The "Holy Grail" Real Estate Strategy Most Passive Investors Miss | Featuring Glenn Hanson

The people that are successful in business are the ones that are paying attention to the detail so that they don't have that scrap. And it might not be in the case of real estate, it might not be in the case of throwing product away, but we throw money away. There's a huge amount of inefficiencies.

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Uh, before we go ahead, just a little bit, 2 cents from my lawyer, that this is information and education purpose only. If you want to engage with any of our guests, including Shauna, please do your own due diligence. And I'm not particularly a financial, legal, or tax advisor or investment advisor. So please seek your own team, and maybe Tashana would be one of that team members, right? And also, we, you know, we'll have some examples for educational information purpose only. So keep that in mind. These are point in time. These are not representative of any real information, real information. Hey, hey, hey, welcome back to Think Outside the Stocks. I am your host, Madhavi Jain. And I have a person who is very, very close to me, Glenn Hansen. uh, in our studio today, and I'm so privileged to have you here, Glenn. Thank you so much for being here with me and my audience.

Good to be here. Thanks for the opportunity.

Thank you so much. So today's episode is going to be very interesting. You know, LPs, as limited partners, they think about investing into real estate, especially the syndicated, in one possible way, and that is being an LP, a passive investor. But today we're gonna actually dive deeper into how being an LP, being passive, you can still participate the GP, that is the general partner side of the business. And if you're wondering, what does this mean? Well, the truth is that writing a check to investment as a passive investor, that's not the only way to participate. Behind every successful acquisition, there sits a group who is expert, who are sourcing the opportunity, they have that experience, they're raising capital, they're structuring partnership, they're structuring the deals, solving problems, keeping up with the market up and downs, the challenges that are bringing in, and that's immense amount of, you know, people with expertise that are coming to actually make this deal successful. Guess what? There is a way to participate and to invest and believe in them as well. And that is the GP side of business. And that is going to be the main conversation of this episode today. So thanks for tuning in. My guest today, Glenn, has participated in more than a billion dollars Glenn, it's almost $1.3 billion in transactions at this point, right? With Colony Hills. Yeah. So tremendous, tremendous experience with Colony Hills. And he has spent years and years, and we will talk about how, in building relationship. That is probably the first foundational asset that we're going to talk about is the relationship, right? The relationship with investors, Operators, you know how to bring these acquisitions and capital partners as well, right? What makes Glenn's perspective really interesting that after all the acquisitions market cycles, he believes that the greatest challenge is not just real estate itself; it's the relationship and how you structured this, right? And that is what the capital structuring as a GP stake. If you haven't heard about GP stake. Tony Robbins talk about GP stake as a holy grail of investing. So that is what today's episode is going to be. So Glenn, again, welcome back. And let's jump right in. Are you excited to talk about all this, you know, different, deeper topics today?

I am. I haven't heard of GP stakes referred to as the holy grail, but God bless.

Yes, absolutely. So Glenn, very interestingly, I like to start My episode with the you know the the fun facts about guest. It's not here in you know the typical bio that I want to read out, but just the fun facts. This just humanizes us, right? And oh my God! I had such a tough time selecting three fun facts about you. There were like probably ten fun facts, right? So I'm just gonna start with it. First of all, wow! You are one of the ten thousand only civilian helicopter pilots in this country. Is that correct?

Yeah, that's the number. It's surprisingly low.

Yeah, it's surprising. So you're like, you know, it's like a really a minority of the civilian helicopter pilots. And actually, you have had quite a bit experience by being a pilot and doing some, you know, really good work and connecting and building relationship with people. So that's fun fact number 1. Number 2, Glenn actually is a serial, serial, serial entrepreneur, right? He has participated in 25 startups. But in his life, the first, you know, time when he was 20 years old, he actually participated in a family business, in his family business. And he actually bought that business. He walked away and then bought that business in 1991. He exited that business in 1999 for $32 million. That's in 1999. And Glenn, you have had several exits after that and several, several interesting businesses as well.

Yeah.

And would love to know a little bit more into the businesses as we go along, right? So, I think that is his, the second fun fact. And the third fun fact that, you know, after going through the cycles of startups exiting, participating in those startups, he has built up immense amount of experience. And now he has narrowed down to the multifamily and the real estate, and he truly believes in that. And not only believes in, he is building something quite a bit substantial for our audience to even listen in and understand because it could be complex and Glenn has this tremendous ability of spelling it out. So we are going to jump into it. But the last fun fact I do want to mention that, you know, Glenn is a tremendous wealth of knowledge and education. And giving, and I have had a chance and you know privilege to actually experience that firsthand. I'm so proud and excited to call Glenn my mentor, and Glenn has been mentoring me, just looking at you know what I do, what I do, what I don't do, how I can tweak some things, which just you know quite honestly makes that two million two millimeters difference in the strategy and the way I'm thinking about it. So Glenn. Very grateful. Thank you so much for all the time you have been spending absolutely selflessly and being my mentor. I truly appreciate that.

