Feb. 15, 2023

E97: Deal Maven CEO Discusses Benefits Of Partial Acquisitions & Reducing Risk In M&A Transactions

E97: Deal Maven CEO Discusses Benefits Of Partial Acquisitions & Reducing Risk In M&A Transactions

Former M&A lawyer turned entrepreneur. Sold his last company for $26M and now the CEO of Dealmaven where they help entrepreneurs scale their businesses using mergers and acquisitions.

Former M&A lawyer turned entrepreneur. Sold his last company for $26M and now the CEO of Dealmaven where they help entrepreneurs scale their businesses using mergers and acquisitions.
Contact Raleigh on
Linkedin: https://www.linkedin.com/in/raleigh-williams-32477042/
Website: dealmaven.io
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[00:00:00] Ron Skelton: Hello and welcome to the How2Exit podcast. Today I'm here with Raleigh Williams. He is the CEO of Deal Maven, and he sold his last company for over $26 million. And now he's out there, he's helping people like you and I do acquisition deals. So I want to thank you for being on this show today and, get to learn from you today.

[00:00:15] Raleigh Williams: Stoked to be here. Let's get into it. 

[00:00:17] Ron Skelton: Okay. I always joke around and my favorite joke is, hey, you were born and now today you ended up on a show about buying and selling businesses. Could you fill in the gap a in between a little bit? Can you tell us how you ended up on a show like this? 

[00:00:29] Raleigh Williams: Sure. This is the most salient, this is the most important part of my life. So almost everything else almost pales in comparison, but, we'll, I started as a mergers and acquisitions lawyer. I went to law school. I knew I wanted to be a lawyer. I come from a family of lawyers. I'm the youngest of five kids. My dad's a lawyer. They're all on the litigation side. I was the black sheep because I wanted to do transactions. I wanted to do deals and litigators view deal lawyers as fake lawyers basically. And so I wanted to do mergers and acquisitions. I [00:01:00] actually started in bankruptcy, doing restructuring deals. I didn't like that. So I went into mergers and acquisitions. I did it in Manhattan and, Dallas, Texas. And so at big firms doing, billion dollar plus mergers, acquisitions, capital market offerings, raising new financings for public companies.

[00:01:18] And I lasted there about nine months. I really didn't like it as I was doing it. It is a very corporate environment. I just didn't, I didn't respect the people that I was working for because I felt like they knew so much. They knew so much on how to mitigate risk and how to do all these deals and do all this complex stuff, but they wouldn't put their own skin into the game on something that they knew very well. And M&A it didn't take me very long to see the closing term sheets of these deals where the entrepreneurs were making 500, $750 million to say. I feel like I'm in [00:02:00] the wrong piece of this transaction. How do I get into a different site of this somehow? And the opportunity came along pretty quickly for me to, buy an interest in a family entertainment center. A trampoline park business and escape rooms were just coming in vogue at that time.

[00:02:22] And so I felt like I could use my acquisition experience, my law experience, to kind of ingratiate myself with the guys that were running it at that time. And so I bought a small stake that ultimately became a larger stake. And, from 2016 to 2021, we took a business that was doing, that had been doing about $2 million a year in revenue for the prior six years. And we got it to a little over $10 million a year in revenue. Mostly through acquisitions and through growing locations. And then right before Covid, I kind of felt like I had [00:03:00] taken this opportunity that helped me get out of law and that it had grown into a bigger thing than I expected it to be. And I felt like it was time for me to start being on the disposition side of things that I didn't want to continue growing it like I thought that I did.

[00:03:15] And timing was fortunate because Covid, blew a hole in that industry of what it looked like. And we didn't get fully out before Covid. We actually still have two of the parks currently. But, we sold the majority of that business. It took us nine transactions to do it between sellers. We owned real estate, we owned a lot of different types of businesses and I learned that we, I learned a lot through that sale process. And as I was kind of coming out of the operational responsibilities of that business, I felt like there was a gap in the marketplace in terms of how these assets, trade hands, that, full acquisitions as they're current usually termed with an SBA loan, a personal guarantee. Those are heavy transactions to do. [00:04:00] They're difficult transactions to do. The acquirer has to put a lot of skin in the game. If they're wrong about the deal, they can lose a lot. And so Deal Maven was kind of a response to that of connecting buyers and sellers on different types of assets to, let them do more entrepreneurial deals that brokers wouldn't typically allow for. And now I'm here, so that should bridge the gap completely. 

[00:04:27] Ron Skelton: I got it. Yeah. Thing that comes in my mind is, two things. I think there's as many non-practicing attorneys out there than there are that practicing. It's not uncommon for somebody to go to law school, pass the bar, go out into the field and do it and decide they wanna do something else. 

[00:04:43] Raleigh Williams: Yeah. I think, when I was growing up, my dad would always tell me that, a legal education is the best education you can get no matter what. And I think that's true to some extent. I think the cost of a legal education is very different than it was when he went to law school in the 1980s. And so for a lot of people, it's cost prohibitive [00:05:00] to spend that much money in a legal and legal learning, and then not leverage it in the area that you're getting the most money to do. Which is practicing law.

[00:05:09] Ron Skelton: You talk a lot about, on your side, about partial acquisitions and that reducing some of the risk and some of the exposure and stuff. Let's talk about what is a partial acquisition and from your point of view. And, how do you guys help facilitate that? 

[00:05:22] Raleigh Williams: A partial acquisition, so the kind of, the principle that I focus on, one of the best things that, one of my very first mentors, when I was practicing law a billionaire. I went to a dinner with him and he was doing a lot more deals than all of these private equity guys were doing, and he was doing it on his own dime. He didn't have limited partners or any of that stuff. And I asked him how he could do so many deals and how he was able to kind of crank through these faster than the professionals could. And what he said was that he only does deals that if he's right, he gets rich and if he's wrong, he doesn't go broke.

