Episode 21 - Abhi Golhar, Meridian 84

My parents had no freaking clue what was going on and I was trying to figure out my life and at the end of the day, I was the only witness in a grand jury that came forward to put his ass in jail for 15 years. That type of stress, that type of pressure, it does one or two things to people. When your back's in a corner, the question is, are you going to come out fighting or will you let that moment of doubt rule your life?

So the big question is this. How are entrepreneurs who aren't scaling tech startups or building lifestyle businesses from scratch doing it? How do acquisition entrepreneurs find businesses, buy them, and then create generational wealth while taking on less risk? Welcome to Surge funded the Entrepreneurship Through Acquisition podcast. I'm your host Nick Law and I'm here today with Avi Golhar. Abhi started his first business at the age of 14 and since then he has scaled up multiple businesses in healthcare and real estate, including leading the development of an AI powered private lending platform which has deployed over $500 million in non agency debt and equity financing nationwide. Avi is also a three time nationally syndicated radio host on Wall Street Business Radio Network. Avi holds a BSE in Electrical Engineering from the University of Michigan as well. And gotta say, I'm really honored to have you on. I know that you have great podcasts of your own and you've been on a lot of shows, but I'd still love to just cover your entire journey as much as we can on this podcast. I think it could be really interesting to start out with your origin story. Not everyone starts a business at the age of 14 like you did, especially a successful one. So I think that that could be a great place to start just to get into where you were at that age in your life and any learnings you got from that experience that have influenced the journey that you've taken since then and led to what you are doing now.

Cool. Nick, first of all, thanks for doing this podcast. I'm sure it's a super awesome inspiration for folks that want to go buy business one day. It's sure an inspiration to me. So good job on it man. Congratulations. Just a little bit about me. I grew up in like beyond small town Michigan. So I grew up in Texas Township, which is a township outside of Portage, Michigan, outside of a smaller city in Michigan called Kalamazoo. That's where I'm from. I've got two Indian parents. My dad's a PhD from Michigan, a master's from India, bachelor's from India, my mom Wicked genius. I think she runs circles around my dad. Sometimes a couple bachelor's degrees for her and a master's or two to boot. And I grew up in a really academic household. You think about your brown Indian family growing up in the 90s. Very safe, academically focused. You don't talk to girls, you don't think about girls. You study for the SATs, and you memorize the dictionary on the weekends and during the summertime. Right? That's. That was my upbringing. So I have a really good vocabulary, even though I rarely, rarely get to use it. When I was in high school, I remember watching Barbara Walters interview this guy on 2020. And this guy was driving around the car that I wanted at the time, which was a Lexus RX, like 300 or 350, one of my favorite SUVs growing up. And like, how does somebody do this? He was 24, 25 years old. He was going from one flea market to the next flea market, buying stuff and then sell on ebay. And I was hooked. I thought, wait a minute, he could do this? Clearly, I'm better looking and way more intelligent. So let me see what I could do. Let me see if there was a pathway forward for the little entrepreneurship inspiration that I got from Barbara Walters. Watching 20 20, or maybe it was 60 Minutes. I can't remember what it was. Whatever. And one of the challenges, though, that I had was my parents were not entrepreneurially minded at all. They just, this is such a waste of time. What are you doing? And to their credit, now we have an amazing relationship, and it's not a big deal, right? 25 years later, that's what it takes. That's what it takes to get a little appreciation at a Brown family. 25 years and a lot of hard work. And even then, they're like, really? You could have done a little better. Thanks. Where's the A plus instead of the A? Why did this happen? So I went down the street, one of my really good friends, his name is Matt Carroll, and he was my neighbor growing up. And I said, matt, we've got to do something a little differently. Can we figure out a way to maybe run a business or something? What can we do? And his dad was always tinkering with computers in the basement. And my first computer was a Zenith computer. Dot matrix printer, black screen, green text, with a really clunky keyboard and a five and a quarter floppy. Okay. That was my world. The first computer. The next computer that we got was a Dell. It was a Dell 3000 or something like this ran Windows 95 for the first time. Super buggy. I crashed it a lot. I had to redo the software, reinstall it, back everything up. The floppy used a hundred disks. And I realized something. Wait a minute, this is a commodity. This is something that we could sell. So at the age of 14, we started Max Technologies. Max Technologies was geared to help our neighborhood troubleshoot their gateway computers. Compaq, hp. Right. All the computers that were out back in the day when CD ROM drives were sometimes used as coffee mugs, coffee mug holders, coffee holders. Like, you kidding me? This is not a thing. This shouldn't be a thing. And they broke consistently all the time. So we troubleshooted both hardware and software. When I was in this is late middle school, early high school, we ended up doing a substantial amount of revenue, just kind of hanging out in the basement of our houses. That was the first business, Max Technologies. It was an early geek squad.