You're welcome. It's a pleasure.

Thank you, Glenn. So let's dive into it. Let's dive into your entrepreneurship journey. As a serial entrepreneur, do you want to just give us a kind of a glimpse into your backstory? How did you and what you have done to be here? And I don't know. If you can finish that, the entire story in one episode, but at least the highlight of it, please.

Yeah, I can do that. You know, I, we haven't talked about this, but I'm dyslexic and I think being dyslexic forced me more into being an entrepreneur than if I wasn't, because I always like to figure things out how they work. And I can't always do it with a book because I read too slow. So I dig in and get my hands dirty. And I had the opportunity right out of high school to go to work for a family business that built— at that time built patterns for the foundry industry, wood patterns. And I served an apprenticeship at the company and went to school nights working on an engineering and management degree. That business turned into making steel injection molds for plastics. In fact, I saw Michael Dell has become very successful. We actually built his first plastic keyboards and monitor housings. I think probably back in, if it wasn't '78, it would have been 1980 timeframe. And from there, I got involved in the family business sort of by default, which was an entrepreneurial type business. And I was 20 years old when I had an operating division under me, and when I was 24, I had the whole company reporting to me. And we had some pretty tough times. We had union strikes, we had the Volcker interest rates, they went from, you know, 9% to 22% overnight. We had Millions of dollars of heavy equipment that was on loan, and it nearly bankrupted the company. Not unlike what happened in the real estate business recently. It was much more severe.

Hmm.

That experience, and it's all part of entrepreneurship, I learned that you have to block and tackle and solve problems. And the key is to never give up because It's when it's hard is when you make the greatest moves. You start to have the courage to fix it and grow it and get on the other side.

That's amazing.

That's a little bit about how I got involved in entrepreneurship and it just sticks with me.

Yeah, that's very interesting, you know, being dyslexic and kind of taking that as power. Not as a limitation, and just you know digging much deeper and intrigued by different topics and subjects. I think I that's really commendable. Tell a little bit about tell us a little bit about your entrepreneurial journey and the different type of you know startups or things that you created, and you know kind of an interesting journey on that side before you landed and on multifamily. And I would love to know that you know why multifamily? But let's just talk about. that business world a little bit.

Yeah. So, I was 47 years old when I sold the Hanson Group Limited. My brother and I built it from— we actually purchased it from the family in 1991. And then, we decided to scale it and we grew it to 400 people. And we had a group, a private equity group come out of California and pay More for it than— we were surprised at how much value we created. And the reason we created the value even surprised us more. And I learned about private equity exiting and how you sell to those people. And the magic is you create value that gives them the opportunity to invest on a multiple of earnings. And that's where value creation is. As far as where I went from there, from retirement at 47, I got bored and I started with 3 other people, an angel investment group, and we grew that to 35 members. And as a result of that, I was involved in personally investing in 25 startups, and most of them failed.

Mm-hmm.

you guys know, right? 80— there's an 80% failure rate, and we, we participated in that, but we knew that was the outcome. And several made it, and it was a common theme to why they made it. And, and that led me to other businesses to buy. The theme was that if you want to, you want to do something that cannot go to China, it's wildly profitable, scalable, doesn't need skilled labor, and if, if you can get it, recession-proof.

Right.

And so fast forward from 1999 when I sold the company to 2007 when I launched my first, my own company instead of investing in others. I launched a company doing roll-up of pet crematories, and the goal was to go across the United States with these things. I had done a lot of research. They're very profitable. They're tiny operations, and there's no systems to manage them. So what I did is I brought the systematic programming concept to the acquisition model.

Mm-hmm.

And we created standards and operating systems so that As we added more crematories, we could manage them and build that enterprise value that somebody paid me for on my manufacturing company.

Right.

So focusing on— we focused on the endgame rather than the issues day by day. We knew it was going to cost a lot of money and there was a lot of work to do. We did all the work and then somebody paid a high multiple. For the company. So we started the pet cremation business in '07 and exited, I think it was 2016. And then in 2008, the same month that Lehman Brothers went bankrupt, I started real estate investment business in multifamily.

Interesting.

And you asked why multifamily, and I'm surprised we did it too, because my wife and I had purchased 2 families back in the late '70s, early '80s, and we hated it, got rid of it. And then we tried it again in the late '90s, hated it, and got rid of those again. And then we decided that to do it, we want to do it at scale. So my first multifamily property at Colony Hills Capital was a 30-unit $6 million transaction in Hoover, Alabama.

Interesting.

So that was deal number 1. Deal number 2 was $14 million. Deal number 3 was $100 million. And I was able to think like that from the years of helping entrepreneurs build startup companies. You know what it takes to make it work. And I had the experience of having exited to private equity twice now.

Right.

And that helped me to, you know, fine-tune my model and focus it. So, what we're doing at Colony Hills Capital is we're scaling it for an exit in 7 years from now.

