April 2, 2025 • 32 mins
In this episode, we're excited to have Chris Van Dusen from the venture capital world join us. He brings a wealth of experience from both the VC and entrepreneurial worlds. He shares his unique journey through sales, marketing, and three successful business exits. Chris also talks about Solyco Capital, his firm that prioritizes smart capital over mere funding, and their approach to matching investors with the right opportunities.
Tune in as we dive into venture capital strategies, how to navigate investment rounds, and the balance of assessing venture potential. He and Pete also discuss the realities of selling a business and the unexpected lessons learned from being an angel investor. Whether you're an entrepreneur looking to perhaps one day sell your business, or are already an investor in the HALO space, Chris's perspective absolutely offers a fresh take!
On funding and valuation, Chris states, "To qualify for your Series B, you'd ask . . . did I hit those goals? And secondarily, am I on glide path for the next big growth or step function of my business? If the answer is no, then you're not going to get this larger, new valuation. If the answer is 'maybe, but I need a little bit more time,' maybe you do what's called an extension round . . . it's maybe the same valuation because you really haven't hit it, but you're very close."
Key themes discussed
- Private Equity Fund Term Sheet Dynamics
- Series B Funding and Valuation Criteria
- Regrets of Angel Investing
- Pandemic-Proof Investment Strategies
- Entrepreneurial Struggles and Successes
- Navigating Pivots in Startups
- Challenges in Selling Businesses
- Entrepreneurial Deal Insights
A few key takeaways:
1. Smart Capital Over Just Capital: Chris emphasizes the importance of "smart money" versus just having capital. He elaborates on how smart investors not only provide funds but also strategic guidance and support to help companies scale.
2. Flexible Investment Strategy: Instead of raising a fund and sticking to a mandate, Solyco finds great assets first and then raises capital specifically for each venture. This allows them to be more flexible and diverse in their investment choices.
3. Value and Growth Stages: Chris discusses the importance of each investment stage from Seed to Series A, B, etc. He stresses that value isn't automatically created and validated at every stage; instead, growth and meeting KPIs are crucial for valuation increases.
4. Portfolio Theory in Investing: While angels often invest in single deals that can be risky, professional investment firms use portfolio theory, investing in multiple ventures to balance risks and potential rewards. This allows them to absorb losses more efficiently while aiming for high returns from successful ventures.
5. Relationship Building and Board Involvement: Chris highlights the importance of having seats on the board or being deeply involved in the companies they invest in, to have a better understanding of the business and to support strategic pivots if necessary.
Resources:
- Chris Van Dusen: https://www.linkedin.com/in/chrismvandusen
- Solyco Capital: https://www.solycocapital.com/
- Prospect Wizard: http://www.theprospectwizard.com
- Promotion Vault: http://www.promotionvault.com
- HigherDose: http://www.higherdose.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
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(00:46):
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This is Pete Moore on Halo Talks NYC. I have the pleasure of
(01:07):
bringing to our podcast, Chris Van Dusen, to start off
02/2025. We're gonna talk about venture
capital. We're gonna talk about Sudeikko, and we're gonna talk about the pros and
cons of bringing somebody like him into your business to help you scale
it. Chris, welcome to the show. Thank you so much for having me. Appreciate
it. So, so we met through, through a very passionate,
(01:29):
networker and entrepreneur, Cirox. I wanna give a shout out
to him. And, Chris, wanna take this episode and really try
to hone in on for entrepreneurs. You know, what is
the benefit of going to somebody like you, taking capital from you,
the way your fund is structured, you know, to really match up the right
opportunities with the right investors. So maybe you could give a little bit of your
(01:52):
background coming from SoCal and, you know, talk
about, talk talk about the pros and cons of taking capital.
Sure. Yeah. So background, originally from the Northeast, came to
California at the end of o nine. You know, I wasn't always in venture. I
did get a degree in economics from William and Mary in Virginia, but my career
was anything but but but linear. Right? Not the
(02:14):
traditional route. You know, is in sales for many years.
Had the opportunity to then go on the marketing side, and started understanding
how companies really scaled, how they worked, started by an agency,
and then had the opportunity to meet some some great cofounders, of
ventures along the way, all kind of culminating in three exits, two
in '21 that we sold and one in '19
(02:36):
02/2019. So I have, you know, three exits under my belt, if
you will. Congrats. Many other gravestones along the way
as we know because everyone likes talking about their successes. I'm happy to talk about
the failures as well. Real highlight reel. The real real highlight reel.
The real. Right? Everyone shows you that home run swing. No one shows you the
other strikeouts. Right? Sure. So I had these three exits. And, you
(02:59):
know, during that journey, I met, this gentleman, John Garcia, who founded
Sligo Capital back in 02/2017. And,
loved their ethos of what they did. You know, we we talk a
lot internally, about the difference between capital and smart capital.
Right? Money and smart money. I thought they were really a a smart money type
group. Again, love their their strategy. They invested in one
(03:21):
of the deals that we took full cycle. So I joined
them January 22, and our firm is different. You know, I was
kind of alluding to that. The reason I see that is traditional venture.
We're gonna go raise a fund. We're gonna find we're gonna have a mandate. We're
gonna have something we're interested in. That interest could be around AI. It could be
industrial manufacturing, ESG, you know, you know, consumer goods,
(03:43):
you name it. And then you go raise capital for that
fund and then find assets to deploy. What we like doing
is a little different. We're gonna find great assets, great opportunities. We're
gonna set terms on deals. We're gonna come in and help you. Then we're gonna
go to our LP base and we're gonna or we're gonna go out, generally
to, you know, what we call our COIs or our network and go raise the
(04:05):
capital for that specific venture. It allows us a little bit of flexibility in
that we don't just take on specific deals. We may
do biotech to fintech to
straight play real estate project. We're finding great ways to,
to never make alpha for our investors. So when you take a look at,
you know, one of the benefits of a private equity fund that would have
(04:28):
dedicated capital or venture is that they say, hey. Look. I got a term
sheet. I'm gonna give it to you. If everything checks out, you know, we could
call the capital, and and fund this deal. Obviously, you've
got guys that have had a lot of success, Garcia. So have there been
instances where you have to pull back a term sheet, or would you guys have
conviction on a deal and you wanna put down a term sheet? Look.
(04:49):
We get this funded. Yeah. It's we'll get this funded. You
know? To say it perfectly lays out to the timing that we
had, I would think would be a little shortsighted. Right? I would say
from time to time, we may delay, but we also make that in.
And so I wanna make sure I'm clear here. You know, we're not causing delays
or or hardship. What we're saying is, you know, a traditional venture shop may
(05:11):
deliver that term sheet and fund within a week. We're going to
discuss, hey. We need three weeks or we need a month to fund, but here's
how this is gonna happen. Here's how we're gonna ladder in capital. That's really how
we bridge this because you're right. It's the one thing we can't control in our
model is is is time. Right? But, again, it
allows us and our LPs flexibility. Yeah. Look. The private
(05:32):
equity deal, the under over, I'm getting a deal funded from from an LOI is
for, like, six months. So if you get deals closed in, like, a month,
you know, you know, serendipity to, to everybody involved.
