E:42 Top M&A Entrepreneurs - Tom Shipley raised $100 million for ecommerce acquisitions - Add a ZERO

Cloud. Thanks for joining us on the top M&A entrepreneurs. I want to first talk to you about my first sponsor. It's Do Dillio. It's, you can hire due diligence professionals on demand. It's an M&A due diligence marketplace and service providers, acquisition entrepreneurs. It's free to use, free to sign up. You only pay when you engage with the service provider. I like to say, No deal is better than a bad deal. So you could take a look at the prices. It's for offline, online businesses. I'll tell you what, if you're borrowing money, you're gonna require, they are gonna require due diligence. So, let's get into my guest today is Tom Shipley. He's an investor, strategic advisor, co-founder of Foundry, an e-commerce aggregator. He's also a founder of Atlantic Coast Brands, which did in the past are still doing 1 billion in revenue. Is it 1 billion or $2 billion in revenue? To? OK, so over the, we've launched a large number of brands over the years, and all the brands that we created from scratch and the revenue that we generated was over $2 billion. Wow, that's amazing. Hey, so how did you get started? I'm gonna want to go back all the way back with this Atlantic Coast brands. How did you get started with e-commerce brands? And I know that we're gonna get it to later this uh uh the foundry and raising capital, but let's start with the Atlantic Coast brands, and how that got started. Oh, absolutely. And I'll just take a quick uh step back. is, well, I'm a, I was a kid from, uh, Cleveland, Ohio, in Orlando, Florida. Um, and what taught me a lot of what I needed to know about entrepreneurship is I was at Florida State University and decided to make a major shift in my life and start having impact. I moved to Israel at the age of 20. I served in the Israeli Special Forces. And I'm gonna say that significant amount of what I know about leadership and how to build things, and tenacity and what you really need to be an entrepreneur, I learned in special forces. Man, it's, uh, I've, I already talked to somebody from that the Israeli Special Forces. Is it 3 years for men, 2 years for women, or? So I still, yeah, so it was it, so that's the foundation and what shifted is for special forces now, again, not when I was there it was 3 years for men, but what shifted is, is that now they actually sign ask you to sign an extra 2 years because they invest at least a million dollars in your training, so they want a little bit higher of an ROI on that. Yeah. So you are from a tiny small country or you spent time there that uh could be attacked at any second, any moment. How does it feel to be The responsibility on your shoulders on that part, that you have to serve duty. I mean, here it's elective to serve in the Marines, Air Force, or army. Well, it's um it it was it was interesting cause I felt even though I was born in the United States, I'm Jewish, so I felt the obligation and responsibilities is why I moved to Israel. I did that, um. Also, I learned the power of the impossible. If you look at most successful businesses and how many businesses we're talking it actually gets over $10 million let alone $100 million a year, and survives more than 5 years, we're talking about a small percent of a small percent of a small percent. Yeah, same thing in special forces in the Israeli army, it's 170,000 soldiers in the army. There's 7. 000 combat soldiers. There's 10,000 that tried to get into my unit specifically. They've put a bunch of us through tests, including a day test. They pick 1000 of us to go through a week of hell, and they try to break you physically, mentally. They tried to and they measure everything including your not only your tenacity, but also your, your integrity. And out of that they picked uh 25 of us for an 18 month course, and you know, um and at the end of 18 months there were 13 of us. So, but with that same focus and clarity that I had of I will be, and I saw I envisioned myself in the unit and nothing was gonna stop me, you need the same level of clarity you do, no matter what you do as an entrepreneur, because it's not easy. It's soul crushing. There's so many things that will happen, and occasionally you might get a streak of luck and the winds behind you, but I guarantee you it's never as good as you think it is, and that the worst of times is never as bad as you think it is. And again, it's, it's those valuable lessons about always putting 1 ft in the other, and there's always a finish line, there's always an end to everything, except for this incredible game of life, which is an infinite game. Yeah. I gotta tell you this, I have a buddy that uh was a Navy SEAL and the training and the Three duties he did over Afghanistan, then he went on to Sharky and he goes, John, that was a piece of cake. Doing business is a piece of cake, what I did for the last 7 years. Would you share the same story on that? Yeah. Yeah, cause I remember that I came back out of Israel and I had $100 in my pocket, and I saw a product in Israel and it was in the United States and I went, oh my God, I, you know, what do I have to lose, right? You know, it's like, OK, you were talking about risk. You're taking fire, that's risk. It's business, you know, it's like what's um what's the worst that can happen, right? So therefore you take a different level of risk and your level of tenacity and hard work for me in the army, well, you always had Friday and Thursday night and Friday were always combined, there was no sleep on Thursday night. And so when I started my first business, that's exactly what I did is I said, well, I didn't sleep in the army, now that I'm building my business, why would I ever sleep on Thursday night, that just make it one long day. So again, I, I had uh different levels of expectations back there and then my mode of opera of working, but it's the same grit and tenacity that you get you through it and it's just a great game to get my business. Yeah, how Could you translate that to somebody that doesn't take the military route? I mean, I, I was in the, uh, Air Force, but we didn't go through that kind of training or in live fire like you were. I got a couple of buddies in the Marines that did, and, but having those life-changing events, how would you say to somebody that doesn't go through that, how to look at life and go, look, it's not as bad as you think. It's, yeah. Um, Or just take more risk. It, it, what's the worst that could happen, yeah, so let let me that's a very good point. There's a couple of big points there is, is you can't underestimate a couple things. First of