Wow.

Wow.

So, let's actually, you know, unfold. There's so much that you just explained, right? And I would love to unfold it and just make it a little bit easier for our listeners to just tune into what it really means, what you're saying, right? So first of all, having the exit, the roll-up strategy to exit to the private equity, right? So let's talk about that. And you know how I really like how you have created the same strategy in multifamily because real estate is considered as an asset level, right? You invest in an asset, the asset exits, the real estate investment exit, and it gives you whatever you have, right? The gain, the equity gain that you have. But now we're talking about the value add as a business, right? So let's take, by the way, very interesting, very, very interesting, you know, business, the pet crematory services, right? So let's talk about what the value creation in that is, right? When you're doing, talking about roll-up, we are talking about the multiple when we are talking about exiting as a rolled-up. to private equity, right? Can you explain to our listeners a little bit in detail about what it means that, you know, what it means to increase the value of a business? And we're talking about probably the EBITDA, and then what it means to roll it up. So it's again, that second layer builds up for the next layer, and what is the multiple that comes into play in the picture Yeah, great questions.

It's grueling, dirty work to build a business. Those of you who have done it know it. And there's lots of high-rise enthusiasm and there's lots of low plateaus to fight through.

Right.

So, I think the key is, I know that the key is to build with the right people and put systems in place, systems and procedures, And because I'm a pilot, I'm a fixed-wing pilot and a helicopter pilot. And the disciplines that go on in the aviation industry are so much more appreciated and followed than any other industry I can think of. And an example of the value of what happens in aviation— in manufacturing, which I also did at high volume, There's a 1% scrap rate that occurs in production that's acceptable. That means 1% of the products are either repaired or remade or thrown out. If the airline industry had a 1% scrap rate and it was acceptable, we'd have 30 planes a day falling out of the sky.

Wow. That's scary.

Yeah. So if it, if it, if it means somebody's life, there's more attention to the detail, right? So the people that are successful in business are the ones that are paying attention to the detail so that they don't have that scrap. And, and it might not be in the case of real estate, it might not be in the case of throwing product away, but we throw money away. There's a huge amount of inefficiencies in the space. And since starting Colony Hills Capital, I've been focused on trying to solve that. And I even hired a full-time person, VP of Operations, 3 years ago to focus only on systems.

Right.

We did that with pet cremation business and that was the value creation. We've been struggling in the real estate business with how to tie all these people and processes together. And the gift that's come to us and it's Claude, the AI, We have implemented so much of that very quickly, and it's reducing the need for labor to do repeatable tasks. It's more accurate, it's quicker, it gives us access to data better. So the idea of focusing on building the system is where the real value creation is because one, you keep your employees, two, You can demonstrate where you're— where you need improvements and where you're doing well. And then ultimately you get a cadence going of performance. And that's the opportunity for the investors in Colony is that cadence and performance can be sold for a multiple of earnings. And in the business of what we're in at Colony Hills Capital, the multiples are paid out at a 7 to 10 times earnings. So you say to yourself, who would pay that much for a real estate investment firm?

Yeah.

Why would they do it, right? So they pay for it because the work is done. So they bought— they're buying critical mass and cash flow. They don't have to deal with what we're dealing with, where we're short on cash. We've got to, you know, give up equity to bring in cash. We got to fund the business ourselves. All that is gone once— once we're— when we get finished, all that'll be gone and we'll have a A cadence of successful profitability and growth. The other thing is the people that want it are those that deploy enormous amounts of capital. If you think about it, if somebody's got $500 million or $1 billion to put out and they place it with me, I make money on it. They don't. They make money on the investment, but not on what I make.

Right.

So if they can buy the business, they can keep all the cookies. The profits that are made by Colony Hills Capital or other GPs, that money, a portion of it can go to the acquirer or they can keep all of it. So now they've put their $500 billion out and they make their normal income, but then they make on top of that what the operating company was previously making and paying to Glenn and his investors.

Right.

So, that's the model that private equity people look for, as I know it. There may be other avenues and things and tricks I'm unaware of, but that's what we're targeting.

Love it. So, you know, I love the fact that you just mentioned that, you know, the scrap rate, that's so important. You know, a business like an air, you know, the flights, if there's that scrap rate is acceptable, what disaster can happen, right? So, I like how you're looking at that, making the system or systemizing this so that it over and over again, it just works like a machine almost, right? That it's scalable. And I think that's when, you know, looking at that, the pet crematory business that you had, when it could be mom-and-pop owned, it could be everything including the daily processes, the daily steps that they need to take from getting the clients, the marketing portion of it, the finance portion of it. So now you're systemizing, you're creating a system almost like a blueprint, right? Like a cookie cutter. When we see the single-family homes being built up, that, you know, there is, you know, 4 plans or 5 plans in a master-planned community, and the one plan is built very similar to others. So similar to that, that value creation in a business is kind of building so that it's kind of repeatable, it's same, and it's scalable. And now you apply that to multiple businesses. And you pull them together. And if they're making whatever, you know, the, the EBITDA, which is the profit in a sense, you can now get a multiple of— so if they're making $1 million, you can get a multiple of, say, $7 to $8 million. Sorry, 7 to 8 times.

