Nate Ginsburg and the Acquisition of Centurica - Due Diligence Top M&A Entrepreneurs Podcast

Welcome to the top M&A entrepreneurs today. My guest is Nate Ginsberg. Nate is in the M&A community. Uh, so, uh, welcome to the show, Nate. Yeah, thanks for, for having me. Yeah, so Nate, let's talk about where you started from, and then we're gonna get into that recent acquisition you did because all of it has this origin story. So how did you start? Yeah, well, I'll, I'll, yeah, uh, I think what, uh, you know, like I know we've, um, discussed before, recently acquired Centurria, which is the leading, uh, due diligence provider specifically focused on online acquisitions, so ecom content website, uh, you know, also do some SAS and, and, um, service. And, and that deal for me closed, uh, we're right about at my 3 month anniversary, uh, 3 months in. And, um, and yeah, you know, I mean, there's been a, a, a 10-year journey, you know, getting to this point, which I'll, you know, now, now go back and, uh, you know, provide a little more context. And so, so, yeah, I started my journey. As an entrepreneur, uh, yeah, 10 years ago, uh, was, was backpacking in, in the north of Thailand in 2011 and met some guy working on his computer. And at the time, I had just finished teaching English in South Korea for a year and was trying to think of, you know, what I wanted to do with my life. I'm, you know, 23, 3 years old. And, uh, you know, met this guy who was, you know, doing the digital nomad thing, which was pretty early days for that whole scene. And, you know, was basically got super inspired by what he was doing and really decided that, like, that's what I wanted to pursue with my, you know, uh, my, my, my career, my life. I mean, you know, it's very, uh, intertwined and anyway, so basically, got home, you know, had some ideas of business models from him, and he introduced me to, like, internet marketing and, and outsourcing and hiring people from all over the world, which just totally, like, blew my mind that that, that this was even possible. And yeah, fast forward, you know, was trying different business models, ideas, uh, didn't go so well at first, spent all my money, moved back home with my parents, and, uh, that's when I started, uh, just like freelancing, internet marketing. I mean, in my, some of these, you know, business attempts, learned some things and, you know, as a I don't know. I mean, especially 10 years ago at like a little bit of SEO experience, you're compared to most, all of a sudden you're an expert and so you're way ahead of most people, yeah, yeah, so, you, you know, so, uh, after I moved back home, I, I was focused more around just picking up like some freelance internet marketing clients, which, you know, I mean, I did, uh, fast forward a couple of months and I did, and, you know, look, I wasn't making like by now current standards, it wasn't a ton of money, but, you know, it was enough to At least cover my expenses enough to, you know, take off and, and kind of start my journey, uh, traveling and, you know, as a location independent entrepreneur, digital, digital nomad. And uh so I took off, you know, from my parents' basement. This was in 20, the beginning of 2013. And uh And, and, yeah, fast forward, I basically, um, linked up and joined with this uh online entrepreneur community called, called the DC that, uh, that basically the theme was, is online entrepreneurs. They had their big event in Bangkok in, in October of that year that I, that I attended. And attending that event, Just really, like, you know, opened my eyes again to just like, I mean, I met, you know, there was maybe 200 people at that event, and these are all online business entrepreneurs, services, e-commerce, SAS, and I mean, this like, blew my mind that there, these are all people that, you know, a lot of this community was like, read the 4-hour workweek and kinda did it, you know, one way or the other, and, and, you know, I was still at the very beginning of my journey and You know, I was super inspired and, and, you know, met these incredible successful people that had, you know, been in their businesses longer than I had and built, you know, by my standards at that time, you know, much bigger, significant, you know, kind of stuff and Yeah, so this was huge for me, just being around this community, and I basically, uh, like, Asia was home base, fast forward for, you know, a number of years. And, you know, I was, I was living in Ho Chi Minh City, and it was, it was while I was living there, you know, surrounded by these other, you know, online entrepreneurs that You know, I was still at that phase of my career, I was trying a bunch of stuff, you know, some of this, some of that, some things worked a little bit, other things, yes, no, I mean, throwing a lot of stuff at the wall, and, you know, what, what hit for me, uh, the first thing that, yeah, like, hit more than a little bit was selling products on Amazon. And so, that became the first business that I really built, and this was in, man, I got into that in maybe 2014, 2015. And, uh, fast forward, uh, sold that business, uh, had an exit uh in 2017. And so got into FBA. Where did you sell that, uh, what site did you sell that through, or was it a private? Yeah, so it was a, it was a private deal to a, uh, a, a big Chinese buyer that was actually like, they were kind of rolling up and aggregating deals or attempting to, uh, before this whole wave, and, uh, yeah, I mean, I was, I was living in Vietnam at the time, so I literally like, you know, this all happened very quickly and I was on a call with my business partner and he, and this, so there, there was this, yeah, this, this character, Jerry, who was like, buying up businesses, uh, you know, some other people in my community. He, he bought um a much larger business of my business partner and other people, and anyway, it was just like, I was catching up with my business partner. Uh, I was in Ho Chi Minh City, Vietnam. I was like, hey, like, uh, Jerry might be interested in buying the business, like, what do you think? And I was like, You know, ran a little napkin math and I was like, well, like, what's it worth first? You're, like, what, what do you, what, what can we make? Yes? Yeah, I was like, you, but, you know, like, long story short, I was interested, and basically two days later, I was literally on a plane to China to meet with this guy, you know, went to their offices, had tea, they have a, you know, like 200 Chinese people in their office there, you know, running a, a large Amazon operation. What were you selling? Online, uh, yeah, I was selling, it was a mix of products like uh some, some glass wine accessories, so like wine decanters, wine glasses, champagne flutes, as well as, um, like activated charcoal related products, um, was the majority of, of, but it was kind of a random mix of, you know, it was a product you were interested, like yoga kind of products or what was it just a I mean, the Amazon games more about like working backwards, finding an opportunity, and so, you know, saw an opportunity in this category, you know, sourced, imported, launched, you know, rinse repeat is all right, so sorry, get back to your, uh, the Jerry in China, yeah, the