Podcast: Briscoe Protective: Alexander Schuil

From SMEVentures, it’s The Search Fund Podcast, a show about hungry entrepreneurs who, instead of starting a business, decide to buy one. These are their stories of success, failure, and the lessons they’ve learned.

In this inspiring episode of "The Search Fund Podcast," we delve into Alexander Schuil's remarkable journey from an early interest in entrepreneurship to achieving a significant exit through a search fund. Alexander shares his beginnings, from diverse early work experiences to pivotal educational moments that shaped his path. He discusses the strategic acquisitions that propelled his business forward, leading to a successful exit. This episode is a must-listen for mid-career professionals seeking to explore entrepreneurship through acquisition, offering valuable insights into the challenges and triumphs of the search fund model. Alexander's reflections post-sale and his ongoing contributions as an investor and board member provide a comprehensive view of the search fund ecosystem. Join us to uncover how Alexander's journey can inspire your own path to entrepreneurial success.

This transcript is auto-generated, so please forgive any errors.

[00:00:01] Alexander: So there were 10 lectures around entrepreneurship. Lecture six was something around, I'll say M and a, or let's say startups or no being an entrepreneur with, a business that's already there.

[00:00:13] Alexander: And then, bullet point six was something like, Hey, there's also a way to become an entrepreneur without any money. And then my ears started to open up

GLOBAL INTRO

[00:00:20] Jake: From SME Ventures, it's the Search Fund Podcast. A show about hungry entrepreneurs who, instead of starting a business, decide to buy one. These are their stories of success, failure, and the lessons they've learned.

EPISODE INTRO

[00:00:37] Jake: Welcome to the Search Fund Podcast. Today, we're diving into a story that not only defines the essence of the search fund journey, but also culminates in one of the most extraordinary exits in search fund history.

[00:00:52] Our guest, Alexander Schuyl, takes us on an adventure from the early sparks of entrepreneurship in the Netherlands to achieving a nine figure exit via the sale of Brasco Protective. But Alexander's story is not just about the financial triumphs.

[00:01:05] Jake: It's a testament to the power of strategic thinking, relentless perseverance, and the profound impact of collaboration. Join us as we explore the journey of a man who turned a classroom concept into a legacy, making search fund history as he did. Stay tuned as Alexander shares the highs, the lows, and the lessons learned from one of the most remarkable search fund journeys the world has ever seen.

EPISODE BODY

[00:01:30] Jake: Alexander, thank you so much for joining the show today. Really excited to talk to you. I know you have a fascinating story to tell. You and I have known each other for a while, so I'm looking forward to digging in.

[00:01:44] Alexander: Thanks, Jake. Look forward to it.

[00:01:47] Jake: Let's start from the beginning. Where did you grow up?

[00:01:51] Alexander: So I grew up in the Netherlands in Europe, and I'll tell you right off the bat that the untraditional part of that is I actually had an American mom and a Dutch dad. So, ending up where I did in the U. S. Wasn't too unfamiliar terrain, I guess, from the get go.

[00:02:07] Jake: So your American mom is happy, and your Dutch dad

[00:02:10] Alexander: Well, no, no, no, they're, they're both still there. They've been there for 45 years or so. So the American mom is still unhappy with my choice. But no, that's not fair. I think we're all fine.

[00:02:19] Jake: What were you like as a child? What, what interested you? What, what

[00:02:23] Alexander: um, well, I mean, I would say relatively simple. I like sports and and I was outside a lot. My mom would say that I probably arrived at the daycare earliest to be able to drive the truck to make sure others didn't, if this is going towards whether something entrepreneurial at a young age, maybe.

[00:02:39] Alexander: And, I do think that happened throughout high school. I wasn't a great student in high school. I did okay. I went ups and downs, but I did start a first little business, at 16, like a drive in DJ company. And I think I expressed the interest in, in, in some real work and try to make some money maybe, relatively early.

[00:02:56] Alexander: But I think my youth and everything was pretty standard and, at least a positive experience.

[00:03:02] Jake: You said you ran a DJ company.

[00:03:05] Alexander: Yeah, I did. Well a buddy of mine and I, started a business when we were, um, 15 or 16, and my father was, uh, willing to drive us to places at 2:00 AM I have to say, my father, grandfather, and others were also entrepreneurs in the family seemed, lots of bad and also some good. And it's in the DNA, talking at the, at the dinner table.

[00:03:24] Alexander: Too much about companies versus , probably talk about other important things But so yeah, that got me going and this dj company was something that I had a technical friend who liked to fiddle around with Yes, stroboscopes, you know dj lights and and I I do like a little bit of music so that combination Made itself into, let's say, advertisements in local supermarkets and stuff like hire us when you have your 50 year old a party, because we know some old music too.

[00:03:52] Alexander: So I spent quite some time behind DJ tables and building up this stuff where I think I was more of the commercial part of the, of the, of the team and he was more of a technical. So when we went to college, I also actually sold, I don't know how we valued that, but the materials or something like that for a thousand euros or so at the end, when I reflect back, I never thought about it, but that was, that was the first experience with MNA.

[00:04:15] Jake: Did you have any other side jobs in high school or

[00:04:17] Alexander: I did. I did. I worked, I worked at a gas station every, um, at least Sunday. I'm not sure if it was Saturdays too, which in Holland is difficult because people go out, you know, into bars at a relatively young age. So I had to be home early enough to wake up three, four hours later and open up the shop at like 5, 6 AM on a Sunday.

[00:04:34] Alexander: I liked that because you got to see some nice cars once in a while and you got to clean them, that sort of thing, but that was a standard job. Like. eight, nine hours in a shop and filling up cars. It was fine. I think it was good for the experience. It was something my dad also kind of pushed.

[00:04:49] Jake: Did you know when you were running that DJ company that you were an entrepreneur and that you were starting an entrepreneurial path?

[00:04:57] Alexander: No, no, I think, it was just there in, in the blood and in the, what I wanted to do, but was I so thoughtful and thinking ahead? No, I think I need, I knew I needed to go to college like, like most did. But really, really on what will it be after? I may have had some interest in it. But I wasn't like watching the then form of shark tank or so every day or knowing that that had to be me.

[00:05:20] Alexander: I might've known somewhere in the back of my mind, I wasn't going to work for someone else the rest of my life, but how and what not really.

[00:05:27] Jake: You said your dad and your grandfather were entrepreneurs. What did they do?

[00:05:34] Alexander: My grandfather did a variety of things with which, yeah, if I have to go way back, and that's also the link that started our family with the U. S., but he ran a poultry, let's say, machine distributor business. So the way we always get this explained as an America company called Cobb, K O B B in the Northeast or in New England.

[00:05:52] Alexander: Sold machines to help breed, specific type chickens and, those machines were not yet available in, uh, in, in Europe, specifically in the Netherlands. So we started an importership or distributorship of those machines into the country. And you won't believe it, that company in the Netherlands actually went public to a very small, exchange.

[00:06:11] Alexander: also went bankrupt. So it's the other side of the story. And actually because of that bankruptcy or one of these, somewhat field attempts of entrepreneurship, the family left for Switzerland or another gig, which was building houses and chalets for those fortunate Europeans that had made it.

