How To Buy a Business With Little to No Money (Acquisition, Search Funds & Rollups Explained) ft. Codie Sanchez

And I think it's sexy, but it's real. Today we're talking about M&A, search funds, and entrepreneurship through acquisition. This is not building a startup zero to one. This is taking an existing business from one to two. What the best part about entrepreneurship is that you get to be unemployable.

Right? You get to actually do the rarest of things, which is be your own boss for life.

The best ROI is always going to be spelled while you.

Do you want to be right or do you want to win? I want to win. So, if I have a strategy that shows that I make 30% more money based on putting on Facebook, clown me up. This isn't just for finance bros. No, it's for hot people.

I'm Shari, I'm Jean, and we're the Tiger Sisters. We are your Wall Street and Silicon Valley big sisters. And we're a top 10 business podcast on Spotify, where we bring late-night sister talk, meets boardroom strategy, or at hot take. The fastest way to become a CEO isn't by starting the company.

It's by buying one. Yep, and in today's episode, we're going to teach you how normal people buy and then run their own businesses.

“And why this is low key, one of the most underrated business and career moves.”

That's really just that simple. You just buy a business and then boom, you're the CEO. Welcome to payroll. There's got to be more. Okay, yeah, that was a little bit of a joke, a little bit of an oversimplification. But by the end of this episode, you're going to see who should buy a business.

And what types of businesses are the best to buy? And also today, we're sitting down with Cody Sanchez, a badass entrepreneur and investor who's built an empire by buying boring businesses, like laundromats and car washes, and actually turning them into stable cash flowing businesses. I'm so excited to sit down and chat with her so that we can learn all the things that people do wrong,

so that we can tell you guys what to do right. All right, let's get into it. Today's episode is presented by Sofi, the all-in-one finance app that helps you bank, borrow, and invest your money in one place. Okay, so like we're saying, most people think they're only two ways to becoming the CEO.

Either one grind for 15 plus years and climb the corporate ladder, or two, start your own company and emotionally collapse in a weak work. Trust us, we've seen both, and they aren't pretty.

But there's actually a third path that people don't really talk about.

It's buying and then building. You buy or acquire an existing business and then you build to make it better. Yes, and our upcoming special correspondent for this episode, Cody Sanchez, talks about this all the time.

“So the question is, how do you actually find these businesses?”

And the more traditional corporate route, this is something called a search fund, and I'm so excited to talk about this. It's usually used to find a business and that basically involves a person or a searcher raising a small pool of capital or money to search full time to find a business to buy. Yeah, and so these investors, they're not just actually funding only your search.

They also get the right to invest in your company if and when you find this business. And that's all pre-negotiated in the contract that you sign with them ahead of time, where they get the right of first refusal to fund your acquisition. And that's the point when the searcher becomes the CEO. Yeah, it's actually kind of funny because the whole concept is kind of like fund by job search.

But that job search is to become a CEO. And so why does this exist? Because there are tons of small businesses that are extremely successful, where the owners or founders want to retire, but they don't have a succession plan. And you, as the searcher, become their succession plan.

Yeah, and when we say small business, we don't mean just like a standalone coffee shop.

So we're actually looking for companies that are somewhere in the range of a five to 30 million dollar

acquisition that's doing between five to 50 million in revenue, or maybe one to five million in annual profit. Because that's the zone where you can come in as a CEO and actually professionalize and improve the operations to then make more money. Yeah, and they call this lower-to-middle market or also SMB's small-to-medium-sized businesses.

Okay, so a very clear example of what this would look like is that a person has built a very successful plumbing business. He or she has poured their whole life into growing it into a multi-million dollar business. They're 70 years old now and they're ready to retire and stop working on this, but maybe they don't have any kids, you know, children who

“want to take over this plumbing business. So then what happens? What is he or she do?”

Next up, we talk about this actual search fund model. So a really easy way to think about this is this model. Okay, let's say you're building your own startup like we talked about in the beginning. You're grinding. It's called a zero-to-one because you're building it from the ground up. It's your baby, it's your own idea and you're taking it to market, you're raising money.

That's like the startup founder that everyone really knows and loves and is familiar with. Entrepreneurship through acquisition, what we're going to be talking about today, M&A for Hot People is really known as one to two. Because what you're doing is that you're finding an existing business that already is doing very well. It has profit, it has revenue,

So you're not really taking a idea that hasn't existed before. It's already existed.

“The business is doing well, and you're taking it from one to two.”

We're going to go into a history lesson later about how the search fund was actually invented at Stanford, but she and you have some experience with this already. Yeah, so actually back in 2009, in the midst of the financial crisis, I interned for these two Stanford GSB graduate school of business. New grads who were doing their own search fund. And this was like way back in the day when

search funds were actually really like pretty underground and no one really knew about them. And the way that I kind of ended up in this internship is because like I said, it was the middle of the financial crisis. None of the banks were hiring for interns. And I sort of randomly stumbled into this unpaid internship where every day I would take the Long Island Railroad into the city and then we were hold up into this tiny little office.

So the two GSB grads plus two interns, like both of us happened to be from Dartmouth. And we were just doing research day in and day out on like what types of companies we could try to acquire. Yeah, the Lord goes really deep. You've seen the search fund the searcher in the wild. Yeah, and it is the number one thing that I remember is that it is not glamorous. You're basically spending day in and day out doing all this research, making all these calls,

trying to understand these different industries. And then you're also basically talking to all these

companies where you're like, hey, can I acquire your company? And a lot of times the answer is no,

“most of the time actually the answer is no. So you need to be really kind of like hardheaded about it.”

So when you're running your own search, you're going to get so many nodes because you're going to be like interviewing these business owners until you find the one right company that you actually acquire. Yeah, and it's not just interviewing them. Like most of the time, you're actually kind of doing a sales call to them because a lot of times you're approaching these owners who haven't necessarily thought about their their succession plan. So they're not like out there being like who wants to buy

my company. You're coming to them. It's like if you see a house on the street and you're like, oh, I like that house. You're actually going and knocking on the door and being like, hey, can I buy your house? And it doesn't have a four sales line. Right. You're like, hey,

you're in your mid 70s. Yeah. What are you going to do about your multimillion dollar profitable

business? Yeah. If you haven't, you know, thought about giving it to your kids if there's no one to take it over. Exactly. So in that way, it's very much a sales job, which we all know is really hard. And then at the same time, you have your investors. So you're also doing your investor calls to keep them updated and be like, these are all the companies that I talk to. This is where we are in the process with each of these. So when I was doing this internship in college, I got to sit in on both

of these types of calls, which was actually very illuminating. Yeah. It's interesting because it takes

