Nov 25, 2025 · 30m · we-live-to-build
He Built a Mutual Fund Out of 200 Recruiting Clients and Hit $50M
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this interview, an entrepreneur discusses how he scaled an executive recruiting firm to $50 million using a diversified hourly business model, weathered a pandemic-era acquisition by Caldwell, and spun out an independent AI sourcing startup while championing the necessity of human judgment in hiring.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Sean holds 24% of the talking time here. How this is scored →
Sean as informed peer 3.3 Guest teaching 3.6 Guest disagreement 0.4 Sean pushing back 1.5
speaking balance: gold is Sean, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 27:04 David Corrects Recruiter Output Economics
David immediately steps in to correct Sean's flippant suggestion that an internal executive recruiter only needs to hire two people per year to justify a high salary.
Hardest push from Sean ▶ 12:40 Sean Challenges $50M Math on 200 ClientsSean refuses to accept the vague premise and presses David on how an hourly service model without commissions could generate $50M across just 200 accounts.
Biggest teaching moment ▶ 9:19 David Deconstructs Search Agency Commission FlawsDavid uses his 28 years of corporate experience to show why the traditional one-third commission model is inefficient for clients compared to dedicated internal hourly teams.
Sean holds their own ▶ 13:25 Sean Identifies Agency Growth CeilingsSean demonstrates strong business acumen by observing that hourly professional service firms almost always stall at $10M unless they add tiered software or productized services.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Sean as informed peer | Guest teaching | Guest disagreement | Sean pushing back | Why |
|---|---|---|---|---|---|---|
| Surviving COVID-19 and Closing the Caldwell Acquisition Deal | 4 | 2 | 0 | 1 | Sean probes David's experience surviving the onset of COVID-19 and shares a lengthy personal anecdote about his own startup pivot during the pandemic. David recounts how PPP funding and client furloughs helped his recruiting firm rebound. | |
| Rethinking Executive Recruiting and the Decision to Exit | 2 | 5 | 0 | 1 | Sean asks why David decided to sell a highly profitable company. David educates the host on the legacy search industry's commission flaws and his rationale for treating recruitment as a professional services consulting model. | |
| The Mutual Fund Business Model for Hourly Recruiting | 6 | 4 | 1 | 4 | Sean pushes back on how an hourly billing structure could generate $50M from only 200 clients, citing standard industry ceilings for hourly service agencies. David breaks down hourly rates and his mutual fund diversification thesis. | |
| Developing Internal AI Tools and Spinning Out Hoot Recruit | 4 | 3 | 0 | 0 | Sean notes that services firms often build software products to break growth ceilings. David details how internal tooling evolved into Hoot Recruit and why Caldwell spun it off to protect P&L margins. | |
| Structuring the Corporate Spinout and Separation from Caldwell | 4 | 2 | 1 | 4 | Sean drills down on whether Caldwell provided ongoing cash, investor introductions, or advisory backing post-spinout. David firmly clarifies the strict corporate separation and lack of board control. | |
| The Mechanics and Productivity Gains of AI Candidate Sourcing | 1 | 5 | 0 | 0 | Sean asks David to explain the tangible benefits of recruitment AI agents. David provides an in-depth breakdown of top-of-funnel sourcing mechanics and human-in-the-loop qualitative checks. | |
| Preserving Human Judgment in Recruiting and Mitigating AI Bias | 5 | 4 | 1 | 2 | Sean shares his experience firing and rehiring human designers over AI shortcomings and discusses resume demographic bias. David reframes the deterministic versus judgment divide in corporate tasks. | |
| Universal Lessons in Executive Leadership, Character, and Culture | 0 | 4 | 0 | 0 | Sean poses a broad retrospective question on life and career lessons. David provides a detailed discourse on the primacy of character over technical competence and the organic formation of workplace culture. |
Statements from this episode (13)
Windley's recruiting business lost 75% of revenue at COVID-19 onset
“We dropped. 75% of the business. I put people on furlough, which was ended up being a good move instead of laying them off completely.”
Windley: Recruiting firm peaked at about $50M in revenue
“We peaked at about fifty million dollars in revenue.”
Windley: Recruiting firm sustained 30% CAGR from under $1M base
“We were growing at 30% a year. Kager was, you know, we started less than a million, like I said, and grew it, you know, from 20 14 through the teens.”
Windley: Internal Executive Recruiting Teams Are More Efficient Than External Search
“All my tech companies that I worked for, we hired internal staff, even at executive recruiting, because it was just a more efficient, better model”
Windley: Traditional search firms charge a 33.3% fee per search
“And what you've pointed out is my theory of why there hasn't been as much change in this industry as in others, because it's such a good model for the hydrogen struggles, for the corn fairies, charging 33 and a third percent. Per search, right?”
Windley: Largest client never exceeded 10% of recruiting revenue
“Over those 10 years, our largest customer never got over 10% of our total revenue, and so we would run like a 182 hundred customers live at a time, right?”
Windley: Firm billed $115-$125/hr for recruiting and $75-$80/hr for sourcing
“We would charge about 125, 115 dollars an hour for recruiting, about 75, 80 dollars an hour for sourcing, right?”
Windley: Building a software startup inside a services firm drains P&L
“Because we were investing in a software startup within a. Professional services company, and it's a drain on the P and L right.”
Windley: AI sourcing will eventually match or exceed human recruiting quality
“As AI gets better and better I think there will be a time where you can say that AI will be as good and maybe even better in quality.”
Windley: Human-in-the-loop is the optimal AI agent architecture today
“We've designed our application to make sure the human is still in the loop, so the recruiter or the user, because of, for qualitative checks, right, and judgment calls, we believe that's the best state of design for AI applications and AI agents today”
Weisbrot: Companies replacing workers with AI will quickly regret mass layoffs
“We're probably all finding that while there's a rush to implement AI within the business operations, that they will very quickly go, whoops, I probably shouldn't have fired those 10,000 employees or those hundred employees because the AI isn't really capable o…”
Windley: Judgment-based processes will be the last AI agents automate
“Those processes where you still need human judgment will be the last ones that the AI agents will take over.”
Windley: Character, not competence, is the differentiator in executive hiring
“When you're hiring executives at one of these big companies, someone's going to be competent at all the things you need, right? You're hiring a CMO, you're hiring a chief technical, you're hiring a sales leader. They're going to be good at what they do. And th…”