Today's episode is a great example of that cliche Go slow to go fast. While the headline number to this story hopefully grabbed your attention, the key lesson should be the value of taking your time building a foundation. We spend a good amount of time on that. The year or so after Michael Davidoff and his partner Jonathan acquired their first business, what levers they pulled, changes they made to fortify it into a platform that could support a lot more growth, both organic and inorganic, over the next six years. This was a $6 million home care agency that they bought in 2019. Today their portfolio does around 140 million in revenue, a lot of that due to a single big acquisition that was actually a larger business than they were at the time they bought it. Other themes covered today Exiting versus holding the business and compounding it how to hire the right CEO. Michael and Jonathan have done that so this home care business continues to grow as they turn their attention to new platforms and categories and the value of having a great partner. Okay, please enjoy this interview with Michael Davidoff, Managing Partner of Pine Street Group. You know the SBA loan is a powerful tool to unlock your ability to buy a business, but it can actually unlock the ability to do an entire roll up. We're going to dive into how that looks in a webinar next week with SBA loan broker Heather Anderson entitled How to Use an SBA Loan to Start a Roll Up. The webinar will be co hosted by an entrepreneur actually doing it, Brian Boland of HTL Freight, A3PL and Freight Solutions company that began with an SBA finance acquisition. So come learn the theory and see the practice of using an SBA loan to start a roll up. That is next Thursday, May 22nd. Register at the link in today's show notes or on the Acquiring Minds homepage. AcquiringMinds Co Thursday, May 22 Noon Eastern. See you there. Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs and on this podcast I talk to the people who are who do it looking for an SBA loan to buy a business. Then meet Pioneer Capital Advisory, your team for getting an SBA 7A loan quickly and at great terms. The team at Pioneer has closed 81 SBA loans in just the last two and a half years with an average close time well under the industry standard. Founder Matthias Smith and General Manager Valerie stash both have 10 years of SBA experience and and know the process cold. There are three analysts at Pioneer who build you a lending presentation that speaks the language of the bank's underwriters and gets them to yes, two account managers to guide you from underwriting to close as fast and smoothly as possible and two sales associates ready to walk you through the Pioneer Capital advisory process. That's nine people at Pioneer, a real team. To get you where you're trying to go. New owner of a business, go to pioneer capital advisory.com or click the link in the notes. Michael Davidoff, 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 this crazy world of acquisitions, I was working at a 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, 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, 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. 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 who had that other side of the table moment or who's really the smart one in the room here, you know, that we private equity guys 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. What, what kind of business was it? Was this a sort of typical blue collar trades, tradesy business story? Yeah, I mean, this was a, an individual who had started 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, 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, maybe a little bit of the craziness to just go out and, and just go do it. And he 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, maybe I can get halfway there. So, you know, and there was a couple different instances like that, but I remember that one in particular standing out to me. I love it. The other side of the table moment. Great. We're making that a thing, Michael. Okay, carry on. So I think from there I decided to. I went to business school and that kind of gave me a little bit of opportunity to take a step back and evaluate, frankly, in a little bit of a risk free way, you know, what I wanted to do and kind of start to scratch that itch that I think I kind of just mentioned. And you know, at the time, the search fund or entrepreneurship through acquisition 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 built out than it is today, which is, you know, exciting. 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. 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 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 in my old fund. I started to kind of build out a decent pipeline of deals which started in healthcare, but then it kind of broadened out a little bit as you just start to meet people who, you know, who sell businesses. And so at that point decided to separate and actually kind of go full head, you know, headfirst into acquiring a business. And you're given the background that I had in private equity, I thought, you know, a roll up would, would make sense. We, we always were. And when I say we, at that point I actually decided to partner with my still existing partner and co founder. His name, John, his name is Jonathan. And you know, he was also working on the buy side in New York and kind of told him, hey, this is what I'm thinking about doing. And we had 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 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 and we got very lucky. What I noticed within health care was, you know, look, it was kind of a lot of the standard items that I think, you know, people preach in this space, which is you want to look for fragmentation, which health care had. Right. I would say health care 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 areas within healthcare. And frankly, you know, I think the other thing that got me excited, 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, 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 and ultimately kind of do that repeatedly and build something of scale. And look, I will say also, like, personally, I also just enjoyed the fact that in health care, 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 and you know, a little bit of what drove kind of my thinking there. So you know, so that's kind of where I'd say and this is all still while I was frankly in business school and so on the way out was when I had to kind of make that make or break decision. I was like, okay, are we going to continue down that path or 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. Exactly. And so what does the, what are the parameters or the search 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 sir or you know, do you didn't maybe identify as a self funded searcher, Maybe you did 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 of, 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 six months after I graduated, there was a deal that we closed on that came in through actually crazy enough Biz by Sell, which 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 roll up, we wanted to figure out a, like just where are there robust amount of targets? Like that's the first thing. Right. Like you don't need to make life's hard enough. I don't need to make it harder to go find a needle in a haystack. 