The Next Step

G'day, I'm Pete Seligman. There are a growing number of people thinking about buying a business in this region, but it can be hard to see what that actually looks like. So to help bring one part of that process to life, I've teamed up with my mates Jason Andrew and James Frank to throw some businesses on the table and share our raw thoughts on each. This is Eta down under. We hope you enjoy it. In the latest segment of "ETA Down Under," we embark on an exploration of a thriving excavation business, initially captivated by its impressive presentation and robust 10 million dollars in revenue. Specializing in critical water and sewer infrastructure, stormwater solutions, and holding Sydney Water accreditation, the business stands as a preferred partner for top-tier corporations. As financial considerations unfold, red flags are raised regarding EBITDA usage, specifically in light of a million-dollar fleet of equipment impacting perceived profitability. James Frank introduces the concept of sustainable future earnings, prompting a nuanced discussion on owner involvement, team engagement, and the intricacies of transitioning to a new operator. Leaders in Civil Excavation Revenue $10m EBITDA $2m Link: https://resolve.com.au/business/transportation-infrastructure/leaders-in-civil-excavation Located in Sydney, the company is the preferred partner for numerous top-tier corporations, renowned for their expertise in critical water and sewer infrastructure, stormwater solutions, pumping stations, precision bore and inspection pits, and a comprehensive suite of Civil Excavation Services. With varying levels of interest among us, ranging from cautious optimism to tentative inquiry, the fate of the excavation business hangs in the balance! Thanks for listening. I hope you enjoyed it. If you want to learn more, please hit us up on LinkedIn. You can find all three of our profiles in the show notes below and stay tuned for the next episode. Follow Pete on YouTube: http://www.youtube.com/@PeteSeligman Connect with Pete: https://www.linkedin.com/in/peteseligman/ Connect with James: https://www.linkedin.com/in/james-frank-905b2155/ Connect with Jason: https://www.linkedin.com/in/jason-andrew/

G'day, I'm Pete Seligman. There are a growing number of people thinking about buying a business in this region, but it can be hard to see what that actually looks like. So to help bring one part of that process to life, I've teamed up with my mates Jason Andrew and James Frank to throw some businesses on the table and share our raw thoughts on each. This is Eta down under. We hope you enjoy it. In the latest "Eta Down Under" segment, we delved into the potential acquisition of a high-end beauty business in Queensland. Despite its 4.2 million dollars in revenue and 900 thousand dollars in earnings, we expressed skepticism about scalability and raised concerns about the discretionary nature of the industry, cyclicality, and potential revenue decline. We discussed challenges in creative businesses, particularly jewelry, scrutinizing intellectual property protection, scalability, and the potential for navigating larger corporate customers. Premium candle, body-products, & gifts business Brisbane-based Inhouse manufacturing of biggest selling product, import suite of other products sells to large network of retails (B2B) and D2C through online channels EBITDA: $0.9m Part-time owner, skilled team in place 2,800+ B2B clients including several contracted customers Link to enquire: https://resolve.com.au/business/wholesale-trade/highend-home-body-and-gift-business Manufacturer and wholesaler of high-end homewares, jewellery, and giftware products marketed under company-owned brands, which are positioned at the premium end of the market. The business has a strong network of suppliers for its whole range, including its contract-manufactured jewellery range. Perfect bolt-on acquisition for trade buyers looking to enter or expand in the gift, e-commerce, homewares, or bath & body product sectors. The verdict on whether we decided to embrace or pass on this intriguing venture? Well, you'll have to tune in to the next episode of "Eta Down Under" to find out! Thanks for listening. I hope you enjoyed it. If you want to learn more, please hit us up on LinkedIn. You can find all three of our profiles in the show notes below and stay tuned. For the next episode. Follow Pete on YouTube: http://www.youtube.com/@PeteSeligman Connect with Pete: https://www.linkedin.com/in/peteseligman/ Connect with James: https://www.linkedin.com/in/james-frank-905b2155/ Connect with Jason: https://www.linkedin.com/in/jason-andrew/

G'day, I'm Pete Seligman. There are a growing number of people thinking about buying a business in this region, but it can be hard to see what that actually looks like. So to help bring one part of that process to life, I've teamed up with my mates Jason Andrew and James Frank to throw some businesses on the table and share our raw thoughts on each. This is 'Eta Down Under'. We hope you enjoy it! In our inaugural episode, Jason introduces a diverse range of businesses, from a vertically integrated pallets venture to a high-end home and gift business. We delve into opportunities, exploring a 4-million-dollar rental solutions business and a 7-million-dollar engineering gem in southeast Queensland. The spotlight turns to the pallets business, dissecting its manufacturing dynamics, selling strategies, and the challenges of the rental model. Jason's insights spark a spirited conversation on potential innovations, regional significance, pricing strategies, and operational intricacies. Pallet Manufacturer Regional NSW (within 2 hrs of Sydney): Pallet Manufacturer EBITDA: $1.7-1.9m Under Mgt Link to enquire: https://resolve.com.au/business/manufacturing/vertically-integrated-pallet-business Pallet manufacturing business with "mill on wheels" and commercial agreement for wood supply. Competitively advantaged with supply of wood (very valuable after bushfires has restricted competitors ability to supply their clients). The owner has invested heavily and this business is growing on the back of blue chip clients, both of which are growing. A trailer-mill allows the business to cut wood to size, reducing offcuts and stock wastage. Production/General manager runs the daily operations with non-exec owner living interstate. This episode lays the foundation for an exciting season, promising deeper insights into the world of business acquisitions down under. Thanks for listening. I hope you enjoyed it. If you want to learn more, please hit us up on LinkedIn. You can find all three of our profiles below and stay tuned. For the next episode. Subscribe to Pete's YouTube Channel: http://www.youtube.com/@PeteSeligman Connect with Pete: https://www.linkedin.com/in/peteseligman/ Connect with James: https://www.linkedin.com/in/james-frank-905b2155/ Connect with Jason: https://www.linkedin.com/in/jason-andrew/

This episode of The Next Step – the final episode for the season – is a short bookend to wrap up the series, and we've included it in the interest of completeness. These are closing remarks after a wonderful and insightful EtA Forum. As I mentioned, for the first effort at something of this scale for the EtA community, the turnout was truly incredible. Many more people came than was expected, and consequently, thanks to that support, not only was the atmosphere at the event as dynamic as it was, but the event was able to donate profits to several charities across Sydney. The success of the event means that it will be back this year, so be sure to attend if you can! As you'll hear here, not only is it an excellent event for sharing information, but you'll enjoy plenty of networking opportunities at an after-party that will go late into the night. It is our great privilege to be part of the local search community in Australia, and help connect and inform what will be a major path to entrepreneurship in the years ahead. Thanks for listening to this season of the podcast, and we look forward to being back with Season 5 soon. Register for the 2023 EtA Forum: https://www.peteseligman.com.au/etaforum Connect with Pete: https://www.linkedin.com/in/peteseligman/ What we discussed: 1:20 Pete begins his concluding remarks from the EtA Forum 2022. 2:04 Thanks to the sponsors and partners of the event. 3:58 Thanks to the support of the forum we were able to donate to several local charities.

