Buyers and Builders
00:06:52 · Mikk
[00:06:52] S0: When it comes to the actual outreach, did you just sat down and set like specific goals? Because myself, like a lifelong salesperson. And when I was just doing an podcast episode with Ramsey, the co founder of Evergreen, they've done so far 160 acquisitions. And they said that when they first got started, he reached out to those individuals who have who has been doing outsourcing for living. And they really got the process down to the number, how many calls they have to do. And then it's very easy. You just wake up in the morning, you have your breakfast and you just go to the office and you just start calling and meeting with those businesses. Did you have any sort of data you were going after or you were just
00:07:38 · Felix Jander
[00:07:38] S1: Actually trying we did. Get Yeah, actually we did. So after like I mean what I now mentioned is like the first let's say twelve weeks yeah or ten weeks where we started with ideation and deciding for market. After that we had pretty much settled on let's look deeper into occupational safety and medicine And that was also the phase where we kind of we set a goal where we sat down and said look if we want to be successful in this and especially at fundraising we need two to four deals in like twelve months in time. And so we sat down and calculated a conversion of 1% I think and calculated like how many letters and how many contexts do we need to make in order to achieve this number of deals in twelve to eighteen months. And that's actually how we did it. We send out like the first few batches were like three to 400 letters. So meaning 1% conversion is like three to four deals. And that's also what we did. So we put a of work into these letters because you only have kind of one chance of contacting them first. Together with working students and interns we let them research like literally anything about the company. So we crawl their website, we try to find newspaper articles and so on that when we wrote the letter it was very specific. Look you opened two new locations this year. That's very impressive or it's very interesting you have five employees in occupational medicine and you grew your part of employees in occupational safety that might be a good fit to us. Very specific to the information why this specific company was relevant and I think that in the end also made it so successful. So after repeated outreach we over the years this is now a bit blurred number we had up to 80% reply rate depending a bit on the cohort which is super rarely seen. Mean myself I come from sales and there a good reply rate and cold outreach was like 2030% max. So 80% was unseen but it's also proof of how diligently we were writing to these entrepreneurs and how diligently we were also following up on it. So every time we were in let's say Karlsruhe we called up this one guy who was in Karlsruhe and told him look we're there we have spontaneously time for some coffee, can we meet? So that's also part of the work which goes into that reply rate obviously. But to your actual question, yes we did.
00:10:03 · Felix Jander, Mikk
We sat down and we set us a target like two to four years within twelve months and that's how we calculated backwards how many letters and outreaches we want to do. [00:10:14] S0: 80% that's remarkable. [00:10:15] S1: But that's only after three years right? It's not in year one so it adds up over time. Then you write on christmas cards and so on and then every time you write, you get another response, obviously. You should just not be too annoying. Don't know how you did it in sales. [00:10:32] S0: No, sometimes you are annoying, but I think if you put in the effort, people appreciate that. The answer will be no, but they will appreciate that. [00:10:37] S1: Yeah. And I think also if you notice that people are kind of at that point where you get on the nerves, yeah, you should also let them alone. Yeah. Not push further once they told you, look, it's not the right time. Then give them half a year and then ask again if there's a good reason for asking again but that's also something I think we sometimes we do better sometimes we do lesser at but most of the time we kind of responded to that and let them alone for some time. [00:11:07] S0: And during the same time, did you do the same type of outreach to investors as well? Or how did you put it all together eventually?
00:11:16 · Felix Jander
[00:11:16] S1: Yes, good point. Yeah, I mean, no. Our process with investors was more like bilateral relationship based, right? We first first when we started, when we started, we didn't have a clear idea of how we want to structure this. Yeah, We ended up structuring it like a search fund. You maybe know from search funds there is this 30 to 35% for the founders and then the rest for investors. You do like one time financing of equity and so we had something like this in mind. First we started just talking to some people out of our extended contacts and network basis and we started looping them in into regular discussions. Every month or so we spoke to them and told them, Look, we find roll up interesting or we find this specific market interesting or look we talked to these three companies and they have pretty impressive margins. We had like a circle of 10 then 20 then 30 people that we that we entertained on a regular basis. Yeah, we did like monthly investor updates how we called it. And then at some point we we kind of nailed down some terms. So we did a term sheet and we presented to the spaces. I think it was like six months in February or March. This is how we want to do it. Are you fine with this? And then we had one or two lead investors who we renegotiated some little things with them. But in the end we ended up at exactly what I mentioned earlier like a search fund like structure so there was a time based vesting portion and there was a performance based vesting portion and the performance based vesting portion was based on money multiple that we would give to investors at exit Or that the investment would provide to investors at exit.
00:12:57 · Mikk
[00:12:57] S0: And personally, how was this period for you at the moment? You're this calm, relaxed. It's a beautiful summer. You've seen a great amount of success. But during this time of doing it all, how did you feel? And because I think these type of people who have been going through this period, I wouldn't say they're like different animals, but they have this level of grit, persistence, not giving up. They're tough people in a best way possible. So how was it for you this period? Did you ever have like tougher days or is there anything you'd like to bring out? What helped you to keep going?
00:13:32 · Felix Jander
[00:13:32] S1: So actually, I mean, if you want to have a frank response, it was kind of, I think the best time of my life. Yeah, I was never again. So it's, you know, it's very you building every day something. It's very creative as well. When you're iterating, you're sparring with smart people. So you don't have the burden of leadership, Of developing people, which sometimes also is tough and needs a lot of effort. You're just surrounded by like minded smart people. You can iterate every day and you move very fast. So I I found that back in the days, I found it super cool. Yeah. So like the first six to twelve months, I tell everyone were were the best, so to say. Yeah. Also the times afterwards were were super cool. Yeah. But like this fast moving pace, really intrigued. Yeah. And look, by nature, I'm actually... I I wouldn't say I'm such a brave person. Actually, I'm pretty cautious, and I wouldn't say hesitant, but but cautious, I think, is better to say because I could have also started something similar just right after BCG. Right? But I did not feel ready. I first wanted to get some more entrepreneurial experience and so on. I wouldn't even say that I was like the classical startup founder that did this bootstrapping. Don't know, of €100 a day. Had some savings. I knew I was fine, know. Still obviously it was also a tough period. Mean when we tried to save every cent we could we could run longer for looking for businesses and markets. And I remember very well when Alex and I, I mean we slept together in Ibis hotels for €60 a night. We were very cost conscious. And yeah, but it was cool. Yeah, I liked it. Though the sleep was not the best, yeah.