Episode #543: From Idea to Exit-Venture Capital Insights from Chris Van Dusen

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This is Pete Moore on Halo Talks NYC. I have the pleasure of

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bringing to our podcast, Chris Van Dusen, to start off

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02/2025. We're gonna talk about venture

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capital. We're gonna talk about Sudeikko, and we're gonna talk about the pros and

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cons of bringing somebody like him into your business to help you scale

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it. Chris, welcome to the show. Thank you so much for having me. Appreciate

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it. So, so we met through, through a very passionate,

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networker and entrepreneur, Cirox. I wanna give a shout out

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to him. And, Chris, wanna take this episode and really try

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to hone in on for entrepreneurs. You know, what is

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the benefit of going to somebody like you, taking capital from you,

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the way your fund is structured, you know, to really match up the right

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opportunities with the right investors. So maybe you could give a little bit of your

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background coming from SoCal and, you know, talk

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about, talk talk about the pros and cons of taking capital.

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Sure. Yeah. So background, originally from the Northeast, came to

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California at the end of o nine. You know, I wasn't always in venture. I

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did get a degree in economics from William and Mary in Virginia, but my career

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was anything but but but linear. Right? Not the

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traditional route. You know, is in sales for many years.

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Had the opportunity to then go on the marketing side, and started understanding

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how companies really scaled, how they worked, started by an agency,

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and then had the opportunity to meet some some great cofounders, of

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ventures along the way, all kind of culminating in three exits, two

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in '21 that we sold and one in '19

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02/2019. So I have, you know, three exits under my belt, if

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you will. Congrats. Many other gravestones along the way

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as we know because everyone likes talking about their successes. I'm happy to talk about

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the failures as well. Real highlight reel. The real real highlight reel.

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The real. Right? Everyone shows you that home run swing. No one shows you the

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other strikeouts. Right? Sure. So I had these three exits. And, you

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know, during that journey, I met, this gentleman, John Garcia, who founded

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Sligo Capital back in 02/2017. And,

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loved their ethos of what they did. You know, we we talk a

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lot internally, about the difference between capital and smart capital.

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Right? Money and smart money. I thought they were really a a smart money type

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group. Again, love their their strategy. They invested in one

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of the deals that we took full cycle. So I joined

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them January 22, and our firm is different. You know, I was

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kind of alluding to that. The reason I see that is traditional venture.

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We're gonna go raise a fund. We're gonna find we're gonna have a mandate. We're

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gonna have something we're interested in. That interest could be around AI. It could be

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industrial manufacturing, ESG, you know, you know, consumer goods,

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you name it. And then you go raise capital for that

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fund and then find assets to deploy. What we like doing

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is a little different. We're gonna find great assets, great opportunities. We're

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gonna set terms on deals. We're gonna come in and help you. Then we're gonna

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go to our LP base and we're gonna or we're gonna go out, generally

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to, you know, what we call our COIs or our network and go raise the

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capital for that specific venture. It allows us a little bit of flexibility in

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that we don't just take on specific deals. We may

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do biotech to fintech to

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straight play real estate project. We're finding great ways to,

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to never make alpha for our investors. So when you take a look at,

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you know, one of the benefits of a private equity fund that would have

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dedicated capital or venture is that they say, hey. Look. I got a term

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sheet. I'm gonna give it to you. If everything checks out, you know, we could

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call the capital, and and fund this deal. Obviously, you've

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got guys that have had a lot of success, Garcia. So have there been

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instances where you have to pull back a term sheet, or would you guys have

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conviction on a deal and you wanna put down a term sheet? Look.

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We get this funded. Yeah. It's we'll get this funded. You

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know? To say it perfectly lays out to the timing that we

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had, I would think would be a little shortsighted. Right? I would say

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from time to time, we may delay, but we also make that in.