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 know, a good revenue base and where we felt really comfortable with like the stability of the business. And three, 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 as much of the equity as possible. And in particular, I think our view was if we're going to 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 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 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 EIT 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's, and still deliver obviously a great return to our investors who by the way are still actually invested the original ones. But, but that's kind of how we started. That's, that's great, Michael. 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. 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. 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, three to five times range, oftentimes you can max that out, which, you know, is essentially like 90% on the SBA side. But you're not very levered from a EBITDA to debt perspective. You just have a lot of, it's a percentage of, 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. And so that's, that's one of the things again where the kind of the SBA is in some sense, I don't want to say subsidizing, but it's enabling this market to occur because take that away and 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 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 its 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 that's part of what it was doing. So, you know, that's, it's funny, sometimes we will 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. Oh, that's funny. Which is. 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 like, you're penalizing me for getting a good deal. You know that. One of the most common levers to pull in a target acquisition is technology updating the systems of a business that may still be running off a spreadsheet or even pen and paper. But tech is complicated with tons of solutions out there. So choosing the right cloud platform, CRM, telephony, compliance and cybersecurity, not to mention implementing all that, is a job in itself. Acquiring minds Guest Nick Akers knows this firsthand. As a former searcher who now owns Inso Technologies, Nick has seen the tech challenges searchers face when acquiring businesses. His team at Inzo regularly works with searchers and their acquisitions, offering a complimentary IT audit of the target company. Nick takes a personal interest in all their searcher clients. Drawing from his own experience in the search phase. Enzo dates back to 1989. So this is a company that has managed the tech for hundreds of small businesses over decades. And one last thing, no long term contracts with Enzo. A big differentiator. Check out enzotechnologies.com inzo or email Nick directly at nickzotechnologies.com and don't forget to tell them you're a searcher. Okay, so got your parameters. So you kind of laid out three. You wanted to maximize the SBA and you wanted to high fragmentation, I think. And, and then 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 in this lines 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 it's 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 you 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 project based and you gotta 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, you know, with their existing customer base or just as is. Yeah. So, you know, which I'm sure. High quality of revenue. High quality 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 you 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. 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, you know, that, that we really liked. I remember we obviously never bought anything in the space, but I really liked the pest control space back in the day, which I thought was a really good one. You know, I 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 use that to to kill the bugs. And you know, I was exposed to that space and I was like, oh, actually, that's actually, you know, downstream. I was like, that's actually pretty good business. So I think a lot of it came from some of it was kind of ideation. But honestly some of the better ideas I think just came from frankly, everyday kind of life, just looking around be like, oh, that's, that's actually kind of interesting. And I get why 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, you know, nurses going into somebody's house tends to be older, so geriatric clients. This was actually a pediatric and young adult focused home health. So what they did was they took care of, you know, individuals who had high physical acuities. So, you know, this might be somebody who may be on a breathing tube or, or have event. 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. Because without the support, frankly, the family would either be pretty much, you know, focused 247 on taking care of them or, you know, in some cases would actually most of the time have to be institutionalized. Yeah, 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, you know, these individuals to really grow and live full lives. I remember there was 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. But when we evaluated it from a business perspective, you know, first of all, we love the space, which was, 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 or patient, you know, you had a couple hundred, right, that you were taking care of. Additionally, you have, you know, you do have an insurance element here which in healthcare is, it's kind of its own thing, but you have a pretty high credit 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 insurance is. But you know, nonetheless they are a good credit and pay on time and pay pretty quickly, which we, which we liked. And I think, you know, third, 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 for first of all, not only they require it, in my opinion, they deserve it. But secondly, you know, the way we, we, you