First Acquisition in March, $200m by Year End | Jordan Dubin Interview

0:00 Jordan duban welcome to acquiring minds thanks for having me it's it's fun being a longtime fan and now finally being able to be on an episode well that that's great to hear it's always fun for me too to have a listener on well Jordan you and your two partners are building a large business in the garage door repair industry and by large I mean getting to 200 million in Revenue 30 in eitaa by the end of this year

0:30 in your first acquisition closed only in March of this year that is an incredible Pace let's hear about it Jordan how did this hypergrowth rollup begin yeah well thank you again for having me on so you know I think like a lot of the the stories and and the entrepreneurs you have on your show it's a long long path getting kind of to today certainly not linear but I guess

1:03 I'll start with my own background which then will coincide with Shawn and Joe's background when we do eventually meet in The Narrative of Guild but I grew up in New York City went to school up in Boston played football in college and I think where you could probably say for me this journey really started was sophomore year of college kind of the first year I was thinking about potentially doing some sort of business internship at the time I had no idea

1:33 what I wanted to do I grew up with a father who worked in finance for a hedge fund I didn't think I wanted to do that but kind of my knowledge of hey what are the other parts of the finance ecosystem was not very broad and I was lucky enough to get introduced to two guys by the names of Matt Pearlman and Alex Sloan who at the time had just graduated from Harvard business school and were building out a portfolio

2:04 of Burger King franchises across the southeast United States and so I became effectively their first ever intern before they probably even needed an intern and they they've they've grown their business Garnet station Partners today to be one of the truly Premier lower Middle Market private Equity firms in the US but at the time there office was literally one of their dad's tow houses so Patrick oi

2:35 just had them on I think like the best yeah exactly they're a big deal it's a great it's a great entrepreneurial story like you said they very modest start I guess and I guess you were there I guess you you were part of that Mony yeah that's that's that's my claim to fame as being their first ever intern but I I I learned a ton from them that summer and I think the bigger thing was you

3:00 know I was 19 years old very impressionable and these two guys who were 3031 at the time I mean they were they were like gods in my eyes they were so cool they were so smart and I just loved being a part of what they were building and I think you know to the extent I really understood the the actual Financial engineering that goes on behind the scenes I think I I found that interesting but it was more

3:30 just the dynamic the energy the relationships they were forming with all these underlying sellers of Burger King franchises and I think that was the first time I had kind of had a light go off in my head where I was like I I could see myself doing this down the road I don't know if it's you know doing it as a part of a franchise system or doing it in qsr but you know I love this

3:56 idea of meeting with sellers all across the US for forming relationships forming bonds and then building something together and taking disparate parts and and creating something much larger Jordan let let me jump in with that because I have to say to to your credit you thought that was cool and you and you could see their Vision because I would imagine that when they were starting ETA wasn't a thing I mean PE people have been buying businesses

4:25 forever etc etc but ETA as we understand it with its own name and label and courses wasn't a thing franchises still aren't a thing or even less so then so I would imagine two guys working out of working out of a house working out of their house your parents house or whatever buying un unsexy fast food franchises

4:55 was and there and there was no precedent for this like now they are the precedent so people doing this today will point at them and be like see these guys did this really cool thing so that gives me you know 25y old 35y old coverage to go do it but they were they were real Trailblazers with this model so anyway I I just would imagine it would be very easy to to to scratch your head roll

5:18 your eyes dismiss it and yet you were taken with it you saw the vision so say more yeah I think you hit the nail on the head I think you know spending an summer with them again when you're when you're 19 years old and and here come these two kind of 30-year-old guys who have their together they're confident they're smart I mean I think it would be hard not to leave that summer being like I want to be Matt

5:44 Pearlman and Alex Sloan and that's exactly what I did but I think you know to to more specifically answer your question it wasn't about the sophistication it wasn't about the financial engineering the sexiness or un sexiness of what we were doing it was I just so much appreciated and loved how they formed these real relationships and bonds with all these different families and owner operators across the US and they knew

6:17 them not even on a first name basis by their nicknames and they had funny inside jokes and they you know knew exactly hey when we go to Memphis we go to this restaurant cuz that's the restaurant they love and that's what I was drawn to and and you know fast forward to today and you know we'll go through the whole story and there are many more kind of things that went into starting Guild but to this day that's my favorite part about

6:44 Guild is you know the the different relationships and bonds that I've been able to form with all the different owners that have joined Guild and and really just having almost like families in different states that I consider like second families to me and having Traditions with them having inside jokes with them so yeah so I think I think that answers your question it does it does that's great and and it is such a good precursor because from what I know from the preall

7:15 and from the videos you you really are the connections that you're making with the owners are a key part of your of your playbook for lack of a better word I don't want to make it sound clinical go ahead yeah I think you know we have 14 Deals closed today and of those 14 I think five of the owner kids call me Uncle Jordan so I'd like to believe that's a testament to the connections we form although how old are you Jordan

7:44 that does make you that does make you seem old and you're like what 20 what I'm 27 yeah I'm 27 years old young Uncle young Uncle Jordan all right young Uncle Jordan so yeah so I think you know that was kind of the spark that started the fire spending that summer with Alex and Matt and you know I think I think I point blank said to them at the end of the summer what do I do how do I become you

8:10 two I I want to be you two and you know our relationship my relationship with with mad and Alex has grown immensely over the last I guess decade and they have been two of the most influential people in my life I think you know I I never grew up with a brother they're probably the two closest things I have told the brothers and so they really laid out the road map for me and they said look you got to start with

8:41 Investment Banking and then you know go to a great private Equity Firm and then take it from there see see where things go you'll probably change your mind this is not what you want to do but start with Banking and then and then do private equity and so I did just that so ended up working in Investment Bank ing like many people do in the finance world right out of college spent two years at Goldman Sachs and then after

9:09 Goldman Sachs I went to a private Equity Firm called el certon my first day on the job at El catterton I met Joe Delaney and Sean slazak so they had both done three years of investment banking at different banks at city and borays and I'd done two years at Goldman but we were a part of the same associate class so I think there were eight Associates in our class but we all came

9:40 in together and and that's where I met my two partners Joe and Shawn and then while we were at catterton we spent about two and a half years there you know the beautiful thing about our experience was we basically exclusively focused on buy and build and testing and so you know we saw underrot and then worked on platforms across veterinary clinics Collision Repair Optometry

10:12 clinics Med Spa HVAC Electrical Plumbing and so our two and a half years there was truly like a a learning grounds where we found out the Playbook and learn the Playbook firsthand from brilliant Partners at Al Caton I think you know one of the things we got to experience at alcaton which makes it such a unique place to work is when you're at the associate level your work on the deal is not limited to just

10:45 the underwriting process you know you of course do the three-month Sprint where you don't sleep and get the IC memo across but that's just the beginning then you basically work hand inand with your portfolio company and and ser a role almost as like the VP of Finance for that company through the hold period And so especially for Joe and Johan who had portfolio companies at the time that were rollups so Alliance Animal

11:15 Health which was a vet clinic rollup and L the plumber which was an HVAC and plumbing rollup every day they got to do the exact things we do at Guild and every day they were charged with putting out the same fires that we have to put out a guild and so you know I I think that all of us felt very very confident in this Playbook and and then this investing style and so when we ultimately made the decision hey this is

11:45 something we'd like to do on our own and and take this leap and take this massive risk we felt confident in it well that's a great background Jordan and I have to say you know one of the things about this podcast is that I try to show that ETA is not just for people with a certain pedigree because a lot of people with that pedigree that that pedigree is over represented in the ATA world because the