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And so I wanna make sure I'm clear here. You know, we're not causing delays

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or or hardship. What we're saying is, you know, a traditional venture shop may

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deliver that term sheet and fund within a week. We're going to

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discuss, hey. We need three weeks or we need a month to fund, but here's

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how this is gonna happen. Here's how we're gonna ladder in capital. That's really how

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we bridge this because you're right. It's the one thing we can't control in our

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model is is is time. Right? But, again, it

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allows us and our LPs flexibility. Yeah. Look. The private

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equity deal, the under over, I'm getting a deal funded from from an LOI is

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for, like, six months. So if you get deals closed in, like, a month,

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you know, you know, serendipity to, to everybody involved.

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You know, I would say it's, those are gonna be a little different. So maybe

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our full underwriting is the six months. Right? But from term sheet

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to delivery. And and the difference between the p kind of VC side and not

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to be pedantic is they're doing my you know, big minority or majority recaps are

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buying the company. So they're going, hey. We like what you have. Now we wanna

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really get in that data room and make sure our assumptions are correct. And that's

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your time. For us, we're gonna do that before we ever deliver a

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term sheet in venture. So there may have been and, you

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know, I would say last probably three, four deals that I've brought in have been

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what I would call incubated, meaning I've known or met the

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founder. I've been looking and understanding the company. We've

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been in the data room, and this could be upwards of four or five months

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at this point before we're ready. Mhmm. Because the type of deals we

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like to be a part of are ones where they are

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capitalized. Right? So think of seed round and and above, seed

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a b. They're capitalized. They're on their glide path, and

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maybe they're anticipating a raise in six months. So

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we're gonna watch them hit their KPIs towards that raise. We're gonna start

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discussing what realistic valuation is gonna be. We're gonna

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start going into the data room, and and that is that multi month

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process. But the minute we deliver a term sheet, we were already at the point

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where we know we have conviction we're going to do it. And then a lot

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of times, we're already having conversations with those LPs on our side to say, we're

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getting close to funding something like this. Is this in or we know it's in

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your wheelhouse, or is this in your wheelhouse, or do we wanna do something here?

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Yeah. Yeah. I was I was doing a rift the other day on,

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you know, seed round, series a, series b, series d, and I was trying

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to remind the audience that the reason why you get a series b

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is because the series a went well, whatever experiment that was. Could you

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kind of, you know, pour some either cold water, warm water,

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or, you know, lukewarm water on the fact that, like, look, you don't

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automatically get to, you know, swing at the bat every time and and your

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valuation just because the valuation of series a was 6,000,000,

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you have to, like, prove that and then validate, you know, at each

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step, of the way. Maybe just like an education for

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entrepreneurs to kinda think like we do and understand that, like,

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value is created or it's not created. And if you get another swing at the

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bat, I can't give you the same value for that swing. Yeah. You

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know, a a great way to look at it is and it almost goes up

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to a little bit of a more macro question, which is, when is it the

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right time to take capital from someone like me, right,

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who does this for a living? And it's really saying and it depends. It's

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saying, I'm ready to grow to this next stage, and I have market

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signals. I have new clients. I have manufacturing needs to get done,

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whatever it may be, to get to that next level. So let's start. The reason

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why you you received that valuation for your series a is you are on

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glide path towards it. You just needed capital to really grow the team,

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grow your grow something. Right? Now to qualify for your

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series b, did I hit that, those goals? And

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then secondarily, am I on glide path for the next

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big growth or step function of my business?

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And if the answer is no, then you're not gonna get this large new valuation.

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If the answer is maybe, but I need a little bit more time, maybe you

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do an extension round, what they call an a extension. Right? Where it's

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maybe the same valuation because you really haven't hit it, but you're very close or

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you're you know, things are looking like they're going to be at. There's a macro

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factor that that slowed it down. And so but to to your

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point, if we're underwriting the next round, we've

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set up modeling around it to say, here's what you

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should be at with the capital we have provided. And if you're there, great.

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If you're not, we're really gonna wanna understand why. And we're certainly

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not gonna give you the valuation you'd want. And as a founder,

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every time you take capital from us, you're being diluted and same

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with everyone else on the cap table or on, you know, on the the ledger

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of owners, if you will. Right? And so I don't wanna raise it

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that 6,000,000 and then come back and need more capital at the same 6,000,000

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because that's just dilutive for I don't wanna say no reason,

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but that's extra dilutive to everyone involved. But if I go out and hit my

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goals, I'm gonna bring in more capital at a higher valuation, and it's gonna be

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less dilution because I am on path to where I need to go.