[00:05:57] Which is a pretty simple [00:06:00] formula, but I look at every deal with that lens. That meaning on the upside, I don't want to buy something that even if I do everything right, there's not enough impact to my personal net worth to make it all worth it. And I see that mistake a lot and kind of the no money down, like try to get as many assets on like a hundred percent seller financing as possible. And from my vantage, the majority of those assets that a seller wants to give on a hundred percent seller financing are usually not assets that if you're right about the asset, it's going to get you rich because the seller themselves knows something that you don't about that asset. There's exceptions to that rule, right?

[00:06:47] And obviously the game is to try to live in the world of exceptions there. And then on the flip side, it's if you're wrong, you don't go broke. And what I've found is on the other end, on the one hand of the spectrum, you have kind of the [00:07:00] Warren on buffet cigarette butt analogy of only buy assets for as cheap as you can and whatever you can get for seller, a hundred percent seller financing, take those deals. That's how Warren Buffet started. And then over time he said, it's better to get great assets at fair prices over fair assets at great prices, right? The price doesn't have to be the sorting mechanism, really. It's better to buy great things. And on the other end of the spectrum, particularly in the SMB world, kind of lower, beneath the middle market where the private equity professionals are playing, you have SBA deals where the SBA will land up to 90%.

[00:07:36] And the operator, anyone who's owning more than 20% of that business is signing a full personal guarantee on that asset. That's backed by the cash flow, but also the personal assets of typically the operator. And on those deals, the risk is, if you're wrong, you can very clearly go broke, right? And so then you have the middle ground of how do you get deals done in the middle that if you're right, you [00:08:00] get rich. And if you're wrong, you don't go broken. So what this guy did, the experience that I saw as his deal lawyer was he wouldn't ever take, he wouldn't ever buy all of a business or an asset at the very beginning. Business mode like he would do real estate deals differently, but businesses, he would buy a partial stake in a business. A meaningful stake, not a venture style, not one or 2%, 20, 30 up to 60% of a business.

[00:08:25] Cuz it solves two things. One, it allows the operator, you only, you own, at least I only want to be in businesses that the operator doesn't view me as their escape path. I wanna find the escape path with the operator who has the knowledge to leverage on me on that asset. They know what's happening in that business cuz they're the one who started it. And so I don't like operators seeing me as the escape path out because there's information asymmetry. They know something I don't. Why do they want to get out while I'm trying to get in? That feels like a law firm, right? Goes in one out, goes in out, one in. [00:09:00] And so I like to find deals where the entrepreneur, the operator has enough gas in the tank that they're still long-term bullish, optimistic about the future prospects of the business. 

[00:09:12] Maybe they need a little bit of funding. Maybe they want to take some chips off of the table. So they're, so all of their net worth isn't tied up in this asset. and typically they need some strategic help or some, resource help in order to, take the business to the next level. And so partial acquisitions are, are kind of the vehicle to buy less than all of the business. And typically you're buying a portion of the equity without buying all of the equity and the operator is staying in and some function in order to help you get to the next stage. And there's a lot of terms, it could be called growth equity.

[00:09:50] Most private equity firms do some version of this with either an earn out or seller financing where there's the front end transaction and typically the operating team and the executive [00:10:00] team either rolls equity back into the business to keep operating or, has some continued stake in the future performance of the business outside of the buy sell transaction.

[00:10:12] Ron Skelton: I see that a lot in the private equity space. Where they come in, they'll buy, 80% leave, 20% on the table. You have an earn out, you get your 20% at the other end, and it's usually a three to five year earn out period and stuff. It happens over and over again. Right. I had Adam Coffey on here once and, I think he said there's the company he worked with and for as the CEO went through like five tracked equity, transactions.

[00:10:34] The last one selling for over a, in the billions, right? I think it was a heat and air company. But yeah, they come in, they buy some portion of it, and leave some on the table. So you get to participate in the scale and the growth and you got skin in the game. So it's kind of that employee, ownership. You take that totally off the, I wouldn't want the owner to stay if I took everything off the table and he had no right financial motive for making it work. [00:11:00] So I'm a big believer in what you're doing there. I'm a big believer in, coming in as much as 60, maybe as much as 70%. And a clear plan on what it looks like with that other part of that.

[00:11:11] Raleigh Williams: It also opens up assets, particularly in kind of the, this new age of internet style businesses. A lot of times, the entrepreneur hasn't built a business that's sellable or that's functional without the, their heavy involvement in it. And so it's not something like the deal that I did at the end of 2022 was a deal where, the operator, entrepreneur who owned all of the business prior, wanted to sell the business. And put her business on Deal Maven. We looked at helping her as an advisor, but as we took it to market, we realized that, she was the heart of the business.

[00:11:53] And if you take the heart out, you're left with a corpse and you're selling it for [00:12:00] pieces and you get far less. You get no multiple expansion. You don't get great economics selling off a business that, that isn't doing much. And the one wild card that you have to manage on partial acquisitions is you're bringing in a new partner in this business. And so it's a relationship game. You have to feel very comfortable that they have good judgment and that they can, that they have a vision that aligns with the acquisition team in terms of where this business wants to go. Cuz you can build the operating agreement from heaven and it's no good, if you're dealing with someone who's insane. And so trying to get to know who the entrepreneur is, what their situation is and what their long-term goals are and trying to structure something to that. And so partial acquisitions are, that's an attempt to try to give. Acquisition entrepreneur is maybe people that are more on the SMB side of things. Some of the toolkits that I've [00:13:00] seen on the legal side from the private equity side that, usually aren't readily available, or like very commonly spoken about at kind of broad mass market in terms of how real deal people get a lot of deals done.