12:16 top Business Schools are among the first places that have taught ETA explicitly private Equity basically is ETA at an Institutional level and so a lot of people come down here from private Equity so so those people like you are over represented in this world but I try to show enough examples just a lot of examples of people who don't have that background to show that this is open to all with your story however we're I'm getting the impression that

12:46 really the your ability to move as fast as you've moved quite frankly I let's just not beat around the bush it probably is not something that somebody who I mean you just said you guys had cumulative cumulatively a lot of experience doing precisely what you are now doing and further that you Jordan at least have had your eye on doing something like this since you were 19 so you have been plotting maybe maybe you had

13:19 distractions in there or whatever but at least you know this is this is something it feels like this is a a vision years in the in the making is that overstating it that you know that's the Disney version of it I think you know at 19 I I thought I wanted to do this and and as you correctly pointed out will there were certainly distractions along the way but then you know I came back to it

13:48 and I think certon certon was a really good experience for all of us CU you know we learned so much about this investing style and that that was really where we learned kind of the the financial engineering side of it versus what I got exposure to at 19 years old which was the relationship side of it the camaraderie side of it the team building side of it but I think that for us what we saw and and one of the reasons

14:19 we had the confidence to go out is there are all these lower and Middle Market private Equity firms who are paying these high premiums for residential and Commercial Services platforms when they Eclipse 20 million of eida but they're not the ones going and starting them from scratch they're not the ones willing to go stack pennies and fly around the country to create that scale because at the end of the day when you're a private Equity

14:50 Firm whether you're the smallest lower Middle Market private Equity Firm or you're a large middl Market private Equity Firm like in alcaton you have so much money to deploy that constantly time and time again I I would hear the partners at certon during the IC discussions ask is the juice worth the squeeze and so there is always going to be a threshold of a deal of a company that is too small to Warrant the attention and time of a

15:19 lower middl Market private Equity Firm even if that business is growing 20% 25% even if that business has best-in-class management and so I think we saw that Niche and that Gap as hey here's where we can put our thumb on the scale here's an Niche we can own in play in where we're not trying to be someone we're not we're not trying to be heroes and and go head to head with every single private Equity Firm every single well-

15:48 capitalized private Equity Firm with a deep team of operating Partners this is the part of the ecosystem where 32y olds can actually be uniquely advantaged and create something very special and so three 20y olds yeah yep yeah actually let me let me let me pause you Jordan because I want I want to get into the thesis in some detail but first of all for those who don't know the private Equity world elaton is a name that anybody in private Equity

16:17 would know this is a yeah I mean El Caton's a great firm they're they're I wouldn't say it's as well known as a a Blackstone or a KKR but but they're pretty well known in the consumer space and as you can probably tell I think the world of alcaton and the partners there they they're we we myself Joe and Sean would not be where we are today without them and you said that you saw how private

16:48 Equity firms like elcon don't go you know is the juice worth the squeeze they don't below go below a certain threshold of IA yet here in the lower lower Middle Market of ETA we always hear that things have gotten so competitive that private Equity is dipping below $2 million in Via and so if you so the the needle to thread is to find that business that's

17:19 750,000 of eida or SD up to a million a half below that it's too small of course there are countless of chir Minds guests who are counter examples but the conventional wisdom below 750 is too small above a million and a half of SD or EA you're going to start competing with private Equity but I'm hearing you say say that private Equity doesn't go that low so so square that Circle for me well I'll actually I I think it I'll

17:48 take a step back and kind of challenge something you said well I I think one of the things I get frustrated with when I hear people kind of talk about the threshold and all that is I think the worst thing you can do is box yourself in and say hey here here's my spreadsheet here's my criteria if it doesn't check these boxes it it doesn't work for me if it's below 750 it's too small if it's above 1.5 million of EA

18:14 it's too big I think that you have to stay flexible you have to stay Nimble most of most of the private Equity firms I've seen yeah they they're usually looking for $1 million plus EA do businesses however that doesn't mean you can't compete in that one to three 1 to four million doll Eid range similarly I guess the rule of thumb as you pointed out is hey don't go below

18:45 750k of e for all the reasons I I acknowledge and understand but we've acquired now two businesses that do between 400,000 and 500,000 of eida that in the hold period we've owned them have all reached 750,000 plus via and had we kind of said to ourselves hey we're never going to dip below 500 we're never going to dip below 700 we may have now partnered with two of the fastest growing companies we

19:17 have and so I think that in this world of lower lower lower Middle Market ETA rollups private Equity whatever you want to call it there are so many other things you have to look at so many other intangibles non-financial metrics you have to look at to really see okay this is a company primed for growth and I think that's where we've been really successful is our willingness to be

19:49 creative our willingness to evolve and we're ever evolving to best position Guild for growth I mean not including tuck because those obviously get very small our smallest partner company has $400,000 of eida our largest partner company has seven and a half million of e you know there's no private Equity Firm pack platform that would ever tell you our eida range is 400,000 to 7 and a

20:20 half million like yeah someone would laugh at you but that's exactly what we've done well I I want to return to the 41 Jord and and and and talk about some of the intangibles that you saw in that particular business that that entic you to go that low back to the thesis formation so there you guys are at elaton thinking we can do something like this for ourselves we see that there's a gap in the market because private Equity

20:48 isn't going to go as we're we're willing to stack pennies as you put it and we feel like we have a lot of experience with the Playbook here tell tell tell me more about how this with this thesis looked like and how it took shape yeah so it's funny because in many ways it feels like just yesterday but in other ways it feels like a lifetime ago myself Joe and Sean we used to stay late at the office we're talking one 2 3

21:15 a.m. and talk about this and for so long it felt like one of those things yeah we'll talk about it we'll Pretend We're going to do it and then it's never going to happen because it's so scary there's so much risk and I think one day we were just like it's time to put up or shut up you know every single person in finance talks about doing this but you know we got to burn the ships we got to

21:41 do it and so I think we came to the conclusion that you know we just got to commit to this and talking about it strategizing trying to Source on the side when you have a full-time job you're just never going to get it anywhere and so so that that was kind of us getting started but in terms of the thesis generation you know we had spent a lot of time looking into the residential and

22:11 Commercial Services categories in our last year at El certon ultimately we ended up settling on residential services as kind of the category that we wanted to create a platform in and ended up acquiring L the plumber which was an HVAC Plumbing an electrical platform and going into the HVAC Market along with what seemed like every private Equity Firm at the time and and still to this day and it it's been to my understanding a phenomenal investment for Al

22:41 catterton but one of the things we saw about the residential services category more broadly that was really enticing was there was real industrial logic that supported consolidation you know you had all the underlying attractive part about the industry and the companies you know things being non-discretionary you know having very good free cash flow conversion all all kind of the line items you check when you're like hey if I'm going to do a rollup what are the

23:11 five things that matter but aside from just those five things you know what you saw with HVAC was when you take four businesses and bring them together if you really do have strong intentional integration you can rightsize those pnls so quickly and you know whether it be procurement savings go to the manufacturers eliminating duplicative back off his functions again there is real industrial logic that supports

23:43 consolidation you're not just shoving things together for the sake of gaining scale and so our thesis which isn't a novel one was this does not just apply for HVAC plumbing and electrical but in fact this is more this speaks more broadly to the residential services category as a whole so what is the next Frontier in residential services that doesn't have every single private Equity Firm in it already but has at least one

