years, are you doing all this by yourself or do you have other people on your team? I know that. You know, on your website, you've got two different companies, Domain Magnet and Deal Flow Brokerage. So I do have a question about the difference in those, but uh Yeah, sure. So Deal Flow Brokerage is uh M&A advisory firm where we represent sellers and help them sell their businesses. So it's, so it's a brokerage. And we have, uh, we have 4 people there in total, 5 people, myself, my partner, and um we have a manager and two brokers. For the main magnet, which is my main company, we have, uh, we have a team of about 15 people currently, um. All, all the remote, some are full time, some are part time. And so, uh, throughout this time, yeah, mostly I was, I always had some, some people because there are some things I'm just not good at doing, like, I'm not very good at technical stuff, despite actually studying to be a programmer. I'm just, I just don't like doing that. I'm not good at that. I'm not very good at writing. So there is also, so I always have to delegate some things. So I've always had a few employees and recently we've we've gotten a bigger team. Yeah. Does anybody have, I mean, if you, if somebody finds a deal and say, hey, Michael, take a look at this, it meets the criteria of our business model, uh, Did you, did you have a ability to say, hey, yeah, go ahead and buy it, and you got a company credit card and they buy it, you know, if it was only $5000 or $10,000 or you mean like for what, from like the team or investors or the team, right, yeah, or is it all going through you? Uh, well, we don't really buy smaller deals now because it's, it's generally not worth it. Like the, the costs are quite high for us to review a business and, and, and transfer everything and set it up. So if you buy a $4000 website. It might cost us more than that just to talk about in, in our staff cost and everything, yeah, just to do the due diligence and to go through the whole process and like sign the agreements and on board it and transfer everything and then start working on it so it's just not worth it for us. Um, but yeah, uh, in terms of deals, uh, all the deals, so currently I have to review and, and approve before they, before they go through. Do you, do they have to be profitable or can they be unprofitable? Yeah, they have to be profitable. We, we don't buy profitable deals. Before then, then I was buying. So, so now we only buy deals in 6 figures, uh, generally like targeting mostly like mid high 6 figure deals, right? So if you are buying a $50 million dollar business. Uh, you, you, you don't wanna pay that much for something that's not profitable. Uh, previously when I was starting with some smaller sites, sometimes I would buy some things that are profitable, yeah. Uh, then, then I was buying sites like hundreds of dollars or thousands of dollars, but generally it's um. Uh, yeah, it's not recommended unless you know exactly what to fix, how to make it profitable quickly, I would not recommend buying something that's not profitable or something that's like dropping rapidly in revenue. Yeah, unless you can, uh, unless you know what you and get a good deal on it, great deal on it, like they pay you. Yeah. Yeah. That, that happens too sometimes. I've, um, we haven't had those deals, but, but there are people in the industry who are able to get deals where they, uh, they, they get equity for nothing and they, and they get, uh, basically seller financing and just manage the business and grow it and get more and more equity. Um, So that's a thing apparently it doesn't happen often though. What is the is the the price of a content company today? Is that a multiple of revenue or multiple of ebita? Yeah, so it sort of depends on, on, on price range. So if you are in the price range of, let's say, under, under mid low 6 figures, so maybe up to a couple $100,000 it's generally just a, um, a multiple of revenue. And sometimes it might include, uh, the cost of hosting or some, some minor costs and call it the cost of net revenue or the cost of profit. But in reality, you are just paying for revenue. Because to operate a business, you don't need a lot of expenses. Yeah. Um, which is not, not entirely true. It's just something that's in, that's acceptable in the industry currently, but that's not entirely true because you do need to constantly update the content. So the current average multiples is, um, around 3 times the annual profit. It it can be a little bit, it can be uh quite a bit higher for something that's very well established, can go up to maybe 4X. Uh, it can be low like 2 X, uh, annual, annual revenue for something that's, uh, that, that has less, less history. Yeah. Do you is there any, uh, part of that business, you know, I have a lot of listeners and they're all over the board, and some people