The final session of the inaugural EtA Forum was a hugely entertaining and insightful story about the searcher's journey. Richard Hernan decided, at the age of 40, that it was “now or never” to follow his dream to become an entrepreneur and business owner. At the time he had 12 months' worth of financial reserves, which he assumed would be ample to find and acquire a business. Three years later he found himself in Centrelink for benefits, and still trying to finalise a deal. It was at that critical moment that it came together for him and the search was finally successful. This is a story of discipline, confidence and belief, and really highlights the kind of resolve and determination that searchers sometimes need. The payoff, of course, is well worth it, as they can then follow through with their entrepreneurial ambitions. However, it is a process that requires a particular profile of a person to see it through to success. Richard also shares his thoughts on the “four seasons” philosophy towards search, one that I love myself. It starts in Spring, when the entire process is exciting and the search is underway. Then it moves to Summer, when the acquisition is hot and the business growth and opportunity is dynamic. Then comes Autumn, which is the time for the searcher to start to ease back on their role within the business, before finishing with the exit in Winter. This “four seasons” approach is an excellent way to look at the journey of a searcher, and Richard's own story is the perfect example of it. For anyone looking to get into search, this is a must-listen presentation because it will help you to prepare for your own journey. Connect with Richard Hernan - https://www.linkedin.com/in/richard-hernan-a655267b/?originalSubdomain=au What we discussed: 2:26 Richard starts his presentation and introduces the “four seasons of search” concept. 5:25 Richard shares his backstory: how he got involved in Search and why he took that path. 10:52 The importance of self-awareness when starting the search journey. 12:37 Getting the search started – where searchers can start learning what they need to know. 17:07 The psychology of search – what can searchers do to help keep themselves grounded and positive? 20:27 Richard shares a story about the challenges he had getting a deal finalised even after it had been accepted by all parties. 22:40 Going from solo search to partner search, and the difference that made to the search effort. 23:50 Richard shares the story of when his financial reserves had just about run dry and he needed to seek assistance from Centrelink. 28:22 Having now acquired the company, what should your first priorities be? 29:20 The good and the bad – Richard highlights some of the most memorable experiences on both extremes from his search journey. 32:34 Richard shares an update on where Broadleaf stands now and its ongoing growth. 35:37 Richard finishes with closing thoughts – “was it worth it?” Key quotes: “I had a moment where I was sitting across the table having lunch with the CEO of the world's biggest or second biggest mining company. And I found myself thinking “I don't want to be you.” But then, when I reached out to entrepreneurs I realised that that's who I want to be – an entrepreneur who's in control of what they do.” “At the start, in the Spring, what you want to do is leave your eyes open and your ears open, and really try and learn as much as you possibly can.” “To quote Otto von Bismarck, “any fool can learn from experience, but the trick is to learn from other people's experience.” So what I tried to do, even before I jumped out of the corporate world, and then certainly after I jumped out of that was to say, “who's done this before? I'm not trying to do anything that hasn't been done before.” So I went and met with the three or four people in Perth, who had previously acquired a handful of businesses.” “To achieve the aspiration I had about having an impact on a million lives, I knew I needed to acquire something of service. And so, while I looked at a lot of different businesses, I narrowed that down to service businesses.” “I felt that with search, there's not much tangible progress that you can show. So, I feel that you need to have hobbies or different things that are going on in your life that give you that, that release and a sense of tangible progress. For me, I ran a couple of marathons.” “I prided myself on being able to say “what's the time period between one deal falling over and the point where I fully focus on the next one,” and then build that muscle that would allow me to then get up and go again.” “Along the way, I joined up with a co-founder who had deep experience in financial planning and financial services. So I went from that solo search to a partnered search, and that was game-changing for me thanks to his industry knowledge.” “There wasn't a second where I thought, “oh, no, I'm done.” There was one day where I'd gone from a visit to Centrelink and having to spend $170 that I didn't have to recover my car after having it wheel planted, to having lunch with the execs from Macquarie Bank and outlining for them that I need 50 million dollars for a planned acquisition.” “The MBA book would tell you to get in there with your new business in the first 90 days and smash it out, and change everything. However, the search book says that for your first 90 days or the first six months, whatever it is, don't go and smash things. Try not to touch anything.” “There are going to be surprises. People ask what you were most surprised by, and I always respond that I've never really been surprised by them. Because I'm putting myself in there thinking, “there's going to be a whole heap of stuff that I don't know about.” It's also important to note that there are not just bad surprises, there are good surprises too.”

In this session of the inaugural EtA Forum, people from all ends of the search spectrum came together to discuss a vital, if sometimes prickly topic: how to structure the perfect deal, especially when the seller isn't as experienced. Often in search, the business owner is not an experienced business seller, and this can have implications in many ways. For example, they might be unaware of the critical information that the searcher will want to see in a due diligence process. Or, they may have unknowingly surrounded themselves with poor-quality advice, which can end up undermining the entire deal. A searcher's first job, after identifying a business that they like the look of, is trying to encourage the seller to have the best quality support and advice around them as possible. From there it will become more straightforward to negotiate and gain access to the information that they need to come to a conclusion. Another major point that was brought up by the panel was the need to be flexible. Through any due diligence process, there is going to be information that comes to light that is unexpected. The experienced searcher, however, approaches this with the mindset that these are hurdles, not roadblocks. There is a solution in the deal and negotiation which means that neither party needs to walk away when the unexpected is found during due diligence. For an awesome insight into the psychology of searchers and their relationship with sellers, this panel is a must-listen! Connect with: Michael Chew – Flywheel Effect https://www.linkedin.com/in/michael-chew-3028b61 Brent Goldman – Nexia Australia https://www.linkedin.com/in/brentgoldmanadviser/ Nima Sedaghat – HWL Ebsworth https://www.linkedin.com/in/nimasedaghat Pete Seligman - https://www.linkedin.com/in/peteseligman/ What We Discussed: 2:44 What's driving the headline information as a deal is being structured? 4:42 Why it is important that the vendor is getting good advice for a deal. 6:35 What are the challenges that come from unsophisticated sellers, and how do you manage those deals? 9:01 What's the mindset of the inexperienced seller? Are they just looking for a cash price, or how else might they approach a deal? 12:33 Why it's valuable to communicate how the deal will practically work for a seller, and building education into the process. 14:29 Why being flexible during the due diligence process is so critical. 16:34 For buyers, how does the due diligence process influence the structure of a deal? 20:40 Q & A with the audience. 26:31 Pete provides a summary and analysis of the panel's key findings. Quotes: Michael Chew: “Something that I think is common with a lot of the deals of the size that that we have is that there are relationships and other things held in with the person how you mitigate that risk. Pete Seligman: “You've got to know how the vendor on the other side of the deal is being advised and how capable the advice is. The better the advice that the vendor is being given, the better the process is going to be. You might go in there thinking “oh, they've got crap advice, and this is going to make it really easy for me to walk all over them.” But actually, it just makes it really, really hard to structure a deal.” Brent Goldman: “A business that doesn't have the right financial information doesn't actually mean that it's badly run – it may well be making money and surviving comfortably. So I would see that as an opportunity to put in some processes and systems and really drive growth.” Nima Sedaghat: (10:59): “As a buyer, it's a worthwhile exercise to ask your advisors “what does this deal structure that we're proposing look like for the seller?” If they're expecting just to take all the cash off the table, from day one, it's important to be able to articulate why that works for them, whether that's because they're managing the tax timing, or if it's likely that they can access exemptions, and so on.” Pete Seligman: “Working capital is the most misunderstood kind of function, definitely in small businesses, but plenty of larger businesses too. It's the one that sellers always misinterpret with regards to the impact that it's going to have on cash flow and what they're selling.” Nima Sedaghat “You just don't know what is going to be uncovered as part of your due diligence process. You could start a deal and get through commercial due diligence and you're on to a winner, but then your accountant gets in there and discovers that the quality of earnings is nowhere near what you thought. So, you're going back to the drawing board to manage that risk.” Pete Seligman: “When you go skiing and you're about to hop on the chairlift, you're going to be thinking about all the runs that you're going to do. This is like when you're just seeing a deal for the first time. You might think to yourself that you like the business, so you “get on the chairlift” and start doing due diligence. Then you get to the top of the hill, and you can actually see the business. You have completed commercial due diligence, and you understand the business. Then you need to move into the confirmatory stuff, which is the point where you start skiing down the hill and your options start to get fewer and fewer. That's when you need to commit – and just like skiing, once you get started you can't half commit to a run.” Pete Seligman: “There's no doubt you'll find all sorts of stuff. It's about saying every single thing I'm going to find is going to be a hurdle, not a roadblock. I'm going to look for things that I can do with the deal or negotiation so I can continue moving forward because I am doing this deal.”

Andrew Locke's Ambit Partners is one of the big global names in search. Based in South Africa, the company has invested in searches across the world, and in some interesting markets. From the mature and established markets of Western Europe and the US to fascinating emerging opportunities in places like Brazil and Cote d'Ivoire, Andrew and his people have deep insight into the true opportunity and value of search. In the presentation that he made at the inaugural EtA Forum last year, Andrew provided some fascinating and valuable insights into why search is appealing from an investor's perspective. He presented a compelling case for how search fits into the spectrum of returns and why it is a relatively low-risk opportunity for investors. Search, done well, provides the downside protection of private equity investment while also offering the upside that venture capital brings to the table. It also provides strong returns. Currently, the profile for both searcher and the type of companies that they look to acquire means that search is relatively lucrative. Additionally, it allows for substantial portfolio divestment, given the individual nature of most searchers and the breadth of companies that can be acquired through them. Andrew also ran an extended Q & A session at the end of his presentation, which provided us with some excellent insights into the kind of searcher that Ambit Partners invests in, as well as the appeal of supporting the first (or one of the first) searchers in any given market. For anyone who is interested in understanding the kind of searcher and business that investors will find appealing, this is a must-listen. Connect with Andrew: https://www.linkedin.com/in/andrewtlocke/ Connect with Pete: https://www.linkedin.com/in/peteseligman/ Join us at the next EtA Forum in September: https://www.peteseligman.com.au/etaforum What we discussed 1:15 Pete introduces the topic, and speaker Andrew Locke from Ambit Partners. 2:25 Andrew introduces himself and the broad topic of “why invest, what causes returns, and how do we hold them up?” 3:48 How do search funds fit into the wider private equity and VC landscape? 5:58 How successful are search efforts? How many find acquisitions and how many of those have a positive return? 8:05 Why do searches so frequently show a positive return? Why do these returns happen? 12:22 Open Q & A with the audience. 12:52 Why Andrew and Ambit Partners like working in unusual markets. 14:38 Andrew talks about one of the search funds that failed in the US. 15:40 How Andrew and Ambit Partners do due diligence on searchers. 17:15 Andrew explains the mix of Ambit Partners' portfolio. 18:28 On why Andrew is agnostic about the need to have an MBA to be a searcher. 20:15 Pete provides a summary and analysis of the presentation. Quotes “We see search funds filling a missing segment of the investment landscape for smaller businesses that have the maturity and the stability of traditional private equity. Because of this, the chance of investment going to zero is very low.” “When we look for businesses, we want to see companies that are post-concept risk and have missed that concept chasm. In other words, we're looking for businesses that have found product market fit and are on their way to scale.” “About two-thirds will find an acquisition and one-third will fail to find an acquisition and close after their search for capital. We don't see that as a failure. In the sense, it's far better to do no deal than to do the wrong deal.” “There's a very compelling individual profile for a searcher and for investors in a single asset. But as these are combined in portfolios, the overall benefits of diversification are quite meaningful.” “What we often see is people taking a hybrid or omnivore approach, where you invest in a fund to get that diversification of exposure to search. And then you take targeted co-investment opportunities with searchers that you think you can provide additional value to.” “Part of the reason that we actually like supporting entrepreneurs to be the first or among the first in a new market is that it's very hard to do that. And the type of person that is able to and has the appetite to meet the requirements of the profile very well.”