You know, I would say it's, those are gonna be a little different. So maybe
our full underwriting is the six months. Right? But from term sheet
to delivery. And and the difference between the p kind of VC side and not
(05:54):
to be pedantic is they're doing my you know, big minority or majority recaps are
buying the company. So they're going, hey. We like what you have. Now we wanna
really get in that data room and make sure our assumptions are correct. And that's
your time. For us, we're gonna do that before we ever deliver a
term sheet in venture. So there may have been and, you
know, I would say last probably three, four deals that I've brought in have been
(06:16):
what I would call incubated, meaning I've known or met the
founder. I've been looking and understanding the company. We've
been in the data room, and this could be upwards of four or five months
at this point before we're ready. Mhmm. Because the type of deals we
like to be a part of are ones where they are
capitalized. Right? So think of seed round and and above, seed
(06:37):
a b. They're capitalized. They're on their glide path, and
maybe they're anticipating a raise in six months. So
we're gonna watch them hit their KPIs towards that raise. We're gonna start
discussing what realistic valuation is gonna be. We're gonna
start going into the data room, and and that is that multi month
process. But the minute we deliver a term sheet, we were already at the point
(06:58):
where we know we have conviction we're going to do it. And then a lot
of times, we're already having conversations with those LPs on our side to say, we're
getting close to funding something like this. Is this in or we know it's in
your wheelhouse, or is this in your wheelhouse, or do we wanna do something here?
Yeah. Yeah. I was I was doing a rift the other day on,
you know, seed round, series a, series b, series d, and I was trying
(07:20):
to remind the audience that the reason why you get a series b
is because the series a went well, whatever experiment that was. Could you
kind of, you know, pour some either cold water, warm water,
or, you know, lukewarm water on the fact that, like, look, you don't
automatically get to, you know, swing at the bat every time and and your
valuation just because the valuation of series a was 6,000,000,
(07:43):
you have to, like, prove that and then validate, you know, at each
step, of the way. Maybe just like an education for
entrepreneurs to kinda think like we do and understand that, like,
value is created or it's not created. And if you get another swing at the
bat, I can't give you the same value for that swing. Yeah. You
know, a a great way to look at it is and it almost goes up
(08:04):
to a little bit of a more macro question, which is, when is it the
right time to take capital from someone like me, right,
who does this for a living? And it's really saying and it depends. It's
saying, I'm ready to grow to this next stage, and I have market
signals. I have new clients. I have manufacturing needs to get done,
whatever it may be, to get to that next level. So let's start. The reason
(08:27):
why you you received that valuation for your series a is you are on
glide path towards it. You just needed capital to really grow the team,
grow your grow something. Right? Now to qualify for your
series b, did I hit that, those goals? And
then secondarily, am I on glide path for the next
big growth or step function of my business?
(08:49):
And if the answer is no, then you're not gonna get this large new valuation.
If the answer is maybe, but I need a little bit more time, maybe you
do an extension round, what they call an a extension. Right? Where it's
maybe the same valuation because you really haven't hit it, but you're very close or
you're you know, things are looking like they're going to be at. There's a macro
factor that that slowed it down. And so but to to your
(09:11):
point, if we're underwriting the next round, we've
set up modeling around it to say, here's what you
should be at with the capital we have provided. And if you're there, great.
If you're not, we're really gonna wanna understand why. And we're certainly
not gonna give you the valuation you'd want. And as a founder,
every time you take capital from us, you're being diluted and same
(09:33):
with everyone else on the cap table or on, you know, on the the ledger
of owners, if you will. Right? And so I don't wanna raise it
that 6,000,000 and then come back and need more capital at the same 6,000,000
because that's just dilutive for I don't wanna say no reason,
but that's extra dilutive to everyone involved. But if I go out and hit my
goals, I'm gonna bring in more capital at a higher valuation, and it's gonna be
(09:55):
less dilution because I am on path to where I need to go.
This is Pete Moore. I wanna let you in on a little secret. There's this
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members without having to do zero down and one month
(10:16):
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The rewards vault is going to allow a member to set up their
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(10:38):
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(11:00):
This is real.
Yeah. One of the mistakes I made, which I am very vocal about my
mistakes in life, you know, and and and things that I don't want other
people to, to have to experience. So at least I, you know, tell a story
and say, hey. Do you want this to happen to you? Yeah. I was kind
of, like, trumpeting the fact that, like, I'm a I'm a angel investor. And I
(11:22):
realized that being an angel investor is a great way to kinda lose money
because, you know, like, I'm supposed to kinda be an angel
and, like, really nice to the entrepreneur all the time, and, like, I'm just trying
to be there to help. And then when I give advice and they don't take
it, you know, like, somehow, like, this angel from, like, what
was that movie? Like, revenge or something or, like, yeah,
(11:44):
something like that. Like, Chip Belushi. I think it was you know, like, the angel's
like, okay. No problem. No big deal. You know, pat on the back. Good
try. And if that happens four or five times, you realize that, like, the angel
is kinda like could be like the angel of death because it's like, you know,
like, how many times do you not listen to me? And I'm, like, still trying
to be, like, helpful. So Yeah. One, do you ever use that term?
(12:06):
Two, why does that term exist? And, like, when does the angel become,
like, rational? Yeah. Right? So it's
it's tough. Like, let's let's let's go up on and say,
let's start adventure. I'll I'll answer the angel question, but let's start venture what we
do. There's some there's some facts out
there. Right? One is if you look
(12:28):
at traditional venture, they're gonna do a fund as we were talking about. And
those funds traditionally apply portfolio theory.
Now portfolio theory, very kinda 30,000 foot, is
I'm gonna make 10 investments, and let's assume they're the exact same.
And I know that four of them, just like baseball we're talking about, I'm gonna
strike out four times, and then I'm gonna have one home run. And that thing
(12:51):
is gonna return a really good, if not the entirety of what
I've raised out of that fund. And then in the middle, there's gonna be some
singles, doubles, triples, hopefully. Right? And that's gonna get us our overall return.
Typically, as an angel investor who's not
doing early stage investing in a fund but is actually angel investing in a deal,
I have one deal. Meaning, there's no portfolio
(13:13):
theory. You have your one at bat. Right. And so that just
by the law of statistics and probability says I have
a much more a much harder path
to getting a return there. Now I can build my own portfolio by making
10, but now my cash outlay is much larger than,
than it would have been on that one. Number two,
(13:35):
Angel, if we think about it, the reason it's being used is it
is extremely early stage. So, traditionally,
I call it friends and family and Angel all being around the same
thing. Mhmm. We invest in seed. Why
that's important is, traditionally, these companies are in revenue,
have market signals, and need capital to expand up
(13:58):
before they do a large a round. If I
go precede or what we call angel, they may be in r and d.
