2024 Tiny Ltd. Annual General Meeting

Everybody, if you could take your seats, we're about to get started. >> On? >> Okay. >> Hello. >> Hey guys, how's it going? Um, I just wanted to start by asking who here, show of hands, is from Victoria? Awesome. Thank you. Uh, what about uh, British Columbia? Okay. Canada? Uh, elsewhere in the world? Okay, now keep your hand up if you traveled more than 5 hours to be here. More than 15 hours to be here? Anybody? Oh, oh my god. Uh, more than 25 hours to be here? What, where are you where are you coming from? >> Brazil. >> Brazil, thank you. That's uh, that's amazing. >> Oh, that's cool. >> That's really cool. Well, guys, this is uh, kind of a trip, honestly. I mean, we uh, I remember last year we had this and Chris and I were nervously saying like, did we mess up? We got this big room. Are we going to fill it? >> Yeah. >> And we're expecting like three anal retentive investors asking us a couple questions and then we'd leave. And we were amazed. We filled the room and uh, it's so awesome to be able to meet all of you. Uh, you know, if you're a shareholder, we view you as a partner in the business, so it's great to be able to put a face to a name and get to know you guys. Um, the way this meeting is going to go, first we've got uh, the legal side. We got to go through the formal meeting. That's basically going to be me reading, unfortunately, for a couple minutes. And then once we do that, we're going to do uh, Q&A. We'll go for hour and a half, two hours or something, as long as you guys have questions, and then we'll call it. Does that sound good? Awesome. Great. Okay, I'm sorry about this. Good morning, ladies and gentlemen. Welcome to the annual general and special meeting of the shareholders of Tiny Ltd. My name is Andrew Wilkinson, and I'm the executive chair of the board of Tiny Limited. In terms of our agenda today, we will be dealing with the formal business of our annual general and special meeting as described in the proxy materials that were sent to shareholders. Prior to starting the meeting, I would like to introduce the directors and officers which are present in person at the meeting today. Carla Matheson. Can we get a hand? Okay, let's get a round of applause for Carla. Tim Maclellan. >> >> Uh Shane Parrish. Chris Sparling. Uh oh, it's And then we also have officers here. So, sorry, Chris Sparling, David Charron, CFO. Jordan Tob, chief executive officer. And then also to our left, we have Austin Sengara. The meeting will now come to order, and I shall ask Steve Seville of Fasken Martineau, counsel to the company, to act as secretary of the meeting, and Irene Lee of Computershare Trust Company to act as the scrutineer of the meeting. The purpose of this meeting are to receive the audited financial statements of the company for the fiscal year ended December 31st, 2023, together with the auditors' report thereon, to fix the number of directors of the company to be elected to the at the meeting to five, to elect the directors of the company for the ensuing year, to appoint the auditor of the company for the ensuing year, and to authorize the board to set the auditors' remuneration, to consider, and if thought advisable, to pass with or without amendments an ordinary resolution, the full text of which is set out in the company's management information circular dated May 13th, 2024 relating to the ratification, adoption, and reapproval of the 10% rolling omnibus equity incentive plan compensation plan of the company and to transact such other business as may be properly come before the meeting. Specific details of the matters to be put before the meeting are set forth in the company's management information circular. The secretary provided me with proof that the notice calling this meeting and related materials were mailed to tiny shareholders on May 22nd, 2024. I direct that proof of service be annexed to the meeting minutes of the meeting. I will dispense with the readings of the notice of the meeting. Before proceeding with the business of the meeting, I would like to take a moment to discuss the voting procedures. Each holder of a common share is entitled to one vote for each common share held. I propose that all votes or matters before today's meeting be conducted by a show of hands. If, as chair, I feel that it is appropriate, I may ask for a poll on other resolutions to be taken. Similar, a shareholder or proxy holder may demand a poll. In such case, we will break so that each shareholder and proxy holder can register his or her vote by ballot with the scrutineer. Once all of the votes have been registered, we will take a moment to tally them so that the results of the vote can be announced before the next matter on the agenda is considered. The bylaws of the company provide that a quorum of shareholders is present at a meeting of shareholders. If one or more persons are present holding or representing by proxy at least 10% of the shares entitled to vote at the at a meeting of shareholders, I have received the scrutineer's report showing that there are in attendance at this meeting in person or by proxy 110 shareholders holding 151 million 569 common shares. According accordingly, the total representation at this meeting by shareholders present in person and by proxy is 84.47% of the common shares of the company. Therefore, I declare that there is a quorum present at this meeting. With the appropriate notice of the meeting having been given and a quorum being present, I declare the meeting duly constituted and ready for the transaction of business. Certain persons have been asked in advance of the meeting to make certain motions. This is in no way intended to discourage any discussion, comments, or questions from the floor. Should any shareholder or proxy holder wish to speak on any matter, please do so. I would ask that shareholders or proxy holders identify themselves by stating their names so that they may be recognized by the chair prior to speaking. I welcome all guests, but would ask that any non-shareholders or non-designated persons refrain from voting. The first item of business is to receive and consider the audited consolidated financial statements of the company for the year ended December 31st, 2023 and the auditor's report thereon and the management's discussions and analyses, both of which are available for review on SEDAR, on the company's website, and all were also mailed to shareholders with the meeting materials. Given the foregoing, it is not proposed that they be read at the meeting, but that they be taken as received. The next item of business is to fix the number of directors of the company to be elected at this meeting for the ensuing year. The company is proposing the size of the board of directors be set at five. Do I have a motion to fix the number of directors of the company at five? I second the motion. All in favor or Sorry, did someone else do that? Someone else should Can you second it? Okay. >> >> Sorry, guys. Uh uh All those in favor signify in the usual manner by raising their hand. Opposed? No? Okay, great. The motion is carried. We will now proceed with the election of directors. Andrew Wilkinson, Chris Sparling, Shane Parrish, Tim McElvaine, and Carla Matheson are the nominees standing for election as directors. They have all consented to stand for election, and I would appreciate a motion to elect those nominated as directors of the company to hold office until the the close of the next annual meeting or until their successors are duly elected and appointed. All those in favor signify the usual in the usual manner by raising their hand. Opposed? The motion is carried. I now declare Andrew Wilkinson, Chris Sparling, Shane Parrish, Tim McElvaine, and Carla Matheson to be the duly elected directors of the company to hold office until the next annual election of directors unless their office is vacated or a successor is appointed in accordance with the bylaws of the company. The next item of business is the appointment of KPMG LLP, Chartered Professional Accountants, as auditors to hold office until the next annual meeting of shareholders at a remuneration to be fixed by the Board of Directors. I will now ask for somebody to move and someone to second the motion in this regard. All those in favor? Opposed? The motion is carried. The next item of business is the ratification, adoption, and reapproval of the Omnibus Equity Incentive Plan of the company. A copy of the plan is attached as Schedule A to the management information circular. I will now ask for somebody to move and someone to second a motion in this regard. All those in favor? Opposed? Okay, the motion is carried. Is there any further business to be brought before the meeting? As there's no further proper business to be brought before the meeting, I declare the meeting concluded. Thank you very much for your participation. Isn't that fun? >> Yeah. >> I'm sure the guy who traveled 25 hours to get here is just like, "What have I done? This is a huge mistake." >> That's what you came for. >> Um so, um before we get started, I thought it'd be really great to introduce Jordan. Um you know, it's really interesting. I think entrepreneurship is really just delegation. I think it's identifying the things that you are not good at, that you don't enjoy doing, and elevating other people to do the things that you are terrible at, that they excel at. So, in the early phases of my business, that was accounting. You know, I was a bank balance accountant. I would look at my bank balance, and if it went up, that was good. Uh I knew I needed accounting. So, I met Chris one day at TD Bank, and I said, "Do you want to be my CFO?" And here we are, 15 years or something like that later. >> Yep. >> And that process has continued over and over and over again. And basically, about 1 to 2 years ago, Chris and I started realizing that we were getting mired in day-to-day operations. We have 40 companies. We have a lot of other investments, and there's a lot of complexity in the business day-to-day, and especially being public, there's actually a ton of day-to-day legal work, uh IR, all that kind of stuff. And over the last year especially, we found that our time was being eaten. We were being pulled away from our zone of genius, which in my opinion is doing deals and getting attention for the business and trying to connect with founders. And we're getting pulled into stuff that we're not exceptional at. Meanwhile, we watched Jordan as he took over WeCommerce a couple years ago and built probably our best platform. And we were just so impressed with the way that Jordan negotiated deals, the way that he held his CEOs to account, uh the way that he operated his day-to-day and his FP&A and everything. But most importantly, Jordan is somebody that is incredibly forceful and a very strong negotiator, and yet everybody loves him. So, I've had people negotiate against Jordan and he's, you know, basically had to deliver hard news or negotiate a deal really aggressively, and they still walk away going, "Ah, but Jordan's such a good guy." And that I think is a superpower uh in addition to being strong at all the things that Chris and I are weak at. And so, you know, over the course of the last 6 months we had a lot of conversations with our board about how to solve that problem. And ultimately we decided that the most logical thing to do is to make Jordan the CEO of the business. Now, the obvious question is, "Well, why make him the CEO?" And the reason for that is because in a public company, at least in our experience and in almost any company, everybody wants to go to the CEO. If you have a number two, people always want to go to you no matter what. Investors, uh investors, employees, CEOs, they want to know they're talking to the CEO. And so ultimately we felt it was important that we elevate Jordan and give him that role. Now, this does not mean that Chris and I are exiting stage left. Chris and I have the large majority of our net worths in the business. We are not going anywhere. We are spending the same amount of time on the business. We're We're focused on the areas that we're actually great at. Um so we're really excited about that. I'll let Jordan give a quick intro on himself. >> Thank you. Thank you, Andrew. Um no pressure. Um it's my first AGM here. It's my first day. Let's just say that. So go easy on me. Um it's really nice to meet all of you. I know some of you. Um yeah, welcome. Thanks for coming. Where do I start? Uh why don't I tell you a bit about myself, about my career, about how I got here? So uh started my career as an accountant. Um accountants in the house? Anyone? Come on. Yeah, the rowdy crew, yeah. Um quickly you know, got out of that. Um as some as most as most accountants do. But uh I switched into corporate finance at KPMG. Uh I did that probably for far too long, but um it was a really formative experience. I spent eight years, you know, in the nitty-gritty of mid-market deal making. Um sold everything from gummy vitamin factories to radiology clinics to potato processing plants, software, IT services businesses, you name it, I have sold it. Um but the the the best part about that was really getting a view of um helping corporates, helping