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This is Pete Moore. I wanna let you in on a little secret. There's this

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company called Promotion Vault, and what they do is they give out rewards from

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retailers that allow you to incentivize your

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members without having to do zero down and one month

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free or giving away shakes or giving away t shirts.

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What you wanna do is build a rewards program that lasts,

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that people value, and that doesn't discount your own products and

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services. So here's the deal. There's something called rewards vault.

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The rewards vault is going to allow a member to set up their

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own profile. They are going to answer questions. You are gonna get those

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answers. You're gonna be able to target those members, and you're gonna reward

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them inside your club, inside your spa, and outside of

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the club, and outside of the spa to get them to become loyal,

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to get them to pay their monthly dues, and to be

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rewarded properly for the actions. A lot of companies are cutting back on

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rewards. You shouldn't be. Promotion Vault's your answer. Trust me.

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This is real.

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Yeah. One of the mistakes I made, which I am very vocal about my

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mistakes in life, you know, and and and things that I don't want other

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people to, to have to experience. So at least I, you know, tell a story

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and say, hey. Do you want this to happen to you? Yeah. I was kind

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of, like, trumpeting the fact that, like, I'm a I'm a angel investor. And I

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realized that being an angel investor is a great way to kinda lose money

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because, you know, like, I'm supposed to kinda be an angel

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and, like, really nice to the entrepreneur all the time, and, like, I'm just trying

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to be there to help. And then when I give advice and they don't take

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it, you know, like, somehow, like, this angel from, like, what

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was that movie? Like, revenge or something or, like, yeah,

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something like that. Like, Chip Belushi. I think it was you know, like, the angel's

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like, okay. No problem. No big deal. You know, pat on the back. Good

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try. And if that happens four or five times, you realize that, like, the angel

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is kinda like could be like the angel of death because it's like, you know,

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like, how many times do you not listen to me? And I'm, like, still trying

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to be, like, helpful. So Yeah. One, do you ever use that term?

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Two, why does that term exist? And, like, when does the angel become,

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like, rational? Yeah. Right? So it's

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it's tough. Like, let's let's let's go up on and say,

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let's start adventure. I'll I'll answer the angel question, but let's start venture what we

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do. There's some there's some facts out

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there. Right? One is if you look

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at traditional venture, they're gonna do a fund as we were talking about. And

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those funds traditionally apply portfolio theory.

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Now portfolio theory, very kinda 30,000 foot, is

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I'm gonna make 10 investments, and let's assume they're the exact same.

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And I know that four of them, just like baseball we're talking about, I'm gonna

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strike out four times, and then I'm gonna have one home run. And that thing

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is gonna return a really good, if not the entirety of what

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I've raised out of that fund. And then in the middle, there's gonna be some

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singles, doubles, triples, hopefully. Right? And that's gonna get us our overall return.

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Typically, as an angel investor who's not

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doing early stage investing in a fund but is actually angel investing in a deal,

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I have one deal. Meaning, there's no portfolio

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theory. You have your one at bat. Right. And so that just

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by the law of statistics and probability says I have

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a much more a much harder path

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to getting a return there. Now I can build my own portfolio by making

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10, but now my cash outlay is much larger than,

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than it would have been on that one. Number two,

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Angel, if we think about it, the reason it's being used is it

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is extremely early stage. So, traditionally,

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I call it friends and family and Angel all being around the same

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thing. Mhmm. We invest in seed. Why

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that's important is, traditionally, these companies are in revenue,

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have market signals, and need capital to expand up

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before they do a large a round. If I

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go precede or what we call angel, they may be in r and d.

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They may be just have their ideas or they're about to start a

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beta, but they're traditionally not in market, which means you

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believe in their idea. You just it's not in in

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practice yet. So you're taking a higher risk overall.