“a really like varied skill set. You have to be good at a lot of different skills or at least have”

a co-founder who's like a co-searcher who's doing it with you. And you guys can balance each other out because you're managing your stakeholders, the people who've literally invested in you. Like, at this point, you don't even know if you can find a business that you can buy. You're doing the search. So your investors are invested in you and your potential. And so that's like a lot of pressure. And you have to keep them updated and be like, this is how we're doing. These are the companies

that we're talking to. These are the companies that we're, you know, we've investigated and we're not going to buy. And this goes on for a couple of years. Yeah. So imagine over the course of several years, imagine if you were doing a job search and it took multiple years. So you need to have a lot of kind of stamina and endurance and also emotional management to not be like depressed if you're not, if something falls through or because a lot of times you can actually get into these

like acquisition agreements with the company and you can like get all the way to the end where you're about to sign and they change their minds. Right? Because these are not corporations. These are not massive corporations. These are people. These are people who have built these businesses up over the course of like 10, 20, 30, 40 years of their life. So they actually have a lot of emotional attachment to their companies as well. And a lot of times that emotional attachment outweighs the sort

of like practical decision to actually sell the business to you. I mean, there's so many other factors too. It's not that like, I mean, at the last minute, like the company could pull out, but also like if you're diligently, like you're going through reading the financial statements, this company looks good and you're like doing some investigations. Like you could find something like this on the outside looks really good. But now you're like month three into digging into the financial

statements and you're like, oh, well, crap. This company is actually not as profitable or there's some like skeletons in the closet that we didn't know about. And the reason why Gene and I can also speak so deeply about this is because we have a lot of friends and we're going to go into some examples and some stories. But like a lot of my close friends are doing the search right now, which is

two-year mark and I've seen up close and heard their stories about how it's going and how this is

actually, it can be very, very grueling. Yeah. But then on the flip side, we'll get into this.

“They're also some really amazing success stories. And I think the last factor to keep in mind”

is that also the environment can change on you, like meaning the economic environment, like there can be outside forces of something that happens in the specific industry, like maybe there's some sort of change in legislation or there's change in a different company that's like the 500 pound gorilla in the area. So there's so many factors that you're trying to balance and keep in mind while you're doing this actual process. And I will add another factor. Is that if you have a co-cirter with you,

you're also managing the relationship with your co-cirter/co-founder and it can be like even more

stressful than creating your own startup because at that point, like you guys are building something

together, searching together is a different scenario altogether. Yeah, yeah, I also got to witness that upfront in my 2009 internship. The lore. Okay, just so to wrap this up, the real thing here is to not find a perfect company. It's to find a real company that you feel like you can go in, acquire, and then improve. Yeah, and if you guys remember watching our episode that was called PE private equity for hot people, you might this might sound a little bit familiar to you,

but on a much smaller scale. Okay, you ready for another history lesson with Jean? Let's get into it. Okay, so search runs sound like they've existed since the beginning of capitalism, but they actually have a very specific origin story that relates back to both of our alma mater's. Yeah, I know that search runs traced back to the Stanford ecosystem in 1984 at the center of entrepreneurial studies

“with Professor Erv Grossbeck, who I've actually met before. He's, I think, in his 90s and”

absolutely iconic. Oh my god, he's touching these? Yes, I got it. That I didn't know. No, I had coffee with him, like maybe two days ago, and I was just like, so what's next for you, like you're in your 90s? He's like, he recently sold his sports team, the Boston Celtics, which he owned with his family, and I'm like, what's up? Like Erv, like, what's next in your chapter? And he's like, well, I'm going to keep teaching until I start ruling, and I was like, my guy. He loves what he does.

At Stanford, he teaches a lot of the entrepreneurship classes, a lot of the search run classes, and actually he said this really iconic quote, "separate note," that, like, I think about all the time. That's really left like a mark on me, and he's the one actually who pushed me to do entrepreneurship in our conversation, where he says, "I don't fear failing. I fear the regret of

never having tried." So that's kind of a side note. He's just like an entrepreneurial man himself

and one who pushes students to reach their full potential. So I'm excited to talk more about his legacy. Yeah, it sounds like a true legend. Absolutely. I think it's really interesting that you mentioned that a professor grossed back teaches all these search fund classes, because that is something that is pretty well known about Stanford. His search funds are always attributed to Stanford, because they've built up this entire curriculum around it. That's like, you can actually take

classes to learn how to do this in school, and they also have a lot of like alumni groups that sort of look at students who are in these classes and want to invest in them, right? Exactly. Yeah, so it's actually really cool. There's so much like institutionally built up around this idea to help you be successful if you wanted to take this path. Yeah, there's a lot of infrastructure around it for sure. Yeah, but for the record, technically the term search fund was invented at

Harvard Business School in 1984, but it was institutionalized and popularized at Stanford Business School.

“Yeah, damn straight. Never forget it. Okay, so in 1984, you basically had a bunch of ambitious”

MBAs going around saying, we want to be CEOs, but we're not going to start our own company, and we also don't have our own money or our own capital to buy a company right now. No one's handing us a title of CEO at 28 years old. Yeah, pretty much. So the innovation here is the idea that what if the investors funded the search itself? So kind of like a structured sponsored hunt for a really great small to medium business to buy, and then you also fund the acquisition once you find

that business. Okay, and so this process was actually designed to solve a real gap in the market, because there are a ton of profitable, privately held small businesses where the owner eventually wants to retire, but doesn't have a clear succession plan. Yes, and on the other side of that marketplace, you also have a lot of young people who are in their 20s who really want to do entrepreneurship, but they don't necessarily have an idea to start a new company. So this is kind

of also a practical solve for them where they can immediately become entrepreneurs and immediately

become CEO, the host of problems that you inherit are very different from the problems that you would

“create yourself if you were a zero to one entrepreneur. So I think that's super interesting that”

this is entrepreneurship, but at a different part of the process. Yeah, right, because you're jumping into a company that is in a totally different life stage than had you started your own company. So it's not really, it's not a startup, but you are an entrepreneur, but of a company that is already quite mature. Yeah, exactly. I think it's super interesting. One of my friends was telling me about this, when you become the CEO of a company, you don't really know what the vibes are,

of course you're doing your diligence and your research, but the employees of the company where there might be 10, 15, 20, 50, 100 employees of this company. You don't know what the vibes are, they could be either very excited that someone's coming in and there's like a new management, or they could be really pissed. They really loved the culture that existed already and when like a young scrappy 28 year old comes in, it says, hi, I'm CEO and the founder is gone. It can be

really tense. So there's a lot of different factors that play. Right. And so a lot of times that's

“why the diligence take so long to decide if you want to buy a company, because a lot of times”

this is even part of the diligence, right? The culture. Exactly. You're not just interviewing and talking to the owner who you're buying the company from, who a lot of times you actually keep on for a little bit, you include that in the contract with them that like they stay on to advise or help you with their transition period. But a lot of times you're also interviewing like the owner's top five, six, seven, eight, nine, ten lutenants because they're going to have a report and to you

right away and like you want them to be excited and bought into this transition. And helpful. So, Shari, how do you think about your checkings and savings account? Because for me, checkings is money that I need to use in the next three to four months and then savings is everything after that, like long term. And because of that, I feel like most of us don't think

about the interest that we could be earning on those accounts. Mm-hmm. Well, the problem is,

