Michael Davidov, welcome to Acquiring Minds. Well, thanks for having me. Michael, you started as a self-funded searcher, though you may not have called yourself that at the time. Since, you've grown revenue 20x on that first acquisition and acquired platforms and other verticals. So this is a story of how buying a business blossomed into a substantial portfolio. Dare I say holdco. Let's hear the story. Michael, take us back. Why did you turn your attention to buying a business in the first place? Yeah. So I think you know there was a couple pivotal moments for me that I think kind of put me on this on this path. So to rewind a little bit before I kind of went down uh this uh crazy world of uh acquisitions, I was working at a uh mid-market private equity fund. And you know, I think one day I was sitting across the desk from somebody who we had just written a fairly large check to and I thought to myself, hey, you know, I'd like to be, you know, on the other side of the table, let's call it. And I thought, hey, you know, at the time I hadn't operated anything. I'd done private equity and consulting and but in the back of my mind I think that was kind of the seed that ultimately grew into you know what we built today and ultimately knew I needed to own something, buy something, operate something but it had to be not mine but you know obviously we had investors but you know I had to be the driving force to really a build something that I'd be proud of and and b get the outcome um you know that that I was seeing on the other side of the table. So I think that's kind of where initially it started. M Michael, let me just stop you right there because you are not the first that there's a pattern. Multiple people who have sat in in the seat you're now in have said the same to me, former private equity types, uh who had that other side of the table moment or who's really the smart one in the room here? You know, we private equity guys or or the the seller. So to be clear, you were you were you were basically stroking a check to a seller whose business you were buying. Uh what what kind of business was it? Was this a sort of typical bluecollar trades tradesy business story? Yeah, I mean this was a uh an individual who had started um a franchise. He was a franchisee within a gym system, a large gym system that you know most most people have heard of. And you know what really stood out was he was definitely smart, but he just went out and and did it right. I think that that's what really stood out to me is I think half the battle is is just kind of having, you know, the courage and maybe a little bit of the craziness to just go out and and just go do it and he had built a great business and a great team and it was the right time for him. And I thought, hey, like if you know, if he can do it, like may maybe I can get halfway there. So you know, there was a couple different instances like that, but I remember that one in particular um standing out to me. I love it. the other side of the table moment. Great. We're we're making that a thing, Michael. Okay, carry on. Um, so I think from there, you know, I decided to uh I went to business school and uh that kind of gave me a little bit of a opportunity to take a step back and evaluate, frankly, in a little bit of a risk-free way, you know, what I what I wanted to do. Um, and kind of start to scratch that itch that I think I kind of just mentioned. And you know at the time um the search fund or entrepreneurship through acquisition um focus was actually pretty popular and so there was definitely a group and there was some professors that you know were teaching it and there was an ecosystem starting to be built out. I can't say it was like the first one but it was definitely I think a little less um built out than it is today which is you know exciting. Um but what year was this? This would have been 2016. Thank you. So in 2016 and you know started poking around and figuring out hey like how am I going to be able to do this? This was while I was in school and initially I actually tried and had an idea not to necessarily buy but actually partner I had an idea within the healthcare space and I had done some healthcare work before. Um there was a a doctor that I was friendly with that I knew who had an interesting normal practice but an interesting little side business and I thought hey like this might be an interesting way to kind of enter into this world. So I partnered with him uh while I was in school and said hey you know let's grow out. He had a side business that serviced nursing homes aside from his normal practice. And I thought, hey, like there might be a there there. And it actually reminded me of a similar business that we invested in at my old fund. I started to kind of build out a a decent pipeline um of deals which started in healthcare, but then it kind of broadened out a little bit as you just start to meet people who uh you know, who sell businesses. And so at that point decided to separate and actually kind of go full head you know um head first into acquiring a business and you know given the background that I had in uh private equity I thought you know a rollup would would make sense we we always were and when I say we at that point I actually uh decided to partner with my still existing partner and co-founder um his name's John his name is Jonathan and uh you know he was uh also uh working on the by side in New York and kind of told him, hey, this is what I'm thinking about doing. And we'd always talked, actually, we're friends from college, so like we're actually really close friends from, you know, for for a long time, but both had gone our own way um professionally. And we thought, hey, like let's go let's go do this together. So, we got together and started to actually bid on, you know, some of these deals that were coming through. Uh and we got very lucky. What I noticed within healthcare was, you know, look, it was kind of a lot of the standard items that I think, you know, people preach in the space, which is you want to look for fragmentation, which healthcare had, right? I would say healthcare today is still probably like the largest mom and pop business. There is obviously there's quite a bit of, you know, consolidation. You know, there's no mom and pop hospitals, but there's still a lot of mom and pop um areas within healthcare. Um, and frankly, you know, I think the other thing that got me excited, I'm probably not the first person to say this, and I know it's a little bit of like a meme, but when you walk into the office with a fax machine or, you know, everything on paper and kind of very old school, uh, this is definitely an area where you still saw a lot of that. So, yeah. um you know we I kind of walked into that and personally thought hey you know I think there's an opportunity to you know go after some targets b make some process improvements you know hopefully be able to build a better organization um and ultimately kind of do that repeatedly and build something of scale and and look I will say also like personally I also just enjoyed the fact that in healthcare like at the end of the day you actually if you're doing a good job you're also hopefully doing some good and helping people which you know was was was nice. Um and um you know a little bit of what drove kind of my thinking there. So um you know so that's kind of where I'd say and this was all still while I was uh frankly in in business school. And so on the way out was when I had to kind of make that make or break decision where I was like okay am I going to continue down that path or um try something you know a little different but in a similar vein. So so you have this kind of a loose thesis. Yeah. You bring it, you partner with Jonathan to to join you on this and so what does the what are the parameters or the search uh the parameters of the your target or of your search look for as you guys embark are you I I called you an unidentified self-funded or you know you didn't maybe identify as a self-unded search or maybe you did um what say more about that yeah so I think yeah I say that because I don't think I necessarily went down a defined path. I think it was a little bit just, you know, kind of went with kind of how my path developed, which is I kind I start with that story because we got pretty I would say we got pretty lucky in that a good deal came around pretty soon actually and I know you know sometimes it can take a while and part of that was I guess depends on when you start the clock, right? I guess if I started the clock from when I started the first partnership it might have been actually two years but it was while I was working on something, right? but happened to have some deal flow already coming throughout that whole period. And you know when pretty much 6 months after I graduated, there was a deal that we closed on that came in through actually crazy enough bis by sell which um Wow. Yeah. came through there and I think look the way that we were looking at it from a criteria perspective I'd say you know given we wanted we knew we wanted to do a rollup we wanted to figure out a like just where are their robust amount of targets like that's the first thing right like you don't need to make it's life's hard enough I don't need to make it harder to go find a needle in a hay stack so as we looked at industries we thought okay like where can we do a lot of acquisitions at you know with a lot of speed two we wanted to and you know we wanted to find places that had you a good revenue base and where we felt really comfortable with like the stability of the business. And three, you know, I would say the last thing which was a little more structure related was we needed to find a deal where we could structure it where Jonathan and I could keep um as much of the equity as possible, right? And so and in particular, I think our view was if we're going to start start small, most of your dilution and we kind of went at it not with a carry structure, but most of your dilution really comes early, right? when you're small and you're giving you're giving away a lot for a million dollars as an example versus later you may be larger and a million dollars may not be much. So, we were very very um cognizant of figuring out like essentially we were we knew we at the time going to use SBA because that was probably the only real financing available at you know the smaller end back then. And so really what we were solving for was what's the most amount of Ebida that we could buy with the max SBA exposure and the least amount of equity so that we could keep you know the majority of the economics