PEs, helping founders, um and understanding how to best maximize value. So I I I I come at this you know, come at the kind of deal making side from a from another lens in that like I know what the other side looks like. I know how to position a company for sale. Like I've sold a lot of businesses. Too too many businesses, to be honest. Um and that's probably why, you know, after I'd done it for a while, I started picking up my head and thinking I need to learn how to run a business. Like I I I don't want to be a professional service person for the rest of my life. Um it's a good life. It's fine. I'm sure many of you are professional service people. Um but it wasn't for for So I was lucky enough I knew someone at the Constellation Software head office, and he was in my area saying like, "Hey, you know, like you might be good for this job. Um Mark Leonard looks for someone every year or two. He brings them on. You work with him directly. You know, you kind of have this mentee relationship with Mark. You get a full view of the operating company, of the operating groups. Um and you should come talk to him. So, I came into the Constellation head office one day. Um I saw Mark. He's huge. He's a huge man. Um he has a huge beard. That's why I'm growing the beard. I think, you know, one day >> >> it'll give me the investing powers of Mark. Um and the more I talked to him, the more I learned about Constellation, um the more I talked to other people, I knew I'd be an idiot if I didn't take that job. So, I took a big pay cut. I went to go work for Mark. I spent a year with him doing massive studies of the organization, meeting everyone around the organization, having time with each of the operating group CEOs, understanding the inner workings of Constellation, and how to build the culture around best practices, and and really doing a million things right. Um like there are a ton of things that obviously make Constellation work the way it does, but I was really lucky to kind of get a view from the top, and really just understand why the culture exists like that because it's a reflection of what Mark is. Um So, I did that for a year. I had kind of a pick of where I wanted to go within the organization, and because I had an M&A background, and because I wanted to do operations, I knew that I wanted to get into portfolio management. Like I wanted to do deals, but I also wanted to have purview over the operations, and kind of run a portfolio of software businesses. So, I took an opportunity within Vela as CFO. Um we had a VP finance, so my role was really leading investments, responsible for strategic finance, and managing the portfolio alongside an operator CEO. I was extremely lucky to get um a gray-haired veteran operator, someone who wasn't a software guy, but who was a industry operator. So, like I got to spend 3 years learning how to operate businesses, how to build teams, how to just kind of motivate people and and hopefully be a good leader, right? Um We bought over 10 businesses over 3 years. We grew that business considerably, learned a ton about optimizing portfolios and running decentralized organizations. Um and during that time, I was lucky enough again for actually Austin. Um Austin reached out to me maybe a year or two before that, and we got to know each other. Um and then Austin came to work at Tiny, and he said, "You know what? You got to meet Chris. You know, I think you guys are going to you guys are going to hit it off." Um and I remember talking to Chris on the phone, and we were talking about best practices of running decentralized organizations and constellation stuff and what we could learn from each other and how Tiny operates, um and how exciting things were going. You were talking to me about going public with WeCommerce. And I remember thinking actually, I was like I was like, "I wonder I wonder if I'll work with Chris one day." Like I remember getting off the phone with you and I was like, "I bet I bet one day we'll work together." Um and that kind of settled down, and I was continuing to work at Constellation. Then I one day I got a call, and Chris was like, "Well, you should come you should come work at WeCommerce. We just went public, you know, we think you're perfect for this investment role." Um and I thought I was too. Like I was I was kind of I wasn't looking to leave Constellation. Constellation's an amazing place. Um but the attractiveness of joining WeCommerce and Tiny was, "Okay, what can I take from Constellation, which is, you know, amazing, they they do all this amazing stuff, but take it to a place where we can be more flexible, more dynamic, invest in businesses that have higher growth, um maybe do things that Constellation would never do because they have a very rigid structure around the way what they invest in and they're very very kind of, you know, they have their thing. Um So, it was a no-brainer. Like I, you know, I the the philosophy that you guys were espousing spoke to me and um and I joined. Uh fast forward a year after that, I'm CEO of WeCommerce. Uh we've done five acquisitions, acquired great platforms, acquired some amazing functional integrations or tuck-ins. Um I think we've done a really good job of creating a portfolio that kind of operates similarly to Constellation, like in terms of having centralized centralized finance and a common language and holding people to account and learning from each other. Um So, now I'm here. Um I >> >> I I had a conversation with you guys, I don't know, a little while ago. Um the transition is ongoing. I'm absolutely thrilled. I think this is an amazing opportunity. Um the past 2 weeks have been amazing. I'm meeting all the different CEOs. I've met some of you already. Um there is opportunity here and I think given my experience and given the talent that we already have, uh this is great. Genuinely pumped. >> Right on. Can you >> >> One one thing when we were talking yesterday, you said, "In a year, I want to come to the AGM and I want to say three things." What were those three things? >> That's a good question. So, in a year, what do I I actually wrote this down. We we we had a big management strategy session and I said, "Why don't we start this session with what do what do we want to tell this group of people and hopefully more people, same people, etc. What do we want to tell you next year?" I think it's pretty simple. >> >> We paid down debt. You know, X amount of debt, this much debt. We've increased cash flow by this amount and we can be proud of that and that might be through you know, investment in organic growth, it might be through efficiencies, it might be through optimizing the platforms, it might be through optimizing our incentive structures, but there are there are a ton of levers that I see to optimize cash flow. So, like, you know, disciplined investment in organic growth, optimizing cash flow. >> >> The second thing I want to say is we've improved our disclosure, we've improved our reporting, we've added metrics that hold us to account. Um we're working on it already, we understand, we want you to get information that allows you to make good decisions that allows you to be a good partner with us and I want to tell you about all those great things that we've done. And three, we've acquired great businesses and we want to tell you what what they do, what did we do right, what did we do wrong, what have we learned, and what are we going to do again. So, I think that's a pretty simple message. Um and you can hold me to account to it next year. >> That's great. Thank you, Jordan. >> >> So, now I'm going to pass over Louie. Louie's going to MC in terms of Q&A and everything else from here on out. And please feel free to ask us anything. >> Thank you. There's two mics, one here and then one further down there. So, if you have questions, please just line up and we'll just alternate back and forth and we'll just go till there's no more questions. Go ahead. >> Sorry, I ran up cuz last year I was the first one to ask a question, so I want to I want to make that an annual thing. >> I like it. >> >> Um I have a statement and a question, so statement is for anyone who came out of town at 2:30, a bunch of us are going to go to Swan's Pub. It's a 15-minute walk from here. So, if you want to, come hang out. Come see Victoria. And, uh, my actual question is, it sounds like there are these online businesses that are kind of these sleepy websites or sleepy businesses with a very little management. Um, kind of like that that job board that you guys purchased. Where do you find these things? How do you find these businesses? >> A lot of, you know, it's really interesting. I think a lot of private equity firms and holding companies have these very formal outbound strategies where they have an army of junior interns who go and then send out emails to people. Most of the best businesses that we've found have actually been through our own network. So, Chris and I will be at a conference, someone will mention they own a business, we'll say, "Would you ever sell it?" Uh, and then we we go and buy it. So, um, I would say that you probably already in your social network know somebody who has a successful business, and you might think, "Well, why would they sell it?" But, often people are terrified owning one business. They have one egg, you know, and they they see all the risk in it, and they are actually open to selling it. And, I think a lot of the time it's simply about asking. Um, I was in Auckland, New Zealand for a conference, and I had a spare afternoon, and I went in my email and I went, "Who do I know in Auckland?" And, it turned out I knew this designer named Matthew Buchanan. We had met at South by Southwest 10 years before, and we just followed each other on Twitter. And, I caught up with him, and it turned out that in the ensuing years, he had started a social network called Letterboxd. And, I'd seen it. I was aware of it. I you know, my brother used it. I didn't know how big it was. And, I had coffee with him, and I said, "Oh, how big is Letterboxd now?" And, I gulped. I was like, holy crap, he has built this massive social network right under my nose. And I just said, have you ever thought about selling it? And he said, well, sure, maybe in a couple years. I You know, we got to get to a certain stage first. And I said, well, what would it take? What's your number? And he said a number, and I sent him an offer within 24 hours. And then we closed the deal in the uh New Zealand airport or the Auckland airport. So, I have found the best deals are often random and under your nose. Okay, come on, guys. Don't be shy. >> >> We're going to We're going to go back and >> Yeah, we'll alternate to this one first. >> Oh, nice. >> All right. I'm curious as to how you're thinking about sustaining growth over the next 3 to 5 years. Like, what is the mindset? Is it acquisition-focused? How are you going to keep up with growth priorities? >> I think actually, you know, like we've kind of touched on this a little bit already in terms of like what Jordan's going to bring to the table. A real hard realization Andrew and I had is that the skills necessary for us to get here are not the same skills that are going to get us there. And I kind of look at what Jordan brings to the table in terms of like how he's systematically built up WeCommerce to be a well-oiled machine poised for actual scale and growth. And I think that a big aspect of what growth is going to be for Tiny is actually going to be through Jordan's effort of building more of like sys- you know, greater systems of accountability all across Tiny. And I think that's going to There's hundred-dollar bills all over the floor. There's that, and then there's also our continued efforts just looking for wonderful opportunities, structuring them to be asymmetric in our benefit, um continuing to go and meet people. It's going to be the same hybrid approach, but I kind of look at Jordan's efforts are going to be a big initiative over the next 1 to 5 years. >> Do you think you'll have to Do you think you'll be forced to maybe go outside where you've acquired additional businesses or businesses in the portfolio because you won't be able to find enough of them or at scale? Do you think you'll branch out into other verticals? >> I think we might branch out if we understand the business well enough. And if we see that there's like an unfair advantage, um but I don't think we'll be forced to do anything necessarily. It's a vast ocean in every category. >> And and I was going to add to that like I think >> I think the the platforms that exist today and particularly like, you know, some of the software platforms, there's there's a ton of opportunity. Like we're getting inbound interest, we're getting like especially as kind of VC has abandoned some some spaces, we're finding that there are a lot of good opportunities. Like I I I wouldn't I wouldn't be worried about running out. I'd be worried Well, I'm not worried because I think we're going to be disciplined. Like we just want to be selective, right? Like we want to find the right opportunities, we want to pay the right prices, and like that's what we're going to do. >> Yeah. >> Thanks, guys. >> David. >> Yeah. Hey, hey, I'm