Ryan’s and Roland’s Advice to Mark Cuban and the 4 Types of Shark Tank Investments

But in fairness, you're the napkin plan guy. And so I got my idea. I filled out my napkin, and now I need you to invest so that I can sell and serve 10, because I need to get the inventory manufactured of this thing that I'm going to sell, which is a unicorn harness fastening system. And I believe it's a great idea because I haven't seen it before. And I mean, I would like to have it if I had a unicorn. So, Ryan, what the heck? Invest in my company.

What do you say?

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Hey, everybody. Roland Frazier and Ryan Deiss here with another episode of Business Lunch coming at you live from Austin or the beach.

Yeah, I love that you were saying live, like we're recording it live, but nobody's watching this live.

No, it's coming live right now. If you happen to be on this recording with us, you are totally live, 100%. And we're both alive while we're recording this. So. So that's live times live, which equals live.

Yeah, all these things are very true and totally unhelpful. What are we talking about, by the way? What's going on? Like, you've seen, we. We just got back from a nice. Like we had a week long. We had our mastermind retreat for all of our mastermind members. That was awesome. In Cabo. And then you and I and the wives hung out for another week, another few days down there. That was. That was great. Then we had another event. I feel like we've basically been. Two weeks have been crazy. So what did we miss? What's going on in the world. Yeah.

So lots of cool things. One thing that I thought was interesting is I saw an interview with Mark Cuban where he said that I think he came on and I didn't. I know he'd been on this long. I want to say he's been on since like 2013 on Shark Tank and that over that period of time he's made about $20 million in investments in various deals that were on the show and that he's negative, that like he's lost more than he's invested. So I thought that was pretty interesting because $20 million is quite a bit to invest and obviously if you have and lose, if you've got billions, it still hurts. I mean, I, it's. To me it's like you're going to be smart about that, but, you know, are there other benefits? So I know you've got some cool, unique insights because you went down and were visiting with Daymond and those guys at one of the shoots and kind of learned some behind the scenes things. So I thought it'd just be interesting to talk about, number one, like, why would he stay on if it continues to be negative? Number two, what goes on behind the show. And number three, entrepreneurial investing is what he's doing, although they're primarily investing on a venture basis. And so I'd like to talk a little bit about what's the difference between how you invest as a venture investor and your success rates versus how do you invest as a more of what you and I call an entrepreneurial investor? The way we do it. And what are the success and failure rates of that? And that seemed like it'd be some cool stuff to talk about.

Yeah, no, and it is funny because a lot of people I know who like entrepreneurs love the. And if you're not familiar with what we're talking about. So TV show in the States been on for. Yeah, I think 13 years, 13 seasons now it's called Shark Tank.

Famous longer than that because. Because he wasn't on there for the first few years, so.

Oh yeah. I mean, so very popular show there has a Canadian and UK European equivalent called Dragon's Den and it's kind of one of the first business shows to really break out. And I think. Yeah, I mean, kind of my take on this is I'm not super surprised. I've. And you know this like we're been friends and have done business deals with Damon John, who's one of the other stars of the, of the show. And, and Damon, we were doing a Deal with him. And he's like, oh, why don't you come out to one of the shoots and come on set? So I did, and it was great. It was a lot of fun. And he was back there. He's like, yeah, if you see anything that you think would be cool for us to invest in, let my team know, because basically they. They're in his ear, right? Their teams are backstage, and if there's something they think is cool, they're like, hey, yeah, we should invest in this. And so there were some things. And maybe we could get into some. Some stories there that might be interesting but not necessarily relevant. But I will tell you what I know, based on my experience there and talking to some of the guys backstage, is they're making tv. And everybody kind of knows they're making.

TV enough so that they've got a psychiatrist or psychologist that's, like, there to help people who are freaking out. Right. Like, they create the drama. Yeah.

