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D 5 · C 5 · P 5 · Cm 4 4.85
Q to, to tech? Why did you move into, um, mainstream businesses? If that one was going so well, I assume And I, I know it's going well now. Um, I think you've done a fantastic job, um, growing the business and, uh, keeping it alive and improving it. Um, what, what made you decide to diversify even more into, um, maybe some of the other companies that are completely different?
A Yeah, it all comes down to purchase multiple and cash flow, right? We have a unique lens on the world. Our business model is cash flow first. So everything we think about is how do we create an engine that generates cash flow that we can then reappropriate or move in a direction that we want. We don't want to Buy an expensive business that we then flip a few years later at a higher multiple. That's really not our model, and there's a lot of firms that do do that. I would say first, you know, the thing that allows us to do this is like for the up council story, Xavier and I were not involved as operators. The real operators were KJ and her team. She's the CEO of the business. She's, she's the CEO of the whole tech platform where we now own three companies. And because we have such high quality leadership, we can actually look across different industries as opposed to having our hands tied And having to really just focus on the day-to-day operations of the business. So it's that partnership between us as investors and our operators that allow us to go into different industries in the first place. Um, and then back to my comment about generating cash flow, you know, if you buy a software business and I'm sure, you know, folks have seen it, let's say you buy a three million ARR software business, maybe you're paying three to five Times yearly revenue. Maybe cash flow is like 500,00…
AI assessment note: “it all comes down to purchase multiple and cash flow, right?”
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D 5 · C 5 · P 4 · Cm 4 4.60
Q know, one business, but you have these businesses in such different industries, like, dramatically different. Um, so I guess for people that are listening, who are thinking, like, this is extremely interesting, like, how do you, Manage this. Is it just basically from the structure that you built where you put in an operator and then Uh, you basically step back and then oversee the business from there. Is that?
A Yeah, we, we really look for world-class operators first and foremost. Um, people who've been doing this for 20, ideally 30 years that are looking for their next thing. Maybe they want to start a business. Maybe they want to be an owner in a business. Um, and that's really our business model is finding those people Because it's really all about the people. It's really all about these leaders. They run the businesses as their own, you know, they're the face, they're the president, they, they're co-owners in the business. They oftentimes bring in their own executive team. So I, I certainly, you know, would not have the guts to go into many of these businesses, you know, for example, like the broadband business without a world-class operating team. And we really have put together, uh, or Martin there, uh, Who is the CEO of a telecom company who was the CEO of a telecom company for 20 years. He came and he put together a world-class team in order to do this, uh, to run this play, run this playbook in the US and really build up a challenger ISP brand. Um, you know, I would say a couple things. One is that we really look at businesses that are simple to understand. There's a lot of businesses. There's thousands and thousands of companies per year that we'll look at and we'll say no to, um, just because it's too complex, right? There's too many moving pieces for us to really get our h…
AI assessment note: “Yeah, we, we really look for world-class operators first and foremost.”