David from Toronto. I've been a fan of the ecosystem of the media for for a few years. So, um my question is specifically about kind of like um the investments side, guys. So, the past decade was very clearly SaaS, and I think this decade is very clearly AI and generative AI specifically. I'm curious specifically for you, Andrew, how you think about Tiny's role and evolution and kind of um dealing with how software businesses are changing massively in the way they're being built in the sense the marginal cost of software is going to zero, but also kind of um the quality of revenue and uh recurring revenue is going down significantly if you look at like, you know, UiPath's earnings and and recently with like the multiples going down significantly, investors on the public market discounting SaaS multiples significantly if you're not kind of like one of the Meg 7. So, I'm curious as to how you think Tiny can evolve and kind of really play in this ecosystem of this decade. >> Well, I wouldn't say that we're not going to do software. I think that we've often found opportunity where other people other people in areas that other people have dismissed or are fearful of and I think in software there's going to be a lot of orphan players, people that have raised a lot of venture and we're certainly seeing that opportunities to recap of venture investors. You know, what I can think of a couple deals in particular but one you know, we acquired a business for next to nothing that was a SaaS company and we acquired it I believe for $500,000 and we have paid ourselves back many millions of dollars since then and it was a perfectly good business. It was simply that the VCs had dismissed it. They just it was never going to turn into a billion dollar business. So I think there's going to be a lot of opportunities like that and I think that our approach to software has always been incredibly conservative underwriting. We are always trying to pay ourselves back in a number of years and I think that AI is like a fog, right? It's like it could be that we have AGI in 2029 in which at which point it's like if I own an like even like an HVAC company like robots will just be doing it, right? Like I don't know how to underwrite that risk. What I do know how to underwrite is software when it comes to narrow niches. So for example, I think if you own software that does something in an incredibly boring world like golf course management software for instance, I'm making this up. How how sophisticated are golf course management teams going to be that they're going to go use AI and build their own tools? I'm not super worried about that. Would I pay a high multiple on that business? Probably not still. I'd still want to pay myself back in a couple of years. >> I I oh >> I was going to add to that. Like I I just think in the near term I'm excited about the opportunity to kind of integrate like like to use use and enhance our software and like I think there's a lot of opportunity to kind of just create stickier versions of our software integrating AI or integrating like you know behind the scenes stuff. So I think that's where we're more focused and we're not ignoring the risk. But we yeah, it's hard to make sweeping calls. >> Can you Jordan can you share that story of the business the I think we can talk about the business you acquired those incredibly cheap and it was venture backed? >> Yeah, I mean like a a good example of something we picked up like we just bought a company called Repeat. Like I I can't say how much we paid for it but this is a VC backed business. Um you know, it does it does retention and personalization. It it has an AI aspect to it like I mean everything has an AI aspect to it. But this is a business that it was never going to achieve venture scale, was looking for a long-term home, and was looking for a partnership with existing e-commerce companies and ecosystem. And you know, I I I I don't feel uncomfortable saying like we're going to be integrating it into one of our companies and we're going to be enhancing the functionality so that we can create some kind of differentiated approach and we can go upmarket and cater to enterprise customers. So like that's what I'm excited about in in the you know, enhancing our product. >> share the valuation of what you paid though? The not not the number but just like the idea of the deal. >> It is very attractive. >> >> It's >> I believe it's like what's the payback period do you think? >> I I yeah, well there's well I is yeah, I am. >> All right, we don't need to we don't need to we don't need to yeah, yeah. Maybe you could tell me offline. >> Yeah, can I have a quick follow up to that? So I'm curious as to how you like think about structuring those deals. Like specifically, do you like think about paying back press stack and then giving the founders like a very small exit? >> That that was you know, I'd say on that deal there's you know, like these are very opportunistic. Like these are investors who have basically written off >> Hey Jordan, you got to get closer to your mic. >> These are very opportunistic deals, sorry. These are we're dealing with investors who have who have written off deals most of the time. Like we're especially in the e-commerce space like if you think of you know, 2020 2021 you know, it's extremely hot. You have companies raising six, 10, 20 million dollars at enormous valuations and are now coming back to earth with a market that is still good but that is not a VC scale market. So, you know, we're happy to pay opportunistic prices with very low downside and have great platforms where that's an opportunity or enhance our existing portfolio with really really good technology or really good people and and allow us to create a moat within our already big platforms. So, that's that's kind of like the the way I think about that opportunity. >> I was talking to a friend recently who's a big Silicon Valley VC and we were looking at a deal. I don't know if that deal is going to go. We were looking at we were looking at a deal for this venture back business and they had raised tens of millions of dollars. I think like 70, 80, 100 million dollars into this business and this is a business we would look at and value it like 10, 15, something like that, right? And they'd done it at a 300 million dollar valuation and my friend goes, "Well, it's not it's not that big of a position for us. We're we're just going to write it to zero." And I said, "Well, how much did you invest?" And he goes, "Ah, 30, 40 million." Right? Like to them a business like that is just a zero. They've you know, one to two billion dollar venture fund. They make these 50 million dollar bets and it's a zero or it's a one and in this case it's a zero and they just want it gone. They just want to get off the board. They don't want to deal with it. So, I think that creates a lot of opportunity for us. >> Many such cases, thanks. >> Oh, thank thanks David. >> Move over here. >> Hey, I had a Is that good? Okay. Um the question is specifically to Chris and Andrew as their largest shareholders, but over the long term, um I know you guys do things outside of Tiny as well. And so, if you could talk a little bit about like how you decide what goes to you versus what goes to Tiny just to give clarification as shareholders on that, that'd be great. >> Yeah, I can take this one. Um generally, if it's stupid and Chris doesn't want to do it, it's outside of Tiny. So, um when I got the hairbrained idea to start a sugar-free bakery, uh that was outside of Tiny. When I wanted to go and buy a bunch of restaurants, that was outside of Tiny. Um and that's been how we've done it traditionally is if Chris and I can't agree about something, I go do it or if it's a hobby project. So, for example, the book that I wrote, that is owned by Tiny. All the royalties go to Tiny. Uh you know, I've been doing this silly podcast thing or whatever and like I don't want to put all those costs in Tiny at this point, so I don't, but I will, you know, if it works, then maybe I would consider it. I don't know. >> Cool. Thank you. >> Over here. >> Hi. My name is Zal. Uh it's pronounced like wow, except with a Z. Zal. Got it. Um uh this this is for uh primarily Jordan, um but um uh uh so, I'm a little curious on kind of about what what the playbook is. So, Tiny is like a amalgamation of like vertical social networks, uh uh verticalized software, uh e-commerce, you have like uh CPG, you know, there's a lot of different things. So, you know, with Constellation and Vista, you know, you you you tend to have a certain set of things. You cut costs, centralize operations, centralize uh sales, uh uh and marketing, and then, you know, you fire a bunch of expensive Silicon Valley engineers, move them to Texas, you know, and uh >> That E Are you talking about ESW? I would never do that. >> Well. >> >> Well, I mean, different private equity firms have different kind of And then And then with Constellation, it's it's very specific. So, it's a verticalized software. So, you basically have economies of scale with uh centralized operation, finance, and other things. So, I'm I'm I'm curious, what is the playbook? Yeah. You know, exactly. Like >> Yeah, I think I I think that's a great question. I think there's a ton of stuff that I've learned, you know, just managing WeCommerce and like, you know, that's It is It's vertical software, but it's actually not, right? Like, I mean, that's a bit of a horizontal. It kind of shares It shares some aspects of vertical software and horizontal software, right? So, um there are ways that we can centralize certain functions, still share best practice with practices with each other. We have We do have a string that runs through, you know, all of our businesses, even if they're not all vertical market software. Like, there's no reason uh Metalab can't teach Stamped how to do software development better. There's no reason that Stamped can't, you know, refer clients to Metalab. And not that we would force that or anything like that, but they don't have to be the exact same types of businesses for us to kind of like, you know, leverage domain expertise. So, like, I do see a string that falls through all of our businesses, and it's technology, and it's being kind of like almost best-in-class technology, right? Um but I think I I think it's almost a little bit more broad than that around culture, um sh- you know, having a best practice about how to run decentralized autonomous portfolios. So, like, you know, doing all the little things right, like as I alluded to, like, optimizing for tax, optimizing for finance, optimizing for reporting, having a shared language around success and what that means, setting expectations. Like, those Those are easy to say, but it's hard to create a business like that 40, 50, 60, and scale it. Um And we we are doing that. Like that's what we want to do. And there's a And And you find opportunity when you do that. >> Got it. >> Um >> The second kind of our question is uh how do you think about um monetization and terminal value? Uh so um specifically with uh Dribbble and Letterboxd, these are like very vertical verticalized social network. So you you you take a look at Letterboxd, it's like, well, there's different ways to monetize. You can basically take the ad way, you can go into streaming. You know, how do you think about like a capex versus uh uh you know, opex? You know, how how do you basically think about growing and monetizing kind of about these networks? >> Yeah, and and and Austin can maybe add to some of this. But like I think it's it's >> >> What What I think we do a bit differently than something like Constellation, which is very rigid in their terminal value approach. Like And And they probably said this. But And I think that means they pay extremely low prices. They have an They have an insane margin of safety. And they buy businesses that don't grow fast. Um I think we take a very still disciplined approach, but different approach. And it's on a case-by-case basis. We're looking at the market. We're looking at the type of business. We're looking at what might be done with it. We're not afraid to sell a business. Like I I I'm I'm I'm comfortable saying that. Like I mean, if we see a good opportunity to sell something, we there's no reason we shouldn't do that. Um we would like to own them for the long term. So I You know, I'm being a bit vague, but like I mean, we're taking a kind of holistic approach to it. Like I mean, if we think, you know, there's a real terminal value or something's going to go to zero, we'll say it's zero. Um and then we'll value it like that. And we'll say the cash flows go there. And we'll buy We'll buy it for a fair price. >> Yeah. >> Um And I guess the the the third and last question is um I'm I'm I'm curious a little bit on what's your stick. So, like um so so you know, different CEOs have, you know, different ways of uh growing companies. You know, some people are marketing focused, some people are sales focused. Um what I'm hearing is basically like you're more uh uh operations and finance focused. Uh would that basically be a correct characterization? >> Yeah, I I think it's I think it's probably three things. It's