From Apollo & Viking to the Gritty Lower Middle Market. Building Tucker’s Farm with Kyle Tucker

0:00 [Music] Hello and welcome everyone. I'm Peter Lairman and this is Masters in Small Business M&A. This show is an ongoing exploration into the vast and undercovered world of small business M&A where we interview both the proven and the emerging owners, operators, investors, and advisers whose strategies and methods for transaction success have been put to the test. The show aims to surface the nuanced intricacies, the key ingredients, and the important factors that can improve your decision-making in your own journey in the world of small business M&A. This podcast is produced by Axial, an online platform that makes it easier for business owners and their M&A advisers to find, research, and privately connect with a diverse mix of professional buyers of small businesses.

0:46 In addition to learning more about Axial, you can find this podcast show notes, edited transcripts, and many other related resources, all for free at axial.com. Hey everybody, uh this is Peter Lairman. Welcome back to Masters in Small Business M&A. I am super excited to have Kyle Tucker on the show today. Uh I've gotten to know Kyle over the last couple of years. Uh we've had a chance to meet in New York a couple of times and um we're really excited to dive into Tucker's Farm. Kyle, it's great to have you on the program. Thanks for making time with me. Yeah, excited to be here. As we discussed, I want to understand the light bulb moments for for Tucker's Farm, what you're doing, um and and how you got there. I don't know the whole Kyle, you know, Kyle Tucker story all that well yet. All I know is you spent multiple years in private equity at Apollo, which is about, you know, at the top of the heap in terms of big cap private equity. Then you were at Viking, which is a worldclass uh hedge fund that was started by uh one of the top investors at Tiger who went out on his own and and built an amazing institution. And then somehow you decided to leave that path and and create Tucker's Farm and buy lots of businesses in the lower middle market um and and get back to goat farming. Um as uh so take me through it like just what were the do you remember some of the moments when you started to think about this change in direction and just like love to just sort of start there and and have you take us through it. Yeah, for sure. So, I can answer that in a bunch of different ways, but I think like my real light bulb moment was when I think I was like 13 or pretty young and um I know this is cliche to say, but I came across Buffett somehow. I want to say that's when Snowball came out, but it's the first time I became aware of his story and he was like this ven diagram of super super successful in kind of like one bucket and then like a good guy. And I that was a new like archetype for me. I thought that if you're going to be super you had to be like a corporate fat cat, like a bad dude. And um I think there was like something else about his story that like emulatable is I sound delusional saying that, but like he um was basically like a professional opportunist. Like he a really good kind of good playing this game of chess or being, you know, being able to judge riskreward. And I I think there was something that was like intuitively appealing about that to me versus maybe the other like versions of Extreme Success. I don't know, Bill Gates or something where that is a like point in time. I don't say lucky because he's such a remarkable guy, but they're um there's not as many like lessons. He didn't do it in this like repeatable methodical way over this. He didn't create this mountain in this kind of like understandable again, I don't want to say copyable way, but something like this clear path. So, I was really into Buffett early on. I kind of hate to say that because it's such a popular thing to say, but it was true for, you know, sort of proverbial light bulb. And I uh and I at that time I was really into like like this concept of value investing, like this intellectual framework of, hey, I can buy a dollar for 50 cents like that that really appealed to me. And I I want to say that was like early I thought the latest version of that was kind of like these hedge funds. So that was like early green light third point kinding square act one and my understanding someone told me that the way you get into one of those those places is you you start in private equity and then before that you start in banking. So there's like this like pipeline that ends up there. Now I don't know if I knew what private equity was or or investment banking but at some point that path sort of crystallized like oh I need to go do that thing. You know I'm not from a traditional background born and raised in Bermuda.

4:41 So that was a a very hard thing in its own story. But I was very focused on getting into the getting into that pipeline so to speak and you know how do I almost like accumulate prestige early on on in my career. And so I started my career in banking and then worked like hell to get into you know the best private equity firm um or the best private equity firm I could get into. And um and then I get so I go from banking to Apollo and that was well actually I'll say in banking that was another sort of light bulb moment in that even preparing for the private interviews like doing an LBO model again and again and again in all these different forms.

5:20 it was a you know it's 15-minute paper LBO or it's a threeh hour you know full whatever 10 tab whatever and I I think at that moment I I felt like I really understand really understood like accounting and the financials and how they all work together which is sort of ironic because I I went I did multiple accounting classes in college but that was another moment where like oh I think I get this it's like basically a math equinient and there's something about an LBO that's like like sort of mathematically elegant uh if that makes any sense it's basically you know as I say leverage spread math. And so anyway, I I go to Apollo and I I'm on the you know, Apollo is this big asset manager, right?

5:57 Whatever hundreds of billions of AUM and I think at this point thousands of employees, but the private equity team, which was its core business or is it core business, much smaller kind of group and uh super broad mandate. So across industries, geographies, cross capital structure, they can do buyout, distress for control, structured equity, structured credit, you name it, they can do it. And these are my words like their basic like constraints or parameters that they're working with is it needs to be big and it needs to be cheap. So they're trying to deploy billion or two of equity and let's say pay less than eight times eight times cash flow. And I there was something about that strategy that was super appealing to me and I and I I really enjoyed it. I love Apollo for for many reasons but I really enjoyed like the elegance of that math. I will say though in these like large institutions at some point for me the like wheels would just come off. I just wasn't I just wasn't into I mean, I could fake it for a couple years or whatever, but ultimately, you know, I have the words now. Like, really, I was an entrepreneur, but I I just at the time I was just more, man, I I know that this isn't like a long-term path, but at Apollo, I got exposed to there was this, you know, typically you you either become a partner there or you leave and you go into a hedge fun.

7:17 Those are kind of like the two two routes for your your Apollo private equity associate. But there was this one guy who had left to roll up Burger King. his name is Alex Sloan and his story, you know, would come up a decent amount and it totally hit me like I was like, "Holy smokes, that that's awesome." So, you know, I kind of vaguely understood the math way he can buy Burkings for, let's say, five, six times with three turns of leverage. And I um there was something very like intrinsically appealing about that that path. And then I heard about Alex's younger brother, Jake Sloan, and his partner Frank Zank, who's also was also an Apollo guy. So very much kind of like part of the Apollo ecosystem. Uh those groups and they were rolling out vet clinics and it was kind of like a better version of the math. This is call it mid- teens and they were buying vet clinics for four or five times and three terms of leverage and the platform would trade for 15 times and the category as a whole would grow at you know let's say nine high single digits 9 10%. And um I was just like holy [ __ ] like that that's remarkable you know I don't I don't need to do that LBO. I I just like I isn't everybody in this bullpen quitting to go do that right now. But I remember thinking like, "Oh man, that's a version of um you know, these guys would build these these businesses became multiundred million dollar enterprise value businesses like overnight." And I remember thinking like that's a version of kind of success that I can emulate, right? Like you you say take Mark Zuckerberg or something with apps and software and like that that's Chinese to me. I don't know the first thing about that. But like this was scrainess and hustle and creativity and you know deal math and all things that I felt like you know I'm pretty good at that. I I think I could be really really good at that.