all, tenacity and grit. Is that I will bet on people with tenacity and grit more than anything else because there's one thing working hard for a short period of time or going for something with a big idea, but everything gets difficult. And the question, the, the thing is, is that I look for entrepreneurs that I back with that grit and the tenacity and the heart to keep on going even when there's tough times. And, and also the other thing is is that I also noticed that the guys that try to get into my unit with the biggest ego and Uh, failed over and over again. Yeah, there's one there's a difference between confidence and having uh ego, and I can't share you how many businesses I've seen over the last couple of decades that have failed because of because of ego. So tenacity is, is, is a is a is a very, uh, is a very important piece, um, and keeping a level head and the other thing is risk, I understand that in life, I don't know who wants to get to the end of their life and say wow. I was really good. I didn't take any risks my whole life on anything. Yeah, I mean, I don't have any scratches, don't have any scars, don't have any sore bones, don't have any great relationships, don't have any meaningful stories, don't have any epic adventures, but man, I got safely to the finish line and here I'm dying. Who wants a life like that? So we take, I don't say take stupid risk cause that's just stupid, OK? But take calculated risk and go big and sometimes by adding a 0 onto your idea, create the foundation, but by adding a 0, sometimes it is easier to go for a big concept than playing small. And I'm gonna say playing small is the most soul crushing thing if you think of yourself a decade from now that you could do in your life. So that's why I say to people that want to go for it is take the risk, go for it. What's the worst that can happen? I'll share a quick story if it's OK. Something that, so, uh, Atlantico Brands again, it was, I'll let me answer your question. After the army, I started my first business. It was a product business. Eventually, I saw that my weaknesses in business were in, I'm a strategic guy, I'm a marketing guy, I'm a merchandizing guy. I did not understand this whole thing of operations, analytics, accounting, computer systems, how it all works together, and um and the operations, and I have um this passion about my weaknesses that I just don't like them, so I end up getting a master's degree, bachelor's master's in industrial engineering. But you think that again you were in, uh, you were in um in in directing consumer market, so you understand, it's about processes, it's about large volume of process systems and analytics. It's the core of it. There's an art and science to any business, so industrial engineering is it gave me that great foundation, that when I got into direct to consumer marketing and omnichannel marketing, it was the perfect foundation that allowed me to uh put together blueprints for business and execute on it that very few people could. So as it was getting that skill set, so that was my uh degrees. I ended up um launching my first uh omnichannel business in 1999 and early days of email, if you remember, early days of of Google AdWords, it was such a great while ride, but it was omnichannel also. We also did, uh, we were, uh, we ended up having 14 pages in the Sky Sky Skymall maga. We did full page ads, advertising, we mailed millions of catalogs out every month, driving people to our website. So it was an incredible time. And that was a, uh, my first brand, the Thi T Shipley catalog. Um, we did some acquisitions, bought a division of Boise Cascade. And remember, my first real business is, and here I was, girl. this at the same time buying businesses that were bigger than I was, a division of Boise Cascade. What did I have to lose if I brought in good people around me that know how to execute and good advisors, you go for it for some, because basically I knew what the GNA leverage that I can get, so I acquired a this uh division of Boise Cascade and what an incredible experience and learning. So again, that's how I grew my first business. It's also when I sold those businesses off in early 2001, stayed around for a year for the transition. Spent a few years consulting again, and then I had this idea is when I take my blueprint and exactly what I did in the product space in the office and business product space, and apply that to the beauty industry, which was exploding in 2005, and show that we can build iconic beauty brands instead of the $200 million launch budget, we can actually do this through direct consumer marketing. And then of course there's a B2B aspect and once we create this brand with this great pull through, we'll put a retail and the product will fly off the shelves, and that's exactly what happened. We had two, you know, two special forces guys, my but my uh partner was a former, uh, former Ranger, so we were two guys starting this business outside Brisbane, Virginia, and with this dream that we're going to create this $100 million skincare brand. And the first year we did $300,000 and then what we did is we found a business that was doing $15 million of business and 1.5 million of profit, but they had it in New Jersey, they had an infrastructure systems processes, and so we gave the two young owners a deal that did, they didn't think they can refuse. We bought their business using mezzanine financing to do that. And they bet we're able to get the financing because they were cash flow positive, not based off the startup that we just did. And what they did is you put our business onto there and that's how we took that business, and they had $15 million in revenue with $300,000. The next year we did $35 million the next year we did $125 million. Wow, yeah, that's a leapfrog. That's amazing. And back then you didn't have, you didn't have umAS platforms to plug into, so we were building things along the way on the fly. But it was rapid growth of taking playbooks and just playing bigger. Yeah, that's right. So again it was, so that was a Hydroxyone was our first brand and that over the life of that we did um a billion dollars of revenue. Uh, next man was carrying for one's hair regrowth. We were a category king. We created this concept about how do we take this idea, which was a men's issue, and some women were using men's product and create a woman's solution to this and say we're only about women, 1 of every 3 women suffer from hair loss. And so right now, uh Kaani is still the category king, and you find it is for a CVS Alta. That's 10% of business, 15%. percent of business is Amazon, and the rest of it is Omnichannel