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It's tough to be an angel in a series b because this company is now

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doing revenue, might even, depending on the sector, be in EBITDA, meaning

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in profit. Are you much of an angel anymore? No. You're an investor at this

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point because you're investing in a in in something. So it's, you know, me and

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you saying we have an idea to revolutionize this space. We have put

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our capital in and gotten it to this place to show you there's something here.

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Now we want angel capital to come help us bring it to market, and then

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you come to someone like me to actually commercialize it from a growth

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perspective. Okay. So I might be treating this almost like an entrepreneurial

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of, angel therapy session with

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Van Dusen, you know, therapy. Some of the things

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that I've dealt with, you know, just to get it out there because your perspective

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on on things that I've that I've experienced is kind of like how I

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feel like this should play out now because I'm I'm telling you what I did,

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and now people can say like, Maybe he shouldn't have done it that way or

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you're giving a perspective. So let me ask you this other question.

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You've had LPs in deals that crush it, and and those same

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LPs, you know, are in in your other deals. That's

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fine. But then you've got LPs that have they're in, like, the four strikeouts,

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and they missed the home run, and they missed the single, and they missed the

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double, and they missed the triple. You know, how do you kinda say, like, look.

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We didn't do a fund. We came to you on each one. That's kinda like

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the pros and cons of, you know, being able to pick your own vegetables.

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Yeah. So so I'll answer two ways. One is,

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you know, it's it's a delicate balance

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because every deal if we put up 10 deals right now that

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we went and sourced together, Pete. Right? We look at it and go, oh, these

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have amazing potential. Maybe disproportionate. Maybe some are gonna be the next huge,

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you know, unicorn, and some you're like, no. This is gonna be a great return.

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There are things like interest rate cycles we just went through and are still going

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through. Global pandemics that happen, right,

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that end up derailing things that you can't foresee. Traditionally,

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the reason why you'd invest with an organization

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like ours or many others out there is there's a level of due

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diligence to say, do we believe in this, and do we have

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modeling and the right underwriting to say we

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believe it can happen versus an individual investor finding what we'll

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call a club deal, right, the country club deal, trying to figure

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out whether or not this is right. Right? So there's a level of sophistication that

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starts there. Number two, our investors,

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especially, I mean, certainly on the equity side, are what are considered accredited

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investor or qualified investors. These are individuals who do not want to lose

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money but also are making small bets.

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And anytime you're gonna do and I'm not a financial planner, so this is

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not financial advice. But when you are looking at, I have x

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amount per year or in my net worth to invest.

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Right? There are certain ways to build portfolios. And, traditionally,

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something like this is a very small part because it is

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going to naturally be more speculative than a mutual

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fund or a CD or an ETF you're going to buy. And so you're

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gonna look at this as this small piece that if it goes away

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because of reasons within the, you know, growth trajectory doesn't

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happen, then this is my exposure, and

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that exposure is x y z capital. And so but if it

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hits, that could be the biggest return in my portfolio for the

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year. And so there's just a little bit more of a speculation there.

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I would also say, and it's a weird way, and I don't take credit for

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this. I heard this, from someone a few years ago, and it's such an

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interesting way of looking at it. Most professional investors,

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which I hate to call myself one, but this is what I do for a

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living. Right? So by technicality, it's a professional. We are not as

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mad about the money we lose than the money we did not

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have the opportunity to earn. So let me break that down for one

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second. If we invest, let's just say,

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$100,000 into a deal and it goes wrong, that is

298
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not good. We understand that. We have lost $100,000.

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If we pass on a deal and

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00:18:29,990 --> 00:18:32,809
that 20 x's, I didn't lose a hundred thousand.

301
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Right? I lost 22,000,000. Yeah. And

302
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so you've gotta That's tough. That's tough love on yourself for sure. Exactly. Right?

303
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We're like tough. That's where there's this balance of we

304
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wanna participate in great opportunities, and we wanna be able to try

305
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to see into the future on what these things could be.