8:54 So I um so kind of two things were happening. I was I you know I knew I didn't want to be a long-term part of kind of an institution and then also I I saw this like version of uh private equity that was just mathematically so compelling and also I feel like I could execute and I totally understood So, why Viking then? Why did you move to Viking instead of just leave the bullpen at Apollo and get underway? How ex explain that chapter? I wept out, man. I uh So, the So, so I was like, "All right, I'm going to quit. I'm going to go do this thing."

9:27 And then, you know, one thing about Paul Private equity is you you get all these super fancy hedge funds knocking on your door. And I'm not from like a prestigious background at all. So, I I feel like I worked so hard to get into like the the core the burning hot core of Wall Street. And I just was like, you know, maybe I'll take like the hedge fund option. I I'll go become a hedge fund guy and maybe I make a bunch of money and like I just become like a hedge fun guy and that that I can I can there's worse things than that. And if I get fired, which was kind of like the knock against hedge funds, like oh well you you know you can go to Tiger or Viking or whatever, but like you know what if it doesn't work out? You know that's that's not doesn't have the inherent stability of working at a private equity firm. And I didn't give a [ __ ] about that because I was going to quit anyway.

10:10 Okay. So, I was like, "All right, well, if I got fired, then whatever. I'll just go do my thing that I was originally planning on doing." So, I went to um I took basically two interviews. The first one was Bowpost. I didn't get it. And then the second one was Viking. Just like totally different. Was not looking for a certain type of investment style. I I basically wanted like prestige, highaying, like so I had that sort of volatility of uh perhaps that upside.

10:35 And and Viking is an awesome place, but I immediately realized that oh boy that uh you know this style not for you know Vikings are very hedge fundy hedge funds like what's the quarter you know what's consensus what's this KPI where the stock will beat or miss you know 20 longs 20 shorts that sort of thing and not like Buffett cash flow kind of investing so within like a year I went to my portfolio manager who's this awesome guy and I was just like you know this this isn't for me.

11:06 Um, and I, you know, his family offset ended up being a big investor of of ours, but just, you know, anyway, then then I left and and started this whole journey. So, when you left and started Tucker's Farm, which I want to just I I'd love to just create a bit of a platform for you to talk about Tucker's Farm because some people think it's a farm, some people think it's a family office. It's neither. No. So, I want to I want to uh give you the floor there, but is that when you moved home to Bermuda? No. No. In the first my first two platforms were not um not even part of Tucker Farm. I did them with a a 50/50 cogp. Okay, great. So, let's let's get into Tucker's Farm now.

11:44 What is Tucker's Farm? And you know, and what is it today? And and um and to what extent is that different from how it began? So, first of all, it's it's not a farm. My dad's a small scale dairy farmer. So he's got like 15 goats, but that means like $50,000 of revenue and like $70,000 of expenses. Like it's not like there's like some people think that he's like runs this like dairy conglomerate, which is not the case.

12:08 It's good. It's good my mystery and intrigue. Yeah. Yeah. Yeah. My parents are the equivalent of like wealthy dentists. He's he's a pippy. He's a like artisal guy. And I've always loved his like this business that he has. It doesn't really make any money. it loses money but it's this wonderful you know everybody in Bermuda knows about it and he's a cheese maker and so when I you know was contemplating like what form do I want to be or what honestly it's what brand do I want to be as I build my investment firm what I say like the folksy Midwest compounders were like a lot more appealing to me than like starting Raptor Lane Capital Management you know so so Birkshere Ko Industries those those sorts of things which were kind of in corporate form versus fund form. And I can get into like some of the differences, but I I just I view those as like true kind of MOIC or compounding stories. You know, those are, hey, we compounded at 20% for 50 years versus a traditional private equity vehicle where it's like, yeah, we've got like a 40% gross irra, but it's like, you know, maybe a twobagger net if you're if you're lucky.

13:14 So, I like like the the corporate forms, if that makes any sense, versus kind of a traditional like layering funds and and being in Midtown and doing PPM rollups. And so, there's something like aesthetic about that, I guess, is what I'm trying to say. So, I used my dad's like, you know, little goat dairy or brand. I said, "Okay, this is going to be like, you know, the like the the starting kind of like ember that we're gonna build from that." But like just structurally there's kind of like it's an unwieldy kind of confederation of different like vehicles holding companies. It's not like one like corporate. It's not like a call it a chenmark where I believe they have one C corp and then everything is within that C corp or ours. That's why I say holding vehicle which is like a little bit more squishy. What is it designed to do? you know it's what just tell us a little bit about like the acquisition e efforts that it prioritizes obviously this is masters in small business M&A so it's 100% focused on sort of lower middle market typically subundred million dollar transactions all all the way down into the singledigit millions um so you wouldn't be on the show if you weren't active in that in that in that area but yeah just give us uh give us some more details on where you're spending time what kinds of acquisitions you're hoping to make uh and we'll get into some examples as well. Yeah, for sure. So, I think of our product, if you will, as long duration compounding or MOIC oriented private equity. So, like you give me a dollar, I'm trying to turn that into 10, 20, $50, $100 depending on the time period. And we primarily or not primarily, all we do is our our lower middle market transaction. So, think call it sub $50 million of enterprise value. and and and typically our average equity kind of check to a given holding company is which will target a specific theme or industry or whatever is let's say 20 to $30 million. Now that that's not because like there's nothing like intrinsically appealing about like deploying smaller amounts of money. It's just that if I have to deploy $100 million I can't get this I can't create the same like honestly returns right size is the strategy. The bigger you get the harder it is to turn it's harder to turn a billion dollars into 10 billion than it is to turn you know, let's say $20 million into 200 million. Um, both 10xes, but but it's different. So, so we're very focused on kind of taking advantage of the math of the lower middle market, if you will. And then that, as I said earlier, like the other characteristic is just duration, right?

15:40 We're trying to compound and and have a kind of a high mo outcome versus a, you know, RU is like a pretty underwhelming traditional private equity result. Um and and and Peter maybe I should say like our kind of core thing is rollups, roll-ups, buy bills, aggregations, whatever you want to call them, but like highly active M&A strategies. I will say that like well I got views on we are open-minded to non roll-ups and we we're doing kind of more of that thing and I there's a whole there's a whole story there but traditionally it's what I call rolloffs. Can we talk a little bit about maybe duration and just what you mean by that and how you set up the various entities and vehicles under Tucker's farm to lean into duration? Yeah. You know, and it's evolved, right? Um so the like of all everything we've done first first structure was permanent. Second structure was permanent. Third one I want to say was permanent, but maybe maybe it wasn't. I I forgot the docs.