online. And yeah, there still is a small segment of of infomercial, um, that the business generates, but I sold that business off last June. Oh, did you? Yeah. Who did you sell it to? What kind of a private equity group. Yeah, private equity group, yeah. And and the and and with all the brands, and of course along the way, we also have other smaller brands like Christie Brinkley Beauty. Uh, which is a partnership with Christie Brinkley, but it was just an incredible ride. I love, um, I love the product business. Um, and then the idea came up during the, uh, during COVID when suddenly I didn't have my 3+ hours of commuting back and forth and, and, and going in the office and had all this uh uh surplus time and so, well, we knew we'd be selling our business Latico brands. The question is, what do I want to be spending the next few years of my life doing? What is that billion dollar idea? What is, what is something that could be a category defining and is, uh, the winds of the market are at us. So I started looking at, um, acquisitions. I love acquisitions. I starting business from crash a little bit tougher. I love acquisitions. I love, um, and so I looked at the aggregation play first with ecom. And then I started through a buddy of mine who has an Amazon agency looking at the Amazon spaces, and since Amazon on to so much of the heavy lifting. We started looking at building an aggregator to buy Amazon businesses, and then that's when we discovered the first business that really got significant scale in funding was Thracio. This is April of 2000. Yeah, yeah, I saw that Thracio closed its first big funding round of equity. I said the world just, and they had a $750 million valuation back then, now they're $10 billion. I said the world has just changed that we're in the past getting institutional money behind as Amazon brands was very difficult. I said the world has just changed. They do, they are the Netflix or what became for search engine became capital is available. I said they broke the glass ceiling. So, therefore, uh we took this side hustle of a business. Created a big vision for we will be the future and the way we'll be the leading digital omni digital CPG company, where Procter and Gamble, Church, and Dwight are stuck with legacy. They're basically number one clients of the retailers and bricks and mortars. You don't have to be slave to that. It's all gonna be about the consumer and direct consumer, and we'll sell to those other channels, but this is the reimagining, revisioning the way brands are built and scaled. So that was the idea behind Foundry, um, I met with 7 private equity groups, uh, got 6 term sheets between $50 to $150 million put two of my favorite together and that's how we raised the money. Uh, for this now, along the way, when I started with what is the next big thing, you take momentum step. You don't really start with the big idea in mind. You take momentum step, and one of the educational processes I did along the way, which I'll appreciate was Roland's at the course. Yeah, the challenge, yeah. Why did you think that you, you go like, hey man, I need to, uh, you know, get better at this acquisition. I'll take Roland's course. I mean, did you already know Roland or did, how would that relationship? I knew Roland from Warbo. Yeah, more room for a couple years and um you're OK, everyone should be constantly improving your skill sets every day and fine tuning craft and expanding your craft and expand your knowledge because the game is about, um, is about your knowledge and your network. And that's really what the whole game is about. So whenever I can sharpen the sword and learn new skills, and Roland is brilliant and this and this and this tool sets and structures and frameworks that he presents are brilliant, and not only that is within Epic you have this network of great people. That are just uh driven, hungry, different people at different levels. So whether it's someone at low level who is an operator that you can access for later, or whether it is people like Peter Lang. Um, you know, Peter? Oh, I know Peter. I talked to him a couple times, yeah. OK, so, uh, Peter Lang, who I saw his, uh, it won the presentation in one of the courses, and I reached out to Peter, and now Peter and I, uh, have just, um, are launching as we speak, um, what I believe is the next my next billion dollar business and a new aggregator platform. So, um, but just fast forward with Foundry, um, so we got that funded, um, great partners, hired a uh full C-suite, hired a CEO, did our first few acquisitions, and now that I brought in again, a seasoned CEO that I believe has the ability to create a um an exit IPO event in 3 to 4 years. My job. Is done there. I'm an, I'm an entrepreneurial, uh, investor now and I'm an operator. So I stepped out of that role and started, took the last 90 days to look at the marketplace to identify what the next big opportunity or opportunities that I'll be working on. And so one of the biggest things I'm spending most of my time on is this platform that I'm building out with Peter. Interesting. I got a question about your exit and the Army Special Forces. Did he stay on with the company that you sold, or did he come with you on the or off the merry go round? So, uh, uh, so he actually stayed on with the company and he's works, he works with the private for the private equity firm that bought. How difficult do you was it to find all the people to fill in this the roles for this new venture, the Um. Uh, let me, with every business, the number one thing you should be spending, your #1 job is recruiting. Your #2 job is recruiting and developing the culture. I framework structure, everything, but basically is, um, getting the right people in the right roles is the biggest domino you can do with any business. So I spent half my time just recruiting, recruiting through networks using professional recruiters, doing everything I can to find the best talent. That to bring in the organization. Yeah, I think it's a mixture of uh Dean Smith from North Carolina and uh Marcus Lamonas. It's recruiting for recruiting, recruiting people, processed products. There you go. That's it. That's it, that's it. And you and the one thing we, you know, we spent a lot of time with, and it's interesting, remember, I'm an engineering background, structure, processes and numbers. I spend a disproportionate amount of my time. Engineering culture into every one of my organization. It has to be deliberate, because the key thing that is evolving and so much important for any business to compete is speed. The only way you can compete in speed is through a great culture and a functional