They may be just have their ideas or they're about to start a
beta, but they're traditionally not in market, which means you
believe in their idea. You just it's not in in
practice yet. So you're taking a higher risk overall.
(14:22):
It's tough to be an angel in a series b because this company is now
doing revenue, might even, depending on the sector, be in EBITDA, meaning
in profit. Are you much of an angel anymore? No. You're an investor at this
point because you're investing in a in in something. So it's, you know, me and
you saying we have an idea to revolutionize this space. We have put
our capital in and gotten it to this place to show you there's something here.
(14:44):
Now we want angel capital to come help us bring it to market, and then
you come to someone like me to actually commercialize it from a growth
perspective. Okay. So I might be treating this almost like an entrepreneurial
of, angel therapy session with
Van Dusen, you know, therapy. Some of the things
that I've dealt with, you know, just to get it out there because your perspective
(15:06):
on on things that I've that I've experienced is kind of like how I
feel like this should play out now because I'm I'm telling you what I did,
and now people can say like, Maybe he shouldn't have done it that way or
you're giving a perspective. So let me ask you this other question.
You've had LPs in deals that crush it, and and those same
LPs, you know, are in in your other deals. That's
(15:27):
fine. But then you've got LPs that have they're in, like, the four strikeouts,
and they missed the home run, and they missed the single, and they missed the
double, and they missed the triple. You know, how do you kinda say, like, look.
We didn't do a fund. We came to you on each one. That's kinda like
the pros and cons of, you know, being able to pick your own vegetables.
Yeah. So so I'll answer two ways. One is,
(15:49):
you know, it's it's a delicate balance
because every deal if we put up 10 deals right now that
we went and sourced together, Pete. Right? We look at it and go, oh, these
have amazing potential. Maybe disproportionate. Maybe some are gonna be the next huge,
you know, unicorn, and some you're like, no. This is gonna be a great return.
There are things like interest rate cycles we just went through and are still going
(16:11):
through. Global pandemics that happen, right,
that end up derailing things that you can't foresee. Traditionally,
the reason why you'd invest with an organization
like ours or many others out there is there's a level of due
diligence to say, do we believe in this, and do we have
modeling and the right underwriting to say we
(16:34):
believe it can happen versus an individual investor finding what we'll
call a club deal, right, the country club deal, trying to figure
out whether or not this is right. Right? So there's a level of sophistication that
starts there. Number two, our investors,
especially, I mean, certainly on the equity side, are what are considered accredited
investor or qualified investors. These are individuals who do not want to lose
(16:56):
money but also are making small bets.
And anytime you're gonna do and I'm not a financial planner, so this is
not financial advice. But when you are looking at, I have x
amount per year or in my net worth to invest.
Right? There are certain ways to build portfolios. And, traditionally,
something like this is a very small part because it is
(17:19):
going to naturally be more speculative than a mutual
fund or a CD or an ETF you're going to buy. And so you're
gonna look at this as this small piece that if it goes away
because of reasons within the, you know, growth trajectory doesn't
happen, then this is my exposure, and
that exposure is x y z capital. And so but if it
(17:41):
hits, that could be the biggest return in my portfolio for the
year. And so there's just a little bit more of a speculation there.
I would also say, and it's a weird way, and I don't take credit for
this. I heard this, from someone a few years ago, and it's such an
interesting way of looking at it. Most professional investors,
(18:01):
which I hate to call myself one, but this is what I do for a
living. Right? So by technicality, it's a professional. We are not as
mad about the money we lose than the money we did not
have the opportunity to earn. So let me break that down for one
second. If we invest, let's just say,
$100,000 into a deal and it goes wrong, that is
(18:22):
not good. We understand that. We have lost $100,000.
If we pass on a deal and
that 20 x's, I didn't lose a hundred thousand.
Right? I lost 22,000,000. Yeah. And
so you've gotta That's tough. That's tough love on yourself for sure. Exactly. Right?
We're like tough. That's where there's this balance of we
(18:45):
wanna participate in great opportunities, and we wanna be able to try
to see into the future on what these things could be.
But we're constantly having to evaluate and underwrite
and do due diligence on, is this going to be something? How do we see
it? And then with that capital outlay, do we
believe we can be good fiduciaries to see it through from an investor side
(19:07):
and investment side? Also, if we miss,
what's the lie what what would be that miss? Right? Yeah. And there are
no one bats a thousand. Never met that person in my life. So it Well,
he's not be there today, buddy. Yeah. And
so there's this level of, you know, we're constantly trying to figure
out those great deals. Right? We'll use this, and it's a little
(19:30):
kitschy, but, like, we wanna be truffle pegs. We wanna find these amazing deals and
bring them to our investors to to participate in. But there's definitely a
difference between the the hard capital lost and the,
opportunity cost of not not participating. So so
different stories over the years where, you know, like the guy from FedEx, he was
kinda, like, on his last leg, and, you know, he got, like, a c plus
(19:50):
or t t t plus or something on his business plan and then,
you know, had, like I don't know. I think he might have gone to Vegas
or something, like, put his last $10 on to cover payroll, and then, bam, it
turned into, you know, what it did. One of the things that I've dealt
with, going along the lines of our, you know, you know, this,
you know, CVD therapy session here on the on the venture path,
(20:12):
is, like, it's really hard to go to an entrepreneur who's like, you know,
they're working eighteen hours a day. You know, they're they're trying to make it work.
And, like, look. Like, it's like, the market's not resonating with your your
product. Like, I put in here, you know, you know,
capital to I put in rocket fuel, and, like, we're not going
any faster or we're we're going in reverse. And you gotta shut those
(20:33):
four out of 10 companies down, or you gotta kinda let them die on their
own, or they gotta just turn into, you know, like, three or four people doing
something that kinda keeps the lights on. One of the things that that I
ran into is like, hey. You're an angel investor. You know, a big advocate of
the business, and you're like, hey. Look. You you didn't make it work. You know?
Now I'm gonna have to, like we're probably not friends anymore. It's it's not my
(20:53):
fault. Right? But, like, I can't support you. And we were
friends, but I was your investor. Like, I wasn't, like, your buddy like, you're not
my fraternity brother, and you're not, you know, we're not related. So what
are some of the things that you've had to deal with maybe on a no
names basis or maybe an elegant way to kinda say, like, look. I'm taking
this exit ramp, and, like, I'll give you back my equity. I don't think it's
(21:14):
worth anything. I'll write it off as a as a tax write off. But please
don't call me to ask me for money because I'm not your I'm not your
bank account. Right? Yeah. You know, personally,
I haven't had that happen, so I wanna be
clear there. What I have had is you
have certain investments, and we can see them you can see these stories a
(21:35):
lot when you look at the origin stories of some companies that may raise
good money, their own path, but you're right. There's something
within the business that just can't be worked out. Yeah. Or you'll hear things
in, let's call it, fintech or biotech where there's some government change
that comes through that affects all the way through your business, and you
can't recoup costs or the entirety of your
(21:58):
model changed. Right? And so when you're looking at that, that's what we call
in the business a pivot. Right? Is there a pivot place you can go?
