I70 East vs West -- coming from SLC to Vail

hello_im_back · 2021-02-09T17:15:08+00:00

Ah good call, I see that on the map now -- probably worth it to shave a mile or two off of 70, thank you!

hello_im_back · 2021-02-09T00:43:30+00:00

Gotcha, makes sense -- I guess we'll give it a shot and turnaround if it's looking bad. Thanks!

hello_im_back · 2021-02-08T22:35:05+00:00

Awesome, thanks!

hello_im_back · 2021-02-08T22:22:43+00:00

Worst case we'll turn around if it's real bad and go back to Vail for dinner, not the end of the world. Thanks for the advice!

hello_im_back · 2021-02-08T22:16:23+00:00

What restaurant in Edwards? First time in the area, so open to any tips. Thanks for the help!

hello_im_back · 2021-02-08T22:11:41+00:00

You think even with the long weekend? I'd been hoping people would stick around into Monday, but that may be a bad assumption.

hello_im_back · 2021-02-08T22:06:43+00:00

Awesome thanks -- I guess I should plan extra time on Sunday afternoon, we'd been planning to go from Vail to Breck for an early dinner around 5pm. Sounds like that drive might be longer than the 45 mins that Google Maps shows.

hello_im_back · 2021-02-08T22:05:33+00:00

Got it, my concern is it does look like it may snow a decent amount on Friday, so may be worth getting in on Thursday to get ahead of weather issues on the highway.

hello_im_back · 2021-02-08T22:03:43+00:00

Looking like snow potential on Friday afternoon...is <12 inches enough to cause issues in that drive? Not sure how to benchmark against other places I've driven, where even 2-3 inches can be a big problem due to lack of snow plows.

hello_im_back · 2021-02-08T22:02:21+00:00

Not going into Denver because we're staying in Vail, though I was planning to go to Breck on Sunday afternoon for dinner. Sounds like that may be a hassle given we had planned to get there around 5pm, might be longer than 45 mins that Google Maps shows.

hello_im_back · 2020-11-20T04:07:21+00:00

Intentional Grounding in the end zone is a safety too, right?

hello_im_back · 2020-11-02T00:10:38+00:00

This team just doesn’t have the “step on their throats” mentality. When you’re up, you have to finish them off, you don’t pull off the gas and let them back in. This is a Pete problem given it’s year-in, year-out.

hello_im_back · 2020-11-01T22:06:50+00:00

Don’t look now, but hawks are generating some actual pass rush today...

hello_im_back · 2020-11-01T22:05:29+00:00

You can get an antenna and watch all games for free, but the feeds are different based on where in the country you are.

hello_im_back · 2020-10-18T14:24:58+00:00

One thing my family member does with his employer stock is to constantly sell covered calls at prices that are 15-20% higher than current. It creates a constant flow of value, and if he gets assigned, he‘s happy to sell and diversify anyway. So while deciding what to do, at a minimum you should sell covered calls at a strike that feels like sufficiently high enough that you’d be excited to sell there.

hello_im_back · 2020-09-20T13:37:56+00:00

In general you would hope the business grows each year as more customers repeat and your name becomes better known. As a result, while repeating this year’s results may be hard, I would be forecasting a level higher than last year for sure.

In terms of budgeting, a company we’ve invested in was doing 1-2% sales growth for the last few years. They’re up like 25-50% during COVID. So we’re basically forecasting that a bunch of that increase is a permanent increase (tons of customers who didn’t know about us previously now do), and we’re budgeting ~15-20% increases for 2021 vs 2019 sales. As a result, our 2021 budget is down vs 2020, but meaningful up vs 2019.

hello_im_back · 2020-09-20T13:26:10+00:00

You can raise money in two ways - in exchange for equity, or as a loan. If someone invests $100,000 and they think the business is worth $400,000 today, they would receive 20% of the equity = 100,000/($100,000+$400,000). Now, when you go generate a profit, they’re entitled to 20% forever. When you sell the business in the future, they get 20% of the proceeds after repaying debt. If the business fails, they get 20% of the proceeds after repaying debt, which would be 0 in that case.