uh culture. So what are you looking for an individual to create this culture or that mirrors yours? You know, um, cause everybody comes from a different background. I mean, it's just like, if you could say hey I wanna hire all special forces guy, I know a guy out of the Detroit, Michigan, that's all he does is hire, you know, for his companies he buys, he just hires these special forces people. I'm very big in diversity. Again, I like diversity of thought, diversity of background, diversity of ethnicities, diversity of religion. So I again, there's this thing about a fabric company diversity, but there is more of, um, it is absolutely true that I only fill organization with high performers. A high performer could be someone who works hard and is steady. They're never gonna be the CEO, but they're a high performer, but they're people that you can rely on and get the stuff done and don't take excuses. And so I'm gonna say high performance in every level and people who get it. Those are my core criteria and then from a culture perspective is they have to work great in teams and with people. I've, I've had had superstars that are incredible, that are just so toxic. And I fired them and then increased the performance of the overall organization. And so again, there's things that I look for that I look for, and there's certain things that I hire against. Big egos. No room for in any of my organizations. Yeah, I mean there's a, I don't know if you know Simon Semantic. He does, yeah, so he's got this great presentation. It's seen millions of times on YouTube. He said anybody that joins the Seals, the biggest ego, leaves the earliest or or gets the teams usually in trouble. It's the, it's the, it's the trust and performance. It's, it's the performance capacity and trust. I will take someone who again, trust is everything and there's this, uh, it's interesting and and this this level of trust where not only you trust in the capability and you trust in someone's heart, but also you sincerely believe. That they believe they trust in your capability and they trust in your heart, that you only expect the right for them and you and me actually looking at someone saying, I sincerely look at them as a 10 that they only want the best for me. And if you can have an organization where you're surrounded with people that you trust and you believe trust you, at the highest level, you can perform extraordinary things. This is how in special forces, you get to that level of performance because you have that level of trust that's there, and you could do extraordinary things. Same thing as organizations. The other thing is that it's never there permanently. There will always be changes and shifts that will restructure that and if and and John, I'm sure you've heard this before is There's 4 different levels that every time you put together a couple, a team, a company, same thing as you form this group together. You go through, everything's fine, and then always 100% of the time there'll be some level of storm storming. Little things that will conflict if I start, you know, dating my wife, really loved her. Suddenly she starts saying over and now suddenly she's squeezing the toothpaste from the from the top and it's driving me crazy. Little things get on your nerve again. It creates whatever level of storming there is. If you're healthy, you can get through that next level and get to a norming where everything is good, we work well together, and if you're very fortunate to get to a high performance where the winds hit your back and you you do extraordinary things. Then you hire a new person onto your team and you go right back to storming. It just isn't, but if you're healthy, you get through this. So you want to create a culture where you can get through the storming, get to norming and performing. You all have focus, you all know the outcome, you're rowing in the same direction, you aren't doing everything you can, you because there's so many projects to do, you're constantly reprioritizing, but staying clear on the focus what the mission is. And asking the right questions and teaching organization the right, ask the right questions. Yeah, I, I've taken a little, I'd say stoicism training from Tim Ferris, you know, it's not as bad as it seems like the if they're scrolling from the bottom of the toothpaste or top of the toy, hey man, that's not over. Don't let that bug you. Focus on the right things. That's it. That's it, that's it, perspective on everything. Yeah, so you raised a 100 million debt-free fund. I think I'm just reading your press release here. Light Bay Capital and Monogram Capital Partners. Uh, how did you decide on these guys to work with them versus, you know, the other 7 that Yeah, um, we, we, we, I pitched 7, we got 6 term sheets, so one was and the, the 6th 1, the 7th 1 was it's too early stage, they will, they want to come into the next the next series, um. I, I had a look at um The way they operate, the way they interact, um, are they more collaborative? Do they want to micromanage? Um, what is the culture, what is the feedback from former CEOs, good and bad that work with them? Do they, how well do they understand space? Capital is one thing is how much value added they can, they, they can bring. Typically, if you're in private equity and you have a large shop where you have access to hundreds of millions of funds, you know, these are smart people to begin with, OK? So because typically private equity only hires and only the best rise up within it. But the question is, is how do they manage and how do they communicate? And how well did they understand the domain, so how much value can they bring in doing, because what you're trying to do, especially trying to become a category king and trying to define something new, is there's complexity in everything. So if you good partner to think through problems, that's the ideal. So your board meetings aren't about, let me show my numbers and defend. Yeah, I'll share with you an example without naming names. Um, a friend of mine has a, um, his organization was, I guess, had a, had a public event for 3.5 billion, and they went private again owned by a private equity firm. Every time they missed their quarterly numbers, unannounced the uh the the the the private, the person who's in charge of the private equity fund would get on a plane, fly down to their office, assemble the sea level team, yell at them for two hours. And then he'd listen to what they're doing. And whenever they missed their numbers even by bit, even if they were truly profitable, that's what, yeah, I don't operate well with that type of sharp elbows. I look for