[00:06:26] Alexander: I wanted to emigrate , to Switzerland, which happened a lot in the sixties. That time my dad was 16, was either going to join the family or had an opportunity to spend six months at this old American, business relationship and who at age of 16 wants to join their family to Switzerland. so he said, wow, I can spend, six months in front of the U.

[00:06:42] Alexander: S. Let's do that. Long story short, there is, he left the Netherlands for the U. S. at 16, spent 8 years there, met my American mom, worked for AIG, the insurance company, and after a stint in London, because they had the European roots, at least my dad did. With AIG decided, this real insurance brokerage stuff.

[00:07:02] Alexander: I can do that on my own. Let's do it in the Netherlands for a while. Because my grandmother then from Switzerland and moved back to the Netherlands, my grandfather passed away. Um, and they were going to spend three years in Holland and come back to the U S. But this is not like now we're in 1985. He started his business in Holland and, um, and never left.

[00:07:19] Alexander: The conclusion there is. So when I was born, I grew up with a father that was, away a lot, working a lot, but also, um, that never hurt the relationship. And I never found, found that anything bad in the mid late nineties, that industry really took a hit. So we all know Buffett and some others that actually did really well in reinsurance or when you're a small brokerage firm.

[00:07:39] Alexander: Placing American business into Europe and vice versa, there was less space for it. So they really struggled in my later youth when I was already in college. Reinvented themselves and are focused on smaller niche insurance products since. But I'll say that there were good years in the early 90s and since it's been tough.

[00:07:55] Alexander: So. You know, lots of respect. My dad is still working and he loves it, and he's been closely in tune with, uh, with our endeavors and eventual success in the search fund world. But, think I've seen a lot of the tough side of entrepreneurship and experienced some of it, but also the things, you know, where you might not always want to be in it.

[00:08:12] Alexander: Again, all the respect to the family, but I think, where we ended up, um, yeah, is a place where some of my family would have wanted to end up too, but they've seen more of the hard work for it. You know, my dad's older brother, my cousin, who was also involved in the search fund world, also many entrepreneur entrepreneurial ventures, ups and downs, and you just see.

[00:08:30] Alexander: How difficult it is, and a big piece of luck you need to actually get somewhere, um, meaningfully, financially. But I don't think anyone would have traded the freedom and, uh, and the, um, the journey, regardless of the outcome.

[00:08:44] Jake: After high school, you went to the Rotterdam School of Management, Erasmus, for your bachelor's and master's in business and finance. During that time, did you have an idea of what you were going to do after school?

[00:08:56] Alexander: yeah, that was, so that, school is a pretty logical path when you want to study economics or business in, in the Netherlands. It's, it's somewhat old fashioned to say that's where you go and do that. There are more good places to do it, but it was one of them. The beginning was more about student life.

[00:09:10] Alexander: The later piece was, was actually a little bit more focused about next steps. So I, um, went down the rabbit hole of exploring different type, careers, ranging from investment banking to what we, they are called management traineeship at big, international businesses, typically the Dutch, you know, Haddock and Phillips.

[00:09:29] Alexander: I do think in the masters phase, cause, cause we went for our masters directly right out of the bachelors, arguably maybe not as involved as an MBA, but pretty detailed and, um, you do, you do that in a full year or a little longer, um, mine was finance and investments. So, there was a lot of exposure as much as you could, I guess, at, you know, what age, I don't know, uh, 23, 24 ish, , to things like MNA. The intrigue was there for that, but I thought the way to do that might be through an investment bank. And there was also intrigue to the old fashioned American option system where I did learn how CEOs that did well participated in some way, but typically meaningful, meaningfully, in let's say upside cases of running a business, uh, even, even for shareholders.

[00:10:13] Alexander: So I'm not sure if I then thought, Oh yeah, I need to be an entrepreneur, but I did feel like. If you want to make some money, which I do think was of interest, you need to have some sort of equity options or so. Stock position over time. But, but all those things I didn't really end up doing right away because, because I joined the McKinsey and company, the consulting firm, um, that was something that came about when I was applying for all these companies and thought, you know, of course I should include consulting as well, because it gives me the time window to see what I really want to do.

[00:10:44] Alexander: And if I get lucky enough to get into one of these, then, you know, that's not a bad path, I guess, ever to just see a lot in terms of functional areas and, and different industries. So the long story short is there. I got, hired by McKinsey and, I felt I shouldn't say no. There were some other options, but went into that for a couple of years.

[00:11:00] Alexander: And, um, that was the step right after college.

[00:11:03] Jake: Side note, I saw on your LinkedIn profile that in 2008, you published your thesis entitled, Predicting Mortgage Default Risk Reflecting on the 2007 Subprime Crisis, and you won a I'm worried for that. Did you see what was coming down the pike in

[00:11:20] Alexander: but I'm a decent listener at times, and, and in this case, there was a, a real estate finance professor. and I think he's one of the best, at least in the country you're aware from her at that time. I was working with him. I had some interest in real estate and the stints that I didn't tell you about yet, I'll allude in one sentence, but I didn't join McKinsey instantly.

[00:11:39] Alexander: I actually helped one of my cousins set up a packaging business , in the U S as, as a six to 12 months, let's do something else and get a sniff of this. Entrepreneurship. And before that, when I was working on this thesis, that's what that idea came about. it was already happening. This was like summer through winter, 2007.

[00:11:58] Alexander: and this professor said, you know what, we need to peel the onion a little bit on this topic. And, um, you want to go deep and let's discover some reasons why these things might be defaulting. And the reasons we discovered were the ones that we already all know, but they needed to be proven by, uh, statistics, things like divorces, age, household income, and leading to prove that we're defaulting more on those mortgages than the ones where those things might've been in, you know, on the other side of the spectrum.

[00:12:23] Alexander: But I, I thought if I do really well and just listen to him and follow his advice every two weeks. You know really well, maybe I get a good grade to get the rest of the grades and averages up a little bit I ended up really liking this project. But I I can't take the credit for choosing the topic or the details As much as the help that I got.

[00:12:42] Jake: I know you wanted to cover it in one sentence, but I'm actually really interested in learning about that packaging business. What was the opportunity there?

[00:12:49] Alexander: Okay. So that uncle of mine my father's older brother, uh for years ran a business in paper and paperboard trading It's still there and they, uh, and they've done really well. My two older cousins, so his sons, at some point, um, took it over. And, the youngest of the two, uh, built the business, uh, where it only had a very small piece in Southeast Asia, your neck of the woods, in Malaysia of all places.

[00:13:13] Alexander: So during college, I've been traveling to Kuala Lumpur quite some times because I was interested in the business and visiting my cousin. And during INSEAD, we'll get to in a second, I guess, in Singapore, I got to see them even more. Now this was at a point in time where besides just paper trading they decided to do something with the paper so there was some vertical integration going on.

[00:13:31] Alexander: And they were starting to sell, starting to sell packaging materials, let's say small boxes for the food industry, um, right into retail or, or into, um, uh, I guess wholesale, uh, locally, but nothing yet in the, in the U. S. And we thought there might be a price, uh, advantage for shipping the stuff from Southeast Asia into the U.