know, we had seen that they also 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 win win. Right. You're able to provide a cost effective, preferred setting level of service for, you know, individuals who deserve this, you know, this care. And so we, we dove right in and you know, in essentially January 1st of 2019 was the date pretty much we, we acquired that, 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 flywhee. So we can hear a little bit more about that if helpful and great. And so 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 high 30s ish is what you're trying to target. Depends on kind of where, where that is. And then, you know, your, your EBITDA margins at the bottom line are, they can vary just depending on how much support staff is needed by, you know, by, by the client. So but you're probably somewhere in the, you know, mid to mid teen. Like you're in the teens if you're, if you're operating. Great. Okay, so this is a million dollar STE business. Yes. And it was definitely SD because there was, you know, the owner was very much so doing a lot of the work. Tell it, tell us more about what is the human capital in a business of that size and an agency in this industry 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 pool of, not even pool. You have a, you know, whole team of nurses who are on the ground every day providing services to these individuals. 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 nurses who are paired up with these individuals for, for a very long time. So you actually have a pretty, it's a very, like they have a strong bond there too between, between them too. So you. Long time meaning years in some. Yeah, in some, in a lot of cases, years. Yeah. 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, we always viewed our frontline staff, frankly, almost as like a different set of customers. 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 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 kind of two groups of individuals. We have 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 had any conditions that were worsening or needed real attention that they could provide that support. And then behind them you'd have your schedulers and your 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 our services that we do. And then 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 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 SDE business, you probably did come close to maxing out that SBA loan. We, yeah, we, we used every, we used every dollar. Used every dollar. Your point about your thinking about your frontline caregivers and nurses as your customers and not just employees. The other person I've heard say that was also in a home care business. Another guest probably 200 episodes ago now, Jerome, in a visiting Angels 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 customer, as his second set of customers, it just sort of changed everything. And it really was an sort of a, an unlock in terms of how he thought about the business for him. So very interesting that I don't know if this is unique to home care or just staffing in general, but thinking about your employees as customers. 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 $100 million in revenue? What, what, what, what did you think that was going to be year 5 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 this strategy with, with a goal to, to grow really quickly and, and try and do. And, and you know, get, get big. Yeah, yeah, I think. And that kind of, I would say directed our strategy a little bit right from the beginning, which was, 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 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 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 put them all those add ons onto. So, you know, I think we spent probably the first year really doing that. You know, it was a pretty heavy lift, 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 deal flow, which is interesting. I think once you buy something and you're in the space, a lot of people actually start to come, start, start knocking or frankly will just pick up your call. More so than, you know, I think I'd done the let's just call and email a bunch of people in a space pre acquisition. Right. 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 were in the space and not that we were known by any means, but somebody googled and saw they're like, okay, like this, this person's actually, you know, run something similar or I think it kind of gave the comfort actually to additional people. So yeah, we've kind of gone a little 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 call 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 see you as such. So thank you for sharing your own experience with that. I love. It's, it's sort of obvious that you 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. 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. 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. 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 earlier, 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, which frankly we weren't in the first year. 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. Then we would have, if we would have done those first two. Right. Because we would just show bogged down initially. Yeah, yeah. 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, you know, basically made your platform, this is essentially a platform acquisition, stronger so that you could then acquire faster. 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. 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, the new hire paperwork to the individual who came into the office 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. 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 core 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 two week process when we got there. And you can imagine if 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 first. Things about nurses 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 in nowadays that I need you to come in to necessarily, you know, put in your name 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, HR I s and payroll system and kind of put in the, the appropriate processes. And then after that and did you. See results that like 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, 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 holdup at that point was actually just the nurse themselves needed to finish the paperwork, for example. But no, it, it sped it up and we were able to hire much faster and, and get people working frankly like within days of them contacting us, which, which definitely helped. And so, yeah, look at that translates to, to more revenue and it, 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 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 CRM, some kind of mix of those two things. And what that allowed us to do was kind of schedule and document everything digitally, which right now is being done very manually. Like we're talking, you know, paper charting notes that were had to be emailed or not even email had to be mailed or dropped or dropped off. Well, when you're in healthcare you're not allowed to, you know, there's hipaa, so there's certain, yeah, so there's certain things you can and can't do. So we would have people, 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. 