partners that are great partners. If I could, John, give one of their example. Yeah, yeah, absolutely. Remember I shared with you when we uh started Atlantica's brand, we bought a company out of New Jersey. We, we've hired a great broker to find uh uh the right mez level investor to come and he brought 5 to the table, and we gave, and Emily, we got two quick term sheets from them. We had one with better terms, but the uh the young guy, he was a younger private younger mezzanel level firm, they were extremely enthusiastic and they want to be every part of our business. The other one, the terms weren't quite as good, but the gentleman from there had been around for a couple decades. Southerner, they're out of Tennessee, one of the nicest guys I've ever met and very smart. And we just liked him, and he's was seasoned and so we decided to go with him, even though it wasn't quite as good of a deal, we went with them anyways. We bought it when we got the money to do an acquisition. We did the acquisition and 8 months after we uh we started the business, we had one company that was doing our order processing, as well as our customer service and had the 800 numbers everything we get turnkey. Um, they went Chapter 7, not 11, chapter 7, liquidation. Chains on the doors on a Friday and we're known like this. No one's answering our phone calls, no one can get through, get returns, processing anything done, couldn't get the orders out, it didn't have access to our customer files, nothing. This was an early phase. We put together a quick plan. We called up our private our mezzanine lender. We said, John, this happened to us. He went, mhm, you got a plan? We said, yes we do. He said, mhm. When will you know if it's working? We said give us 3 weeks, he said, call me then. I immediately, how he responded with stoicism, said, you know what, these guys can fix it. Uh, I'm not gonna overreact and get angry. It's business, like a monopoly game, I start over and like, if you got a plan, let's see what hear what it sounds like. That's and that's why I gave an example of is how do you pick, so I look for people that are good, or what are, what's the world gonna be like with them when things go bad and in every business, John, we have the experience to know that I don't care what something will go bad. And for those people who want to understand about risk. Um, uh, in Q. Q4 of 2018, the win was our back with our business. Things were going well, you know, we were doing a, um, not peak revenue, but we were doing extremely profitable at, um, I think we were at $85 million in revenue at that period of time. We had 55 offers to buy the business between $55 million.85 million dollars, so not a bad day for any of us. And uh our sole supplier for one of our items that was the majority of our revenue went out of business, um, basically Chapter 7 again, it was the only FDA approved uh manufacturer of this product in the world. And so with, with that, and our business was autoship revenue, that's most of it. So it was extremely challenging. We try to save the deals, we did a few things in order to try to save the deals. Those didn't work and suddenly we, because of everything coming together. By the time we get to March of 2019, we went from uh making close to a million dollars a month to actually not even making enough before overhead of $600,000 enough to so we were actually hemorrhaging cash, and our lender called up and said they're calling our lines. And uh there was basically we were done. But you know, as we're just we're never done. I don't care what people say, we're never done. So I was out at um Russell Bronson's inner circle meeting on in Boise, Idaho, and I went for a run with my wife, and this is just about attitude and philosophy, but I understand that I have, you know, if you look at our ecosystem, I have thousands of people that rely on me for their income, for their livelihood. Yeah, so much and, you know, and I, I was running with Pam and I and I and I, I think things are dark right now. She's, yeah, I said, can we go there? She said, yeah, let's go there. And I said, OK, I said, uh, what's, she said, what's gonna happen if you can't turn the company around? I said, then we're going to uh lose everything that I'm personally guaranteed. She said, and then what? I said, well, we're gonna lose the house and the car, she said, and then what? I said, uh, we're gonna owe the IRS a lot of money still, even when that happens. If that happens, there's gonna be a big tax consequence, she said, and then what? She said that we will be in 5 years. I said, back where we are right now. She said, so what do you worry about? She sounds amazing. She sounds amazing. Yeah, I have in my girls. As long as I have my girls, she said, so what we start in an apartment. We start from the very beginning. So what? You know, it's life. Yeah, yeah, it's looking at risk. What real risk is if it's comes with the health of my daughters and my life, that's scary shit. Yeah, and so I'm gonna say I didn't, I have those, you know, I had, I can't say that I didn't have those weak at the nemo moments when that reality faced me. But it doesn't matter. It's, it's basically you balance risk and base and the and the end of the story obviously is, is massive imperfect action, clear plan team that got on board. I got rid of some of the deadwood in the company that wouldn't take this new journey with me. And with that, it was among the best time I've ever had in the business with the team turning the company around, getting back to where we. were, it was a blast. It wasn't, it was a lot of hard work, but again, and it positioned us for the sale of the business, so. Yeah, any, any like this, would you say that's your favorite failure and or and then rebound and anything you learn from that, like, I'm not gonna sign personal guarantees ever again kind of deal. Well, in that situation, there's a lot of issues that I had there as far as um Cause we always go always go, well, I'm not gonna do that again, right? And you can't be on a planet long enough to make all the mistakes. I'm gonna say that we, the two things we should have done is, there was one the private equity groups who did not give us the best deal, but it was the clearest path to getting done, and we were a little bit greedy going for the best deal versus the surest thing, and a lot of money is a lot of money. And that lesson led to this great relationship kind of learning from this Tennessee guy, the way he responded possibly. I'm gonna, uh, yes, those are, well, we didn't follow this lesson with 2018, so that's one lesson. The other thing is, is we tried to save the business