24:16 precedent transaction that we can point to and hold on to to give us comfort that this is a category that institutional Capital likes and has interest in and what's a precedent transaction or what was it in your case for us it was A1 but I think I think that point is a really important one you know when I have people kind of ask me about the guild story and they were

24:47 thinking about doing something similar or just want to understand how I made the decision you know one of the things I told them I tell people which is is very true is you know it's all great and good to say hey we're going to go into this category where no private Equity Firm is and find the next Frontier but I think you have to be very intentional that you know the next Frontier has to have some sort of proof

25:12 point if you're going to play a role in the ecosystem a role in the food chain you don't want to go into a category where nobody has established any type of platform no one has built out the proof coins for the industrial logic that supports consolidation no one has kind of put up a a a benchmark a watermark for hey this is what a scaled platform trades for you just don't want to do that and so you want to find a category

25:40 that doesn't have a million private Equity firms running around but yet there's one precedent transaction and on the precedent transaction sure it's good to know where a scaled platform trades but more importantly hey this is a best-in-class scaled business let's reverse engineer what they do to understand what the tech stack is in the category how you have best-in-class employee retention how digital marketing plays a role in the category and so the

26:12 ability to learn from someone else is critical and I've always thought what's made Guild so successful is we're not the first mover we're the second mover and we'll probably talk about A1 a lot over the next several minutes I have so much respect for that organization and their founder Tommy Melo I mean he he's a Visionary he truly is and he redefined this category and so much of what we do

26:43 at Guild today is modeled after A1 not because we're trying to rip them off of their ideas or practices but because they're a best inclass business and they've shown how to be hyper successful in the garage door category and they've really lifted this entire industry Jordan let's give a little context so A1 is an organically grown or inorg give us 60 seconds on A1 yeah sure tomm and Tommy melow and and let me apologize in advance I I find myself

27:14 doing this a lot where I talk about the garage door category as if everyone knows as much as I do I get yelled at a lot by my my friends and family about this but what you don't know who Tommy melow is friends and family you you don't know post Tommy Melo in your bedroom so Tommy Melo he's an entrepreneur who founded this Garage Door Company A1 Garage Door I think it was like in 2008 or 2009 and he

27:42 organically grew it to be about a hundred million of Revenue and I think 20 million of IA and then sold it to a private Equity Firm in November of 2022 private Equity Firm by the name of the cortech group and then the core Tech group their whole thesis was hey you have this unbelievable best-in-class business that's growing 20 to 25% a year organically let's supplement this growth

28:16 with m&a and create a best-in-class organic growth engine with a m&a platform which would have been amazing and so they weren't like gild in the sense that they got their start through m&a their Heritage their start was all organic growth and then when the cortech group came in they tried to introduce m&a you know I think they've continued to be very successful on the organic growth front less successful

28:49 with m&a but it's still it's still an amazing business and it's grown incredibly over the last 2 to 3 years but yeah I think that answers your question yeah it does and Tommy still the CEO he he you know sold majority stake but he's actually still the CEO and and Tommy Melo is an influencer I mean he's very online he's he's a personality so anybody can Google him and see lots of

29:20 lots of Tommy Melo but to be be clear what you said he built $100 million in Revenue organic yeah over 10 or 12 years wow yeah very very impressive very very impressive yeah we don't we don't hear that number very often and when we do it's almost certainly involves acquisition being the nature of this podcast but so anyway great and I think to give him to give him credit to you know he introduced a lot of things into

29:50 the industry that he saw in HVAC and plumbing and Landscaping that previously no one in the industry had been doing you know service Titan which we think is the best digital CRM system to use in the residential services space he brought that to the garage door industry you know he brought the concept of branding and wrapping your trucks to the garage door industry so you know he grew A1 a ton but he also like really helped

30:21 reinvent the industry and so again I I try to give credit where credit's do and I sometimes feel sad about the fact that we're competitors but he he's built an amazing business great great background okay so so now we're turning to your thesis so one of the the things that you just articulated is you're you know you use this phrase Last Frontier or New Frontier or next Frontier so I guess in private Equity

30:53 land there's always you know looking for the next category where there's opportunity yeah and HVAC is long since picked over it's it's the poster child for private Equity being hyperactive in the category and so you were looking for other res other Residential Services Home Services categories and one of your criteria was that there at least be a precedent transaction which you just described Tommy Melo selling to cortech what other criteria are there how

31:24 else what else did you use to zero in on garage doors well I'll just kind of set the stage for you and what we saw and it you know you you can do all you can do all this desktop research desktop diligence and you can gather all these facts but as I tell Joe and Sean all the time and I I think they're ready to punch me in the face now after I say it for the 100th time but you know this is

31:48 not taking a final exam and your college fin class it's yeah you can gather all the research you want you can have all the expert calls you want but how you win and how you create is getting out there getting in the game convincing owners to join your vision and so but obviously the research is important and understanding what you're walking into is important so here were the facts that got us so excited you had a

32:20 category that was 92% fragmented had roughly 15,000 independent garage door repair companies on the residential side had a total addressable Market of around 13 billion on the commercial side 20 billion the category was set to grow 7 to 9% over the next five years because it had historically been in the Stone Age you know digitalization was just

32:51 starting to be rolled out owners were leaning into branding best practices and so you had this category that was about to hit its breakout Point similar to honestly HVAC 10 years ago and it kind of set the stage perfectly where hey I mean you know do you want to go in and and be the acquir of choice of course but just getting exposure to this category would make for a great

33:23 investment so that that's kind of what we saw and then you know as I alluded to earlier and I don't mean to sound like a broken record here there was real industrial logic that supported consolidation in the same way that in the HVAC industry as you built scale you could go to the manufacturers you could go to different people in your ecosystem and realize procurement savings you could do the same thing here where as you scaled up as you had more volume

33:51 coming through you could go to the manufacturers that provided the doors for you the manufacturers that provided the motors for you you could go to the people in your ecosystem even like the service Titans of the world or the insurance providers or even the providers of Fleet Management you know I think today we have like 600 vans on the road you're telling me that person buying 600 Vans can't get better pricing than the person buying 10 so you know

34:18 all the same things that again made HVAC so successful existed here the only difference was there weren't 25p back platforms doing it but Jordan let me push back on that the the what you call the industrial logic of of what what was it of of of consolidation or yeah the industrial logic of consolidation where you know the kind of the centralizing procurement is the classic example by more stuff for larger Enterprise and you get better pricing that doesn't seem

34:48 you're saying that as if in other rollups that doesn't happen I thought that was one of the reasons to do a rollup anytime anywhere any category you know you're saying is you'd be surprised okay I mean you'd be surprised and I think yes all of them to an extent have kind of some aspect of this but it comes down to the quantum you know how much of your cost can you really reduce when you have scale how

35:20 powerful are the economies of scale so like the example I I'll give and I can't speak to this industry intelligent at all but you think about some of these like doggy overnight boarding rollups that you see everywhere you know if I own 20 of those where am I really cutting cost like maybe I can buy more food and bulk maybe I can buy more shampoo in bulk if I'm shampooing the dogs but like is that a needle mover no

35:49 because like the shampoo and the food is not a real cost line item in my p&l go to the garage door category you know the doors what you're buying from the manufacturers the motors like the lift masters of the world what you're buying to operate those doors I mean we're talking we're talking hundreds of thousands of dollars per company in savings and so I think you're right that there's some flavor of it in most

