The Other Side: 3 Deals. 3 CEOs. No Filter.

Brandon (00:36) Hello, hello, hello. I'm very, excited about this session. I will make the argument. I'm most excited about this session, which is three CEOs who have Gravy members, which I'm very proud about, who came, saw and conquered.

They left corporate gigs. left, you know, security, right, to pursue this arduous track of acquiring a business. They are now on the other side of that equation. They are CEOs and presidents of their business and more importantly, owners of their businesses. And they are recent enough. We have folks, you know, in the last six months have acquired their businesses. We have folks like Mario has been

year and a half going on on two years now as CEO. And so these folks have experienced before and after that we can kind of call upon in recent memory. So with that, we're going to spend a quick second just kind of getting an introduction a little bit on the background of these fine gentlemen. And we're going to dive into what is this journey like? We're keeping things really transparent. Our goal is, and we joked about this before we started, was to scare you away, right? We want to

We want to get you inspired, but we don't want you to get inspired and not be in tune with the realities of what this journey entails. At the same time, right? You're here because you've done all the checked all the boxes, gone to the right schools, right? Are, you know, working at the right companies and you're looking for what's next. These gentlemen represent what's next. So first I'm going to start off with brother Mario. Mario is someone who, you know, is a Howard fellow, Howard alum. I got my bison mug here. he is.

He is the OG in this crew and that he acquired his business almost two years ago. And he went through a very, very arduous process to get this deal over the line. Today, he is the CEO and owner of Pearl Interactive. Mario, just give us a quick, quick, if you don't mind, quick summary of your background prior to becoming CEO of Pearl.

Yeah, absolutely. Thanks, Brandon. So, you know, background is in, you know, different areas of, of finance. I started in Wall Street finance and banking. I've moved over to consulting, doing M&A more specifically. Left, went to grad school and pursued investment management. And, you know, really use that to then, you know, saw a huge opportunity to

to grow and scale companies, was able to leave investment management. And that really segued into doing more M&A type of work. So I guess, gosh, it's been about six years since I stood up the company. We did a couple of deals out the gate. And then about three years ago, I set out on this specific platform to acquire Pearl Interactive Network. Excellent. We'll definitely double click on that.

We're going to move over to brother Rock Irvin, another Bison, another Howard brother who I've known for the better part of 20 years. he had already done some work in his world, but he had never, you know, really put the, the, the pedals to the metal and get out there to focus on buying a business out of Chicago brother Rock, tell us a little bit around your background before you, before you went, and acquired your company, Illumitech out of Chicago. yeah, absolutely. so.

My background, I started off in investment management, then shifted over to work on the business side of tech companies. That included working at cars.com. That included then going over and working at Vista Equity Partners on the operations side. And that's really where

Yeah, I learned about the PE space sort of outside of academics and you know from there, Brandon, like you like you alluded to, bought my first company with a more traditional search fund model, bought my first two companies in 2019. I've since moved, moved on from those companies and as of

August, late August last year, bought Illumitech here in Chicago and bought that one solo. So 100 % owner. And I'm sure we'll talk more about that and you know, some of the, some of the trade-offs there. But that's where I am now. Happy to be talking through this. For sure. So we got Mario, he's in Atlanta. Rock is in Chicago coming over to you, brother Mitch Harris.

Mitch is someone who is, his story is near and to my heart because he had a path that's very similar to one that I can relate to, which was coming from meta, right? And then navigating his way into a space where he realized he wanted to acquire a business. And now he's, I think we're 105, 110 days, you know, as CEO and owner of your business Vertex Communication Group out of New York. Mitch, tell us a little bit about your background.

Thanks Brandon. Great to be here as always. So I'm from Detroit originally live in New York with my wife and two kids and started my career in sales and marketing roles. So I was at Procter & Gamble, Viacom, did B-School and then transitioned into tech. As you mentioned is at Meta, also at a few other companies, startup, large e-commerce company, eventually kind of working my way up, became CMO a couple of times. All was going well.

Now continuing to rise, but there are a few things that were missing. And as I learned about the opportunity to buy and operate a small business, I started my search in February of 24. I searched for about 20 months in total from beginning to close. And the reasons were really because one, I wanted a true holistic operational control. I also wanted to remove the compensation ceiling.

or as much as possible, much as I could. And lastly, I wanted to make an even more direct impact on legacy for my family directly, but also on staff and community as well. And so recently acquired Vertex Communication Group in September of 25 and in month four and things are rocking along, but it's a challenging path, but excited to be here. Love it, love it. So let's dive in.

Brother Mario Mitch kind of described his why he wants to remove the ceiling. He wanted operational control over his, his destiny. What was your why? When did you hone in on, on this is the path, right? Cause this summit is about breaking down various pathways. You can launch something from, from the start. You can build a portfolio, you know, as you're working, there's a lot of ways to approach, you know, kind of this wealth building idea.

How did you kind of hone in on acquiring a business?

Yeah. I mean, I think it really comes down for me to having true autonomy and that's true autonomy of time. Uh, I hated those ceilings. I didn't like to be at this level or this level and you can't, know, you know, I remember, you know, being at, and this is a huge, uh, probably fortune five company. Um, and I'm talking at that time to their CFO and you know, he's telling me.

You know, we, we, we know exactly what your kind of linear track will be. You know, and I, I, I was taken aback and this was, you know, almost 20 years ago plus, but I was taken aback because, you know, here's a guy and you know, who's probably met me at dinner before and now I'm in his office the next day. And he's, he's told me, well, my ceiling of aptitude, you know, effectively could be, more what my professional trajectory could be here.