That's correct.

That's about the value creation, right?

Yes. And it throws people off when they look at investing. They're saying, I'm investing with you because you're going to do an 8-time multiple.

How do you do Exactly, exactly.

Can't do it yet, but we will do it in seven years.

Yeah, and and that's the beauty of it, right? I mean, that's why probably Tony Robbins, you know, in his one of the recent books called It's a Holy Grail, right? That GP sticks. So again, I love how you just explained it to model it from a pred cremation to real estate, right? Now real estate, as we know. That there is a, in an even syndication, I'm just going to keep it to syndication, not to the rental, but you invest, say, your $100K into real estate syndication, you get maybe 7%, 6 to 7% cash flow, and you probably get 15%, 16% IRRs. So you might see, you know, 2x of your money, including the leverage, the loan that has been included in the real estate. So you might see that 2x happen in 5 to 7 years.

Yeah.

But now what you are bringing, and let's, you know, go a little bit deeper on that side, what you just mentioned, right? So LPs typically just look at investing into the asset, but you're inviting them to invest into the team. And when they invest in the team, it is actually going to be investing into Colony Hills business, the past, present, and future. So whatever in future also, fees, you know, the asset management annual, and also at the end, what you will make as a GP, as a general partner, to have used your expertise, your experience of managing it. Now they actually get a parallel piece of that without actually working hard for that. Is that how it works?

Exactly. Yes, it does. And go back to the pet cremation business because everybody likes that story. And by the way, pet aftercare turned out to be a hot market and we shouldn't have sold it. We should have kept it and continued to scale it because pets are part of a family now. But what we'd look for in an operation like the pet business or like real estate is where can we improve? So, you know, the time that it takes to cremate an animal is an hour and a half. We were able to reduce it to 15 minutes.

Wow.

And then we could combine the crematory ovens so that there was one smokestack per 10 ovens. And that reduced our fuel consumption and bills by like 80%. And those are big moves. We're moving the needle. And to do that, we need investment dollars, right? You can't do that without money. So we sell off parts of the company, just like they do on Wall Street, right?

Yeah.

SpaceX is an example. They raised money, never made any money, but they just poured money in so that they could get the big heyday. And they did. And they deserve it. They took the risk.

Right.

So parlay what I just said into multifamily. We're doing the same thing with the operation to make it more productive. And in order to do that, we need investment dollars. You know, we need people, we need systems, and we could self-fund, but it's actually safer to bring in some outside talent and With that, some investors bring significant talent with their money.

Right.

So it's not just bringing in investors. If we can find investors with talent, that's even better.

Right, right. That's very interesting. That's a very interesting, you know, kind of a perspective. So let me kind of again step back. The understanding is to bring in investor capital not just for the capital, but also sometimes it's the expertise that they bring to the table. And it's really the burn to support the churn, right? That's what we are building.

How did you know that? That was a good— that's funny that you said it.

It just came to me, you know, the burn and the churn. It just came to me. Let's talk about that a little bit.

I tell you what, I know how to burn it. And you just have to have the courage. You have to do it. And recently, I just hired a group to help us learn how to market and sell and raise capital. And you'd think, well, geez, with all that I've done, why am I paying somebody to help me? Right? Well, because I'm not doing it good enough. I don't— it's not— there's always room for improvement no matter how good you are. Right?

Right.

Right. And helicopter pilots train all the time. Passengers don't see that, but we train, train, train. And building a business is the same kind of thing. You have to just keep doing it, get better and stronger, faster.

Absolutely. Yeah, absolutely. Love that. So, so tell me about from the investor perspective, please share with me that, I mean, to buy in and move that capital inside a company which is, you know, so big. I mean, you're such a big company, right? A billion $1.3 billion in transactions. So do they need like millions of dollars to participate, or what is the size of the participation?

It's the same thing as buying equity in a public company. You can pay the share price. So we value the company, and then we decide what the value is and what we're going to sell off. And the investors can buy the whole round, or they can buy a small piece of it. And it's, it's actually pretty exciting for people that haven't touched a business like this. You know, when you, when you invest in an operating company with your own cash and it's not a publicly traded company, you're, you're, you're watching the team sweat. You're watching them, watching them succeed. And you start to— I get investors calling me up and, you know, they want to know like, well, what are we doing? You know, how did we do? And when it doesn't go well, they don't whine. They say, can I help? What can we do? How are we going to fix it? It's actually, it's like a private club. You know, the people that are invested in there, we have the same vision and we understand the risk. That's, I think, what matters. You don't want to invest in a GP position if you don't know what you're doing, right? You have to understand.

Exactly.