will just say, gosh, I just You know, updating content every day and having a content site, you know, I just can't do, uh, because that's what content sites are like. If you stop coming back if they don't have fresh content. Yeah, so To, to run it, run most content sites, most content blogs, you basically just need to think some. You need some basic technical expertise. Most of them use WordPress, so you need to know how to use WordPress, or you need to have someone that, that you trust, someone that, that you can work with to, to take care of the technical things. And think things break, you know, all code breaks, so you have to be ready for that. And uh that's really the number one thing that people often um uh ignore, and then you would see someone going and spending $50,000 on the website, and two months later, the website is down and they don't know what to do and so it just stays down. Which is quite, quite, you know, quite a shame to see, so you have to have some basic technical expertise. Uh, but beyond that, uh, content and, and SEO is, is the main thing. So for content, it's relatively easy now to, to hire people to delegate. Uh, often when you acquire a business, you can ask the previous owner to connect you with the writer who worked on the site before, and then you can just continue working with the same, with the same writers, with the same editors and publishers. Yeah, um, and then also often you have to do some SEO, so maybe updating some old pages, optimizing them, or building some back links, so that too you can find uh service providers. Upwork and fiber, they all do that, yeah, yeah, you just have to, to know how to choose them. Yeah, I, uh, the lesson I got from that was, uh, you know, you pick, if you wanted a logo or something worked on, you select 3 of them. When it was $5 it was a lot easier, but you select 3 of them, you take the best one, and you keep working with that one. yeah. Are you, uh, Have you set yourself up for business where you're the feeder to bigger companies to acquire that acquire your, your flips? Because a lot of these businesses only have the platform business and they go, oh gosh, I need media cause I need customers flowing in. I wanna own those customers and Michael's a great business. I just tell him to go get this bug. It's too small right now. Buy it, flip it, we'll buy it when you get it to a point where it makes sense. It's an interesting idea. Uh, not, not really, I haven't, but, uh, I, we did have quite a few people coming in and saying, Uh, maybe you can like help us find this kind of deal. Like we wanna buy this business for 1 million, for $2 million for 5 million. Uh, would you find us a deal? And that's not really our main, uh, the main thing we do. So I want us to just stay focused on the, the flips that we do, finding good deals, acquiring, growing, selling. So we get a lot of requests, but mostly we, we just reject them. And, um, when, when it comes to profitable businesses, it's, it's easy to sell. Like you, you don't need to have a, a, a community of, of feeders or bigger companies to sell them. You can always sell a profitable business. Of course, if you do have the contacts, it usually helps. So most of the, the businesses that we sell, we actually sell directly to some of our customers, to some of our networks to. To bypass the brokers and processes so it's faster and cheaper. Because the deal happens faster, it's a fair deal versus going to an auction like Empire Flippers or something. Yeah, yeah, and we can save the the the 15 or 10% commission and, you know, weeks of preparing things and compiling data and just, yeah, often it's as simple as me just contacting one of my contacts and saying, hey, we have this website for sale. This is the revenue, this is the price you want to buy it. And I would just say yes, and then they send the money and I send the website and that's it. Yeah. When you, when you know each other, when you have the reputation in the industry, it's, it's much easier to like, don't go outside that, yeah. Yeah, yeah. Did you ever have the temptation to, you know, you saw a business and you, it was starting to grow, grow more and more to say, well, let's keep it a little bit longer, like, you know, you know when to hold them, you know when to fold them kind of deal. You got your profits. There was that threshold like I need to sell, uh, and if you ever went outside that, it always is painful. Yeah, that's the, that's probably one of the most difficult questions in this, in this, uh, in this industry, when to sell, and I have to say I've made that mistake many times when I try to hold on to, to businesses. And uh And, and then they, they got hit by Google update and we we've lost some money and uh. And we had to sell for a lower amount. So that certainly happened, and I also had those deals where we sold prematurely