E149: Bill Snow: Author, Mid-Market Investment Banker and Mergers and Acquisitions Expert

[00:00:00] Ronald Skelton: Come to the How2Exit podcast. Today I'm here with Bill Snow. He is the author of Mergers and Acquisitions for Dummies. Thank you for being on the show today, Bill. 

[00:00:07] Bill Snow: My pleasure. Thank you for having me. 

[00:00:09] Ronald Skelton: I always start off with my, the running joke. And if you have listened to a couple of shows, you already know it, but the joke is, Hey, you were born and then you ended up on a show about mergers and acquisitions.

[00:00:17] Can you fill out that small gap in between? Can you give us your origin story and connect us with, kind of who you are and how you ended up writing the book and being in the M&A space in general? 

[00:00:27] Bill Snow: Sure. Nothing but happy accidents. It's not by any sort of a plan. And that's what I always tell people.

[00:00:32] If you put a plan together, people always say, I want to do what you do. And I always wonder why the hell's, what the hell's wrong with you? Why'd you want to do this? And in life you gotta be open to different things that show up and other opportunities that show up. And sometimes it's not forecasted.

[00:00:45] I'm a big believer in something else. Something else will typically happen. And you have to be adept enough, is this the right thing for me? So I grew up in the Chicago area, from Chicago originally. Live in the city now. Spent most of my life here, a couple stops elsewhere, but most of my life in Chicago.

[00:01:00] Got out of college. I didn't know what I wanted to do. Didn't know what I was good at. Tried some sales jobs. I worked for a retailer. Buying up mom and pop retail operations, primarily in the Southeast. I spent a lot of time in Georgia and Alabama, South Carolina, a little bit in Florida and came back to Chicago. Got interested in startups and where did these business ideas come from and how do you put this together?

[00:01:22] So I worked for friends and family. Funded companies, angel funded. Venture capital funded, kind of working up, working my way up the food chain. And we worked at one point, I worked for a, online source that was linking or supposedly linking entrepreneurs with venture capital. So I learned a lot about the financing game and venture capital game and things like that.

[00:01:41] A couple of years after that job, ground to a halt. A friend of mine who had worked at the same company. was working for a middle market investment banking firm. And so they needed somebody to execute transactions. Somebody who could make phone calls and think quickly and read balance sheets and understood business and so forth.

[00:01:58] So they couldn't find him. So they called me and I very wisely turned down the investment banking job, I think four or five times. And the owner called me. It was Memorial Day weekend. And he said, I'm not taking no for an answer. He caught me in a moment of weakness. And so I said, okay, fine. I'll call me an investment banker.

[00:02:16] So everybody thinks it's some sort of, I don't know how to get into this kind of stuff, but I, that's how I got it, and I turned down the job. So I didn't really want to do it, which is a big irony. I thought it was just gonna be another sales job. And, cause I was focused on the execution. So we had clients, someone puts the material together.

[00:02:30] And my job was to execute, get the materials out, set up the meetings, get the offers and close the transaction. And what I found, one of the great things about M& A is when you are selling something, you're actually buying. Because if you have a good company that you're selling, you're probably going to get multiple offers.

[00:02:45] Buyers are chomping at the bit. They're always looking to deploy capital. Whether it's private equity firms or strategic companies. They want to make acquisitions. And so if you've got a good asset that you're selling, you're going to get multiple offers. You can sell the company only one time. And so it was a great,realization that I made.

[00:03:03] Anything I figured out in anybody in the business knows that, but I did that. Really enjoyed that. I've been doing that since for almost 20 years. Since '05. As far as the book, going back to the venture capital days, I had a business meeting that did not go well, and I was very upset at myself and the chairman of this company said, what the blank do you know about venture capital?

[00:03:22] He did not say blank. You can fill in your own expletive, whatever you want. And I was so upset that I'd been working on this article or just some very rough ideas. And I thought, I'll finish this article. I didn't know what I was going to do with it. And I kept writing and it turned into a longer article.

[00:03:35] I'll make it a two part, make it a five, 10 part. And then I thought, I'll make it a book. I'll weave a narration through it. So I kept doing this and having a lot of fun. And I called it Venture Capital 101, which you can buy on Amazon, by the way, for a dollar I think, I sell it for. And I didn't know what to do with it.

[00:03:48] I made a PDF. I sent it out. This is back in '03 and it went all over the internet. I was a very, very minor viral hit before that was a term. People are contacting me with offers, good, bad, and indifferent. And if I knew what to do, I remember thinking I could do something with it. I didn't really know what to do.

[00:04:04] So a couple of years go by, that's when I started working for the middle market investment banking firm. Wiley publishing somehow got a hold of that little PDF booklet I put together in Venture Capital. So they reached out to me to write a book. So people always ask, how did you get around the copyright?

[00:04:19] That one always cracks me up. No, Wiley, it's an official for dummies book. Wiley contacted me to write the book and they had another idea. It took a couple of years, but eventually we settled on mergers and acquisitions for dummies. That was in 10. The first one came out 11 and we just had the new one, the second edition right here over my shoulder. Just came out at the end of May this year, second edition.

[00:04:41] Ronald Skelton: That's awesome. So we did cover the, the book a little bit. What's the logical next step here? Let's talk about some of the deals that you've overseen. Some of the stuff you can talk about.

[00:04:50] I know NDAs exist, but from a high level, let's jump into, what were some of the experiences you had in mergers and acquisition transactions that led you to? Gain this knowledge and to, be able to write the book? I know you've had to have done multiple deals by the time you started writing content. 

[00:05:08] Bill Snow: Yeah, when I started in the business, I was in my late thirties. I didn't know anything, which is probably the best way for me to learn.

[00:05:15] So I, I got tossed right in there. I had to figure out, I had colleagues of course, I could ask questions and get some guidance, but I didn't even know that some sort of M&A process existed, that steps existed. I had to figure all that out and that was very helpful. And you see, when you see the end goal, okay, a closed transaction and a wire transfers and you get paid for the work and so forth.

[00:05:37] When you see that goal, then you can fill in, backfill in all the steps that are needed to get there. That's very helpful to me. The first couple of transactions I worked on did not close. One was a small business with just a little bit of technology. Someone was trying to spin out and, we weren't getting, I think we were getting fair offers, weren't getting many offers, but I think they had stars in their eyes in terms of what that might be worth.

[00:06:00] That didn't close. There were, a couple other things, but we finally started hitting our stride. We sold off a marketing company to a large company down in Dallas. And that I was a big part of that. And then, some of the other transactions that, that I worked on, basically soup to nuts.

[00:06:14] We sold a,seller of nurse's scrubs, professional attire, a distributor of those. And also sold, manufacturer of drink dispensing equipment, coffee equipment, and tea and, bubblers that you see in a 7 Eleven and things like that. And what you learn, and a lot of other transactions, and what you learn by doing this is, yeah, you have to have a process.