And I knew at that point and obviously before then, but that was an indicator that a traditional path just wasn't something that was for me personally. think it can work and it is viable for many people. But for me, I always wanted that autonomy of my own path to carve out my path. And it's not that I don't report to anyone. I certainly have.

stakeholders and business partners and investors that I do, you know, I do have to, to report to, but I think being able to, to, really control your own destiny, I think is, exciting. It's, it comes with its own challenges, but you know, it also motivates and gets me excited as well. Got it. Brother Rock. So we hear this, this idea of, know, and many of us have worked in these corporate environments. So we, want autonomy. We want to be our own bosses. Tomorrow's point.

It's hard to really not have a boss. And even if you get home, your partner might be your boss. So this idea of having no boss might be a misnomer, but this is a risk conversation. I would imagine a lot of the folks, the audience here, they're really trying to understand how does their risk tolerance measure up to this idea of buying a business. so assuming you wanted also autonomy, you wanted the opportunity to build out upside and capture that rock. How did you think through the risk calculation process personally for you?

Step away and focus 100 % on your journey.

Yeah, I mean, the the. So the conversation about risk, I think. Has or let me say this, the calculation around risk, I think has changed a lot for people over the last five, six years. Right, so I think we've seen we've seen hiring go from, you know, there's so many higher ups and so many good jobs out there, we saw like the.

the great resignation and quiet quitting. And I knew people who had two full time jobs. Which is just crazy to me, right? So so we went from that to a bunch of different layoffs. hear a lot of people talking about, you know, the professional ceiling. You know, a lot of people talking about having autonomy and and and what I don't hear people talk about who are like.

really excited about this path is like work life balance. So it's not that people are looking for a way to work less, but really, you know, just saying like, Hey, look, what I'd like to do is I'd like to be compensated for my work. Right. So I really thought about risk from a standpoint of if I continue to do what I'm doing, even for great firms, like I worked at some of the best firms, but if I continue to do what I'm doing, I'll never be

paid in line with the value I'm generating for the company. And that's not a knock on any company. That's just the way it's got to be. Right. And so as I think about risk and I'm sure we'll talk about like how you finance, who you partner with, what sort of businesses to go after and all of that. As I think about risk, what I'm thinking about is potential payoff versus the risk associated with that payoff.

And I think that what we've seen from a lot of corporations is that it could be even more risky if you find yourself in a spot where you have no control over what the next step is. or they decide to take a heavy AI strategy and you're on the customer support side, right? And then like, then you have no control. I, think a lot of people are finding that more risky than, going out and maybe pursuing their own path.

Brother Mitch, let's get into the numbers a little bit. So, you you said, hey, look, I want control, but I want to not have a cap on what I'm making. Give us the back of the envelope math of how you thought about the upside of making this move relative to your current state or even the downside scenario.

Yeah, I think that for me, it was not just the ability to bring in a paycheck every month or every quarter or whatever that was that I was receiving. Even when thinking about, you know, commission checks and things like that. But it was having a piece of that, but then also having the ability to make cash distributions to myself from the business that I own or the ability.

to own a significant portion or majority portion of a business that would appreciate over time. Where now we're talking about, you know, five, 10, 20 plus million dollars of a business that I would own and over time could either make a decision to extract cash from that myself or, you know, leave it in, reinvest it, do a variety of things with it. I think the point is owning a business now gives me the ability to make all of those decisions. The upside

is I think much, much, much greater than it was previously. Now in the short term, especially because I just bought my business, my cash that I'm bringing home isn't as great as it was when I was at my last professional job. That said, if I project out five years from now or even three years from now, assuming things go in a decent direction, then I'll start to have that tip in the other direction.

I think that's kind of how I thought about it. There again, there's different scales to this, depending on the size of business, how many businesses you have and all of that. But the point is, is that now I've got more control over that situation. Appreciate that. Brother Mario, there's many flavors of acquisition, right? So their size, and oftentimes the size dictates what kind of financing and partners you might need to bring on and what expectations are there for you.

How did you make your decision of how big of a company to buy, what that meant in terms of the type of partners or financing you need to engage in, basically the level of the game you want to play and walk us through kind of how you thought about that.

Yeah, I mean, that's a great question. So, you know, there's a lot of pathways and this is, you know, typically it's, it's, it's either a sponsored or self-funded pathway. Right. And so for me, you know, I met with both parties. I was obviously familiar through the business school circuits of the traditional search model where the economics sway more to the investor side and you know, there's

You know, there's an economic step up, you know, for the entrepreneur, but it's not that of the self-funded, right? You have a bit more control. So first it was, you know, settling on which pathway made sense there. I went down the self-funded route. know, I, you know, had confidence in my ability to, to source and structure a deal, put together a team, et cetera. And then the next stage for me was to figure out.

You know, what size of the company did I want to go after? Right. And, you know, this is at a time where you have PE and strategists going down market, you know, you know, then obviously anything that's too smart, didn't want to buy a job. Right. And I saw that a lot in some of the other pathways. and so, you know, I needed a certain level of infrastructure is what I would call it. That's people that's profit, you know,

or rather EBITDA that allows us, allow me to kind of come in and, you know, and really start to, you know, have enough to work with to start to, you know, add value. Right. And so I went out there, what would be traditional, a little larger than a, you know, typical self-funded transaction. I did not qualify for an SBA, which meant I needed to seek, you know,

different type of capital partners, right? So these are family offices, I engage private equity firms, you know, and other commercial lending and banking affiliates. And so, you know, ultimately, you know, that really informed the structure, you know, I could, I could probably spend the next hour talking about each of these different, the trade offs of each of these groups. But, you know, ultimately went with the commercial, you know, partner that

And we have a great relationship, you know, so just been able to structure something that again, allowed me to step in with enough infrastructure to Mitch's point, being able to trade my time for the value I'm creating, you know, work across a large team to, really build value and create value. and then, you know, just having that flexibility to, you know, extract it or hopefully, you know, liquidate at some next point.