and then they, they continued growing and growing and growing. So it's really hard to predict. Uh, so currently, uh, the strategy and my model is simple. We, when we acquire a business, we have a plan of what we want to do to accomplish on it, like all the different optimizations and improvements. So we just complete that, we wait a few months so that we see all the results, and then we are ready to sell. Um, if it goes up, if it goes down, that's, that's what happens. But from our side, we know that we've done. We've completed our plan, so it's ready for sale. That's the same plan for every site that you buy. Um, the plan could be different. Like, the actions could be different. Some sites might need paid ads. Some sites might need like a lot of content. And that also depends for some plans that might take half a year only if you are just optimizing some subconversions, or if you are building a lot of content and branching out to different countries, for example, that may take quite a bit longer, like a couple of years. But the plan is similar in the sense that we, we look at, at things we can optimize and improve in this, uh, short to medium term. And once we've covered all of that, we've covered all the content we want to cover. We, we've built some big links, we've optimized convergence as much as we can. That's a good time to sell because um. The improvements, the results from further improvements will, will generally just be marginal, uh, or you just have to spend a lot longer and invest a lot more capital to to grow further. I mean, it's not very far from looking at a house to rehab. Sometimes it's the pool, sometimes it's the curb appeal, sometimes it's the kitchen. It it's the same model, you're still working in your head going, I know what exactly what's gonna cost and the time it takes to get that curb appeal, and then I need to put it back on the market, flip it. Yeah, that's very similar. I've actually done quite a few of those as well. Um, I did uh I did a bunch of uh flips for houses and apartments. And it's pretty similar. You, you, you find a good deal and you buy something cheap, and it's, and usually it's just completely messed up. And then you have to renovate it, make it look good on a budget, rent it out to some, you know, find some good tenants and then sell it. It's pretty similar, except the with houses, it's, it's more work and it takes longer and the profits are limited. You cannot have a 10X. You can never have a 10x profit with houses. The best I was able to do was 2 X, but it was over a span of 3 years, and it was kind of lucky because I found a really good deal. But um it's very hard to get really high profit of houses. Yeah, so after 300 deals, you have a pretty good sense of saying, hey, I bought this site for 500,000, I'm gonna get a wide X on it. 1. 1 million sale, 2 million sale, you kind of know what it's gonna look like after you rehab it. Yeah. Yeah, that's pretty much the main, the main skill that I rely on is just, uh, looking at the business and seeing what can be improved and how it can look after and what, what the value is and what the value can be, yeah. Yeah, and you started this fund, and this fund is to do what? Is it to acquire the sites or put more money into the sites or acquire more sites or all. Right, so we have, so we have, um, we have, uh, two funds. We actually, the first one we had. Um, we start, um, about 2.5 years ago and we just closed it recently, officially, so it had a 135% return in the first year and a half, so it did quite well and it was just a flipping fund also for smaller size. And then the second fund we set up um. Uh, earlier this year, so it's, it's doing well also it's profitable, but we haven't, we haven't yet calculated things, so it's only about 8 months old, I think. And we are setting up the 3rd fund which we are currently raising capital for and it's uh it will, the rate will close at the end of this year and then we'll go and buy some businesses for it. And besides the funds, we also occasionally have like one-off deals if we have a really good deal and we want to, to, to get capital quickly, we would sometimes contact our investors and then we set up a separate entity for an individual deal. Um, yeah. What, so, so what kind of investor, uh, size amount offering are you looking for this, uh, 23, 3rd fund, I guess it is, yeah. So this, yeah, so this 3rd fund, we are looking to raise up to $10 million combined and the minimum investment size is $120,000. And we can only accept acc accredited investors also. What is that, uh, I know that's the United States where the SEC is involved. You have to be a credit investor, but, uh, you're in Thailand. Can you accept checks from Saudi Arabia or, uh, you know, Europe or? Yeah. Yes, so all our, all our companies are based in the US and all our funds are based in the US