00:29:48 · Mikk
[00:29:48] S0: And your approach when it comes to calling or writing to those companies, I guess you just mentioned some of those owners are very old in 70s and 80s. You just give them a call or just, I don't know, go and knock on the on the factory store. Are those 1,300 you mentioned, are those active sellers or just a list of companies you're you'd be interested acquiring?
00:30:13 · Giuseppe Balzano
[00:30:13] S1: So you're asking about, I think, the secret sauce of of the company. In the end, if you think, we don't have any IP. So we we are buying IP. The IP of Novaterra is maybe me, hopefully, until my shareholders decides that I can be the founder and CEO. Joking. There is a pipeline. You know? It's it's it's an IP. There's the reputation, maybe. There's the ability to do something, but in the end, we are a vehicle, you know, for now. Maybe in the future, you know, we will be recognized like Berkshire, you know, Constellation. You know, there is a brand behind the the subsidiaries. But clearly, that's not the case for us since we we just started. We we will try to go there. So in the meantime, the the the way we we we approach the the program is to defend the assets as much as possible. So I'm not gonna go into a lot of details on on the scouting process, but the main... The two main strategies are outbound, inbound. On the inbound, you know, it's it's easy. You just receive calls from accountants, notaries, and banks, and advisers, and so on. At the moment, we have 130 mandates. So there's there's an m and a agreement. In case we ended up buying the company, We will pay a a provision, a fee for... As as a scouter, you know, to to these boutiques, like an introduction fee. And the second the second big investment that we have done is on the outbound. Now on the outbound, I think it depends a lot on who is your leader. You know? If you're sending an email to the founder of a SaaS in Canada, and they are doing 1,000,000, and they started five years ago, and the founder is 25, and and then you want to buy them. I think, just, you know, out of logic, it's completely different than trying to reach out to a 75, 80 old gentleman from the province of Brescia that doesn't speak Italian. You know? Because you must know that in Italy, we have thousands of different dialects. You know. So if you Well,
00:32:39 · Mikk
[00:32:39] S0: I didn't know.
00:32:40 · Giuseppe Balzano
[00:32:40] S1: Yeah. If you have a Sicilian and and someone from Trentino, for the Italians, you know, listening, you you will know this. They will not understand each other. Like, there is no way they they know what the other person is doing or saying unless they switch to Italian, you know. But the language of choice for people from Milano, Roma, you know, big cities, of course, is Italian. But if you are 75, 80, and you're coming from the old province of a little town of 500 inhabitants in the province of Brescia. You're not speaking Italian. You know, you're speaking also Italian, but the the first language is the dialect. You know? So the way to approach these guys is completely different. We're we're not sending emails. Of course, these guys will not read the email. Of course, you know, the guys will just maybe read the email and think these are scammers. You know? They want to buy my company and they're sending an email? Like, no. So there is a way. There are different ways, and and as always, it's a mix. You can do events. You do calls. You reach out to people close to the family, and you try to win over the person behind. But it depends also on how much time you have. In the end, one of the other responsibilities of the CEO is to to allocate resources, you know, and it's also... It's not just capital. It's also resources, energy, you know, time, which in the end is capital. But if I have two employees, I cannot tell my employees to write everyone and call everyone and try to do the brute force kind of approach to win maybe someone. So we we are ranking businesses. We know there is a word. There is a domain. From a mathematical point of view, there is a domain of of possibilities. These are... We estimate in Italy, we have 4,500 companies that we like a lot, like, companies that we will buy, that maybe that we will not buy, we we want to buy. Okay? This is different. And so we rank these companies by some filters, which is including also the age, maybe, of the founder, or if there is a second generation working, or if the the trend or the sector in which they are is something that is interesting or not for us, for the world, for everyone. You know? So we have some sort of parameters, and we rank these businesses by the score. And then we have several scouting strategies to try to have a call.
00:35:07 · Giuseppe Balzano
My outcome, the KPI for my team is we want to have a call with the founder, you know, like a phone call. I want to speak to the founder. And then you have one minute, two minutes. It's like an an elevator of a of a big building kind of piece. And and and there is no way you're gonna win the deal if you say, hey. I'm gonna buy your business. Because Italians are very proud, you know, of themselves. They they are picky. They're different. You know, we we don't trust anyone. So there is no way there is a young voice, you know, calling you and say, hey. Mister x, I'm gonna buy your business if you want. You know? It doesn't work in this way. It's completely different than the Anglo Anglo Saxon and US approach. You know? You want to build trust. This is me. These are my shareholders. This is what I do. I like your business, you know, and why I like your business. So what do you know about my business? You know? And the first question my my colleagues, my my other entrepreneurs, my founders, reply is, how did you find us? How did you end up, you know, having a call with me? Why why are here on the phone? You know? If the answer is pertinent, they will maybe invite me for for a lunch. There is no other way. There is no emails, no, you know, video calls. Just a phone call, five, seven, ten minutes, you will trust, you propose to have a meeting, or they propose, if they're very interested, and then you have a you have a meeting, and you have two, three, four hours, maybe in Puyall, and you have to drive ten hours, you know, and it's it's an investment. So it goes back to how you allocate resources. Maybe I do seven calls per week, but I decide to visit just one company because my logistics, you know, it's impossible in a given week, and I postpone, you know, the the meeting in the future. But if I see the numbers, as always, out of these deals that we have seen this year, 80% are coming from from our way of doing stuff. 20 are brokers and auctions. But if I see the first three deals that I mentioned, none of them has an adviser. So it's just us finding deals.
00:37:19 · Mikk
[00:37:19] S0: I think I've done here in Estonia, like, hundreds of those meetings. They're so special. I don't need to drive ten hours. I need to drive three hours. It's a bit smaller country, but it's I've gone to Finland as well. It was a long day just to spend three hours with the owner. But it's, I don't know, I just enjoy that. It's so special. No one really does it. Like, no one don't really want to I do