At its largest, and there are multiple, you know, Silicon
Valley dream companies today that started one direction,
really couldn't execute and then pivoted and went a different way, and
(22:18):
now they're thriving. What is incumbent is having,
especially when you're making an early stage investment at our level, right,
Angel's gonna be different because you can't command the same power traditionally, is to
get a board seat. And that is traditionally a minimum that we look
for depending on if we're leading or or following into a into a
round is a board seat or board observer because we want the ability to
(22:40):
understand that level of detail in the business early
on to help. Now one thing about Sligo's model that's a little
different is, you know, we we're a fairly large team and all. You
know, there's there's 11 of our senior partners. We have about 40,
40 team members, including our leadership. And in a lot
of cases, we go in these companies similar to what private equity would do,
(23:02):
but early stage, and help them during this formidable time. So we can help them
see over the horizon, not only capital needs, but certainly strategic
needs. And if something doesn't resonate, start having those conversations now
about where you can pivot to try to mitigate that issue. Right?
But you're not immune to it is is the problem, and it happens.
You know, I would say if if
(23:26):
it's tough when you come in between someone and their money. Let's just start there,
right, to go to the therapy session. Sure. And so there's a
level of if you are an investor and you're a
minority investor, which angels are, especially early on,
Are you a past investor? He goes, here's some cash or here's some capital. Let
me know how it goes. I'm in your corner. Or are you, as
(23:49):
part of your angel strategy, rolling up your sleeves and helping? Because that's
traditionally what these founders want at that level of investment.
And if you're not doing that, then my question is why are you an angel
investor in the first place? Traditionally, angel investors
have something to give to that company to help other than capital,
which means you're gonna understand what's happening early on, and you'll be
(24:11):
in the foxhole to your own level. And at the end, if it goes
away, you're gonna go, wow. We did everything we could. This just didn't
work. And that puts you in a different understanding or understanding
position, around it. If you're just throwing capital and saying, why
didn't it work and you took my money? Well, I'd question whether or not you
actually know what was going on and whether or not that founder was doing everything
(24:32):
they possibly could. The answer could be yes, and then I'd say, okay.
What not why are you mad? You lost money. What could you
have done? And on the other side, if you just throw money and the founder
didn't do everything they're supposed to, my question is, how do you not know that
being that early on?
This is Pete Moore. Here's the last tip for you of the podcast.
(24:55):
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(26:03):
So, the last last question here is, you know, our main business
is is mergers and acquisitions. Out of that business, probably
80% is, selling companies. This is usually selling
companies that have EBITDA and have, you know, either under a
franchise or a franchisor. Quite frankly, you know, I'd say
probably 50% of the deals close, whether it's, you know,
(26:25):
valuation expectations are met. Something could happen negative in the
business like you're talking about, like a Sundan tax that came on one of our
company's litigation on a wage an hour with,
in the state of California where you have to pay overtime. Well, actually, you have
to pay everyone hourly for, like, waiting for a massage, or
personal training, things like that that that are not, you know, somewhat uncontrollable.
(26:48):
In the deals that you work and the and the ecosystems that you work in,
can you explain to the audience here, like, how hard it is to actually sell
a business and, you know, actually get liquidity? Because I think
sometimes people think like, oh, I could buy. It's like it's like oat milk. Like,
that that flies off the shelf. You know? So I think that flies off. It's
like, no, dude. This is like cottage cheese with, like, a cover that really
(27:09):
nobody knows what's in it. And I'm trying to sell something, and I have to
explain everything that's in it, and it's not that easy.
Yeah. I, I had the great fortunes, let me start there, of
selling two companies in one year that I was involved
in as an operator, meaning they were mine. Right? Just one of the either
cofounders or partner in, I was operating within the business. I will
(27:31):
tell you late late nights, very early mornings, everyone's yelling at
everyone. Now you think it should be a kumbaya. Right? But it's
not necessarily. You as a founder,
entrepreneur with your cofounders or or yourself, this is your
baby. This is what you've spent years of your life, which means,
naturally, you have a bias towards its value being
(27:54):
high. As a buyer of a business,
you have a bias that you know it's valuable. That's why you wanna
buy it. But you also want to buy it at the most fair
price, which traditionally is not the same as the founder's value
for their company. So there, we start the negotiation.
(28:15):
And the buy side is looking for
reasons to retrade the value down or
question your assumptions. And as a founder, you're saying, no.
I know my business is worth this because of all the amazing things,
both hard things. I use hard things like,
contracts and IP and inventory
(28:38):
versus soft costs. Like, I've spent all this time, and I know how
it's how it's valued to me and everyone who works here.
And that starts being its own rub as well. There was an
old joke an attorney told me a long time ago. If you're not dropping excluders
and yelling at each other, are you even really negotiating for this deal?
So the harder you the harder it becomes
(29:00):
sometimes means you're actually driving towards progress. But I will
tell you every all the sales I've been a part of, every
day, just like the entrepreneurial journey, it's this is the best day of my life.
We're gonna get it, and this deal is already over. I just am realizing it
now. And it keeps going like that for months.
Right? And then you get it done. Yeah. I joke I joke around that every
(29:22):
you know, depending on how many deals we're working on at a time, it's kind
of like playing a doubleheader in baseball. You win one, you lose one, you're trying
to, like, figure out, like, what really happened today. It's like progress that,
like, 50, you know, the, you know, one on one or two and two or
what have you. Yeah, man. So so in closing here,
you know, we'll, we'll put all the information up, and and hopefully entrepreneurs find you
(29:43):
or vice versa, because I like your your model and also seems
like, much more value add than, you know, a group that's coming in
and just trying to portfolio theory, on its own. I think that
that that ethos and and and that starting point actually
makes your the psychology of you putting money into a deal different.
So so kudos for that. And if there's any, you know, advice
(30:06):
or, you know, you know, quotes or, you know, like, you
know, something else somebody told you, that, that you wanna share with
us here on the, on our audience for the health and fitness industry.
You know, I so sports tech in general, I love. And, you
know, specifically around what you guys are are focused on,
(30:26):
with the advent of of I don't say advent. That's not correct. But with AI
being as pervasive as it is right now, there's a lot of amazing technology out
there. We are invested in a company that's in AI for
sports, specifically around scouting and player development. And when you're looking at
adding and appending that layer of data and then democratizing
scouting globally, it's quite amazing what technology can do.