“most banks give you next to nothing, like a fraction of a percent and all the while they're making”

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to learn more and get started. That's SoFi.com/Tiger Sisters. SoFi checking and savings is offered through SoFi Bank and a member FDIC. And now back to the show. Okay, and now we're going to zoom out and really quickly just talk about this broader term of entrepreneurship through acquisition. Okay, so a search fund is one formal version of entrepreneurship through acquisition, but a lot of people buy then build without a classic search fund structure. And our upcoming

special correspondent Cody Sanchez is actually one of the internet's loudest proponents for entrepreneurship through acquisition. Okay, so let's get into who this is actually for and also who it's not for because not everyone should be buying their own business. So this is for you potentially, if you like operating, if you like leading teams, if you can handle messy real life situations and you don't need things to feel glamorous all the

time, like you're probably going to be changing the printer cartridge. And you can make decisions without a 47-page strategy deck. Okay, so this method is not for you. If you want passive income, trust me, there's nothing passive about this. You hate managing humans. Sorry, there's a lot of people you're going to have to manage. Lots of teams, lots of people with the transition. You want to work from Bali energy. Nope, you're going to be boots on the ground,

trying to take this to the next level. Or you think that buying a business is a path so you don't have to work again. Okay, so now let's kick it over to our correspondent. The internet's loudest proponent of entrepreneurship through acquisition, aka the process of buying

unsexy, cashflowing businesses and making them better, Cody Sanchez. Okay, amazing, now we're in

the studio with our incredible guest, Cody Sanchez. And we're so excited to dive in and we have so many

buying boring businesses as a path to freedom. But some critics say that the model still requires capital connections or experience that most people just don't have. How accessible is this path

really for the average person starting from scratch? It's a great question. I mean, I always say like

nothing's easy. If anybody tells you what's going to be super easy and fast and you can make it in 20 minutes, they're probably not telling you the truth about making money. I don't think you can also spell rich without risk. And so there's always risk and it's always going to be a little harder than you think it is. But I think we were sold a real lie about acquisitions and buying businesses

“and it makes all the sense in the world why. The lie is that you have to have capital that is your”

own in order to do an acquisition. And why wouldn't anybody lie to us about that? Well, because large corporations want to be the people who buy these businesses, private equity firms want to buy the business. You know, the world often the middle men make the money, right? And so private equity is the most, this is the most profitable industry in the world. It is the most profitable asset class in the world. Over any 10 year growing period, private equity makes more money than anything else.

And so if you think about it that way, you realize, of course, people don't want you to think you could buy a business. But let's just look at the math. The math says 60% of all businesses that are sold are sold with some percentage of seller financing. So the the seller of the business becomes the bank for you. On top of that, if you were going to look in private equity, they all do something called LBOs, leverage buyouts, which is essentially a fancier way of saying

other people's money and they get it from banks or they get it from institutions. And so right now, you don't think it's crazy that you go to buy a house and you don't have to have all the

“capital and you could use some mortgage and a loan. That's not crazy. I think in the future,”

people will start learning that that is just as normal on buying a business. And the only other thing I'll say is like, you know, I've been doing deals for 15 plus years, but I've only been on the internet talking about it for let's call it three or four. And in those three or four years, we've taught thousands of people how to buy businesses and I've seen transactions done for zero dollars. I've seen transactions done for 50 million dollars from people who had never bought a

business before. And so it's totally possible that the problem is never that you don't have enough

money. It's you don't have enough knowledge. So you don't understand how to do deals. So fill the knowledge gap. I love that. And now that we're kind of like introducing more people to this concept of entrepreneurship through acquisition, if we were to get super tactical, what are the ways that people can finance buying their own companies? Yeah, I mean, three ways to buy a business if you don't want to use a ton of cash. The first way is seller financing. So we're going

to get the seller to allow us to buy the business with a percentage of future profits. And why would they do that? Because most small business owners are 65 plus. They don't have a retirement plan, more than 60% of business owners don't have a transition plan. And they're ready to go to Florida,

“you know, they're ready to retire. So that's one. The second way is sweat equity. So that's what we”

think about typically in Silicon Valley, which is, okay, I'll go work for a start up and I get equity. That's not weird, right? Well, you could do the same thing inside of a small business. In fact, we see people do it every day. Hey, I want to work and do these actions. And if I do these actions,

could I get a part or even the whole business from you? And then the third is expertise to equity,

which is, hey, it's not just that I'm going to work really hard for you. It's I am actually an expert in marketing. And you have a business that needs more clients. Can I get a percentage of your business if I help market it to more people? So those three ways are like three legs of a stool to buy a business without using your own cash. Wow, I love that. These are really creative. These are outside of basically the entire financing system in and of itself. That's the plan. I mean, my goal was like,

I don't know if you guys ever had this moment, but I was working for somebody else in finance. And I kind of looked down the hall. And at some point in your career, you'll look down the hall and you'll either go, gosh, I really want to be that person in the corner office. Like, I want that life. That's for me. Or you looked down the hallway and you go, I don't want any part of this. I don't want my second and third failed marriage. I don't want my kids to hate me. I don't care

about flashy cars. I'm not into any of it. And so I did that in finance and I thought, well, I don't want to just become like all of them and own all these businesses outright. Instead, we can get really, really rich by helping a lot of people own parts of their businesses. Because how annoying is it? We're in a beautiful part of Hollywood here. And there's a lovely corner coffee shop. I'd be really sad if those were all Starbucks. Like, I think this is a real mission

that you can make a bunch of money on. You can also own part of your community, which really you should. Speaking of your anecdote, I had the exact same realization. So my first job out of school was in finance. I worked at Goldman. And like going into it, I totally drank the coolade. And I was like, my goal in life has to become a partner at Goldman. And then like, let's just say a year and a half later, that was no longer my goal in life. So I think we've had some similar, I have the exact

is that you get to be unemployable, right? You get to actually do the rarest of things, which is

“be your own boss for life. And, you know, there are just certain types of people that that's what”

they want. And there's nothing wrong with being an employee. I'd love to be an employee at a

couple of companies. But at those big corporations, that was just never for me. And I think a lot of

young people today are waking up to that. But they think that the only way to do it is by starting something. And the problem is if you go and start something, you realize, you don't make money. Very often. And so, you know, most businesses never make money. The businesses that do lose money for the first three to four years on average. The average entrepreneur makes a salary of $46,000 to $67,000 a year, which is not nothing. But it's not great for all the risk. You could make

more money as an employee by a large. And then simultaneously, you actually have to fund the start up for the right to maybe one day eventually make money. And so, I think we were sold a lot of half truths about how we could run businesses and how we could live our lives. And it really serves Wall Street because they tell, you know, all of our generation go sleep on the floor, build that crazy thing. But the venture capitalists all know only one out of 10 of them are going to make it.