[00:06:36] You have to have a step, step by step process. Okay, we're going to put the materials together, a buyer's list. We'll reach out to the buyers. We'll get initial offers, indications of interest. We'll set up meetings with maybe some of those groups who have expressed interest. We'll do the management meeting.

[00:06:50] Maybe provide some more information. We'll ask for a letter of intent. We'll negotiate that. We'll pick a letter of intent. You can only pick one winner. There's only one company to sell. Then you go to due diligence and purchase agreement writing, and then you close the transaction. So those are the steps, to getting a transaction done.

[00:07:06] And so by, by doing that and understanding that, I think that helps, but you also have to be adept enough to realize that something else will happen. I mentioned that at the onset, something else, quite often happens. And so you might have a linear idea that a process should take seven, eight, nine months.

[00:07:21] Everybody else thinks that's long. Most firms I've worked for, always want to say you can get it done quicker. And we've never gotten deals or rarely happens because something else happens. The client is either slow. Getting information, they've got a business to run. Then sometimes they don't realize the amount of information that is needed to put the book together, that's needed for due diligence.

[00:07:39] They will plan vacations right in the middle of, when we thought we were going to do management meetings. And so you've got, you have to adjust and things like that. Something might happen with the company or the buyer. Things always tend to take longer. So having a number of transactions under my belt and then getting a chance to write a book.

[00:07:56] Was very helpful because it allowed me to really dive deep into the process and the steps that are involved in an M& A transaction. And the corollary to doing that work is I learned how I learn. Which is I experience, and then I write it up. I've always enjoyed writing. I'm a writing preference learner.

[00:08:16] Some people are reading preference learners. I was never a reading preference learner. That's why I think I was always a better teacher than I was student. Cause I thought I could probably do it better than the teacher. Some people like to get their information delivered visually or they want to hear, an audio book.

[00:08:31] That to me is really bizarre. I don't know why anybody would want to listen to somebody read a book. You got to read it. I'm joking that whatever works for you is important. But for me, writing is. But the key is, and it was very fascinating for me to go through the process that I already knew very well, but be able to think and I have to explain things that I made other connections along the way.

[00:08:49] So it's very helpful to me in terms of the work that I do. 

[00:08:52] Ronald Skelton: I am extremely on the visionary side. And you would think I wouldn't be visionary audio considering I have a hearing, hearing issues, but, I am. To the extent that, I think a lot of it had to do, growing up I was dyslexic, and I still am to some extent.

[00:09:06] So reading something was difficult for me. So I got really good if the teacher ever explained it up there and said it, I remembered it. So I made it through multiple college degrees with very few notes because I never missed a class, ever. And, the only questions I ever missed on the test, if they didn't cover in class.

[00:09:21] A lot of times I wouldn't even read the reading assignments if they covered everything fairly well, cause I just remembered what they said. But,still did good in college. But,there is that ability to, I find that the fastest way to learn something is have to teach it to somebody else.

[00:09:34] We had a real estate education company and what we used to do for a little while there, it still exists. I just, I sold my interest off to the partners there, but, I think they're still doing it. I haven't checked on them in a while. One of the things we do is if there were some free classes we did and we catch students and we come back to do the same free class.

[00:09:50] And we caught you there to the third, the third time is like they're like a eight week program. On the third cycle you run through you taught the class, right? We would actually send you up there. We would give you the notes. We'll walk with you but you got up there and you helped us teach it. You were the, because there's always somebody up for help and doing math and stuff and eventually though, we had the students teach them the classes and then they learn it they don't have to come back because, when the best way to learn something is to have to teach somebody else.

[00:10:11] Bill Snow: Absolutely. And you get frustrated too, when someone is showing you how to do a, computer program or what you have to do and they're hitting all the buttons and I get, no, no, no, no. I will hit the buttons because I'm watching you, but I need to actually do that so I can remember the steps and where to go and all that kind of stuff.

[00:10:28] And I think also, when you talk about education, I was always very good in math and I got straight A's and I never studied. It just came naturally to me. I couldn't understand why anybody struggled in algebra and geometry. Those are easy. But, and so I did some tutoring in my thirties for a few years and I thought, well, I was really good at math.

[00:10:46] So give me some kids who's struggling with math. And that was probably a mistake because I had trouble explaining what was just self evident to me. And I looked back on that, I thought, probably even better off maybe working with a kid who was struggling in subjects. Maybe where I had to struggle and had to work and had to figure out how to learn.

[00:11:04] It's kind of like a,an athlete, a professional, a basketball player. That's why the legends of the game, the best players often do not make good coaches because they can't understand why people don't, can't do what they do effortlessly. And that's why I think some of these also runs, the guys that don't make it or at the end of the bench for a while.

[00:11:22] That really had a struggle, maybe just to hold on to a position on a pro team, probably make better coaches because they've had to learn how to learn. And they could probably teach those things to other guys. 

[00:11:32] Ronald Skelton: Yeah, I was really good at math and I don't think I could teach it because I don't follow the process.

[00:11:37] A lot of the stuff I've done so much, you just do it in your head. If somebody says, somebody gives you a math problem, you just kind of know the answer to it after a while. So to explain to another human being how to do it step by step, on paper to where the teacher or the instructor would accept the answer, show your work. 

[00:11:52] I've got kids now they're 12 and seven. Show your work. I was like, I can look at it at the equation and go, the answer is this and you're wrong, but to show your work is like, I just, I don't know how, I do it differently than your teacher wants you to do it. I promise you that. 

[00:12:05] Bill Snow: Some of the way they're teaching math now is, it doesn't make sense. It's like they're teaching for people, teaching me after people don't get math. And it, if I was taught that way, because I've seen some of those things, I don't think I would have done very well. I would have been able to figure out the end result, but following the steps that they have, I don't get that.

[00:12:23] Maybe it's just, I was taught math correctly. And I, like I said, I did have a natural inclination towards it, but I think some of these so called shortcuts or easy ways of teaching math probably end up hurting people who have a natural ability in mathematics, and that probably applies to other subjects as well.

[00:12:41] Ronald Skelton: Yeah, I can see that. So now you're in this, you're a mid market investment banker. For a lot of our audience who are buying SMBs and, small to medium businesses.

[00:12:51] In my view, and I play in that realm of 10 million and under, so we're usually talking to business brokers as opposed to investment bankers.

[00:12:59] that mid market that, where you're starting to talk to investment banker in my purview and correct me if I'm wrong, it's usually somebody who's got, a five to $10 million EBITDA above. And now they've got something we're shopping around and it's almost, I consider it like a, a broker, somebody who's going to market your stuff and an investment banker somebody is going to package it up and almost be a concierge to the, to the sale. 

[00:13:20] An investment banker in my, from my experience of interviewing you guys, they're going to go shop this deal around. They'll strategically find people who may not even know they're looking to buy something and reach out to them and go, Hey, I've got something you need to take a look at, right?