Who would have thought for a 14 year old, that's really impressive. I mean, for anyone to be able to make revenue like that, it's really cool. And I think that for any child, their parental influence is huge over them. And that validation you get from wanting your parents to believe in what you do is maybe even more tough if you're growing up in this sort of an immigrant family. Myself, I have that experience as well. So it surely shows a lot of self confidence and courage to take that path, especially when you're younger. So kudos for that.

Yep.

So that was your first business. Clearly led to having good revenue. What was your path after that? Going to college, becoming an entrepreneur? When you were 14, did you know that you just never were going to work? Or when did you come to the realization that entrepreneurship was the path you're going to follow?

Yeah, I. I kind of knew. I kind of knew, like, going into college, this was not going to be my permanent path. But I didn't really realize it until maybe sophomore year at Michigan. Here's what happened. I was the kind of kid in high school that you just hated. I would show up five minutes before 10, 15 minutes before the exam, study, and then set the curve and AC exam. And you wonder, who is this guy? Everybody hated this kid. Everybody hated me in high school. Then I got bored of high school and I started doing dual enrolling at Western Michigan University, where my dad will soon be retiring from. And I took like all these electronics classes. I did computer science, et cetera. So by the time I got to college, I'm like, I got this. You know, I had 39395 GPA out of high school, I'm walking into Michigan with 48, 49 credits, almost a junior. How hard can Michigan Engineering really be? Like, let's be honest, it's just another school. It's just whatever. It's not that big of deal. Well, I got humbled my first semester. I'm sitting in my dorm room, which is like this 10 foot by 5 foot disgusting shoebox with my gigantic roommate, Mike, and I get a call from my dean and my dean, Dean Munson. I think he says, hey, we gotta talk about your grades. And I said, great grades. We got this. I've been ready for grades in this conversation my entire life. What are you talking about, bro? This is not even. This is. Tell me, tell me what award I'm going to win for setting the curve this time. And he said, well, it's a little bit of a different conversation. We need to talk about your grades. I said, okay, great. I'm from a Brown family. I've got, you know, every Indian is a master of this. I'm square rooting six digit numbers in my head all the time. How bad can this be? He said, well, you've done something that nobody at the College of Engineering has ever done in the history of this university. I said, great, you want to tell me what it is now? He said, you've successfully joined the square root club. And I said, what's the square root club? That's kind of interesting. It's great. I can square root shit, let's go. It's not a problem. He said, well, the square root of your GPA is higher than your gpa. We're putting you on academic probation, so I'll save you the time. The only way that works is the number that you're square rooting is less than 1. My GPA freshman year was 0.83 or something like that. It was like 0.83, 0.84. Ouch. Ego hit. And I didn't know what to do. It was like a glitch in the matrix. I was literally on the floor, curled up in the corner next to my space heater, not knowing what to do. So I do the next natural thing. I lie to my parents. They still don't know what my GPA is, frankly. But I lie. I'm like, yeah, I'm doing really well. It's not a problem. All the while I'm just so stressed out mentally, I couldn't move physically. Maybe we've been there, maybe we know what that feels like. We're so stressed it is. We don't know what to do next. And we're sitting in solitude, kind of wondering, God help me, I don't know what my next move is. I've felt that many a times with capital, with teammates, with co founders, with CEOs, with COOs, with myself, with the person I was dating. Like, I just. What? Anyway, so here I am. I look like shit, I smell like shit, I haven't eaten shit, I haven't brushed my teeth in a week. And one of my good friends, Tommy McAfee, he knocks on my door and he's like, man, I tried calling your dorm room. You know when you still have like the corded phones, the spiraled corded phones, it's like nobody picked up. You're not picking up, what's going on? I said, well, I just failed life. I don't want to do this anymore. I'm going to pack up and just go home and admit everything to my parents. And he then gave me the book Rich Dad, Poor Dad, Cash Flow Quadrant Guide to Investing. And that's what set me off on the path. That's when I realized. So to your initial question, long story short, that's when I realized Michigan Engineering was nothing more than a way for me to figure out the best methods to solve really complex problems and provide elegant solutions. And I knew that the better that I got at that, regardless of what I did in my life, I could always fall back on that particular skill set. I never worked as an engineer. I don't even know what that is. If you tell me what a piezo resistor is and you asked me to do some advanced algebra, I probably couldn't do it. But what I realized in that moment was there is a better path and there is a better way. And that way for me was entrepreneurship.

Yeah, I think most people probably don't speak about it as freely as you do, but almost all of us have probably been through that sort of a humbling experience. Especially if you're someone who grew up in a high achieving environment like we did and you're used to working hard and seeing that hard work pretty easily get you the results that you think that you should. And then suddenly you do get to a place where that doesn't happen. And it is shocking at first, but if you are able to work through it, I think it does really build character and makes you well rounded person. And as I think you alluded to, that is one of the things I got out of my education as well. And I wasn't an engineer. I was a liberal arts grad. But. And what I learned is probably even less directly related to what I do professionally. But what I did learn was how to solve problems, think critically, just work hard, and get results. And I think that does help you with whatever it is that you do in life. And so if there is value to education, that's probably the biggest value that you do get.