16:36 The fourth one was permanent. The fifth one was 15 years and then the sixth one I'll just say not permanent. Um so you know let's just say like a traditional private equity structure is actually pretty long to begin with like yeah five year best period five year harvest period some extensions. The thing is so all in I don't know 10 15 years. The thing is and and and like candidly that's a that's a long that's a lot of time to you know let's say that's on one end of let's say on one end of the spectrum you have like a true holding company where you have shares and there's no sort of redemption or put call provision you're stuck in this thing from an LP's perspective and then the other end of the spectrum you have like you have a hedge fund with like two quarter lockup right they can pull money out we are very much like on that that kind of other end of the spectrum but I I I don't like fetishot I don't know what the right word is I don't you don't necessarily really need to have a holding company structure to to to compound over a prolonged period of time. So we've done different sort of draw down fund structures. We've done C corps. We've done a variety of different things. But the way I think about it is regardless of the underlying structure and I I can describe where we're migrated to like I I think of our product as at least like I'm trying to compound over at least a 10-year period.

17:47 And compounding over 10 years means what you're saying by that is the hold period is at least 10 years from when you purchase the asset. That's how we underwrite, right? And if you look at our history, we've sold we've sold stuff, but I'm trying to think like how do I put a dollar into a box and turn that into many, many more dollars. I think like there's something goofy that happens if you're underwriting honestly to 15, 20, 25, 30 years. Like that's a wonderful whole period, but it's like you're you're the math of a model, it's just so it's so dependent on on abstract things you can't control. So there's that. And there's also like there's this one of the things with like so-called holding companies or permanent equity structures is you know you don't know what is like a true compounder that you want to like hold on to and what if the world decides like one of your assets is like you know the sexiest thing ever and they want to overpay you for it. Like you want the flexibility to to you know monetize animal spirits if that's the case. So, the way I think about our stuff is like if we do, let's say we do five different subhold codes, each one with $30 million of equity, you know, the reality is is like three maybe four out of those five, we're going to get to $30 million of we're going to get we're going to scale it and then there's going to be a very uh like an ocean of private equity money that will pay us a lot of money for it and we may not really like the underlying business, but then there's like one or two that you're like, "Holy [ __ ] we have some we have a runaway train or we something that's going to 5x and then 5x and then 5x and all of a sudden we're looking at a you know multiundx in some like ideal way.

19:17 So those are the one it's a sort of a power law distribution. So that's what I'm trying to isolate in my in what we do and that's why you know I don't necessarily have a religion around like permanent equity structures. I I do think for some assets, hell yeah, I I want to own the seas candy forever. But for like kind of like honestly most of what we do, you know, on a 10-year vehicle private equity structure is like totally satisfactory. Honestly, it will sell in four or five years if that makes sense.

19:45 Yeah. You're just holding on to the ability to isolate that, you know, Yeah. that one portfolio like quote quote unquote like portfolio company or set of assets that happens to just be kind of in a league of its own. It's the seized candy. It's the Geico. Yeah, that's and honestly Peter like this is the thing that I think is misunderstood about track like most track records are a power law thing. Maybe Buffett, he's got some quote I'm make it up, but it's like 400 of my 400 investments, you know, 12 have moved the needle. And that's true for for most track records. And like we're just I feel like I'm just very aware of that. So I don't pretend that like everything we get involved with.

20:25 Yeah. I hope it's the the you know the thing that's the runaway train that's just going to compound forever, but I just you know that be sort of naive of me. I'm trying to find that thing and then when I find that thing, own it. And you can do continuation vehicles and other structures but they have their own kind of issues for us. Yeah, it's often thought of that like the power law dynamic is like the world of venture capital and and like private equity is the world of sort of singles, doubles, and triples. That's like you hear that and I've heard that and sort of been exposed to that sort of as the sort of prevailing narrative in terms of how like private equity and control buyouts is different than did you happen to like be the series A investor in Uber or open AI but it sounds like the power law actually is more true across the asset classes than it is less true. Yeah, I guess maybe more I'm talking about like our specific pro product which is call it rollups or highly active M&A strategies. I do think there is a power law dynamic meaning like it's a good good counterpoint like maybe a traditional buyout it hard to say do you have like a real runaway I don't know like it'd be a great result to get a 7x but it's really hard to get much more than that but with with aggregation strategies for sure like if you look at the empirical like history of these man there's just a graveyard of them there's a ton of ones that just don't work particularly in the 90s where they were primarily public equity funded like there's this one graph of all the uh ppm equity. So, so physicians and docs and whatever and it's just like it goes way up and then way down and and so you have that, right? And that's why like roll-ups is generally a dirty word, but then you have these really powerful counter examples of these M&A stories that just like wow that was like a you know that was a thousandx right obviously constellations den roll up but you know an active M&A strategy transa will thornike like companies. So I do think of what we do as as as a as a sort of power law product if that makes and you know maybe a separate thing is we're in this time in history where there's just so much goddamn private equity money sitting above us. So if we're building an asset, building a like we incubate a platform, it gets to scale and you know, I don't know, we just don't feel that great about the business over the long term, you we can run a process and private equity firm will show up and pay us 15 times for the business. It's like, man, I want to hit that bid every day versus being like, oh, this is my baby that I'm going to hold on for 50 years and that sort of thing. If that makes sense. It does. Could we maybe get into like some of the like the the thesis development um and the places where you've placed bets like to just to be if just to play it back like you're looking to be highly active in M&A categories that lend themselves to repeatable M&A efforts and you're putting capital on a discrete basis behind these thesis. It's not a poolled fund that's sort of distributed across these. It's like $25 $30 million against a thesis here, $25 $30 million against one here. And those are kind of like discreet efforts um uh against against a given thesis. We talked briefly about Med Spa, which has become somewhat cliche as I mentioned prior to pushing record. that could be an interesting one to talk about or any of the others. But I'd love to just get into like how you think about incubation understanding that like any single one of these incubation stories could become the seized candy for Tucker's farm, but you also have this, you know, alternative, you know, sort of exit button that you're very comfortable pushing. Yeah. Just clarify the seas is a good point because sees is non M&A story, right? That's a kind of a GOVA or green field. But fair enough. Yeah. No, but that actually fits into what we do because I I actually if I wanted to say more broadly, we're looking for like high reinvestment opportunity. So honestly, multi-ight retailer select categories. It's got to be the right concept can provide similar if not better like honestly compounding dynamics than M&A stories. So, so that actually it fits totally our thing even though it's not like an M&A thing. So broadly and this is all I'd like to think like based on let me take a step back. You know a lot of what we do is very much a derivative of what I call like decision architecture underwriting frameworks whatever and on one end of the spectrum you have the avankular buffets mongers then you have the hard science behind great repeatable decision-making that could be Paul meal phil tutlaw conment diversity etc and you know these are basic concepts it's pattern recognition base rates checklist things like that and what's nice about a lot of those concepts is they they map very nicely to rollups because roll-ups that you know, you're effectively looking for a a checklist. So, and there's kind of like like to have or what are the 10, 15, 20 characteristics that we're looking for in a given industry. And then there's like what do we what do we really really care about? Because if you care about everything, you know, you kind of care about nothing or whatever that that sort of cliche is. So, broadly in a aggregation strategy, there's the quantitative stuff and the qualitative stuff. The qual quantitative stuff can be growth. These are these are things that like my research team could put a number on, right? So be industry growth rate, fragmentation, acquisition multiples, scale multiples, revenue quality, i.e.