36:21 rollups it's just a question of how powerful is it and and and can you extract those savings great illustration thank you okay and are there are there more criteria I mean there's one I remember from the preall that I really want you to talk about do you recall lack of a platform size oh yeah so so the other thing so as as we learn more about it you know we

36:51 we asked a ton of people in the private Equity space you know why is nobody rolled up garage doors we have built the spreadsheet it checks every box it's it seems perfect what are we missing are we walking in to you know a dumpster fire and you know what people said was yes a ton of private Equity firms have been circling the category very closely since the A1 deal got announced but the issue

37:22 is there's no platform of scale out there there's no single dig Gable asset not even at a platform scale at $20 million plus eida scale but an asset that had five six seven8 million of ebaada that could serve as the base of the platform and so you really really needed to go in and start it from scratch and I think the other factoid I mentioned to you will on our previous call which I should have mentioned when

37:50 I was setting the scene and getting everyone excited about the garage door category was that of the 15,000 garage door repair companies in the US only a 100 have greater than 2 million of Evel 100 and of those 100 less than 20 have less than 10 to 15% new construction exposure so when you think about your Target Universe it's

38:22 tiny tiny and so I'm sure this this will be your next question so I'll just start talking about it the thesis how how we evolved our thesis was okay this is a great category but we have to move fast and we have to move now because there are 10 to 15 Prime candidates out there and only 10 to 15 and we have to get as many off the board as possible before anyone else can take

38:54 them but if you do take 10 of those 15 eight of those 15 you create not just a lead versus potential future institutional Capital competitors trying to come in and build a platform you create a moat because now you've created a digestible asset but there are no other digestible assets out there and so we got started and we basically said

39:24 okay we need as many of those t 15 companies as possible now how are we going to do that this is an really an interesting Criterion or or characteristic of an industry that people should think about that there's no at least these big categories like a home services category that there are no platforms of size in the category not not a one so there's no there's nowhere for a wouldbe consolidator to get a Toe Hold doesn't that but doesn't that say

39:55 something about the industry like that these businesses can't be big un unless you can make some do some sort of national play because otherwise they would be right there would be somebody who's has a $10 million and and how is there how is there not how are there none if Tommy Melo built to 100 million he was just so out there and everybody else was languishing at five million ebit at best and Below sort of thing not even like

40:27 two million and Below there there was there was one $7 million one who's actually a part of Guild now G doors but no I you're you're asking all the right questions so so first I'll answer the last question which was yes Tommy was just so far ahead of everyone historically that he was the one who was able to achieve this scale I think two growth in a category where there is

40:57 no scale is almost exponential where he was able to realize so much better pricing from the manufacturers from the different people in the ecosystem that it was almost like A1 was on Rocket Fuel and everyone else was on vegetable oil so I think that answer is your question about Tommy I think your question about hey if there are no players of scale isn't the writing on the wall that scale shouldn't exist here and I think it's

41:25 it's a it's the correct question to ask and I think what I really want people to understand is when we had all these amazing facts about the garage door category we were still very skeptical you know we asked ourselves constantly what are we missing what are we missing like we are not smarter than private Equity we we did not just discover fire you know what are we missing and I'll talk about them a lot more

41:56 later but I I think one of the reasons my partnership works so well with Joe and Shawn is is I'm kind of the eternal optimist Joe is kind of the Eternal pessimist and so Joe would challenge me always like no there has to be something the category is too small the you know the the price that everyone took in 2021 doesn't stand and and I would push back and and Sean would be kind of the the middle one weighing both

42:23 sides but I think you know why we got Comfort will was A1 proved you can get scale and two the total addressable Market of the category was large enough to where you could create multiple hundred million plus Revenue companies and still not have 20% of the market 10% of the market I think where you get concerned with hey could there be a scaled player here is if

42:54 you're looking at a a billion doll total addressable Market where it's like hey if if we get to 100 million Revenue we'll have 10% of the market share in the US do I really think I can create a platform that has 10% market share in the US probably not so I think the the answer is twofold just to summarize one A1 could do it why can't we do it and two the total addressable Market was large enough that it had the proof point

43:21 that you could easily create a 100 plus million doll Revenue business well those are very comp comping points that's a great analysis and the the the thought about what percentage of a total addressable Market an entire Market do I really think we can get to what is and you and you basically and you said that 10% is too aggressive too optimistic somebody shouldn't go into an industry expecting to get 10% of the market what it what it what should a good Target be

43:53 2% 5% I I don't know if I even think about it that way I think more so of like the outlandish examples like 10% I I have Supreme confidence in myself and my partners but I do not think I can go and get 10% market share in an industry in a year I I think and it's also you know actually this is a good point to bring up it's not just about what you can achieve it's about

44:20 what are you going to sell to the next guy assuming you're reverse engineering this thing where hey we want to sell to a private Equity fir they're going to look at your business and Sayre you're at a 100 million of Revenue 20 million of iida but you're 10% of the market what am I going to do I'm going to make a 25% market share player you've left no meat on the bone for me and so I think what you have to

44:44 be very intentional about is thinking not only about the growth that you can realize but putting yourself in the shoes and the mind of the next guy the next buyer and deciding what are his value creation levers going to be how is he going to grow this and if you're at 10% market share and he has to underwrite 25 to 30% market share you have an issue yeah because he's gonna do the same thing he's gonna say when I

45:12 sell this to KKR they have to have 70% market share like yeah you know it's not gonna happen such a such a great Point Jordan and and not just in the context of the scale at which you're operating for any ETA person in ETA considering buying a business even for those of you who are thinking you'll never sell the business and you're buying it for your career it's it's definitely wise to at least consider the exit strategies you you never know and

45:42 and so always be think one of your one of your matrices of of your analysis should be what does this look like to the the when I'm the seller to a future buyer such such an important exercise great reminder yeah I think that you don't want to be too hyperfocused on this but I think there's certainly an element of reverse engineering that needs to be consistently present in the mind of everyone as they build and scale

46:12 a business because if your ultimate goal is to sell the business whether it be a single company via ETA or you're trying to do a similar rollup to Guild you can really change the trajectory of the exit it with two or three small decisions and so for us we kind of we almost made like a fake sheet a fake one pager of of the eventual future Sim of Guild and said what do we want this to

46:41 look like and so we said okay size we wanted to be at the time we wanted it to be 20 million of iida so we said 20 million of iida with 20% margin so 100 million of Revenue we want new construction to be sub 10% we want all the employees to be W2 employees no 1099 subcontracted labor no union labor we want everyone to be on the same CRM everyone to use the same Financial Erp system so we want everyone to be on

47:09 service Titan everyone to use Sage for accounting everyone to have ADP for HR and you know when you have the little box on the right that says future growth levers you know here's how you grow the business when the bankers pull together these Sims we want the growth levers to be continue to continue to push organic growth launch a green field strategy which is instead of acquiring a business in a new market just start from scratch and three

47:42 take the proof points we will have developed around tuck and Acquisitions and really supercharge that so take these Beach head partners that we've brought together and do three to four small scale Acquisitions per year per partner and and I think that exercise is really helpful for anybody it was certainly very helpful for us but again I I think there's a balance where you want to be flexible and you want to continue to evolve but you want

48:12 to remind yourself of what true north is and what are the things that you can't compromise on and so for us honestly the biggest thing is the new construction percentage you know as the platform has scaled obviously the goal no longer is 20 million of eida but we will not go above 10% new construction that's just a non-negotiable for us and so having that on the page from Day Zero has really like served as a reminder so I think