[00:13:32] Bill Snow: I'm disturbed by this. Hold on. You're telling me that other people have figured out they can represent the owner in a business transaction? I mean, I'm not the only person who does this? This is a shock. 

[00:13:41] Ronald Skelton: Be careful how much credit you give business brokers in the word represent.

[00:13:46] All right. I think it comes down to passive versus active marketing. A lot of brokers are very passive marketing. They throw it out there and hope people call them and the investment bankers actively go out and seek a market for a business, right? 

[00:13:58] Bill Snow: That's a very good way of putting it. Yeah. And that's exactly how I would, I would describe it.

[00:14:02] And then that's not to belittle brokers because I mean, look, some are going to be good. Some are going to be better, but yeah, they do have more of a, a listing approach. Like you're selling a piece of real estate. You put the listings out there. You look, you want to buy a house. You want to buy an office building, whatever.

[00:14:16] What do you do? You go to a broker, you see what's been listed. And that works. I mean, for certain things, the corner pizza shop or a laundry mat, things like that, that probably makes sense. And then certainly what it makes sense to pay the sort of fees that you'd pay an investment bank to sell a smaller business.

[00:14:31] But yeah, you're right. An investment banker will make a market. So we'll run the process. That's part of the reason why we want to have a company that's going to be of a size because we need to charge fees that are going to be commensurate, not only for the work, but we'll have multiple people work on it and you sell a company that's going to fetch a million dollars.

[00:14:48] That just doesn't leave a lot in terms of paying a reasonable fee to somebody doing all of that work. And so that, that becomes part of it as well. We used to want at least a million in earnings EBITDA. I think those deals are difficult. It's 2 million plus and even 2 million. Might be a little bit difficult because companies want to make bigger acquisitions.

[00:15:10] Why? It's going to take the same amount of time, whether you buy half a million in EBITDA or 5 million. It's going to cost the same. It's going to, might be even more difficult to buy the smaller transaction. So why burn all those calories for half a million, million dollars in earnings? 

[00:15:24] You might as well apply the same cost in terms of time, in terms of dollars, hiring lawyers and accounts and so forth to buy a more substantial business. And that's part of the reason why sometimes selling the smaller deals is a little more difficult. 

[00:15:37] Ronald Skelton: Yeah. I've heard it said, it's easier to raise millions than it is hundreds of thousands in this realm. I think it's easier to just tell, at least as a strategic in public companies, it's easier to sell that 10, $20 million company than it is to sell the 1 million. 

[00:15:56] Bill Snow: Absolutely. And it kind of goes into the fundraising world too. Everybody's got an idea.

[00:16:00] They got a nephew that's got some sort of app that's gonna change the world then. And I call the million to $5 million the land of death. I get hit up so many times, whether it's through LinkedIn or just other overtures, and they always say the same thing. All we need, we're just looking to raise, a million dollars, $2 million.

[00:16:19] And that is the worst place to, and it can get done, but it's the worst place because it's too big for friends and family. You might be able to get a couple hundred grand out of friends and family, people who don't know better and they'll pull back because of you. But in terms of going to an institution, a venture capital firm, private equity firm, and yeah, some of the times the smaller deals get done, but it's the same thing.

[00:16:37] If I had a hundred million dollars to invest, am I going to make $100 million investments and have to track all of those? Or might it make more sense to take that a hundred million and make, four or five, six investments where it's going to be much easier for me to stay in touch with all of those companies.

[00:16:53] And so people raising money need to think about that as well. So that million to 5 million is quite often the land of death. Really difficult to find, to find money at those ranges. 

[00:17:02] Ronald Skelton: I learned that the hard way. I created a startup many years ago. Online dating service of all things that kept people honest in their profiles, which turns out I never got product market fit because nobody wants to be kept honest in their dating profile.

[00:17:15] I went out to the VC round, try to raise the capital. And I was trying to play a game where I was only going to raise eight or $10 million in capital, and I was going to tackle big cities. First Dallas, New York, San Francisco. Get a product market fit in those markets and then expand out. E harmony It just raised like the week before just got closed on $100 million dollars worth of funding. And the vcs are looking like we're not going to compete with them and you're not raising enough money to even make us a, right?

[00:17:41] Bill Snow: It is a tough game. If you want to get into the venture capital game, the first thing is, don't. It is difficult. The VC firm spend all of their time up and down Sand Hill road. They spend all their time fending off the great unwashed or showing up with crummy business plans with some crummy idea.

[00:17:58] And that's going to change the world. And it's got to be tiring for them because, the deals that get tossed over the transom, they're just ideas. And maybe some are good ideas, but most, they have no idea what they're doing. That's why it's refreshing in the middle market world, things are different.

[00:18:12] It's the buyers. It's the private equity firms in particular, who are contacting guys like me, investment bankers, looking for transactions. So things have flipped in terms of the demand from the money sources. So in the venture world, it's tough to get up, to get their ear. In the middle market world, the private equity world, it's the PE firms who are looking for the deals. 

[00:18:31] Ronald Skelton: I used to live right down the street from I lived right down in Redwood city. I could drive to Sand Hill anytime. So I'll be honest, that was probably my third or fourth pitch. I came up with ideas. I would send it across to my pitch deck to them and I just get rejected.

[00:18:45] They wouldn't even let me come in and do my dog and pony show. And when they let me do the dog and pony show for the, the dating site, they told me like, Hey, that sounds good. Come back when you got something. Put a team together, build some software. I spent hundreds of thousands of dollars of my money, 26 employees.

[00:19:00] And, across the world in India and other places. Built this thing out and then turn around and like, yeah, we're still not funding it. So lesson learned. I thought I had something because I got their audience. I got their intention. They like, yeah, come in and show us that.

[00:19:11] Bill Snow: They don't want to be the one that says no, is the problem. And then the other thing is, Oh, we love it. When you find a lead, let us know. When you find some other sucker to price this, they will probably still turn it down. 

[00:19:22] Ronald Skelton: Yeah. When you find the lead investor, that's another thing. If you get a lead investor, come back. We just don't want to be the lead on this one.

[00:19:26] Bill Snow: Basically, if this is all news to you, if you're asking me sort of questions and you don't understand, then the venture capital game is not for you. It's kind of like buying something expensive, right? If you have to ask the price, you can't afford it.

[00:19:37] So it's the same thing. So I would always recommend it. If you want to get in the venture game, don't, okay. People with much more experience, if anything, if you're a young person, get hired by a venture funded business and work your way up there, then maybe you get on, you become known.

[00:19:51] And, that might lead to some other opportunities, but just with no experience and just an idea, good luck. And the other thing too, any idea that you have, cause I've been the scout for venture capital deals and everybody thought they had the original deal cause they're very insular.