FBA, uh, game and model and so. Oh, so, yeah, so no, so, so I fly to, fly to China to make a deal with Jerry and, you know, long story short, um, come to an agreement for him to buy our, uh, FBA business and, you know, fast forward that closed, maybe, you know, 60 days later or something. And, you know, this was the, the first of, you know, uh, the first next kind of existential, all right, you know, what's important, what do I do, you know, what am I good at? What do I, you know, focus my time and, and, you know, some of the things that I, that I knew and, and, you know, further realized was like, One, like I've always loved, uh, teams, remote teams, um, you know, leadership, hiring, like those have all been areas that I have been strong in. And so, when I sold my FBA business, I, I kept the team and, you know, it was a small team, maybe 6 or 7 or something people, but, you know, they were, they were running a lot of the business for me and, and they were good, you know, they had experience and And so, from there, started offering services and like, you know, while, while I had good success with the FBA model, um, candidly, you know, cash flow is challenging. It was like, it, the product categories that I was in was sort of a race to the bottom and, you know, I just wanted income, and so, like, OK, services, like, it's not gonna, it's not gonna like 10x over the course of, you know, a couple of months or less, less likely, but Kind of more steady, stable, and, and again, you know, cash flow, profitable. I'm not dumping in all my savings and maxing out credit cards to buy inventory, which I did with my previous business. Yeah, yeah, um, anyway, so that, so that, uh, you know, so this was, um, I think we started offering services the end of 2017 or into 2018, and, and that became my, uh, my other business which is Sellerplex and so. Provides a number of services for FBA ecom sellers. It's, it's a, I mean, it's grown a lot over the years. It's a team of, I think it's around 70 people, uh, globally. We've got a big Philippines office or big Philippines team. We have, uh, like 20 in our supply chain department in Pakistan. We've got, you know, another. 5 or 6 or something in our finance team in India, we've got people in Europe, our recruiting team, we've got like, you know, it's a very global uh team and, and yeah, Cellarplexus, I mean, has been doing well, has been growing, you know, over the last years. I wanna, I wanna ask you about this cause I'm just curious back to the Jerry thing. Did you recognize what he was doing, which was 5 years ahead of Thoracio? Yeah, I mean that, well, yes, and there were, there were a few others actually pre Thrashio that like, you know, I've, I, I, I was in the FBA space, you know, for a while and pretty well connected, you know, when I was selling and this, and so yeah, so I was aware, there was, I, I mean, I can think of at least another, like, you know, fairly big. You know, attempt at the Thrashio business model that, that didn't go well. I mean, it didn't go well for, for Jerry, my understanding, um, as well as, as well as this, this other, you know, pre-Thrashio attempt, and, and then, and yeah, I mean, we can talk about what's been going on in the whole FBA aggregator ecosystem, you know, these days, but, but yeah, I mean, like, um, it's, on one hand, it's a fairly simple model. On the other hand, executing it correctly. You gotta do a lot of things right, and I think some of the challenges that, that, you know, a lot of the, the aggregators these days, and the, the Thracio included in post, and, you know, other ones post Thracio, that, that, yeah, you know, running into similar challenges, I think that some of these earlier ones that didn't, you know, didn't get the headlines and weren't as publicly, um, yeah, there wasn't, you know, as much publicity around. But, but yes, to your point, it was a bit similar model, but, uh, but earlier. Yeah, so Sellerplex is, is basically a service organization. You're helping SAS, you're helping FBA content websites, e-commerce websites, all of them just to execute better. Um, so to clarify, Sellerplex focuses on e-commerce businesses and so. So, SellerPlex, we, it's, it's mostly FBA sellers, but, you know, we do Amazon account management, Amazon marketing, supply chain management, um, we, you know, we have like a bookkeeping department as well. And so, and these are services, you know, overwhelmingly for e-commerce sellers. We work with some agencies, but, you know, e-commerce is that business, uh, you know, expertise. And so, and so, also, uh, when I, after my exit, Um, in addition to starting Sellerplex, I, I mean, I've always just been interested in M&A and think, think it's, it's cool, buying and selling businesses. It's, it's, it's exciting, it's cool. Um, you know, I had my exit, which was, you know, uh, super significant for me at the time, and, uh, and, and, yeah, like, was, wanted to do more and be more involved in M&A and it's just like, I mean, I'm sure you and many of your listeners, like, it's just, it's, it's cool, it's exciting, and so, so, yeah, I also, like, did some smaller deals, um, acquired a, uh, acquired a content website. Uh, invested in a few other, uh, what, what, how big was the content website that you acquired and kind of the traffic size? Yeah, I mean, it was like a low mid six figure acquisition, um. I was in the crypto space, uh, traffic, I mean, uh, yeah, I don't know, like 1000, it fluctuated between 1000 and 2000 and 500 visitors a day, or I don't know, some, something like that. We, we, we actually sold that business, uh, now earlier this year, so, got in, got out, that was, I mean, uh, a, a positive outcome. And as well as, yeah, invested in some of these other businesses and, um, you know, all while, like, you know, Sellerplex was still, you know, kind of growing and And with, uh, with Sellerplex, we, about a year ago, started to get into doing um some due diligence projects because, you know, there's this whole aggregator boom and buying all these businesses and, and yeah, we actually were working with a broker friend of mine, doing some exit prep for, you know, working with him on some of his clients. And, you know, due diligence, a lot of ways, it's just, you know, the other side of the coin of exit prep, and so, we sort of, you know, Modified the scope, did some outreach, and all of a sudden, you know, landed and started doing some, you know, due diligence projects. And so with, with that, um, you know, things were on the buy side or the sell side, uh, buy side. So I mean, we, we were working with the initially we had some projects with a broker friend and that was on the sell side, but then when we started offering as a service was, was by side and, uh. And so, so, yeah, then, you know, coming into, you know, a couple of months later, we, we, we were getting some traction around, you know, this new, uh, you know, service line of due diligence and it got me, just got me thinking more seriously about due diligence as a, as a service category and, you know, if so, if this was an area that I really wanted to, like, double down on and pursue and And yeah, for a lot of reasons, I, I thought it was attractive. I mean, and a