Fund Stuff - Episode 7 - Stephen Olmon from Several Ventures

Fund Stuff - Episode 7 - Stephen Olmon from Several Ventures
Fund Stuff Episode 7 with Stephen Olmon from Several Ventures


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[00:00:00] Andrew Pierno: All right. Fund stuff. Episode seven. I didn't think we'd make it to seven. To be honest, I thought I'd do like two or three and then, forget about it. But anyways, I'm talking today with Stephen Olmon , he is the founder of several ventures and we get into what. He calls sweaty businesses. , Please enjoy my conversation with Stephen Olmon

Thanks for hopping on, man. I appreciate it.

[00:00:24] Stephen Olmon: Yeah, it's great to meet you.

[00:00:26] Andrew Pierno: Likewise. , so I just, you know, these conversations are just super like pretty chill. I wouldn't even call it a podcast or an interview really, but you're doing interesting shit would love to connect and chat, see what you're up to.

Um, and that's really about it. So maybe we could just start from the top and just like run me through. Who you are, what you've got going on. I saw something crazy on Twitter that you said you want to build 50 products, which like, man, as I get further down into like the bias, instead of build it, you know, as step one, like the idea of building 50 things from scratch just sounds like more and more crazy to me as every day goes by.

[00:01:06] Stephen Olmon: Um, well maybe I can help clarify that. So it'll sound slightly less. I love that. And yeah, so, I mean, super quick background spent a couple of years in consulting and then shifted over to head of sales at a software company that was doing real time analytics on like healthcare data. And, um, that company ended up getting required.

And I went out on my own about four years ago. And I I've always kind of wanted to try to build multiple businesses. My dad was involved in three different things, um, when I was growing up. And so I just had this mentality kind of like a different version of diversification, I suppose. And I thought I'd really like to diversify through different businesses.

A lot of people like. Probably the most common way to making significant like welfare generate significant wealth for yourself is to focus on the one thing for a really long time. And. I guess I'm focused on building lots of things for a really long time and we'll see how that goes. But, um, the way that works practically is I have a lot of really great business partners.

And, um, as I've kind of matured through that, there's a couple of companies that I'm still more operational and than the rest, but with each new business, now I really set the expectation that I won't be operational at all. And I'm really more of a guide. I have a set of vendors across a lot of different.

Um, services that I can kind of manage and oversee and let you know, partners or a partner really run the core service of the business and let them really Excel at what they're best at. And so that's kind of where I'm headed and doing more and more and more of that inside of several. Um, because it allows me to scale myself pretty effectively.

Um, so that's, that's an, and then I guess to round that out is it's not all. There's there's some software digital services. There's a couple more agency S businesses. Um, and there's a couple of like sweaty S and B type companies. So it's a again, kind of continuing that concept of diversification. It's , it's not all technology.


[00:03:11] Andrew Pierno: what are your, what are your sweaty? , what are you? Sweaty businesses.

[00:03:15] Stephen Olmon: Yeah. One of them is a dumpster rental company, um, and Houston, Texas, and, the other is a small business and residential, but more so focused on, on the commercial side, security company. So access control, video surveillance, that sort of thing.

And we're just taking a slightly different spin on it. And, um, yeah, so those are those

[00:03:37] Andrew Pierno: two, my last, my last big. My last company, it was a security and surveillance, company, tough market man, tough market to sell.

[00:03:49] Stephen Olmon: I think, I agree. Um, one of the partners in that businesses like expert Ms in and for several years and, yeah, just some strategic advantage.

That's actually something I kind of look for is like, what's the advantage. I don't want to just, I don't know. What's the random example. I don't want to start like an email marketing company. You know,

[00:04:11] Andrew Pierno: I started one of those

that was a perfect, that was a, that was, you couldn't have planned that any better.

[00:04:22] Stephen Olmon: Is that, is that email marketing, technology or is it like as a service?