there um and still deliver obviously a great return to our investors who by the way are still actually invested um the original ones but um but that's kind of how we started. That's that's great Michael and and just say a little bit more about retaining the economics. This is kind of finance 101 but for some people it might be helpful. Um, max leverage means giving away the least equity possible because why? Just just just take that the next two or three steps. Sure. Sure. So, max leverage meaning we wanted to use as much debt to finance the acquisition of the deal as possible versus equity. Um, and you know what we then did, obviously it's kind of a little bit of a calculus, but what's nice about the SBA is, you know, they view it from a percentage of purchase price essentially perspective as well as a leverage perspective. But, you know, given we were trying to buy stuff around initially in the, you know, 3 to five times range, often times you can max that out, which um, you know, is essentially like 90% um, on the SBA side, but you're not very levered from a IBIDA to debt perspective. You're just have a lot of it's a percentage of um, of capitalization. So, you know, that was what we what we tried to do. Yeah. And for again those who may not realize this that 90% leverage is really unheard of in larger period outside of I mean it's a very unusual those sort of economics or LTV is extremely it's unheard of it's it's and so that's that's one of the things again where kind of the SBA is in some sense I don't want to say subsidizing um but it's enabling this market to occur because take that away And no no no other lender is going to give you allow you to leverage so much. No, that look that's that's totally correct. And I actually think the SBA product is is really it's pretty it's pretty amazing for what it does in a lot of ways which is it does enable I think kind of what it mission is right is to some extent to allow people who maybe don't have a ton of liquid capital at any time to actually participate and and that's part of what it was doing. So, um, you know, that's it's funny. Sometimes we'll talk to lenders. We used to talk to some lenders where, you know, I used to say to them, I get it, like you don't want to go to 90%, but if I paid three turns more, you'd give me the same amount of money, but I just paid more for the business and you're actually only at 50% LTV. Um, that's funny, but which is the but it's the same amount of funding. But I get it. You know, a more traditional lender wants to see more equity in the deal. And I always just kind of joke with them. I'm like, you're penalizing me for getting a good deal. Okay. So, got your parameters. Um, so, so you s you kind of laid out three. You wanted to maximize the SBA. Uh, and you wanted to high fragmentation, I think. And and then the the first criterion was what? It was high fragmentation. It was also just, you know, a good stable revenue source. So, I think just the economic model. I think the way we looked at it was, you know, we kind of look at everything through this lens like why does this exist? like how does this business deliver value and you know how stable is that value that it's delivering and its underlying economics. I think that's kind of the way we looked at it. And you know, I think what we were trying to really prevent against was, you know, we were we wanted to have a good call it a good downside if that makes initially, right? Like we we didn't want something that could all of a sudden turn on us and go negative real fast with, you know, 80% customer concentration or, you know, businesses that are projectbased and you got to go, you know, rebid every six months, right? that kind of stuff is just a little tougher. And so we were just looking for businesses that we felt, you know, could sustain for for a while. Um, you know, with their existing customer base or just as is. Um, yeah. So, you know, which I'm sure high quality of revenue, right? I think that's the that's the area that we were really focused on. Great. And so with those criteria, was that just the was that just the the kind of overlay for every deal you looked at or did that then lead you to a particular industry that you were going to target? I would say it that was the overlay we had on pretty much everything we looked at. Um Okay. You know, look, we leaned a bit more towards where I'd say Jonathan and I had some historical experience in, right? I mean, I don't think so. Healthcare being one, industrials and business services were kind of the areas we'd all we'd worked in previously. And so, not to say we didn't look at some other industries, but I think we we definitely had some areas within there, um, you know, that that we really liked. I remember we obviously never bought anything in the space, but, um, I really liked the pest control space back in the day, which I thought was a really good one. Um, you know, can't say, you know, that came from we bought a business in my old fund that actually supplied all the like chemicals that they used that to to kill the bugs. And, you know, I was exposed to that space. I was like, "Oh, actually that's actually, you know, downstream." I was like, "That's actually a pretty good business." So, I think a lot of it came from some of it was kind of ideation, but I honestly some of the better ideas I think just came from, frankly, everyday kind of life just looking around be like, "Oh, they're that's that's actually kind of interesting and I get why um they exist." And funny enough, sometimes I even think about kind of my personal life, right? Like I think, you know, depending on where you are, but I don't I don't think I'm canceling my pest control services anytime soon, right? if you want to use that as the example. Great. So, what'd you find? So, yeah. So, what we ultimately found was our first acquisition, which was a business at the time called American United Home Care, which was a home health business. But, interestingly enough, a little bit different than I think your traditional home health. I think most people when you think home health, you think uh, you know, nurses going into somebody's house tends to be uh older, so geriatric um uh clients. This was actually a uh pediatric and young adult uh focused uh home health. So what they did was they took care of you know individuals who had high uh physical acuities. So, you know, this might be somebody who may be on a breathing tube or or have um a vent. And you know, what they really did was they enabled, you know, these a lot of times kids or again like young adults to to live independently in the community at home with their families and allow them to actually like thrive and allow their families to thrive too. Um because without the support frankly the family would either be pretty much you know focused 24/7 on taking care of them or um you know in some cases would actually most of the time have to be in institutionalized um which which is tough but you know I think on the flip side of that what they did was you know amazing work and you allowed these um you know these individuals to to really grow and and live full lives. I remember there was one one client of ours who graduated from law school which was which was awesome. I remember we got a picture and you know he was there and you know without and by the way like you know without you know us I don't know if that would have necessarily we were a small part it was all him but you know it was it was a nice feeling. Um but when we evaluated it from a business perspective you know first of all um we love the space which was um you know when you talk about kind of evaluating the revenue which is where I'll start right you have no customer concentration from a true perspective if you're talking about each individual client um or patient um you know you had a couple hundred right that you were taking care of um additionally you have you know you do have an insurance element here, which in healthcare is its kind of its own thing, but um you have a pretty high credit um customer in terms of who's paying you, right? In this case, it's a little interesting because the person you're delivering services to actually isn't the end payer. The the insurance is, but you know, nonetheless, they are a good credit and pay on time and and pay pretty quickly, which we which we liked. And I think, you know, third, I I would layer on that value prop that we always look at it from. And I think you know the way we looked at it was these are individuals who require care. Okay. And first of all not only they require in my opinion they deserve it. But secondly, you know, the way we s we we had seen that they also um oftentimes, you know, when you think about kind of how a payer thinks about it, an insurance payer, right? Like yes, they want to do what's right, but they also have to look at, well, what's the economics of this? And the alternative, like I mentioned, would be in many cases institutionalization, which was, you know, I think we've seen some studies like six times the cost of what we were providing. When I say we, at this point, we did acquire it. And you know what we viewed it as, we thought it was a a win-win, right? You're able to provide a cost-effective, preferred setting level of service um for, you know, individuals who, you know, deserve this, you know, this care. And so we we dove right in and uh you know in essentially Jan one of 2019 was the date pretty much we uh we acquired that um that agency which at the time was doing about 6 million in revenue. 