Well, what people don't realize is that just because a deal, quote, unquote, gets done on Shark Tank, it doesn't mean the deal gets done done. Because a lot of times somebody's like, cool, I'm going to do the deal. You know, they high five, they handshake, they. They hug it out. The very next thing that happens is that person that's on the show goes and sits with a psychiatrist who can just evaluate, you know, basically, is this person fit to be an actual business partner and receive any money whatsoever. And a lot of times they don't pass. Okay, I'll just say that I'm not going to name names, but one of the things that. When I was on the set with Damon and I was like, hey, that. That could be a good opportunity, it related to another business that we had, and Damon did the deal and it made the show again. I'm not going to. I'm not going to say what it was or what the business was, but it made the show. But that deal did not happen because when those people went back and met with the psychiatrist and then met with us, they were just jerks, right? Just pompous jerks. And then as soon as Damon walked in, they're like, oh, Damon. It's like, you're an idiot, man. Like, we would have been his partner on the deal. So I'm going to tell him, don't do it. And he didn't. So I will say, they're making tv and everybody knows they're making it. So my read on it with, you know, with Mark is That if he invested 20 million, he probably. It's not like he's lost all 20 million. Let's say he lost half, which would be a lot. Right. You know, you're talking about losing about 800 something grand over the course of, you know, 13 years. How much more would he. Would he have had to spend to get that level of media attention? And how much more has it turned into from an ROI perspective? So I think from, you know, roi, he's fine. He'd be fine anyway. But I think it's just a good investment. Right. If you're going to say the investment is the media, then that investment is more than roi'd. If he took all $20 million and lit it on fire, I bet he is ROI'd. That investment in media and the deals he's gotten into and relevance in the marketplace and all that other stuff. So I wouldn't shed a tear for Mark.

My guess is that he would have had to have spent more than $20 million per year to get the kind of publicity that he's got. If you think about like that reach of that show is and all of its syndication, and that just multiplies every year, right. As more outlets pick it up and they've got more and more episodes. So, you know, and they say, I think once you get over 100 episodes, you're like kind of set. So they've got, you know, they're. They're doing pretty good there. Although it was a little inconsiderate of them to schedule his shoot this year during our traffic and conversion summit, which meant that he couldn't come. So shame on you, Shark Tank, for doing that. But, yeah, jerk. But let's talk a little bit about. So what they do on Shark Tank primarily is, number one, there's a lot of people who are just ideas. And as Ryan said, I think they are looking for just good tv. So they're going to show you, just like American Idol did, the most horrible ideas possible. They're going to have one of those, and then they're going to have one that is totally a venture thing with no real sales and a crazy person that's going to ask for some ridiculous valuation. So they can say, how did you come up with that? It's not going to work. And then there's going to be a deal or two and that they think might be viable. And so you figure out the tearjerker. The tearjerker, yes. Yes.

Yeah, there's going to be a tearjerker.

Right?

There's going to be the Person who, like, you know, whatever. And that's. That's the one that it's like. It's always a terrible deal, but it always gets funded. So.

Because they kind of have to. Right. Otherwise they look like, like privileged rich people. So the. I think that, like, looking at the types of things when you're. If you want to get some takeaways from Mark's loss of 20 million, loss of an investment on 20 million, and most of the other sharks as well, my guess would be. But you understand that there are other reasons that you might choose to do that. So they're going to be all, okay, don't worry. I know you were worried about them. You do not need to do GoFundMes for Mark Cuban or Daymond or any of those people. They're going to be all right. But let's see what takeaways we can get. Number one, let's start with the tearjerker. So when somebody comes to you, Ryan, who has a sad story, and you are a very generous person, I know you participate in lots of charity work and stuff with the church and all that kind of stuff, what do you do? Like, how do you evaluate that person that's coming? And how would everyone who's watching or listening ideally evaluate that person? Let's talk about those four categories and how we might address them.

Well, I mean, I think just that you have to decide, is this a business deal or is this charity? And if it's a business deal, then it's one thing. And if it's charity, I never make loans or investments in charity. I make donations. And so whether it's a formal, like 501c3 nonprofit where I get a tax deduction or just somebody I know who needs a leg up, I don't give those people loans, and I don't necessarily want to own equity in their business. I will just give them money or help and it's totally free. Right. And I will do that and I will ask for nothing.