You have to understand that you could lose your money. And as long as that's an acceptable point in your thinking, then go for it, do it and enjoy it.

Yep.

Yep.

No, I think that, you know, it makes sense. I mean, everything is risky, investments especially are. But understanding just a different bucket and diversifying in different buckets kind of makes sense, right? You always encourage that, you know, Because the investment is right for somebody else, it's not right for you. So you need to do your own due diligence on that. But going back to what you were saying, and we talked about in bits and pieces related to the businesses, the Pareto metric relationship between how it applies to multifamily. But to keep it clean and simple, by the way, it's great that you know that even at the smallest chunk of money, like say $50,000, they can participate. in this GP opportunity, right? So just to clean it, keep it clean and simple, if somebody comes to you and say that, hey, Glenn, what about Colony Hill? Well, what exactly is this GP opportunity? How do you simplify it? And how do you like share it with them in a way that they understand it? Because it is quite a bit. I mean, it's treating real estate as real estate itself in syndication. It could be complex for some people.

Yes, right.

But now treating real estate as a business is even more Yeah, but it's not—

if you think about the fact that if you want to do real estate, we raise money, we can put your money into real estate. So we can buy a deal in Houston, Texas, and park your money there.

Right.

And at the whim of the market, to the extent that it goes up or goes down, right? That's that investment in one deal. Or you can look at another way, say if I invest in the Operating company, I have a piece of all the deals because we, we own and manage those deals with, with other partners. But again, when you, when you finally get these things tuned up, these operating companies tuned up, they, they continue— they continuously make money. Um, but it's a long road. It takes, it takes a while to get there, to scale. To scale a business takes time and people have to be patient. So how do you explain it? If, if you've got time, you don't need the money and you can wait 7 years, it's, it's a significantly better return than any single property is going to get you. And you could argue that the risks are lower because, you know, if we buy properties and some don't make it and others do, The ones that don't make it, those were losses for the investors, where if they owned a GP stake, they, they get the benefit of the amortization of all the deals into one bucket of profit or, or loss, right? It can go either way.

Right.

Um, but it's, it's a case, like I mentioned earlier, it's a cadence. We have to hit that cadence, and once you start to hit it That's when everybody thinks your IQ went up and they start treating you like you're somebody else. You're still the same person you were all along.

That's true.

Perceived as smarter, right?

Yep.

The smarter people are doing what I'm doing right now. They're biting it, they're biting into it early, and they're struggling and fighting through it for the big win. The one at the end, that could be luck, right?

So absolutely. No, I love that. You know, when you're looking at what you just explained, it's a kind of a diversification of the risk because the risk-managed approach is what, you know, investors should always think about. And now you're getting distributed on all different properties. One can do better, one can, you know, do subpar. But if you have that blended risk, I think that diversification is the key. So thank you so much for explaining that in simple terms. I could go on with this conversation on and on. But I think, you know, with our podcast, we still have a couple of more things to cover. But this is incredible, you know, in terms of the GP stacks and how they can participate and just understand it. So I highly encourage listeners to listen to it and go back and listen to it again, because it's a little bit complex. It's a little bit complex to understand it. But the fact that, you know, you are getting a chance, you know, something being created over the period of years and being able to participate as the GP side of it, as a company side of it. That's incredible. So, Glenn, I do want to ask you one question that when you're looking at future of Colony Hills, right, you have done tremendously well in the past, the future of Colony Hills and the future of multifamily in general, right? We have been in mayhem for some time now. With the interest rate just rapidly, rapidly increasing on all of us, right? So there has been a lot of distress, especially in multifamily, but at the same time, we cannot ignore the opportunities also that's uncovering, right? So what is your outlook for Colony Hills' future and just general, the multifamily market, where it's going and what its future in next couple of years looks like?

Yeah, so it's starting to— it's raining really hard where I am and it's so loud on the roof. I'm not sure I heard precisely what you say. So I just want to make sure you're saying what's the future of multifamily or what's it look like based on the interest rate rise? That's what you're—

Yes, yes. What's the opportunities and what's the kind of a fear that we have in the market?

Yeah, I told you in night when Paul Volcker took over as Fed chair and he raised interest rates to 22%, I got crushed, right? It was— there was— everybody got crushed. Anybody who was borrowing money, uh, was hurt. Anybody who had a 401 was, was making lots of dough. Um, it's, it's not much different today than it was then. The, the world survived, right, back when Volcker did this. And yes, we did have some significant strain on, on our properties because of interest rate rises. And it wasn't just the interest rate rise that caused the strain. It was the fact that the banks required that we have rate caps on the variable rate interest so that they're, they know that their assets protected. But those cap rates were worse from an expense standpoint. It was more damaging than the interest itself. And some banks required that the money be put into the deal a year ahead. So all of the operators that were using variable rate loans, they had the same stress point. So that's gone on across the market and it's created a wonderful opportunity for people who are still in the game to buy prices, buy at lower prices. than they were, and then ride it again, ride the, ride the wave back up again. And that's the world we're in always. It's never straight up. And it's since 2008, we had a little bump during COVID in the markets, but it's been pretty solid right along. So people haven't experienced a downturn, and it's hard, it's hard to comprehend. This is where From my perspective, the losses that people entailed because of interest rate rise seem like a lot when you, when you're trying to carry the debt. But at the end of the day, when you're doing what I'm doing and you're getting to this massive exit, it's just a little bit of noise, right? It's, it's like you just gotta— we're fearful, don't get me wrong, um, but we're not Not afraid to open the door again and just go. And so that opportunity is here now. It's just starting. And, um, we, we will take advantage of it. We've repositioned our access to capital, additional capital from foreign countries.