[00:04:27] Andrew Pierno: Totally to service pure 100%

[00:04:28] Stephen Olmon: service. Okay. What I was thinking in my brain to be fair is like a, like, just build another Coleen, build another,

you know, like there's just no advantage. It's the same functionality as anyone else. And you're just going to try to mark it. Like, that sounds painful to me. Whereas especially in the sweaty side, there's some more like relational network effects that you could maybe take advantage of a feeds. Yeah. Um, wherein maybe a partner or there's something like that has built in distribution to kind of help you scale.

So yeah, I,

[00:05:03] Andrew Pierno: this wasn't what I planned on asking you about or chatting about, but if I were to push back on that, I would, I would say that software is increasingly becoming commodified. , so I'm a software developer. You show me a thing. I'll be like, oh, three weeks or like, oh, that one's hard. Oh, like six weeks, right?

Yeah. That's it that's software today. I, for the most part, um, even the really deep, hardcore machine learning stuff, my thesis is that that only ends up being like 20% of the total like code. Let's say like 20% of the lines of code, the other 80% straight up like six inch pipe. I need a fucking six inch pipe over here.

I need duct tape over there. Right. And like, I'm going to get the lowest wage labor that I possibly can to go do it. I do not need US-based people. Um, I want a US-based front door. I know that, that sounds like, I don't know. Probably doesn't sound great, but like just the reality of it feels like that makes a difference.

But, um, yeah, behind the scenes, I think most software is just an utter commodity and distribution is the, is or marketing or a brand is, is the way that you can kind of win on that. That's fair.

Oh, that was it.

[00:06:17] Stephen Olmon: I think that that is a fair take. And, and I think we both agree on the distribution piece. I think there are very certain types of, technology that, yeah, superior like over commoditized, over done overbuilt and no one needs another one. We don't need another email sending tool. We don't need another email warning service.

Build something else, like I'm more interested in more vertical or industry specific technology at this point. Like that gets me more interested. Um, I have a small software business that's focused on, um, continuing education for a lot of those sweaty businesses. And it's basically for the HR office managers that oversee hundreds of employees to manage those continuing education things.

Like I liked that because it's a little more focused. Um, these generic SAS tools with kind of generic functionality that already exists, you know, just. A plethora of them that are, it's hard to distinguish even that's what I was saying is like, yeah, you, you have to have some like, really notable distribution to try to make some noise and those types of tools.

Cause it's just eyes glaze over. It's like, oh, it's just another, you know, sending whatever. So it's hard to get people's attention.

[00:07:37] Andrew Pierno: Are you saying that in terms of your personal interest level in the business or in terms of market opportunity and the reason I I'm trying to make. Distinction is because there's a piece of advice going around.

Like, let's say the indie hackers circle that I think is wise is that don't go try and create a market. Um, go draft off of one that already exists. And so by definition, there will be competition by definition, there will be other products that do more or less what your thing does and maybe a slightly different way.

Right. But you have a different perspective on the problem or whatever, and that's your differentiator and you just go out and market, but you do not go create a market. That's what, in my opinion, ventures for creating markets, um, But for like a first time founder or something like that, definitely go create the 11th whatever tool and go to, you know, not necessarily the 11th, whatever,

[00:08:30] Stephen Olmon: that's what I was going to delineate.

Right. There's a difference between them. There's like two or three, really great. And this is somewhat my experience. My last, hopefully last ever, you know, W2. Was, we were, we were like the third or fourth player in a market, but we had the most beautiful UI and we had the most affordable product and it was really good.

And there was enough room in the market. Like the Tam was big enough where like a fourth player could really come in and make some noise and it was acquired and like, you know, a good, an eight figure acquisition. And so it was like, cool. But yeah, at 11 or 21 or 31 on, like, I don't know if that holds up as essentially, there's some sort of like failure point where that, that isn't good advice anymore.

And I was just, I picked email tech because I feel like it's brutally saturated. Um, like if my buddy were to tell me that he was going to start like a competitor to like lend list, I'd be like this. Like bury yourself, stop. Um, I'm not a fan. You don't have to support that or, you know, but, yeah, I think we were saying some of the similar things.