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But we're constantly having to evaluate and underwrite

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and do due diligence on, is this going to be something? How do we see

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it? And then with that capital outlay, do we

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believe we can be good fiduciaries to see it through from an investor side

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and investment side? Also, if we miss,

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what's the lie what what would be that miss? Right? Yeah. And there are

312
00:19:15,715 --> 00:19:19,155
no one bats a thousand. Never met that person in my life. So it Well,

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he's not be there today, buddy. Yeah. And

314
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so there's this level of, you know, we're constantly trying to figure

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out those great deals. Right? We'll use this, and it's a little

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kitschy, but, like, we wanna be truffle pegs. We wanna find these amazing deals and

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bring them to our investors to to participate in. But there's definitely a

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difference between the the hard capital lost and the,

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opportunity cost of not not participating. So so

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different stories over the years where, you know, like the guy from FedEx, he was

321
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kinda, like, on his last leg, and, you know, he got, like, a c plus

322
00:19:50,549 --> 00:19:54,389
or t t t plus or something on his business plan and then,

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you know, had, like I don't know. I think he might have gone to Vegas

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or something, like, put his last $10 on to cover payroll, and then, bam, it

325
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turned into, you know, what it did. One of the things that I've dealt

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with, going along the lines of our, you know, you know, this,

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you know, CVD therapy session here on the on the venture path,

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is, like, it's really hard to go to an entrepreneur who's like, you know,

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they're working eighteen hours a day. You know, they're they're trying to make it work.

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And, like, look. Like, it's like, the market's not resonating with your your

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product. Like, I put in here, you know, you know,

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capital to I put in rocket fuel, and, like, we're not going

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any faster or we're we're going in reverse. And you gotta shut those

334
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four out of 10 companies down, or you gotta kinda let them die on their

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own, or they gotta just turn into, you know, like, three or four people doing

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something that kinda keeps the lights on. One of the things that that I

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ran into is like, hey. You're an angel investor. You know, a big advocate of

338
00:20:47,490 --> 00:20:50,210
the business, and you're like, hey. Look. You you didn't make it work. You know?

339
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Now I'm gonna have to, like we're probably not friends anymore. It's it's not my

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fault. Right? But, like, I can't support you. And we were

341
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friends, but I was your investor. Like, I wasn't, like, your buddy like, you're not

342
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my fraternity brother, and you're not, you know, we're not related. So what

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are some of the things that you've had to deal with maybe on a no

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names basis or maybe an elegant way to kinda say, like, look. I'm taking

345
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this exit ramp, and, like, I'll give you back my equity. I don't think it's

346
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worth anything. I'll write it off as a as a tax write off. But please

347
00:21:18,059 --> 00:21:20,940
don't call me to ask me for money because I'm not your I'm not your

348
00:21:20,940 --> 00:21:24,705
bank account. Right? Yeah. You know, personally,

349
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I haven't had that happen, so I wanna be

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clear there. What I have had is you

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have certain investments, and we can see them you can see these stories a

352
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lot when you look at the origin stories of some companies that may raise

353
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good money, their own path, but you're right. There's something

354
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within the business that just can't be worked out. Yeah. Or you'll hear things

355
00:21:46,950 --> 00:21:50,789
in, let's call it, fintech or biotech where there's some government change

356
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that comes through that affects all the way through your business, and you

357
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can't recoup costs or the entirety of your

358
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model changed. Right? And so when you're looking at that, that's what we call

359
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in the business a pivot. Right? Is there a pivot place you can go?

360
00:22:06,150 --> 00:22:09,670
At its largest, and there are multiple, you know, Silicon

361
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Valley dream companies today that started one direction,

362
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really couldn't execute and then pivoted and went a different way, and

363
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now they're thriving. What is incumbent is having,

364
00:22:22,414 --> 00:22:26,095
especially when you're making an early stage investment at our level, right,

365
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Angel's gonna be different because you can't command the same power traditionally, is to

366
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get a board seat. And that is traditionally a minimum that we look

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for depending on if we're leading or or following into a into a

368
00:22:37,070 --> 00:22:40,429
round is a board seat or board observer because we want the ability to

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understand that level of detail in the business early

370
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on to help. Now one thing about Sligo's model that's a little

371
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different is, you know, we we're a fairly large team and all. You

372
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know, there's there's 11 of our senior partners. We have about 40,

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40 team members, including our leadership. And in a lot

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of cases, we go in these companies similar to what private equity would do,

375
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but early stage, and help them during this formidable time. So we can help them

376
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see over the horizon, not only capital needs, but certainly strategic

377
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needs. And if something doesn't resonate, start having those conversations now

378
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about where you can pivot to try to mitigate that issue. Right?

