Private Equity Firma: Wachstum durch Zukäufe oder Bestandsfirmen

0:00Unternehmer/Gast I would require companies in the UK and Dubai. Um, current revenue across the portfolio is about 35 million. The metric isn't so much want to get to a revenue metric. Want to try and create a minimum around 50 million enterprise value. Do you own all of them outright? No. So, it's it's varied. I think the problem is do we focus on building out the double down on the companies we already have, grow the EBITDA that way, or do we keep acquiring and build the EBITDA through acquisition? How many do you have?

0:3014. 14? Are they similar? No, that's the thing. So, if we were to grow through acquisition, we'd have to try and create synergy down the line. Yeah, so you're you're in a very classic kind of PE no man's land. Uh, so you have more companies than most funds would ever have. Um, and you didn't pursue a synergistic strategy in order to accommodate volume. And so, on one extreme you have like Constellation, which you're probably familiar with in Canada. It's like they only buy vertically integrated SaaS, and they go sub 3 million, and they just do 100 deals a year, right? And they just know their playbook.

1:05Alex Uh, on the other side you have traditional PE that would have a variety of different businesses they buy, you know, detail shop, and then a supplement company, and then a whatever, but they only have 68 companies in a fund, and they have a decent, you know, decent holdco team to to to add value um to the company. And so, if I were in your position, first thing I would do is probably ask myself who do I want to be when I grow up in terms of what you want the actual day-to-day of the to be, because you can hit 50 on either of those paths, right?

1:32Alex And so, it's which of these do I feel more like more me? Like do I feel like I do have a couple of these businesses that you're like I really understand these ones? Um, and if you don't feel that way, then I would probably look at these and go 80/20 and say, "Okay, what's the 20% that's driving 80% of the of the enterprise value?" And trim. Honestly, I would just like go completely passive on those ones, or just return equity, or do some sort of deal so I can get my attention back, and then double down on the ones that you are good at. So, this gentleman who had a had a PE firm uh suffered from a classic issue that I cover in the Offers book, which is that he had not committed to the niche. So, this is page 38 of the book, and I tell the story where um I try not to niche slap people, which is that they need to pick one niche ideally. Now, this gentleman had basically two paths that he could follow. He could follow a more concentrated path of just a few companies that could be disparate or different in nature, but because of a team of five-ish people, he could probably preside over those call it six companies that are the the better ones of the portfolio, double down on those, inject capital, bring, you know, recruit higher higher-level talent, maybe improve the strategy, and then grow the companies.

2:47The alternative path um was that he just gets really vertical, meaning he tries to get as many uh companies that are of the same type so that he can see trying to use fancy words, but synergies between the companies. So, that they all together, kind of the sum of the parts is greater than the whole, because you can centralize some costs, which adds profit to all of them. You can have cross-business learning, so if you have 10 HVAC companies started by 10 different founders, all of them are going to have a few things they do well.

3:16So, you take the best practices from each of them individually, and then you implement them across all of them. And so, you get this cost savings off the bottom line by centralizing costs, and then you distribute out best practices. And so, that is a typical uh kind of private equity play, which is a roll-up play, where you can buy 10 things for a million dollars, and sell all 10 together for 50 million. And so, he was obviously shooting for a 50 million dollar exit. And the crazy thing is, and this is true of entrepreneurship, is there's a lot of ways up the mountain.

3:43The bigger the goal is, the fewer the ways up the mountain there are. So, you want to get to a trillion dollar company? Well, there's you have to you're going to have to do some crazy new technology that probably doesn't exist um in order for you to get there. If you want to have a 50 million dollar exit, you can do that with just about any business by just getting it to a decent amount of size. And yes, that includes chains of brick and mortar, that includes online like you can you can absolutely do it in any niche, no matter how small it is. So, if you've hit a revenue ceiling, or your entire business relies on you to grow, then I'd love to invite you out to our headquarters here in Vegas to learn how we scale. It's a my team spends 2 days with you to identify the thing that's holding your business back. And so, if that sounds interesting, click, book a call, and if you're a fit, we'd love to potentially see you out here in Vegas.