“And that's okay for the VC. It's not okay for the founders. Yeah. And I think something super”

interesting about this type of entrepreneurship versus the startup type of entrepreneurship is that like the startup life that skill set is like building a company from zero to one. And that's really different from entrepreneurship through acquisition, one to two. It's like completely different. The business that you're acquiring or buying or getting some equity in is already a successful business. Hopefully that you can bring to the next level.

Yeah. I mean, don't buy somebody else's pain or problems for sure. Like you're going to do one thing wrong. And you really want to lose money buying businesses by unprofitable ones, buy businesses that haven't figured it out yet, and buy businesses that have a lot of issues. You don't want to buy the ugly house on the nice block and entrepreneurship. That's that's not

how we do it. At least for our first ones. Those are called turnaround. Instead, we want

we want kind of a nice boring business. So easy, grandma understands it. Checks keep coming in month after a month for the last at least five years of being a business. Those businesses exist all around us. They don't grow like a hockey stick. But they kind of

“consistently make checks. And that's how I think about it. You want a business that's like a bond.”

You know, it's going to just keep paying you over time if you do the right action. Okay. So then let's say you are our audience. You're like, okay, I'm bought into this idea entrepreneurship through acquisition. You're going out to look for different companies. What would you say is like the number one red flag of what to avoid? Yeah. Well, the number one red flag to look for and not in buying a business is you want to make

sure that they're not lying to you too badly. Usually in every deal, every entrepreneur is lying a little bit about their business, whether they realize it or not. You know, oh, I only worked this many hours. You know, oh, no, no, that's a real what's called an ad back, which is like an expense that doesn't really count. You don't need to do that. Oh, there's all this opportunity in the business. If you just marketed it, it would grow so you should buy it for a future potential.

And so you really want to just make sure that you do pretty deep due diligence. The cool part about it is that's not that hard. Let me say that differently. It's a lot of work, but it's relatively simple. It's like formulaic. You know, there is a strategy and a formula and a plan you can follow because as you know from being in finance, we finance people are not very creative. We're like, we're smart, smart, hardworking, good at following instructions. But you know, are we the most

creative people in the world? It's not typically. So there's like, there's a formula that you can just follow. But number one rule is like, make sure they're not lying to you. Number two rule is make sure that the P&L matches the tax return to some degree. And if it doesn't, you buy it for the

one that's cheaper. And the third rule is make sure that you're buying a business not a job, which is

make sure, unless you want to buy a job, which is okay too. But make sure that there's actual systems and processes and enough employees in it that you don't end up doing it. Mm. Something interesting. I'd love to hear your take on this Cody. Is that one of my good friends is doing, you know, a search find, but also like entrepreneurship through acquisition. And something that she's really up against is buying companies that have been very successful, but have been created by

men who are much older now and going to retire. And she's having trouble in the sense of like one of these companies she was looking at. He candidly said to her, he's just like, look, I think you're a great fit. But I can't put you up in front of my investors because I can't tell them they're mostly men that this, you know, woman in her early 30s is a serious candidate for buying my company. So like what is your take about like women in this space who want to go through

this type of entrepreneurship, but might be up against the patriarchy or, you know, older men who might not be as open? Well, you're going to as a woman, you're going to face this everywhere you

than women get venture funding, more men than women definitely buy companies. But I think there's

another side of this. This also has, it really is like, you want to mimic and mirror the person that you're buying from. So let's say she's going to buy a manufacturing company. Let's say you want to buy a nice manufacturing company. Are you walking in there dressing like the three of us

“right now? That's not a good idea. Like, you need to mimic what they are. So you need to go”

and they're looking like you've done this before. You need to go in there. Probably a little rough around the edges. You need to, when somebody says something like that to you, you're not allowed to use the word patriarchy. You got to go listen Bob. I'm going to get those motherfuckers in here that we're going to fix this business. And if you think I'm too, you know, if you think I'm too nice, you haven't met me yet. Like, because guess what the thing is, like, what is he really saying?

He's saying I don't trust your capability. Maybe he's saying I don't know because I don't trust what your capability is because of what you look like. That's not fair. But at least he's being honest. So instead, what would I be doing? I'd be like, listen Bob, like, what matters at your company that you make more money that your employees feel taking care of and that we grow it more this year than last year, right? Is that about right? We don't want to blow it up. We actually

want to outperform. So sure, you can get somebody with a penis in here, but I don't think that has anything to do with how the profits of the business go. Those are two different piece. So we're going to handle the profits over here. And then we're going to let those guys, you know, do whatever

“that men do. It's totally unrelated. And so I think you have to have like this intensity,”

especially when you're a woman that a man does not have to have. Right? And so it matters how you dress, it matters how you talk, it matters how you push back. And if you're too nice or you're too kind or you use words that women use, they might not take you seriously. But the cool part is, the flip side of that is when you push back. Like, if you say the word, this is aggressive. But let's say, I'm your friend. You know what my response would have been to that. But it's been like,

Bob, what does it my vagina have to do with anything? Why? Because he's like, "Bah, one, you're all allowed to say that. Why are you saying that word?" So you get to an immediate shock factor. And then he goes, listen, she's kind of one of us. She can hang. And it doesn't. Let's figure out how to make you a ton of money so you can accent. Let's figure out how to get your guys jobs. And then, you know how women, we often get what we want and things, isn't that

annoying? How often your wife whistles her way into things? I'm going to do that for you in this company. Like, forget the fact that I'm a woman, right? And so those would be the ways that I played. It's all human psychology at the end of the day. The other part is, a guy like that might

just never sell to you. And so that's fine. Then you go on to the next one. Because there's,

“there's what we call a perfect fit seller. And so if you want to find the seller who is perfectly”

fit to sell to you, then you might have to think about what you're good at. I mean, for instance, I'm Latin. So I can speak Spanish. So sometimes I can go and get things done and like a landscaping company where people might speak more Spanish. Then if I went and tried to do maybe an Asian seller, I might not be able to have the same cultural connection. You guys might actually be able to do a way better deal just because of your cultural connection and things that aren't PC today. Because

business owners don't give a fuck about PC. They're out there trying to survive. And so that's what I would think about. The only other thing I'll say too is I really, I hope your friend has good economics on the search fund because I think it is a terrible model for searchers. It's an incredible

model for the fund. They're like, I mean, think about it for a second. Here's what they say. They're

like, this is so complicated. We're going to teach you how to do it. You're going to raise all the money, though. We're only going to raise a tiny little amount. We're going to just like 50 to 70 percent of the company. Even though you're going to go search for it, find it, run it, and raise the money for it. But we're so smart that like you're going to want us on your side. I think that's, I mean, talk about the patriarchy or, you know, somebody who doesn't think that you're that

competent. As opposed to the opposite, our model is we want to teach people how to buy a business for less than a thousand dollars a month and you keep all your economics. Why? Because I shouldn't own part of a business that you have to run for the rest of your life because I taught you how to buy the business. That's not fair. And so people are always like, you know, if you, if you, you know, own all these businesses or know how to buy them, why would you teach people how to buy them?