Getting to the core of what makes a deal backable is at the forefront of anyone who is involved in search. That was the subject of this panel at last year's inaugural EtA Forum, which brought together four people involved in search in different ways to share their experiences. The key theme driving the conversation is, as the moderator, Paige Kohalmi says, “the searcher plus a good opportunity, and the right funding structure, is what makes a deal backable.” These three elements are equally core, and any investor is going to consider those three things closely, giving them equal weighting, before supporting an acquisition. One of the highlights from the panel was when the panellists discussed three different companies, in different sectors and with different profiles. They were asked to choose which of the three they liked most as a candidate for an investment. The fact that all three panellists chose a different first target just goes to highlight how subjective this process can be. Every investor and searcher is going to evaluate risk in a different way and, ultimately, come to a different conclusion. That does drive home the importance of character in the searcher and who they've got backing them, too. The capabilities of the searcher and what they will bring to the business can go a long way to strengthening the numbers sitting behind the business. The panel also covered a subject that is worth keeping in mind, that the downside with search is more protected than it would be with a VC or startup, because the business is already established and earning revenue. There's no point in looking at a business that hasn't proven this or hasn't got strong recurring revenue (or there are clear risks to that revenue), and margins are a key data point that can make a business very attractive. Overall, this is a fascinating panel for anyone who is interested in better understanding the thought processes that factor into deciding which searches to back. Connect with Paige Kohalmi: https://www.linkedin.com/in/paige-kohalmi/ Connect with Sahil Shekhar: https://www.linkedin.com/in/sahil-shekhar/ Connect with Tom McGhie: https://www.linkedin.com/in/tommcghie/ Connect with Lui Pangiarella: https://www.linkedin.com/in/luipangiarella/ What we discussed: 1:25 Paige introduces the panel and topic for discussion. 2:45 Tom kicks off the discussion with his perspective of placing debt – what makes a deal backable? 4:50 Sahil describes his approach to identifying opportunity and how to find a deal to be involved with. 7:16 From the perspective of an investor, Lui discusses the importance of resilience. 10:43 “Simplicity” is a core concept with funding. Lui and the panel discuss what that word means to them. 12:42 The panel segues to discuss balancing the share of upsides. As someone who has been involved in both search and investment, Sahil shares his perspective. 16:57 Summarising the discussion to date, Paige says “the searcher plus a good opportunity, and the right funding structure, is what makes a deal bankable.” The next question is – is one of these elements more important? 18:26 The panel is presented with three companies, and asked to pick apart the opportunity of each. 25:44 An extended Q & A with the panel. 21:49 Pete provides a summary and analysis of the key findings from the panel. Key quotes: Tom: “The most important thing in deciding whether a deal is bankable from a debt perspective and where we should place that deadline is actually the searcher the people involved.” Sahil: “Both as a searcher and as an investor, you're trying to protect the downside, and to reduce business risk. There is a bit of operator risk, because there's a transition in owner operators, so what you're trying to really protect against is other downsides.” Lui: “Recurring revenue is what we would put as our number one priority. If the business has got 90% recurring revenue, you know that you're going to survive next year. It's as simple as that. It's why project-based businesses don't work in search. Because if you don't replace the revenue that disappears, you've got a failure.” Tom: “From a debt perspective, there is no transactional efficiency in adding mezzanine finance in a deal that might be four or five million dollars. Or even thinking that you're going to do that.” Sahil: “There is more risk for an operator than they would be in a private equity environment.” Sahil: “From the investor point of view, you want to know that the searcher is committed, and will stick through with a company and in hard times… there are some deals where searchers are putting on director guarantees, and underwriting debt themselves personally, or making other significant personal contributions. There are many ways to get comfort on how all-in the searcher is.” Lui: “There is no scenario where the wrong searcher will actually give us the right opportunity and right structure.” Tom: “There is absolutely no benefit to a debt provider to thinking through the future trajectory, in terms of the opportunity upside, if the business hasn't been proven today, or hasn't been performing to this point.”

Sometimes a search goes wrong. It'll start with a sense of unease, and only really become apparent after the acquisition, but it can be a stressful, morale-crushing experience when it happens. That's the experience that Nick Bamford had at one point during his own search journey. That case study forms the basis of this important session of the inaugural EtA Forum. Nick – who is now happily running SRO Technology, found himself in a situation with an (eventually) hostile seller and management issues across the board when he took over a business. Analysis and due diligence indicated that the acquisition was worth pursuing. However, when the seller embarked on an extended holiday immediately, Nick was forced to become far too active in the first hundred days, and it became rapidly apparent that there were cultural issues within the business. Ultimately, Nick felt the situation was unsalvageable and decided to exit. Fortunately, the agreement protected him from liability. After a period of reflection, he was able to resume his search journey, eventually finding SRO Technology and now growing that company through acquisition. It's rare to get such an open and frank dialogue as you'll hear in this session. Nick and SMEVentures' Jake Nicholson had a free-flowing conversation that holds back nothing. Consequently, it's essential, both in learning how to identify the red flags that a deal will be challenging, to highlighting the kind of change management mistakes that can occur early into an acquisition. Connect with Jake Nicholson: https://www.linkedin.com/in/jakenicholson/ Connect with Nick Bamford: https://www.linkedin.com/in/njbamford/ What we discussed: 2:01 Jake and Nick kick off their conversation by discussing the big lessons learned from Nick's search. 3:05 Nick summarises his pre-search background, and what inspired him to start his search. 5:13 Nick describes the company that he eventually found to make an offer on. 7:09 Nick summarises the criteria that made the business an attractive target to make an offer on. 9:46 Structuring the offer – Nick describes how he undertook this from a position of inexperience. 11:18 The seller started to have second thoughts deep into the process. Nick explains where those stemmed from. 12:32 Ultimately the seller pulled out, five months into the process. Nick describes what his next steps were. 14:20 The seller actually then came back, and Nick summarises what happened next as discussions were started again. 15:27 Nick describes the first day in the company after having closed the deal. 16:24 Nick explains the diligence process that led to the closing of the transaction. 17:42 Nick describes his first few weeks after taking over the company. 20:11 Nick describes his first experiences with the management team, with the seller being away. 22:16 Nick also brought some new people in early, and describes the experience of making his first hires. 24:35 Another area where Nick saw the need to improve the business was in the finances, so he describes his first efforts to grapple with that. This, too, ended up producing headaches for him. 28:29 The next challenge that Nick needed to grapple with was a cash crunch. He explains how that occurred and how he responded to it here. 32:35 At this point the seller flagged interest in coming back in to run the operations site of the business, or even take the business back over completely. Nick talks through how he managed this. 34:57 Having decided he needed to exit the business, Nick explains his next steps. 38:36 Nick explains what he did after to recover from the ordeal and get back on track, and how his new company, SRO Technology, is in a very strong position. 44:19 Pete provides a summary and analysis of the session. Quotes: Nick: “One of the big reflections I had from the experience of my first search was, the way that someone behaves during a negotiation is pretty much how they're going to be in business.” Nick: “My mindset during the search was very much that I'm going to run through and I'm going to look at a bunch of deals. If one hits the criteria, I'm going to do that one.” Nick: “The thing about being a seller is that you either spend more time with the business or the kids, but there's an emotional side to ready to let go and retire.” Nick: “I was happy with the due diligence that I did. I was probably a little bit optimistic in terms of what the construction sector was going to be doing. There was a lot of infrastructure at the time, in 2018. And there's a lot of infrastructure being announced. So that pipeline of infrastructure was shooting up and it was going to be a driver behind some of the growth. But overall, I look back at the due diligence and I figure I did a reasonable job.” Nick: “Everyone says keep the deal flow going when you're negotiating, but everyone drops the flow when they've found a solid candidate. K that going when you're already imagining yourself in the CEO role and earning a salary is a really hard thing to do.” Nick: “The seller went on holiday, pretty much straight away. I didn't ask him to not go on holiday, because I put a lot of confidence in his ability to manage the transition. He knew the company, right? He knows the people; he knows the best way to do that. Now I think that actually, that's not the case, and unless a person has handed over a company before and has gone through that transition, they're not necessarily coming from the best place.” Nick: “For me, part of leadership is demonstrating that I'm prepared to do the work and prepared to get dirty. My reflection on that was that it didn't work. All that happened was people in the company just started seeing me as a billable resource.” Nick: “I hired two manager slash salespeople who started about two weeks after me. One of them turned out to be very good, and I would work with him again, maybe I will. The other guy was useless. He was meant to sell stuff. And he hadn't sold a cent. And I fired him 12 weeks into his employment. But during that time, while giving him a chance, these two existing managers were looking at the leeway that these guys were getting, and getting really angry, and I needed to do something about that. So very quickly, I'm faced with the big decisions that you don't want to be making in your first 100 days.” Nick: “The seller will complain bitterly about some of the changes, but you've got your business, you got to pick your course. So, in my case the seller said he'd get this person fired, and he'd committed to the boys. He was like, ‘don't worry, I'll take care of this. I'll tell Nick to fire,' and I said no. I was sticking to my values, which is something I've never regretted doing. But when I said no, the seller was pretty angry, as were the two managers.” Nick: “We ended up at this kind of impasse where there wasn't enough money for me to comfortably run the business, although I could have had a structure in place and Westpac lined up to provide invoice financing.” Nick: “I sat down with a mentor, and the question he asked me was, if you were a third-party investor, if you were outside and you weren't involved, would you pick yourself to run the business? I realised that I was going to lose the two key managers, and didn't have enough cash to keep this thing going, and the relationship with the seller had completely broken down. So when I looked in the mirror and answered that question, I had to say I would if I were invested in a passive investor, I would have picked him to take the business.”