and most of our investors are also based in the US, so we have to, to comply with all the US regulations, but we, we can accept investors from anywhere, um, like from, um. Yeah, from, from, from, we have many from Europe and other countries, and the, the regulations are similar like it's, it's less tight for non-Americans, but they still have to comply with having, uh, with, with having the, the accredited investor status, basically, which means, yeah, which means you either need to have about a million dollars net worth or have a $200,000 annual income. So that first fund, 135% return, how long was that fund, the life of the fund? So this is after about a year and a half and it had, yeah, and it had 9 deals. Uh, so this was buying smaller sites like, uh, the average was about $50,000. And it was really higher risk, uh higher risk uh fund where we acquired really high risk websites are quite new. And honestly, the big mistake we made is we haven't sold them fast enough. It just comes back to that question you asked earlier. Because we haven't sold them fast enough, often we, we lost on, on, on sites getting hit by some updates and then the traffic drops. So had we sold them really at the right time, uh, the returns could have been double that even, you know. Yeah, I gotta go back to this. How do you know when to sell them? You, you could buy the site. It needs different things to, uh, improve it, whether it's SEO or whether it's more content. And then you do everything that your skill set brings to it, but, and you wait 3 months, 6 months, go, gosh, we gotta, we gotta flip it. Yeah, but yeah, it's hard. It's, it's like, like Bitcoin. How, how do you know when to sell? How do you know when it's gonna go up or down? You, you don't, or like stocks, you, you don't. It's hard to say. Uh, so, yeah, the best thing you can hope for is to have some strategy, and that's, that's really the strategy we, we, we follow and generally we, we target the time frame of, uh, like for smaller sites, it can be a year for, for bigger sites like mid 6 figures and up, it would be generally a couple of years. And, and, and from my experience, we know that this is the time frame that allows us to add in all the, all the improvements, all the optimizations. And see the results, but also, uh, this, this first fund was targeting really high-risk websites. And now we don't really buy those kind of sites anymore. So we buy bigger sites that are more established, um, more like real businesses, less of, um, kind of, you know, hacks that might get hit by Google update and lose a lot of traffic right away. So now that, that, that happens quite rarely with newer websites. Yeah, did you, you, you were the manager of the fund, you guys still did a, you know, 10, uh, you know, 20% carry, 2% admin fee kind of deal like that. Yeah, for the fund we have, yeah, I'm the manager, we have uh Um, so we have a 2%, uh, management fee the first year and then 1% per subsequent years and, uh, and 30%. I, I keep mixing up the terms. I, I forget which one is scary, but it's like 2% and, and 30% of the, um, of the profit. So the 70% of profit, yeah, so 70% is split the investors. Yeah, but as the fund is smaller, so the minimum we, we plan to accept is about 1.5 million and up to 10 million, um, yeah. So, so, and we also put some of our own money in it as well. Right, of course, yeah, yeah, that's awesome. Yeah, so how did you do, you're from Israel, right? I thought? Yeah, yeah. Did you were you were in the military? Israel. No, I, no, I was, I was born in Russia and then uh and then our family moved to Israel, uh after I finished high school. And so I lived, I lived in Israel for a while and then I decided to live. About 5 years ago, and I traveled around the world and just found myself settling in Thailand because it's, it's nice and people are smiling, yeah. Isn't Empire Flippers in Thailand? Yeah. They, I think they, they used to be, they, they come here often. Um, they, uh, I think they're mostly in Vietnam, but they have a they have a team that's all around there. Yeah. So, what do you, who do you seek to inspire you every day to go, you know what, I, I, I wanna get another site. I really wanna get this model down. We wanna raise more capital. I mean, who do you follow and get inspired by? Uh, no one in particular, so these days, I just look at making sure that any deal we do is just something that can be a win-win for everyone so that we, we can pay a reasonable amount to the sellers, so that give them good terms, we can show them that we are able to grow the business, that they've put so much effort into, that we can give good returns to investors. Uh, just making sure that it's a win-win for everyone, that it's a website we can actually grow. And um we get a lot of deals. We, we only move forward with very, very few out of them. So that gives