big thing just because it's, it's in the M&A space, which, you know, I think we, we both share, uh, you know, an interest and excitement around, and so it's like, OK, cool, like, you know, and I've, I've friends with a lot of brokers and, and just like, I, I, you know, yeah, I had been interested in M&A for a while, and so, like, OK, I thought it could be a cool opportunity to really, like, get even more involved in the ecosystem and, and so, Uh, also, at the same time, I was aware of this other business, Centurria, that, you know, it was really like the, the category leader. I mean, um, yeah, they've been around for a while, yeah, 2013, um, 2013, yeah, like, you know, the, the, the dinosaur days, uh, in terms of online business, you know, I, I mean, man, like I'm, I'm, uh, Like, connected to a lot of the online, you know, brokers and this, and, you know, and a lot of them, we like, lived in Asia together, like the, the Empire Flippers. I remember when they, they actually, like, Empire Flippers was a pivot from their previous business, and like, I remember I was, you know, at, it was actually that same event in Bangkok when they kind of, this is a, this is a couple of years, not my first year, but um when they announced they're sort of like pivot onto building a marketplace and Empire Flippers was launched from, you know, what was before and Anyway, I mean, oh, I know, I know Joe McNaughty. I sold my site through to Empire Flippers. Yeah, cool, nice, yeah, I had, uh, actually Justin, uh, Joe's partner was in Austin last week, and we caught up. They're in Thailand. Yes, yeah, well, they, they were, I mean, yeah, spent a lot of time. I've hung out with those guys a lot in, in Asia, but But anyway, uh, like, you know, this was, you know, they launched Empire Flippers. This must have been, I don't know, 2014, 2015 at the latest, and Centurria started in 2013. I mean, some of these other ones too, I mean, like Quiet Light, EE, uh, you know, website closers, I think like, started, you know, around those years. This was really like the genesis of the online. You know, M&A industry, you know, in, in 2010, I don't think any of them existed. You know, fast forward a couple of years, they're, they're, you know, these businesses are just launching, and, you know, fast forward to today, you know, it's a, it, it's a thriving ecosystem. I mean, you know, the, the, the category basically didn't exist 10 years ago, or was very, very, very early days in terms of, you know, online specific M&A and, uh, And, and yeah, fast, and so, so Centurria, you know, was a part of this, like, you know, industry genesis, and Centurria was uh the orig uh was founded by like original founders and then was bought by uh these other guys, Chris and Brian. And so this is so catching up back to back to our story and my story, you know, I knew, I knew Chris, we were friends online and we, you know, connected a little bit, and Yeah, you know, I was very aware of Centurria, and I kind of got this idea in my, you know, my head like, wow, like, maybe Centurica would be like the dream acquisition for me and just kind of like started thinking about this and, and, you, you know, I thought that It was a good, you know, uh, combination of like, my skill sets that could be added to this business to grow it and take it to the next level, and all this kind of things, and so I was thinking about this for a while until finally one day, you know, shot Chris an email, you know, the email that kind of changed everything and kicked off this whole chain of events and Basically he reached out, it was just like, hey, we're doing more due diligence. I know, you know, let's hop on a call and see if there's any way to collaborate or, you know, whatever. And were they, were they receptive to that, or did it take a little while? No, they, they responded very quickly. It's, you know, it's like I, I should, you know, this was something, you know, it's, it's so funny looking back, but like I, I had some nerves around this, you know, and I was thinking about sending this email, and finally one day I just, you know, freaking sent it. What, what were you afraid about sending the email? What, like, what, what was that like? They'd say no or didn't want to talk to you or not say just not respond. Yeah, I, I mean, that basically, I mean, cause it's like, you know, so I'm also, I'm, I'm really into, you know, just like mindfulness and, you know, a lot of this, like, you know, personal development and working on myself is like a big, um, yeah, a big part of, part of me. And anyway, I, I think about this stuff, and, and, and yeah, with that, I mean, I think what it was is there was this like, you know, before, before you like, take the action, it's all potential, and so, if I never sent that email, Then it's like, oh, it's, it's it it remains this dream, but like, it's, it's, it's the dream is there, you know, you're never gonna, it's never gonna happen unless you do something, but like, but yeah, there's this fear cause, you know, when you, when you take that action. You know, yeah, it can have a good outcome and look like it was a good outcome, you know, I, I fast forward, you know, spoiler alert, it's now my business, so like, you know, it, uh, you know, it all worked out, but, but yeah, but it's like if you don't, you know, there also was the chance that they could have said no, and like, you know, I think that's sort of why were you afraid of that? No? Why do you think? Yeah, cause it's like if they don't say no, then the dream is still alive, you know, it's never gonna go anywhere, I, you know, it's like, it's, it's, it's never gonna go anywhere, obviously, if you don't actually take that action, but like, you're not gonna get a no either, so like, the dream is still there anyway, I mean, I'm, I'm a very like action-oriented person and look, like it wasn't, I wasn't like deliberating, oh, do I send this email, you know, I'm, I'm probably like looking back at, you know, I don't know, it wasn't like this whole thing, it was more like, I just kind of had in the back of my mind like, oh yeah, I should email them, I should email them, and then, you know, one day finally did. I wasn't like, yeah, you know, hovering over and anyway, I, I know, I think we all have that. I mean, I, uh, sent an offer to somebody, say, look, I, Uh, I, I, I like your business. I love your business. It's very profitable, but I have some puzzle pieces that are not together again, and I didn't want to create the perfect email, so I just outlined three of the puzzles and pieces that I'm unaware of, I'm sure of. I don't have answers for. So, I can't really make you an offer till I have this, but I can, I like, I, I'm interested in your business. Right. So, exactly, similar thing and, and so, so anyway, I reached out, um, you know, got a response back quite quickly and so, I thought that was encouraging, you know, we got on a call a couple of days later and, you know, and again, it kind of started off like, hey, we're doing some due diligence and maybe there's, if you're a capacity and you could send us deals or if we're at capacity or, you know, out of scope, we can refer to you and You know, and then, you know, and like, in the back of my mind, you