[00:20:06] They're just thinking about themselves. And I'm thinking, I saw five of these last week doing basically the same thing. I mean, this is what you'll have to, this is the hard lesson, all of you listening. Nobody has an original thought. Anything that you try this, think of a name for a rock and roll band. Think of a name, and then try and see if it's been thought of before.

[00:20:25] It probably, everything has been thought of, yeah. Very few people have an original. 

[00:20:29] Ronald Skelton: Yeah. It wasn't my first thing either. I mean, before that I spent years working at venture capital backed startups. And I even got to go a couple of times to the pitches for second and third rounds of stuff to be the tech, not the guy to do the pitch, but be the tech nerd in the back of the room because somebody asked a really technical question.

[00:20:46] The CTO couldn't make it, they sent me. I usually wasn't the CTO type of guy because I don't write software and I refuse to but that, I've been in the room often enough that goes i'm going to do it for myself this time. It's a different thing when you're in the front of the room.

[00:20:57] It's totally different. So yeah, I agree with you if you, if you haven't done this and you think you're gonna raise capital and buy a business don't or go find somebody who's done it 15 times, let make them your lead and just follow. Some people, you can't turn off entrepreneurs away from an idea that's just stuck on their head.

[00:21:10] If you just got to do it, you're not going to change your mind, you're going to do it anyway, go find you somebody that's done it 10 times. And, that's how you're going to get it done.

[00:21:18] Bill Snow: Yeah. The people haven't done it, I always tell them the same thing.

[00:21:20] Okay. This is what I want you to do. Get a piece of paper, get a pen, and I want you to write down on this piece of paper. Bill said, do something else. And I want you to put that piece of paper in a drawer. Forget about it for one year. One year from now, I want you to open up that drawer, read that note and give me a call.

[00:21:35] Let me know if I was right or wrong. I've been saying that for years. 

[00:21:38] Ronald Skelton: One of the things in those VC pitch somebody actually said to me, he said, you don't have a company here. You have a, a patentable software idea. Because we had algorithms to keep people honest and stuff because you should go pitch that to the big guys.

[00:21:49] EHarmony's matching all those guys. So after it collapse and there was some financial and family issues that happened that made me change gears. I lost my mom and my dad within 18 months of each other. And I realized I didn't want to, it was kind of dramatic. It gave me a chance to set back from everything and look at it.

[00:22:05] And I started, all the conversations start echoing in your head when you have a moment of silence and you're not in the weeds getting something done. And I kept hearing, well, you should pitch these other guys. Your technology and sell, license the technology and sell it off. So I can't say who, but I reached out to a couple of them.

[00:22:19] And one of them was just really honest with me. Go look, I'll be honest with you. We knew what you were doing. We seen what you built. We were kind of intrigued to see if it worked cause we, we pulled our customers years ago and nobody wants to be kept honest in their profile. If you got traction, we might've been your,an acquisition target.

[00:22:32] You might've been an acquisition target of ours, but we were pretty confident our customers wouldn't go for it. They just tell you something like, you should have told me that before I spent every money, every dime in my 401k and some friends and family money. 

[00:22:42] Bill Snow: Yeah, I know. It's unfair and, I think part of that too is people will look to a third party as some sort of validation, right? If we raise venture capital, they're validating the idea. And the same thing, in my business, middle market investment banking, if Bill hires us or someone like Bill hires us, then they validate our view of the business and our view of the valuation and they'll be able to go do things.

[00:23:07] Nobody has that ability. I call that magic words. Nobody has that ability to whisper something in someone's ear. And if someone, I'll pay $10 for something and you whisper your magic words and they come back and say 15, I'll pay 15, nobody has that ability. And I think that a lot of people look, it's a flawed thing.

[00:23:25] They look at that funding source as a source of third party validation. And especially the venture game what do you have to understand, if that's the world that you're in, ask yourself if you have brain damage, first of all. But even if you do raise money, that's not the end. That's just the start.

[00:23:41] You thought you were working hard to get the money. Now you're going to be working really hard to turn that money into more money. And I think a lot of people miss that because they just view this. They see these rounds that are being raised and tens of millions, hundreds of millions of dollars. And they think that's success.

[00:23:56] That's just the starting point. 

[00:23:58] Ronald Skelton: Yeah. If you look at my profile now, it says one of my favorite things to put on the profile says, but can you exit, right? Like people pitch me stuff all the time too. And my, it's like, yeah, but can you exit? We're not profitable. Yeah. Are you building something exitable?

[00:24:11] And nothing proves market. You said, you as an investment banker can't make a market. A venture capital, one of the top, Sandhill. VC firms, Y Combinator, funds you doesn't mean you have a product, right? Cause they fund all kinds of ideas, and they're brilliant.

[00:24:25] They're probably one of the best at it, but it doesn't mean you're going to succeed because they're betting on one, one of a hundred funded companies that they fund is going to be a home run. Nothing proves it. My thing on this is nothing proves it like the market. Show me you've got product market fit, you're growing revenue.

[00:24:40] The people are paying for your service. Now we know you've got something, right?

[00:24:44] Bill Snow: And it needs to scale and be able to grow quickly without having to put more and more and more and more money into it. You know what, what you said there too is an interesting point. And it's something that a lot of the early stage, the people that want to be entrepreneurs, I don't think fully understand.

[00:25:02] Cause you talked about, they make a hundred investments and only one's going to turn into, whatever Google or Apple or Amazon or these big behemoth companies that are worth, tens, hundreds of,billions of dollars now. And so people think, well, these VCs have money.

[00:25:15] They just throw money and ideas. What you have to understand is they will vet every single management team, every single idea as if it will turn into a billion dollar business. Knowing that not all of them, maybe a small number will actually get there, but they're just not throwing money against the wall and seeing what sticks. They are going to vet everything.

[00:25:34] So they're not necessarily crazy risk takers. Risk is part of their game, but they are going to screen everything as if it is going to be the next Apple or Microsoft or Sun Microsystems or whatever big company that you want to think of. So very important if for some reason you want to get into that game, first of all, don't go do something else.

[00:25:55] But if you want to get that game, Ron, as you've said, they should work for somebody else and learn the business by being an employee for somebody else for a while. 

[00:26:02] Ronald Skelton: Yeah. So let's jump into, like buying companies instead of building it. We talked a lot about, but don't raise VC funds. I know you play in the mid market range.

[00:26:13] What to you is a viable business? It's not going to be your mom and pop doing 200, 000 a year as a heat and air service, right? If you're looking to be like, okay, I'm going to get into something that's fairly steady and I'm a safe bet for a good, solid entrepreneur with great skills to acquire, what would you say the minimum entry point should be for them?

[00:26:33] Bill Snow: Somebody looking to make an acquisition?

[00:26:35] Ronald Skelton: Yeah.

[00:26:35] Bill Snow: Well, that depends on what their goals are, what they're looking for. If it's an individual, do you have the wherewithal to compete with a large private equity firm with large strategic buyers in the way that they might bid on a 5 million EBITDA business?