(30:48):
Really, at the end of the day, I talk about it a lot, and it's
something that I think everyone's ripped off of Warren Buffett over the years. But invest
in what you know. Right? I'm a former d one athlete. I love
sports. I understand what we're doing in AI, and that merge
together works really well. So inadvertently to me, I've become
more of the sports guy within our within our firm, and I've
(31:10):
originated a few few deals in that space. And so very much,
enjoy that that sector. Great. Okay. Well, we'll hit you up on those.
We got a pretty good, flow. And, whenever you don't wanna use the word
wellness, you can use the, the term halo. Yes. And, appreciate you,
coming on here to, kickoff 2025. Thank you, guys, for having me.
Really appreciate
I am super excited to announce that we now have a formal partnership
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This is Pete Moore on Halo Talks NYC. I have the pleasure of
(01:07):
bringing to our podcast, Chris Van Dusen, to start off
02/2025. We're gonna talk about venture
capital. We're gonna talk about Sudeikko, and we're gonna talk about the pros and
cons of bringing somebody like him into your business to help you scale
it. Chris, welcome to the show. Thank you so much for having me. Appreciate
it. So, so we met through, through a very passionate,
(01:29):
networker and entrepreneur, Cirox. I wanna give a shout out
to him. And, Chris, wanna take this episode and really try
to hone in on for entrepreneurs. You know, what is
the benefit of going to somebody like you, taking capital from you,
the way your fund is structured, you know, to really match up the right
opportunities with the right investors. So maybe you could give a little bit of your
(01:52):
background coming from SoCal and, you know, talk
about, talk talk about the pros and cons of taking capital.
Sure. Yeah. So background, originally from the Northeast, came to
California at the end of o nine. You know, I wasn't always in venture. I
did get a degree in economics from William and Mary in Virginia, but my career
was anything but but but linear. Right? Not the
(02:14):
traditional route. You know, is in sales for many years.
Had the opportunity to then go on the marketing side, and started understanding
how companies really scaled, how they worked, started by an agency,
and then had the opportunity to meet some some great cofounders, of
ventures along the way, all kind of culminating in three exits, two
in '21 that we sold and one in '19
(02:36):
02/2019. So I have, you know, three exits under my belt, if
you will. Congrats. Many other gravestones along the way
as we know because everyone likes talking about their successes. I'm happy to talk about
the failures as well. Real highlight reel. The real real highlight reel.
The real. Right? Everyone shows you that home run swing. No one shows you the
other strikeouts. Right? Sure. So I had these three exits. And, you
(02:59):
know, during that journey, I met, this gentleman, John Garcia, who founded
Sligo Capital back in 02/2017. And,
loved their ethos of what they did. You know, we we talk a
lot internally, about the difference between capital and smart capital.
Right? Money and smart money. I thought they were really a a smart money type
group. Again, love their their strategy. They invested in one
(03:21):
of the deals that we took full cycle. So I joined
them January 22, and our firm is different. You know, I was
kind of alluding to that. The reason I see that is traditional venture.
We're gonna go raise a fund. We're gonna find we're gonna have a mandate. We're
gonna have something we're interested in. That interest could be around AI. It could be
industrial manufacturing, ESG, you know, you know, consumer goods,
(03:43):
you name it. And then you go raise capital for that
fund and then find assets to deploy. What we like doing
is a little different. We're gonna find great assets, great opportunities. We're
gonna set terms on deals. We're gonna come in and help you. Then we're gonna
go to our LP base and we're gonna or we're gonna go out, generally
to, you know, what we call our COIs or our network and go raise the
(04:05):
capital for that specific venture. It allows us a little bit of flexibility in
that we don't just take on specific deals. We may
do biotech to fintech to
straight play real estate project. We're finding great ways to,
to never make alpha for our investors. So when you take a look at,
you know, one of the benefits of a private equity fund that would have
(04:28):
dedicated capital or venture is that they say, hey. Look. I got a term
sheet. I'm gonna give it to you. If everything checks out, you know, we could
call the capital, and and fund this deal. Obviously, you've
got guys that have had a lot of success, Garcia. So have there been
instances where you have to pull back a term sheet, or would you guys have
conviction on a deal and you wanna put down a term sheet? Look.
(04:49):
We get this funded. Yeah. It's we'll get this funded. You
know? To say it perfectly lays out to the timing that we
had, I would think would be a little shortsighted. Right? I would say
from time to time, we may delay, but we also make that in.
And so I wanna make sure I'm clear here. You know, we're not causing delays
or or hardship. What we're saying is, you know, a traditional venture shop may
(05:11):
deliver that term sheet and fund within a week. We're going to
discuss, hey. We need three weeks or we need a month to fund, but here's
how this is gonna happen. Here's how we're gonna ladder in capital. That's really how
we bridge this because you're right. It's the one thing we can't control in our
model is is is time. Right? But, again, it
allows us and our LPs flexibility. Yeah. Look. The private
(05:32):
equity deal, the under over, I'm getting a deal funded from from an LOI is
for, like, six months. So if you get deals closed in, like, a month,
you know, you know, serendipity to, to everybody involved.
You know, I would say it's, those are gonna be a little different. So maybe
our full underwriting is the six months. Right? But from term sheet
to delivery. And and the difference between the p kind of VC side and not
(05:54):
to be pedantic is they're doing my you know, big minority or majority recaps are
buying the company. So they're going, hey. We like what you have. Now we wanna
really get in that data room and make sure our assumptions are correct. And that's
your time. For us, we're gonna do that before we ever deliver a
term sheet in venture. So there may have been and, you
know, I would say last probably three, four deals that I've brought in have been
(06:16):
what I would call incubated, meaning I've known or met the
founder. I've been looking and understanding the company. We've
been in the data room, and this could be upwards of four or five months
at this point before we're ready. Mhmm. Because the type of deals we
like to be a part of are ones where they are
capitalized. Right? So think of seed round and and above, seed
(06:37):
a b. They're capitalized. They're on their glide path, and
maybe they're anticipating a raise in six months. So
we're gonna watch them hit their KPIs towards that raise. We're gonna start
discussing what realistic valuation is gonna be. We're gonna
start going into the data room, and and that is that multi month
process. But the minute we deliver a term sheet, we were already at the point
(06:58):
where we know we have conviction we're going to do it. And then a lot
of times, we're already having conversations with those LPs on our side to say, we're
getting close to funding something like this. Is this in or we know it's in
your wheelhouse, or is this in your wheelhouse, or do we wanna do something here?