[00:13:16] Ron Skelton: So one of the complexities inside of that is that matchmaking that, I honestly think that business partnerships are, as dangerous and or important to consider as relationships and marriage, right. If it goes wrong, relationship goes wrong, they're gonna, half the stuff goes each way. A business goes wrong. Business relationship, you're probably both left with nothing. Right? You'll fight and destroy it before you have an opportunity to sell it. And nobody wants to buy a company. I've actually looked at a few company where they, you get into it and you find out the reason they're selling is the two owners are fighting.

[00:13:49] And it's just hard to get all the way through that process cuz they're never gonna agree. They're both vindictive and I get to where I just don't even look at 'em anymore if they're doing that right.[00:14:00] It's just the drama that's inside of it, it would've to be pretty lucrative for me to get past the, they're always saying bad things about each other. And, you have to work with both of them at some point, for some period of time.

[00:14:11] Raleigh Williams: And typically on those deals where it's like two owners. One owner is bullish, one owner wants out, and so we take the owner out that wants out, right? So we'll typically not take, I mean, it's one thing if it's an executive team and there's, if there's acrimony there. If there's bad blood in any way, then we will try to excise the tumor as best we can. We excise them with cash. Here's your money, take it. And those are messier deals, but you're, but the risk typically in that deal, the risk is already priced in, right? They know that they have something that's an issue. And so to the extent that you can play it the right way, which is always, the flip of the coin. Then you're looking for other factors that kind of point you to the fact that this business, without this cancer can really do great [00:15:00] things. It's a simple business. It's been around for a long time. All those other factors. If it's a startup, six months in, they have no revenue, and the founders are fighting and one of them wants out. You're not buying an asset, you're buying a project, you're buying a dream and a pitch deck.

[00:15:15] And that's not worth doing. But, yeah, it is definitely a human, it's a human risk, but it's a known human risk. And a lot of times, and even full acquisitions where you bring the SBA in. A lot of times there you have kind of latent human risk that you aren't even aware that you have because a lot of those businesses and the sub two to $3 million range are really driven on the backs of one person. A lot of times it's the owner who's trying to, who's, been coached by a broker to make it seem like the owner is, off on a beach somewhere. When really they're answering the phone calls and, making sure the dry cleaning gets delivered on time.

[00:15:54] Or some, general manager type operator that's usually undercompensated [00:16:00] overworked, that, you have unknown key man risk in most transactions and at least impartial use. You know that you have it.

[00:16:06] Ron Skelton: One of my ventures I did many, many years ago now. Probably 15, 17 years ago, is I actually, this is one of the ones that's kind of embarrassing. I failed miserably at it. I try to start a dating service, right? Online dating. It was called honesty first.com. I still own the domain, but basically, what I didn't know is nobody on this planet wants to be kept honest inside of their dating profile. So that is said, I solved the problem of the Mr. Potatohead problem. Where they kind of looked like they were. And so I had this, tools and stuff we built in to keep people honest in their profiles. The whole concept of like getting two individuals to figure out what the commonalities they're looking for and stuff. All the perimeters that go into finding a match on even just dating.

[00:16:50] I think there would be the equal number of more perimeters you'd want to know as, as far as a human interaction with another person to see if I want to be business partners with you. [00:17:00] Right? Most business partners I've had, it came organically. Like we, we worked together on, we both worked at the same company. We left and created something together cuz we knew we worked well. We complimented each other. And even some of those after a couple years are like, I'm just done with this guy. Right. So how do you handle that dynamics understanding as people come in? How do you guys provide any guidance for that? Or do you guys say, how do you make sure that the people that are buying partial acquisitions know what they're looking for and who they could work well with or not work well with?

[00:17:30] Raleigh Williams: Yeah. Typically in a partial acquisition, you're coming into the capital stack providing a unique value that the current entrepreneur is stuck with, that can't overcome somehow. So in this deal that we did at the end of last year. She had a webinar business. I'm not versed in webinars. We bought two-thirds of the business, but I brought in a guy named Steve Larson, who's a webinar expert.

[00:17:58] Ron Skelton: Very familiar, yeah. 

[00:17:59] Raleigh Williams: Know [00:18:00] what he's doing in webinars. And so Steve and I did that deal, and we brought in a couple limited partners on the capital raise to, bring the equity slug that she took off at the table. I think anytime you get an inclination that a deal feels off or that it feels like you're pressing for it or it feels stressful. I think that's a good inclination that you're barking up the wrong tree. And it's just not, it's just not the deal to do. So this deal that we did with Steve, every, almost every piece of it was easy. She's a pharmacist by trade, and so I like the fact that she had spent time in school. That she had certifications, that she had licenses. It shows a certain, commitment to shitty processes. Certain mental fortitude that's required. She was adamant about wanting to grow something big.

[00:18:49] We just spent a lot of time. We spent far more time on the relationship. The three of us getting to know each other than we did, doing diligence on, the quality of earnings or what the [00:19:00] traffic sources look like, or any of that stuff. And It felt like she had built this, it's small relative in size. It was a couple hundred thousand dollars deal, but it felt like she had built something almost by accident. It felt like she had massively overperformed relative to her marketing, know-how. She's a total expert in the field of pharmacy and, pharmacogenomics, which was the sector that it was in. But, I tried to just pay a lot of attention to what's happening, like, who's bringing the momentum to the conversation.