And I think that's the takeaway, is that if somebody, like when you're looking at. So we're going to go four classes of investment. Class one is sob story, sad story, whatever we want to call or just some might need some help, I think one of the worst things you can do is invest in their business to help them. It's better to figure out what they need and say, look, this isn't an investment I would make. I am willing to give you some money, and I don't expect that you're going to give it back because you're just going to be disappointed. It can't possibly meet your investment criteria unless your investment criteria really sucks. That being the case, then just, that's a gift. So sad story, sob story. Want to help somebody out and they happen to be presenting it in a business context. If you want to do it, understand that it is not an investment. Shed all expectations of receiving anything back for it and just say, I'm going to do this to help this person out and be generally a good human being.

Fair enough. But I want to clarify something on that because I don't want a bunch of people hitting us up with sob stories asking for free money. I can't remember a time when I. Yeah, I can't. I really can't remember a time when I've done this from a business perspective. Right. If somebody brings me a sob story and it's business, then it's like, okay, well, I mean, I might help them if I know them. If we have a personal relationship, I might take, take them out to lunch and give them some, some free advice. Right. In terms of money, no. Right. No. I don't give. I generally don't give money to individuals. I'll give money to something in support of an individual, but I generally don't give money to individuals because it creates dependencies. That's a whole other thing. But I definitely am not going to do it for somebody's business if they're like, if it's merely a sob story. Right. It just is not. It's not business and they're not a charity.

So the business, like the challenge is that most of those stories are. And I'll throw into this businesses that are losing money because just as if a relative is going to come to me, as they maybe have a distant relative that didn't even know how to spell my name correctly, was to come and say, I'm having such a hard time. I'm down and out on my luck and I can't pay the bills for the three cell phones that I have three cell phones. I don't have three cell phones. But anyway, and I'm not down on my luck. So could you please help us make that payment? If you do that, you know that there's going to be a cell phone bill the next month and the month after that and the month after that. If you invest in a business or you give money to a business that, that is losing money, that has no viable plan for how they're going to turn that around, you are only prolonging the moment of their inevitable demise. And so you can either continue to help them fail or allow them to fail. And so to me, the kindest thing that you can do is to say, that's not going to help you. It's only going to continue your ability to not face the problem that you face. And so that's got to change, right? So unless there's something that's going to change that doesn't make any sense as an investment anyway. Right? So I agree with you. So I'm not going to ever make an investment gift, even like that, because it doesn't really do anything positive. I mean, it just kind of.

And I'm not being a good steward of what I have, right? So anything that I have is, you know, it's a gift, right? I mean, even if I earned it, right. I still see it as, like a gift, a blessing. And so it's my job to be a good steward of that. And giving it to somebody who's losing money is not good stewardship. And so, no, I mean, will I buy them a meal, you know, help them out, like. But. But no, certainly. And I'm certainly not going to salvage somebody's business because they got a sob story and they don't. No, no. No way. No way.

This was my dream, and I wanted to make it happen. And I'm sorry, your dream is more of a charity, you know, or not a business thing, or you need to have. You need to take a closer look at it and reinvent it in some way that can be viable. And the best charities are actually viable, right?

Yeah, the best charities are business. Nonprofit is a tax status. Okay? The best charities make money. They're profitable. Okay. The fact they don't pay taxes on it doesn't mean that they're not still a good business. So there is no charity out there, nonprofit or otherwise, that you should give money to if it is not profitable, whether it pays taxes on that profit? Again, that's a tax distinction. Tax treatment in the code. It is not. It's not a business model. Making not, you know, losing money is not a business model.

Okay, Hope is. What is it? Hope is not a strategy. Right? Okay, so let's. We've got three left. Let's take a quick break for our sponsors, since that's part of our business model, to be able to tell you good things. And then we'll come back and we'll chat about the other three categories of investments and how we can help Mark Cuban become wealthier by not losing money going forward. That's really what this is about. This is kind of a. Yeah, almost an intervention. Coming up next. This is an intervention for Mark, you know. Okay. All right, we'll be back in a minute.