know, my, my, my hope was, you know, to, to, you know, wanted to explore the possibility of, you know, an acquisition, and so, You know, fast forward, you know, in the, in, in the call, we're kind of like, oh, well, yeah, you know, at, at some point, maybe it makes sense for one of us to, to buy the other one, and, and then Chris actually responded and was like, oh, well, if, if that's the case, I think it'd make more sense for you to buy us. And like, you know, this like my, you know, uh, you know, what, yeah, why do you going off and why did he say that? Yeah, why do you think he said it? I mean like there's there's the, the what you imagine he thinks he said, and then with this story he actually told like what's going on in the business. Yeah, yeah, I mean, I think if we look at Uh, like, if we look at kind of skill sets, like, it really, you know, it, uh, me taking over Centura really is a good match for, like, my experience to build on the foundations that Chris and Brian, you know, where they, and, and they did amazing with the business. I mean, I don't know it, you know. Uh, significant revenue growth over the last, you know, since they took it over, the business, yeah, grew a ton, but, you know, with them, they, they were, they were coming up against, uh, you know, kind of like a, a bottleneck in capacity issues and a lot around, um, fulfillment, and so they were basically like, always at capacity and, and, you, you know, didn't really have that experience around, like, building a scalable. Ops, team, infrastructure to be able to, you know, to be able to, you know, scale deliverables. And so, that, that is my, I mean, I do have a lot of experience with exactly that, remote teams, scaling remote teams, scaling deliverables, and so, So yeah, I think that's why, you, you know, and and Chris knew that I have this, you know, he knew about Seerplex and knew that we were doing due diligence, but also, you know, it was a large team and doing all kinds of other stuff, and so, I think that's why, I mean, Uh, you know, that was part of why I thought it was a good fit, and I think, yeah, that's why Chris thought it would be, um, you know, make more sense for us to buy them because, you know, of our, you know, the strength around the team and, and infrastructure and, you know, scaling deliverables that, that I, I, I have experience with. So, let me ask you about that. So, I, I, I, let's say assuming somebody watches this and they go, OK, due diligence seems like it's a service-based job. How do you scale a due diligence team with deliverables? How do you do that? I mean, one, yes, it is 100% a service-based job, and, um, and yeah, you know, services scale with more people, and so, I mean, you know, happy to get into as much kind of depth around this, and this has actually been a big part of my You know, 1st 3 months or I guess, man, I think I maybe just crossed my 1st 100 days as, you know, CEO or right around, right about to, you know, CEO at Centura. Yeah, thank you. It's been, it's been a ride, um, but, but yeah, I mean, uh, like, the short answer is, you know, service businesses scale with more people to deliver the service. You know, the, the longer answer is, and, you know, and if you'd like, I can kind of walk through. There's, there's been already within 3 months, like, a number of different variations of, like, the scalable delivery model that I've been building with Centurria, and, you know, and candidly, like, there have been speed bumps, challenges, I mean, especially at first, like, the first plans or models did not work like I I was originally thinking or hoping, and so, you know, the, the, the ops, you know, it's currently on like version 3. But at version 3 is, man, I mean, we are like so much ahead of where we were at version 1 and, and yeah, I mean, you know, happy to break down our kind of like how we're, you know, how we're structured in a way that, you know, will allow us to, to keep scaling and, and do more volume. Um, yeah, no, I think I, I, I got it. I was just, we, we made an offer for a custom development company. Uh, and he thought it was worth $5 billion and then by the time we showed him the EBITDA, which is averaged out to $300,000 over a three-year period, uh, and we said, this is not scalable, it's only scalable. I mean, if we move the revenue up like this, our employees are going up like this. It's not gonna be going up like this. Uh, well, and then had a difference of, uh, opinion on the offer and so, right, well, I mean, how you value that type of a business is a whole other, you, you know, discussion, but, but on the scaling side, and this is something that like I've You know, I very intentionally, so I'm involved with a lot of service bus, I mean, my main businesses are service businesses. I'm an investor advisor in a number of other service businesses, and like, this is, this is intentional, uh, like, and, and, and the reason is because, well, there's a few reasons. One, you know, service businesses rely on people and If you can solve people problems, then that, you know, that, that really goes a long way with resolving bottlenecks and solving problems for service businesses, and, and like I mentioned, you know, recruiting and hiring and, you know, remote teams has always been like, a strength of mine. And so, like, I have a really strong recruiting department that actually services, you know, maybe, At this point, maybe 45 different businesses, and like, you know, knowing that I have, and that that I'm confident in this, you know, recruiting department, it, it just gives me confidence to go into service businesses and know that I can, you know, uh, overcome people problems and resolve people problems. So, so that's one, I mean, and yes, they do involve a lot of people, but if you can solve for people, then I think you're, you know, it goes a long way with this type of business, uh, but, but then the other one, to your point about how it scales, um, you know, every business model has different advantages and disadvantages. I think with the service business, um, you know, you're right, it, it, it, it's more of a linear growth curve. It's not gonna, you know, it's not scalable in the sense like, oh, if a SAS goes viral and all of a sudden you pick up, you know, 10x customers overnight, and yeah, like the SAS can handle, you know, maybe your customer service needs to be adjusted, but like, you know, yeah, the business can scale easier that way, um, or e-commerce, you know, oh, all of a sudden, you know, you, uh, Get in, you know, some ad campaign that just like, you know, hits and you have great return and you just scale ad spend and all of a sudden, boom, the business like takes off. You know, I think that's, it's, that's less likely to happen with the service business because you, you know, as the projects and deliverables grow, you need more people to, to handle that. And so, so my experience with service businesses is like, you know, it's, it's less exponential, but is, you know, is linear and like, You know, and honestly, like, and, and a big thing that I like about service businesses is You know, I, I think they're, they're generally quite stable, and so, you know, it's linear, meaning it's, you know, fairly