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 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 employee base which just from a processing perspective we would never have been able to do, you know, the, the way the business was before. So you know, we were able to 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 product and experience. So, you know, that was kind of our first 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 a director of operations to help manage some of the recruiters and the schedulers, which kind of that layer hadn't existed. And also just frankly get more recruiters, invest in more recruiters and more schedulers to provide, you know, to do more outreach and also to 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 their nurse is performing and all that kind of stuff. So that was really just the basics of what we did initially. The team at Aspen HR recently published a short white paper targeted at searchers Entitled A New CEO's Guide to Human Resources. It lays out the key items you should be thinking about as you transition into CEO and owner of the business you bought. The link to download it is in the show notes. Aspen is a professional employer organization, or peo, run by a searcher for searchers. Search fund veteran Mark Sinatra runs the company which provides HR compliance, flawless payroll, Fortune 500 caliber benefits, and HR due diligence support for your acquisition, all for a fraction of the cost. Go to aspenhr.com or contact Mark directly@markspenhr.com. you know, Michael, I actually feel like a lot of this 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 or you were adding. 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? Yeah, this function, you know, how can we kind of. And let's paint a picture. What we tried to do is just paint a picture of what's ideal. And look, we kind of built a roadmap 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? But you have, 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 dollar SDE business. You then put an SBA loan on it to buy it. And so half of your SDE is now, now EBITDA is, is eaten up by that loan. That leaves you half a million. You guys both are coming from, you know, 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 for fortunate fortunate enough that this business was based in Los Angeles too. You were already back there. Okay. Yeah. And so we were able, that he, you know, he was able to come back as well and, and kind of when we close on this and join up. Great, great. So, so back to the numbers. And really what I'm getting at here for your benefit in the audience 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. You got to pay both of your, both of them. Both of you guys, 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, what did the numbers look like? Were you basically kind of taken. 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 theses we've had in healthcare is 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, oftentimes you don't get price changes very often. You might get them every couple years. And so we kind of had. We knew that this business in this segment was probably due for a little bit of a bump on a rate increase perspective. And so part of our initial investment thesis was if, you know, 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. And so we did get, you know, fortunate enough that there was a bump in the rates. And so the business effectively grew, you know, pretty significantly, just from a pricing perspective, pretty quickly after we closed, we. Which helped give us a little bit more of a, of a buffer. So, you know, that was kind of part of the thesis that we had, which kind of proved out. So it gave us a little more room that said we were still definitely paid way under market because we were not taking really any money, regardless of how that was going. You weren't really, you weren't really paying yourselves, I mean, very, very nominally. Yeah, very, very little. And 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 EBITDA 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 in this business there's frankly no lack of demand for services. It's actually more of a supply issue generally. So it's one of those types of things where if you know, a recruiter can very much justify themselves very quickly. And even the software that we, you know, tried to implement, 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 say we tried to invest in areas where initially where the ROI was either high or just pretty immediate so that we wouldn't have to, you know, run too close to the sun. Yeah. Love investments like that. More of those please. Quick, quick and, and very visible roi. Best kind of. You just said the, you know, these types of investments, 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. One of the things that you, you kind of mentioned in passing in our pre call was being in a people centric business, 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 business where it's really all about it's services. You're selling services. Yeah. So look, I think the pros are you can kind of grow on 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 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. 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 the 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, 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. You're right. Like you're just, you're, you have your capacity constraint. 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 allay 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 as well. So yeah, it'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 you know, a staffing business which frankly, you know, you kind of can, if you have some, know how and, 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. 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. 