[00:19:35] If we all agreed that we were gonna do certain things, did they get done in this meeting? All this is happening in, in diligence. We negotiated the operating agreement prior to the purchase and sale agreement. So that way we could get out. And there were disagreements. There were plenty of disagreements about who should be getting paid and what the payment cycle should look like and how much cash to keep in the bank account. And the disagreements are fine. It's just, is everyone [00:20:00] disagreeing productively? Are we reaching a consensus on the way we're gonna go forward and run this thing and what the goals are? And, it's been less than a month. So we may be in the honeymoon phase. We may, me and you may talk in a year from now.

[00:20:15] And I'll say, under no circumstance. I have my own criteria of what I look for in partners now. Just cuz I've, and that's been a function of having many, many add ones and some great ones. Typically I want to get to know the spouse of the partner, pretty well. And know what the spouse is looking for and what the spouse is okay with and not okay with. I want to know what their hobbies are, what they like to do. Because I found me personally. When I'm a pretty hard charging guy. I like to work 15, 16 hours a day. And so when I have had partners that are hunters or fishers or outdoors, mens or golfers, like, those are kind of, those tend to be lax, kind of, let's take it easy.

[00:20:54] Let's work to live. And I'm kind of a live to work kind of guy, and that's okay. Like it's, [00:21:00] it just is what it is. I'm not saying that's healthy. I don't recommend it. It's just how I'm geared. And so I know that when I've had partners that are hunters and they say, Hey man, I got my elk tag for this year, and so I'll see you in six weeks. And I'll say, what the hell are you talking about to me in six weeks? I'll see you in the office tomorrow. And those issues I've just found, I just have my own internal checklist of, and I try to be very, upfront and frank. As frank as I can be about, the knocks that people that I, that my partners have told me about how I work and, and we do personality tests too.

[00:21:34] We do the disc assessment of everybody. Say, okay, this is how Raleigh works. This is how everybody works. So like, do we still wanna do this thing or don't we want to do this thing? And if it doesn't make sense, then great. Onto the next one. 

[00:21:47] Ron Skelton: That said, I don't wanna be in a position where I've gotta pull 70 hour weeks and miss my kids' stuff. When my kids are outta school, today at two 40, they'll get outta school and I'll hang out with them. I'll make 'em snacks, we'll do [00:22:00] some stuff. They'll get bored with me pretty quickly and go play with their tablets and their video games or whatever. And then I'll come back on the computer, work a little bit more than night, and then I put them to bed. When they go to bed for school at night, I'll put a couple more hours in at night. So I still put a lot of work in, but when my kids need me or want me, I'm there. And I think a lot of it comes from, growing up, until I was old enough to work for my father, I didn't see him very often.

[00:22:22] My concern is like picking that right person. So it's not like, instead of doing that, if you're doing the SBA loan and stuff, you're doing all this due diligence and make sure they're telling you the right story and stuff. You're doing the same amount of due diligence, but is this the right person? Is this the right project? Do I, is this something I want to commit my time to? There is that same level of intensity around due diligence. You're just focusing in on the relationship. As much as most people would focus in on the numbers and the, factual data.

[00:22:49] Raleigh Williams: Yeah. And the assets, the business that they're involved in is important. And typically, I like to do deals in threes where it's me, I'm kind of the deal guy. And then depending on what the subject [00:23:00] matter is of the business and what the lack is. I'll try to find an expert that I bring to the table as kind of the deal partnership. I've made mistakes there. And you just try to minimize them and not make them happen again as best you can. Life's circumstances changed and you try to protect yourself through the purchase and sale agreement. The operating agreements, I have protections in place. And I think it, I found more and more from a negotiating standpoint when I was, I'm not that old, but when I was earlier on in the process, I would think of it in terms of negotiating leverage and, holding information back. Now I try to be much more transparent on the front end about here's what my concerns are in this deal. And because, cuz for me, I've learned that if I'm in a negotiating situation with someone who won't be reciprocal and understanding of what my concerns are, and if it's someone that says, well you can go to hell because that's my terms.

[00:23:58] Either take it or leave it. If I'm [00:24:00] buying a car, I don't really care what our relationship looks like on a post transaction basis. But if we're doing this thing together and, you say, these are my terms, take it or leave it and it's an ultimatum type situation, I've just learned that no asset, is worth that type of relationship. And, there's more deals to be had. Again, on a full purchase and sale kind of typical transaction that works. But, life is short, and dealing with people that suck usually isn't worth it. The economics are typically don't make the juice worth the squeeze.

[00:24:38] Ron Skelton: It's interesting as I, on your website, you mentioned the Shark Tank. It kind of seems like that you're working with people, you're partner with them, you help 'em take 'em to the next level. Infusion some cash infusion, some expertise. Even if it's not just your own. You're bringing a third party operator in to match the expertise they need. So it's a little bit of that Shark Tank. I've known and been around and actually talked to people who pitched the show. A couple people that got deals. [00:25:00] I won't say who they are, just cause I'm gonna say some good things or bad things about it. It doesn't always work out for the Shark Tank guys. A lot of the ones they fund on the show where they say they're funded, they don't actually get funded, right?

[00:25:10] They get a deal in the show and then they have to cut it. Because they'll come back and they can't talk about it and stuff. If you can tell they got an offer. And then later on it never shows them the offer. And for during the due diligence, basically what happens is something wasn't quite right or the relationship, cuz they meet with those people a lot after the show. Something's not right that just didn't feel right or whatever, and they decide to do a different thing. And then the ones that make it, if you watch the interviews now that the show's been around for many as seasons and you watch the interviews on like lessons learned, a lot of those deals are just like anything else. A lot of those deals didn't work out like they expected.