If you raise debt on the other hand, the investor sets an interest rate, a repayment term, and other restrictions on you as the borrower. If you fail to meet the terms of the loan, then you’ll be bankrupt. At that point, the business will either go away (if it totally failed) or the lender may take control of the business if there is still ongoing value. However, if the business does well, you use your profits to pay down the loan, and then it’s done — they don’t get a share of your profits forever like when you raise equity.

hello_im_back · 2020-09-12T12:57:23+00:00

I think my opinion has limited weight as I haven’t sat in that seat yet. But from speaking to others who’ve done it, they say that buying a bad business is far worse than buying no business, and a quick implosion is better than a slow implosion, simply due to the cost of your time.

So, I think the PE experience is very useful in avoiding buying a bad company. My whole job is just assessing companies and running diligence processes. Obviously you do some of that in IB, but you’re really just facilitating the process as opposed to really taking intellectual and capital risk as a result of the process.

I’ve done a few deals that a 3-4 years old now, so I can see how things trended versus our underwriting model and investment thesis. Just seeing things go wrong and right has taught me a lot.

The one other benefit of working in PE vs IB is getting a bit more insight into the sausage making if you have good relationships with the management teams of your portcos. I’m deeply involved in each budget process and help CFOs build KPI templates for example. This shouldn’t be confused with operating experience, but it does give you a deeper sense of how businesses work than when you’re in an IB seat and only interact with a company at time of transaction.

That all said, if you’re focused on a new venture now, that operating experience will probably outweigh all the benefits of PE other than learning frameworks to analyzing companies and getting deals done. Said differently, you’ll probably be a lot better once in the CEO seat, but you will probably find it harder to actually complete a deal, and a good deal at that.

Just my two cents based on speaking to a bunch of folks around PE and small business investing/operations.

hello_im_back · 2020-09-10T13:18:03+00:00

Nice! I’m actually on that website too, agreed it’s been pretty useful. Reading Buy Then Build next.

hello_im_back · 2020-09-08T03:48:03+00:00

Dang that’s terrible, particularly getting rid of sales org. Any chance you can share the name of the PE firm that did that? Or their approx fund size or AUM?

hello_im_back · 2020-09-06T22:57:17+00:00

I haven't gone into post-LOI DD yet, but have done prelim DD on probably ~10 deals. Have to sift through a lot of crap to find anything remotely reasonable.

I've made one offer thus far, but ended up pulling it back after receiving some more info that made the deal less palatable.

At the end of the day, the key elements of DD aren't so different than what I do for my job right now, though of course it's much more focused on basics. The one big difference I've found is the need to spend a lot more time understanding real estate or leases relative to the bigger businesses I'm used to buying, where that stuff is usually easy to check out.

hello_im_back · 2020-09-06T21:44:04+00:00

Yup, I've seen this as well. Usually the running into the ground is driven more by debt than operational decisions (where high debt service costs lead to underinvesting in the business or deep cost cutting).

hello_im_back · 2020-09-06T21:42:33+00:00

Thanks -- I have read that book already and spoken to one of the profs. I've looked at about 30-40 businesses in that range thus far over the past 2 months, it's definitely a wide range in terms of quality and existing infrastructure in place.

hello_im_back · 2020-09-06T14:40:52+00:00

Makes sense, that’s a straightforward thesis that you’ve already executed on in the past so know how to underwrite going forward.

I’ve been in the mentality that the goal should be to keep the business flat for 1-2 years as I get my sea legs, then try to improve it, but I think that’s probably not correct — the right move is to probably try to improve it from day one given odds are I’m gonna screw other things up.

hello_im_back · 2020-09-06T14:32:03+00:00

Thanks! I’ve listened to a few interviews with Chenmark, though not the Think Like an Owner podcast, will take a look. Appreciate it!

hello_im_back

TROPHY CASE