I'm maybe I'm just being picky and getting a little more granular and saying yes, but, you know, but yeah. I, I, in general agree. Yeah. Don't make a market. Um, most of the time that's very accurate. And if you are a lot of times you need some pretty simple. Yeah.

[00:09:58] Andrew Pierno: So several are you doing, is that basically a one man shop that you're kind of putting a brand around?

Um, and then you just kind of putting all of whatever you do under that same brand.

[00:10:09] Stephen Olmon: Yeah. So several is, um, like a holding company of my age interests in various companies. And then I have started to, um, staff inside of several as well, but I'm the only partner, if you will. There's not another partner inside of.

Um, but I have, um, I I'd have to count maybe nine or 10 business partners across the different businesses. Um, so that's, that's kind of how it runs.

[00:10:35] Andrew Pierno: And what was your decision for going at it alone? Because I, so I started XO and it was just me and I very early. I have a room for my cell phones projects that I was trying to take from zero to one.

Like I have to have a business partner. I'm not allowed to do anything by myself anymore because I'll just get fucking bored in three weeks after I build the thing and be like, all right, what's the next shiny object or whatever. Um, so I immediately, I immediately brought in partners to XO. Like there there's four of us now in total.

Um, so a relatively large number, but frankly man, like we've bought three companies. We bought them in a relatively short period of time. And I don't know, I don't think I could have done it just by myself. I S I most certainly didn't wouldn't want it to, um, but what was your decision for, for going about it?

[00:11:25] Stephen Olmon: Yes, I would, I would say I don't feel like I'm going at it. I mean, in the ways I am in ways I'm not. So I really had built three businesses and then, well, three or four and kind of sat back and said, Hey, I think that I should stop talking about Stephen omen and put a name around that. Um, and. T to give, um, just a little more clarity and kind of like put it in its place, I suppose.

And I just didn't like, I literally like used to look Stephen It's like, I just, there wasn't, it didn't feel right anymore. And so, um, I feel very much like I'm doing all of it where it's a bunch of incredible people because I have business partners inside of every opco. Um, it's just the hold co.

Yes, you're right. I am, you know, alone in that. Um, and. That's just kind of the nature of how it transpired. I suppose it wasn't hyper intentional. I just continued to want to build businesses with other people. And my wrapper for my own interest in those businesses is several. And some of it's just marketing and positioning.

It allows people like 50 by 2050, it could be 27. It could be 77. It's just a north star and it shows people my appetite, but I'm always interested in the next deal meeting the next person. And, um, so it's just kind like a platform or place to kind of speak to.

[00:12:47] Andrew Pierno: And what has been your, experience like switching from.

Like, I don't know, we're calling them sweaty businesses, but like let's call them offline businesses, a little more palatable names, um, between like offline businesses, software businesses, the operations for me. So I, where this question is coming from is we're just focused on pure SAS at the moment. Um, we have four partners, so like that's super helpful.

Um, but we're going to have to staff somewhere and two of them that we still have, we sold one-off. Don't have enough revenue coming in to support full-time staff at the individual company level, like take a support person. Um, we're doing support. We're going to wait until we get one more under the umbrella before getting a support person.

They're probably going to sit at the GP level because they can't, I can't bill out a hundred percent of their time to each individual company. There's just not that much support to go around. Um, but how have, like you guys thought about or not? You guys just, you thought about operations at seven. Um, like where, who to put, what, where, where to put what, like under each individual company or under just like you as several.

[00:13:58] Stephen Olmon: Yeah, I think I've, I've done that a little differently. Um, so some of the operations work is done by partners themselves, right? Because a lot of those partners are more inherently operational than they are. Um, and so as like an expectation, um, and so there's, there's that component. And then as a business grows, um, you know, kind of have agreed that we will, um, Re-invest in the business to bring on scale up to part-time people, full-time people as the business grows inside of the individual company, I then have also done kind of stuff at the several level, like from a content side where there was enough work to be done, that I did hire someone full-time.