Yeah, we'll come back to it's a fundraising. Rock the negotiations oftentimes, right? They start at home. If you have a partner, right? It's not you going out. Hey, we're doing this. We're doing that. They have to be on board. They need to understand what the tight enough the bootstraps a little bit so we can figure out how much runway we need. Help us understand how with your wisdom, looking at hindsight, someone who might be approaching this journey, how should they think about

having these conversations with maybe if they have a partner at home that's a good alignment. Yeah. Yeah. I'll, my wisdom. I don't know. I don't know, Brandon. mean, we'll, we'll, we'll see after, after I make my comments, we'll, we'll see how, popular it is. I would say if, if you have a partner, a spouse, you know, long-term partner, they gotta be the first ones to know.

Right. I mean, the the the risk associated and, know, we've kind of talked about it already. We're talking about potential downside risk post acquisition, right? A lot if you go if you go SBA route, you have to personally guarantee the loan. We're talking about loss of income if you take a self-funded full time approach.

Right. You go from being, you know, a high six figure, maybe more earner to making negative dollars. Right. People say zero is not zero. Right. You got to pay. You got to pay for all sorts of stuff. Right. Whether it's travel, whether it's help, all sorts of things. Right. So I would say no surprises right there.

your partner should be like the second person to know that this is what you want to do. And I would say extra points or it's probably it's probably your job being a good partner to sort of involve him or her as you even think about the process. Right. Is that, Brandon, is that what you're asking for? Because I have a couple more points if if this is what we're looking continue. mean, yeah, you're down the right path. Sure.

Okay, so, so, when I met my now wife, I was already doing this. and, this was my, you know, first acquisitions, that I, that I talked about, in the intro. So I was already on the path to buy a company. So this game is no surprise to her. but now going the solo route.

where I was searching, you know, self-funded. was going, using my own money to run my own firm and then acquiring the business with the assets I had accumulated over the course of my professional life. She had to be bought in not only, not necessarily to like the day to day of everything about the business, but she had to be bought into

you know, kind of what my vision is for the business. And the reason why that was important, it's not because she's working side by side with me on the business. She's not, she's in totally different profession. But it just makes life a lot easier when you're kind of going into this as a partner and treating your partner as the partner from day one, as opposed to bringing her, him into

into the story as you need to, as you need to make, you know, sort of a huge go no go decision, or as things go sideways, or as things are about to be even, even if they're about to be great, right? So like reading your partner and, keeping him or her in the loop the whole time. I think that's, that's the, that's the best thing you can do. and implied in that.

She's working. She's also working as well. So as we think about how do we run this household if we have kids, you know, having a two income household is a huge, is a huge, you know, safety net or booster to our ability to, you know, provide and provide security to our family. Brother Mitch, another security that's really important is our belief that we can actually get this done. Right. And so.

You know, I'm looking at Mario. He had this deal making background rock. He worked at a Vista equity coming into this thing. You're coming in as a sales and marketing guy and operator, right? But a lot of folks might be intimidated by the deal making aspect. Can I fundraise kind of all these things that go into acquiring a business and ultimately running a business? How did you perceive your skill set relative to the complete skill set that someone would need to acquire a business?

How did you make yourself feel confident in your ability to get this done? And how did you supplement what you felt were shortcomings maybe to get you to where you want us to be to be successful in this journey?

Yeah, yeah, I think for me, so I felt that I had the operational chops to be able to be successful as an operator. The initial challenge for me was understanding how to get the search done. I did not come from any sort of an M&A finance background whatsoever. So a lot of these concepts were new to me. And I think what helped me through all of that and gave me confidence was talking to people.

I talked to lots and lots of people who had done this before, who were currently doing it. talked to partners in the space. Part of this is be joining the gravy network as an example, and just connecting with folks that were doing it or had done it. to give me perspective, I met folks from all sorts of the spectrum that were really successful. We're really good at own, own owning businesses, buying businesses, and then operating businesses. met some folks that had bought businesses that, were, were suspect also that.

That also gave me some confidence that I could, if they could learn this process that I can, I can certainly learn this process as well. And I think that's what ultimately helped me. I'll say, I say to anybody, I think that the searching portion, I think you can learn that and you can learn it relatively quickly. Now you have to put your head down. You have to have a lot of perseverance. You know, the search process is very binary. So, you know, while you're searching, it's kind of as Rock was mentioning, right? Like you're going negative.

for a while, you're not gonna have a lot of successes to speak of until you kind of get to the end and the close. And you got to be able to weather that storm. I think that's an important characteristic and trait if you're gonna kind of embark on this endeavor to be able to have that ability to take the punches, if you will, because there's just, there's a lot of nos you're gonna get throughout the process, but you're only looking for the one yes. And once you get that one, then things are gonna be, things are gonna be on the other side. So at the end of the day,

This, can be a lonely journey as well, it barking on it. So as much as you could find support from your partner, your family at home to other folks in the ecosystem, that's going to help kind of propel your journey as it did mine. long was your search process, Mitch? So I, I, I searched, for about 12 months until I got into my, the LOI that I ended up, well, maybe about 12, yeah, 12.