me really the opportunity to choose. You have a number on that, what that looks like that funnel, the top funnel, we look at, you know, 100 deals, it gets down to 10 and 2 we make offers on. Yeah, we, uh, over the past couple of years in our database, we've looked at, we've had, I think, 1300 deals in our database over the past couple of years, but that's only the deals that we've found that were good enough to put in our database. So there are probably thousands of others that we did not lock. So there's a lot of deals we were looking into. Um, now though, we, we are changing the strategy a bit because We, we've got the numbers to really do the research and understand that the good deals only come from like certain sources. So they know that there is a specific sources of deals that we just never find good deals, so it's not worth uh spending time to review those. Do you think there's any difference between spending your own money on a deal and then investors' money, because this happens in uh Silicon Valley a lot. You start raising money, it's not your money. And you're buying these companies that don't go anywhere and You know, they end up on micro choir, let's say. Yeah, I think the biggest thing is before you go and ask for investors money, you have to have your own track record. Um, I see many people just, just going and, and raising capital to acquire businesses and they Honestly, I have no idea what they're doing because they've never done it before. They just have some background in in venture capital or in private equity so they know how to raise money and they are able to do it. But I think you should never do that before you, you've done some deals on your own. Yeah. Um, yeah, and, and then you should really only raise, uh, capital from investors if, if that really helps you. Like if you have enough capital of your own that you can safely go and buy businesses, then you probably shouldn't raise capital also like if you are doing some Let's say you have a million dollars of your own capital and you want to buy, you know, a $50,000 business or a $100,000 business, you don't need to raise capital for that. But if you have like a million dollars net worth and you want to buy a million dollars business or, you know, $2 million business, you probably won't be able to fund it by yourself. So, uh, make sure that you have a track record. You've done this before and then make sure that this is actually something that helps you. Of that, yeah, this is something you can't cover if you own capital. Are you at this point, when you look at a deal, say it's a million dollars, the guy's offering you say, hey, it's a good deal, we can fix it. Do you Uh, pretty solid on the type of financing you offer, like, hey, we're gonna put 30% down, we're gonna use 30% seller finding and 30%, uh, you know, equity from investor. Let's just say that's an example. Yeah, um, it, it varies quite a bit from deal to deal. So usually I try to, uh, and that's the best way is just to, to talk to the seller more and understand what we're looking for. And that generally dictates the deal. So if this deal I mentioned, we are doing this week, the seller, uh, said that they are interested in staying on with the deal for a bit longer, and they were also interested, they were also open to doing some seller financing. And that's always great as a, as a, as a buyer. And so we've discussed it a bit and I offered a couple of models to see what they would be open to. And, and then like, I, I sent them an offer and then they responded with a counter offer. And that's how it usually goes. So there is, there is a few different structures I can choose from, but it varies based on the deal and based on the seller, and also based on what we want, because sometimes for some deals, you want to have the seller involved for as long as possible because the, the, the business is so complex. And other deals, like it's a very simple business. We know we can manage it much better than the seller, so we don't need the seller involved. Um, and, you know, and other business might be very high risk, and we, so, so we wanna make sure that we get as much leverage as possible, that we might get as much seller financing as possible. So having the right structure really allows to mitigate different risks. Just curious on that uh deal with the seller financing, you know, with uh earnouts or seller financing, sometimes you see sellers, they'll ask for access to the finances so they can make sure they're getting paid. Did this guy ask for or person asked for it? Um, so, so sometimes it's the seller financing is fixed. Let's say you, you pay them like $10,000 per month for 24 months, right? In that case, it doesn't really depend on anything. And then it can be an earn out that it's like half the revenue or so for the same 24 months, for example. So if it's, uh, if