6 million in revenue. And so these are agencies. So home care services are essentially agencies. I mean they're in some sense they're staffing businesses, right? you're you're finding nurses or or nurse adjacent people to help the patients. So, you're bringing them in the door and then you're dispatching them to the homes of the patients. And that's kind of that's kind of the business. And then and kind of growing that flywheel. Um we can hear a little bit more about that if if if helpful. Uh and great. And so what do in what do margins in a business like this look like? They can. So, it can vary a little bit. It's obviously the biggest thing is just kind of what your different insurance payers pay you versus what your labor costs are. But look, I think what you try to typically target is, you know, gross margins in the probably like high30sish is what you're trying to target. Depends on kind of where where that is. And then you know your uh your your ebida margins at the bottom line are they can vary just depending on how much support staff is needed by um you know by by the client. So but you're probably somewhere in the you know mid to mid like you're in the teens if you're if you're operating effectively. Great. Okay. So this is a million-dollar SDE business. Yes. And it was definitely SDE because there was uh you know the owner was very much so doing a lot of the work. Tell tell us more about what what is the human capital in a business of that size and an agency in this industry uh look like? Yeah. I mean so you're you know starting kind of at the top you obviously have your nurses that's kind of your front line right? So you have a pool of not even a pool, you have a, you know, a whole team of nurses who are on the ground every day providing services uh to these individuals. Um and actually, you know, one thing I forgot to mention is like the individuals you work with are actually pretty long duration. So you have um nurses who are paired up with these individuals for for a very long time. So you actually have a pretty um it's a very like they have a strong bond there too between between them two. So you time meaning years in some Yeah. in some in a lot of cases years. Yeah. Um and so you know that's kind of your that's really your core, right? I mean in some ways when we you know came into the business um we always viewed our frontline staff frankly almost as like a different set of customers. Um right like I think in any business by the way you should treat your you should view your employees not as employees but you know kind of what can you do best to help them um really do their job in the best way and also make it the best place for them to work right because without them I mean frankly we would have we wouldn't have had a business right so I think that's kind of what we woke up every day thinking about but to kind of continue on your question you know after kind of your frontline staff the next thing we really had was um kind of two groups of individ We have uh some supervisory nurses that are kind of higher level nurses that were there to make sure that if any of our frontline nurses needed support or if any of our, you know, patients uh had any conditions that were worsening or or needed real attention, uh that they could provide that support. And then behind them, you'd have your schedulers and your uh recruiters because to your point, a big part of this business is ensuring you're recruiting, you know, top-notch nursing talent to, you know, to provide their services that we do. And then, um, what you then also have is kind of the back office function. So, you got to, you know, you have your billing function and HR and, um, you know, and some of your just general administrative. So, you know, that was kind of what we walked into. But at the time when we walked in, I think the team was about the non-frontline team was seven people. Yeah. Seven people. So this is right. So this is a pretty small business. Although for a $6 million revenue, million-ish dollar um STE business, uh you probably did come close to maxing out that SBA loan. We Yeah, we we used every we used every dollar we used every dollar. your point about your thinking about your frontline caregivers and nurses as your customers and not just employees. Um, the other person I've heard say that was also in a home care business. Another guest probably 200 episodes ago now, Jerome in uh a visiting angels uh franchisee bought two locations, two territories in North Carolina and he found it was a very difficult business for him to get his arms around. But when he had that sort of epiphany to think about his caregivers as his c as his second set of customers, it just sort of changed everything and it really was an sort of a uh an unlock in terms of how he thought about the business for him. So very interesting that um I don't know if this is unique to home care or just staffing in general. Um but thinking about your employees as customers um interesting because we know where this story ends and how big you've grown. Tell us to what degree, if any, you were thinking long-term or big picture. Did you have a plan to grow to over hundred million dollars uh in revenue? What what what did you think that was going to be year five and year 10 in this project was going to look like? Look, I think I we definitely had a goal to get larger. I don't know if we necessarily put like a bogey of 100 million plus, but you know, I think yes, we got in to uh this strategy with with a goal to to grow really quickly and and try and do um and and and you know, get get big. Yeah. Um yeah, I think and that kind of I would say directed our strategy a little bit right from the beginning which was um you know we really spent the first year call it creating what we tried and by the way we as Jonathan myself we operated for the first couple of years um this business and I think kind of our strategy was hey like let's get our let's just understand all the nuances of of you know this industry of this business that we had just bought and let's just try and create the best you know individual you know existing unit we can right like let's try and put in the best systems the best people the best processes because I think you know if you're going to try and then go do a bunch of add-ons and integrate you need to have a solid base and frankly a good framework on which to then uh put them all those add-ons onto so you know I think we spent probably the first year really doing that um you you know, it was a pretty heavy lift. Um, you know, that I was maybe expected, but maybe not as much as I had initially thought, but we were able to do that. And then from there, you know, we kind of geared up and started really driving um, deal flow, which is interesting. I think once you buy something and you're in the space, it a lot of people actually start to come start start knocking or frankly will just pick up your call. um more so than you know I think I I'd done the let's just call and email a bunch of people in a space pre-acquisition right um and I know it's worked for some but frankly you know didn't really have it wasn't super effective on our end but I think what was interesting was it did work kind of after we uh were in the space and not that we were known by any means but somebody googled and saw they're like oh okay like this this person's actually you know run something similar or and I think it kind gave the comfort actually to additional people. So we've kind of gone a little way away from your original question which was did we look to go big but the short answer is yeah I think I think we did and it was part of the kind of initial strategy for sure. Let me react a few things there. First of all we we call that this the value of getting in the game Michael it comes up again and again and again and and while and I'm always so enthusiastic for people to get in the game while balancing not everybody should just go out and buy the first business. There are perils there which we spend countless hours on this podcast talking about. But at the same time there there is just there is just so much acceleration once you're actually you know you've done your first deal and you're in the industry and you're an owner operator and other people uh see you as such. Um so thank you for sharing your own experience with that. Um, I love it's it's it's sort of obvious that you um to to do a consolidation play, a good way to spend the first year or two is to be very in the business as operators and to learn every corner of how to operate one of these businesses, the industry, just get as close as you can. Um, but probably for some it's a little counterintuitive or it's or it's a little their impatience wouldn't let them do that because if you want to build something big, you know, it's all about working on the business and it's about, you know, inorganic growth and finding that next deal. Um, so, so I guess it's obvious, but kudos to you guys for having the self-discipline to say, "Yeah, we want to get big, but we got to go, you know, go slow to go fast sort of thing." Um, anything more to say about that? because it was such a it was such a good decision on your part. It's again kind of obvious, but I I feel like it might have been tempting to not do that. It might have been tempting to just go out and find your next deal, especially especially to your ear earlier point, all these deals are coming to you now that you're in the industry. Yeah. I mean, look, I think I actually, weirdly enough, I actually think it probably sped up our time horizon in the sense that I think I think one thing that could probably doom you is like a bad deal. and not necessarily a bad deal even from like a structuring or financing perspective, but if you're just not ready to take that on um which frankly we weren't in the first year. Um and I think that and I think if you a higher for the growth, if you set it up for the growth, you actually will end up running faster afterwards than you would have if you let's say if we missed out on one or two that first year, right? I think we probably have done more now in the last we've been in it for about six than we would have if we would have done those first two, right? because we would have been just so bogged down um initially. Yeah. And probably never put the right stuff in place, right? Maybe be the other thing, too. So, let's explore like what what did you what were some what were some of the levers you pulled, systems you put in place, fax machines you got rid of that that you know basically made your platform, this is essentially a platform acquisition, um stronger so that you could then acquire faster. What what what are some of the best practices there? reflecting back. Yeah. So, I mean, I think it's helpful to explain a little bit of the organization we walked into, which was I mean, they were doing everything still pretty much on pen and paper. Um, I actually remember when I walked in there, like the first week we were hiring a new nurse and I asked the person who was in charge of kind of getting the new uh the new uh hire paperwork uh to the individual who came into the office uh getting the paperwork. I saw her standing at the copy machine and I noticed that she was actually copying a photocopy of the new hire application and they actually didn't even have it like the original on on a computer just to you know hit print a couple times. So I mean we felt like there was just a lot of basic stuff initially to do. Um and really what we tried to execute on was look we wanted to just put in go digital first on everything we could right so we the first thing we kind of instituted was actually on the HR and hiring front right I mean that's