It's It's having a really deep capital allocation mindset. So, like I think that's like number one is like every dollar should kind of flow to the best possible use of that dollar, right? Like I mean, we are a tech holding company, we're an investment company, and like that should be the culture. Everyone should understand that, right? And then I would agree. Yeah, it's It is very ops finance focused and getting into the nitty-gritty and understanding what's going on and finding opportunity and finding you know, places to connect people or learn or create an environment where like we just kind of compound on our knowledge and our cash flow. Like we have some amazing people, we have some amazing know-how, and like we we are doing a job of sharing it, but we can do a much better job of sharing it. >> Got it. >> So so given given that >> do you mind Do you mind if we just ask you a couple questions? >> Sorry, we we can loop back. >> So, thank you. >> Is that okay? >> Yeah, sure. Can Can I just finish uh one more question? Uh this is the last one, I promise. >> We're going to do one question for everyone going forward, but but then people can always get back in line. >> Yeah. Um given your your uh uh accounting of terminal value is different than Constellation, then then how do you think about terminal value? Like you know, because you alluded to the fact that uh if growth uh stops or you get an attractive value, that basically implies that you have a you have a valuation in mind for all of these businesses effectively. >> like I I I it's still similar to Constellation. We think about hurdle rates, we think about terminal value, we we are conservative, we are disciplined. Like I I it it it we are still doing a discounted cash flow analysis and applying what we believe is a good terminal value on the business. So, it it it's it's pretty traditional. >> Okay. >> Yeah. >> Sorry about that. >> That's okay. And still free feel free to ask more questions. That's why I make sure we keep cycling. >> Rajiv, go ahead. >> Hey, so Is this on? >> Um yeah, I have uh two questions. I'll ask them together. You can answer both or or neither or whatever. >> that's a tough >> I did I wanted to ask uh Jordan um and I think you may have already covered this. So, if you have anything to add, um go for it. Otherwise, just skip it. Uh I was wondering if there's any specific learnings from Constellation that you see applicable to Tiny. Um and then my second question is for Andrew and Chris. Over the last couple years, um you've been spending more time on things like the book, podcasts, reputation building, and just increasing awareness of Tiny in general. And I'm wondering um internally, how do you think about the value of that time? Because it's it seems like it's taking quite a bit of your time. Do you see a return on that for the business and for shareholders? And if so, how do you kind of internally think about that? >> >> Those are such clear separate questions. Oh my god. Jordan, you want to take that first? >> Yeah, I think I you know, I I've I think I've covered quite a lot of it, but I I'm trying to distill it into a few things. It like I I I said I said this before like Constellation does like a billion things right and they're all little things. So, like um optimizing for tax, optimizing for finance, having a score having like a shared scorecard or language around that, having this amazing learning culture. Um I I like the thing that I press upon the most is this idea of this learning best practice culture and the what I loved about Constellation and something that I did there was like, okay, I do this big study at head office, right? We we look at every earnout paid over the past 20 years, okay? They're all structured differently. They they all look different and we say, how did the businesses perform? What was the earnout paid? Did it did it actually have an impact? Is there something we can learn, right? That's all synthesized down and there's a one slide presented at the GM meeting and it says, here are here are our recommendations for structuring earnouts, okay? And immediately, because of the culture of Constellation, that becomes like the Bible. Like it's the law. Like everyone's talking about it within the organization. Within a week, everyone's structuring earnouts in a very similar manner and actually, somebody finds that actually there's a little bit better way to do it. Like actually we added this little thing and guess what? A week later, everyone's talking about the better way to do it and we're all kind of and and that's just organic. That's just like something that happens. So I I that's a really hard thing to do. That's taken a lot of time, but I would say that is kind of an intangible that I would love to bring to Tiny. Like it it something that we started doing at We Commerce and we're and we're start you know, we're we're having these sessions, we're getting people together, we're we're like it is working, but we can do that at all of Tiny and I think it will have a tremendous impact. >> That's honestly one of the number one things we saw Jordan do, by the way, is that I think Andrew and I historically we do a great job of taking chances on people and throwing them in the deep end, but we really don't provide rails for what success looks like. And watching Jordan do this and actually creating environment of fostering and sharing and every time we talk to different CEOs within the organization, they're often looking for, you know, what's this other group doing? What's the best practice? And we would loosely connect the dots, but we wouldn't actually create that. And without a doubt, it's the thing I'm most excited about. >> So, and I can touch on the um you know, the public stuff. So, you know, I've got a big Twitter following. I've got a newsletter. I've got a podcast. I'm writing a book. And I think what people forget when they look at that is that we have gotten millions of dollars of free marketing for the last 20 years by writing. So, uh almost 20 years ago when I started Metalab, I would just say "Hey Mark Zuckerberg, I redesigned Facebook." And I'd redesign Facebook and write a big post about it. And I would stir the pot. And within 5 days, I would get emails from 10 SVPs at different Silicon Valley companies, and we'd have $5 million of new work. And that strategy has always worked for me. And so, what we've been doing is basically scaling up our opportunity surface area. That's kind of how I think about it. I think that if people remember in their brains that Andrew and Tiny buys businesses, and when they are having that bad day, you know, the founders who who is 8 years in and wants to sell their business, and they go, "Oh yeah, that guy I heard on a podcast once." Uh we get a lot of emails like that. And there's not a lot of private equity firms that just have natural inbound where it's prestigious and exciting to sell your company to Tiny. We often have people come to us and say, "I want to sell my company to you. I I have a parasocial relationship with you. I've listened all your podcasts. I have read all your blog posts. I like who you are, and I want to sell to you." And so, I think that's something the expansion of that of trying to be known by more people. And I think the larger that gets, the more benefit Tiny is going to derive. And so, I think that it's been incredibly positive. Um very easy to build a narrative that I'm distracted, but I've been doing this for 20 years. >> He's been distracted for 20 years. >> I think we remember that. yeah, exactly. >> >> We'll go over here. >> No. Hi. Uh my name is Misha. >> We need to increase the mic height for you there. >> Just squat here. >> >> Uh I'm wondering what are the options you're considering for unwinding the Tiny Fund at the end of its term. >> So, I'd say our key focus for the fund is really um getting it to a point where we can share all the numbers. There's a couple accounting issues with that, which Dave can speak to. Um we want to get more transparent in terms of its performance. What I will say is that we think that some of the best companies are in the fund. We're very happy with its performance, and we're incredibly excited about it. Um we're exploring a number of options, um but we have a lot of time. We have a 10-year horizon with extensions before we need to do anything with the fund, and so ultimately it's going to come down to what do the LPs of the fund want to do, and what do Tiny's shareholders want to do. >> Can you maybe share like a best-case, worst-case scenario, maybe? >> Best case, we make $10 billion. Worst case, it goes to zero. >> >> Okay, thank you. >> Over here now. >> Oh, hi. Uh does it work? Okay. >> Yep. >> Uh I just I saw I think last year you mentioned you like uh business that has a float. So, like uh traditionally like uh insurance business. Uh I just wonder have you find any anything that's more like tech, but also has float? Uh I also has a float. Thank you. >> The only So, Creative Market had a float for quite a period because there'd be all these deposits that we'd be able to use um and you know, either issue that up or make acquisitions with. We're constantly on the lookout for other forms of float in any way possible. And if honestly, if anyone comes across something, hit us up. We'd love to partner or buy. And uh we're looking. >> Over here now. >> Cool. Hello, uh, my name's Corey, co-founder CEO at Retreats Venues. I just want to say thanks for having me out. It's been amazing to meet so many amazing people here. Um, just want to give you guys a big shout out. I see behind the scenes how much work you guys put in and dedication. I just wanted to say Thank you. And doesn't go unnoticed. Um, maybe the question is there's an amazing group in the audience. Is there anything you guys need help with from anyone in this audience? So. >> I think the number one way that shareholders can help is by meeting a founder who wants to sell and just making an introduction. Like I said, I mean, our best deals are always under our nose and I promise you there's someone in this room with a wealthy grandfather who wants to sell their business and we would love to talk to anyone who owns a business and wants to sell. So, I'd say probably that. Anything you can think of, Chris? >> No, I think you hit it. Yeah. >> Yeah. >> Thank you. >> We're happy to engage on opportunities. Like I, yeah, and I also we will all talk to any founder. Like we have time for that. That's, yeah, I spend my day talking to founders all day. Love it. You never know what you'll learn and you never know what connection you'll make and I'm always happy to do that. >> Thanks, Chris. >> Thanks, Corey. >> Over here now? >> Uh, thank you for putting this on. This is my uh, second year here. Last year I got up and asked you a question. I actually got two questions here. Um, one's related to the carbon market and I asked you a question regards to carbon credits last year, I know, and you mentioned that you're in the tech business, you don't have a big carbon footprint. Um, has your position changed at all? The biggest participants in the carbon market right now are actually tech companies, um, as far as participating in early investment in project developers. The reason being is they want to acquire carbon credits for a cheap, you know, a cheaper price. This has to do with like scope one, two, and three emissions reporting standards that are being rolled out in both both Canada and the United States, depending on your market cap determines what you're responsible for as far as offsetting that carbon footprint. First question, if you have if your stance has changed at all, and if those are companies or businesses that you're going to look at. Also, the second one was that you were looking at you and Derek were going to buy BioSteel. That's kind of really outside of um Tiny Capital's kind of wheelhouse there. Is there any other companies that are are similar to that that you'd be looking at? And what was the precipice for even being interested in BioSteel? Thank you. >> Yeah, so on the carbon credit side, I have put no thought into carbon credits. And it would really come down to like what's the best use of a dollar in terms of like what the return we could really get in in terms of how that's invested. BioSteel, you might be better able to talk on this Andrew. I I look at a lot of these though as is there an unfair advantage? A lot of what we do isn't necessarily just you know, in terms of TAC or anything. It's hey, is there an unfair advantage? And Derek has a massive brand. At the same time, he was in a big public spat with Logan Paul. Maybe there's an unfair advantage where we could buy this distressed business which has a big brand recognized all across Canada. And you know, it's almost asymmetric at that point where we can you know, fund this great product and leverage this brand and work together to make a big outcome. It's the same thinking with Huberman when it comes to Matina. Hey, we'll buy this in partnership and leverage that brand to help promote it, right? And that was the thinking with BioSteel. It never actually happened. So, it's a bit of a moot point. >> Thank you. >> There we go. Tiny team, thanks for