48:38 it's a good exercise a great exercise that's so fascinating I'd love to get my hands on that that one pager can we yeah of course I'll send it to you yeah great please do and it says 20 million so you'll laugh when you see it so so that that's my question so this was this was your imagined SIM for when you guys go to market with with your the business that you've built 20 million of ebata

49:02 you're going to hit 30 million by the end of this year you're on track to so you were imagining getting to 20 million in EO when 2028 you're kidding no I'm not kidding and I distinctly remember Joe by the way I love Joe Joe's the greatest partner ever I distinctly remember Joe saying that will never happen that's not realistic Jordan so just to make sure if people are only listening or listening to us on two on 2x listen Jordan and his two

49:32 partners were aiming to get to $20 million in Nea in five years from 2024 through 2028 and one of the two three Partners said never going to happen they're on track to hit 30 million IA in at the end of the first year that is crazy we're going to hear why but and and we I got to really keep my eye on time because we're just we're just winding up here we haven't even done acquisition number one but this is really this is

50:04 really rich Jordan but before we before we get into what your strategy was going to be the you know everybody wants to hear what are the categories that you liked but didn't make the cut of course you g to tell us yeah yeah I'll I'll tell you guys great well we narrowed it down to two garage and Tree Servicing and Tree Servicing right now is a really hot category for lower

50:34 Middle Market private Equity it's a smaller total addressable Market than garage I think it's I think it's like five or six billion maybe seven Max but it's a really attractive category and at the time there was only one private Equity Firm executing a rollup fast forward to today I think there's like 10 or 11 and so I think it's a testament to how quickly the windows of opportunity open and close in these

51:07 categories and I think that certainly there's there's a line between being relentless but not Reckless but speed if you're trying to create scale in these super Niche hot categories is is Paramount because the windows just close and and I've I've always kind of had a fear of being in a category that doesn't have a$1 billion plus total addressable market and duking it out with 15 private Equity firms just

51:40 because you know I know what we're capable of I know where we're strong and that is not a situation I think we can be strong in and and that is not a situation I ever want to be in so but yeah why do you like tree why do you tree if it's already getting a lot of activity it's it's I don't like it anymore I would never like it a year ago or a year ago yeah yeah when there was

52:04 one private firm I liked it a lot I I would never go into Tree Servicing today okay timing timing is a big part too but I would distinguish between the strategy we do which is large scale rollups and if you are kind of a ETA eter is that the word the noun I've heard that one yeah ET ET if you're an eter You could argue preserving is the perfect category to go into because

52:34 you'll always be able to find one or two or three great targets that have very reasonable valuation expectations that private Equity has missed or just botched the pitch withd they came off as arrogant or rushed them and you have all these platforms around you that are so Des for growth and scale that if you can create scale with one asset you will command a super premium multiple so I I

53:07 am not an eter but if I was an eter I would Target categories exactly like pre servicing where there are 5 to 10 private Equity platforms duking it out for a finite amount of scaled assets you'll find one or two like it might take you a year it might take you two years you will find one and then grow that business and you will be the most coveted asset in the market yeah it's so interesting and it's

53:35 just one of the patterns that that I had no idea about but that becomes really clear after doing my job as podcaster here in this world for a while which is that there you know that there's just this daisy chain there's tiny little companies and then if you can consolidate a few of those then there's Maybe some small maybe there's a somebody who you know an ETA person who wants to buy a slightly bigger business who will buy it from you because they're

54:04 trying to assemble slightly bigger businesses to sell it to a small private Equity shop who they are and it's just I had no idea that that phenomenon existed in in the market but it's so it's almost formulaic now it does seem like you can't just assume there's always going to be buyers it has to be a category with some this is exactly what you were saying before but related to this this idea of a precedent transaction there

54:30 has to be some private Equity activity you can have to Envision who a buyer might be because I guess in some categories there just aren't buyers probably in probably a lot of categories no no totally totally and and I think you know it's basic but you want to be in a category that you think will be larger and better and more sophisticated in three years than it is today you know you don't want to enter a

54:55 dying industry you don't want to enter an industry that's in the midst of change for the worst change for the better would be great I mean look at garage as an example of that but you want to ensure that you know you have Tailwinds and you don't have headwinds so yeah I think I think you do have to be intentional and and one last to your point about the how fast things can happen I mean your point of tree

55:20 services is the best example that a year ago there was one and now there's 10 or whatever yeah but just to use the the h going back to HVAC you know I've been doing this now for about three years and HVAC for my time doing acquiring mines HVAC has been pointed to as like the hot rollup category and so I just naively assumed that it kind of was always thus well no I mean I now know including my

55:43 business partner in Minds Capital Nicholas James and others who bought in the mid late teens and it was a completely unappealing nobody there category so so I was wrong I mean I I I came into it it was already hot but sure enough just a couple years before I started doing acquiring mines nobody was talking about HVAC it's just so so so it really does move faster than I realized well look at the broader example too

56:11 right now of Residential Services rollups were kind of all anyone talked about for the last 3 to four years and everyone was trying to do it and that's what every Banker pitched a private Equity Firm on that's what every private Equity Firm was looking for now all of a sudden in the last six months partially as a result of kind of the Advent and sophistication of AI is everyone wants to pile into white color Services categories now accounting legal firms

56:41 IT services why because you have similar industrial logic that supports consolidation especially when you have the potential of AI removing 50% of the workforce and costs improving 50% % so we not 50% because there's some flow through but you get my point and so you know you can look at categories but it's also just like broader sectors broader themes broader investment Styles like it just when things get hot they explode

57:15 and it it's a I think it's like a a followers world where if you have kind of one person show success in a category one person show success with a thesis you're going to very quickly see 10 other people mimicking it fascinating okay Jordan so you you've decided on the category here we are at an hour you've decided on the category what is your what is your strategy G to be and we and we're we are

57:43 goingon to have to pick up the pace a little bit sure forgive my constant questioning what what is the strategy how do you start the strategy it was very simple at first which is get a single owner to answer my phone calls which was very challenging took two to three months to get a single person to answer my phone call and what we did was how I thought about it was I was like okay what is every ETA or what is

58:13 every private Equity Firm going to do they're going to sit behind their computer and they're going to pay for a $15,000 a year gr subscription or a zoom info subscription and they're going to send emails 50% of which will go to spam 50% of which will be opened by the owner and they won't respond I wanted to do things differently even if it was harder even if it required way more Sweat Equity so we sourced in two ways we would call

58:44 people until they picked up and we would write handwritten letters in large craft envelopes and the envelopes had to be craft because if they were white or yellow they could be mistaken for like hey you know this is you know the IRS I'm getting subpoena but if they were craft and you handw wrote the name and the address on the front an owner would pick it up and be like oh this is my niece or nephew sending me their art

59:14 project from preschool then they'd open it and it would be a presentation from The Guild guys and a handwritten letter and we must do you mean craft like like construction paper what's a craft en kind like if you just like Google craft envelopes it's kind of like a brownish tan I mean you definitely know what I'm talking about you just have never thought okay it's craft it's kind of like this color like almost like a manila folder yeah yeah yeah got them

59:43 and I mean we probably sent 700 or 800 of those letters wow and like I think the response rate was like 10 to 15% but when you think about it I mean that's 50 plus people 50 plus targets getting on the phone with you and being willing to talk and two of our

60:15 first five deals came that way from handwritten letters three three of our first five deals came from handwritten letters and you know when you get the owner on the phone again I was like okay what would a private Equity Firm do they would sit there and they'd be like okay let's schedule a zoom in two weeks and then let's do a second zoom and a third Zoom I would always make up this excuse where I'd get on the phone with the owner and