Yep. That and the network and your friends. If it weren't for Matthew in high school, and if it weren't for Tommy, if it weren't for Denny and Jonathan and all these mentors, both good and bad. I've had really bad mentors, too. I had a bunch of failed real estate deals in Detroit. I trusted the wrong people. I ended up $750,000 in debt, underwater, and in the middle of an FBI fraud investigation into my mentor that went on for four and a half years in college while I was a full time student. All the while I had a car, I was commuting back and forth between Ann Arbor and Detroit. My parents had no freaking clue what was going on. And I was trying to figure out my life. And at the end of the day, I was the only witness in a grand jury that came forward to put his ass in jail for 15 years. Think about that for a second. Like that. That type of stress, that type of pressure, it does one or two things to people when your back's in a corner. The question is, are you going to come out fighting knowing that there's a promise for a better future? You just don't know yet? Or will you let that moment of doubt fester and fester and fester and fester, and then that moment of doubt turns into this big, scary monster that you let rule your life. I chose the former, not the latter.

What do you think helped you make that choice? Was there any belief that you had or.

Yeah, dude. Like, I embraced losing, but I also hated losing. I just. Oh, God. I needed to, though, prove to myself that I was worth it. For sure. I didn't believe in myself. When your friends don't believe in you, your brother is like, what the heck's going on? Your family has no idea. Your girlfriend's like, I don't understand this. Your friends at school, in university, in college, your cohort members, they're thinking, well, what is he doing? He's always on the phone. You start to doubt who you are. You start to doubt your beliefs. You start to doubt your friends. You start to doubt the universe. You start to doubt the future. You start to doubt what you're doing here, your role, responsibility to others, and also yourself. You've got one of two choices. You can lean into your doubt and use it as a power tool, or you can say, I'm done. I'm going to just lead a life that's relatively average. And that's okay, too. That's totally fine. I just wanted something different from my life, and I wanted it so badly. There were times when I forgot to eat. There were times when I went without water for like a day or two. I'm like, oh, wait a minute, I should be drinking water and not coffee. I should go put something healthier in my system. But I wanted it so bad. Bad. And that's what I think is lost on people of today, is we don't want it bad enough. Hard work is so easy now, right? You got chatgpt perplexity. You can reach out to anybody that you want on LinkedIn, harass them on social, put an ad campaign together that retargets them, gets in front of their face on every social media platform they go to. Let's be honest, the hard work of today is very different than the hard work of when I went to college. From 2002 to 2006, I just grinded out, put in the hours. But that's because I wanted to do that. And it's okay if you don't want to. That's totally okay. It's not a big deal. Buying a business in the world of today carries risk. It's the reason why the SBA default rate has almost doubled over the last year and a half or two. It's the reason why people are looking for something to do that's a little sexier. And entrepreneurship through acquisition, search funder, private equities, like, oh, man, I've got to get into this, right? Five years ago it was real estate, or 10 years ago it was, let me go flip a home and be like Chip and Joanna Gaines on hgtv. But now it's let me go flip a business. Okay, cool. But are you willing to put in the work to be around for the next 150, 200 years? Or are you one of those people that will just recede into the sunset and say, hey, I'm okay with X.

What was the dream or hope that motivated you so much? Was it the freedom or the financial outcome? What was it that really drove you?

Acceptance. It was acceptance at the end of the day. Listen, like, Harvard did a study on There's a professor of happiness at Harvard, right? And he did a study on what happiness truly means. It's not money. Money helps. If you ask any rich person, are you happy? They're not going to not say no. But at the same time, they have a different set of problems. Right. If somebody's making $50,000 a year versus someone making $500,000 a year, is the guy or the gal that's making a half a million dollars a year marginally happier? Probably because they have the resources to go buy whatever they want to go buy, fly wherever they want to fly, take their family first class. You know, you're staying at really nice hotels. Yeah, it doesn't matter. Cool. But is that who we truly are? Like, how are we defining what ultimately happiness is for many people? We get trapped in this concept of money. We get trapped in this concept of what other people are pushing out, what success truly means on Instagram. And now the new definition is, I need to go buy a private jet and make a million dollars a month. That's the new definition. Is that really, though? So growing up, mine was always acceptance. I wanted to be accepted by the teams that I was working with. I wanted to lead teams because I thought I was relatively good at it. Found out really soon after I made that decision when I was younger that I was pretty dogshit at it. And then I had to work at it, work at it, work at it. And then I started to believe in me, and I wanted to be accepted. I wanted to be accepted not only in the circles that I ran in, but more importantly, I want it to be accepted by myself. We all have a condition of. I feel like we. We all live this human condition, right? And I think there are two major faults. I think the first fault is saying, hey, now we've achieved what we thought we wanted and we're going to move the goalpost. That's never fun. Then we never get a chance to really, truly win the game of life. We're moving the goalpost. I think the other challenge that we have is we don't give any time or attention to the word I. We give no time to understanding who I truly am. My name is Abi Golahar. I'm founder, managing partner of Meridian 84. That's a label. I'm a son label, I'm a business person label. I'm a co founder label. I'm a business partner label. I'm a soccer coach. That's a label. I went to Michigan. That's a label. Who cares? But this isn't who I am. Like this. I'm a big believer. And we're spiritual beings having a human experience and we're not human beings having a spiritual one. So if we think beyond that for a second, we're all connected, we're all the same. We just take on different physical forms and physical expressions of the universe. So what are we doing here? And I think that's become the inflection point for me, which is I enjoy what I currently do in identifying the right borrowers that have the right mindset, that have the right beliefs in themselves. They want to be CEOs, they just don't have the right capital stack. Maybe they don't have the right post closing ops teams. Maybe they don't have the right due diligence teams that don't have the capital to move it forward. They're thinking, well, geez, I can't take down a 5 or 10 or 15 or 20, $25 million a year company because I just don't have the money for it. What can I leverage? But looking beyond the numbers, who's the individual at the core? What do they believe about themselves? Are they okay to be vulnerable? Are they okay to be accepted by a group of individuals that struggled with that? That was me. So all of this to say, I think the first challenge is understanding how much is enough. And the second challenge then as we age is what are we doing here and who are we? Because I can tell you something, I am not this. And I'm very confident and fully aware of that.