Um, you talked about overseas. I use people both overseas and state side, um, for several, for different things. And so, um, it's really, it's kind of a function of quantity of like work. Like you kind of brought up and then also available dollars, but some of the things I'm doing across the whole portfolio, if you will, and then somethings we're doing inside of each individual company and I'll just instead of, and that's actually interesting to me, I'm curious how you think about the part-time full-time.

Maybe it's a good quality of work thing, but I'm really comfortable with having a season where there's just like, part-time work of a single person inside of the company. And to hopefully scale that up, whether we scale it up with them or someone else, um, whenever there is enough revenue to support that.

So that's kind of how I've approached it. It's been more about what the task or, um, work is. So like if you you're talking all SAS rights, if you're talking about like client support, That's actually a really interesting challenge. Um, but I think where I probably would have gone without if it was me, which I'm not, I obviously don't run your deal.

I think what I would have done is probably like part-time, VA's that I trained pretty intentionally, um, that I just scaled. , as, as needed, um, within each company. So that they're, I don't know if I would mix for that specific function across, unless, unless it's like, the technologies are pretty similar.

Um, but if they're different enough, then I probably would have totally separate people and just hopefully scale them up in, in

[00:16:16] Andrew Pierno: usage. Yeah. I think the, the, it sounds like some of your deals you're going in as like a minority investor, like sometimes you're the minority sometimes you're the Metro. But almost always like you you're leaving the people in place and the deals that we're doing, we're looking at our first one.

Now that's at a little bit higher level that will come with the original founder. So like, we're going to, I don't know, buy whether it's the whole thing or most of it or whatever, we'll probably buy a majority and then they'll have kind of like an earn back, but he'll be, he'll be still operating a company.

We have others where we just buy it from like two dudes and then like, you know, on Friday we buy it and on Monday we fucking own it and like someone that's coming in. Right. And so I think that that's part of the difference is like, it looks, it sounds like you're coming into a business that exists for them or not


[00:17:06] Stephen Olmon: Yeah. And so that's actually one thing that I apologize if I didn't clarify, I've built everything from scratch. Um, so yeah, everything's been from zero and, um, and, but it's actually really relevant because I'm, I've turned my eyes to, to buying. I'm really interested in that. Um, and I've made a couple offers that I haven't gotten and that's, that's fine.

I felt like they were overvalued and. , no, I haven't had the offer. I love Andrew. Um, but having, um, having offered on micro, if they'd been off market to offer more good deals, um, one was actually, sweaty or, offline and one was, um, a digital business. So, um, yeah, so I'm, I'm really interested in that as well.

I'd probably have plenty to learn from you. Um, cause you're steps ahead of me.

[00:17:54] Andrew Pierno: So when you go into a business that's, um, while you're thinking about starting one, I mean, you're acting in this venture, it's just straight venture. I do bring in other investors under like the LLC of the deal or whatever, or how are you structuring


[00:18:08] Stephen Olmon: Yup. So I'm always putting capital and, and pretty much every time the other partners in the deal, like, let's say it's like the core operator is putting some level of skin in the game, because I think that's just a healthy thing to do, but a lot of times it's, um, it's not equivalent. And then, um, There's a couple of deals where I've had kind of a strategic, I actually kinda referred to that earlier, like a strategic sound partner.

So like when the security business, there is a strategic partner, I'm glad they're involved on the cap table and they have a lot of relevant expertise in network. Um, and so they invested at that like LLC level. Um, but yeah. And so I've done now. I don't love that. I really don't want to do that a lot, but I w I did when it made sense.

Um, so that's, that's how I've done it. What don't you like about it? Um, if I, as a preference, if I can keep from it, I enjoy when people that are somewhat hands-on in the business who have also invested in the business with their own capital, I've just found that it's like the most alive. Um, and it's, it's just kind of a different environment when you have someone that owns a pretty significant chunk of the business.