Interesting.

And, uh, I'm confident that we'll, we'll be, um, rocking and rolling here in the next 12 months.

Love that. I love that. And I love to see, you know, how the Colony Hills progress goes from here. So, if I understood you correctly, you're cautiously optimistic in this market. You're cautious, and that's what is needed.

Oh, God.

Optimistic.

We're cautious. We've underwritten deals 9 ways from Sunday to make them work, and we can't. The math Doesn't, doesn't work. So we're just, we've been on the sidelines for a few years now. So waiting for this to come around.

Love that. Love that. Well, thank you so much for sharing that. And with that, we're gonna, you know, go into the next segment. If the listeners want to get in touch with you, how can they connect, or you or your team? You know, I don't want them jumping on your calendar.

But you know, if, if they're to connect with somebody to understand a little bit more, Yeah, I think the safest thing is just to reach out to me and I'll pass it on to the right department that can help. But the email address is glenn.hanson@colonyhillscapital.com. And that's the best way.

Thank you, Glenn. You know, it baffles me your availability. So thank you so much for giving your direct email address to our listeners here. But yeah, I think going into the next part, which is one of my favorite and most kind of close to my heart, right, is the segment about Think Outside the Stocks. It's not about the company, but it's about that think outside the box kind of a mindset. And I like to learn from our listeners that how are they thinking outside the stocks or, you know, of one particular strategy. And often investors, when they come to me and they ask about my next investments, my returns in the next investment, I talk about, you know, changing a perspective a little bit. As a frog in a pond, we might see the problems around it or the solutions also around it, right? But when we change our perspective and we become that eagle's eye perspective, now we see the forest, we see much more different problems, and we do much more— we do see much more different solutions as well, right? So that's the perspective about not just creating wealth in one particular track, whether it's stock market, whether it's real estate, or anything else. But it's about how you can grow, preserve, protect, and pass your generational wealth. So keeping that in mind, I would love for you to share with our audience the journey over the period of time, years, that you have experienced, that you're actually, you know, put some tools and techniques in place to not just, just grow and invest, but to grow, preserve, protect, and pass what your legacy is going to be. So would you help us highlight on what your lessons have been and how you think differently, not just outside the stocks, but just differently?

So my experience with having wealth back in 1999 was challenging because we had the dot-com crash right after, within a year of selling the business, I had moved the money to professional money managers. And, uh, we got crushed. I mean, like real, real significant losses. We lost more money. My brother and I lost more money in 18 months than we ever thought we'd have.

Wow.

Um, and we, we pulled the money out of that manager and we put it into another one. And then they assured us that what we saw was a 100-year flood. It can never happen again. There can't be another dot-com crash. And then there was a— in 2008, Lehman Brothers went broke and the whole world came to an end. It almost seemed like to us a nuclear bomb had exploded and the sky was gray every day.

Gosh.

My gosh. So to answer your question is, back then I didn't know anything about money management. I was a tool and die maker. I was a sales guy. I was a business owner. And, you know, I knew that I had to make certain amount of collections or I couldn't meet payroll. I got that, but I didn't understand the global markets. And so what I've done to help protect that for the next time when it comes is spending time with people that are focused. There's groups out there that you can join and they focus on how to preserve their wealth and they share their tools and their models. And I'm— I've been participating in that kind of thinking for the past few years in anticipation of my last liquidity event, which is when Colony Hill sells, will probably be the last one I do.

Um, right.

That said, I'm still starting— I am starting another new company, um, this year. So I don't know.

You are? I need to know a little bit more about it. Maybe we can talk on the side on that. So, but yeah, going back to that, that group that you're talking about, and I know you cannot share the names Because it's very coveted and very private circle of wealth almost. But it's a, it's an ultra, ultra high net worth group, right? The buy-in to qualify to be into that group, the qualification itself is pretty up there, right? So what, what does it look like, the qualification to be part of this circle?

The groups, there's different ones, there's, they all have different price points. And You know, if you, if you get online and look for them, you can, you can pick up, um, what they do. And they usually, a lot of them publish what, what it costs to participate. But from the perspective of protecting your wealth, it's inexpensive compared to not having the experience or not knowing who to go to. Right.