60:44 I'd be like oh that's so funny that you're based out of Georgia because I'm going to be there tomorrow visiting my great aunt Susie do you want to get dinner and they'd be like yeah sure if you're in town that's fine and I just booked the first flight to Georgia and why I did that was I I've always had the you know I'm young but I I'm old school in the way I approach things one dinner over a couple beers with with

61:15 an owner is the equivalent in my opinion of 6 to8 zooms both in the information you can extract but more importantly the trust you build and the trust you develop and and I think over those dinners what I would do is I think people kind of and I don't mean to generalize but I think most people approach it one of two ways where they either try to come in and and act

61:47 overly sophisticated and and come in and be like hey we're this large private Equity Firm we have all these resources we've done this a million times times you know trust us and then you have kind of the other side of the spectrum and again not trying and generalize where you know someone buys a pair of cowboy boots to try to relate to the owner in Texas and makes up some story about their father or mother working in the trades their whole life

62:16 when in reality they were a lawyer that that's what we call the presidential candidate method yeah and so totally fake for me I was like I'm not going to do either of those things I I am going to be so authentic so transparent that it's borderline like jeopardizing to the pitch and so I would go in there and be like I'm Jordan Dubin I'm from New York City and if you think a Jew

62:47 from New York City can come in and run your garage door business in Georgia you're crazy you know if if I took over your business if I fired you and took over your business it would go to zero and so how you know this is going to be a true partnership is you may think you're reliant on me I assure you I'm 10 times more reliant on you with that being said I will give you everything I have you know you tell me

63:15 how I can be value added and I will give you every last ounce of attention and effort and care that you need and let's build this thing and so that was the approach I took and and it was really successful and just for the sake of speeding this up deals beget other deals wait but Jordan Jordan two two followups to that what first of all is that what you heard remind me their names the Burger King guys Alex and Matt

63:44 and Alex Matt and Alex is that was that based on what they would say you know honestly it's very similar like they were very authentic and I I think like without even without even thinking what would Madden Alex do it just it kind of naturally the you know now that you say that the pitch is probably very similar like if you were to do a sidebyside cam it would probably be pretty similar which makes me feel

64:11 very good about myself that I've kind of become like my mentors yeah and the other thing Jordan is is what was the pitch so you've told us very clearly and compellingly yeah how you demonstrated your transparency your authenticity but what was the what were you selling come with me we're going to build a giant freaking organization and what yeah so what was the value ad pitch there I think will the the cool thing was my pitch to owners our pitch to

64:44 owners was the same pitch to investors I mean you know how we viewed it was share with them all the information so they have the information at their kind of disposal and they can analyze it themselves of here's how big the industry is here's how fragmented it is here's what a private Equity Firm likes and dislikes in a platform if you create it we have this unbelievable opportunity to create a first ofit kind m&a platform in an industry that has not had one

65:14 built to do that though we need awesome Partners like yourself are you interested and so I think it you know we never wanted to down the pitch CU one all these owners are smarter than we are and two I think helping people understand this isn't about buying your business like you're part of this journey this is a startup we're all marching towards that same goal is hypercritical because you really like align your motivations with

65:47 your partners who again you're hyper reliant on and so I think it was like really just not sugar coating it not being around the book but treating it like you were pitching an investor who going to give you $5 million of equity to start a platform you know the same pitch to the owner whose business is going to be the base of the platform and so that was that was kind of the approach we took now more specifically

66:14 what we said was look we're we're not going to do any type of rebranding we're going to have uniformity in systems and processes across the board you know it's important you know that and there's be kind of no sweetheart deals here where you don't have to go to service Titan or you know you don't have to do your payroll this way but we're still going to maintain the localized brand the localized culture the localized leadership and so

66:41 you know it's a way to create a national platform with localized expertise and so you know there as you can probably tell there are a lot of aspects of the pitch a lot of it would be Fielding questions but that was that was kind of I would say the overarching message of the pitch was you know you're not a seller you are a buyer and you are buying into this vision and you are buying into being

67:10 shoulder-to-shoulder with myself Joe and Sean in creating a first ofit kind platform in an awesome industry great and so obviously then unlike many Searchers who will be listening where their pitch to a seller is I want to carry on your legacy and be the owner of your business for the Next Generation you're explicit about the fact that we are building something here it's going to be a Sprint maybe a long Sprint maybe a five or

67:41 seven year Sprint we're going to go fast and hard for a number of years and then there will be another exit event where there will be another buyer everybody gets that yeah everyone gets it but you know I think what's I think it's important to be transparent about everything because it's not about getting to a yes you know how you really have these platforms go off the rails is you just say and lie through your teeth

68:10 to get people to say yes and then week one when it's not the reality they were promised you know that's when you have things go off the rails and so for us it was be again overly transparent overly honest just to make sure there was alignment but I think in doing that it also created so much more trust off the bat cuz they're like wow Like These people aren't being shady with their responses to the questions of like

68:37 what's going to happen to how we do payroll they're just being blatantly honest and very detailed in their responses and so so yeah but but I think also what I've told every owner which is 100% true is you know when we do eventually sell Guild I'm going to roll as much Equity as I can because I want a portion of my personal net worth tied to Guild for the rest of my life because I fully believe in this

69:06 category and what we're building more than anything and so I I hope for every single owner they get to do the same thing which is don't cash out all your chips in in you know two to three years three to four years whatever it is but continue to take chips off the table and roll equity and have this be a vehicle to create generational wealth for you and your family the same way I hope it will be for mine if if I have a

69:33 family one day and Jordan we we are not gonna get too much into the mechanics because of time around the industrial logic and the economies of scale but I have heard you say a couple of times broad Strokes your strategy is not unify the brand all these owners all these Acquisitions get to retain their local Brands behind the scenes the thing that

70:03 you were insistent about were these you keep bringing up these three tools everybody on Sage the accounting everybody on ADP for payroll and everybody on what was the and service tit service Titan so so why were how did you decide on the line there of what you were what you were going to insist on that be unified and what was it yeah going to be insisted upon well integration is hypercritical for these platforms especially when you get to the

70:34 scale that we're headed towards and the reason integration is so important is that's how you really tap into the economies of scale that's how you really realize the industrial logic that supports consolidation and without it you basically have 20 disparate units and that is a massive headache because you're running 20 different businesses versus running one business with 20 locations and so how I think how we think about kind of the

71:04 the level of integration the level of uniformity is when it comes to the Enterprise facing nature of the businesses when it comes to the back office you want uniformity you want consistent systems processes that allows our executive team our 20 person executive team to be able to Monitor and help every underlying brand now when it comes to the consumer facing nature of the business whether that be the literal brand on the truck the way

71:34 the technicians greet the consumer the ways they upsell cross sell the way they perform the service even we allow the owners and the businesses to continue doing what they've been doing because put simply there's a reason they're a part of Guild they're Best in Class what they do is amazing a and why reinvent the wheel why change something that doesn't need to be fixed and I think you know one of the things that I've come to realize is

72:06 you know this country is so diverse and the underlying markets in this country are so different from each other that to assume what would work in Phoenix would work in Minneapolis is crazy I mean if you think not just in terms of the end consumer but the the tography the style of homes it's all different and so I think actually where some of the platforms have actually shot themselves in the foot is trying to create this

72:36 very uniform homogeneous structure with one brand One Price Book one way to sell and and trying to do that nationally I think you can do that in a regional sense you know if you do a Southwest platform with San Diego Phoenix New Mex parts of New Mexico but to assume that you can paint the country one color on the consumer facing side I think is naive yeah well the other at least in terms of the brand you're also you're