slow and steady, but what you're not gonna have is like, uh, growth and all of a sudden in one month, it drops 80%, you know, it's like less volatile, so, e-commerce, you know, you have an ad campaign that's crushing it. Then all of a sudden, you know, the next day, the next week, ad costs go up. This campaign's not profitable. Now you're sitting on all this inventory, you're not able to sell it profitably, like, you know, that you, you're, you're less likely to run into those kinds of, you know, those kinds of issues with the service business. I mean, look, everything again, pluses and there's plus or minuses, but yeah, and also with service business, I like the, the free cash flow, you know, they're less capital intensive, um. Whether it's investing in inventory, investing in development, it's really like, look, we only need to pay people when people pay us, so it's like, you know, there's, it's, it's less likely that you're gonna all of a sudden, you know, be underwater when, you know, if, if sales go down, you can scale back on your expenses, and if sales go up, you can, you know, Uh, increase your team and expenses and so, so yeah, it's generally a good, you know, good for, uh, you know, cash flow, which I was, I mean, I, I like cash flow. So, so, so how I like services go back to the uh Centurica. Chris decides to, you should buy us. Where, where were they at at that point? They were just max capacity. They were growing, but just max capacity, but healthy cash flow wise. Yeah, super healthy cash flow, very profitable business, um, and yeah, at capacity. Yeah, and then you came in with what kind of offer that said, OK, this guy can 10x us or, or this guy can do a better job than us, or whatever that story. Yeah, I mean, it was, you know, the business was valued on a multiple of, um, I mean, I technically the metric we use was we called it owner benefit because We took, we took basically a profit that didn't include salaries for the two owners, and then I, I built in a, you know, a deduction around what I thought it would cost me to replace their roles because both of them were, I mean, one was very much working in the business, the other was doing some things, but, you know, one was like really heavily involved, and we can talk about the, the challenges around, you know, transitioning this person out. Um, but yeah, so I, you know, we had like the, the, the total profit number and then deducted an amount of what I thought would be reasonable in order to, you know, uh, hire my own team or replace these roles, and that so, but they weren't taking a, a salary, a line item salary, and the GNA. They were taking it out of SDE or, or profits, yeah, yeah, yeah. So, you know, so I, you know, built in, uh, a line item to deduce what I thought it would cost me to replace them. And, you know, and then we applied a multiple to, you know, to that, you know, SDE number or whatever. And you know, we agreed and that became so who proposed that you proposed it first, or did the seller say we're worth it, we think it's 2X3X or we, we sort of danced around it for a little bit at first and it was like, oh, what, what kind of a range are you thinking and oh, like they kind of threw out a ballpark number of what they thought it was worth, but you know, and then it was like, you know, ultimately the ball is in my court to. You know, present an actual, like, you know, LOI offer and, and so, yeah, like, you know, but. When I presented the offer, it was in line with all the, you know, we, I mean, we, we, we were pretty aligned the whole process in terms of how we value the business, what we thought it was worth, you know, da da da. So it really, I mean, yeah, I think like, we both We're just, yeah, had similar ideas or expectations around what the business, you know, how to value it and what it was worth, and so, A lot of the times, so they bought that business, but a lot of the times, you know, you buy these, uh, SA companies or e-commerce or, and they're first-time sellers, they don't have any experience around selling a business, so they think it's always think it's more than it's actually worth, right? Well, well, these guys were running a due diligence business and so looking at a lot of businesses and so very familiar with the process and reasonable, you know, we, we both were coming at this from like, I'd say. You know, fairly rational points of view, yeah, right. And so, and like I said, you know, we pretty much were aligned throughout the process in terms of, you know, yeah, how much it would be worth and, and what was the market rate, and there was none of this like this business is worth 10x revenue, you know, kind of stuff, and, and yeah, we both like, and look like they. You know, there were definitely a number of challenges for them in terms of like finding the right home and, and, you know, I, I candidly, you know, I, I, I was a good fit. And so, it was like, we both, you know, uh, it, it was a good fit for, for both of us. I think we both wanted to make it work. We both were reasonable, and look, like, I didn't wanna, I didn't wanna pay too much. And they also, you know, we all just wanted like a, a fair and appropriate deal. I wasn't trying to like, you know, undercut them, they weren't trying to overcharge me, and so, you know, what we agreed on, I still think is like a pretty fair, you know, fair price, given the circumstance, and, and yeah. Well, so what did that look like? I mean, was it creative financing? Was it cash out of the pocket 100%? And did he leave, uh, mostly, mostly SBA. So SBA, well, so yeah, use SBA for, you know, a big chunk of it, um. And then, you know, my own down payment and. Was that SBA 90% of the uh SBA was 70%, uh, capital injection was 20%, and seller note was 10 or is 10. OK. Yeah, how long did that take to get approved for, qualified, and, and uh executed? I mean, I think we, we like, we got serious about pursuing, you know, this, this acquisition, uh, at the beginning of this year, and so we, you know, waited for the, the, uh, you know, 2021 numbers to finalize in this, and so, yeah, I kind of got serious about the process in January, um. And uh yeah, we closed like the right around like. Either like right at the end of April or right at the beginning of May, and so, you know, the whole SBA process was maybe 4 months or something. Yeah, yeah. And what bank did you use for that? Called First Business Bank. First Business Bank, was it a local bank or it's like a regional lively boat type? No, they're, I mean, uh, they're, they're local and so used a great, um, uh, you know, lender, so Steven Spears, I don't know, you might know him, um, yeah, I mean, uh, you know. Does a lot of these, you know, uh, he's like an SBA coordinator or broker, and so I, I knew Steven and reached out to him and then went through the pre pre-qualification process, and then he, you know, connected us, me with, you know, he shopped it around to some different SBA banks and found the one that was interested that then, you know, like software, didn't mind software, didn't mind services, uh, well, but I mean, yeah, just, you know, like each bank has different. Interests in terms of what they'll lend for and uh and this one, yeah, you know, was