This panel, as part of the inaugural EtA Forum, takes a close look at how a searcher should approach their first hundred days after closing with a business. The panelists – Johnson Wang, Alex Simmons and Nikita Gossain – have all had successful searches and are now busy managing their businesses. They share some excellent insights about what they learned, what surprised them, and the mistakes they made along the way. One key theme comes through the panel, and you'll hear it clearly as you tune in: It's critical to give yourself time in the new role. The temptation will be there to rush in, make a big presentation, and get started on making changes immediately, but this would be a mistake. Taking the time to get to know the business and teams, while promoting stability and a “business as usual" approach will allow you to get a better understanding and vision for the business. The panel covers the whole gamut, from how to handle the need to let people go, to sharing responsibilities with your partner in search. There are also some helpful insights on handling change management. This is because searchers – who often come from private equity or M&A backgrounds, need to quickly transition to their new roles as CEOs and people managers. Naturally, searchers are going to be thinking about what happens when they find that perfect business and close the deal. For those that are doing it for the first time, however, it is a monumental and challenging career step. Being able to listen to the successes and mistakes that others make is an incredibly valuable resource, and that's what this panel provides. Connect with Johnson Wang: https://www.linkedin.com/in/johnsonjwang/ Connect with Alex Simmons: https://www.linkedin.com/in/ansimmons/ Connect with Nikita Gossain: https://au.linkedin.com/in/nikita-gossain What we discussed: 2:37 Introduction of the panel by the host, Johnson Wang. 7:17 The panel kicks off with a discussion about “day one” of a search journey. 10:30 The discussion now transitions to the first 100 days, and what each person on the panel did to prepare themselves for that first few months. 14:27 Johnson shares the three key priorities that he and his partner had for the first 100 days. 15:49 The next topic for discussion was the role of the new CEO – what their day looks like and what the shift is like from searcher to business manager. 19:06 Johnson asks Nikita to describe her thought processes around the timeline for highly strategic activities (like bringing on a new CEO and communicating her vision for the company to customers and employees). 21:38 With the panel being made up of people with private equity, consulting, M&A backgrounds, the discussion then shifted to the sudden need to manage a company of people, and how an acquirer can approach this challenge. 24:36 The panel starts talking about aversion to change being one of the big challenges they came across early on in the business. 26:10 Letting employees go is one of the more difficult challenges that a new owner faces – the panel discusses the best techniques to handle this. 27:38 The panel now discusses how a partnered search divvies up responsibilities between the new owners. 29:34 The panel shares their most positive and negative surprises of the entire process. 32:49 Q & A with the audience. 44:37 Pete provides a final summary and analysis of the panel discussion. Key quotes: Nikita: “I don't think people have massive expectations on day one. They want to get to know you, they want to know that their jobs are not going to get cut immediately, and otherwise there's an open mindedness on day one.” Alex: “We've seen in other examples in search that people come in with a real plan for the things they want to do in the first 90 days. I didn't have any of that, but was very conscious that it was important to invest in understanding the business early and make sure that you understand the people and the relationships. We had some objectives, but nothing like a big PowerPoint of the wonderful things that we wanted to get done.” Nikita: “You want to get some quick wins in those first 100 days. You want to stabilize, and you want to show them that for the first six months there's no change coming, jobs aren't on the line, and so on.” Johnson: “It is hard to sit there and try to not make decisions and not act on things. People often will look at you and expect you to act. So it is much harder in practice.” Nikita: “In terms of strategic thinking, we were claiming that we were one of Australia's most innovative companies. And that was true at a time, but sort of hadn't been for about 10 or 15 years. So there was a need to go back and strategically think about everything, and go through our mission, our vision, our purpose, our goals, our values, and so on. That was actually really well accepted, and the employees took to that.” Alex: “Culturally, the business had a very passive owner for the last three to five years, and it now had a very active and involved CEO who wanted to take the business to the next stage. So we needed to have the teams start to come on that journey, and some were there, which was great, but others were not yet. So I would spend a lot of time with the teams building projects around growth.” Nikita: “Having to let someone go is painful, but it's for the good of the team. It's unfair to them and to the person that's not thriving in the environment to keep them on. So it's something that you've just got to do sometimes.” Alex: “What I didn't appreciate on day zero or minus one was, there's more time for you to get into the role than you think. I probably should have prioritised personal things, like getting comfortable with the rhythm of being CEO, rather than charging in there and trying to get on with everything.”

Anyone that is interested in search and acquisitions needs to tune into this panel. It ran at last year's inaugural EtA Forum, and brought together four experienced veterans at this fledgling space to talk about how they got started, and what options are available to searchers. The panel kicks off with a breakdown of the different approaches to search, as well as the benefits of each and what might inspire someone to self-fund a search, or alternatively opt to work with an accelerator or traditional investors. Critically, it also asks questions that go well beyond the standard “cap raise” challenge. What kind of self-awareness process does a person need to go through to understand that they're ready for the challenges of a search? How should people go about building up their networks, and then leveraging them once they have them? What is the ideal profile of a searcher, and does this vary by sector? This panel also prompted some lively Q & A discussion at the end – showing just how insightful prospective searchers and investors found the group. That wide-ranging Q & A covers everything from how a searcher could expect to finance themselves before finding a company to acquire, through to whether it's better to be “all in'' or instead be a “moonlighting entrepreneur” and conduct the search while still working for a company. The depth of insights that came out of this panel make it an ideal “beginner's guide” for anyone who is considering taking up the life search lifestyle for themselves. Connect with Rob Gaunt: https://au.linkedin.com/in/rob-gaunt Connect with Greg Green: https://www.linkedin.com/in/greg-green-stc/ Connect with Michael Chu: https://www.linkedin.com/in/michael-chew-3028b61/ Connect with Scott Middleton: https://au.linkedin.com/in/scottmiddleton What we discussed: 1:39 An introduction to the panel and the panelists. 4:00 The definitions of traditional search vs. self-funded. 5:53 Greg Green explains the appeal of traditional search as an EtA approach. 5:57 Michael Chu explains what attracted him to the self-funded search model. 8:55 The panel addresses how a searcher (especially a self-funded searcher) goes about that first cap raise? 13:34 The panel answers the question that beyond the cap raise, what should searchers be focused on as they commence the search? 17:00 Michael discusses how much self-awareness and preparation he did before deciding to undertake the search. 19:28 Scott Middleton explains the value that an accelerator brings to a searcher. 23:05 Rob Gaunt asks Scott whether being in a non-typical area for search (tech), changes the profile of the searcher they look to work with. 24:12 Rob asks the panel about whether they considered having a partner in their searches, and if not, why not? 26:32 The panel discusses the implications of the economics of search and searcher equity, and whether this had any impact on the type of search they embarked on. 29:43 The panel discusses mistakes and general advice for prospective searchers and/or investors, looking at this opportunity for the first time. 35:34 Rob discusses the importance of time management and the question of how many people you should speak to when searching. 37:48 An extended Q & A with the audience. 54:57 Pete summarises the conversation and provides some analysis. Quotes: Greg Green: “If I'm going to surround myself with people to buy a business, I want to know that they've got some commitment to me, because I've already put cash on the table.” Greg Green: “One of the best things about this model is that it's a stepping stone. So the capital raising initially teaches you how to search, the searching process teaches you a whole lot about running a business.” Rob Gaunt: “A lot of people focus on the capital raise, which is really pre search, but not a lot of focus, at least in the questions that I get is focused on what happens during the search.” Michael Chu: “I went and spoke to specific individuals that I thought had the skills and experiences that could help me not make mistakes. I got them on board and started to build a relationship slowly and incrementally so that they could almost form an advisory board for what I'm doing. I do call them my advisers, even though they're probably the people who will end up investing in the deal.” Michael Chu: “I looked at buying into a business that I would have been a partner with somebody else, and one of the things that It's clear from my experiences that partnerships can be really difficult. There can be different perspectives on the outcomes and the way you go about driving something. It was important to me that it was my show, and I could drive it the way I wanted to.” Greg Green: “I've looked at hundreds of companies, and it has taken me a while to get to the ones that really matter to me. And so I would say that you should talk to your potential investors and ask what matters inside the businesses as they go in. You want to really understand how you should calibrate your thinking around what sort of business you want to own.” Michael Chu: “As a searcher who wants to become a CEO, I want a cap table that's full of people that I can go to and depend on. When things hit the fan, they're the ones that I want there in the corner with me dealing with it.” Scott Middleton: “It can get quite exciting when someone is chatting to you about an interesting opportunity. Then in hindsight you realise that you've wasted a lot of time on something that, deep down, you knew was not right, but stuck with anyway.”