with one big massive swing that had risk to it, and it didn't work and it blew up in our face. And I'm gonna say is that be very, very careful with those, those, those home run swings. I built my businesses by doubles and triples, and that's the way I like to do it. And with good fundamentals, and when you get away from your fundamentals, you, you, it's not you start swinging for the fences, you're gonna strike out. It just happens. You just take the risk. And so I know better and we again sometimes you know better and you do it anyway. So those are big and but then the other side coming out of it, it's, it's a clear plan getting your team on board and massive imperfect action. Understanding is that half things you're trying shouldn't work anyways. You don't bet the farm on them, but you keep on massive imperfect action, focus on the winds, go and build off the winds, and that's what we did and just grind it out and um you take things one, you know, you built a solution with bite size pieces at the time. It looks like this. mountain that cannot be climbed, but everything, if you break it down into bite size pieces, you can. So, um, anyway, so amazing journeys, and I'm really excited we're at now is and again it's um I I'm fortunate that I was enabled moving here to Austin and developing this relationship with uh Peter. I don't think I mentioned is well we lived in New Jersey, we're part of the great COVID migration south. We moved to, we moved to Austin, um, last year, October. So being able to build a relationship with people like as as as as smartness to Peter, but actually, as you know, Peter's developed this programmatic M&A process, and that's the way he's been able to roll these agencies, but then what I found easier sometimes is by adding zeros on to idea. It becomes easier. So the question is is how not to, you know, how not to grow by one agency at a time by rolling them up, but how can we do something on a really big level? And the idea here is, is that um the reason why agencies also typically bigger ones focus on bigger integrations because every um agency is difficult unless you figure out some of the keys to integrate smaller agencies with the personality and the owner led decisions, and so we have, we've had that sound. So the idea that we're doing right now is we're we're basically integrating uh 10 agencies into groups, and every 90 days we're gonna be forming a group, and right now Peter's process is 500 agencies in the pipeline, so deal flow is not the issue. And so the focus then is about aggregation integration and implementing standards. And then either if they fit our culture, then we're going to integrate them into our super groups. If not, we're gonna spin those off as they're on revenue stream because there are strong, there's not that it's difficult to sell an agency that's doing $3 million of revenue, but buying a group that's doing 3. million dollars of revenue, it's a totally different world out there. There's a lot, it's a great asset class, and I was looking for a great asset class, and I'm always looking from a category king. What are the inherent problems out there that no one's figured out how to solve, but we've figured out a way to solve them, and the agency aggregation. I we have a mousetrap which we're going to test offer of different groups that solves a pinpoint that most agencies and agency holding companies like um uh WPP have not solved. Yeah, is this with the Foundry group or is it completely different business? So October 3rd, I left, you know, my team's doing it. They're on their own, and this is next venture. Wow, that's amazing. I mean, are you gonna raise capital for this or is it uh kind of an epic type money out of pocket? So yeah, so I we're using some of the foundations of Epic and how to um optimize cash flow, but the difference is, is that, um, and but the deal's trauma deal structure we're giving, paying the um the agency owners 3 out of pocket. The rest of it is gonna be in an earnout because we want to incentivize them to save for a successful transition of the business. Um, so there was cash, so I, and unlike I did with Foundry where I brought in, uh, one of the private equity groups who I said no to said, Tom, I don't want to lose out on the next one. We went in and I had the call with them this week. I said, I love you guys, but it's too early. I'm not bringing private equity this early to it. We can do we're so we're basically funding each group, the 1st 3 groups on their own through our network. And a high net worth individuals and family offices. It doesn't take that much capital since every agency that we buy or we acquire comes in with cash in the bank. And so that's why I love this asset class. So it's very capital efficient, and I don't have to raise that much to do every group. And then we'll bring in some type of big, we'll we'll also overlay with some dead instruments, so be very capital efficient. Yeah. What, what I mean, what are the challenges that you don't know the answer to, to this new opportunity? I mean, the last time I talked to Peter, he, it was, hey, I got this system for finding digital marketing agencies, and I got a whole bunch of, I, I think it was 45. I had 45 available for sale. He didn't know what to do with them, it was just there. So you guys got the Uh, operations looks like solved, the capital source solved, and the acquisition solved. What, what's, what do you don't know the answer to? Um, the biggest challenge is going to be is, remember I talked about culture, we have our cultural, uh, we have, um, Peter's cultural assessment, it has my assessment also, meaning I can go into most organizations, spend a few hours, and get a sense on the leadership and whether they're gonna be a good cultural fit. Um, and plus we'll do a normal, um, as the standard assessments anyways to understand them and their team, but ultimately when you bring these groups together, you still have to integrate cultures now again we expect every agencies to Operate on their own. We're giving them tools and structure, but they have to work well, collaborating with the other agencies, and that's part of the fit that we look. But until you actually pull them together and understand that, uh, there's gonna be happening, there's something either a health issue or one the founder, because they don't want to be there, is gonna leave early and we'll have to address those issues. There's always those operational and people issue you'll address, but how do you bring in these 10 agencies to still work as part of an operating unit? Where they can then go and where they weren't able to um potentially get a Fortune 100 