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. And so, you know, once you're kind of in, it's actually very competitive, but to actually get in, it's not impossible, but it definitely takes some time. So there were some barriers to entry in this, in this service business versus maybe some others where there's probably just, you know, there isn't much. Right. Yeah. Yeah. And all of what you described about the business being totally. What's the opposite of digital, whatever manual paper. Thank you. The analog. Thank you. The business being completely analog. This was 2017, 2018. Timeframe. 2019. 2019. Okay, so we're only six years later. 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 the, I think the industry in just general has, has moved forward quite a bit, actually. Okay. But I think, I still think there's some, there's some people out there who, I get it. They've worked the way they worked for 25 years and it's gone really well. And you know, why, why change it? Like, 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. I don't ask to disparage 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 there, there still exists, but I think it's less, actually. Great. And we're about to move on just from this first, this first year or two. But you did have a payroll story, so tell that to the audience, please. Yeah, so, you know, everybody I talk 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, the top, top thing everyone talks about because, you know, the new, the new guy comes in or gal comes in and you know, the thing that obviously people care about the most and want to make sure that doesn't change is, is their paycheck, which, by the way, like, I get. Right. 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 you know that day came where we were going to hit go on that first payroll. And we got a message back saying that 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, Friday's payroll. And next thing I know, we called. We called a 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 so we didn't actually keep. We had access, but we were tying it to 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 the actual account didn't have 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 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 we do? And actually, 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 was 140. About 140 employees at that point went through. And we wrote every check by hand. I remember we were at my apartment, me, my, My. 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 have to go to Chase, you got to go to bank of America, every single one. And we direct deposited, literally direct deposited every check into everybody's bank account so that everybody would get paid on time. In fact, actually, some people called and they were like, why did mine come come in on Thursday? We said, you know, we, we didn't. We didn't tell them why, but we're like, oh, that's weird. It must be the new system. But nonetheless, we were able to. To get everybody their check. Even the, you know, one person who had a credit union that only had one branch, I think that was like three hours away, but nonetheless, we were able to get. To get it done. Wow. Wow. Well, way to pull it off. That's one of those really kind of year one stories. Good. Okay, Michael. So after pulling these levers, after working, you know, making this first acquisition a real foundation, a real platform, take us through, you know, the next part of the story or, or maybe even fast forward through a few years, because 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. Yeah. Okay, 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 Covid that happened, if everybody remembers. But, 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 Covid winner. We weren't a really a Covid loser either. It was kind of actually pretty steady throughout, given, I think, kind of the nature of our services. But although that does tell you that the quality of revenue is incredibly robust, that your revenue just stayed all the way through this international crisis. Yes, I mean, I think that shows kind of the, just 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. And so, you know, we continue 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 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. We used at that point, we refinanced our SBA debt. We were able to have enough EBITDA with our existing business plus the add on to, at that point, 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 kept going and actually. Wait, wait, wait. Sorry. Did that one all debt, but 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, would have been too much to do. With past the five. Past the five million. Past the five. Correct. But, but what, but what you just described there where acquisition number two in the same NAICS code, even with the sba, you can actually, you can acquire without putting any money down. The lender can do 100 of the deal, do the whole deal, 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. 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. Which was definitely super helpful. And then actually part of that was a. We. There was a program during COVID that actually allowed banks to extend 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 as well. And with, you know, we continue to grow, though. So the leverage profile actually was de Levering as we kind of did some of these. Not a crazy amount, but a little bit. And so a couple months afterwards, we closed our third one, which is a different part of Southern California as well. 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, you know, we did the two acquisitions, we opened up a bunch of offices, and at that point, you know, kind of we're sitting on a pretty nice size home health business with good coverage across almost all of Southern California. So we did that and then. Michael, wait, nice size? After the. Let's call it the end of year two. What does a 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 know, tripled the business essentially, and over two years through both organic and inorganic. And so 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. Yeah. You know, the hiring process, for example, where you could get a nurse, you know, working super quick and the recruiters that you'd hire, all of that kind of synergy, 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 EBITDA grew, right. We were able to kind of use that new EBITDA to re lever a bit. And the, you know, lending partner we were working with was. Was actually was super accommodating and allowed us to do that again. Our leverage profile wasn't very high from An EBITDA to that perspective. And they kind of let us continue to keep going without having to put additional. We put a little bit 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. There was a little bit of