Subscribe
Share
Share
Embed
Welcome to Founder 2 Founder, the ultimate podcast for entrepreneurs who refuse to settle for ordinary. Hosted by Sardor Umrdinov, founder and CEO of Home Alliance - a $100+ million tech-enabled home services platform operating nationwide.
From bootstrapping his first business to building a horizontally and vertically integrated empire, Sardor brings you raw, unfiltered conversations with successful entrepreneurs, industry leaders, and game-changers who've turned their visions into multi-million dollar realities.
Each episode dives deep into the real stories behind business success - the failures, pivots, breakthroughs, and strategies that actually work. Whether you're scaling your first startup, planning an exit, or looking to acquire your next business, you'll get actionable insights from founders who've been there and done that.
What You'll Learn:
- How to scale from startup to 8-figure valuations
- M&A strategies and exit planning
- Home services industry insights and opportunities
- Investment and business acquisition tactics
- Leadership, team building, and operational excellence
- Fundraising, private equity, and wealth building strategies
Connect with Sardor:
Instagram: https://www.instagram.com/sardorum/
LinkedIn: https://www.linkedin.com/in/sardorum/
Facebook: https://www.facebook.com/sardorum
Subscribe now and join thousands of entrepreneurs building their path to financial freedom!
"Partnerships are everything. Success is not a solo journey." - Sardor Umrdinov
What was your most expensive mistake? $22 million. What do you think about home service sector? There's capital that is sitting on the sidelines dying to get into it. What was your smallest and what was your largest acquisition? You as a CEO have to make decisions how you would find capital. You get your greatest learning by jumping in. Welcome to new episode of Founder to Founder, the podcast for entrepreneurs who think far ahead. I am Sardoor Morinov. My guest today is Tom Shipley, a serial entrepreneur who has built and sold multiple companies totaling over $2 billion. He created iconic brands Hydra Saton and Kiraniku raised 100 million for foundry brands and is now a building aa a holding company that acquires digital agencies. Tom, welcome to the show.
Tom uh you say any business problem can be solved with acquisition. What do you mean that and when it can be used and when do you think it won't be able to we won't be able to use that strategy? Okay, let me clarify. Almost every business challenge can be addressed through acquisitions. Not every single one, but it's about mindset. So the as you look back and you say, "Okay, here's my goals for my business. Here's where I feel the most momentum and the most opportunity is." And the question is is why aren't you moving faster? Why is it why is your growth limited to 5 10 15% growth a year? What would it take for you to be growing by 30 to 50% a year? And what are the key things that are holding you back? So when I think about acquisition, yes, it's good to acquire based on growth, but I like to have other thesis on top of it. So let me give you some examples. An example is um is that I have a business that is doing really great selling to consumers. However, I don't have any experience and neither we do. We don't have relationships to be dealing with bricks and mortar. If we were develop a service acquire a product line that had a very strong relationships there and credibility suddenly I do the acquisition it drives me eBay it expands my product but then I have all these relationships then I can take my other products into it so that's on the product side if you say thing from the service side what does that mean is let's say I have an advertising agency I specialize in Amazon what I do know is that anyone who's buying Amazon services will buy Tik Tok shops. So why and I can develop in the internally internally trying to teach my team at the same caliber that I'm delivering my current services and they learn and they grow by experimentation off my current clients. Hopefully my team gets it where I hire someone thinking that they could be great but you don't know why they were successful and if it was really them that were successful in their prior business. Once buying agency specializes in that they're already profitable. It adds to your profit contribution and B and you're going to pay for them ultimately through the cash flow that business is now there your ability to not only cross-ell their customers your Amazon services and your Amazon services crosselled it. So and again you can go on and on your friend of ours is Brian Bert. Brian Bert was one of we going back probably about 8 years. He is one of the best sales and business development and marketing people you'll ever meet. Because of that, when he launched his little boutique agency in Amazon, he was able to charge over two times the market rate and acquire businesses very fast. The problem was is they were fine with with the way they were servicing the client, but not with the way they were charging them. There was a mismatch. So, what he decided to do is I need to have a great team. and he went out and fired and found one of the best small boutique agencies run by one of the best operators. They were their weaknesses was sales and business development. So, we acquired that business with 1,600 pages of SOPs and the team put the gentleman in as an as as a COO. For Jeremy, it was great. He didn't have to be worried about sales in April and run the agency. He can do what he love. You put that on top of Brian Bird's agency and fast forward u a number of years later he had an offer for 187 million to buy his business. So again you can tell me whatever it is in your business the challenge and I will show you how an acquisition can can address that and solve that. So basically for me instead of building them in the venture studio going through the failures and trial and errors it's better just