client. Now they're big enough and the the scale and the breadth of scales and they could do it, but you still have to operationalize this. And I like to take complex things. And make them really, really boring through processing system. It's what I love about like a standard operating procedure and overwhelming like 10 commandments kind of thing, or how you how we operate standing operating procedure standard systems, but standard also systems and how we integrate these businesses and how we develop uniformly with each group their cultural Bibles in which they, uh, uh, they Operate finding we ultimately our goal is to find one of the agencies that's strong enough that as a CEO can work as from where they're used to running a $5 million agencies. Now suddenly they're, um, they're the group lead over a $30 million agency. So again, making sure we develop them and nurture them with the right skill sets to do that. If not, then we're gonna bring in someone from the outside. So those are the big people issues, but the thing I love about this asset classes, um. Unless you're really, unless you screw it up, you can't lose the equity in there. Basically, then you're selling it off, you're selling your group off at a less than you wanted to from uh uh from valuation. We might have one or two of the agencies in this group of 10 that end up blowing up. You don't know. But however, by putting the other 10, but then you have other groups in the agencies that will grow by 3x by putting in our systems and our sales processes. So. How do you, I'm gonna go back to the adding a 0. I had heard it the different ways like, you know, it's a process takes 2 years, how can we do it in 6 months? Um, what are the skills and tools you use to say, OK, it's easy to add a 0 just in your head, but how do we work backwards and chunks it. And I'm gonna answer this in two different ways. First of all, um, when I started, uh, when I during COVID hit, I started thinking about what is a new business idea, and I needed momentum. So I started creating a little business on the side that start generating revenue and then it wasn't really me and then I took Epic and I started with the concept of let's just go and buy 3 or 4, and originally was agencies, let's buy 5 agencies and put them together. Well, let's do econ business, put 5 or 10 together. is when I developed this big vision for, see the beautiful thing about the bigger the vision, the easier it is to attract the right people that are in not only as um employees, also contractors, also vendors, and also capital, the bigger the bigger the idea is versus when you play small and sometimes it's just a lot more difficult. So therefore, with with this idea, we started this idea is what can we do from agency with Peter, but the bigger we made this idea into actually creating a How do we create a 3 $3 billion company in the agency space? What would have to be true in order for that to happen? And, and John, that that's the question, the most powerful question that I've added to my toolbox. And for me it's about questions. If you ask the right questions, you get the right answer, and I love that. My favorite used to be what's the problem? It used to be my favorite question to ask. And the second favorite question I learned along the way was why. If we solve this, or sorry, so what? If we solve this, so what? To really know why we're doing it and so what is really important. The third question then again it was by um Uh, Doctor Martin, it was in Harvard Business Review. Um, the question is, is what would have to be true? In order for this to happen. So you come up with the, whether you're solving a problem, and the problem is when most people get in a room, they're solving a problem, they're they're they're they're constraint driven instead of abundance. So they think of things and and they argue based on the way they see this. Instead, the approach is is what would have to be true, OK, so we want this to happen, what would have to be true for this to happen? And by coming that in that direction, you come up with Better solutions that can be executed coming out the way you wouldn't normally think of it. So that's one of my favorite questions now is, is what would have to be true. So we do a lot of this in order to create a company that's worth a billion dollars by doing aggregate. In order for us to do this through requiring small uh small agencies, which is not done, what would have to be true? And then we start identifying what would have to be true, and then we start developing a plan on how do we address those issues. And that's solvable bite size issues. What would have to be true. Do you, and I'm not picking on Peter, do you think that you, if you had the great questions, what would have to be true for this to happen, but you've never done it before, you have to bring on somebody that's seen it or been there? Oh, by the way, that's exactly it is what would that be true is, OK, we need an expert in this. So for this deal is, Peter found um uh uh Felix Verde, who wrote 2Y3X and basically is with Felix's track record with 100% of the business, they doubled their profit in 2 years. 100% of every business he's implemented the system and he's an he's an agency OG that in England that he basically started the first and most successful digital agencies in 19 uh digital age creative shop in 1994. So he's an OG in this space, built 6 agencies, sold them, but he's implemented this process consistently over six years. So Peter has brought him in as one of the key pieces is on how to scale these business plus his network is then he then through Felix we got. We have a pipeline of operators, but the number one choice for an operator to help us execute is a woman right now who has a team of 6000 people, and she's, again, she's worked through agencies for over the years. She's scales, she's integrated, and right now her team at Unilever is 6000 employees. So again, she knows how to do things in in integrating entrepreneurial um um um agencies and how to integrate them, and then how to uh um uh uh uh run an agency at scale. So, been there, done that. So again, so we're minimizing all the risk factor by putting in the right people and the right systems and structures. Is this kind of a process in your life learning, you say, hey, I can uh encapsulate this into a book and put it in a book, cause this sounds really powerful. Um, the book will come when I have time. you know, and I and I, and I say this, so I, this, this, this opportunity with Peter is, is a blast. He's great to work with, so is Felix. I love working, collaborating with really smart people that understand what