At what point did you have this realization? And after having the realization, how does it affect how you show up in life or approach this existence?

Yeah, it changes everything. So I went to India when I was in the 12th grade with my parents and we visited a temple. And the guiding scripture in Hinduism is the Bhagavad Gita, right? And I grew up studying a couple of different religious books, studied the Quran, the Bible and the Gita. And I did my best. You know, I don't know if I've read every book through and through a bunch of times. I'm not a very religious person. But when I went to India, we went to a very specific temple. And I realized something. My dad and I had a really interesting conversation. He said, there's a concept of religion and then there's the use of religion. He said, what do you believe? What do you believe about the Bhagavad Gita? Is it a concept for you? You studied it, you studied portions of it, we talked about it. You went to Bible study, you went to the mosque, Right. You had conversations with different people from all different backgrounds. Is this a concept for you or is this something that you truly, ultimately believe? And that's when it changed for me. That's when I realized that one has the ability to rest in one's awareness. And by resting in one's awareness, we can have better outcomes because we are setting our emotions, we're setting our biases aside to understand what's actually happening. That's what I Learned in the 12th grade on that trip. And that influenced everything for me. I'm not the best person to run a team. I'm not the best person to step in and be C suite. I know my strengths and I know my weaknesses. I just build around my strengths and I fill the gaps with my weaknesses. If I'm wrong, I'm wrong. But what I can also say is if we're in a really tough position and if I'm feeling anxiety, here's a really great summary kind of of this concept of resting in one's awareness. So it doesn't get no. I think your listener is like, wow, this guy's kind of nuts. But here's a really good example. Let's say you're in a very tense situation at work or in one of your companies. The fact that you recognize that the situation is tense is in and of itself a moment where you're resting in one's awareness. Because that's who we are. We're nothing more than awareness. We just happen to have this physical body called abigohar, et cetera, and all the labels that are associated with it. And we are attached to the expectations of our lives and of others. But in that moment, if we have clarity in saying, hey, I'm feeling this weird kind of sensation in my body about the situation, I need to dig into this a little more. And I've just used that as my compass. When working with individuals, when buying companies, when raising capital, when, when finding the right opportunities, when working with co founders, when working with sponsors, non sponsored funds. This type of opportunity doesn't come along if one doesn't pay attention to how we are feeling in the moment on a regular basis. And instead we'll chase some stupid rabbit because we believe that we deserve X, right? Think about this. It's okay to have expectations, but if we're attached to our expectations. Christians have this concept of heaven and hell. That's what happens after you pass away, right? You go to the pearly gates of heaven or you join the devil in hell. Great. I don't Believe that. I believe that we create our own heaven and hell in the moment by being attached to the expectation that we have of a situation or of things. Quick example and then we can keep going here. Let's say we go to a restaurant and all of our friends, Nick, you and I are headed to a restaurant where we're about to go talk up some PE opportunities, right? We're like, oh, man, we're really excited to go try out this Michelin restaurant. It's going to be great, great, great. Everybody here has loved it. Google reviews are saying it's amazing. Yelp's great. I mean, the guy is just fantastic. The chef is amazing. And we've built this up and now we're attached to the expectation of the experience is just going to be mind blowing. It's going to be so epically good. But what if it's not? In that moment, we're so attached to the expectation, it's going to be good that if the experience is dog shit, we are creating our own hell by then telling all of our friends, don't go here, don't go do this. We're writing Yelp reviews. We're talking to the manager. Like this happens every day. Imagine you get a new car and it gets scratched the moment you buy it. How does that make you feel? But that's because you're attached to the expectation. Your car is supposed to be new all the time, but then more important than that and beyond that, you're attached to your car. So it's very easy to do these things because the mind, in order to survive, because the mind is a survival tool, it needs to be attached to something. So just like a car, just like football, which is a religion to many people in America, we can say the same thing about religion. We get attached to the concepts of religion, but we forget what religion can truly do for us, which is show us the path to awareness.