Because I think we're getting taken advantage of buy Wall Street yet again. They don't want to do the hard things. Search for businesses and actually run them. They just want to have the financial arbitrage and leverage on top of us. And I don't like that. This is your friend going to, would she ever say the word of the giant up to a seller? No. You know, they'll shake your head so easily. And I think she passed on that business because, like, her point of view is that, like,

if that's their, the seller's point of view, I don't think this is going to work in terms of a partnership. Yeah. And also, like, the management team is probably, you know, shaped in the, the same sort of philosophy as the owner. Yeah. So, like, you don't want to be working with some, like, oh, not team that's not really on. No, on your side. No. But like, well, I mean, it depends on

good looking and a woman, you might find that a lot. And so, I think it doesn't matter. It's great

if she walked away for the deal. Never fall in love with something that can't love you back.

“And I think it's always good to feel like you can walk away from the deal because you're more”

likely to win it. But also, it's a fun game to be, like, not that make them want me. You know, I think that'd be a little unhinged to play this game, too. Like, watch me, you know? Yeah. But there's plenty of sellers that want to sell and don't care what you look like, too. Yeah. One thing that our friend Susie Welch says is she says, "What is there's, there's no last best deal?" Yeah. It's 100%. They're except the deal that you did that you wish you hadn't.

Oh, yeah. That's exactly. That's the, yeah, that's what, that's the, yeah, we're in Buffet. Always says, I never think about the deals I missed on. I always think about the deals that I did, but I shouldn't have. Do you have some examples of that you want to share? Oh, God, yeah. I mean, if you're going to play this game, you know, one of my favorite mentors at Goldman

actually back in the day, he said to me, you never want to invest your first $500,000 in a deal.

You want to invest somebody else's first $500,000 because you're pretty sure to lose it. And I think there's a real, real reason why. Learn on someone else's. Learn on somebody. And I know people hate right now, like talking about going and working in corporations,

“I think it's great to start. Like, go, that's why I say when you want to go buy a business,”

I think you should start with buying part of it. You don't have to blow up your whole life and change everything to do an acquisition. Just do a partial acquisition. I did that when I was, while I was an employee for years and years and years and years. And guess what? Most guys do, too. Most guys, I mean, you saw this on Wall Street. They do club deals, you know, that's famous 19th hole where most deals get done and they own parts of lots of businesses of their friends,

because they speak this language and they know how to do it. That's why I think it's so cool. You guys are doing here because more women need to find this interesting. And I actually, like, I want people to come and learn from us on how to buy businesses, but I actually don't care if you ever buy a business or not. You should come and learn how to do it because it'll be like the matrix. You won't see the world the same afterwards. Like, if you come and learn how to do a deal,

you do, you'll just, you'll negotiate differently. You'll look at companies differently. You'll look at roles differently. You won't ever be able to do it the same. You'll just see more opportunities in your day-to-day life that you hadn't seen before. It's exactly right. Yeah. But, you know, we're still probably like 70-30, 70 percent men and 30 percent women, even though I'm a woman. And so, you know, it's a lot more. And then obviously an investment banking and private equity.

It's like 90-10. So, we got some room. Yeah. I think the thing that was the most frustrating, especially when I was at business school, I could see that there were a lot of grout chats that like guys just created. And it was like fantasy football, but then also like they talked about, like investing, or like, you know, angel investing, or like, what are the deals that are happening? But I didn't see as many of the group chats for women around this topic. So, I think

something, like, big mission of what we're doing. I know what you're doing is like increasing this obviously like financial literacy, but also financial independence for all these women. Yeah. You know, I hope you guys are doing it right now. But, you know, one of the things I'm pushing myself to do, and it's really uncomfortable for women, for somebody who's even me, which is, whenever I have deals, I now have a list of women that I send the deals to.

And most of these women don't do deals. And so, feels weird to send investment opportunities to people. I think as women, we feel like we're trying to sell somebody something. Yeah. And so, I just, I gave them the opt-in. And this is like, something you guys could try. I just, I put a little text together. And I send the same one to all of them. And I was like, listen, part of my mission is getting more people in the ownership. And that includes women.

And so, and I realize that most of the time, when I've ever raised money from everything, it's been almost 99% men. And they've proactively asked to invest in my stuff. And they've pro, and I've proactively sent them things. So I got, I'm going to get a group of women

“together. And I'm, I'm going to send you my deals. If you want, if you want to come and see the”

investments that I'm looking at, I will text them to you. And so, now, I do it. But it felt really uncomfortable at first, because women don't have the same sort of group chats that do things like that. Yeah. Yeah. And also, I think as women, we are very conscious of not making other people

feel uncomfortable. So we never want to put people in a position where they're like, oh, well,

I don't know if I'm really interested in that. Like, we don't want to make them feel like they owe us something. Yeah, but it's not really, but it's more so you're sharing opportunity with them. Yeah, we got to normalize it. And so, you know, if anybody's listening, I think you guys should start doing the exact same thing. And even if you, like, and get everybody really comfortable, be like, hey, say no to every deal. I don't care. Just, just let's share them and give real

feedback one way or the other. Because, you know, almost all the businesses that I have that have been, you know, I'm best in a figure. So that's Brett Adcock's company. You know, we invested at a very low valuation. Now it's a $38 billion valuation. And it's because a guy in front sent it to me. And like, I don't really have women that send me deals. Maybe Sophie Amarosa. She runs trust fund VC. Her and I share deals back and forth. This other woman Jenny just and I do too. But

tactical, Cody. What is one financial move that people can make in the next 90 days that would

materially change their lives? The best ROI is always going to be spelled while you. And I remember,

like, really early on, realizing that any time I could put an investment into myself, I have unlimited upside, right? You know, there's a restraint on every other type of asset class. It can only make you so much money. But the more you can invest in getting better yourself, skills, dacking, like Scott Adams would say, the more money you're going to make. And so I'm pretty obsessed with where can you put, you know, if if money is your focus in the next 90 days, let's say,

“I would be trying to figure out where can I go learn as much as humanly possible about money?”