[00:26:51] Probably you're not going to be able tohave the capital to meet that. No offense to you, some do. If you do have the capital, you probably would have done something already. So if you're looking at making, you want to be an entrepreneur, then you want to look at businesses. First of all, what is something that you like? Do you understand the business?

[00:27:08] What's going on with the nature of the sales? Is it a long sales cycle? Do they have a big concentration with any buyer? Do they have any concentrations with suppliers of the product or the materials used to make the products? What sort of business do you want? Do you want to get into manufacturing?

[00:27:22] Do you want to be a metal vendor? Do you want to distribute? Are you a value added distributor? Do you want to do some sort of business service? What are your skills? What are you good at? What is the team like at the company? I mean, are you looking at, being the president and running that company day to day, and that's going to be your main focus?

[00:27:38] Or do you want to buy numerous companies? Maybe be the chairman and have an executive team that operates it. Do you have a team now at that company or do you need to replace a key people? So myriad factors, myriad decisions go into it. And as with a business owner who wants to sell the business, we always say, put together your plan.

[00:27:56] Let's figure out what you want to do. And then we'll find the right buyer. That's the same thing for the buyers. Buyers should be thinking about what are they looking to do? What do I want to do? What am I good at? What am I not good at? That's something that I think very few people have a good handle on.

[00:28:11] Everybody wants to talk about their skills. Very few people have an ability to say what I'm not good at, what I don't like. And if you're honest with yourself, you talked about the honesty with your matchmaking business. If you're honest with yourself, especially with your weaknesses, that for me has been a huge eye opener.

[00:28:28] And especially if you want to be an entrepreneur, figure out what you're bad at, because you either have to bolster those skills or find team members who can handle those things that you don't like to do or you're bad at. 

[00:28:40] Ronald Skelton: I would say not only find team members that are good at what you don't, you're not good at, but understand the process of finding them and know how to find a second one if that one leaves, right?

[00:28:51] Because I've had really good partners and life changes and, they get married and the spouse wants to move away or whatever happens. It's funny as you, if you're a business partner of a small business and you're partner gets married, you almost got to do partner in the business, right?

[00:29:05] It's my wife says we need to move to this state. And I'm not in business with your wife. I'm kind of in business with you and we're doing something here. yeah, but I still got to deal with this analysis and I have to deal with it. So that said, not only Find that great partner, but understand the process you took to find them and understand what you would take to do it again, right?

[00:29:23] It's going to take, a lot of times it's going to take you months. Five months, six months to identify people, build that bond, know that that's the right person to bring in. So understand that and be ready for it. And, not that your current one's ever going to leave or do anything, but just understand what it took.

[00:29:38] Because, I have no idea how I found a couple of the ones I've had in the past and I'm still looking for a great operator that would be my second. This whole reason I host, monthly meetups for mergers and acquisitions people as I'm looking for somebody who is less visionary and more operator oriented.

[00:29:53] So a lot of times I meet somebody I really click on these rooms and I say, Hey, can you take this EOS test that tells you whether or not you're busy? I don't tell them why, but the whole goal is at some point, I'm going to find somebody just rockstar operator. And, Hey, you and I click, we should chat some more. And we'll build a relationship, see where it goes, but, all via zoom, of course.

[00:30:10] Bill Snow: Yeah, you should get into these outsourced CFO people. You want somebody who's an operator? You want someone who obviously understands the numbers and accounting and then the financial statements and so forth. That might, you know, better than me. That might prove more fruitful too, because a lot of those people, I mean, they've done well, they've got some money.

[00:30:30] Off source, but they might be open to the right opportunity going full time at a particular position. A lot of these, and I don't know who comes to your M&A networking events. You might control it, in terms of who comes, but my experience has been, I tend to not go to networking events unless I'm a speaker, unless I'm organizing it.

[00:30:48] I don't want to be just one of, there's a lot of job seekers in early stage, the wannabes, and there's nothing wrong with that. But you get a lot of that and it's, you got to ask yourself who's selling who. And again, I'm not criticizing what you're doing because I don't know anything about it, but, that might be helpful looking at some of those CFO group server.

[00:31:04] Ronald Skelton: Occasionally when I need services and stuff, I do use those fractional CFO and different services out there. But I never thought about farming them like, Hey, would you like to be a more full time partner type of thing? It's not a bad idea. The networking thing we do is actually really for beginners.

[00:31:18] We kind of say who you are, what you're looking for, what you're trying to acquire. And then we do a round of like, where are you stuck? And after interviewing 160 people, I usually know a guy, like you or somebody else. And I can pair people up like, don't call Bill if you've got to, if you're trying to sell your $500, 000 heat and air services. I know he's been on my show, but that's not his thing. Here, call this guy.

[00:31:38] But you know, also in the same realm, don't call Joe broker, if you got a $25 million tech firm that's growing like mad and you're ready to talk to somebody. You needed a mid market investment bank. I literally keep a database. I call, I know a guy database.

[00:31:53] I built it on air table and it's like, what does each one of you guys do? What's your primary spot? So when people call me and go, Hey, I need somebody to do X, Y, Z. I can go back and search all these people and go, these four people are the ones they need to talk to. 

[00:32:06] Bill Snow: I think that's great. And, especially with your early stage, you might want to do the interview question that I always do. And if people have been interviewed by me, they're probably trembling in fear when I asked this question. Which I always ask them, this is the BS question that we all get by lazy interviewers, to the interviewee.

[00:32:22] What are your strengths? What are your weaknesses? What are you good at? What are you bad at? And the reason it's a bad question, it's actually a wonderful question, is most people do what? They talk about very high level, I'm a people person. I work hard. Anybody can say that.

[00:32:36] That's not getting down into the nitty gritty. And then the big fallacy, and this is always fun for me, because I will tell people, I'm going to grade you too. And you're probably going to fail. Then I'll tell you my strengths and weaknesses and we'll do it again. And maybe you'll do better because I want them to be more insightful and thinking about themselves.

[00:32:52] And so the weakness, they say, I must phrase weakness in form of strength. And so, what do they say? I work so hard, I irritate people. And I always say, of all the things you could do in the world, you're an expert everywhere in sales and marketing and accounting and finance and building things and manufacturing, everything.

[00:33:11] Leadership, you're just flawless. And the big set and the thing that you don't do so well is you sometimes irritate people because you work so hard. And when you do that, sometimes it gets them thinking a little different. So what I tell them is, look, what I'm really good at is writing. I've always been good at that.

[00:33:26] And I've had to work very hard to find those skills and hone those skills. And I feel very fortunate, I've had some opportunities. Work with publisher and I've self published books just for some folks. I worked very hard at that to develop those skills. What I'm bad at is visual design. You're looking at the back of my house where I think the only wall that has any pictures on it.