buy the company right and add it. That's correct. That's correct. And you're going to find so many sellers that are just tired. They did the work. They have good platform. But doing alone is very, very rough. Being under your coattails and having the wind at your back that you can create that that draft for them will allow them to succeed at a level they couldn't get to. And they may be on the verge of calling it quits because they can't do it anymore. But being in a safe environment where you're you're encouraging them and mentoring them, they are able to achieve their dreams and see a strong financial outcome. You're just participating in it. Where's the M&A happening now? You mean such as niches? I'm saying there are big funds being established in the area of AI where basically people are rolling up early stage medium stage AI businesses and taking big bets on it. There's a lot of cash out there and so that's that's an obvious one. However, there is a lot of money right now that's sitting on the sidelines. There's a lot of private equity. There's venture. There's there's there's specialty debt that's sitting there looking for good businesses. And if you're buying an existing businesses, there's plenty of capital out there if you're a good operator. It doesn't matter what the niche are. Now, as an investor, what do they look at is what is the probability of me getting my return? Do I trust the operator that's doing the acquisition? Is the business that they're buying a good underlying assets? And how do I confident I feel them being able to produce continue uh profits and growth? But from that perspective is you name the niche and I'll show you where there's capital that is sitting on the sidelines dying to get into it. They're looking for great businesses and good entrepreneurs to run What do you think about home service sector? I think home service sector is one of the hottest sectors right now in the marketplace. There's significant amount of dollars because in the shorter term perspective there's less concerns about it being AI disruptive and what we're looking for is anti-fragile niches that can be helped through through this. Now granted, every home service business can be enabled and improve its profitability and scaling through AI obviously, but it's not going to put out of business like certain AI platforms uh will. So that's what's great about this. Now longer term those eight those eight to if I'm looking at home services I'm saying how can I keep on acquiring not only to increase my value also increase my amazing services recruit top talent how can I keep on scaling at the same time have the scale where I can successfully invest into AI for the way I generate sales the way I service my customers the way I do follow up my customer journey how do I make this relationship ship with this customer seeing that it's very personal. You could do this with AI and you could do it at scale. So again, it's just and that's why the home service sector is very hot because it's actually anti-fragile but it will be significantly enabled by AI. Yeah. Because all of the like data centers like which is doubling up and coming up on size. They need the electricians, the plumbers like HVAC to install and actually service all of that equipment as well, right? whole industry. Yeah. Let me verify. You're going to separate that from basically you look at existing infrastructure of businesses, manufacturer, homes. It's it's needed as it always has been. Now there are better, faster ways and more reliable way to deliver that. Better ways of recruiting your team, better ways sustaining your team on that, but especially in the new data centers that are being built. Now, they're not going to be built. They might not be built in your home, but the amount that they're paying is very, very significant. And again, we're in a world of transition where the economy is transition and therefore people and businesses have to be flexible and adapt, but the amount of of businesses out there significant. Now, uh, 5 years from now, there's going to be an interesting transit in in in my opinion, and I'm not the one who's the most versed on this, but it's logical. In the next 5 to 10 years, the home services will be disrupted by what services can be done by ro by robotics and robots in the home, whether they're general purpose or there are special purchase purpose. and they're trained along with their underlying ele actually it's um SLMs behind it for specific language models that are built specifically for what they can do and solve those issues. The cost of those are going to be cheap to implement and it's a question of psychology of letting those in my home to fix whatever problem I have. But it is the home service businesses that do acquisitions that are forward that are going to have the scale in order to implement AI and what they're doing currently doing and the future actually implementing a hybrid of their team and robotics. So they don't have to scale through pure people. They can sell you scale using a hybrid model. Yeah. Yeah. I think I also believe in the hybrid model. they probably going to be using those uh the Tesla robots but actually there was information in the brain of whatever that's coming from the humans right so it's a hybrid model I think it's going to work like whatever we can replace the same tasks it can be do done by robotics but whenever is unpredictable uh plumbers probably is going to be the last one to replace yeah but you look at speed suddenly I have an issue with my with my home and what's what's the issue my home is the drain is stuck. Again, look at simple things and you have a choice. You're going to go onto apps cuz this is inevitable. You're going to go on to apps like the platform you're building or an app you're going to go on that's very similar like Uber and then you have a choice. Do you want a Jew and a plumber that can get to you that's inerson plumber authentic five-star rating? It'll