top up that they wanted to see as opposed to, you know, maybe making a distribution to ourselves. But we were obviously wanted to be good partners to them as well. So they helped us quite a bit in doing that. And then, 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, I think maybe, you know, thought he wanted to maybe buy a business as well. He was Anderson MBA and he had been working us for us for a while and he was interested in the in home ABA so autism therapy space. And you know, we'd been working with him and actually during his time with us we found, we found a deal that came across our desk that we liked and we decided to work with him and 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. There were also some synergies across both that we thought at some point maybe would make sense, but initially kind of would acquired it as a separate business. We did do some shared services which was nice 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 our business and Holdco, I think, you know, we always wanted to do a roll up 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 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 again, I think again, like at the forefront of everything we did was trying to provide the best experience for our clients, the, you know, the end patient as well as our frontline staff. So it was kind of the same ethos. And so, you know, we, you know, we went into that one and it was definitely helpful to have a on the ground operator there in terms of just capacity because we were still operating the home health business. And so from there we then, you know, after that we continued to just grow and acquire in both of those segments. So we, we did another home health acquisition again in Southern California, which added, you know, kind of our fourth deal in that, in that segment. And we did an add on to the ABA business as well in that third year. So at this point, you know, after three years, we were sitting on four acquisitions in the home health side and two in the ABA side. And 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, 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? Yes, correct. Yeah, they were this, they, they ended up being kind of the lead on that business. Correct. And 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, you know, similar to how a CEO or some CEO, you know, type would be able to, to, 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 either to de risk or to be around people who've done it before who are further along the journey like you guys. 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. 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. I think, though, both sides have to bring a good amount of value though, right. And I think what we were able to provide him was essentially a plug and play 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 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'd been doing together, you know, we had a deal ready to go. And I actually think it 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 alignment. Okay. So. So, so hard to re. Engineer maybe, I think, without like really being. And I know, I think some people are trying to do it and I think, 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 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'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. Right. 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 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. So there was actually a very similar and adjacent service line that we entered into organically already in our home health business that provides in home care for individuals with developmental disabilities. So very, very similar to the home health. It's just a, you know, it's a client who has a. Just different kind of diagnoses and different types of needs. And it's not a nurse, it's a, it's a caregiver, you know, who's actually, who's actually there. Again, we kind of expanded into it organically, made a lot of sense. It was a lot of our payers actually. Also they reimbursed 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's asking you for something, right, maybe think about maybe giving it to them. And so we had actually, you know, oftentimes get calls from our referral partners. They'd be like, oh, like do you guys also do, you know, ID'd home care? And we at the time didn't and thought, okay, like this is. Makes a ton of sense. Again, it's in home, we're recruiting, we're providing top level, you know, care and customer service. So we went into that organically and in 23, there was an opportunity to acquire 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, 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 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 inorganically 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 know how to take 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. So it was kind of a perfect fit. And we were fortunate enough to work with those sellers to get that transaction done. And they were great partners in it. They're still involved, not involved. They're still invested a bit in the combined business. And that's really kind of what was transformative and put our business together and what it is today. 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 kind of one stop shop for in home care for young adults, children. Most of our services are all focused on young adults, children and frankly non geriatric 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, you know, therapy as well. So it was that. When I say it was transformative, right. We combined all, we did an acquisition and combined all three into one business here. So I said Holdco at the beginning. It's really not, it really is a single business. We haven't talked about it. We do own another healthcare business that we haven't touched on that is completely separate. But, but at one point, yes, I mean this business though was combined into, into one. We also own a, it's a vascular access business that's called Victopic. They work with hospitals and other facilities to place 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. But yes, I mean at one point we went from, I guess having what we thought was going to be four individual 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 doubled the business. If they were bigger than you, you more than doubled. Yeah, we more than we, 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 a hundred and a million of revenue. We know we had about 3,000 employees, 3,000 plus employees at that point. And yeah, I mean, and. Oh, and over and over, 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 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, to me and listeners will feel like a tremendous amount of progress. You know, many of my guests, some of my guests will kind of their North Star or their. Or their final goal will be a hundred million dollars in revenue at some point in the future. You guys got there in four years. 