379
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But you're not immune to it is is the problem, and it happens.

380
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You know, I would say if if

381
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it's tough when you come in between someone and their money. Let's just start there,

382
00:23:29,970 --> 00:23:33,810
right, to go to the therapy session. Sure. And so there's a

383
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level of if you are an investor and you're a

384
00:23:37,250 --> 00:23:40,630
minority investor, which angels are, especially early on,

385
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Are you a past investor? He goes, here's some cash or here's some capital. Let

386
00:23:45,325 --> 00:23:49,005
me know how it goes. I'm in your corner. Or are you, as

387
00:23:49,005 --> 00:23:52,764
part of your angel strategy, rolling up your sleeves and helping? Because that's

388
00:23:52,764 --> 00:23:56,065
traditionally what these founders want at that level of investment.

389
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And if you're not doing that, then my question is why are you an angel

390
00:24:00,059 --> 00:24:03,520
investor in the first place? Traditionally, angel investors

391
00:24:03,980 --> 00:24:07,600
have something to give to that company to help other than capital,

392
00:24:07,820 --> 00:24:11,575
which means you're gonna understand what's happening early on, and you'll be

393
00:24:11,575 --> 00:24:15,175
in the foxhole to your own level. And at the end, if it goes

394
00:24:15,175 --> 00:24:18,855
away, you're gonna go, wow. We did everything we could. This just didn't

395
00:24:18,855 --> 00:24:22,475
work. And that puts you in a different understanding or understanding

396
00:24:22,535 --> 00:24:26,200
position, around it. If you're just throwing capital and saying, why

397
00:24:26,200 --> 00:24:29,640
didn't it work and you took my money? Well, I'd question whether or not you

398
00:24:29,640 --> 00:24:32,920
actually know what was going on and whether or not that founder was doing everything

399
00:24:32,920 --> 00:24:36,460
they possibly could. The answer could be yes, and then I'd say, okay.

400
00:24:37,145 --> 00:24:40,985
What not why are you mad? You lost money. What could you

401
00:24:40,985 --> 00:24:44,424
have done? And on the other side, if you just throw money and the founder

402
00:24:44,424 --> 00:24:47,865
didn't do everything they're supposed to, my question is, how do you not know that

403
00:24:47,865 --> 00:24:49,164
being that early on?

404
00:24:51,900 --> 00:24:55,520
This is Pete Moore. Here's the last tip for you of the podcast.

405
00:24:55,980 --> 00:24:59,820
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422
00:26:03,035 --> 00:26:06,795
So, the last last question here is, you know, our main business

423
00:26:06,795 --> 00:26:10,475
is is mergers and acquisitions. Out of that business, probably

424
00:26:10,475 --> 00:26:14,235
80% is, selling companies. This is usually selling

425
00:26:14,235 --> 00:26:17,980
companies that have EBITDA and have, you know, either under a

426
00:26:17,980 --> 00:26:21,500
franchise or a franchisor. Quite frankly, you know, I'd say

427
00:26:21,500 --> 00:26:25,260
probably 50% of the deals close, whether it's, you know,

428
00:26:25,260 --> 00:26:29,100
valuation expectations are met. Something could happen negative in the

429
00:26:29,100 --> 00:26:32,654
business like you're talking about, like a Sundan tax that came on one of our

430
00:26:32,654 --> 00:26:36,255
company's litigation on a wage an hour with,

431
00:26:36,575 --> 00:26:40,015
in the state of California where you have to pay overtime. Well, actually, you have

432
00:26:40,015 --> 00:26:43,534
to pay everyone hourly for, like, waiting for a massage, or

433
00:26:43,534 --> 00:26:47,250
personal training, things like that that that are not, you know, somewhat uncontrollable.