take them 12 to 24 hours to get to you. Or you can have a robotic solution come do the assessment do some level one maintenance all that to fix it and they can that's it and they can be there in 30 minutes and those are the decisions that we are going to have to be making as consumers and and from that it's economics and convenience just like why people are choosing Whimo in Austin Texas to drive instead of drive cars with drivers for the same reason. Tom, let's talk about your uh experience. You served in elite uh unit 669. Out of 10,000 candidates, only 13s are selected. And what have you learned from that experience in the military and how you apply to the business and focus on a task and an objective that was almost impossible? Every entrepreneur who starts a business does not look at themselves at the 99.5% that will fail along the way. They look at themselves as a 5% without really thinking about their probability. Okay? And that's the same thing you is the person who started the journey is me to the person that was able to get in the unit and succeed and save lives was not the person who started the journey. And so what I learned is it, you know, I didn't get caught up in the numbers. I knew I was going to be in the unit. I visualized it. I knew with all my heart. It didn't matter that I didn't know the language like everyone else knew physically. I was half the athlete of main these guys who were period and I didn't really understand the army and because again I hadn't been raised on it. I'm a kid from Cleveland, Ohio who came back from Florida State University and said mom and dad I respect you. I love you but this is going to what I'm going to do. But let's go back to the numbers. 10,000 soldiers try to get in my unit. go through batteries of test after that and think about the Navy Seals. Let's think of Delta again. So, there were 10,000 soldiers that try to get in. They picked a thousand of us for Hell Week. Out of the thousand of us from Hell Week, they picked 25 of us for an 18-month course. And it was me and 13 other men uh that finished that. and the quality of the character and tenacity, innovation, and just real heart that these gentlemen had, which is why we had each other's back through the military, which again, so I learned about teams. I learned what true grit and tenacity is because Thursday night was always an overnighter. You they always call it a combination of Thursday and Friday because there was no sleep there. There were things to get done, missions to get accomplished, and that was just part of it. And so you learn that there's no you can do anything. You can always put one foot in front of the other. There's no breaking point in businesses. There'll be time where the world and your friends and your management leadership were telling you you're done. That's it. Quit. You have to make the decision is one is am I really done? Is this really business done? two is um what are some different ways and leverage that I could just flip the script on this and create something something new or three is it's just faith and grit or four is it's just a slight pivot to the left or to the right that the answer is so again you as a CEO have to make decisions you'll get input from everyone but ultimately it is you founder that has to make the decisions so therefore from a grit sor from a grit and tenacity there's very few people that can actually work and grind harder than I can. Even though I like to think of ways that are smarter that are on my on ramps to the freeway that give me real leverage. The other thing that I learned that goes really ties in with that sardor is in med course we're taught
a good manus one who improvises. What does that mean? When you're in a mass casual event, there's never going to be enough resources to save everyone that's out there. So, what do you do? You improvise. A good medic is one who improvises. Now, how does it translate to business? You will never have the resources you need in every situation. And so, what you have to do is you have to be resourcefulness. I will take resourcefulness and a little bit of luck over ultimate unlimited resources. any single day. Super. Wow. And and what was your first business? So, a lot of people you hear a lot of entrepreneurs tell stories about their high school business or their at the age of 10 or something where they took a computer apart and they basically open developed open AI. I'm I'm joking about that. You hear a lot of people telling stories about what they did when they were young. For me, my first business was not until I got out of the army. And again, my risk tolerance, what real risk was was totally different. I had $100 in my pocket. So, I saw two products. I saw a product line that was manufactured from Israel, manufactured by two Israelis in California. The business niche was exploding. I saw that I just the question is I, you know, what do I have to lose? I have 100 bucks in my pocket. I see this massive demand brewing in California. Everyone in Israel has this product. It's the corrugated pieces of cardboard that goes in your dashboard. It protects the dashboard. Again, we're talking about mid80s. And I said, I can do that. I found a manufacturer because what did I have to lose? I got terms for them. And then I started like a beast calling on everyone with confidence whether it was small stores, regional chains, Woolworths, Albertsons, calling up the man, you know, calling up I remember I called up Chrysler and I said I'm coming up next week to meet with Ford. Imagine a million billboards and a million cars by inscribing that I'm meeting with Chrysler. I'd like to get a meeting with you on Thursday. Boom. I got that meeting. Then I called Chrysler and said, I'm meeting with Ford next week, the head of marketing. I'd like to meet with you while I'm out there. Boom. Got that. Then I did the same thing from GM. And again, you get your greatest learning by jumping in and just doing it. And