Hey, business lunch listeners. We're going to get right back to the show, but Roland wanted me to invite you to a brand new training that he's doing on acquiring businesses with no money out of pocket. It's something that he's talked quite a bit about on the show, but he's doing a free training where he's going to walk through the entire process. So if you want to get access to that, go to businesslunchpodcast.com EPIC. That's businesslunch podcast.com EPIC and you can get signed up.

Okay, we're back.

And as far as I can tell, what we're doing is working because Mark Cuban does not yet seem bankrupt. So I think we've done a good job so far.

You're welcome.

Yeah, you're welcome, Mark. Okay, so the other three types of investments. So let's go to idea. So when we're looking at somebody that comes to us with an idea, which. Do you hear this a whole lot? Do you have a lot of people that come to you and say, I mean, I got a great an idea for a company or something like that?

Yeah, all the time still. Which I'm surprised because I've tried to be pretty adamant about the fact that we don't invest in ideas. You know, it goes back to the scale. Right, level one. Yeah. Level one is sell and serve 10. So if you have an idea that is great, sell and serve 10. That means that you have to get 10 customers and serve doesn't just mean I sold it to them and now they hate me. It means that they feel served by the process. So if you have an idea, sell and serve 10 and then we can have a conversation. You're not an entrepreneur until you sold and serve 10. And I'm certainly not going to make any investment until you're beyond that point.

But in fairness, you're the napkin plan guy. And so I got my idea, I filled out my napkin, and now I need you to invest so that I can sell and serve 10. Because I need to get the inventory manufactured of this thing that I'm going to sell, which is a unicorn harness fastening system. And I believe it's a great idea because I haven't seen it before. And I mean, I would like to have it if I had a unicorn. So, Ryan, what the heck? Invest in my company.

What do you say, yeah, that's not my business, it's not my investment criteria. There are people out there who will invest in ideas. They're just not the two people on this podcast right now. And so there are folks who will do it, angel investors, super early seed stage. You would need to network with them. It's not the business that. It's not what we're in, it's not what we want to do. And going back to the napkin thing. Yep. Wrote out ideas on napkins, went and sold it like, didn't it? Unless you are doing something in just heavy, heavy R and D, you know, biochem. I mean, you got to be doing some really intense research level development, development kind of stuff to need investment before you can go sell something. You could sell some version of something. And so I don't buy it. Most investors today, by the way, even seed stage investors, don't buy it. They want to see some kind of traction. You know, you can find them if you just want to get an investment for your idea. I think, and you know, I put this back on you, I think it's dumb for the entrepreneur to do it because you're giving up a lot. I mean, at that early stage, you got to give up a lot of equity to get somebody to invest. They're basically a co founder. So I wouldn't want to do it. I wouldn't want to invest in it. I wouldn't want to do it on the other side.

That's what I was going to say too. Is that really the level one of the scalable system, which is the sell and serve 10 I think is a great, I mean, it's a great level one. We have it so low so that you can hit that and then work towards, okay, well, I've got that. Now how do I build this predictable, you know, this growth engine, this predictable selling system? And so I think in terms of if you're on the I've got an idea side, go validate the idea, get the 10 sales. And really I would recommend that you should build that growth engine and be sure you've got product market fit before you go and get any money at all, as you know. And definitely before you get equity money, maybe you want to, you're comfortable borrowing some money because you need that to, to do some tooling or engineering or whatever. But it's so expensive at that point. It's the worst time that you could ever do it. And that's the whole point of having friends and family to, you know, to kind of Help you along and prop you up a little bit, but not be an institutional investor who's just going to take pretty much everything at that stage and you're going to be, you know, you're almost better off. You hear on Shark Tank, to kind of refer back to the theme of the show where there'll be somebody that has something and they'll say, well, why don't we just license that to somebody that already does that? Why don't we license that to somebody that's already got sales and it's got a business and we'll actually make more money than trying to hire a bunch of people and have all the equipment and factory and stuff that surrounds an actual business. We can just take that idea and go to somebody and say, okay, we've protected the idea in some way. Now we can go and license it to somebody else. That, that to me is the only, you know, like takeaway from if you've got something that's going to require a whole bunch of money to get going, maybe think about licensing it. Even if you license it to somebody for a specific application in a limited market for a limited period of time, to get the idea and validate it is really important. Okay, so we got the idea validated.