hosting us you guys. Of course. I'm Cody, I'm from Texas. Wonderful to be here in Victoria. Never been on this side of the country before. Couple quick questions. First one is on share dilution. Looks like y'all have been happy to issue shares from time to time for various reasons. You know, outline that in the shareholder letter. Curious how y'all look at that going forward as a shareholder, what we should expect in terms of when and why you guys might dilute the share base. >> Well, I would say that we really do not want to dilute ourselves or the shareholders unless there's an incredible reason to do so. So, I think that if we were to find that we had a amazing opportunity where it was highly accretive to issue equity, we would do it. We certainly have a lot of equity partners at the table who have, you know, offered that. But, I don't know whether we would pursue it unless it was the right opportunity. Jordan, do you have thoughts? >> I I I echo those same thoughts. Like I I I think it it would really be on a case for case case by case basis. I'm I'm kind of like philosophically against dilution and equity is expensive. Like I I I agree. Um so, if I think about like, well, how would we fund acquisitions? Like ideally from cash flow, um prudently through debt and like very prudently. And then, you know, if there's something big and really attractive and really asymmetrical and and accretive, then we can tap the equity markets and I think, yeah, I think that's it. >> Okay, great. And then, the second question. Last year, I think Andrew, I think you talked about this with circle of competence. Um and this sort of builds on the last question, but y'all talked about sort of looking outside of the tech space sort of traditionally what you guys have have sort of been working on for your career. I'm wondering what other spaces, sort of where you're expanding your circle of competence. Obviously, the most recent acquisition was a little different than some of the other things you guys have been involved in, but still kind of in the tech world. Curious kind of what what areas you guys are looking at right now in terms of businesses. >> Sorry, which which acquisition are you thinking of? >> Uh was it Medianet? >> Oh, that's I would say that's very much in our Do you want to speak to that, Austin? Want to talk about that investment? >> Yeah, I'd say that's right in our wheelhouse. So, a vertical market software business, one that's been around for 20 years, uh really high market share in the state of Arizona where they serve. And so, general characteristics that we're looking for, predictable free cash flow generative business with high degrees of barriers to entry, that was right there. Uh and at an attractive value. And so, that one I say is right in our wheelhouse. Those same characteristics, we are studying other industries and where we can find those. And so, I say we haven't dipped our toes yet, but we are studying other areas for sure. >> And and I think I'd add that like we'd want it we'd want to be sure we're really smart about it. We'd want to partner with existing operators. Like I like it's it's I don't think we're we're kind of kidding ourselves that we can throw anyone in there or we've got, you know, just because Mike runs Stamp, he can now go run Aeropress. You know what I mean? Like so, um where we don't have the confidence on the op side, like we're really proud or or the thesis might involve hey, well, actually we're going to bring Gerard in. He ran SodaStream for a number of years. Um he understands kind of brand and distribution and all those things. And, you know, you put kind of valuation plus expertise plus, you know, all the things that we do really well on the finance administration side and all that stuff. That's where we might do something that's slightly outside of our sphere of competence. >> Great. Love it. Thanks, you guys. Looking forward to see what you guys do next >> Thanks coming up. >> Thanks, guys. >> Thank you. >> Over there now? >> Yeah, you you mentioned that HVAC before, which is sort of like a common business model for private equity roll-ups. Um I was curious, what is your take on sort of more traditional non-tech um sort of platform companies with like an expansion model of growth through acquisition um real you know, as far as like a portfolio company. Um are you guys like entirely tech focused or um is diversifying to other industries ever on the ever on the pipeline? >> Well, we have we have non-tech businesses for example like Aeropress and Metina and I think that like what we try and do is just buy great businesses that we can wrap our heads around. Um when it comes to Um it's funny actually it's like Tiny originally I think I mentioned this last year but uh when we originally started Tiny we were looking at an HVAC business and I got really far down the line on diligence with one locally. Um but it was this realization like hey you know where's the actual cash flows and he had all this crazy equipment and it was sucking up all the actual cash. And it was just a realization that hey that's business on hard mode. And a lot of the things we buy is almost business on easy mode when you look at like Dribbble or We Work Remotely they're hard businesses but nowhere near as complicated as the logistics required on HVAC. Um how do I feel about some of these roll ups? Um I think that like some of them you know if there's like a tuck in play within an existing operating business I think it could work really well. I always have this lingering fear of some of the private equity roll ups in those spaces where it almost feels like it's predicated on a greater fool theory where one will do an aggressive roll up at any valuation in hopes that they can pass that buck on to the next PE firm and that theory works really well in a low interest rate environment when there's like tons of excess capital but I I think that that playbook might get really hard. Jordan? >> Great. Hi everyone my name's Jordan Weller nice to see you Andrew come a long way since high school. And um two questions one in or two in one one how does someone become a shareholder and I a lot of people say big words here but like if when you when you invest in a company or you buy a business what are some of the challenges you find with the owner or the founder in the initial two to three years say? >> So in high school Jordan's nickname was world champ and mine was Palm Pilot Because I was once spotted with a Palm Pilot and everyone thought that was really funny. Yeah. >> We were very cool. The girls went crazy for both of us. Uh >> That's my recollection. >> So, in terms of buying uh stock, you can go to any investment account and buy it there. What And what was the other question? >> What are some of the challenges in the first few years with an owner founder after you? >> I think the hardest part is often people are selling you their business baby. And you are a foster parent. And two things can happen when you're a foster parent. The children can reject you, so the employees might not like you and the way you do business, or the parent can get really mad at you and say, "I don't feed them that and I don't take them there and don't do these things." And so, I think the big challenge for a lot of founders is actually letting go. And um that's a hard thing. And we really have to spend a lot of time up front being very direct about if we do a deal, either you're going to stay and you're going to run it and we're going to give you a lot of autonomy and here's what we care about, or if they're going to leave, we say, "Okay, you know, you're out and here's just so you know, here's what we're going to do. Are you okay with that?" Um and usually it's actually worked out fine. And in a few instances, I've found that founders can get a little bit persnickety at first because they don't like someone coming in and messing with their stuff. But usually after a year or two, uh they're like, "Whoa. That's pretty crazy what you managed to do with the business." Because often I find founders you know, they get a little bit myopic in stock. Someone asked before, you know, "What's Jordan's hammer?" To a man with a hammer, everything looks like a nail. And often a founder will be obsessed with doing one thing and they'll miss marketing or sales or other opportunities. Um so yeah, usually it sorts itself out, but people are you know, for good reason, they're touchy. >> Right. Fair enough. >> Thanks, Jordan. >> Good to see you, man. We'll go over here now. Robert from Texas. Uh how do you guys assess the moat at Shopify? And how durable is that moat? And then what's the impact on WooCommerce? >> Jordan. >> >> Yeah, yeah. It's it's a good question. Um this this is a bit anecdotal, but I mean when I when I started at WooCommerce, you know, I I I think if I asked each one of the CEOs, you know, are you you know, we have platform risk, like you know, we're all exposed to Shopify, it's very scary, etc. And everyone would have said, well, yeah, we're actively differentiate like we're actually you know, we're actively going after different platforms. Like we don't want to be completely tied to Shopify, it's very risky, etc. Um if I fast forward to like maybe last year and and and now, we talk to hundreds of agencies, we talk to thousands of brands, and we we feel like based on that assessment, there is there is almost or there is little value in being on another platform at the moment. Um that may change, but it has changed dramatically. And you can kind of sense that shift is like Shopify is the default. Like like people are migrating to Shopify, they are not migrating away from Shopify. The investment in Shopify as a platform, you know, in terms of being the easiest to onboard, cost-effective, serving merchants well, is is kind of you know, they have won in a way. Um of course that can change and it's something that we monitor a lot. And and we are on other platforms for sure. We serve BigCommerce, we serve Magento, we we we're on them, we're not ignoring them, but it makes good business sense for us to invest in Shopify because that's where merchants are going. >> Over here now? >> I'm a little shorter, but someone behind me is probably taller, so I'll just do this. Uh my name's Desmond. Um thanks for having us. Um so there's a lot about, you know, talk about financial metrics, um and that's just sort of the outcome. Um and I think we're sort of too focused on that, and it's easy to pull financial levers like cut costs here, cut costs there, great, right? But what I'm sort of um curious about is what has been done, and I know Andrew's been working on it, building that platform, that brand, um so that people want to be here, want to work here, which I think is important, and once you build that brand, that net income or I know EBITDA's a number, but that will start it start to sort of come along. Um so Jordan, I just want to hear what will be done or has been done to get that best place to work badge or cultivate that culture where you're not and I'm sure there's resumes flying in, but you're keeping people, cuz labor's a big problem, right? >> Oh, I I I couldn't agree more. It's something I'm you know, if I think about like the the sub priorities that sit within there and like how, you know, how do we incentivize people to get the absolute best result. So, I think something that we can do at Tiny is be creative. Like I'm I you know, it's something we're doing. I can't I I I don't want to disclose too much stuff like but we want to incentivize people to increase the value of their individual businesses. That's that's the best way for us to make to make money for shareholders, to create value, right? So what is the best way for us to do that? And I think that also goes into this idea that how can we attract the best talent? How can we, you know, take people away from VC, but also maybe give them something of a style of a VC outcome. Um so that's something we're working on. Like I I I think incentives are the biggest lever for that along with the brand, the opportunity, the best practices, the the the opportunity to work with 40 amazing CEOs, to come and, you know, be part of like, you know, an actual culture like this is is very attractive, but it all has to kind of stem into this idea that if I'm successful, oh, I'm going to also do really well financially. Um so we That's what we're doing. >> You mentioned what do we do to keep people and one of the I read a study and it said that the number one reason people leave, it's not their compensation or anything else, it's often the culture. Do they like their co-workers? And as soon as they get a co-worker that they think is toxic or whatever, then they that's often why they leave. And I think that Tiny has We like to joke that it's nice and normal as a competitive advantage. We are incredibly thoughtful about who we let into the business and we ensure that everyone that we work with is somebody that we would let babysit our kids. Any one of these guys I'd let babysit my kids. I'd feel very comfortable being stuck on an in an elevator for two days with them. That'd be gross, but but but but you know, like that's really our focus is great people. And I think if you have