you learn along the way and you became that person. So that was my first business, Car Shades. Um, it made some decent amount of money along the way. The education that I got was incredible. Good face, highs and low. And the thing that I learned along the way is that while I understand merchandising, I'm a really good marketer. I'm a decent business. I'm a above average back then. Above average business development guy and relationship guy. What I didn't understand is the operations. Okay. You're talking about a highly seasonable bit uh business spikes. How do you manage inventory, distribution, fulfillment, statistics, probability, everything you need to understand the business accounting? How that integrates together? or how you're measuring cost sold at profit margin and then I discovered industrial engineering and I hate weaknesses in myself. So that's why I end up getting two degrees in industrial engineering again that whole period of time was the foundation between the army and that first business was the foundation for my what I call my real businesses and and for and you grow that from $100 to 20 million. What was that? And so I moved probably about $5 million of product. It was my first business while I was getting my two degrees in industrial engineering and again it was and I viewed it as what do I have to lose? Let me jump on. Now again the one challenge with the business it was a one product business. The trend was very very hot and then it got very very cold because everyone and their mother got into this business. The licensed owner because it was patented decided to go for a land grab licensed everyone. So what was the value of having a patented product? And so I learned again it's lessons in pricing offer distribution. I could have gone a lot faster. There were those people they got in to basically start selling on TVs and infomercials. It was so hot. A cared piece of a cardboard. Tell me the power of marketing, the power of branding. So but it was just that it was to me I viewed it as a I was hopeful that this would make me establish me for life. But the reality was it was a learning experience. And I didn't know then how to look at the platform that I established and just it was a basically I had a distribution business with great relationship just going and plugging in other products. Some would be my own proprietary products others would be one that we represented it. Got it. Got it. What you did after what was other businesses? I got distracted for three years by doing what I was supposed to be doing, what I was told I should in the United States, getting a job in corporate America, AT&T, which was like being in a prison. It was I kept on being promoted so I couldn't leave. My Pam got pregnant and then it was like, oh [ __ ] I can see based on my promotion, cash, everything else, I'll be stuck there for years. And she gave me permission that I can leave and pursue my entrepreneurial dreams. And at first, you know, you still have to the first thing you have to say is you need to take care of my Maslo's hierarchy. So, in order to make sure I had a roof over my head and food and medical, so for my family and my two young daughters, I generated cash flow by starting my first uh consulting firm. And I was able to do that in weekends and evenings at AT&T. So, the revenue got significant enough I was able to leave. And then I knew I had 6 months to cover Pam's income because as a new mother being pregnant, you know, we'd have to cover that. But that was a foundation learning. I started my world first real business in 1999. Web 1.0 was amazing because basically these periods of creativity and opportunity, but there are those people that are irrational the way they pitch it and the businesses that are building and those people that look at the foundation. Okay. So I started a business. It was an online store. and Adwords were new, email commerce was new, very exciting, but you needed more than that that back back then. So, I mailed out millions of cataloges. I was 12 pages in the Sky Mall magazine. Life was great until the com bust happened. For those that don't remember the com bust, basically the whole e um uh do economy blew up. Value u valuations went from um stupid to nothing. being raising money was almost impossible at that period of time and therefore also a recession hits conversion rate goes down average order goes down which means we're losing money suddenly my CFO came to me and said Tom we have 30 days of cash and we can't fire fast enough I said I know we have at least 90 days of cash but he had 90 days of cash and then we're all done and again there are certain times where I've been really smart and really good and sometimes I've been lucky this was a question of luck and and execution on it. A a friend of mine who I met at a conference called me up and he was an investment banker out of New York City. Tom, I got a great deal for you. I'm representing Boys and Cascade. They have a $750 million division which has a $15 million division and you are the the logical home for this business. It complements your business. And I said, "Sure, absolutely." Knowing I couldn't even make payroll coming up. So, what was it going to do? In the end, we were able to negotiate a term deal with payments. I was able to bring in a little bit extra outside capital for this acquisition because the thing is even when you can't raise money for your own business, if you're buying a profitable business, you can typically raise outside capital on on that. And with that, I was able to buy business twice my size. And a year later, I exited that business. Okay. So, that was my first business. My conclusions on that was one is wow this acquisition thing is cool it was but I didn't view that as a business model even though I should have. The second thing is what I was clear with is I learned and I proved how to build an iconic brand from nothing using direct response marketing at scale. And so uh with