14 months until I got into the LOI that I ended up closing on. And then my closing process was about seven months. So about 20 months from start to finish. you can make the argument that actually is on the earlier side of things we've seen as well. So you need to prepare yourself for 36 months, right? And I think some folks need to, to just ingrain that in their minds that this is not a speedy journey. In fact, we have another Gravy member who went

three years searching and ultimately didn't close the transaction because he maintained the discipline of saying like, it's the worst case scenarios that I step out there and acquire a business that doesn't make sense just to have acquired a business, right? But just wanna, again, the goal here is to not scare people away, but give them a realistic view of how long these things take and how, you you can even have an outcome where you're unsuccessful in closing the search. Brother Mario, when it comes to

best practices in this search process, right? You need to have your buy box and you need to be focused. How did you decide what industry you were going to target? What's your buy box was? You know, a lot, a lot, hear it, you know, help people help you. The more specific you are, the easier it is to be, you know, to be top of mind with something that fits whatever you told people comes around, right? And you're helping people help you by focusing.

Give us a little bit of guidance around how you approached that, how you chose your industry, how you kind of kept that niche in focus, or maybe even your journey to getting a little bit more selective over your process.

Yeah, I mean, and before I jump in, I think because you're on your own at that point, you're leaving corporate, it is absolutely critical to treat it with maybe even a heightened level of rigor in organization, right? So you're not having to clock in or show up anywhere. You don't have to do that. It's very unstructured, right? So starting there, you have to create that level of just structure. I'm going to knock out these things.

Here are my day milestones, here are my weekly milestones. Here's what success looks like over these increments, over a month period, et cetera. So that's the first thing. The second thing is, was, initially there's a lot of ways to approach this, and I approached it a few different ways. I initially started down a path of a franchise, and I was looking at multiple franchises and franchise,

Yeah, to some extent can be kind of shunned upon in this space and that, you know, you're not, you know, I don't think there's any unique merit in creating a business or, or taking over existing business. I mean, a franchise is, you know, it be a really great system to, build and scale. met, you know, like you mentioned, met many folks, you know, through network that you had done very well in that space. And, know, I very interested in, you know, pursuing that path. met with a lot of.

franchisors and you know, so these are the parent companies, if you will, you know, and looked at a multitude of industries, you know, from boutique fitness to, you know, to, you know, more niche based, you know, home services, et cetera, or even home health, you know, looking at lot of different verticals, you know, ultimately decided against that path for various reasons.

Uh, and then I, it took me down another path. Again, going back to, you know, earlier mentioned of, you know, I wanted a certain level of infrastructure. so part of that decision was built into, know, I didn't want to launch a franchise from scratch. Right. So sometimes you jump down that path. You're kind of put on a Chevron, you know, a conveyor belt, if you will, you know, and you just kind of get, you either can get, you know, routine then like a pathway.

of building out, you know, territory, if you will, or franchises that wasn't my interest in none of the, you know, none of the opportunity sets that I looked at had a large enough opportunity for me to step in with a risk adjusted, you know, outcome. So that took me down a path of, you know, really determining, you know, what are the other industries that excite me? I landed on, you know, I tend to like things that, you know, needs

Uh, they, they had our, you know, their growth markets, but they are, you know, they're migrating from an analog to a more tech enabled, you know, solution. Right. And so that's, you know, so really starting to identify, you know, an industry and, and, and, and, and, and customer support and, and, and, you know, business process outsourcing that allowed me to, to then tailor into the, the federal government space, the commercial space as well. And they kind of really.

You know, I got, I got really deep into the stakeholders that operate in or around that area. Right. So that took me, you know, from meeting to meeting attorneys and consultants and brokers and bankers. And, know, really, I, you know, really ingratiating myself across this network. ultimately finding the deal that, I found. And we'll get into the deal specifics, in a second, brother rock, let's talk discipline. Right. So I would love to hear.

to what extent you stayed committed to the thesis you came out of the gates with it through the evolution of you ultimately closing a business that you closed, but also this point in terms of how you approached the search itself. So give us the tools you use, the systems you use to really lock in, whether it's a CRM, an approach that you deploy. Tell us a little bit, kind of give us a deep dive into your active search journey. Yeah, yeah.

So, so a couple of things, if I start all the way at the top, what I was looking for, I kind of put things in like, I put things in these two buckets. You the one bucket was this is my proprietary outreach. Right. And I'm sure people on this, on this call, you know, be familiar, but these are the companies that I'm going to pick up the phone and reach out to. I'm going to call my friends, my network.

in this space, tell them I'm interested, right? And in that space, I really focused on my background, right? So my competitive edge and those spaces of B2B, SaaS, anything like automotive data and tech, know, that sort of stuff, I had a reason to, I had a built-in reason for business owners to want to talk to me, right?

Worst case scenario, you get someone who's got 20 years of experience doing some of the things you've done. Worst case scenario, if we meet up for coffee and you say, I'm not interested in selling to this guy or working with this guy, you can at least hit me up for some information. So as I have free consulting, so that hit a lot harder than me picking out something that I thought was cool and doing a bunch of proprietary outreach right there.