434
00:26:48,030 --> 00:26:51,710
In the deals that you work and the and the ecosystems that you work in,

435
00:26:51,710 --> 00:26:55,470
can you explain to the audience here, like, how hard it is to actually sell

436
00:26:55,470 --> 00:26:59,245
a business and, you know, actually get liquidity? Because I think

437
00:26:59,245 --> 00:27:03,005
sometimes people think like, oh, I could buy. It's like it's like oat milk. Like,

438
00:27:03,005 --> 00:27:05,965
that that flies off the shelf. You know? So I think that flies off. It's

439
00:27:05,965 --> 00:27:09,725
like, no, dude. This is like cottage cheese with, like, a cover that really

440
00:27:09,725 --> 00:27:13,000
nobody knows what's in it. And I'm trying to sell something, and I have to

441
00:27:13,000 --> 00:27:15,660
explain everything that's in it, and it's not that easy.

442
00:27:16,760 --> 00:27:20,520
Yeah. I, I had the great fortunes, let me start there, of

443
00:27:20,520 --> 00:27:24,295
selling two companies in one year that I was involved

444
00:27:24,295 --> 00:27:27,975
in as an operator, meaning they were mine. Right? Just one of the either

445
00:27:27,975 --> 00:27:31,815
cofounders or partner in, I was operating within the business. I will

446
00:27:31,815 --> 00:27:35,575
tell you late late nights, very early mornings, everyone's yelling at

447
00:27:35,575 --> 00:27:39,160
everyone. Now you think it should be a kumbaya. Right? But it's

448
00:27:39,220 --> 00:27:42,040
not necessarily. You as a founder,

449
00:27:43,060 --> 00:27:46,900
entrepreneur with your cofounders or or yourself, this is your

450
00:27:46,900 --> 00:27:50,425
baby. This is what you've spent years of your life, which means,

451
00:27:50,425 --> 00:27:54,125
naturally, you have a bias towards its value being

452
00:27:54,345 --> 00:27:57,885
high. As a buyer of a business,

453
00:27:58,265 --> 00:28:02,025
you have a bias that you know it's valuable. That's why you wanna

454
00:28:02,025 --> 00:28:05,800
buy it. But you also want to buy it at the most fair

455
00:28:05,800 --> 00:28:09,420
price, which traditionally is not the same as the founder's value

456
00:28:09,560 --> 00:28:12,780
for their company. So there, we start the negotiation.

457
00:28:15,560 --> 00:28:19,335
And the buy side is looking for

458
00:28:19,335 --> 00:28:22,855
reasons to retrade the value down or

459
00:28:22,855 --> 00:28:26,695
question your assumptions. And as a founder, you're saying, no.

460
00:28:26,695 --> 00:28:30,235
I know my business is worth this because of all the amazing things,

461
00:28:30,615 --> 00:28:33,115
both hard things. I use hard things like,

462
00:28:34,350 --> 00:28:37,650
contracts and IP and inventory

463
00:28:38,110 --> 00:28:41,790
versus soft costs. Like, I've spent all this time, and I know how

464
00:28:41,790 --> 00:28:45,330
it's how it's valued to me and everyone who works here.

465
00:28:45,550 --> 00:28:49,205
And that starts being its own rub as well. There was an

466
00:28:49,205 --> 00:28:52,965
old joke an attorney told me a long time ago. If you're not dropping excluders

467
00:28:52,965 --> 00:28:56,265
and yelling at each other, are you even really negotiating for this deal?

468
00:28:56,885 --> 00:29:00,265
So the harder you the harder it becomes

469
00:29:00,565 --> 00:29:04,169
sometimes means you're actually driving towards progress. But I will

470
00:29:04,169 --> 00:29:07,929
tell you every all the sales I've been a part of, every

471
00:29:07,929 --> 00:29:11,690
day, just like the entrepreneurial journey, it's this is the best day of my life.