25:42 is there some sort of like retention, churn, recurring, whatever, uh metric, recession vulnerability, i.e. how the topline do 9010, margin, you know, there's there's a variety of these kind of numerical things that we can assess. And then there's like a series of qualitative things that you need to make a judgment call on in a given industry that we will still put a number on, but are are uh just squishier. So it could be key manneris, right? If I'm rolling up dentist, that's a different, you know, if Peter's my dentist and wants to go have margaritas, like I've lost all my revenue. Whereas, if I'm rolling up McDonald's and Peter's serving burgers and wants to have margaritas, like whatever, I'm I'm good. So, operational complexity, right? Like acquiring HVAC companies or land, you know, there that's different than acquiring real estate, right? Like high margin like technology risk. I always joke with my team, we don't want to be acquiring bunch of blockbusters before Netflix comes out. uh industrial logic of scale like is there a reason that you know this industry is consol we have like six airlines but we have like 50,000 child care facilities and so these are all things that we try to make a judgment on and there you know there's there's variety of more but these are all things that we try to make a a judgment on and ultimately you know you get kind of like some picture oh is this a a plus or is this a a B minus or C++ or whatever and and I'd say like the punch line of when you do this across industries is you know it's very hard to find like A+, right? Everybody, every HBS kid is looking for that A+ or that really that really like compelling thing. And um yeah, there's no there's no kind of silver bullet. You just laid out a bunch of great like concepts, right?

27:15 Checklists like almost like almost like stock screener type, you know, right? And then you sort of said and like you go through this process, you look at a bunch of different categories and then like stuff gets spit out and it can be an A+, an A minus, B, you know, and um people whether they know it or not or in one way or another doing this like pick one that you have already decided to put capital behind and sort of just overlay it against some of these concepts. You know, I'd love to just go through like, you know, if you take one of the areas where you've decided that you want to that where you're currently running a business or building a business, making, you know, repeatable acquisitions or multi-ight, you know, multi-sight expansion. Just lay one of those over some of these concepts and sort of how you got to a place where you were excited to to spend the time and spend the capital to to to swing the bat. All right. So Med Spa was probably the uh Medspa 2021 the best example of this and honestly it crushed across these metrics. It was such a compelling thing.

28:16 Super fragmented, you know, we at that time you could buy a billion dollars of eBay of true cash flow for maybe five six times and we there was one or two scaled marks that were awesome. the revenue quality, you know, like oh wow, it's this recurring Botox at least this great story if nothing else. And uh you know key man kind of less so than like a traditional physician practice management roll up. You're not dependent on the doc. You got you have few injectors. Technology risk, you know, Botox's been around forever. It's probably going to be around for a while.

28:49 Anyway, just from from all these different kind of scorecard metrics, it it did really well. And uh and boom, we went after it. And and and what's funny is that like I think we're like the second or third platform that went into the space. What was the day one acquisition there? Like what what what was the size and scale of it? Was this did you did you buy a meda or did you incorporate and incubate one and then what what was the structure that like you guys took on in this case? No. So we I put put a kind of core pole co together put about $30 million of equity in it and um with no assets out there just like a a strong thesis I mean like a pipeline but like you know a pipeline as much as a pipeline can be a pipeline which is like you know you think you have a bunch of these assets but it's it's a little bit different when you're actually in the industry and churning through stuff. Um and then uh yeah just you know went after built the team out and then went after the industry. Well I'll stop there. I could describe kind of the evolution of that, but that was one where like, man, we put the thesis through the framework and it was like, wow, this came out on the other side.

29:52 Really compelling. Was the first transaction a single box or was it a series of boxes? Yeah. Well, I don't like to talk about our first transaction because it was our it was by far our worst deal. But no, it's uh it was I think you should you should definitely talk about it then. Yeah. No, it was it was a terrible deal. It was doing about like one of these classic examples of of really compelling math. At some point, my partner was like, "Hey, Kyle, like I don't think there's any way we can lose money on that." I should have like known as soon as he said that, I should have known that this thing was doomed to fail. But we uh it had about $700,000 of of cash flow and it was kind of across like I think two units, but they had two more opening and it was like this goofily structured crazy earnout and all this other stuff. And that I think we've shut it down, but that med spa brand today or like before we shut it down was burning like $400,000 a year. So like lost lost a quick few million dollars on that one. But um you know, you get better at these things and you learn, oh wow, I I missed the honestly in that moment we kind of knew it was it wasn't a great brand. And I think like particularly in that this thesis you need objectors are generating your revenue and there was like a higher degree of turnover and we just looked at historical cash flows and we're like you know this thing would probably probably work. I mean simplifying a more nuanced underwriting process but um it turns out you know bad brand not only when you lose injectors but it was it's hard to get more injectors and so it was just a it was just a mess. I mean you clearly pursued through this right? I mean what is what is are you do you still own this you know this platform like and is this platform at some level of scale or what level of scale did it get to because it sounds it sounds like you had a thesis the thesis pencled out in a way that you got excited about then your first deal was like maybe your worst deal but then it sounds like you powered through like that's pretty interesting. Yeah. Yeah.

31:39 For sure. So I think we're the proformer for what we're about to close on. I want to say like 80-ish million of of revenue, you know, a couple hundred million dollar valuation. We're I think in the process of raising a growth equity round, but something like that. So, so totally like on paper worked or again middle in it middleish innings, but seems seems to work. And honestly, like it I think it's a derivative of that underwriting process in particular because it sort of checked so many boxes before consumer P really woke up to it and then consumer P woke up to it. And in a weird way that made the thesis kind of harder to execute because it's hey I can't buy a million dollars of cash flow particularly if it's well marketed for less than I don't know let's say eight times. So that's a negative you know it's harder to get to scale although like sourcing is our core thing. So we we we are still able to grow. On the flip side the enterprise value of the business the multiple of the business is is is very high because it's you know there's no inventory in this this asset class for $20 million EB of businesses.

32:37 So if you have one that's a very and particularly with the right systems, the right team and and we've worked very hard to do all that sort sort of thing correctly that's a very attractive thing to to private equity and I'd say as I like it's a I think it's a result of that original underwrite that like hey this does check a lot of boxes eventually a lot of smart folks in private equity woke up to that and therefore there's like embedded equity value that is created from that underwriting process. when you shut down or were just struggling with the first acquisition, did you guys think about like how how much conviction did you have in the category and the thesis versus did like to what extent did you go through like a period of like real self-doubt that like you got you had the whole thing wrong? Like how did you end up deciding to just sort of power through and then you know get to a much much stronger place despite having a really tough start in this category?

33:29 Yeah, it's a good question. Like one of the beauties of of of rollups is it's a diversified portfolio of things. So like if you got the c if you got the like category bet right chose the right game to play. You're less dependent on the individual asset. That's you know in some ways like I feel bad for search fun folks are so tied to like their individual street cleaning company in Topeka making sure that sucker works.