that uh with that I decided to with a partner in Richmond, Virginia taking to an industry that had never been done before which was we everyone laughed at us. Two former special forces guys he was a captain in in in the Rangers and myself special forces and people laughed at us that we said we're going to build a hundred million dollar beauty brand. It was absurd. But here we were. We scraped together $5,000. We had uh manufacturers actually uh manu incredible lab manufacturing products for us. We tested it cheaply around people around us in our neighborhood things like that. Again, we were scrappy as hell. And then we started testing this very methodically in print and radio and then online. At the end of the year, we had funded this baby so much that um the business had nothing left. We had nothing left. Even the cars were mortgaged, the host was mortgaged and I had two young daughters at home. So with real problem. So we took on a small consulting game with a company in and Hoboken, New Jersey. They were a $15 million business uh supplement business generating a million half a profit, very strong online. They had spent 5 years building a great tech stack. And we said I said, you know, said to Drew, imagine what we would do with this platform. And Drew said, we either want to buy this or build this business. and they said, "How much would you pay us for it?" Two young a young couple 25 years old that had been dating for 5 years built this business. So for them getting $3 million for this business, 85% of them in cash, 15% in in rollover equity seemed like an amazing thing. We said we continue employing their team. Eventually when they want to leave, they can take their team with them for their next ventures. So they knew this was such a big home run. We put our little business 15 at the end of the year. What do we have to show for it is 331,000 in revenue and we proved to work in radio and print and we were doing okay online but the model worked. We put this little 15 uh this $300,000 business on top of this platform. Within three years, we did $100 million. And sorry, I shared with you before that over time, that first brand, we did over a billion of revenue. And then we launched other brands, you know, Christy Rampy Beauty, the and then in 2009, the most iconic brand and the first women's hair regrowth brand we launched, which inevitably that's what allowed us to sell to private equity in 21. But that's I'm going to say with$2 billion dollars of sales that was our first real business. Wow. What was your smallest and what was your largest acquisition and what was your best deal and what was your worst deal? The biggest acquisition I did was not that significant. Okay. It was but it was our let it was our first acquisition. We had zero dollars. We had again we we just were starting out. We raised a little bit of money, but we was a $6 million advertising agency throwing off $3 million e bida. So, it was a solid business, great team, growing fast. And we bought it on seller notes without any cash out of pocket or close. And in the end, we sold that business off. It had a 9 million in revenue, 4 million in Ibida when we sold it. So again, it was a very solid great business brought with a great team. Uh, so I'm going to say that's probably one well that was a great deal. Urban Nutrition by far was the best deal I ever done did. I was doing 331,000 in revenue. We sold it and we and basically it was a $15 million business generating a million and a half of EBIDA and had a great infrastructure. It was a platform play. Worst deal that I ever did. Um it was um sometimes you have to be very very careful about speed and thinking that you can cover all bases. It was a business agency that we met. We like the owner. They were brilliant in creative and they were brilliant in sales and marketing operation project management. They were struggling so bad that they were backlogged on their on their current client base and they were uh they taken the money. They burned through the money. They took their customers and it was one this reinforcing loop and they were just about to go out of business and we said and they couldn't make the next payroll. We said okay the deal we negotiated that with them is we won't pay him a dime for the business but if we succeed over the next 6 months we'll pay him it was low it was half million for the business spread over 3 years after that. So yeah for us it looked like low risk. the other thing but and we because they were uh couldn't make payroll we rushed in we closed a deal without really taking a beat and the reality is they were burning through customers and angry customers so fast that we couldn't even though we weren't obligated of taking those customers obligations on because it was an asset purchase reputation we did a lot for those customers and in the end and they stopped generating sales and So in the end we took a nice hit on that business financially but the worst part is we got distracted and our some of our team members got discouraged and lost a little bit of trust and again so there's always implications you don't think about but that's one where we knew better we have our checklist we have our due diligent process we have our go and no goes in a normal situation this would have been killed but I over we uh we as a leadership overrode those concerns. We thought we had this one for for the for the founders who are listening and who wants to do deals. What kind of like advice you would give before the deal and what things has they have to watch out or do after the deal closed postacquisition? I always start with what is your goal? Really understand your goal for the business. Is it to exit? Is to exit this year? Is exit 3 years, 5 years from now? Look at yourself from a financial perspective. Is this business when you're going to sell going to achieve your financial goals? For example, if you're generating a business that generates between half a million to $2 