really the the core um uh like back office function of this business and it's pretty competitive so what we tried to really focus on initially was how do we make hiring as easy as possible right I don't want to ever get because it used to be like a twoe process when we got there and you can imagine somebody down the street is offering this nurse employment can get them working tomorrow, right? Like that's not we're not all that competitive if we're saying, "Oh, yeah, we might be able to finish your paperwork in two weeks." So, that was one of the thinking about nurses as as customers again. Yeah, exactly. We were like, you know, I think the way that we always thought about it was, you know, I wanted somebody to be able to get get their paperwork done, you know, sitting on the couch at home if needed, right? like there's no reason and nowadays that I need you to come in to necessarily, you know, put in your name and and all that information. And so that was really like the first thing that we really tried value lever to pull was let's just improve our our time to hire and let's just make that process like super seamless and easy. And so that was the first thing we did was you know we picked a good HR HRIS and payroll system and kind of put in the the appropriate processes. And then after that and did you see results that like the you know speed from Oh yeah nurse raising her hand to actually being in the field that throughput resulted in more revenue for sure. Yeah. I mean we were able to hire immediately. There was less drop off. So we used to track kind of you know from like a inbound interview or just initial contact to actual start and hire and I mean at that point it became fast enough where the holdup wasn't us. The hold up at that point was actually just the nurse themselves needed to finish the paperwork for example. Um but no it sped it up and we were able to hire much faster and and get people working frankly like within days um of them contacting us which which definitely helped. Um and so yeah, look it that translates to to more revenue and it um and helped grow the business quite a bit. Yeah. So that was kind of one area we really focused on. The other area was actually getting just the general practice overall um electronics. So you know practice management software exists out there. It's kind of what most healthcare businesses run on. Think about it like an ERP or or CRM, some kind of mix of those two things. Um, and what that allowed us to do was kind of schedule and document everything digitally, which um, right now was being done very manually. Like we're talking, you know, paper charting notes that were had to be emailed or not even emailed had to be mailed or uh, dropped off or dropped off. Well, when you're in healthcare, you're not allowed to um, you know, there's HIPPA, so there's certain Yeah. So, there's certain things you can and can't do. So we would have people come, you know, come by the office and just drop off, you know, reams of of clinical notes and stuff like that, which was just very inefficient. And frankly, again, talking about our our nurses, like it was time out of their day that they had to drive there and, you know, gas that they had to spend money on to go drop off their notes. So we were immediately trying to focus on getting that pretty clean. Um and you know I think the other piece that we also tried to do was once we had good data we were able to actually offer and clean the digital data we were able actually to offer some benefits that we weren't able even able to do before. So we moved to like weekly payroll which was a big deal and really helped our our our employee base which just from a processing perspective we would never have been able to do um you know the the way the business was before. So you know we were able to you know improve our employee experience our existing employee experience improve the onboarding process and also as part of this frankly like let's not forget about our clients which was we were giving our clients and their families you know full digital access to their records and to calendars and just delivering frankly just a better overall um product experience. So, you know, that was kind of our first um move from like a systems perspective. And look, I don't want to underestimate also how important it was also just to hire up the right people, right? So, bringing on I remember we brought on kind of like a you know, like a wasn't it was like a director of operations to help manage some of the recruiters and the schedulers which kind of that layer hadn't existed. Um and also just frankly get more recruiters, invest in more recruiters and more schedulers to provide um you know to do more outreach and also to um frankly provide better customer service and reach out to our to our clients and you know ask them you know how they're doing and how how their nurse is performing and all that kind of stuff. So that was really just the the basics of what we did initially. You know Michael I actually feel like a lot of this w was working on the business. you're not doing the blocking and tackling, you're putting in systems. Not to not to take away from the value you were adding. Um but but is that fair to say that you basically you guys got in there and just started, you know, these are all big strategic improvements? Oh yeah. We we we kind of tore everything. We looked at everything from from zero and we thought, hey, like this function, how can it be better? This function, you know, how can we kind of and let's paint a what we tried to do is just paint a picture of what's ideal. And look, we kind of built the road map out from how do we get from where we are to to there with obviously some inter intermediate steps, right? You couldn't get to the end, you know, all at once. But no, we definitely looked at every single function and every single stakeholder and just thought like how do we actually make this better for them and but you had, for example, you you brought in an operations person. So you were not operating the business. I mean, we were no, we were overseeing them as CEO, right? I'm just saying we brought in I would say more of a middle layer, but what had existed before was really just let's call it the owner and and then just, you know, office staff, right? And I think what we started to do, part of that was to free us up from some of the day-to-day to be able to do some of these bigger changes. But I would say the other thing was, you know, we knew we were going to eventually have, you know, a recruiting staff or a scheduling staff that would be, you know, 10 or 20 or 30 people. And at that point, you do need, you know, mid-level managers over that, right? So, we were also trying to hire maybe a little bit in advance of the growth we were hoping we'd see. So, both organic and and inorganic. Yeah. Just on the numbers a little bit again, loosely calling this a million-doll business. You then put an SBA loan on it to buy it. And so, half of your SDE is now or now is is eaten up by that loan. That leaves you half a million. Um, you guys both are coming from uh, you know, you could have had other jobs on Wall Street. By the way, you moved from New York to California. We haven't said this part. This this business is in LA, where you're both from happily, right? Yeah. Yeah. Actually, so Jonathan, my partner, was the one who was in New York. I moved back after after business school to LA. But yes, we were both from Los Angeles. And um, we're fortunate fortunate enough that this business was based in Los Angeles, too. you were already back there. Okay. Yeah. And so we were able he, you know, he was able to come back um as well and and kind of when we close on this and join up. Great. Great. So, so back to the numbers and and really what I'm getting at here for your benefit in the audience is is is to to kind of like under show what it looks like to be reinvesting heavily into a business to make it a strong platform and foundation using an SBA structure. So, you got half a million left over after your SBA loan payments. uh you got to pay both of your both of both of you guys. Um maybe you can share to what degree you were paying yourselves probably under market and then you're making all these investments that you've just shared with us. So heavy J curve kind of investment here. Can you say more what did the numbers look like? Were you basically kind of taking it probably took the business to no profitability in this first couple years? Yeah, there was a there was a mix. So look, one of the I would say one of the thesis we've had in healthcare is um some of the areas we like to invest in are areas where the reimbursement cycle may be at its bottom. And what I mean by that is, you know, in healthcare often times you don't get price changes very often. You might get them every couple years. And so we kind of had there we knew that this business and this segment was probably due for a little bit of a bump um on a rate increase perspective. Um, and so part of our initial investment thesis was if you know we were we were buying what we were buying, but we kind of were pricing in what we thought would be a bump within the next call it 12 to 18 months. H and so we did get you know fortunate enough that there was a bump in the rates. Um and so the business effectively grew um you know pretty significantly um just from a pricing perspective uh pretty quickly after we we closed which helped give us a little bit more of a of a buffer. So you know that was kind of part of the the thesis that we had um which kind of proved out so it gave us a little more room. Um that said we were still definitely paid way undermarket because we were not taking really any money regardless of how that was going. um you weren't really t you weren't really paying yourselves. I mean very very little. Nominally. Yeah. Very very little. And um you know I think to your point I think what we tried to do though was you know I think sometimes out of necessity right like and actually it part of the culture at the company I think still exists which was you know frankly we pinched we didn't want to we weren't cheap but we were frugal if that makes sense right. So like we invested in the areas where we really thought there was value but in areas where frankly it was kind of superfluous like we really tried to you know cut back and we tried to also just use the right processes to frankly kind of lessen or increase the amount of work or the amount of flow through that any individual could potentially do. So, you know, I think what we did was, yes, we invested quite a bit and we took our EBIT dot