[00:33:46] And of course the wonderful cover for the new book. I don't have any visual skills. That came to me when the first edition came out, which was in spring of 2011, and I got the book and I was really happy and I'm looking through it. I'm thinking, holy cow, I wrote a book. This is amazing. And then I'm looking at the empty walls of my house and I thought, I don't have any visual design skills.

[00:34:06] And so that for me has been freeing. Where I don't bother with the visual design stuff at work. I want to find people who are good at that. Whether that's putting the document together, a PowerPoint, things like that, it has been free. Let me work on the words and the messaging and things like that.

[00:34:24] Instead of me getting into something where I'm guessing, that has been incredibly free. I realized I was good at sales. I realized I didn't know anything about marketing. And the tip off there is Wiley sent me a book, they call it the author toolkit. I call it, How to Market Your for Dummies Book for Dummies.

[00:34:39] And as I'm flipping through that, I realized the marketing is left up to the author. I don't know anything about marketing. Maybe I can teach myself some things. And so, I will ask people who have a marketing degree, what's the difference between marketing and sales? Most people completely flounder at this.

[00:34:54] And it's a very simple thing. Marketing is what you do to get a chance to make a sale. That's it. And when I really thought about it, my great skill, what I think is taking a complicated subject and explaining it in a very simple, easy to understand manner. So I'll explain that. There's a few other strengths and weaknesses I have that I'll turn around to the other person.

[00:35:12] And then they usually do a little bit better. They dig a little deeper. And so that might be helpful too, having them dig into what they're really bad at. Not this platitudinous nonsense, right? I work hard and irritate people, but what their skills are, what they're good at and what they're bad at. 

[00:35:28] Ronald Skelton: It's interesting as I like to do the, repeat their question, like their answer back to them and just cut halfway off.

[00:35:33] The thing I'm really good at is, I work so hard to irritate people. The first comment I always say is like, irritate people? And I just think totally silent. And, they'll realize that they're starting to dig a little bit.

[00:35:42] And then we switch gears. Okay, now, if you ask me that about business and stuff, and I'll tell you right now, it's the financials. I don't do my own. I know how to read them, I know how to see them, but I don't do my own accounting. I'm not an accountant. And if I do it, we're in trouble, right?

[00:35:55] So we bring in people to do that stuff. Our lead sponsor is an outsourced CFO company now. Which I haven't switched over to yet because I'm not big enough to match their clientele, but I will be at some point. Everybody has strengths and weaknesses and it's nothing wrong with it.

[00:36:08] People honestly think that they're not going to get a job or they're not going to be your partner because they have a weakness and you're going to be concerned. I think it's a strength to be able to identify those things. I hate doing repetitive tasks. If you need me to come to work for you and do the same thing every day and day out, it's not going to last very long.

[00:36:25] It's just, I don't do repetitive. Like I joke around all the time. So I would outsource brushing my damn teeth if I could get somebody to show up my house in the morning and evening, every day at the right time. And I go to bed at different times, but I get up every day at 4 a. m. 

[00:36:37] So if you could get here at 4 a. m. And you get there between, 9 p. m. and midnight, depending on what I'm up to, I need somebody to come by and I'll smile and you do the brushing. But until I find that, I don't like repetitive tasks. Understanding your strengths and weaknesses is key inside of an entrepreneurial skill set.

[00:36:54] And being able to tell somebody else what they are, I think it's a strength. I really do.

[00:36:58] Bill Snow: I was at a dinner last, last year and a couple of people at the table and you get to talking to them and a entrepreneur and he's got a real estate company and things like that. So I'm doing my usual strengths and weaknesses, some business conversation over dinner. And he said, well, I don't have any weaknesses.

[00:37:14] He was very, very short himself, very, very calm. Okay, so I just put that aside. And so I start talking and asking about work and I was able to steer him where I wanted to, which is I got him talking about the frustration, without saying talk about the frustrations at work. We got on the subject of what he finds frustrating, which is people never do things the way that he wants to.

[00:37:36] He always has to get in there. I'm fixing everything. I'm doing everything. And he's going on and on about it, as if it's a strength. And I look at him and I said, sounds like you're a micromanager. And he said, yeah, I guess I am. And I said, sounds like a weakness. Look at this poor guy's face. And yeah, so a little bit, but he had not dug in deep like that and had done well, but had not dug in deep and especially younger people.

[00:38:02] I wish somebody would have told me this when I was in my twenties. This is what we should be teaching kids. In high school you should learn one thing. How do you learn? Are you reading preference, writing preference, visual, audio. You need to experience. And there could be a combination of those things too.

[00:38:14] It doesn't have to be, they're not mutually exclusive. And then in college, you should be figuring out strengths and weaknesses. Here's where I'm really good. Here's where I'm not good of the bad stuff. Maybe some things I can fix and get better. Other things I'm hopelessly clueless about. And so I need to find jobs where I can tell my strengths, use these real strengths and find where I fit in, in terms of the weaknesses by being able to elaborate and discuss that and find situations where other people have strengths where I'm weak. That's what we should be teaching in college. We're doing it completely wrong. 

[00:38:46] Ronald Skelton: I think one of the things that's totally missed is adequate, I call it storytelling. I'm a huge believer that everything you have now, everything you've ever had in the past, everything you ever want to have in the future is a direct correlation to conversations you've either had, should have or avoid having, or avoided having.

[00:39:04] And that said, the difference between me and you and somebody, I'm trying to think, Warren Buffett is, we're talking about, mid market companies and raising capital in the, me on my case, hundreds of thousands of millions, in your case, tens of millions, hundreds of millions potentially to acquire companies. Where he's out there looking at billion dollar transactions on a regular basis, right?

[00:39:25] Different conversations with different people, but it's all in that. I think that most of the people I see coming out of college, they really just don't know how to communicate. They don't know how to tell a passionate story by enrolling people in their vision of what they want to do in the world with confidence and with, if you look at some of the lead people in this world, I mean, look at the guy, a guy that did WeWork. Horrible business model, brilliant storyteller.

[00:39:51] The guy was absolutely just, confident in his storytelling abilities, creating a vision and getting other people to buy into it, to the tune of billions of dollars. When anybody with decent businesses would look at okay, he's overdoing this a bit, right? It was just the math does not back up the story, but he, his vision was so strong.

[00:40:10] People would keep backing him and keep backing him. He's already, I think he's got another bench. They paid him to leave and he's now, he's got a new venture. There's a huge skill set and the ability to tell a story. To be, design a vision and get other people what I refer to as enrolled in the vision, but people don't buy in and be fully engaged and see that vision as their own and take ownership of that vision.

[00:40:32] That is a skill set that, no matter what you're doing in the world, whether it's sales or entrepreneurship or, raising kids is unparalleled with anything else.

[00:40:44] Bill Snow: I think you're absolutely right. And especially younger people. I get asked all the time. I want to do what you do.