I think, you know, like statistically significant, um, and just, you've literally never interacted with them other than maybe introductions or some sort of like distribution ID might get from them. Um, yeah, it's just not, I don't enjoy it as. Um, I liked when everyone that is proactively invested is also practically engaged and involved.

And, I just liked it more as.

[00:19:47] Andrew Pierno: So, unless I misunderstood and don't let me put words in your mouth. That's basically like venture capital is what you're describing, where you all these silent majority shareholders that, I mean, they're not there. They, objectively they're not active in the business.

99% are not active in any given.

[00:20:08] Stephen Olmon: And I don't know, that's somewhere in between. I started out very operational, I, as I've grown and gotten more and more deals, I'm trying to be less operational, but still involved because I'm really like the thing that I love the most is like convincing someone from corporate America to quit their job and start a company with me because they've got some unique.

No, it really it's like my addiction, like just put it in my veins. And so I, I love it. And. So maybe I'm kind of in between, because my year 10 goal I'm. My year 10 goals to have a monthly meeting with each business. Um, I do more than that. I'm more involved in pretty much every one of the businesses in that today.

And, um, that's my goal. Um, but I, um, I'm a natural coach and I just, I love convincing people to believe in themselves and to start a business and, um, like go into the great beyond sort of thing. And, so that's kinda my mechanism for doing that. Um, but yeah, I'm not like anti VC, ABC sort of thing.

[00:21:07] Andrew Pierno: No, no, no, I wasn't.

I wasn't suggesting that the reason I brought it up is because you guys at a certain point, let's take offline businesses off the table for a second. In any given portfolio of, of digital businesses, you're going to have what I think is going to be winners and losers. And I kind of am battling right now with like, are we kind of in our models, which are similar, are we subject to power laws?

And I think it's kind of inevitable that we're going to have a certain amount of winners and losers, even for us where we buy stuff with 2, 3, 5, 10,000 in MRR. Some are just naturally gonna fucking grow no matter what we do. And some are just naturally not going to fucking grow no matter what we do, right?

Like it's just gonna happen. And the interesting part about us is like, if we buy a business for, let's say half a million and we grow it to a million a year now we're in kind of venture land. Right. Um, could I theoretically go out and build a team and go raise venture around that individual company and just go fucking see it to the moon.

Like we that, but putting a ceiling on it and saying, no, I don't ever want to do that. Feels somewhat limiting. So I'm like, I'm just kind of piecing together, like what? Cause that's a really interesting opportunity for a particular company. We buy. COVID hits it's in remote working and like, holy fuck.

We've got like, you know, we've got a fucking whale on the line, right? Like we got to go see this thing through for all it's worth. Obviously it's not going to be us. That can be full-time on that. We got to go build a team like a full, full team around this and go try and raise venture and scale up.


[00:22:39] Stephen Olmon: I like the optional. Especially for what you're doing. I think it's really wise to preserve the optionality and, or maybe reserve the right to go down that path. Um, I, I probably won't lean that direction because I'm so against like having a dad, so to speak, um, that the. And there's not necessarily a need to blow something out of the water.

I mean maybe, and I don't know, you never know, like time will tell, but I joked at several ventures should be called several small ventures because I'm really comfortable with smaller, high margin cash flowing businesses that aren't going anywhere. And I'm just pretty comfortable. And I just want to build more of those.

It's more about like a quantity of healthy, profitable businesses with partners that I love working with. And that's just, that's kind of like my. What I lean towards, but I'm also an opportunist. So like you're saying, I would probably be willing to do that if, if the right company presented itself and it was like, man, we're just going to waste such a huge opportunity.

If we don't do this, it would be unfair to like the business to not try. Yeah, I would, I would go for it. Hmm.

[00:23:59] Andrew Pierno: And in terms of deal size, what are you what's small to you

[00:24:04] Stephen Olmon: in terms of something that I've built or.