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, 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 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. 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 used like Sage for our, you know, accounting software. I think when we were talking to the account rev, 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 his. I'm joking. But. 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's yet another example in your story of how you spent that first year be 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 now not operating. You were operating this whole time. You were, you were in there as the operators. When was the decision to step out or how, 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, know to at some point take a step back 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 the 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 that 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 roll ups 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 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 done. I think we were, I think we were 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 industry, you know, vets in the space. And you know, I think to date we still work very actively with them, but I mean they're, you know, they're doing a great job. And you know, again, I think it's, it was the right move for us. So we removed ourselves, ourselves about six months after, after that, from after that deal so early 24 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 Mind's Capital podcast with an independent sponsor who talks about how half the time he makes a leadership hire into one of his portfolio companies. 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 is only about 50%. How did you get so fortunate that 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 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 time. This was not a, you know, two interview process to place this one. And I think a. There was no question that this person knew how to run a business of this 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. And ultimately, I think just had the drive and the eagerness to go and do it. And so, you know, look, maybe it was a little bit of luck, too, but I think we definitely chose right. Why? I think that's why I think we just kind of. We hopefully we had the right setup and, you know, process, but, you know, 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. It's, you know, kind of. Kind of obvious, but your leadership has to fit within the existing culture of the organization. Your chosen leader, deep industry expertise, so already knows the industry can hit the ground running, but. And then 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 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, because when we started, we'd do it too, which is, you know, we want somebody who's willing to do everything. Not that they should. Right, 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 go to the next step. Great. Michael. 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, look, I think we still have a lot of room to run. I mean, I think one thing 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 get 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. Our view is, I think, let's hold onto 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. 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. Yeah. You know, doubling. Yeah. And. And you were in a financial position where you could go off and. And start a new platform, 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 even though we haven't, you know, at this point yet, we have a great set of investors who have backed us. And so, you know, we're. We're doing it obviously, 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 backers now at this point who I think want to want us to execute on a similar strategy or, you know, similar investing, you know, thesis, but, you know, somewhere in a new space. But were these investors with you for the SBA deal? No. So a lot of them were. Yeah, 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, so that you could maximize your equity in the business, but in fact you still needed to bring in investors into that. 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, of LPs as well who, you know, who've been also fantastic from the get go and you know, I think it's been a, so far a pretty good result and I think people are excited to, you know, continue to invest. So we're, we're getting toward the end here, but just to 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 6 million of revenue and now the whole portfolio is going to be doing about 1:40. So when I said 20x I was actually understating it. Maybe. 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 oftentimes 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 just that, that that partner in, in the business with you, like, I'm, I'm all for it. I actually think it was 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. 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 as good a decision as you. 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. Six years, over $100 million. So a lot of people may be inspired to, to go down this path, are. Are inspired to go down this path by stories like yours. Of course, there's a lot of hardship along the way, but are you as enthusiastic, you know, a proponent of this career as I would. I would presume you are. Is this a pretty great way to spend a career? I Do searchers reach out to you? Do you know others who are. Who are earlier in their journey and you're pretty enthusiastic that they, that they proceed? Yeah. I mean, the short answer is yes. I mean, look, and I think if this is something that is right, is right for the, 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. 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 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, and I think I would recommend it for anybody who 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 Davidoff, 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. I say it again. It's called the Pine Street Group. The Pine Street Group. Great. And if people can if people want to reach out they can grab you on LinkedIn or or would love would love that. Okay. Super. 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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