[00:13:50] Alexander: S. And there was, but we learned it the hard way. He said, Hey, or, or I said, Hey, I'm going to graduate soon before I find a real job, let's help you guys sell some of these boxes into, into the U S market. So rather than a traditional internship, I moved to New York, um, kind of with two suitcases. Supported by the whole family, by the way, because my dad was involved in this as well as trying to figure out a way to renew the more difficult reinsurance brokerage company at the time. Now, there was very limited analysis. This was, let's just get in a plane and sell the heck out of this. And yeah, I probably thought I was a pretty decent salesman. And we didn't make many deals. We made some. It was learning the hard way. And I remember the moment when somebody in Nebraska opened up a container.

[00:14:38] Alexander: Full of let's say, um, um, bakery boxes or so sleeves of them. And either the color was wrong or the, or it was still smelling of paint because in the factory in Penang, uh, Malaysia. Uh, they forgot to use the paint that, you know, didn't what was, was okay with other temperatures or something like that. And yeah, you get some lessons on, you know, with time difference, getting some difficult phone calls from people trying to negotiate discounts, this and that.

[00:15:05] Alexander: So that was probably the best summary of that, that story. But I got to spend some time in New York, met my wife or closer than it was before. And, um, you know, I'd never tried that year for anything, but it was, it was, it was a little bit of learning the hard way of entrepreneurship.

[00:15:21] Jake: Yeah, I mean, that's fantastic. It's really interesting mix you have at this point in your life. You need, you'd run your own little business and, and in high school, you're studying hardcore finance. It at uni, uh, and, and rolling your sleeves up, selling paperboard boxes. Um, and then you joined McKinsey, uh, I mean, you're surrounded by entrepreneurship sort of come in, come in out your ears.

[00:15:51] Jake: It sounds like in your family. And then you joined the firm. How was that? Um, how I would imagine that was a bit of a juxtaposition

[00:16:00] Alexander: yeah, yeah, it wasn't. I also think I got the benefit of the doubt because of that background, right? McKinsey is pretty, at least in Amsterdam, but I would, I would think everywhere. Open to different backgrounds. It's something, by the way, I missed in total. I give anyone that advice. Specifically for Americans, it's more normal.

[00:16:14] Alexander: But the fact that you could study history and then at the gates of McKinsey, they'll figure out a way to like interview you or test you, blah, blah, blah, and you can still get in and then, you know, learn more. Maybe you got an MBA. Um, where I'm from or in the Netherlands, it's more, um, um, they're too old fashioned where we think we need to study.

[00:16:31] Alexander: You know, there are five things. There's law, psychology, medicine, economics, and maybe one other. Um, and you need to do that because otherwise, you know, how can you, how can you. Build a career if you studied history, but McKinsey and many other American firms don't discriminate on an undergrad, which is lovely So when I arrived there, there were people arriving from every type background.

[00:16:51] Alexander: It was there. That was one and and then what had they done before in terms of internships or extracurriculars And there, everyone was diverse. So that's, I guess, two and it were in my bucket. Um, uh, it was, hey, that must that guy has some entrepreneurial experience. I think they like that and they wanted a little bit more of that.

[00:17:10] Alexander: And then three, um, everyone is pretty smart. I don't know how I won there, but at least they admitted me. Um, so those things together builds you a profile. And then, you know, these are, these are, um, momentary things. You interview poorly that one day you can miss superstars. I think that happens a lot, but still they need some sort of system.

[00:17:30] Alexander: I got lucky, was admitted. It's a generalist role, relatively, um, I'll say more adult, if you will, than in typical other countries, because we're just a little bit older in Western Europe, right? Having done the master's immediately taking a little bit more time for study. So it's a bit of a mixed role between an analyst and an associate.

[00:17:47] Alexander: I can remember. And, um, it was interesting because in a couple of years, you get to see a variety of industries, you And functional areas. So I spend time in banks in, um, uh, consumer goods companies. Um, um, NGOs actually, and the functional areas were ranging from, yeah, uh, ops problems, sales problems, some strategy, um, there was some entrepreneurship there too in one of these NGOs and they're pretty well known, um, uh, NGO person in the Netherlands.

[00:18:20] Alexander: So that, that gave me some, that broadness, but it also taught me this wasn't for me. Um, and I'm not sure if I was like 1 in 10 it was probably, who knows, but for 20 or 30%, it says, my goodness, hard work, lots of learning, but not my career for the long run. And there is the pyramid principle over time anyway, as you grow older, but that, that wasn't there at the beginning.

[00:18:42] Alexander: But the whole thing around, okay, what do we do next? And probably in the last six months of the first two, three years, when you have a conversation about, is the next step an MBA or, um, or something totally different, which McKinsey supports, so I mean, it remains. Wonderful. Um, and also the quality of people I got to work with.

[00:18:58] Alexander: I think I really learned a lot, but for me it was how can we find something to, um, to actually have some time to think about what I do want to do and going into some sort of development leave that's hardcore, um, you know, Tanzania, working for an NGO, which I'm actually going to do the next six months, but that's a whole different story.

[00:19:15] Alexander: Um, uh, wasn't, I wasn't ready for that, but doing an MBA also felt pretty double when you already have a master's in, um, financial economics or something like that. And having studied so much in Europe, it's, I always felt that MBA is more for someone that's going to do, um, you know, a real career or educational change.

[00:19:34] Alexander: Um, but I did do it, and primarily for the reason that I thought lifestyle would be a little better, right? INSEAD is on steroids lifestyle, but, um, it wasn't as bad as McKinsey. And, um, and I purposely chose the one year or European MBA version because I realized if I'm not going to come back to the employer, I'm going to be paying for it myself.

[00:19:56] Alexander: And I had nothing except for large student loans already, um, where the American MBA might have been a more logical bridge to what I thought I might be doing, right? Entrepreneurship in the U. S. Um, but that, that just drove the NCI choice. And I did like the international approach. My wife was still working on a management traineeship, um, for an airline not too far from Paris, right back in Amsterdam.

[00:20:17] Alexander: So this gave way for some, um, uh, some travel up and down. So that's what McKinsey concluded into, into, into INSEAD in France and Singapore.

[00:20:25] Jake: Presumably you discovered search funds at INSEAD.

[00:20:33] Alexander: you, but this is 2013. Uh, one of the entrepreneurial courses from, from Tim Bovar, where I always describe this. It's like, okay.

[00:20:40] Alexander: So there were 10 lectures around entrepreneurship. Lecture six was something around, , I'll say M and a, or let's say,

[00:20:47] Alexander: yeah,

[00:20:47] Alexander: startups or no being an entrepreneur

[00:20:50] Alexander: with

[00:20:50] Alexander: a business that's already there.

[00:20:52] Alexander: And then,

[00:20:52] Alexander: you know,

[00:20:53] Alexander: bullet point six was something like, Hey, there's also a way to become an entrepreneur without any money. And then my ears started to open up

[00:20:59] Alexander: and then, you know, one of the ways of doing it. So let's say level three of these bullet points. Uh, bullet point three said something like a, um, think about search funds and it was will, um, Thorndike, um, work with closely now and friends with, uh, and it might have been Simon.