[00:24:08] Andrew Pierno: I dunno, you just said several small ventures.

[00:24:12] Stephen Olmon: So I'm like really great at the business is doing 500 at 1.5 gross.

That's a high margin business and I own a notable percentage of that. Great high five chest bump, all of it, like, love it. Um, so if I just stack those. What's there to complain about like a personal level. , no complaints. I'm happy. My partners are happy. Great. I'm buying, I'm probably in a, in a similar space to you.

I would probably look, um, for an act like an acquisition price of 500 K to 1.5, something like that. Um, That, that would make sense. Um, so, you know, there's just, there's a rule, like acquiring stuff. It's, it's amazing to see the stuff that gets bought. I love it. Like I'm micro acquired inspires me. People that will buy something doing like $104 of MRR for like 20 K.

It's just, it's great. Go for it. Go get the multiple, sell it. It feels good. And like you bought something that already exists. It's cool. Like, I think it's really neat. I, I probably struggled to buy something, um, that is a certain tiny micro size, um, because I have technical resources where I look at that.

And I just, like you were saying, yeah, I can feel that in three weeks. Like saying I am not, but partners or other resources I have ready to boom. Let's just go build it. You know? So I've struggled with that some, but I think at least north of, um, north of 200 K or so would be about the smallest I would buy, just

which would make sense.

[00:25:49] Andrew Pierno: Yeah. The buy versus build thing is tough at the very small level. Like let's say sub a hundred grand total purchase price because yes, you could build the product. Um, and this happened to me with a, the email services business. I just happened to hit like a message to the right market at the right time.

And that worked. And so, and this has already happened. Somebody clones, literally our whole business, like found our, the template we used cut, literally copied the whole fucking thing. Just carp launch. But I don't think it's going to work for them. Right. Like it's not going to work for them in the same way that it worked for us.

, or for me, just me at the beginning. And same with, when you go to build like a copycat of an existing business, you still like, fuck dude, we bought one of these little things. It was only doing like 800 bucks a month, but it had 10,000 people at an email list. So like,

[00:26:41] Stephen Olmon: that's different though. Right?

There's another asset behind that that's really, really relevant and valuable. So. That would skew how I might view that.

[00:26:50] Andrew Pierno: Right. Okay. All right. Yeah, that's fair. But yeah, we, we, at the beginning, we're thinking maybe we would, we would go try and build some of these things and we may even still buy something with zero revenue as a product.

Just if it's like gives us, gives us a huge headstart, but for the most part, it's like, it's just the cashflow. The rest of it is a bit of a commodity.

[00:27:10] Stephen Olmon: Yeah. That's fair. I was thinking of $800 MRR. You've got 15 customers. I'm only behind by 15, like . And I get to see that the market value. I can see that the market validated it unless they convince like 15 of their buddies to buy it for like six months, whatever, which there is, I will say that I think there's a little bit of fraud going on in some of those really tiny things with like very small MRRs and you have to be really careful to validate.

Where that MRR is coming from and who that is. Like the underlying customer base is very interesting to me because I've got 15 friends that I could convince to pay me $50 a month for something for three months, and then tell them, I'll give them a kicker on the back end. And I was like, Hey, like, yeah, I made 15 grand was all said and done that super nice vacations.

So, you know, I have to be careful about that stuff. But in general, if there is something else valuable, Maybe the technology actually is pretty tough to build, or it would just take too long. You just want it now, or 10,000 person prison email list. That would speed evaluation for me significantly,

[00:28:24] Andrew Pierno: right?

Yeah. What's so I come at this from a developer's angle, right? Like that's my background. Um, and you're coming at this from like more of an operational side. And so like, it's, it's interesting to hear you value that more than the code and, and in some ways, right. Yeah, it's just, it's just cool. Cause I always come at it from probably like too technical of an angle.