million of EBID profit, congratulations. You're incredible. You beat you're such a small fraction of the success, especially if this business has been operating for 5 years. The challenge is you are in the valley of despair. What I mean by that is you you've been running this business for 5 10 15 20 25 years. you generate nice cash flow from that. But if you want to retire from this, when you sell the business, it's probably worth anywhere from three to five times the cash flow you're pulling on the business or EBID up. So what does that mean? Is that when you sell it, if you want to live off the same level of income, let's forget about taxes and just keep this simple simple scenario. you are going to get three to five years of cash flow from this business which means that either you need to drastically cut back on your lifestyle or two um you just need to face the fact that at a certain point you need to get a job or you need to start a new business. So again those are really tough. It isn't one going to be one of those. Now again, if you've been running this for 30 years, put together way a large amount of money and because you've been smartly saved and invested and you don't really need anything from the sale, it's all gravy. Congratulations. Then you can have that ticker tape moment assuming you sell your business to the right seller, the right buyer that meets your criteria and it could be that takes care of your clients, takes care of your team, continues the legacy. you're going to determine what that is. But most situation, let me also share this with you, is companies between those ranges of half million to $2 million, the probability of them having a successful sale are under 35%. That means twothirds of businesses will never sell. Even those that get term sheets will not close. You suddenly after 30 years you go to market hire an investment banker you pay a retainer suddenly you go to market and you get a term sheet you lock into that perfect everything's great and suddenly something happens with their business it happened to me I was being bought by a billion dollar company my first business it was great they my company fit perfectly into that but what happened is their biggest division got in trouble so the chairman at the board meeting where they are voting on our deal said Why you even bring this to me is our biggest divisions in trouble. We're we're freezing all acquisitions. These things these things happen. It could be that the funer couldn't get the money and couldn't close. They could have identified something in your core business that they don't like. There's a thousand1 reasons why people back off even with term sheets. So at that level, the probability of successful sales say smalls a third. And then what? You're going to give it to your employees. You're just going to shut it down. the you know so and so if you have a larger business if you can figure out how to scale the eBay up from to four or five million or $6 million now you're talking about a multiple that's could be 6 7 8 times your profit you're talking about a bigger scale of business and this is where world happens where you can achieve the numbers and have that um crossing the finish line moment knowing that you're financially set for life and potentially Dagna uh generational wealth for your kids. Yeah. Yeah. Recently one of my friends he just sold his agency uh was doing about 5 million ITA I believe 4.8 he just sold it for $50 million. That was I think good deal. There you go. That's incredible. That's incredible. Again the multiple and therefore how do you actually how you how do you actually achieve that have a probably a success and it's a number that really uh that really is worthwhile. Yeah. Yeah. So, so that's is who is about to sell. What about when you are about to buy a company? Well, again, it's I start with this is what is your ultimate goal there? So, start with your ultimate goal is is it to sell? Is it to sell one year from now, 3 years, 5 years from now? What are the things that a seller is going to look at that they're going to put under value? For example, the first thing a seller is going to say is do you have consistent growth? If not, if you buy a good growing agency, it can basically hide that fact. And again, you have underlying core core economics. When they do due diligence, they can work it out. They're looking to buy your business. You have a 40% client concentration, meaning one of your clients represents 40% of the business. I don't care whether you're a manufacturer. If you have a client concentration risk, it'll scare most buyers off to not doing the deal or discounting it in a very drastic way. If you could do an acquisition of of with different companies and pull together now sudden you the largest company is very small. So you have to identify what is it that you're you're going to risk. If you see that you're an Amazon agency look like everyone else but those that have are successful in Tik Tok shops which is a very similar business you can say great let me do an acquisition of a Tik Tok shop agency and therefore we're it'll help us scale and we're more of a fullervice specialty agency. So that's why I said this, what are you trying to solve? What are your greatest agencies that acquisition can do? But how does that fit in your way to achieving your goal? And I'm always focusing on the goal and building an architectural plan on how to get there. So basically, you will build it backwards, right? What is your exit strategy? Who's your buyer and what the buyer wants, right? I use the word a lot of times liquidity event starter versus acquisition strategy because you know we had u um her campus on our show you know at event our deal CEO M&A summit talk and she's a platform she brought in private equity funding and she's was they were doing incredible and what they decided to do is take some ships off the table one the partners wanted to leave and here was the opportunity to