down a little, but most of our investment was kind of on a variable basis, right? Like this isn't a, you know, we weren't buying a large piece of equipment or anything like that. And so most of our investments we'd look at, we'd expect frankly some type of payback pretty quickly, right? If we're bringing on a new recruiter, for example, from like a human capital perspective, I mean, that person should be bringing on nurses immediately, right? and and there was in and in this business there's frankly no lack of demand for services. Uh it's actually more of a supply issue um generally. So it's one of those types of things where if you know a recruiter can very much justify themselves very quickly. Um and even the software that we you know try to implement um you know it's it's there's definitely a cost there but you know the savings versus frankly being on paper were net net almost like neutral. So, we did invest, but I'd say we tried to invest um in areas where initially where the ROI was either high or just pretty immediate so that we wouldn't have to um you know, run too close to the sun. Yeah, love investments like that. More of those, please. Uh quick quick and and very visible ROI. Best kind. Um you just said the you know these types of investments um they were also kind of incremental investments maybe hiring a recruiter you know that that's more of a big outlay but again they they kind of start paying for themselves they kind of become a profit center kind of like hiring a salesperson quickly you hope um one of the things that you you'd um kind of mentioned in passing in our precallentric business, uh, which is what this is, as opposed to a heavy capex business, let's say. Say more about maybe the pros there, but also the cons of being in a in a business where it's really all about it's services. You're you're selling services. Yes. So, look, I think the pros are you can kind of grow in almost an unlimited amount, right? Very without having to actually, you know, put a huge capital outlay. If ultimately what generates revenue in this business, right, is hiring that next nurse and there's a little bit of training and and onboarding, but you know, they're let's call it generating revenue very quickly, right? You don't have to you're not really taking a loss on on that growth initially, right? There's not a whole lot of they call it investment. Um, and so I think that's definitely one of the positives of this business is you could kind of grow forever without having to necessarily, you know, invest in this other side of that coin, which is, you know, let's talk about a factory, right? Eventually you might hit a capacity issue and you'll have to either build a new factory or buy a new machine or whatever it might be. And there you actually have to think about, hey, how do I actually finance my next round of growth? So I think that's kind of, you know, the way that I look at it. On the flip side though on, you know, the stuff that's a little more capital heavy, you're able to once you kind of invest in it, you're actually able to um, you know, get a little bit more marginal dollars out of it, right? On the flip side, I don't have really the ability to get like economies of scale on people, right? Like you're just you're you have a your capacity constrained each person. You just have to hire another person if you grow. whereas a factory to some extent right you can initially it's a big capital outlay and you know the cost per widget or whatever's coming out of there but I think you know there's a nice kind of you know you're able to get some economies of scale from that um as well so there's kind of you know puts and takes and I think the other thing too is frankly it's harder to enter a business like that right you you if if there's real capital commitments needed it's a little bit the barrier to entry might be a little harder than um you know a staff laughing business, which frankly, you know, you kind of can if you have some knowhow and um and you know, some grit, you can kind of do it, right? You can kind of go out there without a whole lot of cash and start one up, right? Which of course, you know, barriers to entry works both ways. If you're on the outside looking in, low barriers to entry is a good thing because you can get you can get in the game and start competing and be in the industry. On the inside looking out, it's not a good thing because all these other competitors can can flock in. Exactly. Uh so so is that so do you find in your low barrier to entry business that it is cutthroat it is super competitive? So it is very competitive from a recruiting perspective. Um the one thing that I will say that we did it we did like about healthcare generally in this sector is there may not be once you're in it it's pretty competitive but there are some barriers to entry that are let's just call it a little non-economic which is there's definitely a regulatory and licensing component within this space which you can't just for example tomorrow go open up a home health and you actually need to go through a whole kind of process to do so. Um, and so, you know, on the once you're kind of in, it's actually very competitive, but to actually get in, it's not it's not impossible, but it definitely takes some time. So, there were some barriers to entry in this in this service business. Um, versus maybe some others where there's probably just, you know, there there isn't much, right? Yeah. Yeah. and all of what you described about the business being totally um what's the opposite of digital whatever manual paper analog thank you analog thank you the business being completely analog this was 2017 2018 time frame 2019 2019 okay so we're only six years later do you think that these opportunities still exist or do you think most like agencies at this point have digitized I think some do, but I think a lot of I think that I think the industry in just general has has moved forward quite a bit actually. Um, but I think I still think there's some there's some people out there who look I get it. They've worked the way they've worked for 25 years and it's gone really well and you know why why change it? Like I by the way I'm probably going to be that and you know in 20 years myself but at some point but well right and we're not we're not disparaging and I don't ask to disparrage those folks but more to speak to the audience about whether opportunities like you found still might exist or they have been picked over. I I think they're there still exist but I think it's less actually. Great. And we're about to move on um just from this first this first year or two but um you did have a payroll story. So tell that to the audience please. Yeah. So, um, you know, everybody I talked to in the kind of the this ecosystem, the acquisition ecosystem was always I remember the first thing they always said was after you do a deal and it's your first time on on on the ground, you know, don't mess up payroll, right? That's kind of I think the like top top thing everyone talks about cuz you know the new the new guy comes in or gal comes in and um you know the the thing that obviously people care about the most and want to make sure that doesn't change is uh is their paycheck which by the way like I I get right um and so with that on my mind I remember we were making the transition and you know we'd set up everything with ADP and we were ready to go and um you know that day came where we were going to hit, you know, go on that first payroll. And we got a message back saying that um it didn't go through. And we're we look at the bank account, it has cash, more than enough to cover. And we kind of fret and we're sitting there, it's, you know, Wednesday, Wednesday evening, um Friday's payroll. And next thing I know, um we called we called the bank and we didn't realize was so we did a we did an asset deal. So, we had a new bank account and versus uh so we didn't actually keep we had access but we were tying it to a new a new bank account and I guess they weren't used to on a new bank account that amount of money being withdrawn from the account so that they the actual account didn't have like the approval rights to draw the amount for payroll even though the cash was there because it was relatively new and there was nothing we could do at this point um to make payroll actually hit on time until the next day. But if we would have waited till the next day, stuff wouldn't have cleared until like Monday. And so with all this in the back of my mind, everything everybody had said, I was like, "Okay, like what do what do we do?" And actually, um, you know, we had the idea, which was a little old school, which was but worked, which was we sat there with the actual physical checkbook. We went through the entire check statement for I want to say it wasund 140 about 140 employees at that point. um went through and we wrote every check by hand. I remember we were at my apartment, me um my my uh my wife and my business partner, and we sat there and just wrote each check by hand individually and then spent all day Thursday and Friday going to a branch of each type of bank. So, you had to go to Chase, you had to go to Bank of America, every single one. and we direct deposited, literally direct deposited every check into everybody's bank account. Um, so that everybody would get paid on time. Um, in fact, actually some people called and they were like, "Why didn't mine come come in on Thursday?" We said, you know, we we didn't we didn't tell them why, but um we're like, "Oh, that's weird. It must be the new system." But um, nonetheless, we were able to uh to get everybody their check, even the you know, one person who had a credit union that only had one branch. which I think that was like 3 hours away, but nonetheless, uh, we were able to to get it to get it done. Wow. Wow. Well, way way to pull it off. That's a one of those really kind of year one stories. Um, good. Okay, Michael. So after pulling these levers, after working, you know, built making this first acquisition, a real foundation, a real platform, um, take us through, you know, the the next part of the story or or maybe even fast forward through a few years cuz what you got now is a lot bigger and and I'm looking at the clock and we're only we're only year one into acquisition one. I know. I know. Um, yeah. Okay, I'll I'll speed it up a little bit. So what we ended up doing in year two was a little crazy because there's that little thing called CO that happened if everybody remembers but um you know we nonetheless kind of kept going at it and we thought you know our thesis makes sense and frankly we