Yeah. Yeah. I was I was doing a rift the other day on,
you know, seed round, series a, series b, series d, and I was trying
(07:20):
to remind the audience that the reason why you get a series b
is because the series a went well, whatever experiment that was. Could you
kind of, you know, pour some either cold water, warm water,
or, you know, lukewarm water on the fact that, like, look, you don't
automatically get to, you know, swing at the bat every time and and your
valuation just because the valuation of series a was 6,000,000,
(07:43):
you have to, like, prove that and then validate, you know, at each
step, of the way. Maybe just like an education for
entrepreneurs to kinda think like we do and understand that, like,
value is created or it's not created. And if you get another swing at the
bat, I can't give you the same value for that swing. Yeah. You
know, a a great way to look at it is and it almost goes up
(08:04):
to a little bit of a more macro question, which is, when is it the
right time to take capital from someone like me, right,
who does this for a living? And it's really saying and it depends. It's
saying, I'm ready to grow to this next stage, and I have market
signals. I have new clients. I have manufacturing needs to get done,
whatever it may be, to get to that next level. So let's start. The reason
(08:27):
why you you received that valuation for your series a is you are on
glide path towards it. You just needed capital to really grow the team,
grow your grow something. Right? Now to qualify for your
series b, did I hit that, those goals? And
then secondarily, am I on glide path for the next
big growth or step function of my business?
(08:49):
And if the answer is no, then you're not gonna get this large new valuation.
If the answer is maybe, but I need a little bit more time, maybe you
do an extension round, what they call an a extension. Right? Where it's
maybe the same valuation because you really haven't hit it, but you're very close or
you're you know, things are looking like they're going to be at. There's a macro
factor that that slowed it down. And so but to to your
(09:11):
point, if we're underwriting the next round, we've
set up modeling around it to say, here's what you
should be at with the capital we have provided. And if you're there, great.
If you're not, we're really gonna wanna understand why. And we're certainly
not gonna give you the valuation you'd want. And as a founder,
every time you take capital from us, you're being diluted and same
(09:33):
with everyone else on the cap table or on, you know, on the the ledger
of owners, if you will. Right? And so I don't wanna raise it
that 6,000,000 and then come back and need more capital at the same 6,000,000
because that's just dilutive for I don't wanna say no reason,
but that's extra dilutive to everyone involved. But if I go out and hit my
goals, I'm gonna bring in more capital at a higher valuation, and it's gonna be
(09:55):
less dilution because I am on path to where I need to go.
This is Pete Moore. I wanna let you in on a little secret. There's this
company called Promotion Vault, and what they do is they give out rewards from
retailers that allow you to incentivize your
members without having to do zero down and one month
(10:16):
free or giving away shakes or giving away t shirts.
What you wanna do is build a rewards program that lasts,
that people value, and that doesn't discount your own products and
services. So here's the deal. There's something called rewards vault.
The rewards vault is going to allow a member to set up their
own profile. They are going to answer questions. You are gonna get those
(10:38):
answers. You're gonna be able to target those members, and you're gonna reward
them inside your club, inside your spa, and outside of
the club, and outside of the spa to get them to become loyal,
to get them to pay their monthly dues, and to be
rewarded properly for the actions. A lot of companies are cutting back on
rewards. You shouldn't be. Promotion Vault's your answer. Trust me.
(11:00):
This is real.
Yeah. One of the mistakes I made, which I am very vocal about my
mistakes in life, you know, and and and things that I don't want other
people to, to have to experience. So at least I, you know, tell a story
and say, hey. Do you want this to happen to you? Yeah. I was kind
of, like, trumpeting the fact that, like, I'm a I'm a angel investor. And I
(11:22):
realized that being an angel investor is a great way to kinda lose money
because, you know, like, I'm supposed to kinda be an angel
and, like, really nice to the entrepreneur all the time, and, like, I'm just trying
to be there to help. And then when I give advice and they don't take
it, you know, like, somehow, like, this angel from, like, what
was that movie? Like, revenge or something or, like, yeah,
(11:44):
something like that. Like, Chip Belushi. I think it was you know, like, the angel's
like, okay. No problem. No big deal. You know, pat on the back. Good
try. And if that happens four or five times, you realize that, like, the angel
is kinda like could be like the angel of death because it's like, you know,
like, how many times do you not listen to me? And I'm, like, still trying
to be, like, helpful. So Yeah. One, do you ever use that term?
(12:06):
Two, why does that term exist? And, like, when does the angel become,
like, rational? Yeah. Right? So it's
it's tough. Like, let's let's let's go up on and say,
let's start adventure. I'll I'll answer the angel question, but let's start venture what we
do. There's some there's some facts out
there. Right? One is if you look
(12:28):
at traditional venture, they're gonna do a fund as we were talking about. And
those funds traditionally apply portfolio theory.
Now portfolio theory, very kinda 30,000 foot, is
I'm gonna make 10 investments, and let's assume they're the exact same.
And I know that four of them, just like baseball we're talking about, I'm gonna
strike out four times, and then I'm gonna have one home run. And that thing
(12:51):
is gonna return a really good, if not the entirety of what
I've raised out of that fund. And then in the middle, there's gonna be some
singles, doubles, triples, hopefully. Right? And that's gonna get us our overall return.
Typically, as an angel investor who's not
doing early stage investing in a fund but is actually angel investing in a deal,
I have one deal. Meaning, there's no portfolio
(13:13):
theory. You have your one at bat. Right. And so that just
by the law of statistics and probability says I have
a much more a much harder path
to getting a return there. Now I can build my own portfolio by making
10, but now my cash outlay is much larger than,
than it would have been on that one. Number two,
(13:35):
Angel, if we think about it, the reason it's being used is it
is extremely early stage. So, traditionally,
I call it friends and family and Angel all being around the same
thing. Mhmm. We invest in seed. Why
that's important is, traditionally, these companies are in revenue,
have market signals, and need capital to expand up
(13:58):
before they do a large a round. If I
go precede or what we call angel, they may be in r and d.
They may be just have their ideas or they're about to start a
beta, but they're traditionally not in market, which means you
believe in their idea. You just it's not in in
practice yet. So you're taking a higher risk overall.
(14:22):
It's tough to be an angel in a series b because this company is now
doing revenue, might even, depending on the sector, be in EBITDA, meaning
in profit. Are you much of an angel anymore? No. You're an investor at this
point because you're investing in a in in something. So it's, you know, me and
you saying we have an idea to revolutionize this space. We have put
our capital in and gotten it to this place to show you there's something here.
(14:44):
Now we want angel capital to come help us bring it to market, and then
you come to someone like me to actually commercialize it from a growth
perspective. Okay. So I might be treating this almost like an entrepreneurial
of, angel therapy session with
Van Dusen, you know, therapy. Some of the things
that I've dealt with, you know, just to get it out there because your perspective
(15:06):
on on things that I've that I've experienced is kind of like how I
feel like this should play out now because I'm I'm telling you what I did,
and now people can say like, Maybe he shouldn't have done it that way or
you're giving a perspective. So let me ask you this other question.