[00:21:17] Alexander: I forget who the second person was, but, but what I have to say in this, you know, calendar year of an MBA. And for me, it was January through December. This was maybe March or April, and I wasn't sold. I didn't think, oh, this is the thing for me, this is what I was going to do. And that was probably driven by me not listening carefully and not just expressing most interest, because I was focused on these startup competitions and wanting to build something myself, you know, bad ideas and not winning them.

[00:21:42] Alexander: , but I was still under the impression that I was going to Singapore next and, you know, convincing the school and my wife that I can build something from scratch or I should. So it took me until the second session about, um, uh, search funds in, I don't know, let's say October in Singapore, maybe September, um, where we spent the next part of the year at the campus there to listen again to, I think, in this, this case, a video, uh, probably from Will again and someone else and some other classmates getting interested and maybe speaking to you, Jake, because I think that's the start when we started to connect or maybe a little later.

[00:22:14] Alexander: Thinking about that. This could be a path for me and maybe to add. I remember my parents and with my wife, we took a small trip. I invited them to Southeast Asia and we did something at least this. What I liked about this path of entrepreneurship is I could show my, you know, American mom who was educated in the U.

[00:22:30] Alexander: S. Uh, a good school in the on the East Coast to say something like, um. Hey, uh, look, this is not just simply entrepreneurship. There's actually some data. Here's a 100 page book from Stanford that says, uh, this might be okay. And some smart people have thought about this. And by the way, those average IRRs are 34 percent or so.

[00:22:51] Alexander: Of course, mom didn't know what that meant, but, um, I think the sample size then was a hundred or so you might know better. And now that IRR is sustaining at a sample size of a thousand or so is way a better bet, right? But in the past, it still felt like a better calculated risk than just starting something from nothing.

[00:23:09] Jake: So you launched your search fund, ran your search in the U. S. And in 2016, you acquired Worldwide Security, which was 1979, based in Garden City, New York. Interestingly, I Looked closely at a company during my search in Garden City And I remember the owner driving me around the nicer parts of town. It's a very very picturesque nice part of New York Can you give us a picture of that business at the time?

[00:23:38] Jake: What did it

[00:23:39] Alexander: Yeah. Yeah. Yeah. Yeah.

[00:23:40] Jake: was the size?

[00:23:42] Alexander: Yeah, yeah, you got it. And exactly the search, like the day after INSEAD, I started the search in the U. S. And it was very traditional, finding traditional investors and spending two years in the grind with the budget that actually dwindled down over those two years.

[00:23:54] Alexander: So it was really important to find this company because the money was running out and, um, you know, it was, the search was just the classic example. Five months before the 24 months were up, this gentleman of worldwide security Um, now passed away, unfortunately, but, but received the letter. I don't think this was per se, the Sunny never had.

[00:24:15] Alexander: Click. He had been under L. O. I. For a million dollars left and that was open to this one

[00:24:20] Alexander: as long as it was a million dollars more. Um, but, um, um, good company. All the stuff that we like to recurring revenues, the margins in an industry that the search world had some experience with security alarms. So alarm systems, cameras, et cetera.

[00:24:33] Alexander: Um, and not just focused on the residential in that nice area. 45 minutes outside the city that you mentioned, but also some commercial customers in New York City, which I liked. And the huge thing here was too, wow, we didn't even have to move, right? My wife was probably having a job already at that point.

[00:24:49] Alexander: And, um, and we were liking New York. So this, this made sense, uh, along many things, but what we inherited, and this might be interesting to the story. Um, was it business with a good moat of recurring revenue? Let's say about 8 million of total revenue, maybe seven. And, um, of that, something like four million plus of recurring, real good, sticky five year contract, recurring revenue, um, with high margin stuff, those are the monitoring fees that people pay for when you install a security alarm. And, um, but with only a million and a little of EBITDA, yet this man wanted 22 million, which you'll think, hey, wow, how does that work? 15 times EBITDA or so. And, um, and well, it didn't, but that's another story. Um, but we pay for it because then still in this specific industry, valuations were made on a multiple of RMR, recurring monthly revenue, and specific lenders also had their own desks, like really a security lending desk, um, that supported this, this way of looking at the equity. Um, I think I had a very high take of investors participating, something like 90%. But the truth, and they were right, the few investors that didn't participate were, I mean, they were all well known investors, but were the well known investors that actually had experience in the space. So when the two, let's say, alarm guys said, we're not going to participate now, where is this thing going to close?

[00:26:12] Alexander: Um, one of those gentlemen actually said, well, you know what? Um, it'll close. Don't worry. There's no participation. And they were not participating because they probably saw the writing on the wall. This, this valuing on equity based on, um, uh, monthly revenue is not the way to work it. So, and I learned that the hard way over time.

[00:26:29] Alexander: But the company was actually pretty darn decent, 35 people or so, 30 people, maybe every, you know, running an old fashioned way, not thinking as much about growth at the end anymore, but the lovely how I look at it now as an investor to, we had to double click the PNL at the end of the month and 60, 70 percent of revenue came rolling in.

[00:26:47] Alexander: Right. So that means the margin for error, finding new business and install service, et cetera, was relatively low. Um, and I made some classic mistakes early on. I listened to many people of, Hey, I was expected to get this title or my raise has been due for years. Or this guy or person should be promoted up and all those things, which meant for an first year PNL, uh, pretty much the same as it was.

[00:27:14] Alexander: Um, and, and, and probably some overspending if you will, cause costs actually went up, EBITDA went down, but we had a revolving credit for that, uh, on this, on this big, uh, you know, equity valuation. We're also able to borrow a lot. Um, and, and of course I dropped prices because I thought that would give us more recurring revenue.

[00:27:31] Alexander: Something that I also learned, uh, wasn't the case. So, yeah, I think it was a good classic first year, but I had a strong board. I mean, the deal itself was fine, except we found some things in, uh, in the balance sheet that we needed some true up on all the inventory wasn't there. So I ended up having to, you know, go to court on the seller in the first year, which wasn't pleasant.

[00:27:51] Alexander: One of my board members said, well, you're in New York. Roll up your sleeve. Um, it's the most competitive market in the world, but go get us our money. You know, the comment and I, and I had a really good board with, with. Well known investors. I think what made them really good is that they all had their own style and type experience, you know, with, with some, I worked on the worst of days, um, and with some on the best and, um, no, I, without knowing them prior really, well, that ended up awesome, great team.

[00:28:19] Alexander: And I would tell everyone think, think very carefully about the board because the whole collaborative nature of this, of this ecosystem, if you will. And also you not being in it alone is key, uh, to drive

[00:28:33] Jake: So not a rocket start to the first year, Ibida depressed a little bit, but you had a good team in place. You're learning the business, not an uncommon story for year one in, in search funds. And then I believe about a year later, uh, you started making a series of bolt on acquisitions, including Briscoe protective systems.

[00:28:54] Jake: Can you walk us through that timeline?

[00:28:58] Alexander: one set. Um, yes, exactly that. So think about it this way, where I, you know, searchers have the benefit of having spoken to many peers, owners, if you will, or competitors, if you will, because we've simply been searching, you know, the six months or so before you buy that one company in that industry. And if you go on an M& A trajectory, you're going to learn even more about competition than the typical CEO in your industry.