I think that now stop. Keep it going. It's all gems. But there's the saying, happiness is equal to reality minus expectations. And I think that comes through a little bit in what you're saying. I think there's also this idea of monks or whatever following non attachment and just sit there and don't do anything. But you can have that worldview and then still be incredibly successful in the world as you are. You've mentioned that you had a bad mentor to start and ended up with that investigation. But also mentors have been really helpful for you in your growth. I was wondering if you could talk a little bit about how helpful mentors have been to you, what you look for in a mentor when you work with one.

The one thing that I look for is obviously, what kind of value can I provide this individual? Because I already know I'm taking time and they don't have to spend any time with me. So I'm already two steps behind here. But what I do look for is can they help me get from unconscious incompetence to conscious incompetence? That's the scale for me. Unconscious incompetence. I don't know what I don't know to. I know that I don't know something. And if I can get there, then the mentor has done their job. I'm not looking for the mentor to help me execute. I'm not looking for the mentor to provide resources. If they do, great. If they don't, then that's fine. Just help me with a new perspective. Help me understand this lens that you've been seeing through for the last 25, 30 years in your investment banking PE experience as a principal at XYZ Firm. What is it that you see? How are you seeing it? That's what I look for the most. One of my mentors is Dr. Arthur Laffer. He created the Laffer Curve. I fly to him, we meet, we talk. He doesn't have to take his time, but he does. I pay him for his time. I ask questions for an hour and then I leave. If you want to find a mentor, couple things. One, find the best there is. Two, pay them. Three, don't take a lot of their time. It's unlikely you're going to find somebody at the height of their game that will spend 6, 7, 8, 9, 10 hours working alongside you to teach you what you need to know. It's going to be in super small bites that you need. And your questions will inform your experience with your mentor and the information that your mentor will give you. For example, yesterday I had a really great conversation with the young gentleman. He's trying to get into business acquisition. He doesn't really know where to start from creating a search fund. Like he doesn't. He's not there yet. And that's okay. It's not a problem. It's a good step one. So my response to him was, have you seen the movie Coach Carter? Okay, well, in the movie, Coach Carter essentially goes into the gym and he presents himself to the group of young black men in his community, saying, hey, my name is Coach Carter. I'm your new basketball coach. And eventually you fast forward the scene maybe about 30 seconds. And what he realizes is he can't teach the game of basketball until these young men are conditioned to play the game of basketball very similarly. For me, it is very difficult for me to teach somebody the game that I am playing unless they are willing to be coached to play the game. And that level of conditioning is torture because guess what? I don't give a. I had a young gentleman, he said, well, I'm. I want to learn from you and I'm going to just. I'm willing to work. I said, great, you can work for free. And it's going to be 80 hours a week. He's like, oh, man, I don't know if I can do 80 hours. I'm like, okay, great. Then I don't know what we're talking about. What are we doing now? We did just open up an analyst position at meridian 84 on a rolling basis. And that is a role that does offer compensation, but the hours will be just as long. If you're putting in 40 hours a week, I'm kind of wondering, why is it only 40 when everybody else cranks it every single day? Right. Oh, it's cute that you take holidays off. Okay, I'll keep a note of that.

Yeah. And I think that that's informed from your own experience and how you became successful is that you did put in that amount of time. Maybe you could talk a little bit more about some of those learnings and how you got to where you actually are in terms of. I know it was first real estate where you were successful, and then eventually shifted over to business acquisitions as well.

