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In your perspectives of investing I Looked at you know you had nine of them You had luck price due diligence Instinct management Etc when you talk About price you mentioned in that Aspen Your perspective that you've heard that Companies management team prefers you as Their investor they're going to choose You talk to me about leadership and talk To me about management well the point I Was making there is when we're doing a Buyout uh you're competing everything is An auction pretty much and when uh Somebody my team comes to me and says Our the management team or the company Want to buy they prefer us well they're Often not the people making the decision It's the owner and so when people tell Me that the the seller or the management Team prefers us I get skeptical a bit Because they're not necessarily the Decision maker Um so I I just think in the end what Gets down to when you're trying to buy a Company is pretty much the price and the Certainty of closing at that price Um you know maybe people like you a Little bit more maybe in some cases it Makes a modest difference but generally In the buyout World whoever pays the Highest price with a certainty of Closing is almost certainly going to win That deal because people I experienced That with you and then this exit we've
Had that you prefer to certain investor To purchase PHP it wasn't just any Because there's a lot of money there's a Lot of offers coming your way but I saw You look for example if I'm buying a Company they want you to buy them right Because they feel that you're going to Take the business to the next level and That's kind of like the perspective you Had it depends if you're controlling the Company if you're buying 100 of the Company the seller probably doesn't care That much if you were they're going to Stay in the deal then they want somebody They think is going to add value then They might look at something other than Price because they're still going to Ride with the upside He's right he that's exactly it because Uh you have to think about the people That have been running a company who are Going to be with the new buyer longer Than the founder maybe so it's important For that partnership to make sense and Then the structure to be set up you know Sometimes uh it's set up in a way where The founder doesn't go with the deal They don't even want the founder to go With the deals like listen kind of step Out of the way you've been partying too Much you're kind of living a lifestyle The whole yacht all this other stuff You're not you haven't been operating For four years let us just take over and
We'll do our part and then sometimes if The founder is very involved they kind Of want the guy to be locked in a little Bit for a couple years before they Transition them out that's true um Sometimes if it's a Founder it's a Difference if it's a founder and a CEO If it's a Founder but he is not really Still running the company they'd Probably be happy if he would lend his Credibility to the customers say I'm Still happy with this buyer I'm still Around but they don't really want to his Advice that much they don't want him Involved that much if it's a CEO who's Really built the company and is still Running at a company and is really Valuable you probably would keep him for A while but in a buyout about more than 50 percent of the time the person who's Running the company in a buyout at the Time you do the deal is not running it When you exit that deal that totally Makes sense and and some people would Say the biggest mistake that buyout Firms make is staying with a CO too long Sometimes the co was good maybe before Or maybe wasn't that good but if you Keep riding with him for too long or her Too long it generally doesn't work and Very often you make you make changes Right why is that why is that because Operating a buyout company with Leverage Is different than operating one without
Leverage also people have different Philosophies and somebody if you built Your this company this company you now Own you built it it's your baby and Let's suppose you sell it tomorrow you Say look I know everything here why Would you not want to keep me and they Would say well you're nice but now it's Our money at risk and our money at risk Is different and we have different ways Of doing things now sometimes they might Say we want to keep you for a while to Keep the customers happy to make certain That there's no transition people Employees aren't leaving right away yeah But after a while they'll say you know You know you don't need to come into Work 40 hours a week maybe maybe 30 Hours a week or maybe 20 hours a week Maybe 10 hours a week and by the way you Know we're going to call you chairman Emeritus and by the way Um your parking spot's gone now at some Point you know they don't need you so Much that's what happens in life what's What's the difference between a way of Founders wired versus a CEO's wired like What what do you see to say I don't Think this founder is going to is a real CEO like what's the difference between Those our founder is willing to take Entrepreneurial risks when you take an Entrepreneurial risk you're betting a Lot on something happening and if it
Doesn't work out you lose a lot more the CEO is basically getting a salary and Maybe some stock incentives and so forth But he or she you know will will Transition to some other job and they Can run another company the founder has More of his heart and soul in it as a Generally uh principle and so when you Build something it's much different than If you're running something so what all The craziness taking place I believe Future looks right if you believe future Looks bright get your latest Future Looks bright hat of valuetainment it Says future looks bright here future Looks bright here we got them in white We got them in Black we got them in red Are black on black sold out these are About to sell out if you haven't ordered One yet we had a person in Michigan but One then he bought three then when those Three people wore it in the office they Had to order 58 of them because people Wanted the future looks bright hat Especially during times like this Because ain't nobody's saying future Looks spread toward your future looks Bright hat click over here and to watch The entire podcast click here take care Everybody Foreign [Music]