472
00:29:11,690 --> 00:29:15,450
We're gonna get it, and this deal is already over. I just am realizing it

473
00:29:15,450 --> 00:29:18,345
now. And it keeps going like that for months.

474
00:29:18,965 --> 00:29:22,325
Right? And then you get it done. Yeah. I joke I joke around that every

475
00:29:22,404 --> 00:29:25,365
you know, depending on how many deals we're working on at a time, it's kind

476
00:29:25,365 --> 00:29:28,965
of like playing a doubleheader in baseball. You win one, you lose one, you're trying

477
00:29:28,965 --> 00:29:32,740
to, like, figure out, like, what really happened today. It's like progress that,

478
00:29:32,740 --> 00:29:36,020
like, 50, you know, the, you know, one on one or two and two or

479
00:29:36,020 --> 00:29:39,220
what have you. Yeah, man. So so in closing here,

480
00:29:40,020 --> 00:29:43,780
you know, we'll, we'll put all the information up, and and hopefully entrepreneurs find you

481
00:29:43,780 --> 00:29:47,355
or vice versa, because I like your your model and also seems

482
00:29:47,355 --> 00:29:51,195
like, much more value add than, you know, a group that's coming in

483
00:29:51,195 --> 00:29:54,875
and just trying to portfolio theory, on its own. I think that

484
00:29:54,875 --> 00:29:58,255
that that ethos and and and that starting point actually

485
00:29:58,810 --> 00:30:02,190
makes your the psychology of you putting money into a deal different.

486
00:30:02,730 --> 00:30:06,410
So so kudos for that. And if there's any, you know, advice

487
00:30:06,410 --> 00:30:10,170
or, you know, you know, quotes or, you know, like, you

488
00:30:10,170 --> 00:30:13,985
know, something else somebody told you, that, that you wanna share with

489
00:30:13,985 --> 00:30:17,605
us here on the, on our audience for the health and fitness industry.

490
00:30:19,025 --> 00:30:22,865
You know, I so sports tech in general, I love. And, you

491
00:30:22,865 --> 00:30:26,005
know, specifically around what you guys are are focused on,

492
00:30:26,570 --> 00:30:30,010
with the advent of of I don't say advent. That's not correct. But with AI

493
00:30:30,010 --> 00:30:33,370
being as pervasive as it is right now, there's a lot of amazing technology out

494
00:30:33,370 --> 00:30:36,890
there. We are invested in a company that's in AI for

495
00:30:36,890 --> 00:30:40,415
sports, specifically around scouting and player development. And when you're looking at

496
00:30:40,415 --> 00:30:43,875
adding and appending that layer of data and then democratizing

497
00:30:44,095 --> 00:30:47,875
scouting globally, it's quite amazing what technology can do.

498
00:30:48,655 --> 00:30:51,775
Really, at the end of the day, I talk about it a lot, and it's

499
00:30:51,775 --> 00:30:55,170
something that I think everyone's ripped off of Warren Buffett over the years. But invest

500
00:30:55,170 --> 00:30:58,630
in what you know. Right? I'm a former d one athlete. I love

501
00:30:58,690 --> 00:31:02,370
sports. I understand what we're doing in AI, and that merge

502
00:31:02,370 --> 00:31:06,184
together works really well. So inadvertently to me, I've become

503
00:31:06,245 --> 00:31:10,085
more of the sports guy within our within our firm, and I've

504
00:31:10,085 --> 00:31:13,924
originated a few few deals in that space. And so very much,

505
00:31:14,164 --> 00:31:17,865
enjoy that that sector. Great. Okay. Well, we'll hit you up on those.

506
00:31:18,049 --> 00:31:21,570
We got a pretty good, flow. And, whenever you don't wanna use the word

507
00:31:21,570 --> 00:31:25,330
wellness, you can use the, the term halo. Yes. And, appreciate you,

508
00:31:25,490 --> 00:31:29,330
coming on here to, kickoff 2025. Thank you, guys, for having me.

509
00:31:29,330 --> 00:31:30,150
Really appreciate