Akram Sabbagh, the co-founder of Wayfinder Capital and Second Squared, used his presentation at the inaugural EtA Forum to discuss a subject that is often overlooked by searchers and business owners alike: the emotional investment, and how that affects perspective. There's an excellent example that Ak gives in his presentation about the different ways a owner might handle a broken printer. When times are good, the company is growing, and the money is rolling in, it's easy to be blasé about a printer. When the business has hit a plateau and is struggling with the risk of heat death, the frustration the owner feels can result in a very different response. This is why, as Ak said, a searcher might meet with two different businesses in the same sector and with similar product portfolios, only to experience wildly different atmospheres within the business. This doesn't necessarily mean that the emotional energy within a business should be the deciding factor in an acquisition. The owner of an organisation that is riding an emotional high will generally have an inflated sense of its value, while a business that has plateaued, is often an opportunity that is simply waiting for new energy and ideas. What is important is to be able to recognise emotional states and how they can affect perspective, and in his presentation Ak brilliantly runs through the key steps that can help a searcher or business owner stay focused and help the business break through the barriers to achieve advanced growth. Connect with Pete: https://www.linkedin.com/in/peteseligman/ Connect with Ak: https://www.linkedin.com/in/akram-sabbagh/?originalSubdomain=au What we discussed: 1:29 Introduction to Akram Sabbagh. 3:51 The journey and history of Wayfinder Capital. 6:45 The idea and goals behind Second Squared, Australia's first search fund enabler. 10:19 Introducing the idea of “energy”, and the role intangibles, or “vibes” have in a search. 14:02 A breakdown of the emotional journey through a business, from when you're just starting out, to the point where you see growth and success, and the wall of frustration that you can eventually hit at the other end. 21:11 The different ways that a business owner might respond to a challenge, based on the stage that the business is in. 23:46 What can we do to break through a business that is plateauing out to achieve advanced growth? The personal and professional qualities that every business leader should be developing. 28:46 Q & A and discussion with the audience. 35:00 Pete provides a final summary and analysis of the presentation. Key Quotes: “Some of you might have had this weird experience of walking into two almost identical businesses on the same day, similar industries, etc. Yet the energy in one is buzzing and you say to yourself “wow, this is awesome”. You walk into the other one and it's like going into a morgue. They have similar market conditions, similar products, similar everything. But what's different?” “Succession is something that is really not thought through for a lot of people in the SME space.” “The Corporate Leadership Council did research several years ago, and noted that emotional engagement is four times more powerful than irrational engagement. So if we can get to the hearts, and the minds of the people we're working with, there's a four times better rate of connecting with them.” “Frustration If we don't do something about it leads to stress. As we all know, in this room, stress is not good. Our decision making under stress is never great.” “I'm assuming that no one in the room wants a business that's just plateauing out, but you'll see some of those and they could be really, really good opportunities to buy. Because they're just sitting there, waiting to be revitalised.” “When you're feeling frustrated, stressed, disillusioned, and so on, ask how you can reposition yourself? What are you focusing on? What do you need to do to personally refocus and to re engage.” “Some years ago we did some work with ANZ Bank, and got to understand the economic value of a cup of coffee. When they did the numbers, every cup of coffee worked out to be close to $2 million worth of loan opportunity for them. The lesson here is are you working in relationships? And can you measure them, so that you can see that the first 10 coffees may not go anywhere, but they all may lead me to the 11th. So that $110 on coffee will be well spent.” “One of the things we look for in searchers is that they don't have all the skills, but they have the self-awareness to know where to find the ones that they don't have.”

The first panel at the inaugural EtA Forum provided a lively and hugely interesting discussion, as success stories in both investment and search across Australia and New Zealand came together to share their thoughts on a wide range of topics. From the appeal of search to investors, through to the relationship that investors and searchers have, this panel is an essential guide to a truly unique relationship in investment. As the panelists agree, one of the most appealing features of being an investor in a search fund is that it's a rare opportunity for people in private equity to get “hands on.” Searchers and their investors tend to build a deep relationship, which is based on a mutual exchange of information. Searchers do generally know the things that they don't know, and investors are able to provide them with the networks and information that allows the acquisition to flourish. It can also help identify poor opportunities more quickly. Here the panel share a story about a search target that ultimately proved to be an option that the searcher didn't want to follow through with. Thanks to the network that the investor was able to provide, they were able to meet a business leader that had run a similar operation, determined the weaknesses in the business, and was able to exit the opportunity much more quickly than they might have otherwise. Finally, to round off the panel discussion, the group discussed the role of cap tables and how investors and searches alike can make sure they're giving every opportunity the look it deserves, leaving nothing on the table. For anyone interested in the sector, this panel was a true behind-the-scenes look at one of the key dynamics and relationships in the whole process. Connect with Pete: https://www.linkedin.com/in/peteseligman/ Connect with Luke: https://www.linkedin.com/in/luke-taylor11/ Connect with Jack: https://www.linkedin.com/in/jake-maisey-852b3944/ Connect with Doug: https://www.linkedin.com/in/douglas-cook-b5521b/ Connect with Orlando: https://www.linkedin.com/in/orlandoguerra/ What we discussed: 1:28: Introduction to the panelists 6:06: Jack Maisey explains the kind of support that searchers can expect from an organisation like Dorado Capital. 7:20: Doug Cook explains the attraction of the search investment world. 9:51: Orlando Guerra explains the benefits of having a partner in the world of search. 11:44: Jack and Orlando shares a case study to highlight the relationship between investors and searchers, and how they can be mutually beneficial to each other. 14:48: Orlando explains the cap tables and how to structure the research around companies while searching. 17:43: Jack explains the importance of appointing investor directors to the board. 18:23: Doug highlights his views on the role of the investor, transitioning into the operating phase, and the ongoing relationship they should have with the searcher. 21:45: Q & A with the audience. 27:16: Pete provides a summary and final analysis of the panel discussion. Quotes: Jack Maisey: “We have connections that could help the searcher and provide some more background…. It's valuable having boots on the ground and actually meeting the owners of those companies.” Luke Taylor: “I come from an operations and general management background, so didn't come to the table with the same depth of knowledge in the financial modelling space. And so I really linked into the support that my investors provided to iterate myself up to a point where my own financial modelling was able to cut the mustard.” Doug Cook: “I ask a lot of questions, and through that I learn a lot about the searcher, how they think and operate. Everyone's go strengths and weaknesses, so what are those, and how can I help balance those things out… and get out of the way when I don't really need to ask that extra question because they do know what they're doing.” Orlando Guerra: “It's advantageous to have a partner, as that gives you someone to bounce ideas off.” Luke Taylor: “It's an almost symbiotic journey, and the relationship between the searcher and investors is really critical.” Orlando Guerra: “One of the things I learned quite quickly is that there are a lot of things that I don't really know.” Orlando Guerra: “It's much more than money that you're receiving from investors. It's really the knowhow and the things that you don't know that you're leaning on them for. It was important for us to be able to build that big team that could cover a lot of different things at once.” Jack Maisey: “The cap table is super important for the investors as well. To be able to look at the cap table and see that the searchers actually have the people around them that can support them.” Jack Maisey: “That's one of the great things about searches. We're all in it together.” Doug Cook: “There are times where I would talk to the searcher every month, and then other times where we didn't talk for eight, nine months at a time, because he didn't have a need for my skillset. I'm happy to be involved and I like to have good visibility into what's going on, but it's the searcher that's actually in the business and running it.