great people, everything takes care of itself. >> Thank you. >> Go over here next. >> Hello. Scott, I'm just a rando off the street, but small investor, but when I bought this I'm hoping to hold it for 20, 30 years, whatever it is. So that's the plan. I have no insights on the portfolio company, but one thing I'm looking at and of course I'm fair or unfair, I'm comparing it to Constellation. When I look at the big difference right now is the employee based compensation uh regarding stock options or not stock options. Um For anyone who knows Constellation, if I have it correctly, you get a bonus, your after-tax amount has to be bought. >> Yep. >> You have to use it to buy shares that are locked and held for 5 years, roughly. Whereas you guys have the 10% pool available to for your discretion. I'm just worried over 20, 30 years that 10% pool is going to be working against me and I'm wondering if that's a age and stage of Tiny or is it something purposeful that that works for us now and might have might change in the future. >> Yeah, I look at this like a bit of a byproduct of like um you know, where we're at right now. Though our goal, without a doubt, is to kind of actually go very much in the Constellation approach and you know, pay bonuses based on cash flow generation and use the proceeds of those bonuses to buy public stock um in the near term just to get there. There's like a few exceptions, but what's tough is that exceptions end up just keep happening. Um I'd say we're very well aligned, especially just as being large shareholders, and we're incentive junkies, too. The goal is to kind of get there. Uh Jordan, anything you want to add? >> I We we are rolling out a Constellation-like purchase plan, like in and you know, having hold periods and having an incentive and stuff like that, but I agree, like, you know, we we are also focused on, you know, kind of conserving cash flow and making sure, you know, we manage those things. So, there is a bit of push and pull right now. We don't want to you know, use the pool unnecessarily or treat it like some piggy bank that that doesn't have any impact, like far from it. Um but I come from that culture. Like, I think it's super powerful to have people earn their bonus in cash, have it paid on the market. There's extreme alignment with shareholders. I I own all my Constellation shares. I never sold them. Like, I get I get the power of that kind of purchase plan. Um so, we agree. >> Yeah. Over here now? >> Hi, thank you. This working? Okay. I just wanted to um ask uh hearing, you know, that you guys are not just focused on the tech stuff that you're known for. That's uh causing me to be interested in seeing how far afield you might want to go and and when you talk about advantages that you're calling unfair, hope is kind of tongue-in-cheek. Um you know, have you considered or are you interested in situations like right now in Argentina with this extreme economic crisis that they're having? Just about everything is for sale cheap if you're buying it with Canadian dollars or US dollars or something like that. Uh or is that just too far afield and straight >> That's probably too far afield. I think we really are looking for businesses that are based in stable places with good rule of law. And so the concern there would be that we might be able to buy something cheap, but it would just be a headache and complex and there's a lot of risk there. I would say that we are really open to buying any business that we think we can operate and explain in simple terms and that we feel is business on easy mode. I always like to joke, I would much if I'm trying to get to Hawaii you know, there's one option is try and find a beaten down boat on the on the shore and build a sailboat and try and sail there. You know, probably won't work. I'll probably die, but it'll be cheap and maybe I'll get there. Or I can just find a really great cruise ship that's already planning to go there and I can buy a ticket and enjoy myself on the sun deck. I would much rather own that business. I'd much rather own an Aeropress or Letterboxd or Dribbble than something that is a ramshackle operation that I could buy incredibly cheaply. Never Never say never. We do do special situations, but often they're incredibly obvious, right? That business I mentioned before where we bought the business for 500,000 and we've got millions of dollars of cash out. It was so easy. It wasn't a complex business. We could buy it incredibly cheaply. It was in our circle of competence. So yeah, that's how we think about it. >> Okay. >> Thank you. >> Ty? >> Uh Ty Burck here from Colorado. Uh thanks guys for having all of us up here. It's uh really wonderful seeing a lot of familiar faces and such. Dave, you've been quiet. So this question's for you. Congrats on the success taking taking Tiny public. Um and I'm thinking I'm wondering about kind of the future as you think about Tiny as a public company. Where are the opportunities to mature personnel different types of capital market stuff. Like as you look into the future, Tiny is such a a great company, but it's a young public company particularly relative to the competition. Where where are those maturation opportunities that you see? >> Great. Thank Thanks, Ty. It's a great question, and I've spoken to many of you in this room, I recognize, either through Zoom or Teams. We've had one-on-one conversations, and you know, I've always said that Tiny is in the first inning of the ball game. You know, it's a young company, we just went public a year ago, and last year was a heavy lift. You know what I mean? The accounting to get the processes in place was a little messy, and but but we've that's behind us now. And the foundation is there, you know, you've heard Jordan talk about the priorities going forward. The heavy lift of what we had to go through to get to this point as a public company and as a finance team is is mostly behind us right now. And so, I see great opportunity for Tiny to build on that foundation that we've built. A lot of that was behind the scenes, and I was I was talking to somebody in the lobby about, you know, all the things we had to do, and this person was a a previous CFO, and so he knew, he understood when you're going through and you're taking, you know, companies that were private, and you know, you're you're bringing them into a public, you know, realm that it's messy, and it's and it's done behind the scenes, and you don't really know what's happening. But we've we've, you know, we've changed people, we've improved that that the team that we have on the finance side. We've we've improved processes. We're putting in new tools, and that is a fantastic foundation for us to build on going forward. And so, with Jordan at the helm, and, you know, Chris and Andrew still, you know, actively involved, we're really poised now to build on that foundation of that hard work that's been done. >> Just to give Dave a little bit of credit, I mean, we were running on Zero up until a couple years ago, right? Zero is like QuickBooks, basically. And uh so he There's been a lot of work by them to bring us into the PubCo world. And I think it is invisible and behind the scenes, and I'd love to give a round of applause, actually, to Ryan and all the finance folks. Where is he? Uh it's been a it's been a big big task, but they've done an amazing job. >> I'm over here now. Hey guys. Uh back to the fund. Um you mentioned you might be wanting to share some more metrics with shareholders. What what exact metrics do you think you can share and and by when? >> Well, we'd love to share uh simply, you know, what's the revenue and what's the EBITDA or earnings of the businesses that we own, um and break it down business by business, eventually, I think. What's NAV, you know, that kind of stuff. Um you one one day uh it would be nice to be able to disclose all that. And it's simply just a matter of getting audits for all the businesses, and does it make sense uh in the in the ways that we are limited disclosing it, um Sorry, what I mean is if we are if we are to audit it, and Dave can explain this in more detail, if we are to audit it and roll it in, it complicates our financials a lot. So, what we have to figure out is can we keep it as this separate entity without reporting it informally? Uh Dave, do you want to just quickly give a summary of what the issue is? >> Yeah, so so right now, just given our level of ownership as the GP and an LP in the fund, uh it's small enough that we're we're actually not allowed to consolidate the results of the companies that are in the fund into our results. And so, many of you will see just on our balance sheet the level of investment that we have in the fund. And so, I think what we're talking about here, and I know I've had many one-on-one conversations with investors, both in this room and and outside, is we have some wonderful companies in the fund that we'd love to talk about in terms of their growth, their trajectory, their level of profitability, and we really can't because, you know, we can't disclose that. And so, we would have to increase our ownership of the fund to to sort of cross that threshold so that the accounting rules would dictate that we would consolidate the actual results of the companies into Tiny's results. Okay? We're not there yet. That could change in the future. I think that's what Andrew was alluding to. >> All right. >> helpful? >> Yeah, yeah. One more if I can. Just Andrew and Chris on your you own 75% of the business approximately. How do you think about your personal holdings over the next 1 to 2 years? Are you are you wanting to sell or liquidate anymore? >> Yeah. So, you know, I have a foundation. So, I often move stock. I often transfer stock into the foundation. And also, we are gifting Chris and I are personally gifting a bunch of equity to various early employees who were at the business 15 years ago and played critical roles. Wanting to make sure we take care of them. And then, you know, I think I foresee selling a small amount, you know, annually, but I would say probably sub 1%. That's just to live off of and and and then make my I got divorced a couple years ago so make my divorce payments. >> Thanks, guys. >> Hi. If it's okay for me to ask another question. >> Sure. >> I was going to ask something different, but hearing what I just heard, I'm going to ask this. I understand that there is accounting rules that say when and you can and can't consolidate accounting from partially owned subsidiaries. Uh but maybe I'm missing something obvious, but isn't it at least possible then for those companies that you have an ownership interest in to separately publish their financial results even if they're not publicly traded. I mean, what's stopping them from just announcing what the results are? >> Yeah, we we could we could start disclosing those results and and making sure that everybody understood that, you know, they're not some of that might be non-GAAP, right? And so, some of the companies that we've bought that are in the fund are, you know, we're on cash accounting, for example, that weren't following IFRS that are under US GAAP. And so, to bring it into, you know, IFRS is is is a heavy lift. It's a project that we'd have to undergo. If we start disclosing those results and some of them are US GAAP and some of them are cash accounting and some of them are, you know, IFRS related and you don't have opening and closing balance sheets and so you don't know certain adjustments, some of those results might be a bit misleading. And so, we've been just, you know, overly conservative and that's probably my doing here. I'll take full responsibility for that, but it, you know, it's a conservative approach not to disclose it until we're sure the results. And so, if if you're investors relying on those results to make an investment decision, we just want to make sure that we are sure of those results. >> I think I mean, even to put it simply like, listen, we just did the RTO. It was extremely expensive and it involved a lot of accounting work and >> 12 million dollars. >> >> It's there. The the cost is there. So, you know, are we going to run into another project, um, you know, that obviously has value and it's something we we want to do, right? And it's something we are doing, but it takes time and we want to manage the cost. We want to manage the workload of our finance team. We want to make sure that we're getting the value for it because in my mind, if I was thinking, oh, number one priority in the finance side would be like, hey, could we take time and upgrade our FP&A processes and and squeeze more efficiency or more growth or or all these great decision making out of the companies that we own here, while also still helping the fund? You know, that's probably our bigger priority and then can we work in the background about you know, around getting the disclosure and the and the accounting rigor and all that stuff within the fund up to par so we can get you that information? It's It's also a priority. So. >> I I understand. I used to be on the board of directors audit committee for two publicly traded companies. So, yes, I understand that's a very conservative approach and probably safe