Buyers and Builders
00:56:52 · Mark Sinatra
[00:56:52] S1: I mean, I think, you know, I mentioned a few of those qualities before in terms of, like, the level of grit and perseverance. You know, we also look for how prepared are they to search. Do they know what it's really going to be like? Have they done internships with searchers? I mean, it's great if they do internships as well with, like, searcher CEOs. Those are great experiences, but they... Have they interned with folks that are, you know, six months into the search? Have they interned with folks that are, you know, twenty two months into the search and maybe on the tail end? You know, what... How diverse are the experiences that they've encountered, you know, during their preparation phase? Because we found that in general, folks who... And this is not rocket science here, but, you know, folks that are better prepared for search tend to be more successful, right? And so maybe they've already searched, you know, we've, we've come across a lot of folks that have in some form or fashion, you know, done a self funded search and then they convert to to traditional, at some point in time. But they've already gotten all those reps. They know what their tech stack is. They they know what their talk track is. They've got a database, you know, of companies and brokers. So, so anyway, those are things that that, you know, we we really look for, but I'll kind of end that question with this. Somebody asked me the other day, you know, is it the jockey or the horse in terms of the investment decision, when it comes time to evaluate, you know, the, the deal, right? And there's a lot of factors that we underwrite to help us gain conviction on investment opportunity. But there's one factor that wasn't mentioned, and that's the barn, the industry. And so when you think about it, you know, all three of those factors, you know, ideally, right, you... You've got a a searcher that's excited that is gonna be, you know, a great CEO, you know, that's willing to to, know, has that, like, kinda learner mindset, which I haven't talked about, but, you know, that mindset to be open to feedback, be vulnerable, and and open to to growth. And, you know, you've got a company that checks a lot of the boxes in terms of what would be an investable business, but the industry is is is, you know, critically important. Right?
00:59:52 · Mark Sinatra, Mikk
And understanding and ensuring that the industry has ideally, you know, tailwinds to it, and, you know, is is expected to to grow and and, you know, benefit from those tailwinds can can be incredibly beneficial. Right? Because on the flip side of what we spoke about before, you know, an indicator of what can contribute to the success of search deals is the revenue growth at the time of acquisition, the TTM revenue growth, and also, you know, what are those predictable sales metrics at the time of transaction. Right, looking at sales backlog, pipeline, activity, things like that. So a average to above average company in a growing attractive industry, and a company that, you know, can be professionalized from average to be above in that growing industry can be a really, really powerful formula for success. [01:00:55] S0: Now I want to ask about your day to day. How has it changed over the past six years when we take 2020 and now 2026? When it comes to finding those special people, finding those with a great deal, How has your day to day changed? What I mean is, again, six years ago, there weren't too many podcasts, interviews about the people giving out those lessons on what they've learned. There wasn't so much buzz about the industry overall and people quitting their jobs going to buy a traditional business. And I can see and just confirm when it comes to the numbers every day, half a thousand to a thousand people listening to this type of interviews. So how has your day to day changed when it comes to finding those special special people? Because there is a lot going on.
01:01:50 · Mark Sinatra, Mikk
[01:01:50] S1: Yeah. I mean, listen, a couple of things. It's good... It's an interesting question. There... There's been an increase in what I'll call mid career professionals who pursue search, and that's another thing that, you know, is not talked a lot about, but, you know, ETA and search will will always be around. And I remember, you know, thinking as a, you know, a second year MBA about to graduate, I felt like in myself, I was like, you know, I gotta decide right now. Am I doing search or am I not doing search? And I... And there was some pressure that I put on myself. I said, well, you know, if I don't do search now, am I ever gonna do it? And and yeah, I mean, maybe the opportunity cost goes up if you, you know, take a job and and it, you know, pays well post MBA, and, you know, it's a it's a big risk, right, to to let that go. But the reality is, you know, we've seen certainly a material increase of interest in the number of mid career professionals pursuing search. And to your other question, it's hard [01:02:55] S0: to
01:02:55 · Mikk, Mark Sinatra
[01:02:55] S0: to [01:02:55] S1: find those those folks, so, you know, they tend to to kinda, you know, get introduced or or reached out, you know, reach out to to to me, you know, just to connect. You know, from an outwardly facing perspective, you know, I enjoy doing lunch and learns, coffee chats, you know, making the rounds at at, you know, kind of different business schools, right, to to talk about my experiences and to connect with, you know, folks that are interested in doing this. But it's kind of nuts, you know, it makes sense though when you think about nowadays, it's very common for somebody to go to business school with the intent to pursue search afterwards. Right? So now when people are thinking about applying to business school and you know, their banking, private equity, or consulting, or or really any anything pre MBA, it's common where ETA and search is... They're... It's it's part of their application. Right? It's it's what they're thinking about post MBA, and, you know, like, that just was unheard of, you know, years ago. So it's really interesting times. I mean, it's it's, it's great to have all these resources out there to help the next wave of searchers be more successful, but at the same time, it's, you know, it's just increasingly competitive as well to, you know, to buy business.
01:04:39 · Mikk, Mark Sinatra
[01:04:39] S0: Mark, I really enjoyed the conversation. Thanks a lot for sharing in such a detail of the, I would say, early days of buying a business and going through the what is called like a real dark years. And seems like like it never ends. I've experienced that with with the company we are building. It's it's pretty rough. It's much better now, a lot better. So that's why I really wanted to ask about the specific questions like how you were able to survive this period, because mentally, physically, because if you don't recover, if you don't survive, there's not much left to build. So thanks again for sharing all the details of the journey and what you're building today. I I really enjoyed the conversation. [01:05:28] S1: Oh, thank thank you, Mikk. I did I did as well. Thank you. [01:05:31] S0: I hope you enjoyed this episode of Buyers and Builders. Please remember to subscribe wherever you're listening and leave a review. It really helps the show reach more buyers and operators. And if you already haven't, go back and listen to some of the other episodes of Buyers and Builders. This podcast is built for people who buy, build and hold great businesses long term. Every guest you hear on this show has real hard won experience acquiring and operating companies. And the goal is again very simple, to give you ideas you can actually use in your own journey.