And create some seed capital, right? I mean, that could be a fine way to create some seed capital. The basic metric that, a minimum metric I would give somebody, and it's what we have, what we put in place to see when you're ready to ascend beyond level two to level three in the seven level scale. One growth engine producing at least $10,000 a month in revenue, at least three months in a row. One growth engine, 10,000amonth, at least three months in a row. That is the minimum threshold for. I have some predictability of sales. I still wouldn't go and raise money that soon. But if you look from a SaaS perspective, right. Kind of the, when you make the leap from seed to series A is when you have 10,000 in MRR monthly recurring revenue. So it bears out across a lot of different industries. I would just say you can absolutely bootstrap this. One growth engine, 10,000amonth, three months in a row. Then maybe you start looking at raising money or getting investors while you're continuing to turn three into four, into five, into six, and hopefully 10 into 20, 30, 50, 100.

Okay, I like it. So that kind of leads to the next category of. We've moved from idea to more of like a venture stage. So this is a company that is generally got Something going. But they're very early on and maybe they are at that point a stage two or stage three company that they've got the 10k in sales three months in a row. They've got the growth engine, they've got maybe even they've put in an operating system, but they don't. And they've got some level of traction. So they're kind of looking to. But they're still early on and they're kind of looking to like, I need capital for that next stage. So what do you think are the key things to look for in companies like that when you're making an investment?

I mean, I think you want to see if you're going to put capital in, how's it going to be deployed. It's amazing how many companies at that.

Stage also very easy way to get sued you of proceeds. You got to be very clear, I'm going to take this capital in. Here's what I'm going to do with it. Okay, go ahead.

Yeah, I mean, and so that's what I would want to see if I'm going to make an investment in a company like that. Because rarely in a company that is still that early stage is capital, cash flow the thing that's going to propel them to the next level. It just isn't usually. I mean, when you think about the things that are going to constrain a business, there's going to be things with respect to just what's the general vision of the company. Right. Have we moved beyond the just don't die stage? Right. So that we can now begin to attract, you know, stronger people, better talent, you know, even motivate and inspire customers? You know, what about like their planning and their strategy setting? You know, do they seem like they can actually execute? You know, do you see a pattern of execution there? Or is it always like, yeah, this is where we're going to hit and they never hit their goals and they never do the things they said they're going to do. Money isn't going to fix those execution and the strategic, the strategy setting issues generally money is not going to fix demand at that stage because you're still dealing with a relative low quantity. That should be self funding. You don't need money to build systems. You don't need money really especially anymore to have great people. Right. I mean you can get good people for the stage and you know, so all the things that would hold a business back, money is one of them, can capital is one of them. It's just really low on the scale, especially at that stage. So I know when we're talking to businesses that are like that, we might do a consulting for equity type deal. You know, we might help them out, but we're not going to. We're rarely making significant capital investments because it's just not what they need.

Yeah, yeah. And if you're thinking about like on the consulting for equity side, it's a lot of times they're raising capital to buy the things that you might already have in terms of skill. Like they're raising the cash to buy, to exchange for a different kind of capital, which is intellectual capital or operational capital or labor capital. Right. They're, they're looking for something like that. And so if you've got that or got access to that, then you might, instead of giving cash, be able to save yourself some money and, and take a piece of the company in exchange for that. And that's, there's an opportunity right now for that came to us and they've got the, they've got a event that is an industry event and they're monetizing it. There's, you know, about 3 million in revenue, about a million and a half in profit. So it's a good profit margin. It's still early on because it's only a couple years in, but now they've established that they've got something that people want. So there's clearly a product market fit and there is monetization and there's profitability. That's to me a great place to think about consulting for equity. I don't think I would put any cash in because it's still, we don't know what it's going to be and it needs a lot of the things that we could provide that, that could help it go. So that's kind of that category of the company or investment. And then the last one I'm going to call the, the growth capital investment. So this is, and there are out there, by the way, venture funds that will fund your company when you've got a certain level of sales and you're starting and you need another investment to go to a, you know, an A round, B round. But there's also companies that are called growth capital companies for more mature companies that have already proved themselves and are kind of looking to go to the next level, which is really where we prefer to be. And you know, as in terms of investors, from a consulting for equity and a capital contribution cash standpoint, those are really the companies we look for. And we've got our own set of investment criteria. But if the company's not already doing a few million dollars in sales and a million dollars or more in revenue, it's generally going to be outside of what we're interested in. So for that category, Ryan, do you have any thoughts on an approach for that or is it just that dag on when a company's making a million dollars or more in profit and has been around for a few years and has good strong sales and a team, it's kind of hard for them to screw that up if they've got any kind of good plan at all.