restructure from them perspective but basically now they have a I'm going to say it's not unlimited checkbooks, but it's a very deep checkbooks to scale to the next level because they're using the private equity groups money to do that. And again, for her, her exit was not to leave. She loves the business, but she wanted to be building and scaling a bigger platform, but have some liquidities to know that her family's been taken care of. Would you, and I I believe you said your first company you bought, it was even bigger than your company. Like would you buy bigger company than your own company or you would always buy a smaller one on the equal size? Okay, here's what I'm saying is opportunistically I'd buy a bigger company but it has to be opportunistic and clear and I have to feel like I can be successful. The biggest challenge when you buy a bigger company and you're a smaller company is how are you going to you have your way of doing business reporting systems processes culture is a big one. How are you going to go to a company that's twice your size and say, "Guys, this is the way you're supposed to do it when you're a small company and they're big." Again, what are you going to do with the culture? Is it going to be culture clash? Because culture is very, very important on how they operate after day one. So, that's the biggest risk when you're when you're buying something larger. When you're buying something that's a 30 third of your size, it's a lot easier, even half your size. Sir, I don't know if I mentioned the stats is look at your exit goals and decide this. Understand that let's say you're really good at scaling and you think you can scale every year on average 15% which means some years 20 or 25% some year 5% for the next 5 years you're going to grow 15% a year. It means at the end of 5 years you increase your enterprise value about 60%. you increased your enterprise value about by about 60%. Which helps you from a better payday. The other option is if you bought one business a year that's half your size for 5 years. Nothing crazy, just simp systems processes as if you're going after a big account. Just one business a year that's half your size, you will 12x your exit. They don't go for 12x. You can say, "Okay, I want to uh I I basically I want to buy uh businesses that are a third of my size or I'm going to buy do that every other year for 5 years." And therefore, I'm fine with a 5x because, you know, if you look at your business, you're doing a half million in revenue, maybe your your value is 4 million is is going to be uh let's see, doing a half million a year, your business worth about $2 million. Yeah. Okay, now you keep on growing it, you know, and at 15% you get to $4 million. But how can you create an outsized return? You buy one businesses half your size for 5 years, you will 12 extra. That same half million dollar business 5 years later be worth $22 million. Again, it's just that is a more the larger your EBIT is, the more buyers out there with bigger pockets, the less competition there is to buy you, the higher they're going to pay for that same amount of EBID or profit. And that's how you win this multiple arbitrage. What about like how you would find capital? There is so much capitalist out there. Let's start with this is that first of all, the way I lean into the first time to every time I'm looking to buy a business, it always starts with the seller. One seller I met, she just wanted to move to the islands and follow her favorite sports and she wanted a great home for her employees and her team. She was and and and and her and her clients clients. The team was her and she wanted monthly payments and she cared more about price than she did about cash off the table cuz she saved money for years and she didn't need it. So, we're able to buy that business with 5% cash off the table and the rest are pure seller notes that she funded and coupons going back to her. So, again, it's it's, you know, a funding. So, one is you can do seller notes. If I want to buy borrow up to one to two times their monthly revenue, it's a little bit pricey, but and I do this for deposits where it's being heavily seller financed, but basically you can get there are so many lenders and and revenue b revenue advanced lenders that will do that to you and you'll close within a week. Uh there are mezzanine lenders, there are investors that are out there, there are people in your network you're not even talking to. put together a great deal and do your homework in advance to find out who the people are so you're not starting off scratch and then just go put together your models and show them the story. Interesting. And there's capital there. There's debt capital, there's bank capital, there's uh there's working capital for assets and receivables you have. There's equity capital. So there's a large number of sources that are out there. Uh I when I was interviewing Brian uh Bird uh he mentioned that you guys almost raised $500 million, right? Then that deal fall apart or something. What was it? Maybe you can tell that story. I like to add zeros to ideas period. It forces you to think differently. Not necessarily you should do it, but start with this. What would your current revenue or even your business look like if it was 10 times larger than it is? What would it look like? How would it operate? And then the question I love to ask myself is what would have to be true to make this possible? What would have to be true to make this possible? Rewrite operation operating assumptions. So what the example is co hits, I'm not spending my nights watching took Tiger King in my days and then drinking myself to death. I you know I want to be productive. I called I was in northern Burton County, New Jersey. I called my buddy of Brian Bert. We said let's always do something with each other. I said, "Let's buy an Amazon or ecom brand." Brian says, "You know me, I'm in." Next day we're talking and we just brainstorm a