James Laughlin, advisor to the Dalio family, argues for buying middle-stage businesses over startups. Early startups are too uncertain. Look for companies with existing infrastructure, customers, employees, and products already in place. Late-stage businesses are too expensive to acquire.
How do we even, like, identify a good business that's up for sale or might be up for sale? So it's important for anyone to understand that I'm a buy an existing business guy or an existing franchise. For those that looking for a franchise, believe in buying a franchise. Resale versus any type of startup. And I talk about a good business because businesses have their life, their life cycle. They start off, as I call them, the three GS on the hill. They start off at the bottom, whether a startup. And to me, they're all garbage at that point because you have no idea what's going to come about in the future. And then at the top of the pyramid is when they're great, you don't want to buy it, then the only way to go down typically is the only way to go after that point is down. But in the middle are these good businesses. In other words, they're rock solid. They have a foundation, they have infrastructure, they have customers, they have employees, they have products. And they've gone past the startup stage. And so when you look at these businesses, I like to buy a business that's rock solid.