interested or comfortable with this business model and, and, you know, it worked. Yeah, so you executed on the deal, it's now yours. Did they leave? They have to leave with the SBA, right? So they're, I mean, they're not actively in, they're not day to day, but they are both still involved as advisors, and I mean, there's been a transition period and, you know, it wasn't just like, you know, and uh they are still involved, you know, my team has taken over the, like, you know, we're, we're running the business, but they both, you know, have been incredibly Just accommodating in terms of, you know, supporting our team and training our team and answering, you, you know, and, and still are available answering questions and, uh, and so, so yeah, they're, they're more advisors, uh, but not like day to day active. Yeah, so when do you own the business, and you're underneath it, really underneath the hood, was there anything that showed up that you didn't see before? Yeah, good question. So, I mean, Yes, and, I mean There wasn't anything that showed up that, you know, I wasn't. They're in the due diligence business. So yeah, well, well, I'll tell you, I mean, I, so. I greatly underestimated the complexity around the service delivery. And so, that wasn't like, it wasn't a surprise in the sense of like, like, I, I knew this was an important item, but I, again, I, I underestimated what it would take in order to, you know, build the scalable deliverables, and that's, like I mentioned, I mean, man, we've had You know, challenges the first few months and first thing didn't work and had to go to the second thing, and that worked, but then had problems, so then, you know, like I said, we're kind of on V3 of the whole org chart and design, and like, and yeah, like, that's been a big learning curve around just like, what, you know, uh, yeah, I, I underestimated, like, what it would take to successfully build our own deliverables, and so, so, yeah, that was, I, I mean, I'd say. I don't know if surprising is the right word, but like, I underestimated, and that's on me. I mean, the whole thing, I've learned, I've learned more in the last 3 months, you know, taking over and running this business than I have in the last, like, you know, years. So, so, so that's good. Learning and growth is good. Yeah. Is there, when you say scalable, is there software you can write that creates coming out of the dashboard to help you with your due diligence? I mean maybe, but like you know, the, the bulk of the deliverable relies on people and so and, and so yeah, maybe I can share. I think it'd be useful like the way that we look at diligence there are 33 buckets, right? We've got the financial diligence. You know, which is what the primary of that is gonna be, you know, verifying the the seller P&L versus our rebuilt P&L. Um, if you want to get more in-depth on the financials, you can get into quality of earnings reports. Um, then you've got operational diligence, which is gonna be like. You know, red flags, skeletons in the closet, as well as, like, the start of like value creation of like, oh, well, like, I can optimize this, um, you know, I can, I can sub in, you know, I can save costs here, and so that's on the operation, and then there's the, the commercial or like market diligence, which is more, you know, forward facing growth, like, Yeah, there is like market analysis, competitor analysis, um, as well as just kind of like forward-looking opportunities of like, oh, well, like, what if we added a sales team, or what if we, you know, explore this marketing channel, and so, anyway, the three buckets, we got financial, operational, commercial, and, you know, any due diligence is going, and, and one thing I'll say that's kind of, that's, that's unique about Centurria is our So we're a mixture of like accounting and finance as well as like actual, you know, online business operators and so, that makes us unique in, in, in the sense that we can provide both the financial diligence as well as this operational and commercial diligence when it comes to an e-commerce business or a content website or, you know, we're, we're, we're getting better with SASS and everything because, you know, stuff that I've learned getting into the due diligence, you know, industry. Most due diligence companies are very siloed. So it's like, you have a financial diligence accounting firm, you have a, a legal diligence law firm, you have an HR diligence, you, you know, service provider, you have a, an operations diligence consultant, and it's all, it's very, uh, you know, fragmented and You know, and that's one of the opportunities that I see is to really, you know, we already do offer multiple significant, you know, scopes under one house. So we have the financial, operational, commercial, and, you know, we're able to do that because, you know, yeah, we have a finance department, but like, I, I have a deep, uh, uh, you know, my experience, I personally have experience with all these business models, you know, I'm very, you know, connected to E-commerce, uh, you know, content sites, uh, you know, as well as, as well, I mean, service businesses, I've been, you know, I've been running and so, so that a lot, like, we're not just an accounting function, although we have that and, and, you know, that's certainly a necessary piece. But yeah, but that's one of the things that makes us unique is that we, you know, we, we can like touch multiple areas of diligence, which is, is, is, is not common. Um. So, so anyway, um, onto the deliverables, you know, whether or not you want the operational diligence, whether or not you want the commercial diligence, really like, you're, I mean, I, I've yet. Every acquisition, you're gonna want the financial diligence, which is, you know, verifying the numbers are what the seller says they are, matching the P&Ls, where the differences. Let me, let me ask you about that. So somebody's running with QuickBooks or Zero or some other, uh, uh, application, financial application. How, how deep do you go into verifying their Stripe accounts or PayPal accounts or Amazon accounts and then go into the taxes? So, I mean, we, so what we look at is basically we wanna get eyeballs on money in, money out. And so, you know, let's say we're kicking off a project, uh, you know, call, you know, we have the kickoff call and really the, the, you know, the goal or the outcome of that is to get really clarity on like the document and access request list because we need like eyeballs on, on everything and so. You know, let's say it's uh, you're a simple uh FBA business, you're selling on one Amazon marketplace, you've got a bank that you use, you've got a credit card, you, and you use zero. So, in this case, we're gonna want like, you know, eyeballs and access to all of those. You know, all of those parts. So we'll want, you know, direct Amazon account access, so we pull our own data in the reports. We'll want bank statements, credit card statements, you know, month by month for the accounts that they're using. We'll want, uh, you know, uh, QuickBooks X or Zero or whatever their accounting software access to be able to like go in and, I mean, really, that's just kind of pulling the general ledger, um, in, in