33:50 Whereas like if you're a street cleaning aggregator you know you got 20 of those assets. But this was early. This was the first asset. It wasn't like you had built 10 or 15 of these and you had a lot of momentum and and then you made a bad mistake and you were like, "Well, that's a mistake, but I've already done this 10 times and I know that it worked." Like this was harder than that. It was early on. It may have even been the first. Totally. Like first of all, there's definitely highs and lows. You know, there's that Horowitz or Andre Horowitz quote where it's like, you know, entrepreneurship is oscillating between extreme terror and I don't know, joy or something like that. And I I I feel that man because that's that's very true. But yes and no. So we had committed equity capital right and on this deal we deploy I don't know the math I forget the math but like a couple million bucks. I felt good about like the underwrite of the category. Uh I was like you know this is going to work if we just keep keep going and keep finding good assets. Like I always joke like bad deals take years season. So it's not like this was apparent day one right?

34:49 And it was probably paying the outs for the first 6 months, 12 months before probably like two year we're it was only like kind of a year and a half, two years into it. We're like, "Wow, this thing this just we've done we've thrown everything we have at this this particular asset. We can't turn it around. It's not even like a a math thing. It's more of a like my team, my corporate team is spending a disproportionate amount of time on this, you know, lower tier brand. It just they their time is there spent elsewhere elsewhere." So it's that wasn't even totally apparent day one. Well, I'll say Peter like generally, yeah, if you have like a a larger committed pool of capital, you can do more M&A, if you believe in the thesis, which I I don't think I ever wavered in conviction on a thesis, particularly because all while this was happening, increasingly, private equity was getting interested in that. And I knew that, and by the way, we did a separate med um uh investment that we we ended up exiting and and making a ton of money on, and that so like I knew the category bet was right.

35:44 And even honestly ifically the category was poor, I knew that the animal spirits in private equity above the category was gonna like you know take carry us home so to speak. It's helpful just to get into some of those details particularly. Uh I agree with you. I think search funds are highly levered to a single bet. And um that's very different than building conviction and having then a repeatable path where if you don't nail it on the first you don't nail it on every single one the thesis is still intact and you're not upside down and totally and I just to share and I don't know where I'm at on on this one but I I I referenced Jake and Frank earlier did that done various other things they're fairly well known you know they move with a high degree of velocity almost like a Brad Jacobs like velocity and and and and Frank's so smart in many ways and one of his takes is was like hey you know honestly like a lot of times velocity can can take care of a lot of woes because you're not dependent particularly in like a key man risk business like a call it a med spa or physician practice management generally like there is some there is something to that you know you're you're much less lever to one thing and you've all of a sudden got a portfolio of things if that makes sense and Peter I should say actually in those sort of keep let's call like more individual dependent industries you also see a greater you know small to big spread right so if you're going to roll up dentists or or whatever it is you know you can acquire I'm making this up so I don't know the latest but you acquire for six times you can sell for 14 times that spread skinnies as you get into like when the individual asset has more hair like more key man risk or more more issues so sort of as related concept and a lot of times you get more paid for going after an industry where the individual assets less of a less good because you get more of a like a scale benefit or a portfolio benefit than hey I'm going to go roll up you know let's say individual houses at a six cap and when I put it together all of a sudden my portfolio of houses is worth a five cap that means like your multiple went from 17 to 20 right you got three turns on a 17 base versus hey I I've got you know I've acquired like all these dentists for seven and I can sell 14 or something where you get, you know, a true kind of 100% uh increase in your enterprise value. It would be great to just connect a little bit to whatever extent it's I don't want to like force a connection where it doesn't exist, but I am curious sort of now that you're multiple years into this work, how you look back on your your time at Apollo and Viking and think about the way in which it just informed you and shaped the way you're doing the work that you're doing today.

38:26 How much of what you feel like you're doing today, what you're working at, where you're good, where you're trying to get better, how much of that can you sort of like trace back to, you know, formative experiences either in investment banking or at Apollo or Viking, and how much do you feel what you deploy today in the way of skills and mentality and outlook and mindset are are um things that have more been part of like your Tucker's Farm chapter?

38:51 I'm just curious like I guess what is the significance of the formation that you had in some of these kind of rarified Wall Street circles and how do you connect it to the work you're doing today and its value? I think that like in scaling up my holding vehicle and honestly taking on like larger and larger limited partners and increasing the sort of institutional limited partner think insurance companies, endowment managers that sort of thing. I honestly think um just in the simplest way, in the simplest form, having that prestige on my resume early in my career has served benefits. It's opened doors and I know that's like a kind of a distasteful take. Uh but it's coming from a guy who was like not from that environment at all, but I I was an outsider and I recognized, you know, man, I'm not um you know, these sort of names have real signals. So get on the inside and then even a decade I'm 35 even a decade later I think more doors open just frankly because of of of that experience even if there's very lit little like uh kind of like direct benefit which is the second it's a really honest answer although I know you have more to say keep going I'd say like from Apollo very much what we do is much more related to Apollo right we're valueoriented cash flow investors private own control etc not buying like a share in company that's selling, you know, trading for whatever 20 times revenue and is $50 billion market cap.

40:16 Every part of the job is much more related to Apollo. I will say that like Viking really opened my eyes up, I don't say not only to like business analysis, but like honestly creative research techniques, right? Like if you're one of these um highly resourced hedge funds that's trying to like figure out if they're if the market is going to or sorry if the company's going to beat or miss on this KPI, you come up with like a lot of really creative ways to figure that stuff out, right? It could be, you know, even the simplest sense like surveys, expert networks, but to like really proprietary data sources. And I think honestly I think just getting exposed to a lot of that and Viking was exceptional at this.

41:00 I think getting exposed to a lot of that has informed like honestly how we do how we do research. I can give sort of tangible examples but I'm I'm constantly coaching you know as you're going into a new industry and this I think was one of your questions up front is like what uh there's something about the friction let's say in a in a given process and I have a lot more to say about that but even the friction in thesis work you want there to be friction like you don't want to be able to Google how many dentists are there and have like immediately 150,000 dentists comes up you want there to be some sort of capacity to that sort of information because the more difficult it is, the more you get rewarded for being scrappy and creative and figuring that stuff out. And and when I started this with with Ned Spa, there was like no no information out there. And now there's, you know, I think there's like 10 banker books that someone's forwarded me in the last 15 months where, you know, they kind of map out all these characteristics, but early on that was not clear. There's AMSO, but not much else. And um you know I got rewarded for like the leg work and like doing a lot of various sort of like creative things to to figure figure out hey figure out honestly just the sort of checklist I was describing earlier and that's because of Viking you know did do a lot of that stuff right but Viking is heavily invested in that sort of thing and obviously you know you're you get that right from GLG etc.