Well, I mean, anybody can screw anything up. I think from we've. I've watched us in the past screw those up. So I want to be careful not to mischaracterize. But the, but I do think I'm.

Looking at it from a safety standpoint, like from a risk standpoint.

It's going to be the safest investment you can make. Right. I mean, there. Even if you do screw it up, there's still something there. Right. There's something to be said for the longer something has been around, the more likely it is to be around. There's a term for that. I forget what it is. So I think you've got that going for you. I think the challenging aspect of these kind of deals I'm going to put on my entrepreneurial investor hat the challenge with these kind of deals is that you do have more institutional players in growth capital now in the like 12, 24 months ago, it would have been nearly impossible to compete with some of the money that was being thrown at companies. Buy your tiger globals and you know, the big private equity. But there are a lot of, a lot of them. Even though there's money sitting on the sidelines, it's very scared money right now. And they're really nervous.

I just saw SoftBank down $23 billion in their investments.

Yeah, yeah. They might have overpaid for some stuff. And so I think now it is a better time if you're an entrepreneurial investor to get in on some of these deals that you might not have even had a chance at. But where I do think there is a struggle you at those deals. If you want to get in and you're not an institutional investor, you've got to bring some value adds. Right. So we're fortunate. We, we bring value to companies, whether it's from a sales and marketing perspective or from, you know, a strategy, structure, you know, operations perspective, partnership. Like we've got a lot of different Things that we can bring to bear that would cause somebody to want to partner with us, even if we're not bringing as much capital or giving them, quote, unquote, the valuation that one of the others might want. But they know day one, we can make some phone calls and, you know, deploy some, just some things from our bag of tricks and do stuff that money people can't. And so I do think at this level, the competition with institutional investors is higher. So what you need to figure out is how can you add value that gets them the things that they would otherwise need to pay for and really just get clear at this point, your investment criteria is everything like understanding what you're looking for, because it's going to be really tough if you're trying to scatter shot this. What do you think? I mean, this is, this is your, this is your baby. You're kind of asked me what I think, but this is, this is your thing. So how do you approach it?

Yeah, I know. I agree 100%. It's, it's, to me, it just. You've got to be really clear on what your investment criteria is. And if you, if you know that, then you know what to say no to. And that's most of the battle is, is the things that don't fit. And I do say, say not, not now, more than say no, because some things grow into being within your criteria that aren't right now. So it's good to keep the door open and just say, you know, hey, right now this business isn't quite to the level of the kind of thing that we invest in. Definitely think it's cool. Looks like you're going great places just a little bit too soon for us, and we'd love for you to come back. The thing that I've identified as one, one really big opportunity that gets you out of competing against institutional money is if you're looking for businesses that are doing more than, like, if you're looking for large businesses, and let's just say a large business is 5 million in revenue and more than a million in profit. So if you're looking for those kinds of businesses, private equity will dip their toes in those waters. That's about half on both sides of what they would ideally like their smallest deal to be. But, but because there's so much competition for those kinds of deals, they'll go down there. Now what's a big opportunity, and this is something that for me was just kind of a relatively recent breakthrough, is that they still can't do deals effectively. With owner operators. And their greatest risk is dealing with an owner operator. Which is why across all industries, owner operated companies are valued about 2 times profit, 2 times EBITDA, 2 times profit less lower than professionally managed companies. So one big opportunity is that there.

Are, you're saying two turns less. So if the average is seven, then for owner operated it's five.