The opening keynote at the inaugural EtA Forum last year was Tim Moore, the Director of Dorado Property and Dorado Capital. This was a fascinating and far-reaching opening keynote that really set the tone for an excellent day, and I thought the insights that came out of the presentation would be particularly interesting for anyone looking to make acquisitions via search fund. Tim not only has had experience in undertaking his own search, but has some exceptional insights into the operation and opportunity of the family office – a critical part of the search fund community. In his presentation he shares useful information on how entrepreneurs can engage with family offices, including where they prefer to deploy their assets, and what part of it is available for investment into companies (and how they think about that allocation for investment). Later in the presentation he shares some exceptional and practical ideas on how to make effective pitches to investors like him, which is certainly something worth saving to refer back to as you practice and perfect your own pitch technique. Another interesting part of Tim's presentation is a section where he describes the growth in funds. At the moment it's coming from a smaller base, but we're reaching the point where, by 2030, we could have as many as 30 funds launching each year, with $1.5 billion worth of capital available. This is not a small opportunity! All-in-all, this was an excellent, tone-setting keynote which kicked the EtA Forum off with insight and panache, and, as you'll see from the rest of the keynotes as well, made sure everyone left the event with valuable and actionable thoughts. Connect with Tim: https://www.linkedin.com/in/tcsmoore/ Connect with Pete: https://www.linkedin.com/in/peteseligman/ Register for the next Eta Forum Event, download speaker presentations or watch the video of this episode here: https://www.peteseligman.com.au/eta-forum-sessions What we discussed: 1:22 Pete introduces Tim Moore and his background. 3:28 Tim kicks his presentation off with the history of search funds – where it all started. 6:31 Next, Tim looks at the now, and discusses the amount of money invested into search funds and results. 10:54 Tim shares the key differences between the various types of investment pools. 12:22 Tim dispels some of the myths around what people think when they think of a “family office”. 13:56 Tim breaks down where the money in family offices go, and what form investments take. 21:42 To finish his presentation, Tim provides some valuable tips on pitching, and what family office investors want to hear. 26:50 The keynote concludes with an insightful Q & A session. 34:04 Pete wraps the episode up with some thoughts and analysis of Tim's presentation. Quotes “Last night over a drink I got the impression that the searchers feel like they need more of the returns. We more-or-less say ‘it's our money', and they respond ‘it's our business.'” “A lot of the questions I get from people are along the lines of ‘what am I investing in?' There are a lot of misconceptions about what family offices invest in, what their characteristics are, and so on.” “People do have the impression that family offices are oak-panelled board rooms, and older, grumpy businesspeople. But of course, they come in lots of different flavours. You're going to be speaking to a very broad range of people by age, stage level of advice, and so on.” “On types of private equity in Australia, people talk so much about venture capital. They sometimes don't put it in the private equity basket, but from an asset allocation point of view. There's three categories of private equity and venture capital is obviously one of them.” “You wouldn't believe how often you see news in the Financial Review about things being bought by private equity, because it just drifts past your radar if you're not paying attention to it, and then you forget about it, but it's happening all the time below the radar.” “It is extraordinary how you can have someone who has an encyclopedic knowledge of their business, great communication skills, and they come into a boardroom, where there is some magnetic attraction… and they just read through the deck line by line, which is a stifling and paralysing experience for the recipient. Whatever you do, do not simply read through your pitch deck.” “You talk to a CEO of an ASX 100 company, and you ask them how things are with the management team and inevitably they'll say to you something like “look, I've got a bit of a concern about this. We're doing a conversion to SAP next year, my CTO has never done that, and we need to work out how to bolster the team there. But then you talk to a small $20 million revenue business in the suburbs and you ask them the same question and they'll respond that they have everything covered with the four people on the executive committee. The point here is it's much better to talk about where there are gaps and how they're going to be remedied, and don't ignore the negatives. Talk about how you'll deal with them.” “By and large, for confidentiality reasons, tax reasons, all sorts of things, family offices do tend to keep a pretty low profile.”

Search funds are still in their early stages in Australia. For that reason, one of the big questions that those of us that are early movers in the space have, is around what the opportunity really looks like. That can be difficult to define with limited data, and this is why Jake Nicholson's presentation at our inaugural EtA Forum is so essential. Jake has done an incredible job to collect data on the local market, build comparisons between what Australia and the (more mature) US market, and draw analysis on just how deep the opportunity is for Australian entrepreneurship via search funds. The results should be very encouraging to everyone. As Jake says, there are three primary “ingredients” in defining a healthy market for EtA. There needs to be companies to acquire, capital to do so, and the right talent to both make the acquisitions and then run the companies as CEO. The data suggest that across two of those three metrics, Australia is primed to boom. Australia has many companies that fit the ideal profile of companies to acquire through search. Furthermore, while getting funding isn't guaranteed, there is an appetite to invest. It's only the third “ingredient” – the talent question – where we need some attitudes towards entrepreneurship to change. Australia does have some ground to make up there, both in terms of our social outlook on entrepreneurship, and within our education system. Nonetheless, despite the current roadblocks, there is good reason to be bullish there, too. Overall, Jake's presentation was deep and interesting, and instrumental to the EtA Forum being such a successful event. In fully breaking down and articulating the opportunity, Jake was able to present a vision for search acquisitions that should appeal to anyone with an entrepreneurial spirit. Connect with Jake: https://www.linkedin.com/in/jakenicholson/ Connect with Pete: https://www.linkedin.com/in/peteseligman/ Register for the next Eta Forum Event, download speaker presentations or watch the video of this episode here: https://www.peteseligman.com.au/eta-forum-sessions What we discussed 1:08: Pete introduces Jake and his background. 4:10: Jake starts his presentation on the research of search funds by defining the methodology of the research and defining search funds. 6:00: Jake highlights a research study by Stanford that found high rates of returns with search funds over the past 30 years. 7:10: On the question “why has it taken so long for search funds to get to this side of the world?” 9:28: Now, on to the big question: “is Australia a good market for EtA?” There are three primary ingredients for making a healthy market for EtA, so does Australia have them? 10:36: A summary of the common criteria that searchers use when looking for companies to acquire. 17:17: Finding capital – is there enough capital to fund search fund entrepreneurs in Australia, and where does it come from? 26:53: Finally, talent. Simply put, are there enough searchers in Australia? 31:30: Pete provides an analysis and further insights around Jake's presentation. Key Quotes “If you believe that you are an average searcher, then according to the Stanford study, you have about a 48 per cent chance of making money, which is a much (much) greater percentage than your chances of coming out on top with a startup.” “The status of search funds today in Australia is that it is still early days, but the trend line is moving in the right direction.” “For a healthy market for EtA, we need companies to buy, capital to fund the searchers and their acquisitions, and high-calibre CEOs to run the search, buy the business and operate the business as a CEO.” “Most acquisitions to date have been in services, you don't see a whole lot in construction or manufacturing.” “In the typical search funds story, the seller is a retirement age founder or owner, who doesn't have a succession plan and likes the idea of transitioning the business to a hungry younger operator who will carry on the legacy of that business and take it to new heights.” “When I launched SME ventures, I noticed that Australians are a very friendly bunch. You would accept coffee meetings with me and give me very encouraging words, but the only people who wrote cheques were the ones that had some prior tie to the space.” “There are several investors throughout the world who are private equity executives and have spent their lives investing in these bigger businesses and seeing all the smaller businesses with very attractive value creation opportunities. But, because of the structure of their firm, they can't do something about the opportunities.” “A search fund doesn't see consumer discretionary or raw materials, activity and private equity as a threat, typically.” “Early-stage investment activity is even greater in Australia than then in the US as a percentage of GDP. And this to me signals an appetite a willingness of investors to invest in high risk and entrepreneurial activities, which is part of what we need and one of the one of the big questions about new markets, and has been a frequent question about Australia is are investors too conservative to back ventures like this? This data suggests that that might not be the case.” "I've been very lucky to partner with a very few talented entrepreneurs in Australia, but I currently see talent as the bottleneck to the growth of the EtA and search fund ecosystem.” “One thing that's important is the correlation in people's perceptions of high status to being a successful entrepreneur. There's a higher correlation in the idea that entrepreneurship is a good career choice in the US than in Australia, and it's actually quite significantly higher, by about 10 per cent.”

Last year we brought you the inaugural EtA Forum, and were thrilled with the response. The idea was that we would give our growing and dynamic part of the Australian investment and acquisitions space a chance to come together and share some great insights, and the response was overwhelming. To help further spread the insights that came from that event, the content from the presentations will form the core of this season of the Next Step Podcast. As you'll see, this introductory episode is really meant as a statement of record. It covers some of the housekeeping that came at the start of the very first session of the event, and some quick insights on the purpose and value of the forum. This is a shorter episode, but I thought it was important to share the full context of the EtA Forum, to preserve its value for future audiences. As I mention in the introduction, investors and advisors alike need to understand that entrepreneurship through acquisition is understood as a viable pathway towards business ownership and success in Australia. It's a niche, certainly, but it's also one that more Australian entrepreneurs are finding success with, and it will continue to grow as an opportunity in the years ahead. Enjoy this podcast, and the rest in the series, and we hope to see you at the next EtA Forum, later this year! Connect with Pete: https://www.linkedin.com/in/peteseligman/ Watch this recording, download speaker presentations or register for the next EtA Forum here: https://www.peteseligman.com.au/etaforum What we discussed: 00:00 – Introduction to the podcast. 01:09 – ETA is a pathway to business ownership. 02:13 – Presentation from the EtA Forum begins. 06:13 – Our space is a new market. 08:07 – The core purpose of the EtA Forum – Networking. Quotes: “It's important for investors, both domestic and offshore, to know that this is a viable asset class and viable investment.” “It's important that advisors know that this is a great niche for them to build their own business so that our searchers and investors have all the support they need.”