Right.

You really need what we, we should, we should have been taught this stuff in college and high school. But we're not, right? We're not taught how to manage money at school, in school. Um, I, I, I'm doing it because I, I recognize that's not my strength, you know, knowing what to do with cash. I know how to run a business, I know how to raise capital, I know how to make money, but then once you make it, where you park it is important to know.

It's very important.

Yeah. Yeah.

And it's, it's better than you know, reinventing the wheel yourself to be part of. And some of these groups are like even like a million dollars in liquid assets sometimes, you know, that you need. It's not just about the net worth or ultra-high net worth to be able to participate in the investments and stuff like that. So the higher the tier, higher these groups go on. But what's really important is, like you said, that, you know, to blend yourself with this group where these discussions happen and be part of it and how you can implement and, and bring in, right? And Think Outside the Stocks also, you know, it's, it's a group, the community that we have. We talk about a specific strategy, a specific kind of holistic strategy, right? That's called Wealth in the Vault. So starting somewhere is important, not reinventing the wheel and You know, having your own successes is great, but having your own failures could be costly. So thanks for bringing that point that, you know, mentorship and the groups, it's so important, you know, to recognize that you need help and to actually go and get it. That is so important. So thank you for, for saying that. So with that, I'm gonna go into the next round, which is kind of a fun round, unless you want to add something else. Do you know how you can think outside the box?

I want to add, your model on think outside the box is exactly what protects the money from being lost so people can have comfort at night. And that's something as an entrepreneur is hard to comp— it's hard to comprehend because we are playing a risky game all the time, right? We're always putting it out there. And I really, I really think if somebody were to be in a position where they've got over $1 million in cash and they don't know what to do with it, they should talk to people like you. And I should have done that earlier in my life. And I didn't even know they existed, right? I mean, how?

Yeah. Very private, very, you know, kind of coveted. They can't even search for it at times. But thank you. Thank you for sharing that. Appreciate it. So with that, the next round and the final round is going to be the rapid-fire round. And I like this because it's like, it gets just beyond the business, which what you have done, it gets down to what you have experienced and what you are as a personality, right? So whenever you're ready, I'm going to start the rapid-fire round. Are you ready for that?

Okay, I'm ready. Hit me with your best bullet.

All right, right. So since you have been part of such various different startups, and you have seen more failures than successes and learn from those, you know, successes. What is the failure that, that was really hard to take? And you talked about a lot, right? But what was that failure that is just like, oh my gosh, it was just nick in time? You know, can you share that story?

So the failure of— I'm not following what failure that you would mean.

Of the business, right? I mean, I think you were sharing about you know, being in the part of the technology that was ahead of its time. And you're almost there, right? And something happened. So, yeah.

Yeah, totally.

Yeah.

We had— one of my startups was an aerospace company. We built unmanned air vehicles and unmanned air vehicle sensors. And that was in 2003. And I bought in heavily into the startup. It was just one fellow with an idea. Right.

And that's the drone technology in simple terms we're talking about.

Yeah, it's a drone. Essentially, it was what, what guides a drone's missiles to the target. Today, they fly the drone into the target. We were, we were working on something where the drone would release a missile.

And when was this?

This was, um, 2003 to, um, in 10 years I raised $18.5 million for the company. And we had government contracts. Raytheon, I think, was one of them. And, um, in the hundreds of millions. And when Obama became president, he, he voted out the military budget and we lost— we spent— we had a burn of $330,000 a month. And, and we went from thinking we were on top of the world to nothing, and we had to shut it down. We, we just didn't have the, we didn't have the staying power to, to re— recover. So, yeah, there's failures and, and, uh, they hurt, but they, they, they teach too, right? There's learning. There's learning in, in these things.

Yeah.

When I mentioned my filter in the beginning of what, what I would invest in, Part of the thinking was that those failures helped identify my criteria for what I would have been. Right.

Well, Glenn, your story is a story of resilience. I mean, you know, I have had my share of, you know, ups and downs, but it's nowhere close to what you have seen. And every time, you know, it's just so much of resilience and, you know, knowledge and expertise, and there's just that wiseness. to be doing something bigger and better. It's incredible to see that, right? So my next question is going to be a little bit personal, right? 20 years old, if you were to go back and tell your 20-year-old, or when you're restarting, what would you do differently? What would that 20-year-old would have some wisdom Some nuggets of wisdom from you that would help. Yeah.

So, my story was when I was 20 years old, my mom died of breast cancer. I'm so sorry. And my father was so much in love with my mother, he couldn't function. And so, that's how the business defaulted to me. My older brother was in the Marine Corps and my younger brother was only 15. So, it was on my shoulders to figure it out. And so what, what I would do different, I would pray it didn't happen again because it was ugly. It was, it was a hard time. But when you're— I don't know why I had the, the conviction to do what I did and stay with it. Um, there were, there were a lot of people that helped me inside the organization as we grew, but there were also a lot of people that were awkwardly jealous.