from liability. It is ironic though that the securities regulations you're concerned about with the fear of being labeled misleading are supposedly intended to promote as much transparency as you well know. And yet instead they incentivize you to not disclose. But But I understand why that makes sense. >> Oh, the Oh, the accounting rules. Oh, we could we could chat about them. >> >> Thank you. >> Over here now? >> Yeah, my name's David I'm from Austin. Thank Thanks for hosting the meeting. So, two questions for Andrew, for you the the gentleman from Auckland. So, what what's the pit you know, what I mean? If you have a no growth business, Constellation may be like your only option to sell your company. But if you have a good business, you've got lots of options. So, why why do I sell to Tony? That's one question. And then other probably more to Jordan. Not only when a VC, you know, their expectations may not be met, they want to get rid of a company cuz it's not going to be big, but all of those employees who went to work there had expectations that it was going to be big, too. So, how do you reset all the people there and retain the people you want to keep who were planning on >> Very very carefully. No, that's >> Um so, I can speak as a founder to my own experience and I think a lot of founders are high-pace and when they decide they want to sell, they just want to get it done. I remember saying to a potential buyer of a business, I said, "Okay, can we get this wrapped up in a week or two?" And he looked at me like I was insane. Because usually when you sell a business, it's a 6 to 8-month process of get to know you and you go through an investment committee and you have a data room and all this complexity. And I looked at it and said, well, you know, Warren Buffett's doing multi-billion dollar deals with one-page LOIs and super simple contracts. Why can't we do that same thing? And so, ultimately, when we go to somebody and they say, my number is this, and we say, we meet your number, and we say, we have a great reputation and we're going to treat your employees well, and hey, it's actually me writing the check, you know, this is my company and you can trust me versus some private equity firm where it's some Wall Street suit who's never run a business and looks at their business like a spreadsheet. I think it's a pretty easy competition. Now, are there people that are going to seek the maximum dollar and hire a banker? Of course. But, often, we, going back to that analogy of a business is often the founder's baby, they want to choose the right step-parents. They're usually feeling very guilty about selling, and they're worried about who is going to operate the business, will they hold it for the long term, will they treat their employees right? So, that's typically why people sell to us. >> Yeah, on on the VC friendly I think every situation is different, right? Like and and it really just depends on what employees have, what are their expectations, what is the investment thesis, what are the founders' expectations, and you know, I I I can speak to the last few that we've done, but like you know, there are ways to incentivize people going forward and like we've we've structured things like that around maybe revenue bonuses or or aligning them to exactly what the thesis is. Um you know, and there are yeah, like I I we're willing to get creative, I would say, right? Like and and if we're buying a business or or buying a VC-backed business and and it's important that the employees stay, well, then we're going to align an incentive to make sure that they that they feel like they have skin in the game or that they're not being screwed out of some promise that was made. >> Yeah. >> Thank you. Yeah, this is more for Jordan. You spoke a bit about talent and having talent in the team. So, I was curious now as you're transitioning into the role of the CEO, what are the big gaps that you're identifying within It could be within Tiny as a holding company or within operating companies. What are the skill set gaps that you are seeing that are probably priority zero for you to solve? >> Yeah, I Well, it's a good question. I I honestly don't feel like we have any huge gaps. We have We have amazing talent here. Um you know, I've worked with a lot of these people for the past 3 years. I've met people within Tiny. So, like I'm I'm not super concerned about that. I think it's more around optimizing where they sit, what they're doing, what they're focused on, and what the priorities are. Um and then filling in the blanks on maybe the edges around talent and and what we might do better. So, I I I wouldn't say like, "Oh my god, we need a we need three CTOs at these companies." Like I I'm not seeing that. >> Perfect. Thank you. >> Thanks. >> >> So, >> Yeah, hi. >> Uh So, uh I I wanted to unpack a little bit uh the the competencies that you're building kind of about within uh Tiny. So, uh the reason why I I ask is like if you if you take like a CPG conglomerate, it has uh brand marketing, it has uh uh distribution kind of about with retailers, and and there's certain core competencies that you basically kind of about compound over time. And uh um you know, you guys have a variety of social networks, um uh Dribbble, you know, Letterbox. And classically, they're grown by growth uh like uh teams. Uh and growth teams are different than uh brand marketing teams are different than uh pay performance teams, uh which is very analytics driven, you know, core retention, day one, day 30, day 17, survivorship and and kind of a real-time things. So, I the reason why I'm going down slight rabbit hole is I'm kind of wondering what type of competencies given the fact that, you know, you have Aeropress and then you have Letterboxd and then you have Dribbble and >> Well, well, I think that I think that speaks to like just kind of the evolution of a platform strategy. And I think it will really be dictated about where those end up sitting together, right? And like that's something where we're kind of having a brainstorm about right now. Like it's like, "Okay, well, we've got a few platforms. We've got some businesses in the fund. We have WooCommerce." And, you know, as we as we take a fresh look at these, like, what is the best long-term home for each of these and where can they sit in a platform so they can start building maybe more centralized core competencies or start sharing things that are actually a little bit different than an agency business or different than a, you know, they need growth marketers or they need brand building. So, like, you know, we're kind of letting, let's say, Matinan Aeropress or or kind of more traditional, more branded, stuff like that, like, they can learn from each other. Like, I know that they're they're different goods, but they involve more brand, right? Can we start adding more to businesses that look like that? The WooCommerce ones obviously share quite a lot of knowledge and a and a lot of best practice and develop their own core competencies. So, um hopefully that helps. One One thing to be clear on is within a business like Dribbble or Letterboxd, we wouldn't traditionally not build a marketing team over top that does everything. Tiny is not hyper-synergized. Every business runs on its own and each CEO makes its own decisions in terms of what kind of team it wants to build. And so, Letterboxd might pursue a different strategy than Dribbble. And we try not to be prescriptive. I think what we do try and do is get people to share best practices and talk as a group. And to Jordan's point, as we form platforms around those, we'll have more of that. Um but there's no one thing at Tiny where we're saying, you know, we're building a PPC team at head office that's going to service everyone cuz that's always been a nightmare whenever we try and do it. >> All right. All right. Thank you. >> Thanks. >> Over here. >> Hey. Thanks for hosting us, guys. This past year, you guys shared your amazing story with Charlie Munger. Have you worked on a deal with Warren that you can tell us about? >> No. >> >> If you haven't worked on one yet, what would it look like? >> I would love. I I honestly, I was going to make a joke, but I I struggle to see what Berkshire would really need our help with. >> I I If you want to hear the full Charlie Munger story, Chris gave a speech at ValueX that was really good at the Berkshire AGM on YouTube. You can Google it. And then also, if you got my book, there's my books are out there. We tell the story of the Charlie Munger deal we did. >> Yeah. >> We had to take a shot with it. >> Yeah, and my second question is, when when can we expect a book from Chris? >> My book titled Riding Coattails will be coming out >> Thanks. >> Over here again. >> Okay. Hi. Uh the la- last question for me. One I was going to ask earlier before I thought of the accounting thing. Um again to try to get a sense of where you're um looking at and what you're willing to be, you know, involved in or interested in. Uh would it be perhaps of interest if a company is a very boring uh company in a very well-established, not moving industry. Oh, yeah, already. >> >> But they have one thing that or one thing could be added to the business that changes incentives. Um could be for employees, but I'm thinking more like for customers. Something that uh there is evidence that it would drive business to that particular company as opposed to their competitors. And that one thing alone might be enough to transform the profitability and competitiveness ness of that business, but other than that, it's just a regular, you know, retail operation. >> That we call that 1 + 1 = 100. >> Okay. >> And that's when we find, you know, a business where they have a cost or a problem, call it customer acquisition, and then we pair it with either a shareholder or another business that solves that problem. So, a great example is Matina. >> Matina >> uh has an incredible incredible product. It's I highly recommend everyone go chug some after this. >> Okay. >> It's really delicious. But, um one of the big problems with a beverage brand is how do you, without spending $100 million a year on marketing, how do you have people find out about the brand? You're competing with Coca-Cola and stuff. And so, we were able to partner with Dr. Andrew Huberman, who has a huge following and loves yerba mate. You pair those two things together and you get a ton of free marketing for an incredible product. >> 1 + 1 = 100. >> So, we do do that occasionally. We did the same thing with James Clear. He wanted to build a habits app, so we built him a habits app and he promotes it. Um but that to be honest, I'd say that's kind of like 2% of what we do. It's just those uh we only do that when when the stars align perfectly like that. >> Okay. >> Thank you. Thank you. >> Thank you. >> Jordan. >> Hey guys, Jordan from Victoria here. Thanks for having us. This is really cool. Been really interesting. Um question for you regarding the Shopify piece. Um you mentioned from a week converse perspective, um a lot of the portfolio companies haven't really been worried about the platform risk, but I'm just curious like from your perspective, what is the Shopify platform risk if you had to identify it? >> Jordan. >> I I I think I think it's the same as kind of any platform risk. Like it's just that Shopify is its own entity and can do whatever it wants and we at some point we'll have to bend to its will. Like you know, there's always that risk that that sits there, right? How do you avoid that? Um we have a really close relationship with Shopify. Like right, we speak to them every week. Um I'm going to speak at Shopify uh Editions next week. I'm I you know, I'm going to meet the head of VP of Partnerships. I talked to them about roadmap and you know, so like that's how you get comfortable that you know, you're a good partner to this big company. Um you're a big part of what makes them special and what helps them serve merchants really well. Um and you you help each other, right? So like inherently I think they would be I I mean, the reason we're comfortable with it is because they need these partners, right? So screwing them was not in their best interest. >> Maybe I'll see you there. >> Yeah. Yeah. >> Cool. David? >> Um yeah, so I'm curious about how you are thinking about having like the fund like having the fund kind of a core value to the company over the next few years. I think you know, historically public markets severely undervalue GP stakes. Uh I think Bill Ackman's like you know, he had multi-decade long like low mo you know, low multiple kind of thing. And then you know, cake There's very few comparable. So I'm curious you know, obviously kind of predated you know, the the public company. I'm curious as to how you think about you know, um having the market value that much better. Um and you know, what are the roles of the other LPs that are still in the fund? Um you know, maybe you could talk about that a bit. I mean, I don't think the market will really value it until it understands it. So that goes back to the transparency piece. And ultimately in terms of deriving value from it, I think that we are going to receive distributions. We're going to receive