Opinion
Helgeson: Holding companies can successfully decentralize capital allocation to CEOs
“Buffett has a view that basically it's his job to allocate capital and nobody else's. And I think there's a world where you can train your management teams to also be buyers of businesses in their sector and to Smartly allocate capital”
Insight
Helgeson: SBA business acquisitions should base-case a 100% return on equity
“You should really underwrite a hundred percent equity returns when you do one of these. And that should be a very, that should be a base case. That's like growing the business 10% a year.”
Insight
Helgeson: Holding companies with internal capital markets are ideal for compounding
“And so having an internal capital market means I don't need all the friction of going to a pool of investors and pitching them an idea and saying, here's how much you get and here's how much I get. And, or if I need debt, going to a bank and saying, okay, well…”
Opinion
Helgeson: Buffett's focus on downside risk over high returns is underestimated
“I think that's one aspect of his model that is really underestimated is, is, is his view of the downside risk. He's actually okay with relatively low rates of return, as long as there's some Possibility of growth of the business he bought.”
Disclosure
Helgeson: Centralized recruiting backfired by reducing portfolio CEO agency
“Despite having had that really clear message from him, we almost immediately went, oh, it'd be nice to have a recruiter on our team. Let's hire a recruiter. And then sure enough, what happens, she was a perfectly good recruiter, but then the CEOs start losing …”
Insight
Helgeson: Buying a $500k-profit business via SBA loan sets buyers for life
“If you think about the universe of businesses you can buy, if it's under say, 500,000 in profits, you ought to figure out a way to buy it personally as a listener with an SBA loan. That's like a real sweet spot. Cause you can probably buy that business for one…”
Insight
Helgeson: Local plumbing and HVAC depend equally on internet marketing and skills
“In a weird way, local plumbing and HVAC is as much about internet marketing as it is about the toilet.”
Insight
Helgeson: Build a lead-gen engine before acquiring local service businesses
“You can start out internet marketing and just sell leads to local plumbing companies. And once you have the engine cranking, then you can eventually go buy one.”
Assertion Not publicly verifiable
Helgeson: Better World Books sold over $1B in books online
“I think the company has sold in aggregate well over a billion dollars worth of books on the internet since I founded it.”
Disclosure
Helgeson: Enduring Ventures' parent company operates with zero direct employees
“Our C corporation has no employees. It's we actually even see, even I just get a salary from enduring consulting group, LLC, which is a subsidiary.”
Disclosure
Helgeson: Enduring Ventures avoids parent-guaranteed debt across subsidiaries
“So for example, we don't have any debt that is guaranteed by the parent company. That's very important because then If business A, for some reason has a catastrophic failure, it doesn't take down the rest of the ship.”
Assertion Supported
Helgeson: Berkshire Hathaway headquarters operates with just 40 employees
“There's literally still 40 people in the Berkshire head office and most of them do the tax return.”
Disclosure
Helgeson: First ~$8M raised by Enduring Ventures qualifies as QSBS
“So all of our original investors along with me and Cieva have that treatment in the company. And you do as well as an investor. I think about the first eight million that we raised qualified as QSPS.”
Insight
Helgeson: Scaffolding rental businesses uniquely profit from construction delays
“You get paid to put up, you get, you have, you get paid to put up the scaffolding, you get paid a rate, day rate, well it's up, so any construction delays just go in your favor, and then you get paid to take down the scaffolding.”
Assertion Not checkable as stated
Helgeson: NYPL was a $2.5M annual account for Better World Books
“And that was probably, New York Public Library alone was probably a two and a half million dollar a year account where they would ship us the books.”