[00:29:21] Alexander: So I had that luxury, and I think I was still reaching out to some. I also knew there was an M& A possibility in this industry because it was very fragmented. I didn't write that down as a key lever for growth because in 2013, investors didn't want to really hear too much about M& A, right? More risk, more debt, first time CEO.

[00:29:40] Alexander: But it was there, so I didn't shy away from it, and I saw how difficult it was to grow this company organically. So I started reaching out to some of those companies we had approached earlier on but didn't get further with, and or continue to be approached myself by them, where you get things like, you know, the letter that we got, um, a year ago, I wasn't ready, I'd like to learn more.

[00:30:01] Alexander: I think that's might have out went with Briscoe. So, so I forgot if he reached out. Sorry, or if I reached out what made Briscoe interesting was that it had a big piece of type revenue that we didn't meaning fire alarms. We only had a small percentage of that, and it had more commercial customers. So it was more focused to the city than than residential in Long Island.

[00:30:21] Alexander: So I really liked it. That was the one experience out of the 10 companies that we bought. And of 10, I should say, five or six were real businesses, 8 million Evie or more. The others were more tuck ins of books of accounts, but this was the real company where, um, I experienced the sun he never had like to the fullest.

[00:30:38] Alexander: And, um, um, I'll, I can underscore that by, I'll get there in a sec when we bought this company and I showed up in my office. He had actually departed his corner office and I wasn't tucked in a, in a broom closet. And there was, um, like, uh, a file with the most recent happenings at the company introducing me with a picture, blah, blah, blah.

[00:30:58] Alexander: There was a poem of, uh, some sort of legacy giving to the next generation. And when I opened the drawer, you won't believe this. There was a bottle of like an old fashioned Dutch, uh, spirit, alcohol, with a ribbon around it. Yeah, he had really done his homework and you can't buy that stuff in the U. S. So he, he really, you know, Um, you know, I went out of his way to just welcome me there and, and even he, he had some kids in the business, you know, where this man thought more about, I could give it to them, but they wouldn't probably run it as an entrepreneur might, and I better put, you know, trust fund in their pockets by selling it and have someone else, um, carry on the legacy with a company name, by the way, it was the grandfather that raised him, you know, so very special.

[00:31:37] Alexander: He said in an early board meeting, there were tears where our board had some tears too, or at least thinking about, you know, I remember, um. One of the Egan's saying, Hey, this is why we're in business and not for anything else, which was just lovely. So side story, but it exists, you know, rarely, but it was super special.

[00:31:53] Alexander: Uh, he took me out for lunch, even when my dad was visiting at some point. It's great, man. Um, Bob Williams is his name, but, um, so it happened that way and it happened organically. Like he was like, man, shoot. I wish I had responded earlier to that first letter, but I wasn't ready. So I know it's not going to be my name that you're going to keep on the wall.

[00:32:08] Alexander: You guys already bought worldwide security, but I'd still like to explore a deal. Way more classic deal, 11 million EV. I needed to raise equity again because we didn't have it. No cash on the balance sheet yet. We could borrow half from our lender and they were supportive. Um, but the other five minutes so needs to be raised, which means there was some dilution to some of the firm to think about.

[00:32:27] Alexander: We bought that company and that started the catalyst because this company did create lots of cash flow of the further M& A. This is also the only time, except for a funky deal near closing, uh, six, seven years, six years later, that we had to raise, um, equity for. And, uh, yeah, this helps strengthen the platform and it gave us a customer type that we didn't have prior.

[00:32:50] Jake: So how much equity raised at this point, approximately?

[00:32:52] Alexander: Yeah, I raised 9 million for the first deal and I raised 5 million for this one, the second deal.

[00:32:57] Jake: We haven't reached the punchline of this story, but spoiler alert, uh, this strategy worked out pretty well. Um, a lot of prospective searchers consider an aggressive roll up strategy in the very early days, even before they start raising their search capital, but few execute. As successfully as, as you have, um, was, was your M& A story as beautiful as it appears from the outside or, um, and, and, and should this be a common playbook for search fund entrepreneurs?

[00:33:34] Alexander: It, it, I think the fact that this wasn't totally planned helped, specifically in the sense of me really feeling like and having to be an operator early on. I read these decks a lot too, uh, another long term hold strategy left and right. And, and, and they may work and I'm supportive of many.

[00:33:49] Alexander: But, um, I think it really helped that I got my hands dirty for at least a year and a half. That's also what some of the conventional wisdom and then like, think about the great work that Will and Kent are doing on this stuff that you want to start slow, right? And Rich Augustin is also a promoter of this, but also feels like starting slow is important.

[00:34:07] Alexander: And that was really the case for me. I needed to understand how the ops works, right? What really makes the P& L tick, um, where you want to tweak and where you don't before buying this stuff. And then I think you're a better CEO, Ops leader, and you can feel the back a little bit, right, the bench with some good Ops people as you continue to grow yourself.

[00:34:27] Alexander: Um, but no, I think one, that foundation of understanding leadership from the CEO chair is a first piece there. And then, yes, the math around, is it accretive? Will cash flows finally appear? Are there synergies? They work, but they don't work quickly. I, and I'll get there when we get to like kind of my sale, um, seeing explosive margin growth, more free cash flow that took time.

[00:34:56] Alexander: This, what we were doing here, we were buying size, um, and we were doing it from debt and cash on the balance sheet. So that's, that's where then some equity returns, uh, you know, start to start to really grow. Um, but we were still just building a bigger company and growing debts at the same time. So I was like, as long as if if it's not a creative Or if they're not synergies from cash flows and we're just buying at full price, which we kind of were But we were buying them Our first company we simply overpaid we knew that I still respect all of us that did participate because you know I promised them I was going to drive the multiple down or at least Make something out of it and sell it for more and we did but we paid a high price to get a good asset Um, and those next ones were let's say more fairly priced So even though we were buying in my opinion, you know, eight million dollar company In this still RMR multiple at full price, um, which still meant high EBITDA valuations, but we were blending down the originally paid multiples.

[00:35:54] Alexander: I could feel good about that. And I, and I did realize early on with also help from the board that one, not all revenue is equal, right? So you need to be careful of what you buy. And second, that. There is a premium you're going to receive for scarcity. So build the one asset that nobody has, has in that reason, region, then, um, um, somebody's got to pay more.

[00:36:17] Alexander: So I think, I think to answer your question, yes, it was a well executed and thought through MNA strategy. But even when we bought the second or the third, nobody was like, Oh, we're buying 10 companies here. They just came or I found them. And it was a struggle and a real fight every time trying to sell the board on, can we please buy another company, you know, it needed rigor.

[00:36:37] Alexander: And, and, and they, they, they demanded lots of detail.

[00:36:42] Jake: With your operator hat on, you know, you're a few years into your, into your CEO role and you have a portfolio of companies to run already that could all benefit from your attention. Uh, you know, there, when you buy these companies, there are often, often messes in every corner that need to be cleaned up.

[00:36:59] Jake: And then you have all these value creation opportunities. How did you decide where to focus your energy?