42:20 That's actually really really interesting. To what extent are you comfortable talking about like just some of the things that you are doing in that in in that realm in terms of creative research? Like I I think that point you're making about the friction being a good thing and not a bad thing if you're really pursuing outperformance. I think it's an important point and I think it's like a novel it's almost a novel point because obviously you know everybody just wants to be able to Google things and now there's chat GPT and there's Grock and there's all these things and so this idea of opacity being like the basis for outperformance is I think like maybe not appreciated enough by like people that are in this market. How does the work take place for you, Kyle, and how does it take place for your research team? And yeah, I'd start by saying like I think there's this evolution that I went through that a lot of folks go through where you're so obsess obsessed with thesis and like nailing I start by saying the idea is like you know 30% of the battle maybe actually in some abstract way the the only way you can compound to a hundred bagger or thousand bagger is really good game selection but that a lot of it's just unknowable early on. So moving that aside, like gain selection, figuring out thesis is something that I think people spend like arguably too much time on. Certainly I'd say I don't know for data that supports this, but the like really smart folks that have reached out to me, they're obsessed with finding like, oh, have you thought of like this really niche fit?

43:47 And as someone who's done this for a while, I care a little bit less about that. Um, but in uh I guess like in how we do a variety of things to figure stuff out, but honestly the friction point is a good broader point. Like I think you know I'll have uh some Harvard Business School person say hey have you ever thought about rolling up let's say this franchisee system just as an example. They'll say, you know, a wonderful thing about it is I can go into the FDD, this document that all franchise systems have to publish and like there are whatever 50 pages of all the owners and their contact information. And that is the worst thing you want. Like you don't want there to be some sort of centralized I know this is like counter to Axial and your mission is is is awesome and it's it's it's serving a real purpose, but I like the more things are like centralized and transparent makes our job of creating value more difficult. if that makes any sense. The market's huge. There's still plenty of opportunity. But I look at some like if I'm going into an industry, it's like, "Oh, wow. There's one industry association. It lists the 4,000 buyers." Like that's that's not a good thing. Like you want to be you want to you want to get rewarded for basically the husk being scrappy creative and tech forward and finding stuff out. And that's true not only from a research perspective, but also a sourcing perspective because our our whole business is really much more sourcing oriented than sort of thesis driven, if that makes any sense. We we go after various themes and we will launch like direct sourcing campaigns in a variety of industries, but it's like we're trying to test the market to say, "Hey, is there what we call rollup market fit?

45:24 Like is there um are there like enough buyers and sellers that we can basically build a $30 million cost EBA business over the course of a fiveyear period?" And I guess we do a variety of things but the thesis is maybe less important than the actual like the actual call it like generating deals apparat and building that that's really where the value is created in this business if that makes sense. Can you talk a little bit more about like the different areas where there's friction? You mentioned that like you know that there's pros and cons associated with like a lack of friction or the presence of friction in terms of information and availability right so you know if you can go to some trade association website and get the name and email address of you know all the key participants if you can do that then somebody else can do that too right and um if you can access the Axial platform and you have a credible profile on Axial as someone with real capital and real transaction expertise than others can do that too, right? So, so clearly at the tippy top of the funnel, a reduction in friction is not in some ways you like it because it allows you to get into these deals very quickly, but in other ways you don't like it. And I'm I'm very familiar with that like sort of two-minded sort of conflicted point of view that the buy side always has on information businesses. I'm very familiar with that mentality, K.

46:50 But could you talk a little bit about like where else is there friction that you look for? like you've talked about it at kind of the like discovery and top of the funnel but like there's a lot of friction I mean just on axial right the the prevalence of sort of NDA execution and the variability that a you know given broker has or a business owner or an M&A lawyer who says we got to use this NDA I mean there's friction all over the M&A process right and no matter how much standardization or aggregation of data that exists at the top of the funnel there's this huge huge cone of friction between the top of the funnel and closing a transaction. Like where else do you see it? Where else do you look for it? Where else do you do you think about friction as something that you run towards as opposed to run away from? Yeah. So, it's got to be friction around some something that creates value. So to my earlier point like thesis generation it it creates valueish but it's you don't want to spend too much time there but but in that in that kind of subset of like value creation you want there to be more more friction is good more opacity is good than less but moving to stuff that we that like I actually spend most of my time on versus just generating like a really shiny idea that looks good in a conference room is um yeah generating deals and not even like closing deals, right? M&A is a somewhat of a commoditized thing. Even the underwriting is somewhat commoditized if you're Apollo or Viking or whatever. Yeah, you you might create value by having a different take or having some really intelligent underwrite, but not really in this market. So I view like if you have some sort of value chain just you can make it up and there's kind of fees generation you get the assets in the funnel and then you underwrite the assets and then you close the assets and then you operate that that that does create value but I'll I'll just put that operation just the headline there is operation is is really like a talent question and talent is downstream of sourcing as well but of that what I just described pre-operations pre-close I don't care as much about thesis generation I mean we spend a lot of time on it but at the end of the Okay. I And I I don't care as much about the execution piece of it.

48:55 And honestly, like the underwrite is not even that let's say not that important because that's the wrong way to put it, but like it's it's not that it's not the huge value creation lever. It's really how do you get the assets in the hopper? How do you like create this this huge top of funnel? And this is for us. I mean, other people can have different takes, but I'm pretty sure we're we're doing it correctly. You know, how do I I think about Turkish farm corporation like I want this to be like the great like vampire squid of sourcing million plus ebup businesses.

49:25 And I say this to my team every day like I'm like guys like you know how many I I joke that like on a spectrum of boiler room to bow post right a really thoughtful investment organization on one end and then like uh hey what are your numbers always be closing like we are squarely in the boiler room side because because I believe that's what creates value in our business. So of everything I described, it's very much like how do we how do we find assets, get them into the the business? How do we like and and that that's a derivative of of many things. So it can be like a derivative of process, right? Like how do I have like some standardized call it NDA interaction and and my team does that. They follow a cookbook. They follow our SOPs. If if they say there's a non-compete that doesn't work for us or or whatever, if it's this term. So they're they're going through various kind of like if then statements to process NDAs as as an example of that and then it's like oh then I'm interact let's say pre that or post that where you're interacting with a broker or seller what do you say what's the script and their team is following various things on that and then you then you get to an underwrite and we look for a certain you know we're pretty rigorous in how we analyze any given asset and so that will go into its own process of you know hey spread the financials model top line like this fixed variable cost like this.

50:39 We're looking for this unlevered yield or whatever else that will go into our system as well. Um and then you know various judges on other things, revenue quality, customer concentration, variety of other things. So like everything is very processoriented. And what's so wonderful about this market is it's I don't know if I could swear in pockets, but it's [ __ ] hard. Like it's not a problem that you can solve with AI. It's not a problem that you can solve with like a bunch of people. It's kind of this like what to do it really well.