some of these things, we actually verify, like there's more than one way to, to verify, um. But yeah, to your point, you know, we want, we want to, to verify and eyeballs on all the money in, all the money out, and, you know, we take that to then reconstruct the P&L to match against the seller P&L and, you know, and then back to your original question, like, this takes accountants, you know, like, this is, it's a very manual process, and so, so yeah, you know, we have an accounting team. There's, you know, currently 5 accountants where it's like each one can work on. Two projects at a time, you know, the main deliverables, the P&L rebuild, and, you know, identifying the deltas and, hey, you know, the seller reported a million dollars in earnings and, you know, our rebuild was, you know, 900,000 and so, oh, that's a delta of 10% and where did that come from and, and you know, it's like it's, it's a very manual process is what I'm getting at and is there potential to automate parts of the process via software? Sure, I'm sure there are, but like, yeah, I wasn't really thinking about that. I was thinking about just the information you can get from Amazon, but I do wanna ask you about how often do you see somebody. Uh, you have an Amazon site or one product, and they have 3 other, 3 or 4 other products started or selling on Amazon, but they just want to sell one line or one company, but their expenses and sometimes our revenue is commingled with another one, and you try to extricate that. Uh, yeah, these things can get tricky. Um, I mean, it's really, it's, it's, it's all arranged and all the above, you know. The best for us is like, look, it's a single sales channel, single accounts, like, boom, that is, you know, that is one, you know, degree of difficulty, and then, you know, we just finished a project or wrapping up a project where like, There's, you know, they have one parent Amazon account, and they were selling, you know, then they opened up a new account for, you know, uh, that they were actually selling, and they're transitioning the SKUs from the old account to the new account, so there's like, you know, and we're talking like, close to 500 SKUs of what they're selling. The parent account has like thousands of SKUs, so like, it's, I mean, yeah, it gets tricky. That's, that's maybe the trickiest one that we've actually worked on, where it's like, you know, we're, we're pulling a portion of SKUs from one account that actually is like selling out of inventory, that's selling into the next account and like, I mean, yeah, and look, this is also where, you know, we, you know, really like a, a, a differentiator because like, we, you know, we understand Amazon accounts and businesses, you know, we have a lot of that experience more than just like some random accounting firm, and so, like, when you get into these complexities, and look, like this was a challenging project for our team, I'm really proud of how we, you know, yeah, we're able to deliver it. But yeah, but like, it does get tricky, and that's also where we're, you know, we have um a lot of experience with these specific niche models that allow us to deliver on stuff like that. You know, more than just like an accounting firm that doesn't understand Amazon as well. that I picked out of a phone booth. So what is the final report, if you're doing a buy side assignment, what is the final report look like? Are you making a score? Are you making an evaluation, or what are you doing? Yeah, so, so, uh, the, the final report, so, so the deliverables, you know, for, for most projects, so there's gonna be the P&L rebuild, and that's like one of the core. You know, pieces, and so it's literally, you know, we have, and this is something I'm actually like, so I'm, I'm not an accountant, I'm, I'm learning a lot about accounting, you know, now as the CEO of a due diligence company. Um, but yeah, so we have the P&L rebuild, that's like delivered, you know, that's a separate file, uh, you know, Excel file of the P&L and like, this is something I actually recently learned that I think is super cool, but, um, we, we utilize like a method or a process called, um, like audit trails or audit trailing, which basically means, it's, we're not just plugging in numbers into spreadsheets, like, All the data is, is on the sheets and like, dynamically, you know, synced and formula, you know, formulated, and so, you know, when you look at, like, When you look at any one column, it's not just the number, you can actually dive in and be like, oh well, like this number, here's the history of the number, that's kind of a blockchain thing, isn't it? I mean, sort of, yeah, I mean, it's all about like, you know, uh, transparency and being able to, you know, and so this is something that, yeah, one of the, like, I think, I think this is a significant improvement that we've, you know, implemented, where like, as a buyer, there's just more transparency and you can look through the sheet and see like, OK, like, This number, you know, you can, you can follow where the numbers came from. It's not just like an input. And this is something that's like, this is standard practice with like big accounting firms and consulting firms, but, but again, this is like, you know, the, the vision for Centurica is to really bring like, You know, a high level of professional service delivery to these online business assets, and I think that's a big opportunity because a few, a few macro trends. So we've got on the, on the sell side. The, the online business assets themselves are professionalizing, you, you know, the businesses are, you know, they're, it's not just a guy in his basement refreshing affiliate earnings, you know, people are building, you know, 78, 9-fire e-commerce, SAS, you know, some super big content websites. They have teams, they're the CEO, you know, it's, it's like the businesses themselves are professionalizing. And then on the buy side, there's becoming a lot more professional interest and so what do I mean by that, you know, private equity that 5, 10 years ago, wouldn't touch a mid 7 or 8-figure e-commerce brand. Now, you know, they are interested and, you know, uh, a private equity buyer has a different level of, you know, requirements and things they're looking for then. If you're a, you know, an inexperienced individual buying a $50,000 website versus a private equity firm buying, you know, a $10 million e-commerce store, like, there's You know, there's expectations as well as opportunity to kind of meet that higher-end client, which we are, that, you know, that's one path that I'm really committed to of continuing to professionalize so that we can really, you know, act as like a, a bridge between the gap of these more professional buyers, private equity, you know, the new, the, the roll-up funds and aggregators, um, family offices that are interested in these online assets. And, and, you know, and so, so we want to deliver like a, a very, you know, a high professional level service. Anyway, this whole audit tracing or audit trails is, you know, is a part of that. And so, like, our, our, our basically our, our P&L deliverable is like fairly robust, you know, you get the P&L, the rebuild, versus the seller, the