[00:37:05] Alexander: yeah. So I, I learned pretty early on at, um, uh, a conference in our industry that, that was a pretty good one that really focused on bankers, um, consultants, MNA, that sort of thing, and not so much on ops, um, that there was a premium to be made or paid for, I guess, uh, if you, if you bucket the industry players, local players, and regional players, right, that middle layer of regional players and where you want it to be, right.

[00:37:33] Alexander: And then I also, when people either love New York or hate New York, I still love it, um, because of the fact that you're in such a hub where your region can actually be pretty dense. So what we did really focus on is finding companies. In our region that we could drive to, um, you know, I could even show myself, but also where, where it made sense from customer synergy than the downside of a security companies.

[00:37:55] Alexander: Yeah, it's not software. I can't scale it everywhere. Right? But on a hyper local level, and if I draw 2. 5 hours around the headquarters, if you will, I could scale it pretty well because I could use technicians in different areas. You know, the bottleneck is we need to be able to drive everywhere. But the good thing is also we could drive everywhere.

[00:38:11] Alexander: So all these companies that we bought. We're actually in one region. It helped me tell the story well and still, but more importantly, it helped us run it efficiently. So look, when it were two, three businesses, I really did divide my time. I was in each office. A day, two days and then showing myself when it became bigger, it went more towards the, let's spend two, three days in the city running it, me and some people in finance, and then, um, venturing out for the bigger projects.

[00:38:38] Alexander: Cause these companies had their own GMs or COOs. Um, yeah. And that, that made for, it was a pretty, uh, natural growth, right? It took six years. So it wasn't like overnight, all of a sudden we own 10 businesses. It was gradual. The talent level grows when you have more companies, you have a little more cash flow, you can hire better people, which means you can feel your back a little better.

[00:39:00] Alexander: So, um, yeah, no, I think I'm not sure if I'm answering your question correctly, but it was

[00:39:04] Jake: that's great.

[00:39:05] Alexander: as these things grew, I think I settled more into that role and. I would still say, like, just just go slow when you have a focused approach and in my case on a region, um, you know where to say what what might fit the what you're trying to build and you know where you say no.

[00:39:21] Jake: Now, as I hinted at a bit earlier, your journey has been one of the great success stories in the search fund, in the search fund industry. Uh, you build a great business and then sold it to a strategic acquirer in 2022. Uh, can you tell us a little bit about that sale? Hmm.

[00:39:41] Alexander: yeah, I think when we take a step back so in year five or six, a couple of things were happening was a critical moment and I was probably in the category I felt the same that, um, hey, are we going to run it a little longer right year five or so, or are we going to sell it and investors are typically at least mine were supportive of.

[00:39:57] Alexander: Yeah. Um, it's up to you. Um, because you know how I look at it from their perspective, kind of the risk is out with a company who built a valuable business that's going to be wanted at some point. It's finally creating some good cash flows and the risk with working with the entrepreneur is out, right? Is it a partnership with the board?

[00:40:14] Alexander: Is that working out nicely? And if it is, then if you can sustain an X percent IRR or growth rate, then why not for a little bit more assuming the industry is okay and there are no big red flags there. And in my case, since we spent a lot on all these acquisitions, debt, um, uh, some equity, it also felt like, um, the common equity was being eaten up a little bit by that big preferred return.

[00:40:39] Alexander: Um, and, and, you know, selfishly, the absolute number that I stood to make, I thought could be a little higher. Why not run it for two, three more years and grow it a little more. So the answer, investors were supportive of that. And we were having those discussions around. How do we change the incentive economics maybe from an IRR test to something like MOIC that might be more fair?

[00:40:57] Alexander: You know, we're still in New York City and I haven't bought a house or anything and it needed some liquidity Um, and at that time it was indeed a strategic buyer backed by a huge PE firm on the west coast That was looking in and at that conference. I just mentioned where I attended yearly said something like hey Are you guys thinking about a seal because we have nothing in the northeast focused on fire and I said well We're actually not we're going to run it for a little bit longer Um, okay, but will you share like the six bullet points around the company with an NDA or so to let us explore?

[00:41:29] Alexander: That's well, kind of still some pushback, but at some point it's also one, it's the fiduciary duty. And I was intrigued. And I think at that point, you know, in the last board meeting I said something like, I think the company is worth about a hundred million dollars. And that's based on, um, 2 million of monthly recurring revenue times 50, very rudimentary math.

[00:41:46] Alexander: But how this industry was looking at it at that time, at that size, but on an EBITDA perspective, we were maybe, maybe only making 4 million or so, uh uh, or a little more. Of hardcore, uh, gap audited EBITDA, right? Investing lots in growth, blah, blah, blah. We had just bought a company out of some distress, um, uh, in a, in a, in a seal from a lender, which, which was a good buy and actually, uh, a decent asset.

[00:42:12] Alexander: But, um, because we bought it in, in kind of a fire sale approach. We didn't know what their prospective revenue or EBITDA would do to ours. I mean, this was three, four months before this, and we had been so aggressive and cost cutting their slashing rather, um, to say, Hey, since we're buying it on the cheap, since we don't know what we have, let's just blend all the recurring revenue in with ours.

[00:42:35] Alexander: almost kill all the costs and see where we end up. And so think about something like a million or so EBITDA was going to be added but with our slashing that could represent three or four million EBITDA even that that's significant if done well and if the attrition rate won't catch up with us and we raise prices aggressively and all that stuff things that you get more um appetite but also you know you can take more risks actually when your moat has really grown like you're in when you're in company nine you can take a gamble on company 10.

[00:43:05] Alexander: At least that's how I look at it. So, so we did that. So, so I couldn't give them a clear picture, like, what would EBITDA be? But these guys, we signed the NDA, look at the company, and look at our prospective EBITDA, thinking about, about 10 million, which would make sense with my 100 million valuation, times 10.

[00:43:22] Alexander: And finally, the EBITDA started, EBITDA valuation started looking like an RMR valuation. Um, but the company came back with, I'll use round numbers, but it's something like this came back with like 13 times or so this was, by the way, pre interest rates changing September 22, this was around. Spring 22. So when somebody says it's about 13 times 10, and I told the board it was about 10 times and my goodness, three times 10 is 30 million, right?

[00:43:45] Alexander: And a big chunk of that is common equity for me, too. It's like one, you have to present it to you have to consider it. So we thought about this long and hard. Um, where we also said, look, um Do we want to explore further? And I think I did. I thought about it. Right. And, um, and we also figured if we're not going to be, um, going to a small investment bank or a broker in this world, which we clearly would have done it at 100, 000, 000 EV plus in any event later in the game, um, then now we have to tell this company if you want us for.

[00:44:17] Alexander: You know, prior to such a process and we're not going to get the benefit of a bidding war, um, then you're going to have to have to answer, uh, offer us more because of course, we're not going to sell it, you know, that kind of multiple. Um, so, um, uh, yeah, it, you know, it got juicier. It came back at about 15 times or so.

[00:44:34] Alexander: So now we were like, my goodness, it's really happening. And this is the truth, by the way. Much money in P. E. But in search function general gets made at the sale time. And if you're big and you're scarce, and by the way, you can back it up and you have something to offer. Um, and you're willing to sign something for that.