51:07 It's this wonderful mix of like software, technology, and humanity, right? If you're just AI, for example, or some broker or some seller doesn't want to, you know, not going to sell their business to some, I don't know, chatbot, right? Um whereas if you're just like a a bunch of people, you know, maybe like a traditional lower middle market fund, you're definitely not using the latest technology for managing inboxes, managing SMS outreach, managing cleaning up lists or whatever. So it's this like really complicated like optimization problem that I spend all of my my time on which is ironic because you know I was from this investment background. I think myself as like this investor guy but really my job has become how do I like optimize this business? you I kind of my I'm very much like an oper operator in the sense that I've got team and I've got various bottlenecks breakdown points but every time we run into an issue which is constantly and we have some issue with our process or we realize we're not we're AB testing and for this industry X is not working and Y might work and my team's frustrated like I remind everybody like this is a wonderful thing because once we solve this problem we each just lost you know four search funds couldn't do this and then you know this lower middle start a private equity firm didn't do it and so we are now we've shed more competitors if you will u I think there's a quote that's like a a successful business career is a series of like problems well- handled and I I really think that that's the case or at least certainly with our business so we're constantly problem solving to try to like remove these friction points but we want these friction points to exist because it's the whole reason that you can put a you know $50 million into a box in this market and it turns into whatever some multiple of that that's much higher than a traditional private equity Not what's your point of view on just like the durability of these of the friction like when you think about the next 1015 years in this market you think about this combination of humanity software technology and just the imperfections of friction like do you have a point of view on like where what's going to become more important and what's going to become less important over the next 5 to 10 years I think for sure friction is going to be reduced right and then you look at financial markets generally Like people would just crush it in the 80s with these quas hedge funds because they had like I'm going to butcher specific examples but they you know they knew to go to the library to grab this filing that wasn't available here or whatever.

53:29 So these things always always go away and in large part because of you right because of people like you. I think you're giving us too much credit but keep going. That's a totally wonderful just part of life, right? And it gets back to my earlier point of like Buffett, you know, he's an opportunist and we're opportunists, too. And I think over well, this is like the hammer we're hitting right now. You know, in 15 years, we might look a little different because it's like, well, we, you know, we thought the opportunity was there and now we think the opportunity is here.

53:56 But that's more kind of long-term abstract. Definitely there will be like a secular decline in friction over time. That being said, like there is the issue just a small dollar issue, right? So you do you have these people who do exceptionally well in in the lower middle market and they grow and they grow out of it and they're they're you know this like imagine Alex for for Station is a wonderful example of this right they just kicked ass and now they have billions of AUM and they're not they're not my competitor right yeah they've left the party they've left the party so there's a selection mechanism out of this market yeah follow that there's like a little bit of that that will never go away and it's kind like my whole thing is like how do I figure out how to scale horizontally and and still take advantage of this math and do it in a more almost like a manufacture alpine these are these are these are successful examples of this but I I want I'm not I don't want to build like a a like a fund structure where we're doing bigger and bigger funds and I'm I'm more how do I again like a delusional comparison but like how do I build like a coke industry is a semi-permanent structure where but I we can repeatedly take advantage of of lower middle market mass. Does that make sense? Yeah, it does. It does. It does.

55:09 You want to try and find a way to stay in the lower middle market but with greater and greater scale. I was going to ask you like how you're spending your time. You I think you sort of answered it in terms of just and I wasn't sure like it sounds like you're spending a lot of time operationalizing around the friction points in in the system. And I do think it's ironic that someone who like came from like this sort of like you know this um again like this highly pedigreed sort of like thoughtful buyout you know world that you would be spending your time operationalizing and scaling something like this. How much time is spent on that? How much of your time is spent evaluating the intrinsic merit of transactions that are you know on your desk and that are at key points in time and how much time is spent by you with owners, founders, people who you're buying businesses from where you know like if you were to sort of say I've got this operational scale thing that I really want to get excellent for, you know, on behalf of Tucker's Farm and my team, but I can't like just abdicate my judgment over like the final call on on buying businesses and I and I also need to be somewhat instrumental in like closing transactions with founders and sellers that yeah just what's the split of time between like the operational scaling up of Tucker's Farm versus some of these the more um the more like bespoke sort of artal aspects of deal making the operational side of Tucker's farm like the reason I spend my majority of my time there is not because I like grew up wanting to be Jack Welch and I love operations. In fact, in a lot of ways, like I'm a I'm a underwhelming operator. It's just that's what creates value. You know, if if what created value was thinking big thoughts and industry stuff, which I've spent too much time doing as well, like I would spend all my time there. But that, you know, that's as I've evolved in my understanding of this business and how to be the best at this business, it's it's changed. So, just to be clear that I I do it because that's that's where I believe we can where we can outperform or the how we outperform.

57:17 And I've also found myself like there's some things I'm really flawed at from an operational perspective like and I have like I'm really thoughtful about what partners I have to to fill those blind spots. But I am pretty good at like systems and coming up with sort of like optimizing a process. It's it's something I I've discovered now like repeatedly executing that process. That's something I struggle with. That's why I have really strong and consistent team members. So I spend a lot of my time on on that. then moving down to like actually underwriting a deal for sure. Like I, you know, I don't I'm a little cavalier earlier on and saying, "Oh, that the underwriting doesn't create value." But but the reality is is like once it makes it through our basic underwriting process and all the filters and and makes it to my what like weekly deal sheet, I will look at them and my team is pretty good at this point where they know the stuff I I so all the like let's say the the sort of like quantitative stuff is is out there and now it's a little bit more of like judgment discretion along things that like you can't I can't systemize or implement this in a scaled way. I need to like use my body of experience and life and all this stuff to say, "Ah, I kind of like that. I kind of don't like that." And that is um I usually like of the deals I'm going I'm working on in a given week from an underwriting perspective with my team, I like 50% of them. I don't like I immediately kill 50% of them because I'll say, "Oh, well, we missed this or you guys missed this or you know I we should add this part to our underwriting because whatever." And then of the 50% like yeah, I'll I'll look at them. But honestly like within within like an hour if I have all the information like I'll know pretty much I'll go through the model I'll know pretty much like oh this is a this is a winner at that point like it's made it through thousands it's a fil been filtered by thousands so it got it was it landed it's likely that I like it but a lot of times as I said like I don't like it but I I'll go through it and realize oh what we have here is real for example and maybe just to actually close it out so I at that point if I really like something and I actually I know I really like if I'm like hey include me immediately with the seller, the broker, the whatever and I know if I'm like and I'll get on the plane tomorrow like I know if that if I'm like saying those sorts of things then it's like oh wow there's something that I I really like about about this and then for instance this week I was just with seller of an awesome business and this is something that you know a few weeks ago made it to the like con my tracker that I review with my deal team and started going over these individual and individual deals bills and I was um specifically actually what you mentioned earlier what what mattered here was like kind of the ROI math of new builds and they had like just exceptional ROI math and we're very structured and like how we grade this stuff and and the grade was A+ but you see A+ is a lot and you kind of dig in you realize oh no like there's TI there's all sorts of things that you can do to game that sort of like basic metric and this was like beautiful real planet finish Chipotle type econ like ROIs new builds paybacks whatever you want to call them and Um, and check the other boxes that we really care about. I won't bore you with those. And I was just like, man, we have enough data points that this seems real. It's only got whatever 10 units, but like I think that we can dump 50 million bucks in here and turn that 50 million into something much much much bigger than that. And I was like, I want to go meet with the guy, the selling family tomorrow. And and you know, that happened. And turns out they want some goofy price that we won't be able to pay for it. But uh the punch line is I got my ass on the plane and and very much sold us as the best buyer for the business. You did, right? That was like a key moment for you. There was nobody else you were going to put in at that point in the game, right? Yes. And no, like my my my partners like the partners in my firm, which is kind of like our highest tier of whatever, they're they're largely can do it without me.