[00:40:49] You're 23 years old. You're not going to, and there's nothing wrong with that. Be 23, learn from older people. I couldn't do what I did when I was 23. And a big part of that is the people that you can interact with as you get older. I think that you can interact with people roughly 15 years old or younger.

[00:41:06] And so look, I'm in my mid fifties now. So guess what? People in their fifties are my peers. People in their sixties aren't that far away. So I can communicate with them into their seventies. I understand their world and maybe people back into their forties, I can understand. 25 year olds, I don't understand.

[00:41:22] I was 25 once. I was far cooler than they were, of course. When I was the coolest 25 year old in the world. And I, you would have known that I would have told you. But, when you're 25, you know, what people in their twenties, maybe into the thirties, maybe you can, you know, as teenagers, you can still relate to.

[00:41:36] But I really think there's about 15 years. And so if you're a younger person, we see this all the time too, that they work for a week and then they want to get promoted to be the president of the company. I want to run this thing. When am I going to be a partner? It doesn't work that way.

[00:41:49] You gotta learn and sit back and observe people and figure out who you can learn from. And life should be about learning and constantly adding skills and learning things. And I always tell people when they're, young people in their twenties, that difference going from 20 to 30 is, is enormous.

[00:42:05] The learning and when you turn 30, you'll look back and think, wow, I'm different. I mean, I'm the same in a lot of ways, but the same person, but I know so much more, I'm more refined in my thinking and experience. And you don't realize that in your early twenties.

[00:42:19] And then every year that goes by, every decade that goes by, yeah, you'll continue to advance, but you won't see that as much. And, think about someone in their early twenties, ask them today. When you were 20 versus when you were 10, were there some big differences in your life and your approach?

[00:42:33] And yeah, absolutely. So that's part of life too. Especially if you're twenties, you're still going through a process in life where you're going to be learning and changing, and that, that continues your whole life. But as you get older, as you have more revolutions around the sun, that rate of change tends to slow down.

[00:42:48] Ronald Skelton: Just yesterday, somebody on the, one of the meetings we were in. Said, my son's 17, he's graduating here, soon he's graduating early. He wants to get into mergers and acquisitions. What's the path he needs to take? Study finance and college and stuff. I was like, there's two paths and either one of them are easy.

[00:43:03] One path is, yeah, he studies finance in college. He goes out to work as an analyst at some of the PE firms and stuff. He pulls 60, 80 hours a week for 10 years as an analyst. And then he learns this inside and out and he can do it. The other path is he does the same thing, but he becomes an entrepreneur.

[00:43:17] He creates a business. He's an operator. He pulls 60, 80 hours a week. He fails a few businesses, wins a few million dollars, loses a few million dollars, and now he's an excellent operator and he can get into mergers and acquisitions. Neither one of the paths are easy, right? 

[00:43:30] Bill Snow: If he wants a base, if he wants to do this, I mean, first of all, what's wrong with him? Why do you want to do this? 

[00:43:37] But I'll tell him the five things. He's just making a note of five things that if you really want to do this and you're right, you might have an idea that this is what I want to do. And as I've said at the beginning, at the onset of this podcast, something else, right?

[00:43:48] Something else often happens and lead you somewhere else. And maybe that makes more sense and you should be open to it. Accounting, you want the skills to do this job. You need to be, don't be like Ron, you have to be an expert at accounting. And the way that you do this is you would take a lot of classes, be a CPA, that would be ideal.

[00:44:07] But the test is take a balance sheet, take an income statement. You can look up publicly traded companies. You'll need two balance sheets and two income statements, starting and ending same period. And then build this thing called a cashflow statement. And until you can, until you can do that, you don't have the right skills.

[00:44:24] So you have to teach yourself how to do that. You have to be an expert at math. If you struggle at math, if it just, you worked really hard to get C's in algebra, this is probably not going to be what you want to do because we use a lot of algebra, maybe a little bit of calculus in this as well.

[00:44:39] So accounting, math, writing. You need to be an expert at writing because you're going to be writing books and describing things and writing the offers. So you need to be a math expert, an accounting expert, a writing expert. And then if you want extra credit, what you want to do when you're going through college is spend a lot of time playing poker for money with your buddies.

[00:44:56] It doesn't have to be big stakes, but enough where if you lose, it stings because you need to learn the skill, not bluffing. Everybody thinks poker's about bluffing. They think negotiating is about bluffing. If you bluff, you gonna get found out. What you need to do is understand, read the table and understand the strength of your hand versus everybody else. And you have to learn in life, in M&A and in poker, how do I play weak hand?

[00:45:21] How do I play strong hand? Because if you have a strong hand and you bet, the maximum big numbers right off the bat, you chase everybody away and you win the ante. So learn how to play poker. And if you want to be in business, learn how to golf and be at least understanding. If you're a great golfer, that's even better, but at least understand the nomenclature and the rhythm of the game.

[00:45:41] So writing, accounting, math, poker, and golf. You want to be an M&A guy, those are the five things you need. 

[00:45:47] Ronald Skelton: Awesome. Good advice there. On the financial side, I can read the balance statement, income statements. I can do a cashflow statement, but often where I draw the line is why the hell did they put this here?

[00:45:57] You get these things from people like, that just doesn't fit the mold. And the funny thing about accounting is, I kinda look at accounting is you can have a hundred people who are CPAs, have them do the same business and do the same books and you'll get 10 different sets of, you'll have some commonalities, like there'll be some groupings.

[00:46:15] But, it's broad enough and people are opinionated enough. You're going to get 10 different sets. I'm not skilled enough to go that all, out of these 10, these six are right. There's just different ways to do it and these four are flawed in some way. 

[00:46:30] Bill Snow: Yeah, the more complicated the business, certainly the more permutations you might have. Especially when you're looking at assets.

[00:46:37] Do you expense those? Does it go right to the profit and loss statement? Do you capitalize that and then depreciate it over some period of time? And to what period of time? Yeah, absolutely. It can get very confusing, but you should at least be able to understand that and understand why the cashflow statement is important because business owners, for some reason, they never show that.

[00:46:57] They always show the balance sheet, the profit and loss statement, income statement. They understand those. I want to see the cashflow statement. Why? Because it ties the two together. So I want to make sure that I don't have to dig in there and find any, a monkey business or mistakes that are going on.

[00:47:11] But I also want to understand the nature of where the profits are coming from. How much is coming from operations? And even in the operations, are they making a positive cashflow from operations because they're selling off inventory? Or they're running up their payables? What's going on with all of those things.

[00:47:28] So the cashflow statement will show me that, show me how much money they're spending, investing in the business, buying equipment and so forth. And how much they're putting in or taking out by financing the business. I want to see that first and foremost.

[00:47:38] Ronald Skelton: I've gotten to have a lately where I want to see the, trailing 12 months, month over month, because I need to see cycles. Like every business I've found has cycles. Very few of them are steady.