[00:44:49] Alexander: Then, um, then that's where much of the of the upside is made. So three big things happened since, um, during this diligence. One was, and this is advice for searchers or going through a sale. One was, um, EBITDA wasn't 10 million. It was just bigger. We were just finally seeing this integration from cash flows and all these beautiful things coming together.

[00:45:11] Alexander: Um, when you do M& A for a long time and you're running it tightly and you're getting people on the same programs and pricing and, you know, able to share tech, technicians and whatnot. Um, so let's say EBITDA rather than the proposed or thought of 10 million was that was actually something like 13 million.

[00:45:26] Alexander: So now we're at math at 15 times 13. And, um, uh, and it just went on and on with good stuff from there. I think the second thing, um, yeah, that happened. Well, yeah, no, another, another key thing here. Um, we were able to tell the buyer since they were also running a big M& A roll up to say, Hey, we're giving you a great company, but we're leaving something on the table.

[00:45:50] Alexander: And that's our M& A machine. We were buying lots of companies and we think we could hopefully buy more. Let's give you on a silver platter a, um, a list of companies where we've had conversations with, but we weren't willing to pay, you know, their requests at seven times EBITDA, we wanted to pay five times, but we can go back to them and maybe if we're allowed to pay a little more, you know, uh, go at them during your reign, but I'd actually love to include some, um, uh, Prior to the deal.

[00:46:17] Alexander: And of course they said, well, we like to buy a bigger company, but we can't just have you guys buy businesses and tell us that they're good enough. So we're okay. If you guys buy some companies still prior to the real close. So in the next two months, if you will, where they were already doing their, their diligence, as long as an objective, um outside company Does the, um, the diligence, but at your expense, but this meant I could go back in the Rolodex and think about, um, which owners could we, you know, do we trust have a good company might want to sell and might want to sell quickly at a little higher multiple than we could offer them in the past.

[00:46:53] Alexander: And, and, and this story you may have heard, but you know, uh, I worked really hard with my team on that during that summer and we found about two or 3 million ish of EBITDA. Uh, two, two, three businesses. Yeah. At about six times. So the math is 24, 25 million in EV, um, which we needed to raise overnight because the bank's of course not going to finance that quickly and we needed to call some investors and like, what?

[00:47:15] Alexander: So I'm investing a 6 million or what is it? I'm investing 25 million, but we're going to sell the whole company in a month. This doesn't make sense. So we did that quickly with with some arrangement investors were supportive, which is great when you build trust over time. You have a good board that just works.

[00:47:29] Alexander: And the real simple math there is we bought, you know, another 25 million of Evie and and flipped it for 45 million kind of overnight. Um, a month or two later. So Yeah, look, there was there was all of a sudden there was simply more EBITDA. The valuation went up. We got the benefit of a huge, you know, transaction or transactions in M& A at the very end.

[00:47:50] Alexander: And of course, me signing up that that actually needs to look good post close too. And so much, so much was made at the outset. So, you know, the board meeting where, where I went in at like a 10 times 10. We sold the company for more than double that, and at a deal where, you know, kind of everything was just also paid at the close.

[00:48:07] Alexander: I was the one, which is typically the case that, you know, signs up for a little bit longer endeavor. I just rolled off because that timeline has surpassed, and I had a lot of liquidity of it early, so I was able to start. Investing in search and sitting on some boards and really enjoying, uh, all of that.

[00:48:21] Alexander: But, but yeah, I know the thesis here is people are willing to pay for a good company, uh, that was scarce and, and just had market share because the rest in our area was, you know, either family owned that will never sell or public. And I have to say the buyers. Really good people. Um, good company. I have to roll equity, right?

[00:48:41] Alexander: So I still find them good. And what might happen with them soon is, you know, the next chapter, uh, for a liquidity event or not. But, um, all just came together and investors have just been really supportive of that whole trajectory.

[00:48:56] Jake: I knew your story was going to be amazing, but that, um, that's even better than I expected. That was, that's, that's fantastic. Amazing. Well, well, now searchers, uh, In the US and, and around the world are blessed because you are on the other side of the table now as an investor and joining some boards, they get to benefit from your wisdom and experience.

[00:49:21] Jake: Your life looks a little bit different now. Um, are you enjoying it? Are you,

[00:49:26] Alexander: yeah. Look, I think I think what's really important. I tell searches this to it. And this is another one of them. This is a great story. It's like with a nice curve that where things go upright, but but this was really, really tough. And there were moments of hell, if you will, of which, you know, the examples that are around Christmas Eve and a bank calling to say that they're going to pull out 30 million of lending just because yeah, even you're a top quadrant performer on their balance sheet, the CEO decided because it's COVID, we're going to pull out it.

[00:49:51] Alexander: All security lending and and that like that's not a joke and you need to tell your family again You're not going to be there and and wonderfully but then one board member takes the lead It means that they're going to invest time as well. And oh, really? We're going to sue a bank I didn't even know that was going that was possible but all these huge bold difficult things like yeah go sue the owner right after close or I found that stuff Stressful and very tough.

[00:50:14] Alexander: And I think I'm pretty good. And most entrepreneurs probably are in difficult times, right? When the stress comes up, we might be even better, um, at what we do. But this question, I was like, will you do it again? I always, I do take a pause because it's like at the 51 yard line, not at like, not, it's not a 49, but it's not a 50.

[00:50:31] Alexander: And, you know, and of course it's a 99, but it feels like it was really, really tough. Um. Yeah, you have to be willing to take that too. And the family as well. I don't know, maybe the relationship and all stuff at home. So, it's not for everyone. The fact that it ends well is that you've managed many crises, I think.

[00:50:48] Alexander: And, and, so life has changed in the sense that Any crisis would be, you know, you can look at it more calmly that that's also what, what I guess some, um, help money does, but, um, the problems remain the same and the companies that I support or that I'm, I'm looking at doing stuff again, myself too, and, um, I think the quality of people around you is just amazing and you need to search and Jake's and stuff that we're involved in together.

[00:51:14] Alexander: Your business and, um, uh, and my continued relationship with the board or, you know, getting invites to, uh, to, to offsite so we can help think through stuff and just putting some personal investing to work. I think when you have that core group around you, um, that's what helps anyone weather the storm because there will be downs again.

[00:51:33] Alexander: Um, but I, I, I tell everyone. Make sure that you think wisely about this community and who you'd like to work with because to me, I think the Stanford document is great. And I know we look at a lot of data and that's there. But why are we making 35 percent on average and P. E. 17? It's really because of looking at these things from a collaborative approach.

[00:51:51] Alexander: And as long as everyone, you know, nobody gets, um, I know you experiences to gets, um, free riding kind of window. There's 20 people on a capsule. Hopefully someone's doing the work right or the diligence or the support for the for the people on the team. Um, as long as we don't get into that trap, but everyone's still doing some of the work and sharing it and not just investing because we know who else is on the cap table, um, happened to me with with some rigor, right?

