$350M agricultural holdco by age 37 or simply playing golf on Wednedays (true story)

How to achieve the absolute best results post-acquisition?

It seems like a smart idea to leave your ego at the door and join a peer group to gain access to a powerful “process playbook” and put it to use right away

I know two brothers who did just that and grew their portfolio from $9m to $150m by following the manual.

These peer groups can be extremely valuable. As proof of this, earlier today I spoke with Rand, the CEO of Scalepath, who has built a network of 2,000 business owners.

One interesting story we discussed was the specific reason why one entrepreneur (also member of Scalepath community) decided to sell his business:

The lesson here is that small business ownership is tough and unpredictable.

What Rand does is, every month, he shares real stories and hard earned insights from his community of owners.

If you’re a searcher or entrepreneur, sign up to the Scalepath newsletter (it’s free) for an honest, behind-the-scenes look at what it’s really like to run and grow a business — one of the recent members grew his company from $2M to $10M.

- - - -

Most people who I've talked to and who've gone from institutional PE to entrepreneurship after buying a company have said they now work longer hours than before.

When I asked the follow-up question of whether they are happier now, the answer has always been a BIG yes.

- - - -

Building a portfolio of profitable $1-5M EBITDA businesses??

You need this intrinsic hunger and desire to do the work.

There are many layers to master to get very good in this game:

1. Find these VERY good deals (but how do you do that?)

Is it you who finds them?

Do these deals come to you?

In the early days, I have yet to find a better way than number one – go out and find them yourself –  by building your own pipeline, calling these founders and owners, building relationships with brokers or even becoming one yourself?

To do all this… there is this need for that intrinsic hunger and drive to do the work.

Next:

2. Connect with 10/10 people

This COULD be one big competitive advantage…

Who do I know and trust who’s going to be able to put me in touch with someone else who they trust..

Your job is to become creative to find ways to interact (ideally attract) these people

Building a network of people, which THEN creates these special opportunities.

Doing this, again, requires that intrinsic hunger and drive to do the work.

Finally...

3. What and where is your edge?

Is it a specific niche or knowledge of a specific industry you have worked in for the last 5-7 years?

Or… is it building your investing edge through networking - having people to share ideas back and forth.

The fact that you may be in the early days of your career… no problem at all. There will be many folks 10, 20, 30 years ahead of you, willing to give you time IF you have good questions and ideas to discuss.

Here we go…

It doesn't really matter what you do exactly...

In any case, you need that intrinsic hunger and desire to do the work.

- - - -

With Spacebar Studios, the sponsor of this newsletter and podcast today, I’ll keep it VERY short…

2 out of 3 recent podcast guests (episodes which I haven’t posted yet) have said, “When it comes to B2B newsletters and actually growing them… Brandon! Brandon is the guy”.

Plus, I literally heard it from a guy who runs a $25 million e-commerce company.

Btw, Brandon is the co-founder of Spacebar Studios.

So here it is:

If you want to grow your B2B business? Start with your inbox, with your newsletter.

Spacebar Studios builds B2B newsletters that drive pipeline, build authority, and generate real revenue.

- 115k+ subs in compliance

- 7-figure ARR from email

First 6 founders get theirs built free.

Reserve your slot here: https://www.spacebarstudios.co/inquire

- - - -

This week I spoke to a gentleman who left his job at a private equity firm and became an independent sponsor.

In the past year, he completed two platform acquisitions in IT services and software, built a team, and is now hunting for his 3rd acquisition.

Once 4-5 deals are done, they will make a conclusion and see if it is wiser to continue deal by deal or raise a fund.

-

It is possible to acquire a business and then perhaps raise a PE fund one day.

But ONLY… if you’re willing to take the leap now.

- - - -

Read this if you want to make a lot of money acquiring companies:

Thjs advice comes from a gentleman who has done MANY great deals to date, but a while ago started with his first one like most of us all.

So here's his take when it comes to the first deal:

1.  Don't worry about hitting a home run; getting the best economics possible

2.  Just make sure you get something, that way you build reputation

3.  You show you have high integrity, you're a prudent individual

4.  And make sure you make people money - it doesn't need to be a fortune but you're going to get a lot more shots on the goal in the future if you have the great outcome on the first one

- - - -

I got some unreal dealmakers/capital allocators for you today:

A private equity firm called New Mountain Capital

Started in 2000 and have since then invested in 80 businesses

These are their THREE most notable deals which generated over $13-14 billion in gains

- - - -

You can see the first signs of people building something great already at university.

Folks had Wednesday off... So when most of the classmates went to play golf. They went to see an almond mill.

Years later...

Who do you think went and built a $350M aum holdco in the agricultural sector? (true story and the podcast comes out soon)

That said…

I don't think many people have any idea what the people behind those large funds and investment firms are going through to keep the firm going.

Luckily I do a weekly podcast and get to talk to people who run, say, $300M aum funds. The most profound conversations often happen after the official recording part is over.

Personally, these conversations really open my eyes and give me strength to keep going as well. "It never gets easier, you just get better."

In short: They are not lucky and they are not gifted as well. In most cases. But they are tough people who are willing to grind through tough times even if tough times last for years. They can handle more than 99% of the population can imagine.

-

Yes, I said the best conversations happen after the recording is finished... In some cases, not all people are willing to come on the podcast to share their story (as the podcast grows, more and more people say yes...).

Michael Ovitz said no, but I wanted to learn how to find and attract the best talent for your team…

I believe I found the exact playbook to finding people that will 10-100x your invested capital.

As Michael Ovitz, one of Alex Karp's early investors at Palantir and Andreessen Horowitz said:

"Your job as an investor is spotting outliers before the world knows their name."

And here is the takeaway for you:

When you place someone in the CEO seat, you’re making a $10m to $100m decision... (even if you don’t realize it yet)

That person will either:

• compound the brand, the team, and the revenue

• or slowly bleed the business dry with mediocrity

• and there’s no Excel model for that

You need a system for evaluating people, and Ovitz’s playbook is a goldmine:

1. Go for pattern recognition, not credentials

2. Study process, not just output

3. Look for curiosity, not confidence

4. Bet on learners, not knowers

Remember: time is your enemy so don’t waste it on 6s.

(All this is explained in this solo research episode I did. Save it for later in case you don't have time right now.)

Here are the links to Spotify, Apple Podcasts and YouTube.

That’s all for today.

Thanks a lot for reading and I’ll share a few updates again next week.

Take care,

PrivateEquityGuy / Mikk Markus