Yeah, so. Well, so typically the average across all industries right now is 2.5 for owner operated and it's 4.5 for professionally managed. So, so, yeah, so two times profit. So if you're making, if the business is making $3 million a year right now and it's owner operated, it's likely to be valued $6 million less, 2 times 3 less than a professionally managed business, which is a lot. Right? Six million bucks. So to go in and find owner operated businesses that you can help professionalize and grow, you're probably not going to be competing with private equity. Even if the business is doing 6 or $7 million a year in profit on $10 million or more in sales because it's so risky for them to go in and have somebody that has a dependency on that one person that if that person leaves, the company falls apart. It's not that they can't bring in operators and all that. It's just that given all the other things they can do and all the other places they can put their money that's so small to start with that it's going to be a stretch for them to do and they're less likely even still to do it if it's an owner operator. So I like, like for me a really good sweet spot is to find somebody who is an owner operator who's got a team, but they're still critical to the business. And the thing is making a couple million dollars or more in profit that has a huge opportunity like that I'm willing to come in and invest capital in and time in and that, you know, that makes sense. Like there's a, there's one right now which you and I haven't got to talk about. They're doing about $12 million a year in sales. They're doing about a million eight in profit. And there's not really a strong team there. It's got a lot of upside and it's been around for a while, but it's, as a matter of fact, it went through a sale and a buyback. But, but it, that's another piece of indication that it was really dependent upon the owner. And so it needs to get professionalized before it can kind of go to the next level. But that way we're looking at something that's way less risk for us, knowing the things that we know about us. And we're effectively partnering with that person now. We're going to help bring in professional management. But unlike private equity that comes in typically and says, you know, we don't need you anymore, we've got our team that can do this, but they don't because these people aren't entrepreneurial. This person that's going out was and that's the opportunity. So to me like that that's a really big, you know, anybody that's listening to this, to me that's a big deal. As far as how can I invest in entrepreneurial companies that are already successful, that have not got to the level that they're going to be, that you're going to be competing with private equity and kind of dumb, you know, dumb amounts of money, but also you're going to have way lower, way lower risk going into and investing in. So what are your thoughts on that? We haven't got to talk about that.

Yeah, I want to, I definitely want to hear about that deal. The. I'll just say for everybody listening, you know, what Roland gave you there was just the base level of investment criteria, right? So entrepreneurial company, between this in revenue and this in ebitda. You want to layer in some other factors as well though, where you're going to bring, you know, you're able to bring value where you have some experience. And so that could be based on industry vertical. Maybe you're particularly skilled at working with family owned or turnarounds or you know, digital first or legacy. Like there's all these different things. Maybe it's an indus, you know, a geography. Just make sure, because we work with a lot of folks who are doing, you know, whether it's micro M and A or entrepreneurial investing or what have you. The biggest mistake that we see everybody making is having a poorly defined or too broad investment criteria. So I just want to make sure, because you mentioned one thing where you're like, yeah, look for these types of businesses. I don't want somebody to hear that and go, I'm going to look for those types of businesses. Well, good news, bad news. Those types of businesses that Roland described are everywhere, okay? They are everywhere. Especially when you look among baby boomers who are just running businesses and in many cases shutting them down because there's nobody to take them over. They're all over the place. But if you try to look at everything, you're going to look at nothing. So just narrow your search and ideally narrow your search to an area where you can bring some specific value or at least speak intelligently in a room full of the folks.

Yeah, exactly. So anyway, that's our advice to Mark Cuban, which he should probably not listen to because he's a way better investor than we are because he's on Shark Tank and has bill billions and billions of dollars of net worth as far as I know. But if you do find some value there and would like to continue to hear stuff like this, then we would encourage you to subscribe to the podcast so you don't miss any of the episodes. We have, by the way, proved this out. These four things in our own investing. So you know, we do have a bit of a track record here and a company that teaches people how to do this. So subscribe to the podcast. Also, if you like this stuff and want to share it with other people and get other people listening so we can build the community, give us a five star review. We would appreciate that as well and we'll see you on the next episode of Business Lunch Live. But not really.

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