[00:52:17] Alexander: Because there's dilution taking place. But if we do that carefully, this can sustain for many, many years. So I plan to be a part of it. It's very difficult to go back to the big bad bad world, as Coley Andrew told me once. When you have search at your doorstep, right, as long as you're willing to work and put in your time.

[00:52:34] Jake: That's right. And also in this post sale life, you're, in addition to investing and serving on boards, you're, you mentioned you're doing some NGO work. Tell us about

[00:52:46] Alexander: Yeah. Yeah. So I'm, I'm, um, um, I'm in the, in the phase now where I'm debating, how am I going to do this? Right. Continue to invest in search on my own with others, long term hold, um, by one business, that sort of thing. And working closely with some, my old partners thinking through that. But I also got so much advice of let's do something else for a while.

[00:53:07] Alexander: And it's difficult for an entrepreneur to tune out and probably turn off their phone, which I won't, but I was looking for something to do as a family and give back. And I have an eight year old, a five year old and a one year old. So it's busy at home. But we are actually going to do something like that.

[00:53:19] Alexander: So starting later this week, as I just ruled off, we're going to do some traveling, um, um, in, in some remote countries. But a big part of that is the last three months of it, which will be at the Tanzanian Children's Fund. Um, through, uh, another investor I know, his wife's on the board of something really special, where for 110 orphans, a village has been built, and we're going to live there, roll up our sleeves, and do things from teaching to cooking to, um, um, hopefully playing some soccer and working with 110.

[00:53:47] Alexander: Orphan Children, where our own Children will be going to a local school and participating, too. And, you know, seeing a little bit that how lucky we got is not normal. Um, so this is about the giving back, but also hopefully creating a relationship with an organization that might be for more years to come.

[00:54:02] Alexander: So I will be sharing that in some way or form in the search from community. Um, this, this NGO world and Africa in itself has been something my wife has had an interest in since she's been 15. And, you know, between brackets, she came along with me. So the dream of working for the UN or really going into the wild kind of surpassed or at least, uh, uh, got postponed.

[00:54:22] Alexander: So there's that family dynamic too. And I'll let you know how it goes and what it is like. But I think I'd encourage everyone. Hope to do something else and think about giving back or doing something because you know The rewards and successes not just the monetary ones are sums up that I don't think everyone gets to experience and you know We're gonna be in beautiful green heat and and working with some people that can Can can get some help and at the same time?

[00:54:45] Alexander: I know they're intrigued by my experience in companies or on board So I'm also helping them hopefully the CEO and the team there Think about future growth for this, for this organization in particular, um, and helping with some microfinance and some project that might have going on. They lost a CFO and that sort of topic.

[00:55:02] Alexander: So it's a 50 50 kind of on the work front and, and, and, you know, my wife's going to be there as well and we're bringing the baby. So it'll, it'll be another, um, uh, maybe kind of search fund ordeal, but very excited about doing something else and in a different place for a while.

[00:55:17] Jake: Well, I can hear the excitement in your voice, Alexander, and, and, uh, I, I am certainly jealous. Um, but hopefully you'll share your story and we can live vicariously through you and then hopefully do something similar at a later date.

[00:55:31] Jake: Last piece of advice for prospective searchers around the world who might be listening to this from from the US or Western Europe or places in the world where there are no search funds and Considering whether this is the right path for them Any last words that you'd like to leave with them?

[00:55:49] Alexander: Yeah, so as you know, I'm a proponent of the global approach. I mean, even in my own investing, the weight is clearly in the U. S. And that's fine. But I do think it's markets and talent is ready for this in other countries. I'm seeing real success in some of them. That's amazing. Um, so I would say to everyone, think of it as a path, uh, you know, a potential next career path.

[00:56:12] Alexander: I would also say be uber critical around it. Hindsight. And that's why we're having this chat. It, it fit me perfectly around many angles. And, you know, I was really willing to roll up my sleeves. I'm willing to deal with really tough situations. Um, I think I'm a decent salesman and, and, you know, you decent builder of, of, of things with good teams.

[00:56:32] Alexander: But it's really not for everyone and not just because of the tough things. I think you shouldn't be sitting in an MBA, um, lecture hall thinking about, Hey, a mom and dad, I heard about something we can buy these businesses and you may see this once in a while in the self funded approach, we can, um, you know, go and find one and then raise equity for it, blah, blah, blah.

[00:56:51] Alexander: It's just not as easy as it might look. And I really think it doesn't, fit many profiles. If I think about my MBA friends or consulting friends or even startup friends, this is really not for them. Right. So it takes a breed. And even though us investors, you, I'm sure, uh, Jake as well, and, you know, me entrepreneur as well, don't know from the start.

[00:57:13] Alexander: Who's going to be the winner? Who's not? It's just really difficult when placing these bets, if you will. Um, but I do think there are many or there's a big percentage that shouldn't be doing this because it's not a clear fit. So I would say as an advice, you know, since it's becoming global, you have to make sure that your market is ready for it and that there's, that there are people willing to listen to a succession solution and that that structure actually makes sense.

[00:57:36] Alexander: That's one. And then I think in many countries it does. Two is. You know, do your homework, even though these calls scheduling might be tough. Sometimes with, with investors is this for me, all the coffee chats, this and that, and you won't know until you're really in the seat, but if you have the slightest doubt that this might not be for you, you might not be a builder.

[00:57:58] Alexander: You might not want to roll up the sleeves. You might not want to be in that 1950s office where people still smoke inside, you know, like ridiculous stuff. Um, then it's not for you. It's not luxurious at all. Um, but it's a hell of a ride if you, um, if you're willing to do the work and, and find good people around you, I, I, I wouldn't trade it for anything else.

[00:58:19] Jake: Alexander thank you so much for joining and sharing your story. Wonderful.

[00:58:24] Alexander: I know. Thanks, Jake. I appreciate it. Really, really fascinating to see what you're, what you're doing and giving back to the community in this way too. Uh, glad we're working together on multiple things.

EPISODE OUTRO

[00:58:32]

[00:58:32] Jake: As we bring to a close this fantastic discussion with Alexander Shule, it's impossible not to reflect on a theme that's resonated throughout the conversation, and that is the profound impact of collaboration and the humility in recognizing the contribution of others. Alexander's story, marked by significant achievements and transformative decisions, consistently highlighted the importance of teamwork, mentorship, and the collective effort behind individual success.

[00:59:05] Jake: And by the way, that success Well, it can be measured in many quantitative and qualitative ways, but his investors will be happy to report that over six years, Alexander generated a 48 percent IRR and a 10. 5 times MOIC. As we bid farewell to Alexander, whether you're embarking on a search fund journey, leading a business or navigating the waters of entrepreneurship in some other form, Alexander's story is a reminder that success is rarely a solo endeavor.

[00:59:38] Jake: It's the people we meet. The relationships we nurture and the collective wisdom we share that drive us forward. Thank you for joining us on the search fund podcast. We look forward to bringing you more stories of collaboration, resilience, and success in our next episode.

GLOBAL OUTRO

[00:59:56] Jake: Thanks so much for listening to this episode. If you enjoyed it, you can find more at the searchfundblog. com or wherever you listen to podcasts. I'm Jake Nicholson of SME Ventures, and you're listening to The Search Fund Podcast.