Well, I was always a business guy from the get go. I used real estate as a wealth building vehicle. So in my world, I look at two different buckets, and for me it's an and it's not an or so bucket. One is acceleration and the second bucket is preservation. Many folks think that real estate's the way to go because they've been brainwashed to think this way. Real estate is a great preservation vehicle. It's not a wealth acceleration vehicle. If I want to accelerate wealth, I'm going to buy businesses and translate a lower multiple into a higher multiple. I will take a. Call it a 5 million EBITDA, buy it for a 5 times multiple at 25, bolt on additional acquisitions, turn that 5 million EBITDA into. Call it 10 or 15 million EBITDA. And now my multiple increases from the 5 that I bought it at to 8, maybe 9, maybe 7, maybe it's a marginal increase. It's unlikely, but let's call it an eight times. That's pretty significant. Now I'm selling an ecosystem for 80 million less cost, et cetera. Whatever the divisions are, I end up with more money in my pocket. So from a long term perspective, one needs to consider wealth acceleration activities and wealth preservation activities. The reason I love real estate is because you can bonus depreciate the heck out of it. This is how. This is the very Basic Rich Person 101 formula. Let me go make a lot of money, go invest in real estate, bonus depreciate the asset and pay almost nothing in taxes because of the bonus depreciation on my schedule K1 tax return. Like, okay, that's easy. That's so easy. But the misconception is let's only go focus on real estate. I'm advocating for learn how to buy a business, learn how to add value and then go invest in real estate. Nothing wrong with that. So to your point, the other learnings, I think due diligence is a really large piece of the pie. Anybody can. Anybody can buy real estate. Anybody can buy a business. Question is, how are you underwriting it? What's your underwriting? What's your structure? What do your spreadsheets look like? What's your debt coverage? What? I mean, there's so many questions and if you're listening to this and you're thinking, okay, well this seems kind of interesting, what are some actionable steps that I can take? I think one is get to know the type of investor you are. And if you think that buying a business makes sense for you and you haven't done that yet, don't do it yet. Go work for a startup. Go work for a business where you have the ability to run an initiative that you can claim as your own. Almost like an intrapreneur. Being an entrepreneur inside of a business, you have your own teams that you can command. And it gives you a little bit of confidence knowing that, hey, this is something that you can do. When I look at and speak with search funders today, many of them don't have the business experience. Many of them are just thinking, well geez, of course I'm going to put together a really nice slide deck. I'll put together a Wix.com website, go pitch it in New York or on Wall street, and just because I went to Harvard, Yale, Stanford, mit, Wharton, whatever, that they're going to give me a lot of money. And you know what, you're probably right, they might. But if you don't have any business running a business. And if you have no experience running a business, then you will fail. It's just a matter of time. And you need that learning lesson. You need to fail. So fail harder, faster. It's a big deal. The more mistakes you make, the more you get to learn. And so due diligence is one of the places where you have an opportunity to make a lot of mistakes, whether it's in a spreadsheet or otherwise. The other piece of all of this is understanding your investment thesis. What are you going to go buy? Are you going to go buy a salmon farm? Because you just believe that Americans love salmon, which it's not untrue. It's very true. I probably consume all the salmon in this country on a regular basis. But what's your investment thesis? Is it broad? Are you industry agnostic? Are you just buying anything and everything between 5 and 15 million EBITDA? And you see these websites and it's just like, it's just depressing. There's no niche, there's no focus. And the team that's around it also has no experience in these niches. So how can I take that seriously as somebody that's willing to fund and raise capital for these borrowers? That's not going to happen. Very niche. Understand your world. We've created an ecosystem and an initiative called Lafayette and Oak. So you can check it out. Lafayetteandoke.com and it's built and geared for individuals that you might be a McKinsey partner or McKinsey Deloitte associate director or some high level at one of these types of organizations, or you might just be an entrepreneur that has 10, 15, 20 years of experience in salmon farming. But what you don't know is how to go acquire a business. What you don't know is you haven't really stepped into a CEO seat. So Lafayette and Oak is an initiative where you get to learn from my ecosystem of companies. You get to sit side by side along with the CEOs and have conversations with them. Get to come out to one of our retreats called Ludington Labs. Check that out. Ludington labs.com It's a retreat specifically designed for CEOs. And if you're not one, you're not getting an invite. But you get to learn. You get to learn while in the seat. And if you need operations help, we can provide that. If you need capital help, we can help with that. But expect to be humbled, expect to be vulnerable, expect to be challenged on your ideas of growth. The other thing that I learned from my Mentors, both good and bad, is how do you find management? How do you find your team members? Like, where do you go find these individuals that are going to run your organizations? Because we're going to rule the world and we'll have a thousand companies in our portfolio in the next two years. Right? That's what everybody's dream is, I guess. But finding management, finding people that want to work for you, that's hard. Talent management, whether it's in the dental world, in the infrastructure world, in SaaS and technology, government contract, I mean, it's very hard. So you go to these trade shows, you go to these conferences, you have to spend the money, you have to spend the time and build your network. It sounds so basic, but it's so true. If you don't have a good network to rely on, then don't start anything until you do. Relying on only yourself is dangerous because you don't have anybody that's going to cross check.

You sure this question is related to finding management? And also maybe going back to the conversations with mentors, you mentioned that you don't have much time and so you've tried to get the most out of each brief meeting with the mentor you have. I was wondering how you make the most out of those meetings, whether it's with potential hires or with mentors. How do you plan ahead and know that you have the right questions and the right approach to get the most out of that meeting and understand the person the best?

We live in a world where information is readily accessible at our fingertips. Do your homework. Do your fucking homework and I'll know if you ask dumbass questions. You know, stupid questions. Get stupid answers. And guess what? There are stupid questions. Don't let anybody let you think otherwise.

Something else you spoke about was EBITDA multiple expansion as one of the attractive reasons to do eta. I was wondering what levers you pull in terms of making sure that that happens.

