Net profit margin 32.02%

A quick note before we jump in…

Last week I talked about a deal we discussed with a business owner.

He had to travel so we haven't met yet.

I will keep you updated when we have a meeting.

• He is interested in selling majority of the company.

• The good news: there is an extremely motivated operator. A lady in her 30s who is also the co-founder of this company.

• The gentleman told me that the lady is so passionate about business that the company is a God to her.

• The 2023 goal is $4 million in revenue and $800,000 in EBITA

• They just moved to a brand new production facility (located in Estonia), but it has a great brand and exports 95% of its production to Sweden, Germany, France and soon to South Korea.

• They sell a premium product and according to the founder, they always aim for 20% net profit, but with different products they achieve 25% net profit.

• They sell to wealthy clients.

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Another one I posted yesterday:

Here's the interesting thing - I've never received a call from a broker before.

We had a meeting and I said that the price expected from them is too high.

"Sure, we'll get back to you."

Now we are now waiting for their response.

Over the months I have built a small list of people who have shown interest in co-investing with me.

We have also made an intro call with some of them, I have even met some of them in real life. Pretty surreal to be honest — they're all real people actually interested in what we are building.

If you also want to co-invest with us. Let me know by simply replying to this email.

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I have a serious question for you.

How do you beat Magnus Carlsen, a five-time World Chess Champion, the reigning four-time World Rapid Chess Champion?

The answer: Play him at anything but chess.

Always ask, where do you have the edge? History is replete with examples of big business mistakes that could have been avoided if only the people in charge had answered that simple question.

• Gillette began making digital watches and went exploring for oil.

• Coca-Cola veered into businesses like shrimp farming and plastics and even movies.

• American energy company that really was skilled at finding oil, branched out into furniture retailing.

All these ventures went sour because the people running them had no advantage, no natural edge.

It’s extraordinarily difficult for most people to develop expertise in several very different areas.

- - - -

You’re more likely to find satisfaction and superior financial rewards in industries with superior economics.

Doctors and lawyers get paid by the visit or hour.

• 1st hour $60

• 2nd hour $60

• 3rd hour $60

  Etc.

Therefore, their pay is limited to the number of hours in a day.

You can make a very good living at these professions. I know few doctors, they have big hearts and they really love what they do.

However, you will never get truly rich being paid by the hour with a 50 per cent marginal tax rate.

- - - -

This week I was reading about a self-made Canadian billionaire, Mr. Seymour Schulich.

I really like how he described Love.

“Love is a hormonal imbalance that usually occurs in our twenties. If we are lucky, we outgrow it. It should evolve into respect and loyalty, which are the real foundations for a long-term relationship.”

Well said.

- - - -

Three lessons from a CEO of a PE fund which has $13bn AUM.

He shared on how he started out:

• Left investment banking in his early 30s and became an independent sponsor

• Simultaneously started consulting / advisor to support his family and pay dead deal fees

• Didn’t find his first deal for over 18 months.

His biggest takeaway was had he not had some money coming in for the dead deal fees and his overall expenses he’d have rushed to do a bad deal.

His first 3 deals averaged close to a 10x multiple on his capital.

Today he runs a massive organization and owns a pro sports team.

“Don’t put yourself in a position to be forced to do a bad deal – have reserves to support yourself and dead deal fees and do some advisory to help keep you in the game.”

You ONLY get to do your first deal once.

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I've been cold calling people since Monday. We are selling our bonds.

18-20 calls per day.

So far, 3 people/companies have decided to invest a total of $85,000.

• Individual 1 - $30,000 over 1 year (12.5% ​​interest)

• Individual 2 - $5,000 over 1 year (12% interest)

• Company 1 - $50,000 over 1 year (12.5% ​​interest rate)

The goal is to consistently add $200,000 worth of bonds per month. (So ​​if you want to join us in co-investing, send me an email and I'll send you more information.)

More good news:

• We are now profitable after two and a half years of operation

• As owners, we have invested over a million euros in equity

• When coming to Estonia, Tallinn, come and visit us, you will see more closely what we do. (I really mean it. Many investors have already visited us).

I had my little one visit me the other day.

Since starting the company, we have tried to be as transparent as possible.

On an average day we finance $10k to $20k worth of loans. All organically.

Btw cold calling still works.

As long as you're:

• Confident

• Genuine

• Clear communication

• ENERGY!

You'll be better than 99% of folks. And people genuinely want to talk to you.

Obviously, a great product helps.

Take care,

Mikk aka PrivatEquityGuy

P.S. In short: if you want to co-invest in our deals. Send me an email.

Lastly,

I have interviewed ten people on the HoldCo Builders podcast. People have said they loved the show. Which is pretty cool.

Here's a recent one with Sunny:

As always, thanks a lot for following the journey!