Why You Shouldn’t Take Minority Stakes in Portfolio Companies

0:00I have a portfolio company in Brazil with >> Portfolio company? >> Yeah. >> Okay. >> 14 invested business. >> Okay. >> Last year we did 110 million in reais, which means like divided by six. >> Okay. >> Yeah. Yeah. >> We're at anchor though. It's good. >> Yeah. And this year >> six and then divide it by six. You're good. Okay. >> That's true. That's true. But I live in reais. >> No, you're good. Do you own Do you own 100% of all of them?

0:26>> No. We have like a minority that's one of one part of them in question. >> Yeah, it's going to suck. Yeah, keep going. >> This year we are aiming for 200 million reais. And we I I always thought it was a smart move to have the minority because I have the the the founder aligned on the >> you feel about that now? >> Yeah. >> Yeah. >> I It's good and bad. It's good and bad.

0:53Because we can grow really really quickly. >> Yeah. >> Uh but we don't have like different inside leaders for each area like you do like the sales, the HR and the thing like that. Do you think that structure could work for a smaller business especially when you we have like 20 or 30% of the the share? >> Centralizing services for those companies?

1:18>> No, not service like you do here. You have like the special team to help this this this this >> Like could you or should you do that? >> Yeah. >> No, it won't make sense. >> No. >> Financially? >> Economics. And and all >> They're not big enough to afford the talent that you need that you would like the talent of this team would eat up 100% or more you'd literally be losing money and then you have to really bank on the fact you can exit these positions but given the fact that those positions are small and super liquid that would not be a bet I would make.

1:45>> Okay. And mostly of our companies are in full products. >> Okay. >> So online courses and mentorships and thing like that. >> Yeah. >> How would you protect to type of business consider AI? I think we we're already seeing that the the persons are not wanting to learn, they want the answer. So, how would you actually protect this? >> I wouldn't.

2:10>> You wouldn't protect? >> I would try and make as much as you can and look for a different vehicle. >> Okay. Thank you. >> If you are a business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So, my team and I put together the $100 million scaling roadmap, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly, where they got stuck and how they got past it. And so, we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources and finance. And so, no matter what you're struggling with, someone else has already struggled with it and solved it. And so, I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out on the thank you page you can just book a call with my team and we will look at the business, see if we can help and if we can, we'll invite you out to Vegas and we'll do this in person live.