I also really heavily use brokers, websites, platforms, all that sort of stuff. Right. and I use those brokers, but, but, but then my discipline was around the type of company. Right. Now, Brandon, remember back when you said like, Hey, why did we go into this? Everybody talked about autonomy, cashflow. You talk about all this other stuff. Nobody said, cause I want it to be the number one in a thing I was doing before I started the search. Right. So if I can maintain.

some discipline around, need it to be Chicago. I gotta be able to get to my place, my people, my clients. I gotta be able to get to that stuff in 20 minutes, right? So I maintain discipline around that. I maintain discipline around B2B. I didn't want a go direct to consumer. I maintain discipline around, I need this to be a lower competition service.

Not meaning there's a monopoly or anything, but meaning, you know, you can come in and if you have a good product that you do right by folks, you can win more business. So that's how I split it out. And that was my discipline for the type of companies to look at right out of the gate. On a weekly basis, every Monday I did brand new. I went to all the different websites. I, you know, I scoured all over the place. I did that every Monday. Why only on Monday?

One, because that's generally when everything is refreshed. But also. I lost count, but I think I got maybe 7000 no's, OK, and I can't have those no's all day of the week. So Monday, Monday was like, take your medicine, go get it, go do you know, get all the no's, get all that stuff. And that way you're not driving yourself crazy. Seven days a week.

Right. It's the same amount of pain, but it's Monday pain. We don't like Mondays anyway. I didn't lose anything. Right. So it's a it's just Monday day. Then Tuesday, I had a follow up at call back Wednesday. I had a refining my outreach to like to those brokers, to to, you know, estate planners, all that sort of stuff. So I had a weekly and Mario talked about this, right. Like I had that regimented approach.

That way two things happen. One, I knew every week what I was gonna do. But two, every weekend, there was no doubt in my mind, if I followed what I was supposed to do, there was no doubt in my mind that I had done what I was supposed to do in order for me to find a company. Because here's the part people don't tell you much about. Mitch talked about 20 months to find the right company. It took me about 20 months to find the right company as well.

Through the course of that process, those ups and downs are crazy. I went like at least five times, I was like, what the hell am I doing? Stop this. Go make a bunch of money with no risk, right? So it's a, need to have some sort of a check-in to make sure you still feel good about your output, knowing that the system will work if you keep working it.

Right. So that discipline not only helped me land the company, but it helped me keep some sanity too. Love it. Brother Mitch, tell us about your buy box, how you shaped what you were looking for, to what extent did that maybe evolve over time? And then also your systems, you're, know, if you were to reflect back and talk to somebody just getting started now, how could you save them a bunch of time by saying, these are the tools I use. These are systems that really

made a difference for me.

Yeah. Yeah. So I, uh, my buy box was somewhat similar to rock. And everyone's going to have their own few things. wanted something that was, uh, know, cashflow positive turning at least 750,000 in EBITDA. wanted, uh, you know, at the time I think I started with an EBITDA ceiling at like 2 million, but I eventually raised that. Um, I wanted something that had at least five employees and a general manager. was in the B2B services space.

a few other spaces, niche distribution, home services as well. I had a somewhat limited geographic search. So I had seven metros that I was looking at. And then a few other nuances, but that was kind of how I approached my search. I did both a brokered and a proprietary search. I was looking for deals that were on market and deals that were off market. The deal that I ended up with was from a broker originally, but I was an LOI with deals that were proprietary.

I hear a lot of conversation on what are the best methods to search. And after all of my experiences, I don't know if there is a best method to search. I think the important thing is to choose a method or methods and execute really well, be disciplined as Rock was talking about, and just go really hard at it and have a willingness to pivot that's needed. Cause I think I've heard stories about a variety of methods.

to search and people have been successful in a variety, provided that they have just gone hard, they were creative in the way that they went about it. And I think that's the most critical thing. Again, my deal ended up being a brokered search. You know, a few things that I think changed throughout my search. Number one was the size, as I mentioned. I opened up to larger deals throughout my search because initially I didn't know how would get a larger deal done. But as I kept on doing search, I they kept on connecting with folks that had done larger deals. I Mario mentioned that he did a larger deal.

And he was probably one of the folks that I connected with early on. it just taught me that the most important thing and the hardest thing throughout this process, I believe is to find the deal. If you find a good deal, there's money out there, to, help you close it. There's support out there to help you close it. Hardest part is finding the good deal. And so I ended up opening up my search up, to, to some larger size deals as well. industries, that was another area where for the most part I've ruled out some stuff.

after speaking with business owners, speaking with brokers, digging in, doing research. I think that that's another piece of advice that I would give folks is, you know, when you're early on, the best thing that you can do for yourself is to just do, just go, just start talking to folks, pick up the phone, get some Sims, do whatever you have to do to start getting in and looking at deals and talking to business owners, because that's where you're to learn the most amount of stuff about.

the companies about the deals, about the industries, and you'll just kind of accelerate from there. And the last thing that changed in my search process was that over time, I ended up stopped looking for the perfect deal, realizing that they just weren't out there, at least when I was searching. And so everything had a little bit of hair on it and sometimes a lot of hair on it. And instead I started focusing on what are mitigation strategies that I could employ on this particular deal to help to reduce the risk.

that that piece caused. So I ended up buying a company that had some customer concentration on it. And the traditional thesis says, don't get a company that has customer concentration. But I was able to structure it in a way that mitigated just about all of that rest of the customer concentration. So those are just some tidbits that I kind of picked up on my search. Love that. Love that.

Mario, you went big with your deal. Let us know how big your deal was. And then where I want you to focus on is how you went about the fundraising process. Maybe what people may perceive to be the case that you found to not be true. Mitch kind of made the comment that if you find the right deal, getting the money from investors is the easier part. What's your experience and how did you manage the fundraising process?