And so, you know, I have a bias because it's what I think is the most powerful, but I would go learn deal making. I mean, we have something called MSM Live and events they could go to. It's like $47. It's the cheapest thing we do. And the reason why I want people to come to that is because it's three intense days, all virtual, but kind of pushing on people's assumptions about how to do acquisitions. So I would start with that. If you don't like the idea of acquisitions or deal

making, pick something else. But go invest in you because that is the best investment you're going to make. You need, like, sometimes with the financial advice we talk about, I'm like, if you're listening to me to tell you what to do financially, even though I'm pretty good at this by now, it's still not as good as you have in the knowledge of whether what somebody's saying is real or not. And so, like, don't go listen to experts. Go try to get as smart as you can

so that you can pick up the signal from the noise. Yeah, building a level of discernment. 100%, especially in the age of AI. I mean, I saw a thing the other day that scared the hell out of me.

And it was this, it was this kind of looked like a Chinese monk, three million views on this video.

And he was talking about how there's no such thing as a lazy woman. But there's actually called, there's something in Feng Shui called, I can't remember where it was. But like a woman when she lays in the house, she, like, protects the house in a man's aura and all the stuff. Okay, this is the video. And, and I, and I look in the comments of the video, and it's filled with women going, I knew it. Like, this is exactly why, you know, sending it to their husbands,

right? So it's all of this. And then I saw a couple of my girlfriends. And I reached out to them and I go, one, you do know that this isn't real. Did you Google this? It's not real. This is not a real thing. Two, this video is AI. This is not a real monk. And so in the age of AI, if you don't understand how to have discernment, you're going to be so taken advantage of and, and we giggle. But two of the women that, that were commenting, they're not dumb. You're like smart, accomplished women.

A cool, you're out here fighting, like fake AI, like one text message at a time. I know. She's like, it's not my fight, you're like, she's, she's a non-man, she's a life in a gunfight. I know. It's really, I was deeming them personally. They're probably like, can you beat it? But I do worry about that, because, you know, I think, you know, that don't know. Everybody needs a friend who tells them their bullshit. You know, we include it.

No, but back to your idea. Like, one catchphrase or tagline that we say all the time on Tiger Sisters, information is power. Like, information investing in yourself, knowing enough information so that you can make the right decisions, informed decisions. That's like the best investment you've made. 100%. Yeah. You know, I did hear a funny line that I like. I think

“information is power. And then we say information plus implementation, you have to actually do the”

thing. Because if information was enough, then librarians would be really rich. And I haven't been very many rich librarians. So we've got to like take the information and then we got to do something

with it. And so, you know, when they listen to us online, one of my things I'm always worried about,

it's like, it's been too much time. Listen to us. Like, listen, you know, put a little time box and then get out there and do something. Then come back and tell us about it. So taking the conversation, I'm really interested to hear your take back to the topic of how women can succeed in a man's world. And then also, you know, talking about entrepreneurship, genie, we're in the tech world. And you guys were on Wall Street in finance and very male dominated spaces. I want to talk a

little bit more about your take on this. So you've said that women who wear makeup make about 30% more money. Are you basically saying that pretty privilege isn't underutilized financial strategy? Yeah. I think do you want to be right or do you want to win? And I want to win. So if I have a strategy that shows that I make 30% more money based on putting on face paint, clown me up. I don't care.

“No problem. Now, I think you have to decide where your line is. And if you're like absolutely”

not, I won't do that. Okay, fine. But I think if you ask most men, if they could make 30% more money, if they did something like wear makeup, they would probably do it. Because it's hard to win. And so just by, and the other one, you don't even have to wear makeup alone. Just being well groomed, you make more money. And so the interesting part is it actually isn't too much about whether you're pretty or not. And how they typically define pretty is asymmetric. So if your face

You guys both have beautifully asymmetric faces. But there's a asymmetric or symmetric.

You guys, I mean, there's a lot of data that shows obviously if you are perceived as better looking you make money. But this wasn't even saying that. It was the same woman. So it would be like Cody with makeup. Cody without makeup. Cody with makeup. Makes more money. Cody without makeup. Makes less money. And then they do a lot of studies on this. So what in what industries in

“service industries in professional industries, et cetera. So I think I think why not?”

One thing that I'm picking up a lot on, I feel like Cody is that I think one thing you are really really good at is like leaning in and out of certain personas or like what people either expect or don't expect of you. I don't know if I really have a question around it. But I'm just like, I feel like that's one of your superpowers and thanks. I feel like you must use it in both like business and everyday life. I like people. Like I think if you can be really curious about the

people that you're with, then marine is natural. And so you end up sort of wanting to have a connection with a human, which means that they feel that connection, which means you can both accomplish more things together. You know, especially I think sometimes the younger generations are like, I am who I am. You have to conform to who I am. Well that's not going to get you very far.

And so instead I've always said, well, I find almost every human I meet to be interested in

in some way, shape or form. I want to connect with them. And I want us both to have some forward progress. And so, thanks. I've never really thought about it. But there is a lot of data that says that if you're able to mirror somebody's actual movements the way they speak, not in a creepy way, but that you, they like you more. Yeah. So yeah, although the other day we had this guy, we had this amazing artist on called Two Chains. I don't know if you do that ramp to the

church. There you go, exactly. Do you know the restraint I had? I'll say that. You can go to protest. No, no, no. But you did not even at the end. No, because you, no, how many times he literally

“love it. It's like, or no, I don't think it might hate. I don't think that I think they hate it.”

You don't think Jason drew like that. Jason drew a little might. He might like it. Yeah, he might. If I was a car wash owner, if you didn't know that, I know he's going to come on the podcast too, because I was like, Jason, I bet my car washes make more money than years. And you know, you have to like do a little public nagging from to come on. And you want to say it at the end, right? Yeah, it just for you. I'll be like, this is for the tiger's history. Yeah. But he was so fascinating

because he has the other type of thing. He has like a little bit of like a, he's a very preserved like aura. And so he was so calm and I couldn't really, I was trying to get him to laugh and he was like pretty serious. So I don't know, maybe you could win either way, but I like winning with through connection. I actually, the line that you said earlier, that's going to stick in my head, is like, what is having a vagina to do? I can't do it. Yeah, I can't say it. I need to embody

kind of that energy. And when you were saying that and sharing it with us, it made me really respect you because you're tough with like T U F F capital T. It was in Chen. Oh, she was tough. She tough. It's intense. But I think it's also what's needed. Do you want to win or do you want to be right? Now I'm quoting you back to you. But I'm like, really, it's like five minutes later. After she's just going to be walking around, save the giant and everybody. Like, this isn't

working. Yeah. Like, it's not applied to the situation. I know, but I feel like I'm, I really appreciate that. Um, yeah. That kind of like, especially you guys are funny. So if you can do like tough with a little funny, you know? Yeah. Like, I remember exactly. I remember when like,

“negotiating salary, if you want to make more money, that always intimidated the hell out of me. Yeah.”