73:05 also forfeiting all of this accumulated brand Equity if you it's real brand Equity is real and yeah so it's not just you know hey we're not going to change the brand because the owner has you know an emotional attachment to this logo he created on Microsoft Paint 5 years ago it's no there's real brand equity There's real brand recognition and that is so important in a direct to Consumer Residential Services business fascinating Jordan okay let's

73:36 see here oh we didn't get into can you share what your you touched on your pitch to investors can you share what that looked like how much you raised to go do this yeah we raised about $35 million upfront and then put it all to work very quickly and then have since taken on an additional $5 million of equity so $40 million of equity total and just put in place an Institutional debt facility

74:08 with a private credit firm based out of New York that gives us roughly an additional 85 million of dry powder to use and will you then so you don't need to raise any more Equity likely that's the plan yeah that's the plan but you went you went through your 40 or your 35 went through the 35 yeah pretty quickly very quickly okay and we're we're going to get to the that that quickness here is probably where we'll

74:38 how we'll end things what were you gonna say no I I'm I'm ready for the next question great and so and and when you can can you share with us what it looks like the the structure of an acquisition so when you're pitching an owner what you're kind of what you offer you give them a valuation of their business and then and then what does the structure of the acquisition look like or the partnering with you look like

75:02 yeah sure so there two types of I guess Acquisitions we do transactions we do you know we have our partnership Beach head transactions and then we also have the tuck tuck being hey you know oftentimes we'll we'll buy a business that has two employees or even one employee and they're retiring but you're buying it for the customer list the sticker base and so we'll buy 100% of those businesses and just roll them into one of our larger beach head companies

75:32 like for example RightWay garage doors run by quite literally one of my closest friends in the world Jake Wald you know part of our strategy there is hey let's go consolidate and rationalize this hyper fragmented Market in Northern California where we'll buy businesses for $50,000 cash that spit out well you don't really know what the net profit is because it's you know it's it's not a real profit margin because there's one or two employees but 400

76:03 Grand worth of Revenue annually and in a right way with it's sophisticated systems and processes can take that and and immediately realize 20% margins on it with no additional marketing spend and so it's so goddamn creative to do the tuck strategy but you need like I couldn't go go buy the Twan company on my own even if it only cost $50,000 because it would go to zero and so you need your Beach head Partners

76:34 like Jake and RightWay to support those tuck so that's so that's tuck now for our actual Beach head Partners again like RightWay like Jake wal or Jeff Sanford and and tell us the beach head strategy first we didn't get we didn't it's kind of implied but give it to us clearly and then tell us how you the structure yeah so so our strategy is twofold it's two part two phases we call it our land and expand strategy so

77:00 Landing is partner with 15 to 20 uniquely scaled uniquely sophisticated Partners all across the US and then phase two expand is help each of those businesses each of those Brands grow both organically but also inorganically through tuck in m&a and so how we've always kind of conceptualized it in our mind is you know we're not creating one platform we're creating 15 to 20 Regional platforms where I think

77:33 when this is all said and done I would love to be able to say you know in a category where there was only one business with greater than 5 million of eida we created another 10 so that's kind of how I think about it and so 15 to 20 different markets I mean I assume you just go down the list from biggest to smallest cities in the country sort of thing I W I wish it was

77:59 that easy it's not you know Beggars can't be choosers we've run all kind of the MSA data and figured out okay these are the best markets for a garage door company but this is where it's a unique industry where just because you have a market that for all of these reasons all these data points points to the fact that it's a perfect underlying location for a garage Bo company doesn't mean there's a scaled player there and so you

78:27 know you could point to like Omaha Nebraska for example I would love to get into Omaha but there's no scaled player in Omaha so there's no beach head partner to go partner with to execute the land and expand strategy so yes part of it was kind of outside in but more of it was like let's go find those large players and build around them in their markets cuz naturally their markets have to be at least somewhat attractive if

78:54 they've got to this scale and so going back to the the the overall thesis that there aren't platform companies for larger private Equity to buy into of course you have your own your own floor that you won't go below so you have what you your Beach heads are your own platforms you're you're kind of using those those terms interchangeably yeah so so so somebody listening to this who's who's who who is willing to stack pennies an opportunity

79:21 for them would be to go buy a few small garage door businesses in Omaha consolidate them and then call you sell to us kidding not kidding oh yeah I'm not kidding either if you want to do that I I will be the happiest person ever okay join the family okay and so with the thank you for the beach head strategy so basically those 15 to 20 you're just going down the list of size where the the biggest players are

79:51 and going after the biggest players the the highest quality players in the industry and okay so what what the mount Rush more the mount Rush more categories how how I think so how do you then what is your offer to them the structure the offer is the offer is hey we're not here to buy you out we're here to have we're here to take a majority stake in your business so I'll use numbers I'll say hey well you have a

80:21 great business we want to partner with you we want to take a majority stake in the business anywhere between call it 70 to 80% and then we want you to roll we want you to retain 20 to 30% now you'll get The Upfront liquidity of that initial buyout at a mid single digits multiple because that's what a$1 to2 million EA do business commands and then we're going to become partners and over the next three to four years you're

80:51 going to grow your business and you're going to have our help you're going to continue to realize cash flow from distributions every quarter your Prat a share so let's say will you own 30% in addition to your W2 salary you continue to get 30% of the excess cash flow hitting your pocket hitting your wallet every quarter and then in four years when we go to sell this thing you will get a quote unquote second bite of the Apple

81:23 now you may say yeah but I only own 30% at that point however not only has your eida grown your company has grown but also this is where each of the underlying owners get to realize the massive multiple Arbitrage because they're selling off of their eida so let's say you went from one to three you're selling three not off the six to eight times that you sold for in the beginning but now you're selling off of

81:53 a mid to high teens multiple because that is what a that is what the second largest garage door repair business in the US would trade for I mean A1 traded for 21 times so so you know come along for this ride will work with you will help you grow the business but also will help you unlock a valuation range in terms of an exit multiple that previously was just completely

82:23 unfathomable for a standalone mom and pop business even if you did reach 5 to 7 million of EA and and you know in this category that doesn't exist except for one and even they didn't get Aid teens multiple I can't do the math in my head but that 30% the second bite so you end up making two to three times as much even even though it's 30% wow that's quite a deal now in that structure feels

82:52 like I'm no expert but feels like a kind of a typical a typical structure for a rollup where you're where you want the owners to continue to to to roll their equity and and structure it that way yeah for the most part a lot of private Equity firms will just kind of say hey we're buying 100% of the business you know either you're in or you're out just because they have the resources to deploy their own Regional

83:21 GMS they don't need to rely on the existing executive team and you know I think that partnership is is hypercritical to everything we do and you know when we do our next platform and our next platform and our next platform we will always use the same model just because we think it works better than anything but I guess if you were poking holes in it and you're trying to play Devil's Advocate what you could say is hey you're doing all this

83:49 work but you only get 70% of the proceeds at the end of the tunnel why not just buy 100% of the business and put in a little extra work because you don't have the owner rolling and you get 100% of the proceeds at exit but again what I would say is I can't do what the owner does as well as he does and nobody I can hire would do it as well as he does that's why we find uniquely scaled