[00:25:42] Raleigh Williams: Part of the point of deal Maven when I, as I was building it from a marketplace or a software standpoint, is the way that most deals typically get done is, a seller or a broker listed on a marketplace. And the marketplace is all the function of highlighting the asset. Or hopefully, [00:26:00] the business. What is the trailing 12 months? What's the revenue? What location is it? What type of business is it? And then a seller gets inbound leads from buyers. A seller or a broker, right? Is listening to buyers. And buyers just say, Hey, my name is Raleigh Williams. I'm interested, can you send me more info?

[00:26:17] And the CIM, or the confidential investment memorandum is all highlighted around the asset. And 50% of deals that reach a signed letter of intent fall through. And a big reason that happens is because there's so much focus on the, you start at the asset level typically, and then you kind of expand in concentric circles to get to okay, well who's the seller? Why do they want to leave this thing? What's happening? And the seller's also trying to bet out who is this buyer? Do they have money? Why do they want this thing? Can they actually close? And Deal Maven, connects people, but the buyer side of the marketplace is really the sorting function of, the buyer.

[00:26:58] You can see [00:27:00] what their profile is, what cash they have, if they have any. What types of deals that are they looking for. And so it's really a function to help the buyers to put their profile and kind of their mandate criteria, their deal criteria. What are the types of deals that they're looking for? What's their actual expertise? So that way the buyer can get deals from brokers and sellers of, oh, you have a marketing expertise. With your expertise, this asset would actually be a lot better. And so it tries to bring the deal that's typically done on the asset level of what the selling business is. Like you would do a house, and take it more with the realities of an M and A deal on a small or medium sized business isn't the same as buying a house from somebody.

[00:27:43] The asset itself isn't sufficient information to really get the deal done. And you really need more information on the parties that, that are doing the deal. And so trying to highlight particularly the buy side of those deals is the most, enigmatic. It's [00:28:00] the big black box on, in my trampoline part business, I sold all of my businesses. I didn't use an intermediary and I would do, build a financial deck. Put it on BizBuySell. Put it on BizQuest. Put it on all the marketplaces, and then you get this influx of hundreds of inquiries and you have no idea if somebody wants to buy my 26 million business on a hundred percent seller financing. Do they have the cash?

[00:28:22] What's their exposure to the family Entertainment center? Because if you're not, if you're not actively in that space, the chances of us getting a deal done is very low. Because you, there's a massive learning curve for you to actually get it done. And so dealmaven.io, outside of the content aspect of it, is about transparency around who the buyers are. So that way they can get actual inbound deal flow based on their expertise.

[00:28:53] Ron Skelton: Awesome. I think we've covered that concept. I do wanna spend some time talking about one of your recent [00:29:00] acquisitions. Mainly cuz it's, it holds true to my heart, it's media, right? You've got a media thing and that's kind of the space I'm in right now where I'm looking at and creating. Even building. I'm 50, I said I'm not gonna build anything new and I catch myself building stuff just cuz there's nothing, I can't find anything on the market exactly the way I want it. So I'm building something. And that's just the entrepreneur spirit. Like, if it's not there, I'll freaking make it. Right. That said, talk about your recent acquisition in that, owning the audience type of space is the way I like to call it, but I'm sure.

[00:29:27] Raleigh Williams: Yeah. As we've been operating Deal Maven, we've seen a lot of businesses and one of the ways that I have grown, Deal Maven has been buying media channels myself. There are a couple m and a groups, a couple, Instagram accounts of, professional dead investors that have kind of an audience of people that are wanting to learn about how, what these guys thought about doing deals. And so I myself have grown Deal Maven acquiring media assets, Facebook groups, Instagram channels, [00:30:00] blogs, email list, whatever.

[00:30:02] And what I found was as we started to look at doing a potential kind of done for you search service, I really wanted to help entrepreneurs go out and buy other businesses to build kind of a conglomerate HoldCo thing. But the entrepreneurs that we were dealing with, what they really wanted is they really wanted media. They wanted to acquire media assets. That was kind of the thing that they understood and the thing that they could see that would help their business grow. And so we did a couple, we did a couple media deals kind of as a done for you service for people that already had businesses. It was just an interesting trend that, I couldn't find great, there are some, like for newsletters you go to Deuce or, you can kind of scour the marketplaces of Micro Acquire and some of the other smaller ones to look for media specific things, blogs, whatever. But I thought it was interesting that there wasn't one [00:31:00] core marketplace or one core, service provider that really focused on audience and like the assets have inherent value due to the fact that they have audience.

[00:31:08] And everything outside of that is kind of ancillary, right? And there was a business that came up for sale that kind of had the right marketplace layout that I was looking for. After I've been doing Deal Maven. I didn't want to start on a new software dev project. And so there was this marketplace service that came available. It was called Early Acquire, and they were doing it for software. And so it just made sense in my head, maybe not in anybody else's head. But it made sense in my head to buy that business, rebrand it, retool it to media only assets. And build the marketplace and service around. How do you go out and acquire media assets?

[00:31:51] Whatever business you're in post iOS 14, attention is getting more and more expensive to capture and to monetize. And so for [00:32:00] when people who have something already wanting to scale it. The next question is how do we, how do we get traffic on a more consistent basis that we can control? So you can either rent it through Facebook ads, collaborations, whatever, or build it from scratch, which is great, but takes a long time or buy it. And I felt like as I looked at the landscape of what are the buy it options, I didn't see anything that made a ton of sense. It was kind of the go-to buy it place. And so I figured I'd build it.