You've had LPs in deals that crush it, and and those same
LPs, you know, are in in your other deals. That's
(15:27):
fine. But then you've got LPs that have they're in, like, the four strikeouts,
and they missed the home run, and they missed the single, and they missed the
double, and they missed the triple. You know, how do you kinda say, like, look.
We didn't do a fund. We came to you on each one. That's kinda like
the pros and cons of, you know, being able to pick your own vegetables.
Yeah. So so I'll answer two ways. One is,
(15:49):
you know, it's it's a delicate balance
because every deal if we put up 10 deals right now that
we went and sourced together, Pete. Right? We look at it and go, oh, these
have amazing potential. Maybe disproportionate. Maybe some are gonna be the next huge,
you know, unicorn, and some you're like, no. This is gonna be a great return.
There are things like interest rate cycles we just went through and are still going
(16:11):
through. Global pandemics that happen, right,
that end up derailing things that you can't foresee. Traditionally,
the reason why you'd invest with an organization
like ours or many others out there is there's a level of due
diligence to say, do we believe in this, and do we have
modeling and the right underwriting to say we
(16:34):
believe it can happen versus an individual investor finding what we'll
call a club deal, right, the country club deal, trying to figure
out whether or not this is right. Right? So there's a level of sophistication that
starts there. Number two, our investors,
especially, I mean, certainly on the equity side, are what are considered accredited
investor or qualified investors. These are individuals who do not want to lose
(16:56):
money but also are making small bets.
And anytime you're gonna do and I'm not a financial planner, so this is
not financial advice. But when you are looking at, I have x
amount per year or in my net worth to invest.
Right? There are certain ways to build portfolios. And, traditionally,
something like this is a very small part because it is
(17:19):
going to naturally be more speculative than a mutual
fund or a CD or an ETF you're going to buy. And so you're
gonna look at this as this small piece that if it goes away
because of reasons within the, you know, growth trajectory doesn't
happen, then this is my exposure, and
that exposure is x y z capital. And so but if it
(17:41):
hits, that could be the biggest return in my portfolio for the
year. And so there's just a little bit more of a speculation there.
I would also say, and it's a weird way, and I don't take credit for
this. I heard this, from someone a few years ago, and it's such an
interesting way of looking at it. Most professional investors,
(18:01):
which I hate to call myself one, but this is what I do for a
living. Right? So by technicality, it's a professional. We are not as
mad about the money we lose than the money we did not
have the opportunity to earn. So let me break that down for one
second. If we invest, let's just say,
$100,000 into a deal and it goes wrong, that is
(18:22):
not good. We understand that. We have lost $100,000.
If we pass on a deal and
that 20 x's, I didn't lose a hundred thousand.
Right? I lost 22,000,000. Yeah. And
so you've gotta That's tough. That's tough love on yourself for sure. Exactly. Right?
We're like tough. That's where there's this balance of we
(18:45):
wanna participate in great opportunities, and we wanna be able to try
to see into the future on what these things could be.
But we're constantly having to evaluate and underwrite
and do due diligence on, is this going to be something? How do we see
it? And then with that capital outlay, do we
believe we can be good fiduciaries to see it through from an investor side
(19:07):
and investment side? Also, if we miss,
what's the lie what what would be that miss? Right? Yeah. And there are
no one bats a thousand. Never met that person in my life. So it Well,
he's not be there today, buddy. Yeah. And
so there's this level of, you know, we're constantly trying to figure
out those great deals. Right? We'll use this, and it's a little
(19:30):
kitschy, but, like, we wanna be truffle pegs. We wanna find these amazing deals and
bring them to our investors to to participate in. But there's definitely a
difference between the the hard capital lost and the,
opportunity cost of not not participating. So so
different stories over the years where, you know, like the guy from FedEx, he was
kinda, like, on his last leg, and, you know, he got, like, a c plus
(19:50):
or t t t plus or something on his business plan and then,
you know, had, like I don't know. I think he might have gone to Vegas
or something, like, put his last $10 on to cover payroll, and then, bam, it
turned into, you know, what it did. One of the things that I've dealt
with, going along the lines of our, you know, you know, this,
you know, CVD therapy session here on the on the venture path,
(20:12):
is, like, it's really hard to go to an entrepreneur who's like, you know,
they're working eighteen hours a day. You know, they're they're trying to make it work.
And, like, look. Like, it's like, the market's not resonating with your your
product. Like, I put in here, you know, you know,
capital to I put in rocket fuel, and, like, we're not going
any faster or we're we're going in reverse. And you gotta shut those
(20:33):
four out of 10 companies down, or you gotta kinda let them die on their
own, or they gotta just turn into, you know, like, three or four people doing
something that kinda keeps the lights on. One of the things that that I
ran into is like, hey. You're an angel investor. You know, a big advocate of
the business, and you're like, hey. Look. You you didn't make it work. You know?
Now I'm gonna have to, like we're probably not friends anymore. It's it's not my
(20:53):
fault. Right? But, like, I can't support you. And we were
friends, but I was your investor. Like, I wasn't, like, your buddy like, you're not
my fraternity brother, and you're not, you know, we're not related. So what
are some of the things that you've had to deal with maybe on a no
names basis or maybe an elegant way to kinda say, like, look. I'm taking
this exit ramp, and, like, I'll give you back my equity. I don't think it's
(21:14):
worth anything. I'll write it off as a as a tax write off. But please
don't call me to ask me for money because I'm not your I'm not your
bank account. Right? Yeah. You know, personally,
I haven't had that happen, so I wanna be
clear there. What I have had is you
have certain investments, and we can see them you can see these stories a
(21:35):
lot when you look at the origin stories of some companies that may raise
good money, their own path, but you're right. There's something
within the business that just can't be worked out. Yeah. Or you'll hear things
in, let's call it, fintech or biotech where there's some government change
that comes through that affects all the way through your business, and you
can't recoup costs or the entirety of your
(21:58):
model changed. Right? And so when you're looking at that, that's what we call
in the business a pivot. Right? Is there a pivot place you can go?
At its largest, and there are multiple, you know, Silicon
Valley dream companies today that started one direction,
really couldn't execute and then pivoted and went a different way, and
(22:18):
now they're thriving. What is incumbent is having,
especially when you're making an early stage investment at our level, right,
Angel's gonna be different because you can't command the same power traditionally, is to
get a board seat. And that is traditionally a minimum that we look
for depending on if we're leading or or following into a into a
round is a board seat or board observer because we want the ability to
(22:40):
understand that level of detail in the business early
on to help. Now one thing about Sligo's model that's a little
different is, you know, we we're a fairly large team and all. You
know, there's there's 11 of our senior partners. We have about 40,
40 team members, including our leadership. And in a lot
of cases, we go in these companies similar to what private equity would do,
(23:02):
but early stage, and help them during this formidable time. So we can help them
see over the horizon, not only capital needs, but certainly strategic
needs. And if something doesn't resonate, start having those conversations now
about where you can pivot to try to mitigate that issue. Right?