84:12 uniquely sophisticated businesses best in-class owners because Nobody Does it Better than they do and let's come together and create a situation where 2+ 2 equal 5 and not 2 plus 2 equal 4 and let's all benefit well and I suspect that that making an offer the more appealing the offer to the owners the faster you can acquire because you're the owners are pretty receptive to what you're offering them so so there has to be part part part of this totally

84:41 the offer that you're making it being compelling to the owners has to be a contributor to how fast you moved let's let's go yeah but but honestly will I think this is important to call out like before I did this I just assumed everyone is transactional capitalism is capitalism no one cares about the relationship side no one cares about kind of the connection it's I'm being offered seven times by you six times by the other guy yeah I'm going to take

85:11 seven times that is so not the case at least I can only speak to the garage door industry but like that is so not the case in this industry and and I appreciate that so much because it shows how thoughtful each of the owners are and they're not just looking at The Upfront cash but they're thinking about the long-term proceeds and the long-term journey and so you know we're obviously in a very fortunate position today where

85:39 you know we have assets who will join Guild over the three or four other private Equity firms trying to do the same thing as us and those private Equity firms will offer two to three turns higher than we're offering and these owners still join Guild because they believe in the vision and again they're putting themselves in the shoes of a buyer not a seller and they're saying you know which platform do I want to be a co-owner of which platform do I

86:09 think will be more successful in the next three to four years when the dust settles and I think you know we we've created such a lead and built such a behemoth that we've just kind of run away from from all the other platforms that are trying to do something similar and and the owners get that and so yes it's you know you can say you guys offer a better deal but it's not like we're offering higher prices it's it's

86:38 if anything it's the ladder it's the opposite it's just what we have to offer and you know that's not easy to create we certainly didn't have that from day Zero but we're in a fortunate position now where we really benefit from it Jordan let's close by hearing what you attribute moving so fast to faster even than your own boldest your own boldest goals of five

87:10 20 million in iita after five years and you're going to be 30 million after your first year you you've said well please what do you attribute all of that to that's just in just breathtaking really two things it's very simple 50% of the equation is luck and 50% of the equation is I have the best Partners in the world and when I say Partners starts with Joe and Shan they are the two best Partners I could ever ask for

87:43 and I'm so thankful every day that we're on this journey together and then the other side of the partnership equation is all the owners in Guild you know I've grown so close to all them and I care so deeply about all of them from Jake to Jeff to Carrie to Travis to Dan I mean all of them and they're the reason we've been able to move so fast not just because they've reached out to their Network and reached out to

88:14 their friends to join Guild but also because of their 110% commitment to Growing this platform as a team and it's really a beautiful thing man like I I I really think Guild has outgrown me pretty substantially and now you know as it continues to grow and by the way I I have I have no doubt that this time next year Guild is going to be close to 50

88:46 million of iida but it's no longer me kind of pushing this thing it's our great executive team but more importantly it's the owners you know it's it's Jake it's Jeff it's Carrie it's Travis I'm just in such awe of all of them every day because they do such an incredible job and they're the ones redefining this industry not not me Joe and Shawn we're just me Joe and Shawn are simply the stewards that kind of connected the dots

89:17 and brought this Vision together the backbone of Guild are the owners and and they are what make guilds so special and they're the reason we've been able to grow so quickly and become so godamn big but Jordan is that to say that because there because there a lot of that growth has been organic growth from your Beach heads oh yeah oranic organically we are up I think 14% year-over-year And that does obviously does not factor in any Acquisitions so

89:49 think about that you know we're adding on 10 to 15 million of Revenue in Acquisitions basically a month at this point but also growing 14% organically so but that still doesn't exp very powerful combination but that still doesn't explain how you you've done so many Acquisitions how have you been able to do so many Acquisitions in such a short amount of time let's let's leave leave aside I'm sure you're I believe you that

90:19 your your Beach head owners are amazing but still there's pieces to this that is to the credit of the three of you how are you how are you just that pace of acquisition how are you executing so that goes back to the first part Joe and Sean they they're two of the sharpest individuals I've ever met in my life and we all have poured everything into this for the last year and we all play Such different roles

90:48 and that's why the partnership works out so well I'm on the road probably four to five days a week without fail they are not but they are in the office most days past midnight closing all these deals simultaneously managing three different legal diligence streams four different Financial diligence streams and you know we Outsource a lot of the work like we have these great qov providers and we have this great Law Firm that we've worked with for every

91:18 deal so it's it's not like Joe is sitting there or Sean's sitting there you know crafting the legal dock by hand from scratch but to your point it's still a ton and and to do sizable transactions simultaneously is not easy but again that's that's why I have the two greatest Partners they've made the impossible not look possible be possible and I think it's you know that there's

91:52 no one person you can point to as the reason Guild has been so successful is because of that individual it's it's truly a group effort and everyone is exceptional in their own respective Lane and that's what's made Guild so successful and will continue to make Guild so successful you know what I remind people all the time is yeah we're going to surpass 200 million of Revenue and 30 million of e out by the end of this year but we're also literally less

92:21 than a year in from the Clos of our first acquisition I think we're N9 months in eight months in you know where are we going to be two years in where are we going to be three years in and so I I have very high expectations for what Guild can and will become whereas once I thought about it as hey let's build something that will play a role in the food chain you know I think that I think our ultimate goal is to

92:53 create the single largest garage door company in the United States and and frankly one of the largest Residential Services Platforms in the entire country well at this rate that doesn't seem fanciful but but Jordan and then let me ask you you attribute 50% to luck I don't know if you're being humble modest I I supect you are but but we heard you speak for an hour about this carefully crafted very strategic thesis

93:25 industry thesis and it sure doesn't feel lucky it feels like a an intelligent thesis come to life what where's the luck you know the Luck's in timing the luck is in h the luck is in the timing the luck is in you know other parties who probably had a similar thesis to us not ultimately deciding to act on it months before us you know I think one

93:57 of the super frustrating parts of what we do is so much is out of your control and there are so many factors that can derail what you're doing and so yes I think everything we try to do is intentional and I appreciate you saying the thesis was well thought out but you know there's all the stuff that goes on outside of what we can control contr that either breaks your way or doesn't and you know we're lucky

94:28 to have a good amount of stuff yeah break our way well fair enough those of us who experience good things there there's just a lot of good fortune there but just to distinguish that from yeah it's not like you fell into some crazy opportunity that's luck I I'm being a little semantic but but you know really this is you're you're getting there's good fortune going on here that you're able to do this but but there wasn't something

94:58 unforeseen that dramatically changed this to for the better really good that's correct that's correct well Jordan you're busy so maybe you don't want people reaching out but indulge me if people want to or if that person wants to go buy buy up buy up garage door repair businesses in Omaha I'm serious if if if we get three or four people to start building small platforms that would be the greatest outcome of this of this podcast ever but

95:30 no I mean I it sounds crazy to think that myself at 27 could give advice to other people far older and wiser than myself but people want to reach out if they want to ask about my experience I'm always happy to talk I'm pretty damn active on LinkedIn so just I guess follow me on LinkedIn message me on LinkedIn and you you know our offices are in New York city so if you find yourself there and you want to

95:58 get coffee as I alluded to earlier H an in-person interaction is better than Zoom interaction well that's very generous of you Jordan I know you are extremely busy because I am going to end our interview and go trick-or-treating with my daughter and you are going to go back to work so on that on that note sir thank you very much fascinating congratulations to you and the partners on what you built so far really inspiring really and and really an

96:28 education this is really we I think we learn all learned a whole lot about how to approach an choose and then approach an industry so wonderful interview thank you sir thank you for having me on I hope you enjoyed that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business