[00:32:27] Ron Skelton: I mean, that's what I'm doing inside of these newsletters. Like there's just, none of 'em are doing what I want. And I'm in the Deuce and it's not a bad site, but they only, usually, they only have three or four assets for sale and they're not exactly what I'm looking for. And then, I've interviewed both Empire Flippers and Flippa. I've been on their site day in and day out looking for it. There's just usually not. And I'll tell you, the other space that's missing is for these podcasts, right? There's no real good market that I know of to see if anybody wants to sell a podcast. It's inherently hard to sell because we, you're tied to a face or a voice. But there should be some market, some market for [00:33:00] those. I would be willing to, 

[00:33:01] Raleigh Williams: And Media Acquire we're doing it. We have one that's got over a hundred thousand downloads right now. That is, that we're looking at putting on. I mean the difference that we'll do at Media Acquire versus some other marketplaces, and I won't name any of them cuz I'm gonna talk shit about them. Is, we will do proactive outreach in a way that I think most marketplaces are kind of like, this is the infrastructure. Come and fill the, fill it however you'd like. We'll do proactive outreach. Cuz the nice thing about media assets specifically is that they should be findable. You should be able to see where they are.

[00:33:34] And I think a lot of people, spend a lot of time on a podcast with downloads and maybe getting consistent new downloads. There's just not a great place to sell that. So we'll do, Reddit threads, discord servers, podcasts, blogs, Snapchat accounts. Like anything that it's within terms of service to trade hands for whatever reason. Like we will, we'll make it happen. 

[00:33:58] Ron Skelton: So it's interesting and some of [00:34:00] these places say you can't. Right? Like, at some point, I dunno if you can now, but at some point Facebook wasn't really big on, their groups changing hands. And their, like, you couldn't, you're nott supposed to sell, but all you have to do is like, you're just transferring who the admin is. Right?

[00:34:11] Raleigh Williams: Yeah. I think that there is some I think that there's one case that, not legal case, but Facebook case of, I think that they have some restriction around like community specific groups. Like location, community, like the city that you're in type stuff, and those trading hands. I think those are kind of, frowned upon. I think if you read the terms of service of Facebook with, to the letter of the law, you're not supposed to use your Facebook profile for promotion or Facebook group for any type of promot. I mean, if they really put on the enforcement hat, the 6 million Facebook groups that exist, maybe go down to 12 in terms of, true compliance.

[00:34:46] I think it, a part of that is just, and we've done this in the past on, and the people that we've done on a more service level. Is just making sure that the transfer of ownership isn't done with a heavy hand. And the ongoing management, isn't heavy handed to the [00:35:00] people within the community. Which you shouldn't do, if you're buying this thing because you're going to get long-term value out of it. Doing that slowly on the front end and allowing for that transfer of ownership, is important for you to have a long enough time horizon for you to really capture your investment on it.

[00:35:17] Ron Skelton: One of the reasons to do the newsletter is it gives me another output. And, these podcasts, anybody stumbles across the podcast, they're like, they listen to this one, they really like it, right? And they go, I wanna see the rest of the content. Well, I've interviewed over a hundred people now who has a hundred hours to go, listen to all the interviews and to get that caught up. But in the newsletter and in the articles, if I convert all these newsletters, I mean all these podcasts into decent articles about what was discussed, that gives people an opportunity to search engines, to crawl through it a little more thoroughly.

[00:35:50] And people to go, wait a second, there's this part of this one. I wanna read that. And then they can read it and go back and watch the episode. So I think it's a great compliment. So I [00:36:00] like that you're covering all the different a spects of the media that's available on today's world, right? It's not just newsletters or not just, podcasts and not just YouTube channels that you can build a media holding co around a particular topic. The reason I do that and want to do that is to upsell and cross-sell promotion across the different ones. To be able to take a set of assets and, say you're interested in buying, selling business. Are you interested in podcasts? We have a podcast here. Oh, no. Well, then we have a newsletter. Like, what is your media? What is your choice of consuming media? And to be able to provide good content in that source. Right. And there's visual YouTube, there's, spoken podcast, iTunes and that type of stuff, or whatever's around the Apple podcast.

[00:36:43] And then there's the written. I'm sure at some point they'll be some other, we're just getting into that world. 

[00:36:50] Raleigh Williams: Yeah. I mean, for media acquire, it is really built for people that know what they're doing with eyeballs. They just need more of them [00:37:00] and ideally want to own them as opposed to rent them or borrow them or, or do something else. And I think that there's a lot of, the creator economy has created this massive surge in people with eyeballs. They do it for a year or two and then get bored with it or move on to the next thing. Or they just get stuck, right? They don't know, okay, like, I'm doing all this work and I'm not getting anything in return, so screw it, I'm out, I'm done.

[00:37:24] I don't wanna do it anymore. And there's not a great way for those people to benefit from the work that they've done. And really shepherd and foster it to, the change of hands to someone who can really do something for this. I'm excited in that aspect of it. And I'm excited about it because I try to fit within Deal Maven. And Deal Maven is really built, it's really built in a different way to not really manage assets that are that small. And so I was excited when I saw a marketplace that I felt like I could really easily just like change it one degree from a messaging [00:38:00] standpoint, to really cater to it. And that's the hope.

[00:38:03] Ron Skelton: Yep. I see a lot of opportunity in that space and with, I think that it's evolving. I think AI is gonna disrupt it, but I think if you can embrace AI and, I mean, there's some cool, safe going on, they're talking about media and influencers and stuff. I don't remember who he did, who he sold it to. But, Bruce Willis just sold his likeness, his voice, and his whole persona, basically to some Hollywood firm so that they can deep fake him into movies in the future. And it's almost there. I don't know if you've seen my interview with the, the AI bot. I interviewed ChatGPT as if it was an A guru. And then I put it into a deep over voice fake. Not only did it create a voice for the ChatGPT, which I jokingly named Ali Penman, which is artificial language intelligence, so Allie. So I gave him a name that sounded like a real name, and Penman is pin name.