And so, you know, especially back in the day when I had a boss and I knew the things that we all know, which is you should negotiate your salary more. But it's horrifying. I was like, I'm definitely

getting fired. He's going to hate me. I should never do this. But one of my, uh, one of my best sales

mentors, Rob, he told me this line. He goes, listen, here's what you do. He goes, you, you say the line. You don't say a lot of words. You say, hey, you know, boss, I make this. Here's what I think I should make. Here's why here's my couple of points. Um, you know, and, uh, and then you say one other line and that's it, which is, can't blame a girl for asking, right? And then he goes, smile and shrug your shoulders. And so, you know, can't blame a girl for asking. And he's, and, and you can't, you really

get mad at that. Because you're like, all right, you're right. You can't, I get it. And so, I do think if you're going to be tough too, you can play this game of being tough as a woman, but you can also do the opposite. Men can't get away with like, can't blame me for that. Well, baby, if you get you could. But like, this isn't going to go well for most men. Women, we have a lot of superpowers when it comes to negotiating that we just, we almost don't use

for some reason. I don't know why. We do have some other examples because this is so good.

honestly, it's very hard for women to know when to like lean into that persona, of being feminine, versus, you know, being tough and like men like. Yeah. Well, you know, early on, I learned in my career that every man you work with is one of three archetypes. A father figure, a friend, or a guy who wants to fuck you. So it's the three apps. And as soon as you figure out what category they're in, you can adjust accordingly. And, and so the father figure, you play the game of

you're so wise. I want your opinion. So if I was going to go ask for a raise from a father figure, I'd say, hey, I don't know if this is the right way to do this. But I know that I have to negotiate my

“salary because everybody says that that's what you do to progress. And so would you mind if I,”

if I did that with you? And then could you help critique me on how I could do it better? And how I might actually get to this level I want to get to. What are you doing? You're spending the table around here on the same side. So I go for advice if I'm going to get money from a father figure. From a friend, I might say something, I might do the tongue and cheek thing, right? I might say, hey, you know, I really want to have make more money here. Here's all the ways I think that I can help,

you know, is this realistic for me to ask, would it be unreasonable if I asked this? That's a Chris Vossism, would it be unreasonable? And then I'd have a little smile and shoulder shrug. That's friend. And then if it was the guy who wants to fuck you, then that's a totally different thing. Then you might be playing a little bit of the tough card. I'm not really leaning into the,

I never really liked to flirt at the office to get my way. I wasn't very good at it either.

I might be a little tough. Like, hey, what are we doing here? Are we going to, are we going to, are we going to lock this down? You know, come on. I'm doing amazing. You're doing amazing. We're all making more money. Are we going to give me a little bit of a higher salary? Like I would, I would push them a little bit like that. And so, yeah, you know, they say a negotiation, a pound of pre-production is always worth 10 of post. It's like prep and then you win.

Prepared to win. That's another thing we say all the time. I love that. Prepared to win.

“Prepared to win. Because it works both ways. It's the only way to do it. If you prepare”

then you win, but also prepare to win, expect to win. So often, I also think that we're scared because we're not prepared. And so, once you prepare that fear, it often pleads away. Yes, and also, especially for women, I think once you've prepared enough, then you can finally

be in the mindset where you don't have to over prepare. Women are always leaning towards

over-prepared. Building that muscle. I don't need as much preparation as I did last time. Yeah. I also think it's a real superpower to save fewer things. And so, if you can, you know, my team jokes with me about this, but I often will say, like, he has a high or a low signal to look to signal to noise ratio. And I believe that people who are intelligent usually have a pretty high signal to noise. Meaning, you can say something really profound in very few words.

And there is just a, you know, people who speak more clearly and concisely, typically, are more respected. There's lots of studies that support this. And so, for women in particular, if you prepare more, you don't do the blabby thing that women do. Like, well, I was kind of thinking that maybe what we should do is, and then if we could do that, that would be real. But I'm not exactly

sure. It's like, here's what I think we should do. Here is why. It's backed by these data,

which decision do you think is right, A, B, or C. And that's helped me a lot in my career being really concise. I do think that that is another superpower of yours. You are so, like, precise with your words. How did you get to this state? Yappin, a lot of yappin. But, you know, you become what you practice, right? I mean, there's incredible quote I read that said, you don't get, you don't get paid to be in the game. You get paid to practice. The game is the reward. So, the game is the reward.

This speeches the reward, the podcast is the reward. The work is everything you guys did until we got here,

“right? And so, that's how I think about life. So, if I know that part of the reasons why CEOs”

make more money is because they're clear communicators, both externally, internally, up, down, and sideways, well, that I'm going to make sure I know a lot about communication. And one of the reasons I like finance and doing deals is because the feedback loop is almost immediate and it is a zero-sum game. You either win or you lose. And that's really useful in communication, because I will know if I communicated clearly and put together something that was really compelling

by if I went a deal or not. Whereas, you could just speak a lot and think that you're good at it and not have a feedback loop. So, if you're not doing deals, I guess the other way to do this would just be, see how often you get what you want out of life, because that is the clear sign of both intelligence and ability to communicate.

I love that. Thank you so much for all these tactical advice that I think after people are

“watching this episode, I mean, talk about entrepreneurship, the requisition, about communication,”

there's very tactical things that people can implement immediately. Yeah, I love that. That's my love language. I'm like skip the fluff. Let's go straight to some to do less, but you guys seem the same way. Yeah, very tight, babe. Unfortunately, very action oriented. Yes.

Well, you, this was amazing. Thank you so much. Thank you so much.

No, and I'll come back in next time we can talk about building instead of fine. Yeah, this is great. Perfect. Thank you so much. Thank you. That was an incredible conversation with our corresponding Cody Sanchez, the quick recap. So, search funds are basically that MBA flavored pathway of entrepreneurship through acquisition. You raise a fund, you look for

“a company, and then you buy one business, you run it, and you grow it, and eventually sell it.”

So, structurally, it's a little bit more standardized. Right, whereas Cody's approach is more centered on flexible operator capitalism. Not necessarily the classic one-deal search fund path, but more like a playbook for buying and improving a cash flow business. You guys thought we were done when we were talking about entrepreneurship through acquisition? No, we are now getting into roll ups. So, Sherry, what is a roll-up? So, a roll-up is when you buy multiple small businesses

in the same category, for example, like plumbing companies, dental practices, or med spas, accounting firms, and then you combine them under one large umbrella. And the whole point of this is that you can centralize the boring stuff, like HR marketing, pricing, scheduling, standardized operations, and then the whole entire process becomes more profitable and valuable.

Right, so it's basically like you buy a cookie shop, and then you buy five more cookie shops,

and then all of a sudden you're the Costco of cookie shops, which might be Costco, actually. Okay, so in other words, you can turn a lot of these mom and pop shops and move them from chaos into a real company under a larger umbrella. And so, an example that I want to give of this, I mean, there's two. The first one is Med spas. This is a prime business to be rolled up, because there's a lot of different, like, internal things that you could streamline,

“and I hate that I'm using all these different buzzwords. But honestly, like, for med spas,”

when you're scheduling appointments for people to come into the med spas, what software are they using?