Yeah. So, you know, again, going out there, bigger deals. the, you know, at acquisition top line was north of, 50 million. and, you know, I think the trade off there is, know, even that self funded, you're going to have to have other capital partners, right? So you, know, it's in structure really, really matters. You know, you know, my, you know, I don't, I don't think I've seen, I see.

I've probably seen thousands of deals over the past few years. I've never seen a perfect deal, right? So anything under a hundred million, I think you, there's going to be some level of hair or a lot of hair on the deal. And so you have to, you have to contend with those trade-offs. I really do think that zooming in and putting yourself in the operating seat before you're in that operating seat, you know, as much as possible. don't know if it's a ride alone.

if it's extensive conversations, if it's really kind of shadowing and understanding the day-to-day, not what's in the sim. The sim is oftentimes lipstick on a pig, right? So really peeling back the layers and saying, what does this really look like? it's mentioning this, getting two or three layers deeper in analysis, I think was critically important because

You know, oftentimes you, you as the stakeholder, I you're taking capital risks, you know, you're taking, you you're the being in that capital and operating seat, you know, it's going to be arduous, right? I mean, it's, I can't even count how many sleepless nights and, know, all the stress is, you know, sweats and all that. It's, it's, it's the hardest thing I've ever had to do bar none. Right. And I've done some things, but

Yeah, this is, you know, by far the hardest and it's hard for a number of reasons. think, you know, going back to your question specifically, Brandon, I mean, when you're going out there bigger deal, that means that the capital structure is going to be important. I then had to bring in capital parks, right? So that, you know, got me talking to, you know, more institutional capital and, you know, other places and, and is there alignment with how I operate and what their goals are? Right. And I, you you can often find.

some misalignment there that can show up down, down the road. And it's not so great, right. Um, you know, because again, you're going to have, you know, different challenges with operating and, you know, uh, effectuating the strategy and plan. And you want to make sure that you have the right partners on board. Um, you know, so I do have, you know, other partners, some are strategic partners. They either have, you know, run and scaled companies before they, some have been.

directly in my industry. know, so for me, I was looking for the right type of capital. And to Mitch's point, you know, really identifying a solid deal, being able to structure that deal with, you know, downside mitigation was critically important. So when you're going out and you're trying to identify the capital and the partners that can join your journey, you know, you get them comfortable with.

with where you're going and it just really helps, you know, affirm your strategy, you know, more as well. Got you. All right, Rock, let's talk a little bit around like this idea of getting into the red zone with a deal and you're in the middle of diligence. You're trying to get this thing across the finish line and, you know, you and I were locked in and there were false starts and it was an arduous saga, I would call it.

Give us some visibility into this diligence process when you are under LOI, you're trying to get a deal done, the types of things that come up, the types of curve balls coming your way, the types of things you see from sellers that, wait, you surprised me with this, like right now in the game, like give us an appreciation of how real this phase of the deal process is.

Yeah, so so I'll I'll. Most start off with the barbells here. I would say going into the deal, Mitch brought this up. Most deals have some hair on them, right? Mario echoed it, said, I've never seen a deal without here. Right. so you start off, especially for me, for for for me, because I was a team of one.

And at my most successful, you know, of sourcing phase, I had three deals, like ready. So I'm coming into that process and what I'm thinking is, I know the hair I think that's on this deal. And for diligence, I think we have to be really careful, especially folks who have that deal background, worked on much larger deals, worked at much larger companies and corporations and all that.

You gotta be clear about what is hair on the deal and what's just a company not having an FP&A team and they don't have all the metrics you're looking for. So if you've got legit hair like Mitch talked about, maybe it's customer concentration, I need to test the strength of that relationship. That's your due diligence job. You're trying to make sure that things that are hairy about the deal aren't deal breakers.

And I think before you even get into exclusivity, you're saying, I'm checking to see if this customer concentration is as much of a problem as I think it could be. That's what I'm looking for. Right. If they had a they're off by a thousand bucks here or there because they move from cash to accrual accounting, like, catch somebody else with that. I don't care. I don't care. Now, the other part of that is

I've got reasons why I really like the deal. And my due diligence on that is I need to make sure what I think is good is that good. So when I'm thinking about that diligence process, I'm coming into it. And these are going to be the hard, and you're talking about like, what are the hard parts? These are going to be the hardest parts where because of your in-depth analysis, you're revealing something to the owner that maybe that owner did not know about the company.

or you're presenting it through a lens that the owner's not used to presenting, or not used to seeing the information. And then that's where analysis becomes like coaching and still selling. Like you should still do the deal or we should retrade or, mean, it's not retrade if you find something in diligence that's like.

changes, you EBITDA or something like that. But when I'm thinking about diligence, I'm not thinking about how do I find one, two, three mistakes that were made on accounting or something like that, because the accounting is not going to be up to snuff. I come in thinking this is not going to be the accounting we learned about in business school. So let's just get that out of the way. The things I'm looking about is can I mitigate the risk on whatever hair that is on this deal?

And then are the things that I think are good about the company, like are they provably good during diligence? Those are the things I'm thinking about. It's like, if, if this company is, cause if you decided you liked the company, then you like it a lot. But this company is, you know, 80, 85, 90 % of what you think it is. You got it at the right price. I think you still take that deal. Love that. Love that insight.

Let's switch gears a little bit. Brother Mitch, you're a little bit over a hundred days in as the CEO. know, and I always say this, when I think about Mitch, I think about this little flip line. See it, it, buy it, own it. He saw his lifestyle of acquiring a business, become the CEO, as we talked about before. It sounds sexy, right? How sexy is it, Mitch? You're now in the seat. You're the owner. The pressure is on you. The opportunity is on you.