weren't I would say we weren't a co winner we weren't a really a co loser either. It was kind of actually pretty steady throughout given I think kind of the the nature of our services. Um but although that that does tell you that the quality of revenue is incredibly robust that that your your revenue just stayed all the way through this international crisis. Yes. I mean I think that shows kind of the just how how needed frankly it is right. I mean it was it was one of those things that you know was never going to get you know shut down. Um and so you know we continued to work but we went into acquisition mode after that. So you know we'd grown the business nicely. We'd gotten that rate bump which helped quite a bit too. And at that point we found another uh similar you know type agency based in another part of Southern California but not in an area we currently had any services in to acquire and we acquired that business. Um we used um at that point we refinanced our SBA debt. we were able to have enough evida with our existing business plus the add-on to at that point um you know work with like a small bank to actually write us a different type of loan and kind of did that one all debt and then uh kept going and actually um wait sorry did that one all debt was it an SBA loan no it was not no it was not an SBA loan so at that point we it was too it would have been too much um it would have been too much to do with that past the 5 million past the five correct but But what but what you just described there where acquisition number two in the same NAKES code uh even with the SBA you can actually that you can acquire without putting any money down the lender can do 100% of the deal do the whole deal um even within if you could can continue using that SBA 5 million you guys would have maxed out the 5 million so you did conventional but had the same effect and of course this is an incredible accelerant that you don't even need to bring any equity to acquisition number two, all financed by a loan. Yeah. So, we did that and then um which was definitely super helpful. Um and then actually part of that was a we there was a a program during COVID that actually allowed banks to extend um additional credit actually that we tapped in that a bank tapped into that allowed us to actually then do a third deal similarly all debt um as well. And with you know we continued to grow though. So the leverage profile actually was delevering as we kind of did some of these. Not a crazy amount but um a little bit and so a couple months afterwards we closed our third one which is a different part of Southern California as well. Um and you know at that point also at the same time we opened up organically a couple different offices in Ventura County and San Diego. And so we kind of really years like now we're really in year two two and a half. We we really pushed it pretty hard, right? We did um you know, we did the two acquisitions. We opened up a bunch of offices and um at that point, you know, kind of were sitting on a on a pretty nice size home health business with good coverage across almost all of Southern California. So, we did that and then um Michael, wait nice size after the let's call it the end of year two. What does nice size mean? We were probably somewhere between like we were probably like probably in the high teens, so almost 20 at that point was kind of where we were at from from a base of six. So you you tripled the business essentially and over two years uh through both organic and inorganic. And so th this kind of acceleration this is because as you grow the business you're feeling confident that all of the all of the strengthening you've done to your platform was working that you know the hiring process for example where you could get a nurse you know working super quick uh and the recruiters that you would hire all of that kind of synerg synergistic stuff was working as you plugged in and grew. Exactly. So that kept working and you know I think one of the things that was nice was as our Ebida dot grew right we were able to kind of use that new IBTA to relever a bit and the you know lending partner we were working with was was actually was was super um accommodating and allowed us to do that. Again, our leverage profile wasn't very high from an EBA. Debt perspective, and they kind of let us continue to keep going without having to put additional um we put a little bit of equity, but it was just cash off the balance sheet, frankly, which was kind of a little bit, you know, a little bit near neither here or there was a little bit of top up that they wanted to see um as opposed to, you know, maybe making a distribution to ourselves, but we were obviously wanted to be um good partners to them as well. So, they helped us quite a bit um in doing that. And then um you know I think what then happened was a little interesting was we had actually been working with one of our we had an intern who was another uh I think maybe you know thought he wanted to maybe buy a business as well. He was a Anderson uh MBA and uh he had been working us for us for a while and he was interested in the inhome ABA so autism therapy space and um you know we'd been working with him and actually during his time with us we found um we found a deal that came across our desk that we liked and we decided to work with him and um we ended up using the SBA loan that we had at that point paid off, right? So we actually took out a new one and bought a SBA and we used the SBA again to buy an autism an ABA business in home and part of that was look we actually thought it was a really interesting space a lot of the same dynamics that we had in our pediatric home health business. Um there were also some synergies across both that we thought at some point maybe it would make sense but initially you know kind of would uh acquired it as a separate uh business. We did do some shared services which was nice. So because that one was smaller at the time. So that one was able to benefit from some of the administrative backend from our existing pediatric home health business. But that was kind of the next step in kind of the evolution of of our business and Holdco. Um I think you know we always wanted to do a rollup but we were also always interested in potentially venturing out into a couple different holdings from the beginning. So that was So you considering that a entry into a new category that's what you consider that ABA business. Yeah, it was it was it was you know it's it's tangentially related but it was definitely a new category but a lot of the same dynamics right if you think about kind of what we're doing and that's kind of what attracted us to it which was you're recruiting you are you're recruiting you know skilled professionals you are managing schedules you're sending them to somebody's home you're providing good quality care and um again I think again like at the forefront of everything we did was trying to provide the best um experience for our clients the, you know, the end um patient as well as our frontline staff. So, it was kind of the same ethos. And so, you know, we um you know, we went into that one and it was definitely helpful to have a on the ground operator there um in terms of just capacity cuz we were still operating um the home health business. And so from there, um we then, you know, after that, we continued to just grow and and acquire in both of those segments. So we we did another home health acquisition again in Southern California which added um you know kind of our fourth deal in that in that segment and we did um an add-on to the uh ABA business as well um in that third year. So at this point, you know, after 3 years, we were sitting on four acquisitions in the home health side and two in the ABA side and um so that takes us kind of all the way through to through 22ish, right? So we were kind of sitting there and we had a you know at that point we had started to invest in some real, you know, like additional mid layer management and some higher level talent too. Going back to the acquisition of the ABA business, you mentioned that there was sort of somebody you were working with already who could have been a searcher, maybe eventually wanted to be a searcher. Did they you put them in that business to lead that business? Is that was the point there? Correct. They were this they they ended up being kind of the lead on that business. Correct. And are did they take equity in the business as well? Yeah, we gave them Yeah, they took equity, invested, and also we gave them like a, you know, a plan that he would be able to earn some additional equity and, you know, similar to how a a CEO or some COO, you know, type would be able to to to uh to earn it. Correct. And is there a model there? Because there are a lot of people listening who are looking for a way to maybe not just go pure, you know, self-funded themselves on their own, nobody around them. um either to derisk or to be around people who've done it before who are further along the journey like you guys. Um is there is there a model there that others can emulate? I mean it's two sides. There's the the searchers and then there's the the use the people who would kind of partner and bring a lot of the capital the infrastructure to to the to it. Um what what can you say about how you guys worked that out and how others might emulate it? Yeah, look I definitely think there is a model that worked out well in our case. Um, I think though, you know, both sides have have to bring a good amount of value though, right? And I think what we were able to provide, you know, him was essentially a plug-and-play, you know, ready to go deal, right? I think a part of the calculus of a searcher, right, is the uncertainty, not just of closing it all, but then even if you do, of just the time, right? A year or two is is worth quite a bit. And so, you know, I think it was the right opportunity. It was the space that he and we were interested in and because of the work that we've been doing together. You know, we had a deal ready to go and I actually think wasn't by design, but I actually think we closed like a month after he graduated, right? So, it was just kind of a perfect situation. So, I don't know if it was necessarily it wasn't some intentional program we were running, right? It just happened, I think, to be a little bit of fortuitous um alignment. Um Okay. So, so, so hard to re-engineer maybe I think without like really being and I think some people are trying to do it. I think it I think it's great by the way like I think there's actually you know for individuals who have like created good deal flow