[00:38:49] I just nominated and hired him, right? So Allie Penman is now an employee. So anytime you see a co-authored author, like one of my podcast, notes or one of the, A media article for the blog or even a newsletter or [00:39:00] something. If you see it's co-author by Allie Penman, it means we use artificial intelligence to write 60% or more of the content. We're just gonna, we named him, right? We gave him a, we even pulled a, not a real human photo. If you've ever messed with that AI where it just generates fake human photos that look real. So he's got a real person. There's a persona there. He looks like a real person and he's just not.

[00:39:17] Right. So Ali has a face even. But, I honestly think that whole space, somebody that has a voice, like potentially later on, say, five years from now, I decide I'm ready to actually retire and I don't wanna do any of this anymore. I could sell the likeness of my voice. Somebody could write scripts for this show. I could even, there's just so many different things that could happen then that wouldn't be able to happen now. And it could carry on, right. It would sound like me on the podcast. They might probably have to use an avatar instead of, my ugly mug.

[00:39:48] Maybe they'll find a better looking human. The joke is like, there's just so many places this could go. A lot of people are thinking, will AI replace the rider or replace the podcaster and stuff? Like, I know, I think [00:40:00] it'll augment us and make us better. I think it'll give it, in the long run. Could it jump on here in an interview? You very possible. But, I think as humans, we want human connections. I don't know. What do you think about the whole like, ChatGPT and, AI generated content?

[00:40:16] Raleigh Williams: Yeah. I think it'll be, my natural inclination is I'm typically kind of a perma bear on things like the whole Bitcoin. I never really got on the trend of Bitcoin and obviously, so right now I look like a genius and in 12 months I look like, not genius. I tend, I think that progress, I would guess the quote is that progress happens very slowly and then all at once. And I think that ChatGPT, I've talked to a couple buddies that are lawyers and, the Luddite argument, the fear that I, that technology is a job reducer over time, right?

[00:40:54] The technology replaces people. I don't, I think that it's, I think that it'll be a magnifier and [00:41:00] enabler and will replace massively low skill, low wage work. And will be another tool that allows for people to, get a lot more done in a shorter timeframe. And so I think, I think it'll be a cost reducer. Things will be a lot more, a lot cheaper to get done and you can be a lot more prolific in the things that you get done. Using those things as tools and enablers, like an and I think it, it'll have a massive effect in areas where precision is less important. Right. Cuz I think ChatGPT can get you probably 60 or 70% of the way there, kind of in the ballpark. And I think in areas where it, where precision is very important, I think it'll have less of an effect.

[00:41:46] So like in the legal scenario, the doom and gloom scenario is ChatGPT. What do I need a lawyer for if ChatGPT can write this contract for me or can give me all of the case law and tell me the exact answer. Law is very [00:42:00] imprecise as it is. There's a lot of gray area that is left to reasoning. And so like, if you're in a court case, if you're suing somebody, that's the type of thing in law that kind of requires 99.9 9, 9 9 9 9 9% accuracy to get the thing done. Versus me doing a couple hundred thousand dollars deal on a contract, right? That requires less precision than, suing somebody.

[00:42:26] I think it'll be, it'll be a disruptor for sure. I think it'll kind of feel like Bitcoin, blockchain, whatever, right? Like there's going to be a couple winners, a massive amount of losers and over time, I think it'll, it'll have an, have a bigger impact probably than what I price in. Cuz I tend to like underprice and be like, eh, it's all gonna stay the same and then I'm wrong occasionally.

[00:42:52] Ron Skelton: It's funny, is I thought the same thing until I started playing with it and then I started playing with it and I actually interviewed it. Now the trick is I've interviewed over a hundred plus [00:43:00] plate people, right? So I know the question to ask. That's the one thing about any of these AI tools. It's the user that's asking the questions, knowing what to ask, knowing that something's missing, and ask the question differently cuz you see something's missing. Right? 

[00:43:14] Raleigh Williams: Right. And critical. And I think something like Bitcoin, right? I think Bitcoin has an issue because the suburban 45 year old mom can't do bit, it can't, it hasn't made the leap to mass adoption cuz it's not simple enough from a ux, ui, whatever the issues are. Blockchain, putting it into cold storage, all that stuff's crazy. Managing all the keys, it's like, it's too complex. I think ChatGPT, and open AI, all those things. I think they're a lot closer already. Like it's a lot easier for me to interact with it. But to your point, like it, it requires some expertise and I think that drags mass adoption and that's the thing that you have to solve over time is getting it there.

[00:43:57] Ron Skelton: I don't ever close the window. It's open. Right. I use it [00:44:00] for a lot of stuff. It's like, give me like, especially for research, like give me 10 ideas I should look into in this particular subject. Right. And I'll read through it and four of them will intrigue me and I'll dive into it. Right. But it gives me a headstart as far as like, you start Googling stuff and you gotta look at all the sponsored ads and all that. You don't know the validity of, I would rate on an level of accuracy if the question's fairly general ChatGPT at an 80% accurate and Google at 20% accurate. Like when you, your first page of search results is so dependent on who's better at SEO than it is whether or not the content is correct. 

[00:44:34] Raleigh Williams: Right. Totally. I think Google will have, obviously Microsoft putting 10 billion in. I think that there, there's gonna be a shifting landscape definitely. In terms of the way that those things get done. And I'm not expert enough on SEO to know what I'm talking about. But I do think it'll be a big, I think it'll in, in some industries, it'll have massive change in.