Give us a glimpse into what life is like a hundred days in as CEO of this company that you bought. So I'll start with the good news. There's a little bit of it, which is I have, I have some amount of flexibility, which I, which I really appreciate in the way that I go about my day and what I choose to prioritize and all of those things. And that's one of the things that I was after. And that's great. but it is, it is an ugly situation. it is a hard situation.

It's challenging. Now I wanted this challenge. think that it's, I'm growing from the challenge. think that I happen to thrive in it and there are pieces of it that I really like, but it is not a glamorous situation. It is grimy. It is something that requires me to wake up every day and have a high level of flexibility not knowing what's gonna come at me.

There's a lot of administrative stuff. And again, I'm speaking from where I am in month four, knowing that things are going to evolve and change, but right. 75 % of my time is spent on something that is administrative, right? It's something in quick books and figuring out that it is, you know, an employee's got an issue with a healthcare benefit policy and I've got to go in and dig into a whole bunch of research and try to go back and forth with the benefits administrator. I've got to figure out how to navigate state tax websites, right? All this stuff that does not sound fun and it is not fun, but.

It's a requirement to run in the business, especially when you start out, you got to get a strong foundation with all of those things. but it is, I'd say the other part of it that is not a surprise at all, but it is, you know, once, once you start doing it, it's, it's one of those things where you just have to experience with just, people, right? I spent a lot of time with people and that is one of the most critical things to my business. And I think a lot of these small businesses it's who's on your team. You've got relatively few staff members. so.

Making sure that you've got, you understand who the team is, making sure that you are spending time with them, that they understand where you are. If you need to make any changes, right? Making sure you're making those assessments and making those actions, you know, as, most appropriate. I think that those are some of the most critical things, but you know, I go back to the, if anybody's thinking about owning a small business and running and operating a small business, I think you need to be prepared to do a lot of.

just roll up your sleeves, administrative stuff that is not fun, that you're not gonna look forward to doing, but absolutely needs to get done. And I think my hope is that over time, hey, I'm gonna find some ways to try to make those things more efficient. Maybe there's some ways to outsource some of those areas. I expect some of them to just to stay over the long term and be just to get comfortable with them, but all in service of making sure that the business is healthy and strong.

Yeah. And keeping your eyes on the prize. talked about this in a previous conversation around if you do an SBA loan, which Mitch did, it typically has a seven year timeline before you pay off that loan to the bank. And so a large piece of your EBITDA that's paying off that loan is now going to you, right? And so that could be a liquidity event. That could be you bringing in someone who's going to be a GM. You it can be a lot, you stay on with a lot more flexibility.

That clock is started for you, You're a hundred plus days in on that clock. And so I want people to understand that there is a grind, but then there's also a payoff that is making it all worthwhile. Brother Mario, I remember this man, like it was yesterday. You had a baby on the way, a working wife who is a high powered attorney. You had just closed this deal. You got a thousand employees and you got a bunch of clients all over the country. You have to basically, you know,

make sure the business is in a good place and make sure you're not running away. How did you survive just the pressure of stepping into that CEO role that first year?

You know what, at hindsight, it sounds crazy, right? Cause you have so many major life events happening all at once. it's not all at once, but kind of in a sequence, but close, close timeline. Um, you know, for, for me, you know, just kind of, I don't think I took a day off, you know, that first year from being honest, not, not the weekend or, any time it was, it was by far the hardest.

year for many reasons, not just the hours spent, but the mental load. You know, for me stepping into a new company with new team, you know, you have your, you know, your thesis that you're, you're walking into the business that you're trying to put in motion. And then you have the incumbent, you know, kind of strategy that may or may not align with that new plan. Right. And there's a reason why, you know, you may need to.

prioritize certain items on that plan. So yeah, for me, know, it was how did I balance it? I don't know. Maybe it was just, you know, insanity and that I was in the midst of it and I didn't realize, I never took time to just sit back and realize just how hard that period was. it's not, you're never out of the woods, I don't think, or at least I'm still not, you know, there's still things that happen, but I think.

You know, for me, I was just so maniacally focused on, you know, hitting milestones, getting the priorities together, getting a team on board with the new plan and, you know, really building rapport with the new team and, you know, identify, spend a lot of time recruiting. You know, I, had some big systems projects, right? And, some of these things can take, you know, multiple years. We truncated those into a six to nine month period, you know, for, for.

you know, various reasons and so really just being able to, to, to drive a lot of these outcomes. And I think, you know, to your point, having a thousand employees, you got to work through people. Right. And I think that was the other thing too, is, know, if you're going down this path, you typically have been, or you are a high achiever. You're used to operating at the highest level. Mediocrity is just not, it's not in your DNA. Right. And so

you know, really working through people and setting that level of expectation and accountability, you know, an obsession around excellence. You know, I think that was also another challenge, right? Just building and driving that culture, you know, throughout the company. And there was a lot of pushback that I got, you know, candidly, right? So it's not that everybody accepts you with open arms and they say, okay, where's the remit? Where's the goal? We're behind you, full speed.