and have a model and have and are able to do deals like I think right on the one hand you have a lack of operators too. Exactly. And so I think I don't know how it gets done in like a more structured way, but if somebody can figure that out, I mean I think there there is a there there um in my opinion for people who ultimately it's you know there's that whole end of the search community too, right? Who they do the acquisition but it's but they actually want to operate, right? And they they're not really as necessarily interested in maybe doing all the it's like they do the acquisition and they kind of never do it again necessarily. And so I think for somebody like that like why not, right? like if you can get the right opportunity and the right economics like it could work out for both sides. So definitely think there's there's a world where that could work. Okay, so we're in 22, you've got the two ABA businesses, you've got your original home health uh business, which is now four acquisitions large. What happens? So I would say 23 was a pretty transformative year for us in that, you know, everything we'd kind of done at that point set us up well for was really a pretty transformative acquisition that we did in the middle of 23. So um there was actually a very similar and adjacent service line um that we entered into organically already in our home health business um that provides inhome uh care for individuals with developmental disabilities. So ve very similar to the home health. It's just a you know it's a client who has a just different kind of diagnosis um and different types of needs. And it's not a nurse, it's a it's a caregiver um you know who's actually who's actually there. Um again we kind of expanded into it organically made a lot of sense. It was a lot of our payers um actually also uh they reimburse that service as well. similar referral network and we'd actually gotten you know sometimes I think the best the best strategy is actually sometimes to if your customer is asking you for something right maybe think about maybe giving it to them and so we had actually you know often times get calls from our referral partners and be like oh like do you guys also do um you know ID home care and we at the time didn't and thought okay like this is makes a ton of sense again it's inh home we're recruiting we're providing top level you know care and customer service so we went into that organic technically. And in 23 um there was an opportunity to acquire um a business that does just that service line that actually was a bit bigger than we were at the time. So it was a little bit of uh you know we were the minnow and they were the whale. It wasn't that much of an extreme difference, but they were they were substantially bigger than us at the time. And you know, I think the only reason why we were able to pull off that transaction was in some ways they might have had more clients, more revenue than we did at the time, but we actually had, if you were to go, if you were to walk into our offices, like I think, you know, we had the platform built, if that makes sense. Yeah. And so, you know, we were able to um do that acquisition and ultimately absorb that business into ours and gain, you know, a service line that we were already trying to get into and already were in organically that we that we really liked and, you know, was a key component of what we did and added actually just a lot of synergies across the whole organization. And two, you know, I think we had a little bit of the internal knowhow to take um this business which needed the same kind of integration and systems placement that you know we had been doing on a smaller scale done as well. So I think you know we were in a rare position and by the way they were also in Southern California. It was kind of a perfect fit um and we were you know fortunate enough to work with those sellers um to uh you know get that transaction done and you know they were they were great partners in it. They you know they're still they're still involved not involved they're still invested a bit in the kind of combined business and that's really kind of what was transformative and you know put our business to you know together and what it is today. So you know what we ended up doing actually as part of this was we ended up actually combining the ABA business into the larger platform because all three of these segments actually are super complimentary we realized and so we at this point are a diversified you know kind of one-stop shop for inhome care for young adults, children. Most of our services are all focused on young adults, children and frankly non- geriatric um clients. So you know at this point that's what we do which is we can take care of individuals with physical disabilities, developmental disabilities and then also provide uh you know therapy as well. So it was uh that when I say it was transformative right we combined all we did an acquisition and combined all three into one um business here. So I said hold at the beginning um it's really not it really is a as a single business. We haven't talked about it. We do own another healthcare business that we haven't touched on that's is completely separate. But um but at one point, yes, I mean this business though was combined into uh into one. Um we also own a it's a vascular access business. Um that's called Vict. They uh work with hospitals and other facilities to place um picks and midlines which kind of like IVs that go into your they're heavy duty IVs that go into your arm and are used for infusion and stuff like that. So, we do have that asset, but um but yes, I mean at one point we went from I guess having what we thought was going to be four individual uh companies to merging three of the four. And when you merged the three of the four, what was the end result of the employees numbers? What numbers can you share about the size there? You you doubled the business if they were bigger than you. You more than doubled. Yeah, we more than we Yeah, we more than doubled it. And you know at the time of closing we were I'll use round numbers but you know we were at that point combined we were doing about 100 Mhm. and a million of revenue. We you know we had about 3,000 employees 3,000 plus employees at that point. Um and uh yeah I mean and um oh and over and over and about 3,000 you know clients right that we were taking care of every day. Were you at this point like surprised at your at at the at the rate at which you'd moved? I mean in five years you said that transformation that transformational acquisition was actually in 23. So you'd only been at this four years at the time or four years from your first acquisition. This uh to me and listeners will feel like a tremendous amount of progress. you know, many of my gu some of my guests will kind of their north star or their or their final goal will be hund00 million in revenue at some point in the future. Um, you guys got there in four years. Um, so react to your own your own speed. I mean, I got a lot of gray hairs in my beard, I guess, from it, but no, it was uh, you know, it was Yeah, I wouldn't say it was expected. that wasn't necessarily how we mapped it out, but you know, I think we just kind of were always heads down and worked at it and when opportunities came up, we we just jumped at them, right? And I think there's a mix of, you know, there's a mix of being out there and hard work, but also, you know, a little bit of just being in the right place at the right time, right? I think, you know, I think for us, I kind of talk about 23 in that I think the core of it was building a good platform business, whether it was the $6 million of revenue, you know, initially, right? And I think like we just always thought like if we want to build big like it needs to look like a big organization would from the beginning because then when like the when when an opportunity to you know really scale up occurs like you can actually do it right as opposed to you know looking how maybe your revenue reflects you. I mean I remember when we went on to we use like Sage for you know accounting software. I think when we were talking to the uh account rep he was like I think you guys are the smallest revenue business we've ever signed on. Right. I think we were just kind of always just I think we asked him for a discount because of it. So that was I'm joking. But um but you know I think just we just always wanted to kind of make sure that we were positioned for what we ultimately kind of thought we we'd want to be. And yeah, we got there definitely faster than I think we we planned. But yeah, well it it it's yet another example in your story of how you spent that first year being going slow to go fast was ended up being so valuable. You you really that foundation was really something you could plug a lot into and it would hold. Yeah, for sure. You are uh now not operating. You were operating this whole time. You were you were in there as the operators. When was the decision to um step out or how would you characterize what you know the change there? Yeah, I think you know around I don't think actually initially I think our plan was always you know to at some point take a step back um because frankly I think we do want to invest across a couple different assets and I think one thing we learned early on when we owned a couple of these different businesses were you know you really need to show 100% dedication or somebody needs to be 100% fully dedicated to each business and operations, right? Otherwise, you're kind of going to do we were either do acquisitions kind of at 50% or operate at 50%. We were lucky we were two people, so we obviously had and that was part of the reason, you know, it made sense, I think, to to have that partnership in the first place was we knew we were going to both operate and acquire, but it got to the point where I think we realized, you know what, we want to do some other investing and some other rollups and some other acquisitions. we need to go out and actually find some people and some individuals who can 100% dedicate themselves to what this business needs and you know as part of you know when we essentially got that transformative deal under contract I think at that point we realized okay like we're at a scale now where we really should go out and and put together a top-notch um management team and so as part of that deal essentially we kind of kicked off that process and you know I think it's the smartest thing we've ever I think we were I think we're decent operators, but you know, I think the team we have in place now is frankly better and it's the best