Yeah, one of the biggest levers that folks forget is acquire properly. Again, this goes right back to doing your homework. If, say, you're buying in an industry whose historical multiple on exit, okay, this is when you build it up to say a 10 or 15 million EBITDA company, when your exit multiple, say, is, say an 8. Where do you want to be buying this company? Are you going to be buying this company at seven or seven and a quarter times EBITDA initially? If that's the case, then you're not leaving yourself a whole lot of room for growth. Your cash flow will probably suffer. You're probably not going to get the best interest rate, you won't get the best terms. Your warrants are going to be too heavy. Like it's just not going to be a good deal for you. But if you bought the same company or a different company at say four and a half times or 4.8 or 5, it's a bit better. And everybody forgets about the buy, everybody forgets about the acquisition. The answer that you might get is well, we're going to increase revenue by hiring a CRO and a director of sales and we'll expand the sales team and as a result of more sales coming in the door, we'll be able to diversify our service lines and products and distribution warehouses and blah blah, blah. And we're going to compress cogs and we're really going to lean out the team. And what will that do? That will increase efficiencies and that will increase ebitda. And you know what we're going to do? We're going to use AI, whatever that means. There's no plan for it. We're going to use AI and we're going to implement the right technology into this roll up strategy. And of course this is going to have a positive net impact on payroll, HR and whatever. Great. Okay, you can pull all these levers, but if you're buying incorrectly just because you have a mandate to buy, that's a problem. Just look at what happened to the single family housing market. When you take a look at invitation homes and they have a mandate to go deploy billions of dollars in buying single family rentals across the United States. Are they going to be making bad decisions on some properties? Of course there will be toxic assets. This is also what happens in the business world when you're acquiring different businesses and you just don't pay attention because you don't understand the post close levers that you can pull or the pre closed levers that you can pull to get a discount to the multiple that you should be doing in the beginning. You're done.

Yeah. I think that it goes back to the diligence and industry thesis that you mentioned before that if you know what you're looking for, you'll know better whether this is the play that multiple expansion initially is possible. And you've been more thoughtful about finding the type of business where that works rather than just kind of a scattershot approach and then finding a business that looks decent and saying okay, I'm going to put AI in and expand it. So makes sense. I was wondering if you could talk about some of the industries that you are more bullish on in terms of acquisitions. And I know that you've been involved in dental, so maybe if you could talk about the ways that you do add value in some of these different industries that you're looking at.

Yeah. So we could talk about dental. I love healthcare and I love core infrastructure. I think about like construction, management, heavy machinery, manufacturing types of businesses. I like it because it's not going anywhere. It's relatively safe from any major economic upswing or downswing. When you look at something like healthcare, ophthalmology, urgent care, veterinary clinics, people still have teeth that need to be fixed. Right. So one of the things that I take a look at for dental acquisition is, is it a general practice or is it subspecialty? If it's general practice, great. What's the configuration of the office? What's the active patient base? Is there an opportunity to expand the footprint of the practice from say 4 ops, 4 operatories to 10? And when we do expand, are we putting in another gp? How are we optimizing the patient journey? How are we optimizing the employee journey? How are we optimizing the provider journey? How are we paying attention to the different payer mix? Is it just Medicaid? Is it fee for service? What is it? Are we going primarily insurance? What's that deal? And then should we add in subspecialties of dentistry? Should we do endodontics, oral surgery? Is that needed here? What's the competition? Can we buy the competition? Maybe that's a unique opportunity as well. So all of these levers together work like a beautiful orchestra to not only increase revenue, but also increase EBITDA and start to expand the multiple. I'm a big believer in healthcare. It's not going anywhere. Professional services, not going anywhere. SaaS is interesting. I just exited a company last year called NV Hub, where we provided, and they still provide healthcare education services to nurse practitioners around the country. I built a platform that took their clinical rotation journey from months to minutes. That's a pretty unique value add, but we could probably be bolting on additional services there to maximize the value of this organization. So am I a big believer in SaaS? Yeah, for sure. I love SaaS, I love AI and I love tech. Question is, is it good enough for the industry that you're serving? I'm going to stick to my two I love healthcare and I love core infrastructure industrials. That to me is just perfect. It's not going anywhere. You still need food, you still need roads, you still need health care providers. It doesn't matter if you're an np, an md, a do a PA and rn, whatever, you still need them. You're going to get sick and you'll want to go see somebody. You know what didn't get really disrupted during COVID Dentistry? Generally speaking, from the dentist I've spoken to, they were closed less than two weeks during the whole of COVID Less than two weeks. Why wouldn't I want to take advantage of that industry, especially than buying a business, a practice that's been around for 20, 25, 30 years that largely went unaffected because of COVID I think that's pretty cool.

Yeah. The benefit of buying businesses now is if you see something that survived during COVID it's probably a pretty good business. So definitely good to be involved there. You mentioned that you had an exit recently. I was wondering if that's part of your thesis. Do you think long term, in terms of strategic exits, financial exits, what's your goal when it comes to that?