culture is about and aren't driven by ego. Um, confidence is good, but ego is what kill you, so I'm enjoying this. At the same time, I'm also have um. A couple of really interesting, uh, strategic advisory work. One of my clients is in your neck of the woods. Well, kind of, he's he's in, he's in uh Phoenix, uh, uh, snow teeth whitening, who again, he's he's pivoting his business to be the, again, in the teeth whitening space. He is the category king in that right now and owns the online. Business, but he's basically doing acquisitions in that to become the leading premium oral care brand. And basically by aggregating business that are in premium oral care, again, it's a pivot. So having blast doing strategic partnership with really some good people, and I'm doing a really interesting, um, and again, Sometimes things are just Fun in the right parameters. So there's a project that I got involved with that's quickly evolving in the um in the NFT crypto space and blockchain. And I'm not talking, I'm not buying pictures of, of, of artwork of clowns and unicorns, and looking to get an arbitrage by getting lucky in this asset class. That's what crypto kind of said to me. I don't know, I'm kind of naive on it, so, yeah. So basically, you know, when you really structures down to you're talking about transaction, the blockchain, it's a very efficient, secure way of of doing transactions, period. So the question is, is what's a great problem that can be solved through the blockchain? Well, to me it's impact investing. Imagine that and imagine that um instead of using traditional investment banker basically um uh fund structures to do it, we actually bring in the capital in through uh through through the block through blockchain through crypto. But it's being done through people buying the NFTs, but instead of just buying an NFT with nothing behind this, these graphic images, basically every time someone buys one of these, what they're really buying into is an impact fund and our impact fund is focused on brain health. It's about longevity and it's Alzheimer's, it's Parkinson's, his brain injury is basically in our our moonshot on this is to raise $30 billion to uh through brain health, but we're doing them in the front end by selling NFTs and by structuring this through as we did through a Swiss organization through NFTs, we're minimizing any security risk with this. Again, so it's a really interesting asset class we're developing, and where 80% of our proceeds are going through um vetted, uh, vetted deals that we find that impact brain health, and then 20% of our revenue will actually of the of the NFT profits will go for specific uh projects that are not for profit. But basically it's a new way of having impact so I love the idea of how can you take this web 3.0. And use it as a platform which is authentic versus picture betting on pictures of of of clowns and unicorns, and use that as a front end to do something more traditional, but that has a real impact on the world. And therefore everyone wins in that situation. So it's putting align things together. So again, I'm I might put a, I have a company work on a dementia therapy. I might put that in front of you. I'll send that to you. OK, please do, please do. Yeah, yeah. So what, where are you, let me ask you about like how you keep seeing these larger opportunities, adding a zero, where who you seek out to say that's the great inspiration. Everyone. When I say that is that I, I mean, I'm always learning and following uh different thought leaders. Um, however, ultimately what I'm constantly doing is um allocating time in my week. To, um, to reach out and talk to people in my network, constantly want to invest in expanding my network and also asking people the question is, is, what are you thinking about? Where do you see the big opportunities? And then at the end I'll say, I'm looking at these spaces if you know of someone, let me know, and that's how a lot of these opportunities have come up where, you know, um. Um, a person heard I was doing it. They told someone else that I was interested in, um, breakthroughs on blockchain with 3.0 and charities, then knew a person who sold his business in Austin for $300 million living in Switzerland and said, hey, I know a guy and introduced me to someone who's been looking at this space for 5 years and has this project, but I'm, I'm looking at a large number of projects, always on a regular basis. But inevitably you have to go with where your passion is, where your heart is, and there's also just with John, you've been through so much, you also have a good gut, and ultimately we have to listen to our gut and not just talk ourselves into things. Yeah, and I say, hey, that looks like a great opportunity, but it will hurt my family, you know. Ultimately, when all is undone, as I said, um, businesses come, um, I take this game of business, which is the greatest game in the world, extremely seriously, um, but it's a game. Relative to your family, and therefore you have to choose where you want to make your investments. I know someone said to me years ago, if you want to see where uh if you wanna see where someone's real um priorities are in life, look at their checkbook and look at their calendar. How much time are they people say family is number one. On your calendar in your checkbook, is that where you're spending your time with your family, doing things and investing in them? And ultimately that to me is the greatest commodity in life, and we all have different ways we measure life, John. I look at it when all is said and done and I mean, hopefully 30, 40 years from now, maybe 50 years if I'm lucky. Um, I'll look back and say how many people's lives it impact in a positive way. And how and how good it was I to my family. Yeah, ultimately that's my measuring stick is is other people have other measuring stick. It's not how much money I've left in some bank, you know, left in investments is basically what the biggest impact that I had in life. Yeah, and I, I, I gotta tell you, I am really grateful for spending this time with you, because the people that I interview that really have succeeded at the M&A game, raised a lot of money, it all becomes about mindset and putting your mind right with your world and trusting your gut and your heart. So, Tom. Investors, strategic advisor, co-founder, Foundry, and Atlantic Coast Brands, definitely earns a spot as a top M&A entrepreneur. Thank you so much for your time. Appreciate John. All right, take care. And I'll email you that uh dementia uh therapy. Absolutely, let's take a look at it. Great, thank you, sir. Take care, my friend. Sure, talking to you.