You know, typically I've heard this and I think it's somewhat true when you're stepping into a company, 20 % of people are going to be distractors. They're not going to support you, right? The other 20 % will get behind you and then that 60 % they're trying to figure out which side that they want to go with. Right. I, you know, luckily I've managed to get majority of those folks on board and, you know, recruit the others as well. But again, it's a mix of how do you, you know, how do you,

You're really, really lean in and drive those outcomes. And I think over time, you know, you're setting a system, you're setting the North Star, you know, you're, really starting to build that flywheel. And that to me is what allows me to kind of step back and delegate. And now I'm able to work on your more strategic things without having to be as much in the weeds of everything. Right. Cause you know, there, there are many days if I didn't show up or think about that one thing,

It's just when I get done, I can say that those days are not as often as they are as they want. And I appreciate that. And brother Rock, I'm going to close it out with you because I want to bring in the human element of this thing. And I know you were in the same nucleus group as Rock. You saw the before and after you heard the commitments he made as a future dad and as a husband to balance these things. Right. And so and holding folks accountable to

who they say they are and how they wanna show up when the pressure is up, right? It's not when things are comfortable, it's when you're in this gauntlet that Mario's talking about that it matters. And also I gotta shout you out, Rock, you're like a player coach. As you were going through your search process, you doubled in as a coach for our nucleus groups to help gel them together in their experience to kind of create this peer circle of folks that in some ways,

you can talk to about things that you might not be able to talk to the same way as your partner because they don't have the same biases. They don't have the same, you know, connection to the realities of what you're going through. So what would be your thoughts in terms of just the mental, you know, kind of journey that you have to go on? How do you got to, you know, how you have to prepare yourself to be able to weather the ups and downs that you talked about going to try to get a deal over the finish line. And even afterwards, the CEO where

You got what you asked for now. You actually have to show up and deliver, right? The game in a lot of ways starts once you hit the clock, right? Not the win is the deal and we won the game. That's not how it works. So, Rock, give us a little bit of a perspective on just how do you build up that mental resilience?

man. Yeah, that's a big one.

So this one's interesting and Brandon, you're very generous with your description here. But this one's really interesting because I think you started off, we started off the session talking about, why do you want to do this? So having that why, I think that's something, and I'd love to get everybody else's opinion, but I think that's something that I'm able to draw on.

when those days get really, really tough, right? Having a group of friends who are maybe going down the same route and a group you can talk to, know, Brandon, like you just said, Mario and I are in the same nucleus group. we've had, I mean, Mario, you know, we don't have to get into detail. We've had like some pretty...

candid, straightforward conversations with each other because, this is, sorry, I want to be clear about what I'm saying. This is the folks who are listening to the one presenting the information, reminding that person two, three months later, whoa, whoa, whoa, Here's what you said last month. Here's what you said the month before. Here's what you said you were gonna do and you're not doing it and

We gotta know why, right? So having that sort of a group around you sort of keeps you honest even after you buy the company. That's been my experience. So knowing what the why is, what you need to do, like I talked about at the beginning of the week, knowing what you need to do at the beginning of the week for you to feel good about your effort, right?

Cause that's the part that I think drives people crazy is that I keep doing what I keep, I keep working so hard and I'm not getting the deal closed. And it's like, if on Monday morning or Sunday night or whatever you want to do, you're saying if I can accomplish these things, then I'm doing my job, right? This is old, like you, it's trust the process. If I can accomplish these things, I'm doing my job. That keeps you, or that kept me.

mentally locked in for longer. And I think I was able to endure some of the more difficult parts of the search and now even as an operator. So I'm going back to locking in on why you're doing it in the first place, putting a process or some discipline in place. So you make sure you're doing everything you're supposed to do. Because sometimes, especially with search,

It's not about you. Like you could be doing everything right and the seller at the 11th hour says, nah, I'm gonna leave it to my daughter. What can you do? What can you do? Right. So like having that, like that keeps you sane knowing that I'm doing what I'm supposed to do. Having a group you can check in with, they keep you honest and accountable. And the last thing I'll say is although we have these sort of high ambitions,

Once you get in the role. I remember my first day on the job, I was so underwhelmed. I was ready. I went in, I gave my speech to everybody and the looks in their faces were was more like you're going to have to check, right? You know what I mean? They're not going to believe what you say. It's really going to be more than saying like, look.

I'll, I'll believe it when I see it. Right. But for now, just keep the lights on, keep the money coming in, keep the lights on. Right. So those are the things I think about, right? Like just being grounded and in your expectations as well and being willing to wake up like I did this morning, because my team is out in the field, wake up, come in early and shovel snow on the sidewalk. Right. Like that'll keep you grounded.

So staying grounded and we'll all look up in 10 years and say, man, we grew this thing much more than we thought. But that's the way I look at it. I love that. look, I mentioned to the guys before we started that we could talk all day. I could do an hour with each one of them. But our mission at Gravy Wealth is to put these folks in the light of the new gladiators. They left secure, high paying jobs, took on the risk of

putting themselves in this gauntlet of acquiring a business, acquired the business, and now they're well on the way, again, through a lot of trial and tribulation to creating opportunity for themselves, their family, and their community. So audience give a round of virtual applause to brother Rock Irvin, president and owner of Illumitech out of Chicago, brother Mario Antwine, who's out of Atlanta, CEO of Pearl Interactive, and brother Mitch Harris, who is

CEO and owner of Vertex Communication Group. These guys are inspiring the next generation of acquisition entrepreneurs. Just want to say thank you. They are case studies for gravy wealth of how this can be done. They've been very generous with their time. So I want to show some gratitude off to these guys making more more millions and millions and and you know, being bastions of hope for you know, their community and folks like us who are who are thinking about it. And you're making us you see that you let us know that the water is

is warm on the other side. with that, we're going to go ahead and adjourn. Appreciate you guys. Talk to you soon.