So before you even buy a business, you should know exactly what you're doing with it on the exit. Are you going to sell it up river? What's the deal? Am I going to sell this dental roll up to like an Aspen Dental or a Great Expressions or a Heartland Dental? Mona, Are they the right buyer? Maybe, maybe not. But I know exactly who is and I know exactly the multiple I want to sell it for. I definitely want to sell it for north of 12 times EBITDA. And by the time I'm done in five to six years, we'll own anywhere from 30 to 50 dental practices on the eastern seaboard. My EBITDA will probably be anywhere from 15 to 20, 25 million. Right. So that's it. Sounds pretty basic. It sounds pretty boring. Sounds kind of like not cool. But you know what? That's pretty cool to me.

It definitely is. I think that's the right strategy and it's much more predictable than some tech company that may or may not make a billion dollars. But it's like less than a 1% chance that it actually will. So it makes more sense to do things that way.

Exactly.

Was there any other message you wanted to get across or anything else we didn't cover that you might like to talk about?

Well, I'd say this if you have an inclination. You're listening, you know, maybe you're identifying a little bit with what I'm saying, or maybe it's speaking to your soul. Say, feel free to reach out, ask questions. Again, there are stupid questions. So do your homework. I'm like my dad. If you have a question, show me your work and then ask your question and then I'll help you. But I'll also say, if this conversation, we started off talking about who we are as a species and like energy, I would say, when you're just starting off or you're already on your path as a search funder, pay attention to who you're being with, the people you're interacting with, whether they're brokers, whether they're capital partners, whether they're business people, whether it's your spouse, whomever. Pay attention to that because that person, that energy matters. Beyond that, as you scale, have teams to help you along the way. First team, you need due diligence. Second team, closing ops. Third team, post closing ops. And last but not least, fill the gaps. If we're able to fill the gaps and get rid of what we don't need and fill in with really strong foundational, hey, this is what I absolutely need to get to whatever my goal is, I want to be like this person. Great. You live in a country, in a world, in a society where anything is possible. If you have the right conversation, if you have the right attitude. My. He was my seventh, sixth, seventh grade teacher, eighth grade teacher, history teacher. Mr. Roach, he had this thing on attitude. Just a one pager on attitude. And I kept this thing this entire time. And unfortunately, Mr. Roach passed away. But to summarize, what he always used to say about attitude is attitude can be dreamy. Attitude can bring you a lot of despair. But if you use it right, you can change anything that you want about yourself, any situation and anybody else that you come across. And I think that's so perfect. He was the kind of guy that, you know, if he was having a down day, change his attitude. Now you're having a good day. How many times have we woken up in the morning, stubbed our toe, looked at ourselves in the mirror and said, you look disgusting. Brush your teeth, the toothpaste falls on your actual T shirt. And you're like, God damn it, this is just, you know, what the hell? And you walk out the door and your car has a flat tire, and you've got to deal with that shit for like, you know, 45 minutes. AAA doesn't get to you. Now you're pissed off. You're sitting here in 98 degrees summer heat in Atlanta or wherever, and you're wondering, okay, well, this day isn't going to get any better. Then you finally fix the tire, you get to Starbucks and you're in line for like an extra 45 minutes. They screw up your drink and now you're into work and you're just pissed, right? Like we've had those days. So just check your attitude. And that, guess what, is a form of resting in your awareness. Because if you're checking your attitude, you get to rest in your awareness and change who you are being in the moment, not only to yourself, but also to the people around you. And I would say, last but not least, don't forget to love yourself. Don't forget to believe in yourself. Just don't be a douchebag to yourself, because that's really easy to do. It's really easy to get down on yourself. And I, I got down on myself. I thought about killing myself twice. I'm like, this is worth it, this bullshit. What am I even doing here? I'm in the middle of an investigation. I pretty much failed out of Michigan. I graduated, but it felt like I failed out of Michigan. I had $200 to my name. I was living in Lincoln, Nebraska, following a girl that didn't work out, but it's fine. And here I am renting a basement unit with like a small little sunlight window. And the only thing that was working for me was the secret that I got on a DVD from one of my mentors and he said, watch this. Before you decide to do anything else in life, watch this dvd. And it changed my world again. Just another perspective. So before you get down on yourself, realize that people would kill to be in your position.

Amazing. Very wise words. Thanks so much Avi for joining the podcast. This episode of Search Funded is brought to you by smbpodcastnetwork.com the network is a collection of podcasts and shows from around the Internet which focus on bringing you interviews with amazing guests who share actionable advice, ideas and information for small and medium sized business owners and entrepreneurs. Visit www.smbpodcastnetwork.com to find more great shows and easily subscribe to be notified of new episodes. It's a great way to discover quality content. If you've discovered us today via the network, then I hope you're enjoying the show and will consider subscribing directly so you never miss any of our great episodes. This episode of Search Funded is brought to you by smbpodcastnetwork.com the network is a collection of podcasts and shows from around the Internet which focus on bringing you interviews with amazing guests who share actionable advice, ideas and information for small and medium sized business owners and entrepreneurs. Visit www.smbpodcastnetwork.com to find more great shows and easily subscribe to be notified of new episodes. It's a great way to discover quality content. If you've discovered us today via the network, then I hope you're enjoying the show and will consider subscribing directly so you never miss any of our great episodes.