[00:47:49] And you don't want to buy something at a peak cycle, and think you have cash reserves and stuff and then realize that they make all their money in November, December. And,during the Christmas cycle and then the rest of the year, they're coming out of pocket to pay employees cause they're not profitable.

[00:48:02] All right. It happens. A lot of businesses are that way. I grew up well in one, I grew up, my dad was a painter and painter remodeling. I ran it from the time I was 16 until the time I joined the military and was 20. That was a very cyclical business.

[00:48:13] And we needed to keep people on staff during the week, during the winters, just cause we did have a few jobs to do, we did cut back. But if you didn't know that you needed cash reserves to make it to the winter, because you're not going to be doing six houses a week, during the winter.

[00:48:27] You're going to be painting a few kitchens and bathrooms and living rooms, but like you go from, multiple crews down, but you don't know that stuff. If you just glance at somebody's balance statement, their income statement, even in their cashflow statement, it looks great.

[00:48:40] Great business. You just bought it at the peak and the owner wanted to take all the cash with it. Like you're going in, and now you got to keep everybody on until next November when things start picking back up and you make your money. 

[00:48:51] Bill Snow: That's why you want to understand, working capital and what's going on with working capital. Which is basically receivables plus inventory minus APM, and there might be some prepaid.

[00:48:59] Other things there, but you want to understand because if you have that cyclical nature, you'll see that working capital go up and down. And so you're buying working capital is essentially an asset that you're buying and you should place a value on that and that's one of the little nitty gritty things of doing an M& A transaction. Is what is that working capital worth?

[00:49:16] And do we see those big fluctuations and how do we account for that? What would a reasonable target be that when I sell the company, I'm supposed to have a certain amount of, of working capital. If I'm over that, then the buyer should pay me more. If it's under that, then that comes out of the sale price.

[00:49:32] You reduce the sale price by that. So that's a huge piece of the understanding that a lot of people glance over. It's a fallacy. It's a presentation that I'm working on. It's still just in the nebulous stage, but some of the mistakes that business owners make. So they have that short period of time, they have that one great month that they want to extrapolate, the maximum valuation, probably because they read something in the wall street journal on that month, on that quarter, on that relatively short period of time, they want to extrapolate off that.

[00:50:00] And that's why you have to look at, not only trailing 12, but back three years, four years, five years. What's really going on? Is this continuing to increase or does it kind of go up and down? And basically is it steady state? And do we expect it to be steady state for the next five, 10 years? 

[00:50:16] Ronald Skelton: Awesome. You hit a lot of topics. What do you feel that we're missing? What should we cover in our last few minutes for today?

[00:50:21] Bill Snow: That's a great question. How do you normally, this is your show, man. How do you normally wrap this up? 

[00:50:26] Ronald Skelton: I wrap them up, one of my favorite things to do is if somebody walks away from, and all they remember is three things from the show, what would you want them to remember?

[00:50:31] That's my favorite ending question. Like all you can remember is three things. They got three key things to take away from this show and end up viewing what you do, what would you want them to remember by the, from the show? 

[00:50:42] Bill Snow: In the M& A game, merger and acquisition game, selling middle market, lower middle market companies, however you want to define them.

[00:50:48] M& A is microeconomic. Okay. Everybody is focused on the macro, on the big economy. Well, I want to time the market, everybody wants to be the smartest guy in the room and time the market and somehow get to a sale, which might be eight, nine months, 12 months, 18 months from now, when you finally cross the line and close the thing.

[00:51:08] It's impossible to time the market. And it doesn't really matter what's going down with the economy. Yeah, I mean, certainly some big things can happen and that might have an impact on a granular level on the microeconomic level, but a company is going to be worth what the company is worth. Not necessarily what's going on with the economy.

[00:51:25] And the check there is, a great company that's growing rapidly, strong profits, strong profit margins, no concentration, management team, that's not going anywhere, they're going to stay there. Every little, check the box, every great thing, or almost every great thing you want with the business. So it's a great company.

[00:51:42] It's well run. It's growing. The economy is in the doldrums. Who cares that great company is still going to command a good, if not great price from probably multiple bidders. Maybe even more so because finding good companies in a bad economy is going to be difficult. And the check there is, a bad company something that is declining, losing sales, maybe losing money or the profits are dropping, big concentration, owner viewed as integral to the business and the only wants to leave, senior management about ready to retire.

[00:52:10] So all the things that would give any buyer applause, but the economy is going great. Guess what that bad company, that struggling company in a great economy will struggle to find bids. So focus on your company. If you want to sell a company, if you want to exit at some point, focus on what makes your company valuable.

[00:52:29] Yeah, the grand, the big economy, the macro can certainly have an impact, but not as much as you think. It is micro economic. 

[00:52:36] Ronald Skelton: That's awesome. How do people reach out to you? If they, first of all, what is your target market? If somebody wants to reach out and they want you to help them, buy a company or sell a company, what did they needed to come to the table with?

[00:52:46] What is your, I guess the demographics is the word I'm looking for. 

[00:52:49] Bill Snow: Sure. I'll give you a, can I give my firm a plug? 

[00:52:52] Ronald Skelton: Yeah, absolutely. It's always okay on the show to plug. I should have told you that ahead of time. 

[00:52:56] Bill Snow: You can find me at focusbankers. com. So Focus Investment Banking, it's a firm that I'm with.

[00:53:02] We're a middle market investment banking firm. You can find my incredible bio on there. Reach out to me there. You can find me on my website, BillSnow. com. Or as some people like to say, Bill's Now. Why would I want to pay bills now? 

[00:53:14] Ronald Skelton: I didn't think of that. 

[00:53:16] Bill Snow: Yeah, bills now. Billsnow. com and I'd be very happy to talk to you.

[00:53:20] I'm on LinkedIn. You can find me pretty easily on LinkedIn as well. I work with middle market companies. So middle market business owners looking to sell the business. All or part of the business, or maybe sell off a unit or a division that's on the sell side. We'll work with buyers of companies as well.

[00:53:37] Quite often larger companies, whether it's a private equity firm or a company in the hundreds of millions of revenue or billions in revenue, looking to do what acquisitions in the middle market, lower middle market. So that's broadly defined as revenues of, at least 10 to 20 million. Earnings of at least 2 million in EBITDA, up to 300 million in revenue.

[00:53:58] So if a company is, 50, 60, 70 million in revenue, a hundred million in revenue, that's right in the sweet spot, the type of companies that we work with. I've done a lot with manufacturing distributions and business services. I've got colleagues that run the whole gamut. So if you've got more of a techie, SaaS deal, software as a service, medical device, anything we've got, if it's not me, I've got a team members who will be able to help you out.

[00:54:20] Ronald Skelton: That's awesome. And then, so Bill Snow is the website and then your business website does the place to go. I'll make sure those get in the show note. And, I want to thank you, man. It was fun. We had a great time, we'll call that a show. 

[00:54:31] Bill Snow: Excellent. Thank you.