it's the best decision we've ever made, which is putting the people that are in there in place and frankly trusting them to run the business. you know, they were seasoned uh industry, you know, vets in in the space and um you know, I think to to date, we still work very actively with them, but I mean they're, you know, they're doing a great job and um yeah, again, I think it's it was the right move for us. So, we removed oursel ourselves about 6 months after after that um from after that deal. So early 204 was kind of when we started to step away and at this point we've kind of transitioned to looking for kind of new opportunities. I just did another interview this morning for the Minds Capital podcast uh with an independent sponsor who talks about how half the time he makes a leadership hire into one of his portfolio companies. It it just doesn't work out. And they do you know they apply all of the frameworks best practice hiring best practices. still the hit rate uh is only about 50%. How did you get so fortunate that the the management you put in seems to be working out so well on your first try hiring at that level? I think in this case the way that we found um the right individual was first of all they had they did have industry experience so you know they were they were kind of a known commodity that they understood how the space worked and frankly I think you know they were local too so we met a lot of times this was not a you know two interview process to to place this one and I think a there was no question that this person knew how to run a business of the scale how to operate in this industry And you know I think more importantly what they showed was just you know good cultural fit with the existing organization. Um and ultimately I think just had the drive and the eagerness to to to go and do it. And so you know look maybe it was a little bit of luck too but I think we we definitely chose right. why I I think that's why I think we just kind of we hopefully we we had the right setup and um you know process but you know we we definitely made a good choice on that one you know and it's so funny Michael the three things that you just identified not systematically but they jump out at me because the interview this morning was the same three for his story of placing a CEO that just did wonders which was culture fit you know kind of kind of obvious but your leadership has to fit within the c the existing culture of the organization, your chosen leader. Um, deep industry expertise, so already knows the industry, can hit the ground running. But that and then the the third is just the eagerness. This person was characterized as a born salesperson. I don't know if you'd say the same of yours, but but somebody who's just hungry to get after it um as well and grow the business and sees the opportunity, you know, sinks their teeth into the opportunity to take a business to the next level. Yeah, for sure. I mean, I think, you know, we've always had a little bit of the ethos like cuz when we started, we do it too, which is, you know, we want somebody who's willing to do everything. Not that they should, right? But like anything that needs to get done at the company, like nothing's beneath the CEO if they if it needs to get done, right? And I think that's kind of what we wanted. Not that the CEO should be spending their time doing a lot of stuff, but we want somebody who kind of is just, you know, part of the team. And because I think you got to lead from the front these days, frankly. And I think, you know, the the ivory tower office CEO was just not the right, you know, that that wasn't what we were looking for. And we got exactly somebody who's just eager and just willing to to go to the next step. So Greg, Michael, and and in your decision to make this change, why did you decide against selling, which you certainly would have considered, why not just sell and exit and take that and go into something else? Yeah. You know, look, I think we still have a lot of room to run. I mean, I think um you know, one thing I I actually always didn't fully I mean, I understand, but I kind of didn't fully understand from my private equity life was you spend all this time identifying a good company. You build it out, you grow it, and it's going really well. And in some ways, I got you you got to crystallize at some point and funds have, you know, fun lives, but you sell your best assets. And I think in a world today, it's actually kind of hard to get good assets. Um, our view is I think let's hold on to it until we can until we stop compounding effectively, right? And when that happens, then maybe we aren't the right owners. But for now, I think, you know, at that point, we just thought, hey, we have we're hitting on all cylinders. We have a great team coming on board. Um, you know, let's continue to to invest behind this because we believe in it. It's a, you know, it's a great company and love what it does and we'd like to see it, you know, go from double again, you know, Yeah. And and you were in a financial position where you could go off and and start a new plat buy a new platform without needing to exit. I mean, look, we've we have a great set of investors who have backed us and I think um even though we haven't um you know, at this point, yeah, we have a great set of investors who have backed us and so, you know, we're we're doing it obviously um you know, as much as Pine Street can contribute like we do to all of our deals, but you know, we have a great set of uh of backers now at this point who I think want to want us to execute on a similar strategy or you know, similar investing um you know, thesis, but you know, somewhere in a in a new But were these investors with you for the SBA deal? No. So a lot of them were. Yes, actually. A lot of them were from the original A lot of them were from the original set. Oh, okay. So So in fact, you wanted to maximize the SBA loan as we talked about. Um so that you could maximize your equity in the business, but in fact, you still needed to bring in investors into that deal. We brought on we brought on a good set of investors when we the the larger deal in 23 that we did we brought we brought we brought in a new set of um of LPs as well um who you know who've been also fantastic from the get-go and you know I think uh it's been a so far a pretty good result and I think people are excited to you know continue to invest. So uh we're we're getting toward the end here but just to uh give me my headline for this episode. Just kidding. Not kidding. what what give us the the revenue that you started at and where you are today please of the of the whole portfolio. Yeah, so we started at six uh million of revenue and now the whole portfolio is going to be doing about 140. So when I said 20x uh I was actually understating it maybe. Yeah. Yeah. Yeah. That's great. And now we're in 2025. So this is now basically after six years. Remarkable. Yeah. Great. Okay. Michael, wrapping up here, was there any topic that we didn't get to that you want to make sure that we hit? Yeah. I think one thing I would I would add was, you know, I think a lot of searchers often times think whether the partner or not. And I think, you know, in my case, I would say, you know, I'm a big proponent of having, you know, a partner. I mean, I got very lucky that I partnered up with, you know, a good friend for a long time, but also what ended up being a great partnership, right? And I think, you know, I wouldn't say just do it to do it, but I think, you know, if there's a rationale to, which for us was we felt like we could carry twice the load if there was two of us and, you know, block and tackle and also to have, you know, a good sounding board and and just that that that partner in in the business um with you, like I'm I'm all for it. I actually think it was a a huge accelerant to to this. And you know, I know I'm on on on this, but he he's, you know, equally as much a part of this as much as I was. Um, and so I would tell, you know, everybody in the audience like pick carefully, but I think if you can have a if you're lucky enough to pick a good partner, I think it's it it's as good a decision as as you can make. Great. Well said. And and just another thing, Michael, on the choice of ETA as a career, I mean, you're kind of at the risk of making you uncomfortable. You're kind of an exemplar. You guys have moved very quickly. Sort of the phrase of choice of the episode. Uh six years, over hund00 million. Um so, a lot of people may be inspired to to go down this path, are inspired to go down this path by stories like yours. Um, of course there's a lot of hardship along the way, but are are you as enthusiastic a, you know, a proponent of this career as I would I would presume you are? Is this a pretty great way to spend your career? I I do do searchers reach out to you. Do you know others who are who are earlier in their journey and you're and you're pretty enthusiastic that they that they proceed? Yeah, I mean short the short answer is yes. I mean, look, I I and I think if this is something that is right is right for the for for you as a person who is thinking about this and you have that itch and you, you know, want to go and kind of be your own boss or just, you know, just kind of go build something. I mean, I think it's it's the best thing I've ever done. Um, and it's just been both, you know, the ups there are definitely downs, by the way. Like I know we kind of probably focus on more of the ups on this on on this podcast, but trust me, there were definitely days where it was not all up and you know there were days where we thought, "Oh my god, like what are we doing?" But overall, like I mean it's been it's been an amazing experience. Um and I think I would recommend it for anybody who uh really but you really want to want it and I think if you do like there's nothing I think there's nothing better. Fantastic. Well, let's leave it on on that note. Michael David off. If people want to reach out, I'll put we'll put links to your LinkedIn name of the firm. We didn't we heard it once, but say it again. It's called uh the Pine Street Group. The Pine Street Group. Great. Um and if people can if people want to reach out, they can grab you on LinkedIn or or would love that. Okay. Definitely always open to talking to people who are trying to you know do something in the space. Excellent. Michael, thank you for coming on and sharing your story. We really appreciate it. Thanks, Will. Hope you enjoyed that interview. Don't forget to subscribe to the Acquiring Minds newsletter. 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