E213: Ujwal Velagapudi: Buying Unique Businesses and Building a Diverse Portfolio - Watch Here

About the Guest(s):

Ujwal Velagapudi is a seasoned entrepreneur with a rich background in mergers and acquisitions, real estate investments, and a vast array of business ventures across multiple industries. Hailing from Detroit, Ujwal began his investment journey with a striking purchase in the city's real estate market and gradually expanded his portfolio to include a diverse collection of businesses, from a sports bar to a virtual assistant agency. With a hands-on approach and a keen eye for unique and thriving opportunities, Ujwal has amassed experience in buying businesses, navigating off-market deals, and growing them successfully with a spirit of innovation.

Episode Summary:

In this episode of the podcast, host Ronald Skelton welcomes Ujwal Velagapudi, an adept merger and acquisition expert with a passion for turning investment opportunities into thriving business enterprises. The conversation gives listeners an insightful look into Ujwal's unconventional path from real estate to acquiring businesses and the methodology he employs when looking for new ventures.

Ujwal shares his story of the first game-changing investment in Detroit, detailing his astute negotiation tactics and the progression from purchasing real estate to acquiring various businesses. The dialogue reveals his strategic approach to investing, including focusing on businesses with attractive free cash flow, management structures, and the potential for growth. In their discussion, Ujwal touches upon his criteria for selecting businesses, preferring those with a weird and cool factor or those shielded from certain industry risks.

Key Takeaways:

• Trusting one's instincts and conducting thorough vetting are paramount when considering business acquisitions, particularly when dealing with sellers.

• It's essential for businesses to have a solid operational foundation, including management teams in place, for investors like Ujwal to consider them promising opportunities.

• The significance of recurring revenue models and industry longevity are emphasized as prime factors when evaluating the potential of a business.

• Ujwal highlights the importance of deal flow, seeking enough opportunities to discern truly exceptional deals.

• He also advises aspiring entrepreneurs and investors to jump into the field, start making contacts, and learn through hands-on experiences.

Notable Quotes:

1. "It's just getting out there and starting to pick up the phone doing it. I think we overcomplicate this process. It's not very difficult; it's just you need the reps."

2. "I'm very trusting in general. And if I bet you and I bring you on my team or I want to do business with you, I'm believing that you're good, you're, we're going to be in it together."

3. "Each company has someone that runs it, and then I am basically the back office staff. So I'm the administrative staff. I'm the part-time M&A, as well as the back-office HR and the back-office part-time CEO."

4. "This year I'm more back in the saddle, really enjoying being more immersed in my companies and really trying to spend time on building the relationships for off-market opportunities to buy the next company."

5. "So even if I had a small little fund that I created, I want the opportunities to be so overwhelming that I get the pickings of the absolute highest tier of quality."

Article:

Thriving in M&A: Ujwal Velagapudi's Roadmap to Success

In the demanding world of mergers and acquisitions, the path to success can be complex and unpredictable. For Ujwal Velagapudi, his trajectory in this field has been defined by unique investments, the significance of understanding people, and the art of identifying off-market opportunities.

Key Takeaways:

• Diversification is key, where involvement in multiple industries can provide stability and growth opportunities.

• Building authentic relationships and trust is paramount—particularly in gauging the integrity of business owners during acquisitions.

• The importance of operating businesses without being an active manager, allowing entrepreneurs to focus on higher-level growth strategies.

Embracing Diversity in Investments: A Multifaceted Portfolio Strategy

Ujwal Velagapudi's approach to acquiring businesses focuses on diversity across industries. From sports bars and gyms to e-commerce and virtual assistant agencies, Velagapudi's strategy hinges on the potential for growth and revenue across different sectors.

"Bought in six different industries. So it's the 1 bar gym, e-commerce business, software consulting, and a virtual assistant agency and vending insurance. So bought in no six so far, so cool."

This varied investment approach not only mitigates risks associated with any single industry but also allows for a cross-pollination of ideas and strategies. It's an innovative method that exhibits forward-thinking tactics necessary in today's fluctuating markets.

Trusting the Process: The Importance of Sincerity and Consistency in Business Relationships

Velagapudi emphasizes the critical nature of establishing trust, not just in the businesses he invests but equally in the people who run them. His personal measurement of success relies heavily on the authenticity and consistency of the sellers.

"One of the biggest ones that I look out for right now is the seller themselves...I want to dissect them. I want to vet them, I want to do background check, reference checks on them externally, but also internally with their employees."

Purchasing a business is more than a financial transaction for Velagapudi—it's a testament to human interaction and integrity. This human-centric approach transcends typical due diligence, providing a comprehensive understanding of the business and its potential future.

Growing Through Acquisitions: Seeking Innovative Opportunities in the M&A Space

Velagapudi's growth strategy incorporates not just organic expansion but also acquisition-driven growth. His vision aims to establish strong platform entities within select industries. By identifying niche markets and underserved sectors, he is able to find high-quality opportunities that could become industry leaders.

"I want to build about four or five strong platform entities...and then if I happen to come across one-offs that are super attractive just because they're interesting to me and I can learn from them then that's what I enjoy doing."

It's a testament to creative thinking in a space that is too often confined by numbers and spreadsheets. Velagapudi looks to shape his portfolio around the idea of future potential, solidifying his position as a discerning and agile player in the mergers and acquisitions game.

Navigating Through Challenging Investment Waters

Velagapudi acknowledges the importance of staying active in the business exchange arenas to spot the best potential deals. Understanding that this is a "people business" at its core, his emphasis on learning from mistakes—especially those relating to trust—helps navigate the complex human elements of M&A.

The key to success, as Velagapudi lays out, is to blend acknowledgment of past errors with an acute awareness of future possibilities—always bearing in mind the diverse nature of the investment landscape and the essential human factor in every business transaction. This navigation guide through the precarious but potentially lucrative waters of mergers and acquisitions represents the culmination of hard-earned experience and keen insight, propelling an entrepreneur to new heights in an ever-evolving industry.

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