60:57 But yeah, I I assist in them. Um, if that makes any sense. So, so like like one of my partners doesn't bring me into anything and he kind of just does it and he's exceptional. my other partner is capable of doing it all by himself, but like I think he likes, you know, I'm like the color commentary guy while he's kind of like the the real execution guy. And so we have a good dynamic and he he loops me in and I'm eager to be looped in and then then my my team beneath that I do like being looped in just so I can like all right lead that that call if that makes any sense. And I guess that's what I'm curious about is like you know like in a world where maybe information gets more and more abundant and more and more plentiful. Do you feel like that element of value with the seller is potentially one of the most durable areas to to win? For sure. So, yeah, like long-term durability and I I kind of like didn't really answer this like I think brand of firm. So, like if and I think Brand has done a fantastic job with like permanent equity being out there. You really want the people selling the business to to know you as a like a great home with capital and yada yada yada. So I think brand is something that we are really focused on. That is something that like no matter how good AI gets at list building like um we will be able to like persist and and still outperform. And then there's a a second piece of yeah that humanity I tell my guys like we we get on the plane right away as long as like you have some indication of value that like hey we're dancing on the same you know square and the on the dance floor whatever a good analogy is then we we get on the plane.

62:29 This is actually something I we were so excited about the asset we sh that I just just just described. We shared um our view of value and the response is like uh I'm actually not going to share that with the team and and we we went there and I was like you know once that this the the owner of the business this family told us this wild price. I was like, man, I should have I don't know if it was worth it anymore just because like there I just went from like 60% chance we're going to get this to like 8% chance because we're just there's just no way even with a lot of structure are we going to be able to like sniff what they want and I just wasted like three days away from my family on endless planes. But that's friction too, right? I think that's friction too, right? Who's willing to do that again and again and again and again? Totally.

63:10 And the thing about travel often is like if you try to quantify it in any way, it becomes really like hard to justify if that makes any sense. It's like man, I'm going to go spend three day, you know, I got three planes and I got to do all this and bad hotel and it but I and so like there's not like a really clear ROI in a lot of these things. Um, and so I but I tell my team, you know, we're we're we all got to be traveling salesmen. It's, you know, planes, trains, and automobiles for all of us because that's how we're going to outperform.

63:40 It's a great place to maybe leave it. This has been so so good. Um, and really fun to just hear the whole story. Um, I know a lot of people will be interested in it. I'm curious like to those folks that are at, you know, Apollo right now that that would are would be listeners to this like what what is your advice for somebody who's kind of in high finance and thinking about this increasingly well-known sort of off-ramp into small business M&A combination of dealm and entrepreneurship. It's a unique combination of entrepreneurship, dealm, investing, operating. Like when you get a phone when you get phone calls from people like that, what do you talk about? What do you say to them? What kind of advice do you tend to give?

64:30 Yeah, it's nuanced. So I at first my my original answer and was hell yes. Like go do it. You're going to make way more money. You're going to be more fulfilled. You're going to have more autonomy. You're going to be happier. You're just like it almost checks every box except prestige. So if you're willing to leave Blackstone or K wherever it is it'll be hard but you will ultimately achieve all these things that that are more elusive in in that career with the benefit of all your experience. Now what now what do you say?

65:00 I've had one exper one really bad experience where I gave kind of the guidance to do that and it didn't work and um I think the person lacked like uh incredibly smart and everything and from a you know really shiny background really really shiny background and I think there's like a basic kind of like creativity hustle salesmanship kind of like this entrepreneurial energy that um you know candly I think I have that I thought that like everybody what he kind of shared and this person was just did, you know, kind of just didn't have that. And I and and and Flounder, you know, Flounder wasn't wasn't able to effectively kind of source deals and that sort of thing. And my response is a little bit more nuanced. Like I I do generally think it's the right path and I I do encourage people because what happens is you end up in these these large organizations and I don't say like brainwashed but you become goofily riskaverse and and and you kind of like over you sort of like overquantify everything and you you kind of like it's um you know like the midw meme right in like Twitter where it's got the bell curve of intelligence and you've got like the wizard on one end and the caveman on the other end and then you've got like the midw the guy who's like overco complicating it and the the the wizard is saying same the same thing as a caveman. And I I I like I feel like a lot of these conversations they a lot of people end up being the midwe. It's like you know and they'll they'll use kind of fancy like finance terms to well you just took advantage of this option and like that's why it worked or whatever for you and and I'm like yeah I think I think that's like a little bit making it more complicated than it is. The reality is is this journey if you're dedicated to it and and you know honestly most people in those sort of environments have the horsepower i.e. the the intelligence and work ethic and and honestly probably the liability if you survived from banking and you went to KR, you're probably like socially intelligent as well to be really successful in this environment and and raise money and then turn that money into some multiple of that and take a hefty fee of that money and then you know be in a be in a position where you're not only wealthy but you have a degree of autonomy which is what I I was like really super important to me and a degree of fulfillment that would be totally elusive in a traditional career where you have to still exist forever.

67:21 So, so I guess my my original answer was hell yes, do it. Don't even think twice. This thing works. And my updated answer is kind of like you got to like think about who you are because I and more likely than not, you should go do it and try it out and take a swim if that makes sense. This has been great, Kyle. Thank you so much. Um, really, really fun to to connect. Thanks for all the time this morning. Yeah. And, uh, yeah, keep removing that friction. You know what I mean?

67:48 But for the record, you are one of the heaviest users of Axial. You've met over 1300 businesses from 560 brokers in the last 12 months. So, um, kudos to your team for figuring out how to use the platform at a level of scale that few others have, uh, have rival. I I didn't know that. Oh, good. I gotta tell my sourcing ops guy, good job. We can talk more about it offline, but Oh, I didn't know that. Thanks again for the time.

68:17 It's been a great conversation. All right, see you Peter. Hello and welcome everyone. I'm Peter Lairman and this is Masters in Small Business M&A. This show is an ongoing exploration into the vast and undercovered world of small business M&A where we interview both the proven and the emerging owners, operators, investors, and advisers whose strategies and methods for transaction success have been put to the test. The show aims to surface the nuanced intricacies, the key ingredients, and the important factors that can improve your decision-making in your own journey in the world of small business M&A. This podcast is produced by Axial, an online platform that makes it easier for business owners and their M&A advisers to find, research, and privately connect with a diverse mix of professional buyers of small businesses.

69:04 In addition to learning more about Axial, you can find this podcast show notes, edited transcripts, and many other related resources, all for free at axial.com.