00:24:26 · James Andersen
[00:24:26] S1: The next deal was the hardest deal, even harder in a lot of ways. It turns out it was another furniture company. Well, the next deal we closed was was actually the the deal I told you about before that ended up becoming a public company. But the third deal we closed was really difficult because... And, again, we... You learn over time. Right? But we partnered with a founder who was never ever, ever gonna listen to anything we had to say, was 100% driven by himself. And, look, he was really successful, but he built a company that couldn't survive, an afternoon without him. And we tried everything we could to make the business more valuable for all of us, and he just wouldn't do it. He just was an impossible person to deal with. And I can remember, I had little kids at the time. Son that was born shortly after we bought that company, I'd go to sleep at night because I was so tired, just exhausted. Like, I'd be gone. But then he'd wake up, and I'd get up, and then I couldn't go back to sleep because all I could do was think about how we were going to manage this really impossible partner that we had. And again, you know, this is our third deal. We can't blow it up. It needs to be successful. And it was just so hard. We ended up managing through it. We sold the company. We made way, way less money than we would have if our partner, you get in the nest, like, I'm not sure he really ended up, if he really was a partner, but if he had let us do, make the company more robust with better systems, but he just, he just got in the way everywhere, and it was... We learned we'll never do that again. We'll never partner with somebody like that again.
00:26:17 · Mikk, James Andersen
[00:26:17] S0: What did you... When doing, like, underwriting this person, what did you get wrong wrong? [00:26:22] S1: Well, he had a background of blowing up businesses in the past when he didn't get along with his financial partners. Literally drove the prior business into the ground, and then restarted the one that we ended up buying from him, or with him. Look, at the time, it was early on, we were doing the deals we could. Again, it's scratchy and clawing as an entrepreneur, right? We took a lot of risk, more risk than we would take today with a committed fund. It was a little bit of a swing for the fences kind of thing. No, we didn't pay very much for the business, and we convinced ourselves that you know, the three times multiple for a company growing at 40% a year would overcome this guy. And I guess we were right. We made four times our money, but it was painful. It really was. And so not doing that again. [00:27:09] S0: What about this period for you when it comes to day to day? I mean, like, it's so easy to say now, like, small kid and kids at home. But in reality, you have those kids at home, lack of sleep, sometimes four or five hours, constantly waking up during the night. Then you have those long days at the office. How was the day today like? Was this just like another moment for you where you just keep your head down and just just keep going? Pretty much. It's really not It's They're just breaking there.
00:27:09 · Mikk, James Andersen
[00:27:09] S0: What about this period for you when it comes to day to day? I mean, like, it's so easy to say now, like, small kid and kids at home. But in reality, you have those kids at home, lack of sleep, sometimes four or five hours, constantly waking up during the night. Then you have those long days at the office. How was the day today like? Was this just like another moment for you where you just keep your head down and just just keep going? Pretty much. It's really not It's They're just breaking there. [00:27:38] S1: Honestly, it's a blur. Like, because it's just as you describe it. You just keep your head down and you go forward. And like, spent all my waking time when I wasn't at the office the boys and my wife. That's what I did. We were not a gigantic firm. We didn't have a lot of people to manage at the time. It was really more finding new deals and managing the portfolio we had. So it manageable, but the thing was just the stress of, first of all, you never want to take somebody's money and lose it, ever. So there's the stress of that. And our original investors were people that we knew, mostly people that we knew, that we had known. So you don't want to lose their money. So you're going to work really hard. Really, I was more worried about losing other people's money than I was about losing my own, because I didn't have that much in these deals, because I didn't have anything to invest in them when we did them. I had very, very little money. So from that perspective, it was all upside, but I just didn't want to lose anybody's money.
00:27:38 · James Andersen, Mikk
[00:27:38] S1: Honestly, it's a blur. Like, because it's just as you describe it. You just keep your head down and you go forward. And like, spent all my waking time when I wasn't at the office the boys and my wife. That's what I did. We were not a gigantic firm. We didn't have a lot of people to manage at the time. It was really more finding new deals and managing the portfolio we had. So it manageable, but the thing was just the stress of, first of all, you never want to take somebody's money and lose it, ever. So there's the stress of that. And our original investors were people that we knew, mostly people that we knew, that we had known. So you don't want to lose their money. So you're going to work really hard. Really, I was more worried about losing other people's money than I was about losing my own, because I didn't have that much in these deals, because I didn't have anything to invest in them when we did them. I had very, very little money. So from that perspective, it was all upside, but I just didn't want to lose anybody's money. [00:28:42] S0: Yeah, you can probably see why I keep digging because I think it's such an important phase of someone's career and not too many guys are just they don't make it. And that's why I want to keep asking those questions to give folks listening really like what it requires to really do stuff. [00:28:59] S1: Look, it's not easy, but it's really more persistence. You know, the term overused term maybe is grit, but it's persistence. You just got to stay at it. Just stay at it. Keep going.
00:28:59 · James Andersen, Mikk
[00:28:59] S1: Look, it's not easy, but it's really more persistence. You know, the term overused term maybe is grit, but it's persistence. You just got to stay at it. Just stay at it. Keep going. [00:29:14] S0: Let's talk about the deal number three. It was the daycare deal again, with a terrific partner you've said before.
00:29:22 · James Andersen
[00:29:22] S1: Yeah, that was actually, I think, our fourth deal. This company called Senior Care Centers of America. It was an adult daycare business, 17 centers in four states. And it was owned by basically an absentee owner, there was a management team in place, so it was a management buyout. They were buying the company out from the owner, and we were fortunate to be able to convince them that they should partner with us. And, you know, we didn't pay a lot of money for the business, but it was our first health care deal. Like, we didn't know anything about health care at all, quite honestly. But we looked at the business and said, you know, basically it's center based. There's only one payment code. Like, it's not, yes, it's healthcare, but we didn't think it was that different than any other particular kind of business. We had great partners, and from day one of that business, there was a larger player that we really wanted to acquire. It had been owned by a PE firm for five or six years, we thought they might part with it. But they had 50 centers in seven states, know, complementary states, not overlapping us. And we learned early on that it was a company that had, it was three times our size, but made half the amount of money that we made. So the margins were not very good. But we tried to buy that business for four years, five years, and we just couldn't get them to move. And along the way, we acquired a bunch of other 1Z, 2Z kind of centers. And, you know, our and I say we, I'll be completely honest, I don't think we added, we at Clearview added a lot to that business. We had tremendous partners who were really, really good. We just basically let them run. We helped them with the debt financing. Obviously, did all that stuff for them, we let them run because they were such good operators. So they were integrating basically single center acquisitions at a time, very often bought from mom and pops who didn't operate them very well. And these guys really knew how to operate. And we got to the point where five years in, okay, we're gonna make three or four times our money, time to sell, because we really wanted to buy that bigger company, but we couldn't do it. But so as we're just about deciding to pull the trigger to sell, we get a call from this bigger entity saying, Okay, we're ready to talk now. So we said, Great, let's do that.