Right. And of course every developer always says like, oh, that sucks. I could build that better. Right. Like that's the same for a marketer too. Right. Every marketer looks at it's like, oh,

[00:28:58] Stephen Olmon: well, okay. $800 in MRR, 15 customers. I mean, I can go get 15 customers. Like if you got 15, I think 15, you know, so I can get 35, you know?

And so the, the, um, a really funny example, I think you just tweeted this earlier was the sheet best or best sheet. Um, and I'm like, I love that. I just want to pay someone to go build that for me, I'm going to go market it myself. Like I literally had that thought before we got on, on the skull, because I was like, man, that's, that's great.

And I don't think it's going to be that hard to compete,

[00:29:38] Andrew Pierno: um, on the technical side, not that hard. But that was the exact, what I'm talking about. We bought it at 800 MRR. It had like 10,000 people on an email list. We've tripled it and like,

[00:29:51] Stephen Olmon: wait, you bought, you bought, is it sheet best or best sheet? She best, she, I really want it to be best.


was from these, it was from these Brazilian dudes. So like that sounded, I think that was like the only available domain, but whatever.

So, so that's really no, but that's actually super helpful for this conversation because I didn't realize that was a business. I don't know why for some reason I thought you were just mentioning, I didn't realize you bought it.

And I really didn't. I think it's really, really smart to me. It's almost like someone's saw on glide apps and it was like, well, I'm just going to build the underlying infrastructure of glide, put it out. Right. Which is really smart. And actually that whole, I mean, I've seen that happen before in a lot of other spaces where someone built something and they just basically marketed the underlying technologies and API effectively.

And so, you know, I w I love that you now own that. Um, it is funny though, cause I just was thinking of that as an example. So you literally thought through, okay, we could build that, but, but they have this list. And so did you value? So I was looking at this deal the other day, that was us, an offline business, but included some real estate and they were saying, Hey, you should view this as two separate transactions.

So on the digital side, I almost want to think, Hey, I'm going to value this on MRI. Here now I'm going to take the 10,000 person email list. And I want to try to validate like how valuable that list is, how engaged, I don't know if you did this, like how engaged are they? Where did that come from? How old is it?

You know? And then you value that, claim it together. Now here's my. Yeah. Is that how you thought about it?

[00:31:29] Andrew Pierno: We did from the BA, from our perspective, but most of that is not communicated to the, um, the business owner. Right. We're just trying to value it on SDE or whatever, which is like really favorable for us.

And we gave him a form of bookable, but, um, yeah, we saw that. So it was like a hundred percent organic growth, like very little Google ad spend a big fat list. Like really under monetized product. Like the pricing was all fucked up. It's still kind of fucked up, but at least it's higher now. Um, or at least more to market and like, great that, that equals three X.

, we're going to go maybe get like some revenue, like an expansion on the multiple that we sell it for. Like, we bought it at three. Maybe we'll sell it at four plus like the third reacts and growth. Um, I am a little concerned about like, who is above us on some of these smaller sized transactions. Um, it might be.

For awhile, right? You might be, it might be like us, nobody private equity, right? Like that might be it for awhile until I either we grow up stack and then we like XO or several becomes the guys that buys it once it hits like a million a year. Um, then it's like great million a year. Like, what is. Awesome.

It tastes like chicken. We'll fucking buy it. Right? Like, um, as long as it meets these criteria, but I do worry. Yeah. Like who, who the hell is going to buy these things from us? It might be the case that we just have to, you know, cashflow our way into a profit, which is fun, which is fine.

[00:32:54] Stephen Olmon: Sure. That's that's all good.

That's really cool. That was a really good working example of kind of exactly what you're talking about. And, you know, I, I think a lot about that sort of thing. When I'm building businesses too. So like you, we thought about that and buying and just kind of like, um, segmenting out the valuation. I think about that too, when I'm building stuff, is, is there more than just the core business that's valuable and what else could we work on?

Or maybe capture as we're building that would have the secondary value. So I try to apply. Yeah,

[00:33:31] Andrew Pierno: and I know we're kind of at time here, but I would love to just get your kind of quick thoughts on leverage, um, how you've used leverage in deals or how you're thinking about it.