But you're not immune to it is is the problem, and it happens.
You know, I would say if if
(23:26):
it's tough when you come in between someone and their money. Let's just start there,
right, to go to the therapy session. Sure. And so there's a
level of if you are an investor and you're a
minority investor, which angels are, especially early on,
Are you a past investor? He goes, here's some cash or here's some capital. Let
me know how it goes. I'm in your corner. Or are you, as
(23:49):
part of your angel strategy, rolling up your sleeves and helping? Because that's
traditionally what these founders want at that level of investment.
And if you're not doing that, then my question is why are you an angel
investor in the first place? Traditionally, angel investors
have something to give to that company to help other than capital,
which means you're gonna understand what's happening early on, and you'll be
(24:11):
in the foxhole to your own level. And at the end, if it goes
away, you're gonna go, wow. We did everything we could. This just didn't
work. And that puts you in a different understanding or understanding
position, around it. If you're just throwing capital and saying, why
didn't it work and you took my money? Well, I'd question whether or not you
actually know what was going on and whether or not that founder was doing everything
(24:32):
they possibly could. The answer could be yes, and then I'd say, okay.
What not why are you mad? You lost money. What could you
have done? And on the other side, if you just throw money and the founder
didn't do everything they're supposed to, my question is, how do you not know that
being that early on?
This is Pete Moore. Here's the last tip for you of the podcast.
(24:55):
We are partnered up with a company called Higher Dose, higher dose
dot com. They are the leader in workout
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light masks, neck enhancers, and other
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(25:18):
yet, your time and your stop is now. You
gotta get these products in there before these workout recovery and spas
end up saturating your market, having your members walk out of the club
and going into one of their locations for $200 per
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(25:40):
workouts. Higher dose, check it out. There's a
wholesale code, and we look forward to helping
you augment your products and services to meet the demands of your
members. And, hey, let's get people happy, healthy, and
sweating, and the recovery should be just as good as the workout.
(26:03):
So, the last last question here is, you know, our main business
is is mergers and acquisitions. Out of that business, probably
80% is, selling companies. This is usually selling
companies that have EBITDA and have, you know, either under a
franchise or a franchisor. Quite frankly, you know, I'd say
probably 50% of the deals close, whether it's, you know,
(26:25):
valuation expectations are met. Something could happen negative in the
business like you're talking about, like a Sundan tax that came on one of our
company's litigation on a wage an hour with,
in the state of California where you have to pay overtime. Well, actually, you have
to pay everyone hourly for, like, waiting for a massage, or
personal training, things like that that that are not, you know, somewhat uncontrollable.
(26:48):
In the deals that you work and the and the ecosystems that you work in,
can you explain to the audience here, like, how hard it is to actually sell
a business and, you know, actually get liquidity? Because I think
sometimes people think like, oh, I could buy. It's like it's like oat milk. Like,
that that flies off the shelf. You know? So I think that flies off. It's
like, no, dude. This is like cottage cheese with, like, a cover that really
(27:09):
nobody knows what's in it. And I'm trying to sell something, and I have to
explain everything that's in it, and it's not that easy.
Yeah. I, I had the great fortunes, let me start there, of
selling two companies in one year that I was involved
in as an operator, meaning they were mine. Right? Just one of the either
cofounders or partner in, I was operating within the business. I will
(27:31):
tell you late late nights, very early mornings, everyone's yelling at
everyone. Now you think it should be a kumbaya. Right? But it's
not necessarily. You as a founder,
entrepreneur with your cofounders or or yourself, this is your
baby. This is what you've spent years of your life, which means,
naturally, you have a bias towards its value being
(27:54):
high. As a buyer of a business,
you have a bias that you know it's valuable. That's why you wanna
buy it. But you also want to buy it at the most fair
price, which traditionally is not the same as the founder's value
for their company. So there, we start the negotiation.
(28:15):
And the buy side is looking for
reasons to retrade the value down or
question your assumptions. And as a founder, you're saying, no.
I know my business is worth this because of all the amazing things,
both hard things. I use hard things like,
contracts and IP and inventory
(28:38):
versus soft costs. Like, I've spent all this time, and I know how
it's how it's valued to me and everyone who works here.
And that starts being its own rub as well. There was an
old joke an attorney told me a long time ago. If you're not dropping excluders
and yelling at each other, are you even really negotiating for this deal?
So the harder you the harder it becomes
(29:00):
sometimes means you're actually driving towards progress. But I will
tell you every all the sales I've been a part of, every
day, just like the entrepreneurial journey, it's this is the best day of my life.
We're gonna get it, and this deal is already over. I just am realizing it
now. And it keeps going like that for months.
Right? And then you get it done. Yeah. I joke I joke around that every
(29:22):
you know, depending on how many deals we're working on at a time, it's kind
of like playing a doubleheader in baseball. You win one, you lose one, you're trying
to, like, figure out, like, what really happened today. It's like progress that,
like, 50, you know, the, you know, one on one or two and two or
what have you. Yeah, man. So so in closing here,
you know, we'll, we'll put all the information up, and and hopefully entrepreneurs find you
(29:43):
or vice versa, because I like your your model and also seems
like, much more value add than, you know, a group that's coming in
and just trying to portfolio theory, on its own. I think that
that that ethos and and and that starting point actually
makes your the psychology of you putting money into a deal different.
So so kudos for that. And if there's any, you know, advice
(30:06):
or, you know, you know, quotes or, you know, like, you
know, something else somebody told you, that, that you wanna share with
us here on the, on our audience for the health and fitness industry.
You know, I so sports tech in general, I love. And, you
know, specifically around what you guys are are focused on,
(30:26):
with the advent of of I don't say advent. That's not correct. But with AI
being as pervasive as it is right now, there's a lot of amazing technology out
there. We are invested in a company that's in AI for
sports, specifically around scouting and player development. And when you're looking at
adding and appending that layer of data and then democratizing
scouting globally, it's quite amazing what technology can do.
(30:48):
Really, at the end of the day, I talk about it a lot, and it's
something that I think everyone's ripped off of Warren Buffett over the years. But invest
in what you know. Right? I'm a former d one athlete. I love
sports. I understand what we're doing in AI, and that merge
together works really well. So inadvertently to me, I've become
more of the sports guy within our within our firm, and I've
(31:10):
originated a few few deals in that space. And so very much,
enjoy that that sector. Great. Okay. Well, we'll hit you up on those.
We got a pretty good, flow. And, whenever you don't wanna use the word
wellness, you can use the, the term halo. Yes. And, appreciate you,
coming on here to, kickoff 2025. Thank you, guys, for having me.
Really appreciate
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