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held in Manly Beach in Sydney, on Friday 16th September. In today's episode of the next step, I speak to Scott Middleton, who is the founder and CEO of Terem. Terem is a technology based business that provides tech product development support for big to small businesses across Australia and New Zealand, all the way from strategy to product to engineering and everything in between. Scott and his team have recently developed a JV structure whereby they partner with businesses typically small to medium type businesses around building technology that supports the growth of those businesses. And as such, has come across the search model in the last six to 12 months and has been really engaged, so much so that he's become an excellent supporter of the community and will be sponsoring the EtA Forum this month. He'll also be speaking at the event, on a panel about the various forms of search and will be giving us a description of the JV model that he and his team are bringing to market that leverages some elements of the search model, partnering with searchers to buy great businesses. Scott has got a range of experience from building his own computer game years and years ago through working on technology projects with VCs startups, high growth businesses, all the way through to government organizations like the ATO. So he's got a wide range of experience. And in some parts of the conversation, I find it hard not to end up down all sorts of rabbit holes. So it was a great conversation and I hope you enjoy it. www.etaforum.com.au Connect with Pete : https://www.linkedin.com/in/peteseligman/ Connect with Scott : https://www.linkedin.com/in/scottmiddleton/ What we discussed: 03:15 Scott gives us an insight into his background and how he got where he is today. 05:07 Scott tells us about when he was a kid, how he built and sold a game that was sold globally. 08:59 Scott discusses his experience dealing with corporate culture, big business, the bureaucracy in approval structures & processes compared with the agility of the entrepreneurial spirit. 17:03 Scott tells us how he has found the search space so far and what things resonate most in relation to the search model and search community. 24:14 Pete asks Scott if he has started to see an increase in opportunity in relation to the JV model he is building. Quotes: I've been an engineer working on some large projects, and I kind of bring all that together. I've also lost a lot of money. I've probably lost about a million dollars of my own money on let's call it - they weren't a bad idea - though just poorly executed is how I would put it. I have to learn decisions the hard way. Because I'm playing with my own money, not someone else's. That's really my background and why Terem came about. I just saw a real need to help organizations build tech products better, and help their teams perform better. The exciting thing about those big organizations is that there's really big opportunities attached to them. We've launched products with Qantas, for example, that have moved the needle on their share price, and gone to millions of people in the first week. We can push boundaries more, which we think is kind of necessary to make things work and make decisions faster and learn faster. When I'm investing, I'm looking at the stock market saying I'm investing in Company X, who's listed, because I believe in what they're doing in their market, not because I want them to be a VC. The way that we've observed to do it is not so much through an innovation lab. An innovation lab in a business is going to make incremental change on the edges, where you get disruptive outcomes in small teams, isolated from the day to day, freedom to operate. Get them outside the building, let them run separately, don't put red tape around them, let them do what they're going to do for their specific purpose, and you'll get much better success. What I like about the search community is it just kind of vibes with my approach, which is that really methodical considered, take out your downside, give yourself options, build your cash flow.

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held in Manly Beach in Sydney, on Friday 16th September. On this episode of The Next Step podcast, I speak to Grant and Ben from Judo bank. Judo has kindly offered to sponsor the ETA Forum, which is coming up next month in Manly. And it's exciting to have an opportunity to chat to them because I get their perspective on what they're seeing in the SME market, both in terms of acquisitions, debt funding and overall business operations in 2022. Judo was founded only about five years ago, and has grown rapidly into this market space which was effectively under loved by the bigger banks in the Australian market and they're providing a really bespoke approach to SME lending and cashflow lending, which is critical to the success of Search Funds and EtA in this marketplace. Without that debt package, it's almost impossible to make the search acquisitions and the search businesses work as investments and be successful for their operators. We're looking forward to seeing them and their team at the EtA Forum in September. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. www.etaforum.com.au Connect with Pete : https://www.linkedin.com/in/peteseligman/ Connect with Grant : https://www.linkedin.com/in/grant-erskine-9ba38a24/ Connect with Ben : https://www.linkedin.com/in/ben-tuszynski-96746912/ Learn more about Judo Bank : https://www.judo.bank/ What we discussed: 03:13 Ben tells us what's new at Judo and what they are seeing in the market. 09:40 Ben and Grant discuss the SME market in Australia and what is the most common thread amongst this customer base. 13:34 Ben & Grant give us their perspective on acquisition funding of businesses that are in the small to medium size. 19:35 Grant talks about what he's learned so far about search that makes it a good fit for a bank like Judo, and tells us about the characteristics of the model that resonate with him. 27:76 Grant & Ben tell us about their partnership with the EtA Forum. Quotes: But we always had the end goal in sight, which was really to build a business that became or was on its pathway anyway to becoming Australia's most trusted SME bank. . And that's what it's really all about, is servicing those SME customers, who just don't get the love from our competitors in the market. The most important thing to us is who we lend our money to. It's that resilience piece, that is the most common thread that we see across this customer base. And there's also a significant amount of innovation that you see in the SME market. And what we find is, small to medium sized businesses are able to innovate, and then eventually one day they might get bought out by a large corporate. But actually come and talk to us, and we'll discuss how we might be able to structure something up that works for everybody. And I think that's one of our advantages. We think SMEs are the lifeblood of this, not just the Australian economy, but also for innovation and growth, which we're really excited to support. Over the last 12 to 24 months, and everyone's been speaking about this for probably years, if not a decade, is this transition of baby boomers out of their businesses into whether retirement or semi retirement and the need for this transition of wealth to happen. So we're seeing a community rather than an individual by a business, and the ideas and networks in order to bring that business to success, and then just the quality of information and analysis that sits behind the deal. There's no cookie cutter approach to this part of the market. And I think it's such a key thing that needs to be understood by a bank or banker is that you need to really take a bespoke approach to every single transaction because the searcher will be different. We're not plugging it into an algorithm to let the computer make a decision for us. We're putting highly experienced bankers in front of our customers, or brokers or whatever it might be, to ask the right questions, get hopefully good answers, and then make a decision. There's going to be lots of really good businesses whose ownership lifecycles are coming to the end. And they're about to be bought out by these great entrepreneurs that are going to take their business to the next level. So we're really just really excited to go meet and support the ecosystem that's been built out.

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held in Manly Beach in Sydney, on Friday 16th September. In this episode of the next step, I speak to Tim Moore, who is the Director of Dorado capital. Tim originally was a self funded searcher back in the early 2000s. And then after exiting the business that he originally bought, has then moved on to invest in a range of activities, including property infrastructure and small business. More recently, he's been an active investor in the search fund market in Australia and also internationally. Recently, Dorado also raised the first Australian funds focused on search funds, and they raised $10 million with capital and have already deployed a proportion of that over the last 12 months. At the EtA Forum in September, Tim is going to deliver the keynote speech in which he will provide an update on the state of play of Search in Australia and New Zealand, giving us his perspective as an active investor in the marketplace and what he sees now and into the future. I had a great time catching up with Tim, to learn a bit about what he's been up to in the last couple of months and have a chat about what we each expect everyone to be able to get from the day we spend together at the EtA Forum in a couple of weeks time. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Tickets available at: www.etaforum.com.au Connect with Pete : https://www.linkedin.com/in/peteseligman/ Connect with Tim : https://www.linkedin.com/in/tcsmoore/ What we discussed: 03:23 Tim tells us what he has been seeing in the search market recently. 06:32 Pete asks Tim where he sees the balance struck at the moment between investments, investors available to fund and entrepreneurs available to execute. 10:21 Tim discusses what he is seeing in relation to new entrepreneurs that might be coming to market in the next few months. 14:19 Tim gives his take from an investor lens on what more can be done in the Australian market to make sure that there is domestic support. 18:58 Tim tells us what we can expect from his session at the EtA Forum and what he hopes will be the key takeaways. Quotes: I think things have progressed so much in the last two years, the last year, that it's a great cause for optimism. But the reality is, this is still a very fledgling asset class. And there's a long journey to go. It'll be a long time before we do start to scrape the bottom of the barrel in terms of businesses available to buy. It feels like there's still a long way to go there. The investor market domestically here was struggling to keep up because there just wasn't the knowledge about the asset class or the appetite, really. Whereas now I feel like we've got quite a buoyant domestic investor group that's keen to try and find searchers to back. If you think about the period, not very long ago, when some of those people were raising money, they were going and sitting down with family offices who were licking their chops, having had venture cap funds, and share market portfolios performing like rocket ships, and congratulating themselves about how smart they were. A lot of that's changed. I think that we're starting to have the pandemic move slightly into the rearview mirror. You either get started now and have a good crack at it before Christmas. But if you really don't get your act together in the next month or two, don't waste your time in November, December, because you probably won't get anyone's attention. If you don't want to Big C suite job in a big major organization, if you're not walking into a major family business your family owns, and if the whole VC tech world sounds a bit risky, search is the absolutely logical place for you to hit.