deltas, you know, it's all organized and categorized, or, yeah, organized, categorized, so, you know, so. We deliver that to this, to the buyer and like, they have questions and like, oh, why is your cost of goods 3% higher or lower and, you know, why are you missing, you know, there's a, a 10% gap in insurance fees. Why do you have, like, you know, and we need to be able to, you know, explain these things and also in, in having that, that like, you know, audit trail, it, it, it, it answers a lot of questions because, uh, you know, uh, a savvy. You know, finance person can look at that sheet and like seal that answers a lot of questions preemptively because we're like showing our work, basically. Yeah, who, who, what's the makeup of your customers right now? That is funds, PE, family office, Independence, what, what does that look like? Yeah, so we work with a good amount of, you know, uh one kind of client base is gonna be um FBA aggregators. And, and we do a lot with FBA aggregators and like, you know, we love repeat clients, uh, you know, those are, yeah, that's great. So, yeah, we do have a number of, you know, aggregator or private equity firms that are, you know, multiple, multiple buyers. We also get a lot of, um, of individuals and so, you know, Someone, maybe they're doing an SBA deal, you know, more, I mean, we're, we're really, we're going more upmarket because um they pay more, right? I mean, you know, well, like if, if you're buying uh, a $5 million business or a $10 million business. You know, a 10,000 150 $20,000 diligence bill on a $10 million acquisition is like. You know, pays for itself. Well, I mean, I think it's, it's, you know, it's, yeah, worth it and from insurance, but just like, you know, if, if, if we charge, you know, and let's say it's a $20 million or a, a, a $10 million business, a $20,000 you know, project, that's, what is that, 0.2% of the overall price, yeah, versus if it's an $800,000 business and we're charging, you know, $8000. This is like 1% and so, you know, the smaller deals you know, to avoid a landmine, of course, you're gonna pay that bill. Yeah, right. I mean, look, I think it's, it's, it's, it's worth it, but, but like it's, you know, we can provide a lot more value for bigger deals, um, and yeah, you know, we can charge more and like I, in the direction we want to be going is more. upmarket and like, you know, I'm really committed to continuing to improve our services, continuing to improve our deliverables, continuing to add more value, and so I wanna go more up the value chain and, and, and yeah, and then we still, you know, wanna be able to service, you know, sub-million dollar deals. The lowest that we do is, so we have like a minimum fee of 60 or 80 or 7, kind of depends on our capacity, um, but like, You know, you're not, if you're buying a $50,000 website, you're not gonna spend $7000 on diligence. So, the, the smallest deals that we usually touch, I think we've done, you know, $600,000 7000, you know, some in the 800 $900 a million dollars range. But then, yeah, you know, more in the, you know, 1 to 10 is gonna be a lot. And we have some bigger ones too. We're wrapping up a $30 million deal, um. Yeah, you know, 12 million, 11 million, um. Oh, where, so I, I gotta tell you, man, an hour went by real fast, so I only don't have a lot of time. So where do you wanna go with this? Are you just digesting this, or is there some other kind of growth? Did you wanna go after this? I mean, I see this as like, you know, this is, this is a long term play and journey for me. I mean, I'm, I'm, I'm really excited to be, you know, in the online M&A ecosystem. I think that. You know, like we talked about earlier, 10 years ago, there was no online M&A ecosystem. Now, it's, I mean, it's a, it's a thriving industry. I still think these are early days, you know, there's a lot more professional capital that is in, you know, like, the seal's been broken. People have, you know, you know, real money has been jumping in. I think it's still early days though. There's still a lot of money on the sidelines that's interested in these assets that hasn't yet gotten involved. And so, I, I mean, I think the industry has a lot of room to grow, and I wanna, you know, be a part of that and a, a, a contributing factor, and I think there's a lot of opportunity for us to add value for our clients and just, you know, have a really differentiated, uh, deliverable, which, you know, to have a professional deliverable, you know, offer things that, you know, our competitors aren't. And, you know, that's what I'm excited about and really just building this long term, you know, this is like a long-term project for me. And I'm excited to be in the industry and grow with the industry, and, uh, yeah, I mean, it's been a crazy 3 months so far. Um, I'm, I, I feel a lot better about the next 3 months, you know, after all of our, uh, you know, how much we've grown and, and improved already, like, Yeah, I'm really excited to see where we are in a couple of months. I mean, look, we're, we are, we are not yet where, like, at the vision for the deliverables and, and, you know, the breadth and depth of scope that I want to be able to cover. But we've made, I mean, significant progress since, you know, day zero, and I'm excited to keep building on that and like, you know, I love service businesses, I love, uh, you know, solving problems, creating value for others, and like, I think Centuric is a huge opportunity to, to, you know, do that, and, and I'm excited to be able, you know, like, Uh, be on, uh, along for the ride. Well, congratulations, Nate. I wanna appreciate or just thank you for being on the show. Thank you so much. Congratulations on your acquisition. Yeah, thank you. And, and yeah, for any of the audience that's interested, can just check us out at Centurica.com. Um, you wanna connect with me, Nate at Centurica, check out any of my social media. We were talking earlier. I'm, I'm also, I'm very into yoga and health and fitness, as well as M&A. And so if you wanna connect on Facebook, Instagram, Nate Ginsberg, LinkedIn. Um, one thing that your audience also might be interested in, we're, we're finalizing an updated, um, we have some proprietary data around online acquisitions from, it's our, uh, we have like a, a MarketWatch web app that, you know, pulls listing and sales data from a number of, you know, brokers that list online assets and what they sold for? Multiples? Uh, yeah, yeah, uh, and so, so yeah, we're finalizing this report. It'll probably be, I don't know when this will be published, but, you know, it'll be out soon, and, um, yeah, there's, I mean, there's some really cool insight that I'm excited to, to share around. You know, volume of listings over time, per category, multiples over time, um, that is, uh, that's beautiful. That's what people wanna see. Yeah, yeah, well, I'll certainly, uh, I'll ping you when it's ready, and, uh, yeah, I mean, look forward to sharing that and, uh, and, you know, happy to connect with anyone that is interested in, you know, yeah, thinks there's anything we can do to help or, uh, you know, any opportunities to explore together. Well, great. Thank you so much, Nate. Thanks for having me. Cheers.