Mm-hmm.

And, um, those experiences taught me how to manage people. So, so while it was ugly at the time, it created the character I, I have today to handle strife, problems, employee issues in a fair, caring way. And so I think, I think it was good for me. And, uh, and who would've known? And, and on top of working in the, in the manufacturing company, I went to school nights for 14 years to get a degree in engineering and management. And I never, never closed off the degree because I took courses that were appropriate for my business, not for—

Oh, interesting.

Yeah, wasn't it? And I really enjoyed going to school. It was, it was a break from the stress.

So you were on your, your own roadmap.

Yeah, that's it. I got my own degree, my own diploma. Yeah.

Wow, love that answer. And the last question I'm going to ask, or maybe one more after that, but the last question in rapid fire is like, I mean, I have met you and I've met Krista, your wife, as well. You're incredible people. I mean, I have never seen such modest, such down to earth, after having, you know, so much of achievements. And you think about it, you know, people around you, you know, company as well, in different ways. What is one impact that you have done in your life that is just kind of, you know, just different, and you never thought that what it would lead to? And while doing it, it just felt immensely, immensely gratifying to do that.

Yeah. So when I had a lot of money after the sale of the company, my brother and I funded The full budget at Mass General Health Professionals that they were creating a program to help teach kids to deal with dyslexia and how to read.

You did.

And funded it so that they had an operating budget to complete to success. And, um, I, when I was negotiating that with them, I was thinking like an entrepreneur and a, and a private equity guy, and I says, what do you guys need? How much do you need to get to cash flow positive? And that was the amount of money we gave them. So today there's millions of kids that have benefited from it, and their operating budget today is $8.5 million. Wow. Oh my gosh. And they're working their way into the New York school system, and they keep chipping away at it. It's called the Hill for Literacy. is the name. HILL is Hanson Initiative for Language and Literacy.

Oh, okay.

And HILL is what it is. So that was, that was a big deal because, you know, we, we donated funds over the years, but it was $100, $10,000, or even, you know, $3. This was— we made a difference. We, we, we had our hands on the controls and we made a difference that really mattered. To many people. And it still does today. It's live and operational. That was 20, 25 years ago.

That is incredible. And year after year, actually, it's making impact and impact is growing. Well, thank you so much for sharing that. And it's just mind-blowing to even think about how many people it has helped. And I mean, it's not just the life of a person, life of a child that you're changing. But It has gone through multi-cycles of creating these adults, having their families, and how it impacts their families, their kids, their spouses.

Yeah.

So you kind of have— it gives me goosebumps, my goodness, to think about how, like, a domino impact that you have created. Wow. I had not known about this. I'm so glad I asked this question. Thank you so much for sharing that. And thank you so much for making that Such a positive, positive impact. Incredible. My last question then, the bonus question is going to be that you know you and Krista, you travel a lot. So you know what is that one location that you kind of go back to again and again, which feels the most close to heart, most peaceful when you travel? Whether it's here in U.S. or internationally, what's your favorite spot?

I think Krista is Greek and Italian, and. We both like Greece and Italy. So, I think that's probably the place we would go. Those—

Oh, I love that. Yeah.

But I also like California. You can't beat the weather, right? That's pretty—

I don't know why I moved away from California, right? I mean, it's 2008. We had to do things differently.

110 degrees, you wish you were in San Diego, right?

Tell me about it, right? So, with that, I mean, this has been an incredible conversation. What is the one last message that you would want to give to entrepreneurs coming back from this tremendous golden wisdom of nuggets that you have dropped all over this episode? Let's conclude and be grateful about what we have. And then what's that last kind of—

The last piece is get dirty, right? People have these ideas, and they, they're wishful, they're wishing, they're wishing, they're wishing, and it's not hard Once you get started and there's people out there that'll help and the angel investment groups are the place to go with your ideas and just do it. Get dirty.

Love it. Love it. So get dirty. On that note, we will conclude our episode. Again, thank you so much for this incredible, you know, just sharing this incredible experience with us and have this conversation going through your journey, you know, uncovering some rocks in your life and as well as adding value to us and adding impact to others over the period of years and years. Glenn, I'm so grateful and thankful to have you in my life as a mentor, as a person, as an individual. Thank you so much for everything that you do.

All right. Take care. Thanks for having me.

Thank you so much. Absolutely. So listeners, there's a lot to learn on this in this episode. Yeah, you know, we learned about the GP Stacks opportunity, but we learned about resilience. We learned about getting dirty, as Glenn says, and, you know, hope that kind of uncovers something in you that's driving you to be a little bit different, to cause a little bit different impact, and make that 2-millimeter shift in what you're doing today. Glenn has been incredible encouragement and inspiration to do that. And thank you so much again for joining and listening and tuning in. And look forward to see you in the next episode. Thank you so much again, Glenn. Thank you.

Sure. Thanks. Bye-bye.

Thank you.

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