little bit and the question came up is, "What would happen if we add a zero to that and over time build a platform that could sustain acquire and sustain 10 brands?" Look at the numbers, look at the valuation, look at the exit opportunities. Extremely exciting. After a long weekend, and again, I'm not driving three and a half hours in northern Bergen County. What would happen if we were to buy overtime and manage over time 100 brands? And then what has to then the question is what would have to be true to make that possible? At Land of Coast brands, I trouble managing over three brands at the same time. So we actually looked and started reverse engineering that saying what would have to be true to make this possible. Here's all the assumptions that would have to be true. Can we achieve it? Yes. Yes. Yes. Yes. Yes. And with that, we said, "We got this. We're turning this to a business plan." We recruited because we added those zeros. It was a big beautiful clear vision and of a category killer model that we're putting together. We went with seven private equity firms. We got six term sheets for $100 million. We put our two favorite together and that's how we went on raised it. However, the first private equity firm we met with gave us a term sheet between equity and debt of a half a billion dollars. That was so exciting. They were simply amazing. The guy who ran it, he'd been working at that firm for 25 years. He's a full partner. There was something that happened with his partners. Next we we know he's out and that whole division is no longer doing private equity doing no longer doing investment deals for the foreseeable future. So with the reality and understanding we had a tight time window, we just moved on. But that's just one of those great stories which says when you have it's all about momentum. I can't tell you how many deals I either succeeded at the last minute because I pushed hard to get it done before something bad happened or stuff happens. I mean, example, when we um when we bought we're reliable home offers and we merged our business to be able to afford that that acquisition. Um, we closed on um September 7th and I was I flew up to um Hoboken through um through J through Newark airport 4 days before 9/11. If it would have been a week later, I don't know if we ever closed. So again, you always look for understand momentum is key in in getting deals and when you have a deal on the C table, you take it. Don't try to make it perfect. What was your most expensive mistake? I say in hindsight it was building Atlantic Coast brands by building all of our brands from scratch. Regress of how perfect we thought it was. We should have always been doing acquisitions and that cost me hundreds of million dollars on the next. There are things that are painful decisions, but when I say strategically that would that would have been it. The answer was there and we and we just didn't see it. Why did you leave foundry after raising 100 million? So it was my deal with uh my private equity firm is I'm an entrepreneur. So I as though the agreement was they wanted us to bring in a se before we even signed for raising the deal. They wanted a CEO that would run a publicly ent uh if we go public that could run it. I said I do not want to run run a publicly traded company cuz the scrutiny and all the challenge that come along with this. And they said, "Well, basically when our goal number one then is within the first 12 months to find to finish rounding off the senior team, hire a CEO and then I structure my deal that if it wasn't working because I'm not really good at working for other people. I'm an entrepreneur, then I can exit." And that's what happened. If you lost everything and you you only had like 100,000 in 2025, what would you do? What would you start? If I'm Tom Shipley, I'd be le I give you two different answers. If I'm Tom Shipley based on my relationships, I would create events and um create social media presence that gives me the ability to get deal flow do with deal flow coming in. I'm very myopic as far as what would make the most sense from an acquisition or or or scaling or joint venture perspective. And that's one way to do it while I create my next big INSA my big large model um that I believe has that quarter billion to a half a billion dollar exit opportunity. Now if I'm not Tom Shipley just I'm leaning into what I do then essentially what I'd say is okay um the easiest business to start as a service business. I'm going to spend time double down for 2 weeks, learn certain niches, and I'm going to niche down into the into AI and I'm going to start an AI imple implementation service. I'm producing tons of content around my avatar. So, let's say it's accounting and finance. I'm developing different ways for bookkeepers and CPAs to automate. I'm talking about that and I'm doing an agencies that's built around that. I'm getting on stages and talking about that. And in order to get clients on board that pay me a service fee, then I'm looking for opportunities from a software perspective or from an acquisition. And again, another thing I love to if I have an unfair advantage for the platform that I built, then I'm going to leverage that to do acquisitions there. And remember, as far as the we know this is right now the next 10 years, there'll be the biggest transfer of wealth in our history because the baby burners especially accelerated by AI. This means that there's somewhere about 1,500 businesses that will be selling on a monthly basis. Okay? Oh, no, sorry, on a daily basis. Twothirds of those will never sell. So, you're going to have somewhere between 600 or 900 businesses that will not sell every day. So, I'd be looking for those business opportunities, talking to sellers where basically I'm buying an infrastructure, a platform, and a business that could be fun to scale and cash flow for myself. Interesting. Thank you. Absolutely. Absolutely. Thank you. Thank you, Tom. I appreciate that.