carry. Um for anyone that's curious the structure on that, we did 0% management fee, 8% hurdle, and a 30% carry. So it's very attractive for the LPs. We felt it created a lot of alignment. And part of that was also us saying we are going to be uh a large LP in the fund as well. We're going to put our money where our mouth is. And so, um yeah, I think that uh we will receive those and then whether we sell the businesses or um you know, there's a lot of different things that we can do to uh receive value from the fund over the next 5 10 years. >> Yeah. Thanks. Over here. >> Hey guys, Andrew and Chris. I want to I want you to go back to when, you know, Meta you got Metalab, it's spitting off cash, maybe you made an acquisition or two. And come up with I would love to understand advice on how did you adopt the mindset shift from operator of businesses to now like a pubco? And I know that's that that was a long journey to get there. But when you maybe made those first couple acquisitions and you said, "Hey, this is an environment that is working and let's go bigger with that." I'm curious as to the the shifts and processes you guys went through. >> It's It's like a long series of lessons and scar tissue. That's the way I kind of think of it. Um especially in the case of like, you know, we just started off with Metalab. Uh Andrew and I kind of used to come up with this idea of saying, "Let's pretend that we're not this sexy business in tech. Let's pretend we're the world's greatest law firm." And whatever's true for the world's greatest law firm will eventually be true for Metalab. And it ends up this thought exercise works in a variety of different ways, but it really works in the capital allocation situation. Where if you're the world's greatest law firm and you made $10 million tomorrow, what could you spend that money on to meaningfully move the needle? And if you're the world's greatest law firm, you know, you're in a very competitive advertising space, differentiating via marketing's pretty hard. Um maybe you could There's no real computer equipment you need to buy. There's no real big equipment expense. Maybe you could buy other law firms, but if you're the world's greatest in this exercise, you know, you don't need their brand. Growing via acquire is much harder than people realize. It's dangerous to culture. Um you know, maybe you could buy their book of business, but if you're in demand in the world's greatest, you don't really need that. And so, I find most law firms end up eroding margin by getting increasingly nicer offices and art galleries. And that's also true with agencies. Like we know an agency that has a basketball court, for example. So, the the next lesson was actually, "Hey, we should take the proceeds of this business and start better businesses, businesses that you can take a dollar and actually reinvest and, you know, grow those business grow those earnings." And so, for a long period we became serial entrepreneurs and started every business you could possibly imagine. You know, we both have cats. We had an online premium cat furniture, not just any cat furniture, premium cat furniture business. There's an online DJ school. There was like I've got these bumps in the back of my arm, so we started a skin care business. Everything you could possibly imagine we we tried. And then you kind of hit the next series of lessons, which is, "Man, you know, uh we're we're spending all this money, you know, building a product, finding a team, trying to find management in and around Victoria is very hard. You start realizing that we're spending millions of dollars um coming up with a product or an idea, realizing we don't have product market fit, pivoting, refilling the funnel with prospective clients. And it's just this this endless cycle." And the next lesson was, "Well, hey, we can skip the line and buy businesses for a multiple of their earnings." And so, that was the kind of next leap leap. And that was around like 2014. And so, at each of these different moments is just like a more scar tissues. And so, that's that's the way I kind of look at it and how to become public. Well, it's just that continuation. You know, the skipping the line has been true ever since. >> Thanks. Over here. >> Hey guys. Um I asked a question last year. I thought I would follow it up with kind of the same question, but spin it a little bit. Um how are you looking at the agency landscape and what advice are you giving to your agency founders in your portfolio? >> Well, I think that um the agency world has been pretty soft for the last 10 years. There's been a lot of money floating around. Not that many people have been paying attention to budget. And as a result, I think it's been easy to slip on P&L. And so we we often, mostly for our own curiosity, will look at P&Ls of other agency businesses. And we often will see them, even in the good old days, operating at like 5% net margins. We've historically operated them at double digit, very very high margins. Um and I think that it's kind of a wake-up call right now. I think people are tightening their belts. And what I've found in the past is that's created opportunity. So in 2008, I was running my tiny little design firm. And I had It was just me and a couple contractors. And all of a sudden I lost a client. And I was almost dead broke. And I managed to get through by doing I remember I got this project with a skin What was it? A laser hair removal company in Arizona. And so I was photoshopping folliculitis onto this website or whatever. And I was going, "Oh my god, I've fallen from grace. I've gone from designing these really cool startup websites to this." But I pulled through. And it was a little bit like a forest fire because it eliminated all my competition. And I came out the other end much much stronger. And so I think that the agencies that survive winter will be very strong. >> Awesome. Thanks. Over here. In the past, I know you guys have had minority stakes in businesses. But now that you're public, do you look at that differently? And would that kind of Would you have a different lens for minority stakes versus majority stakes? Cuz I know you guys have flexibility on size with majority stakes. But how do you think about minority stake investments in businesses now as a public company? Curious cuz I'm going to try to pitch something later. But >> Yeah, my thought My thinking hasn't really changed. Even even before we were public, I I I'm a big fan of, you know, we I'm wanting to own as much as we possibly can and typically that's been majority and in some cases that's been minority. My main thinking around majority is I love to build a direct cash flows and you know, any dollar over and above working capital threshold has to get back sent up to head office and you know, we'll make the decision as to whether or not there's a further reinvestment. That's typically like the reason why majority and as much as we can own of these great businesses, I'd love to. So. >> Okay. Last question. >> Wow. Thanks. >> Don't disappoint. Okay. >> Everyone. Yeah, I'll try not to. >> No pressure. >> Uh my name is Evan. I'm from Portland, Oregon. I have just a couple questions. We can wrap up with this. Dave, there's a minor internet kerfuffle right now about non-cash step-up accounting. Uh I don't know if you've read that, but hopefully you could address the delta between uh adjusted EBITDA and kind of the cash flow that we saw in 2023. Uh I think that's important for shareholders. Uh second, Jordan, could you talk about Tiny's hurdle rate? Uh I know, you know, from a Constellation background, pretty hard and fast on that. I'm guessing there's not a hard and fast as Constellation hurdle rate here, but I would love for you to address that subject. >> Totally. >> And then last one, just listening to you two over the years, it uh we heard a lot of things that made people believe that this was a baby Berkshire. And listening to you today, it seems more like a baby Constellation. We're talking about golf course management software, right? Um so, if you could just address that directly, uh kind of the philosophies, if there's been a philosophy change, or if this is just you taking some from both. >> That's One One of the Just I'll quickly tackle that one and then we'll jump to Dave and Jordan. Um I One of the funny things I find with investors is you say If you say something a few times, they get it in their head. So, we've said the word Constellation a lot here cuz Jordan said Constellation. Uh and certainly Jordan's going to bring a lot of learnings from Constellation, but ultimately the DNA of the company is very much baby Berkshire. Uh, you know, Jordan pointed out Constellation is a place where they have a formula. It's quite predictable and stayed, and they do one sort of acquisition. Uh, that's not really our style. Uh, we'll look at anything. We'll look at different size things. And uh, you know, Berkshire owns energy companies and a vacuum company and a shoe company and an you know, airplane business. You name it. I think we're going to be broad and continue to be broad. Um, Dave, do you want to address the uh, EBITDA question? >> Yeah, that thanks for that. So, uh, I have not read, you know, the uh, the reference. So, I I will uh, I will just, you know, comment that, you know, we we've struggled internally thinking about what's the best way to uh, you know, be transparent and disclose to shareholders how we're doing. And so, we started off with an adjusted EBITDA number. And um, I know some of the analysts that cover our stock, that's how they value us as multiples of adjusted EBITDA. But, as I had mentioned earlier, that first year of being public was really messy. There was so many adjustments that went into that adjusted EBITDA. We did not want to be that company that had all these adjustments. We just felt it wasn't really, you know, who we were as Tiny. And so, you know, what I would say is if you look at cash flow from operations right off of the cash flow statement, that is a good indication of where we're at. Last year, there were a lot of things, a lot of one-timers that are in that cash flow from operations that won't be there going forward. You know, I think Jordan mentioned you know, 10 to 12 million dollars of just, you know, RTO and and uh, integration costs that we've had with professional services and some severances that we've had with, you know, just changing people. And so, as I mentioned earlier, I think going forward, we're going to be in a great position. A lot of those difficult decisions have been made and those those um, those changes have been made. And so going forward, I think when you look at cash flow from operations, it will be fairly indicative of how we're doing as a company. It's probably a better indicator of how we're doing than than any kind of adjusted EBITDA number that we could come up with. The sec- second thing I'll mention is that, you know, as a as a as a team and in in our board meetings, we've talked about what are those metrics that we could be disclosing going forward in our in our statements and in our MD&A that would be, you know, indicative of and so a free cash flow like metric is something you'll probably see from us at some point because we do want to be transparent in how we're doing and generating cash in business. That is one of the priorities that Jordan just mentioned, right? >> Thank you. >> Is that helpful? >> Yeah. >> Yeah, and then hurdle rate, Jordan. >> We also just just touch on it quickly. We also wrote about this in the letter and specifically addressed this issue and kind of in very clear terms talk about why. So, I'd suggest reading that as well. >> you. >> For sure. Hurdle rate, yes. I I mean, I think you're exactly right. Like what you're assuming is right. I think we not I think, we use hurdle rates, right? There are a lot of things that go into the computation of a hurdle rate. Size, risk, market, predictability of revenue, um you know, risk of cash flows and all that. And it I think we've got a pretty scientific way of kind of coming up with a hurdle rate and in applying that to the acquisitions we make. So, I I like that flexibility because it means that if we think something is really attractive and we think it hits all it hits all of those metrics, well, >> >> it literally hits my um then then we can lower our hurdle rate and we can maybe pay a little bit more and we can compete with the likes of a Constellation or somebody that maybe, you know, is more rigid around the hurdle rates because it's only one thing they're looking at or or two factors they're looking at. So, uh hopefully that's helpful. >> Yeah, thank you. >> Thank you. >> Thanks. >> Great. >> Zia, we might have to wrap it up now. Uh do you mind maybe just asking when we go out there? >> Okay, sure. >> I'll I'll I'll talk We'll come find you. I'll I'll talk to you. I promise. >> Is there anything you guys want to say before we wrap this up? >> Don't think so. I just really appreciate you guys coming out and listening to me read all the boring stuff and uh asking us so many great questions and we really appreciate all of you. So, thank you so much for coming. We It's great to meet you all. >> Thank thank you. >>