[00:44:56] Ron Skelton: I only brought it up cuz there's no way you could be in buying and selling media [00:45:00] assets as of today and not understand that space because some of the stuff that people are gonna bring stuff to you in the next six months that was augmented by, built by and, or, maybe even a hundred percent built by AI and they're trying to sell it. And the question is, where's the real value? Right. Are they, to me it's audience engagement. It isn't the fact you have a hundred thousand followers. It's the fact that if you send something, you get a 25% open rate. Right? It's the interaction you get extra number.

[00:45:25] Raleigh Williams: You need the actual eyeballs. Right. You need human eyeballs. An ideally human eyeballs that have a credit card somewhere. Or somebody's credit card somewhere some day. Like, you gotta get your turn on your investment. And I think ChatGPT also can help in kind of the transition of some of these assets. Having somebody else take over a podcast. Ideally if I were to buy your podcast, I can say, what would the next five episodes of How2Exit podcasts look like? I think that, that's a helpful thing, but yeah, it'll definitely have an impact on media for sure. 

[00:45:57] Ron Skelton: One of the things I haven't found out there, and I [00:46:00] keep posting it on social media, hoping some, rocket science engineer is gonna develop. Is the AI tool where I can go, I'm interviewing, Raleigh Williams, here's five, here's 10 podcasts he's been on, right? Download 'em, consume 'em, know 'em. Right? Know the transcripts. Here's two books he's written. Here's, his is LinkedIn, pages. Here's all the social media. Formulate, well, one article in 20 questions that I should ask this guy. And the knowledge is out there, but none of it is, there's no interactive, to me it's not artificial intelligence, it's serving intelligence.

[00:46:32] It becomes true AI when I can give it a question and it prompts me for more information. Like, oh, you want me to write about Raleigh Williams? Do you have any, what's the social media? Which one? I can find 15 on the internet. Which one are you talking about? This guy? Cool. I see you wrote this book in this book and this book. Is that correct? Nah, that's a different guy. Right? When it interacts with you and gets factual information, then it becomes, that's what we do as humans. That's what you and I do as interviews. That's what you and I do, when we sit down with a business owner [00:47:00] is, and any highly intelligent person I've ever met, they ask a lot of questions, right? They dive deeper in, artificial intelligence that don't, that doesn't ask you more questions, that they'll dive in a little bit deeper, is still lacking for me.

[00:47:13] Raleigh Williams: Yeah. 

[00:47:13] Ron Skelton: I see in the next, when we have this conversation next year, I think it'll be a totally different conversation. 

[00:47:17] Raleigh Williams: Yeah, I agree. 

[00:47:19] Ron Skelton: But alright, let's talk about kind of how people can work with you. Like, make sure that people know how to get ahold of you. Before we do that real quick, my favorite one to do is if somebody can remember only one or two, maybe three things from the show today, what do you want 'em to remember? 

[00:47:35] Raleigh Williams: Only do things that if you're right, you get rich and if you're wrong, you don't go broke. I think that can serve you pretty well. That's it.

[00:47:45] Ron Skelton: You must have said that online or something that you must used that face before. Cause I heard it and when I decided to buy media assets, I'm like, I'm gonna start really, I'm gonna buy something that if I screw it up and I don't know what I'm doing, it don't hurt. I mean, it doesn't, it ain't gonna put me under. I'm not gonna go buy a seven figure assets cuz [00:48:00] I just don't have the wherewithal. I'd have to liquidate a bunch of real estate and much other stuff to ever pull that off. Bring in a bunch of other people, whatever it would take. The risk is too high.

[00:48:08] So I've never run, but I could acquire some smaller assets, build a few things. Build on it, get some skin in the game and figure out like, this is something that really works for me. And then make a larger purchase, later on. 

[00:48:19] Raleigh Williams: Down the road. Yeah, I agree. 

[00:48:21] Ron Skelton: So I love that concept. And how do people work with you? I mean, hey, I know that there's that Doug Gills Get Rich, website, right? 

[00:48:29] Raleigh Williams: Yeah. If you go to deal maven.io, you can, we put out a newsletter once or twice a week on just things that are happening in mergers and acquisitions deals. That's typically the tip of the spear with people getting involved. If you want us to help you acquire a media asset, we do that. And then the other thing is just a lot of times when we find deals that we like, we'll take limited partners in on deals where they just wanna put cash in and let us [00:49:00] manage it. If they're accredited. And all that can, you can on dealmaven.io is probably the easiest place to just kind of see what the ecosystem is and what the availability is. 

[00:49:09] Ron Skelton: Okay, cool. And then, you've got a podcast of your own or your launching one or something, right? You have a show, so you go live a lot.

[00:49:16] Raleigh Williams: Yeah, I do. I have a podcast that used to be, Do Deals Get Rich. Now it's, deal ma we're just, we're simplifying. We have Deal Maven and Media Acquire. We're just in the simplification process and trying to get down to, the core aspects. And so Deal Maven podcast, Deal Maven newsletter, Deal Maven site, and then Media Acquire if you're looking for media assets.

[00:49:37] Ron Skelton: So they're gonna be able to find that on that dealmaven.io if they wanna, like listen to some of your content stuff. I'm a big ocean, blue ocean guy, man. I want people to listen to this and go, I like this guy. I wanna go check out what he is got. He goes, consume some of your content. Learned from you too.

[00:49:50] Raleigh Williams: I appreciate that. Yeah. Dealmaven.io will be the place to find the podcast, all that stuff. 

[00:49:55] Ron Skelton: Awesome. Well, thank you for being on the show today. Hang out for a few seconds afterwards and we'll just call that a show.[00:50:00]