[00:33:43] Stephen Olmon: , this is really funny. I don't know if I have a short answer.

Um, You can ruin your life or make your life using


Well, and I would say this too, what's cool is that you have three other partners and so you should have a sounding board and consensus, or at least rough consensus to where, and that's really mature and like a healthy thing to have. Whereas myself and several being kind of solo to a degree, unless we're talking about a specific opco, I have to really go pursue and ask other people outside for that perspective.

Whereas you have a built-in and so you should be able to avoid big mistakes when it comes to leverage, because you've got four brains, four different experiences and perspectives that help you avoid those. And so I think that's awesome.

[00:34:36] Andrew Pierno: Yeah, I, I just spoke with pipe this morning. They did a partnership with micro choir and I just got on the phone to just, you know, all right.

What's you know, is, are we talking like credit card rates are fucking SBA rates, right? Like what's the deal here? And it looks, it looks really interesting. I was really surprised I have no affiliations.


yeah, they might get pissed, but I don't give a shit. They said anywhere between three and 9%. So it sounded like they start you off with, um, I was like, oh, so like three is a hell yes. And nine is a fuck. No. So you started us off between like, hell yes. And fuck. No, I'm not helpful guys, but they start you off with kind of a shit rate and then over time as you build up, um, yeah, they'll, they'll get you down, but they were.

They were really thoughtful about the way they put it together. The guys seemed super sharp and like, I'm going to go, I'm definitely going to go explore it for working capital. And you know, over time it was less, I don't know what happens, but the SBA is a bitch to get software stuff through. Right. And like, that's all we do.

[00:35:42] Stephen Olmon: It is. Yeah. And I was going to get seven or 8%. That was just, my gut was kind of where they were going to lay on. So, I mean, if you can get underneath that, if you're living in, you know, four or 5%. That's great. Yeah. So I mean, nine is, you know, that starts to, at least they're in single digits, but I feel like, yeah, you could.

And also my curiosity is do they view that and you probably don't have the answer, but well, maybe because you are doing multiple, do they view that by individual company or would they, as they build a relationship with you, see, you have a track record as you have maybe two or three different. Businesses where you, that you've worked with them.

That would be interesting to me. If they'll treat you almost like a banquet, essentially they get to know you and more of like a localized relationship

[00:36:25] Andrew Pierno: for acquisition capital. , you will present an LOI to the buyer, to the, to the seller. Um, Then they will go sign up for pipe and get a number. , people like say yes, now if it's a yes, here's, here's the number, here's the amount.

Um, but for us, we're setting up an account at the GP level. And so we're going to have everything feeding to like one master account, um, and be able to borrow from that master account and divvy it up. However we see fit.

[00:36:56] Stephen Olmon: That also means you don't have to ask the seller to go do that.

[00:36:59] Andrew Pierno: , we will for the acquisition

[00:37:01] Stephen Olmon: capital.

Right. But

[00:37:04] Andrew Pierno: the trick is, is that once we get to a certain point, if I go borrow a million bucks from pipe, they don't care what I use it for. Right. I can go do an acquisition with it without having the, um, the seller involved. , I can just go get the capital myself and then the seller wouldn't even know it's just an all cash deal.

Yeah, or real dangerous, like you said,

at least they're not personally guaranteed, but, thanks so much, Stephen did, this was, this was

[00:37:35] Stephen Olmon: great. Yeah. It's good. Good to talk to you. And I love, I love that you pushed back on some stuff. I said. I sent out a new little piece of media to some friends, give me feedback. 16 people were super positive, one person trash all over it, ripped it apart, up and down.

And I was like, thank you so much. I've been waiting for someone to say that it's not that great. And so I appreciated the pushback and the candor. It's good. It's sharpening. And so I enjoyed the

[00:38:03] Andrew Pierno: conversation. Thanks, dude. All right, well, let's keep in touch. I'll see you back on Twitter. All right.