it's based on the revenue, then yes, absolutely, you have to provide the seller with some. Uh, with some reports, so, uh, if that's the case, then yeah, they would share that. Um, Yeah. And you, and they, they clearly know when they're selling that you're gonna come in, work your magic, and then flip it in 6, 1224 months, whatever that window is. Yeah, we, we are quite open with our strategy, so we, we tell people that uh we, we are not, you know, buying it to hold it forever. We are, we raise capital from investors. We want investors want to see return. And so we, we don't have a, like a fixed, uh, structure that we have to sell after a year and a half. We are open to holding it longer or shorter, but the idea is we would improve as much as we can and then find the buyer to take over. So yeah, on this, uh, fund that you're doing, they're raising the 10 million, what's the expectations the return on that? I mean, how many years? 57, 10? The term of the fund is 5 years, but, uh, most of the deals we acquire, we would generally, uh, resell after about 2 years. And once we resell, we distribute the profits, and we also distribute quarterly profits from the 2nd year. So investors will start receiving receiving returns from the 2nd year and also from like the 3rd 4th year, they will start receiving bigger returns once the businesses are sold. And profits are distributed. Yeah, and let's say those guys, the investors look for a minimum, hey, you know, I'm gonna give you $150,000. I'm looking for a minimum 30% return on this. Do you work backwards and say, well, jeez, we need to do 10 deals, or we need to do 25 deals. You already have that worked out or is it? Uh, no, it's not really, we, first of all, we don't guarantee any returns. We, we don't ever provide any kind of guarantees and investing in online businesses and investing in funds can be very high risk. Yeah, um, no, I didn't mean to guaranteed. I just meant, you know, they have other places to put their money, and here's a guy that's dead it was this first fund is 135%. So you have, have high expectations now from me. Yeah, so what, what we, the way we, we say it is we, we have a bunch of case studies we have from deals and from our funds and portfolios, so we show that and based on that we can We internally expect to be able to achieve this similar high returns, but we don't guarantee it and our objective is generally to, to get more than 50% annual return on the capital. Uh, but again, we, we don't provide guarantees and there could be many things to go wrong. And it doesn't depend as much on number of deals. In fact, fewer deals often lead to better results because we can really put more effort into the deals, more attention, and, and they would, they would perform better. So we, we usually aim to, to do a few deals. So for this fund, we'll probably do like 35 or 6 deals or something like that. So that we can, um, yeah, but based on, based on the final amount you raise. Yeah, and that keeps you busy, you know, like the Andries and Ho Horowitz guys, uh, they will, uh, start a fund, close it, make the investments, simultaneously kind of leapfrog onto the other and start another one, and you have plans to do that also? Yeah, that's sort of what we do. So this is the first fund and we, we can. Uh, we, we plan to continue with that's a model of starting funds maybe every couple of years or so, and, and then also doing this occasional like group buys or or funds that are specialized for specific types of businesses, uh, there's opportunities to arise. And so that that's what we do and we have, so we have this popular industry podcast that allows us to Uh, to, to talk to, to network with many people and we also have a newsletter where we share uh news about the industry that allows us to contact investors quickly once we have a deal available. Yeah, and that PPM or offer documents that that that's a domain magnet, right? Yeah. Yeah, yeah, we, I prefer to keep things simple, though, and we generally just work with investors who have experience in the industry, who have owned or invested or operated online businesses. So they don't need, you know, a 50 page document. They just like look at one or two pages, they, they see the main things they want and they, and they know if it's something they want to invest in or not. And that's because Michael's behind it. Yeah. Yeah. Yeah, good for you, Michael. Thank you so much for taking the time to explain your business model and everything that uh you do here, and I wanna wish you the best of luck and success in the future in Thailand, it's humid there, right? It's, uh, yeah, it's, it's getting to the, the winter soon so the weather should get better. Well, thank you, John. It was a pleasure to talk to you. Yeah pleasure. Wish you, wish you success as well. All right, thank you. Take care, man. Thank you.