If you're just a standalone med spas, you kind of have to figure that out on your own,

and maybe you're using this, like, software that's pretty disorganized, or not the best one. But if you're rolling up a few med spas, you can consolidate them, and be like, "Okay, I have five med spas now. These five are going to be on this single software." And then you start getting into economies of scale, whereas, like, the more companies that you acquire, the smaller or less the cost is. So, that's one very specific example.

Another good, just to add into there, another good example using the med spas example is aside from the software. You also have more economies of scale so that you can negotiate with your suppliers, right? So, like, if you're a med spas, you're buying Botox, or whatever it is from Allergan. So, instead of just saying, I'm buying Botox for these, you know, 1,000 people that I service throughout the course of a year, I'm buying enough for 100,000 people. So,

give me a better deal. Instead of selling me Botox for, like, I don't know, $5 a capsule, or a $5 a portion, sell it to me for $3 a portion. Yes, so you have more power of negotiation when you own a few of these businesses. Yes, so the big concept here is multiple expansion, which kind of sounds a little bit complicated, but it's not. So, the concept of it is that your company is usually valued at a multiple of whatever, for example, your revenue is your annual revenue. When you have

multiple companies and you put them together into one overarching company, usually that overarching company is valued at a higher multiple, because it's understood that you're more professionalized, your company is more stable, and you have higher margins. Okay, guys, so roll-ups, they're not a beginner move, because you're not just buying one business, you're potentially buying five, or more, and you're putting it all together, and so it gets more complicated. Yes, so if you imagine the

types of issues, you might have with buying one company, multiply that by five. So, culture issues, integration issues, scheduling issues, what else compliance, software systems, why do these two

so let's translate this for my hot people out there. Buying one business means hell yeah, I'm the CEO buying multiple businesses, I'll allow a roll-up. I'm becoming CEO and then multiplying my problems by five, and I'm basically like a mini-private equity firm now. God damn. Okay, so roll-ups are done. If you've followed this entire section, you're allowed to say lower-middle market unironically now. What is your biggest takeaway from this episode? Because this was a really

media episode, and likely always say we're always experimenting, so like before you saw we had the

episode for "Galentine's Day." Now this is a much more media kind of almost academic style episode,

“so do you also like this type of episode or do you want us to mostly focus on cultural topics?”

We love to hear your guys' feedback, so please please comment and let us know what you like, what you don't like, and also don't forget to subscribe. Okay, I want to share a very quick example and anecdote of a very boring business that did very well in the search fund process. Okay, so this is one of my professors, actually two of my professors who work together and then taught this class, they bought a business and is so random. I didn't even... Yes. Oh, cute.

There were co-sertures. Okay, and then co-professors of my class. Wait, so they're like us. Yeah, basically. They're iconic. It's these two guys, and the business that they bought

was a traffic cone business. Wait, I love it. I think guys, this is so random. I never even thought

about a business, but obviously it is, and it did really well, and they actually rolled it up, so they bought a bunch of these traffic cone logistics companies, because whenever there is like

“highway construction, you need to put traffic cones on the road or on the shoulder to tell people”

to move away. And there's companies that do this where they put down the cones, they're scheduling, they have to pick up the cones, and it's absolutely insane. And I would have never thought that would be a business to one work in or to acquire, but it did really well, and that's just kind of the magic of the boring business. It's also such a good example of

all of the pre-work that goes into acquiring company, because like you said, like, wait, I never

thought about the fact that this was a whole entire line of business, but it is, and they probably did a bunch of research into all these different areas or industries where you could acquire a company, and that would be good candidates for acquisition and then even a roll-up. So that was actually a lot of the work that I was doing when I was an intern, is I was literally just researching all these really like obscure companies or like obscure types of businesses that you would never think

about. And I was like, okay, is this a good potential acquisition? Is this a good thing in drug position? Does it map into like, these are all of our requirements? How many of these does it hit? Is that so insane? It's really cool though. It's actually, it's actually really interesting. It is, but also, there's a whole host of problems because like, you a lot of people who are doing these searches, they're like fancy MBA, Harvard, Stanford people, look, you're acquiring

a boring business where you're working with hourly employees who are literally like blue collar workers who are going onto the highway and putting down the cones, you know, directing traffic, picking up the cones. There's a lot of, um, finesse you need, because you're going back and forth as the searcher, because you're working with your employees and you're also going back to the

“spreadsheets. You need to be able to like toggle both of those worlds and do it with grace.”

Yeah, and I could imagine that for a lot of these searchers, like if you've never worked an hourly job, like you don't really know the challenges and you don't really know what it's like to have to sort of balance that and be the leader of that type of business. Yeah, and that's where a lot of personality comes into being a good searcher and also being a good CEO for these companies. Yeah, actually, this is, again, purely anecdotal, but one sort of archetype of person that I've

seen be very successful as a searcher or to do entrepreneurship through acquisition is actually post-military people, because a lot of people who are post-military go to business school and they get an MBA and they're kind of like used to having a leadership role through the military, so they want to immediately also then be in a leadership role again, but they don't necessarily want to start do a startup and they don't necessarily want to work in like tech for example,

which is where most startups are, you know, born these days. So entrepreneurship through acquisition is like a very compelling choice for them and they're actually really well suited for a lot of these types of businesses that are quote unquote like boring or more like every day businesses.

It tickles the brain because now I'm like thinking of million different things because I'm like,

oh, like what are the sort of regulations they have to deal with because like maybe some of their jobs are interstate for sure, right? Like what if they have to put the traffic cones and

it like cross the state lines and like do you need like a federal like license versus like state by

“state license and like you have to adhere to the regulations from like different states, etc.”

It's just really it's really interesting. I this is why like honestly I think we both went

to business school because like even thinking through this is kind of like fun for me because it sounds

very unsexy and boring on the surface, but underneath it all I think it's just it's way more complex and that's kind of the beauty in it like in the case where it does a cross state lines and also like if you're employee like gets sick, does it push back, you know, the construction project that was supposed to start and you know how do you communicate that and what happens when you know people aren't able to

“make it or the shifts change. I think it's just really interesting and you have to are you liable? Yeah,”

financially for whatever, you know, push back they have correct. It's just it's really interesting. Thank you for that example. So that's M&A for Hot People, AKA how to be a CEO without a start-up. Thank you again to our correspondent Cody Sanchez who really helped us show that the boring

“on sexy businesses are the ones that really keep the world running. Thanks guys see you next time. Bye!”

We're doing big things this year on Tiger Sisters podcast and we absolutely want you around and on the ride and journey with us. If you guys are watching this right now and you're not subscribed yet, what are we doing? Let's make it official. Subscribe to the Tiger Sisters podcast on Spotify, YouTube and Apple Podcast is how you stay in the loop as we build this community. New episodes every week and we have big conversations coming. Be it a part of the Tiger Sisters family.

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