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held in Manly Beach in Sydney, on Friday 16th September. In this episode, I speak to Ak Sabbagh. Ak is Director and Coach at Beckon Business, Co-Founder of Second Squared and Managing Director and Co-Founder of WayFinder Capital Managers. Ak works extensively with entrepreneurs and business owners in the Mid-Market Enterprise (MME) sector across Australia. For over 20 years his work has primarily focused on sustainable business growth, alignment of commercial strategy with partnership/shareholder aspirations, structuring for growth (including setting up of boards and governance processes), acquisitions, and succession (MBO, outright sale, etc). Ak co-founded Second Squared in 2018 to develop the ecosystem and accelerate the development of the Searcher Community in Australia. He mentors and advises many of the existing and imminent Searchers throughout their searches and acquisitions. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Tickets available at: www.etaforum.com.au Connect with Pete : https://www.linkedin.com/in/peteseligman/ Connect with Ak : https://www.linkedin.com/in/akram-sabbagh/ What we discussed: 03:24 Ak tells us how the year been so far his ventures in the search fund 09:38 Ak gives us his view on the current building blocks for search and where he sees the challenges and opportunities 17:00 Pete asks Ak what we can expect to hear in his session at the EtA Forum 20:35 Ak discusses the importance of the human factor in the owner/operator's journey Quotes: It never ceases to surprise me how much that cultural element translates because even when I'm speaking to people in South America, or Europe, or, or Africa or wherever, there are those common threads around that openness, that abundance mindset, and that willingness to share. We had to keep reminding ourselves that we were one year into something that was 30 years old, in a market which has a huge cultural focus on entrepreneurship that's different to the one in Australia. But having said that, I think we're starting to see those bits of infrastructure coming together. Certainly the searcher community itself is growing. The other side of the equation is that business is a human experience. We often go to the numbers as indicators of what's happening. But rarely do we get the chance to go to the human experience and really tap into the energy of the human experience, that could actually potentially indicate to us what's going on in the business, probably even more so than the numbers. And how can you link that to emotion and the energy of that time? And if you're aware of that, how can you leverage that energy for your betterment? And suddenly, they're sitting on this business five years, six years down the track, which is, and we hear it all the time, if it wasn't for the staff, and the clients wouldn't have been a wonderful place. That human experience, that is really the piece that's missing. The solution won't come from the numbers, it will only come from talking about it with a real human being at the other end. So it's that relational piece, which is really, really powerful and important. The important thing to understand about payback is that generally, the mistake that's made is people take out too much of the business, and they forget to reinvest.

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held in Manly Beach in Sydney, on Friday 16th September. In this episode, I speak to Tom McGhie from Fulcra Financial, an advisory firm focusing on providing Debt Solutions for Australian businesses and their owners. I've had the pleasure of working with Tom on a couple of deals over the last couple of years. And one of the things that I find really valuable about the process and approach that he takes is the ability to translate from the business owner and operator to the bank. Tom has been involved in the search community as it's grown and has been a supporter of a number of transactions on that front. He will also be joining us at the ETA forum next month in September in Manly will be sitting on a panel and contributing his expertise and his experience to that conversation on the day. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Tickets available at: www.etaforum.com.au Connect with Pete: https://www.linkedin.com/in/peteseligman/ Connect with Tom: https://www.linkedin.com/in/tommcghie/ What we discussed: 03:13 Tom gives us an overview into his background and career to date and how he came to help clients navigate the world of debt 10:16 Tom tells us how he first came across deals in the search fund and eta space and how that has evolved over the last couple of years. 15:25 Pete asks Tom about what he is seeing coming to the table at the moment and what he sees as the main characteristics of those deals from a debt perspective. 20:07 Tom discusses how extra layers of credit value are resonating inside the banks. Quotes: Capability across the industry has shifted a lot, the focus of how banking works has shifted a lot, arguably, positively or negatively. But ultimately, the navigation from a customer's perspective has not gotten any easier. And I have to say that there's no one in there trying to do a bad job or trying to make life difficult for a customer or a business owner. There's definitely that interplay of real life experiences required to understand how things practically pay play out in the real world. The absolute first element to these transactions, which is so important is, if I kind of think back to sort of our five C's kind of framework, which, I guess is quite a common framework, but essentially, character being the top right, we're dealing with somebody that has got good experience. That ability to be coached, seek advice, seek input, is the fundamental foundation of what makes for us a bankable transaction. We want in the world of debt, to look back in history and say, that's doable, it's repeatable. And it's going to happen again, and simply you structure debt based on proven business models that essentially are all going to repeat and can be repeated, but most importantly, will repeat. It does really start with that commercial element and lining up, then all the other pieces around it, not limited to what I've just described, to make a transaction really work. So really thinking about how is this business going to perform in a downturn, perhaps that we might have, or, ultimately that they're going to grow this business in all weather. But I think it's going to be really interesting over the next few years to see how that appetite the combination of appetite and capability from the banks to be funding these deals, which kind of sit in that gap like they're too big to have a simplistic approach, which can work very, very well for much smaller deals.

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held in Manly Beach in Sydney, on Friday 16th September. In this episode I speak with Rob Gaunt, CEO of ACE Training. Rob started his career selling photocopiers and worked his way up to COO. He then obtained an MBA at Macquarie Graduate School of Management before launching his search for a company to acquire in partnership with SMEVentures, a platform for search funds in Australia. At the EtA Forum next month, Rob is hosting a panel that will focus on the various “flavours” of EtA that are available to both Entrepreneurs and Investors alike. He will have representatives from a few common models and another from a novel approach to the task. It should be a really interesting session that provides an opportunity for the audience to hear directly from people who have walked each path and learn more about the structure that could suit them best. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Tickets available at: www.etaforum.com.au Connect with Pete : https://www.linkedin.com/in/peteseligman/ Connect with Rob : https://www.linkedin.com/in/rob-gaunt/ What we discussed: 03:49 Rob tells us how things are going at ACE Training a year into the acquisition 08:24 Rob discusses the approach to the panel session “The Flavours of Search” coming up at the EtA Forum 15:35 Pete & Rob talk about what may influence an investor's decision around the structure they follow 17:30 Rob discusses why a certain model may resonate with an investor more than another 18:48 Pete & Rob tell us what the Search community can expect from the EtA Forum in September Quotes: The big shiny thing that everyone wants to chase is growth and how do we scale this but sometimes the real value is in setting that foundation first. So you've got that springboard to then go and achieve what you want to do. There is no right or wrong way to do this. There are just different ways and people's strengths and backgrounds match up to different components of that. It's not only what structure do I think might suit me, but it's also what structure might suit me in this market as opposed to next year's market? Inevitably, everyone wants to know, how did you raise the capital? It's the first question every searcher asked. And it is, in my view, absolutely, the wrong question to be asking If you've got a good idea, or you've got a good kind of approach, the capital will come. I think that the most important part of this is understanding why you gravitate towards one of these different models. And irrespective of the one that you choose, how are you looking to support yourself through that process, and, you know, each model has slightly different components to it. And you need to fill those in in different ways. Someone who really understands their core capabilities and the way that they want to go about it, it's going to stand out from someone who hasn't done that work. We all looked at the problem differently. And we all got elements of it wrong. And we learned more from what we got wrong, than what we got right. It's nice for us to be able to have this type of conversation in a public forum and say, hey, you know, here are some of the things that we learned and answer some of those questions. It's fantastic to see the model doing so well in Australia. I feel very lucky to be part of it.

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held in Manly Beach in Sydney, on Friday 16th September. In this episode I speak with John Liston, Managing Director and William Bracewell, Head of Advisory at Liston Newton Advisory (LNA), who have kindly offered to support the EtA Forum with sponsorship. It is great to have them on board, given they are such dedicated supporters of the Search and EtA community in this region. This conversation was a good opportunity to hear a bit about the background of LNA and also their perspective on the SME market in Australia, in particular those deals and businesses backed by the Search Fund structure. All great deals and business endeavours will have a network of reliable advisors sitting on the sidelines providing the support, guidance and invaluable advice required to make good progress. LNA is one of those advisors whose clients benefit from years of deep experience and a wide ranging perspective on small and medium business operations. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Tickets available at: www.etaforum.com.au Connect with Pete: https://www.linkedin.com/in/peteseligman/ Connect with John: https://www.linkedin.com/in/john-liston-6b8bb147/ Connect with William: https://www.linkedin.com/in/william-bracewell-74257870/ What we discussed: 02:51 We learn about Liston Newton Advisory and how they help business owners on the growth journey. 06:31 John tells us how he got involved with the search community. 12:45 William talks about the key issues that arise when buying, owning and operating a small business in Australia. 14:43 John & William discuss the opportunities and challenges to look for from a growth perspective. 24:30 John talks about the importance of getting the new structure right in the first 100 days. Quotes: We trace that back to why as a business owner do they get into business. Generally, it's because they want to build their own wealth, they want to build their family's wealth. There is this gap in the middle where there are some growing small mid tier businesses that really need good advice and good support. And it's kind of that juggle between whether or not they can afford to either get it in house or pay for the big guys, or whether or not they need to kind of manage it themselves through the process. You have to get your data right, get your ducks in a row. And it's a one to two year journey you should be going on before you even think about taking it to market. You want to really understand what sort of sale you want it to be. So as an asset sale, is it a share sale? So yeah, it really starts from just the first thinking, I want to get into this, and then you sort of build from there. I think a lot of CEOs and people that come on board with the owners, they really don't understand the level of workload that it takes to own a business. I find a lot of businesses that we work alongside with, they've gone in with this massive theory of I'm going to buy it today. And it's going to be two, three times the size within 12 months. And I mean, that sort of does lead to a lot of decisions that probably aren't for the best in the business world. And so the first six months is yet again, just trying to understand how the business is run and making sure that you can get things in place. Can I get the data I want as soon as I want it, because, often you've probably bought it at a decent multiple, because a lot of that stuff is not quite as efficient and not quite as modern as it should be. You've got to update the systems and the software and the processes, but you've also got to find out, okay, who's gonna step up now within the business and actually kind of take control this entire function, because often, they've sort of been able to fall back on the outgoing vendor who's done a bit of everything. So you've got, you know, the incoming CEO who's kind of bought this business, and now they're, they're just bought themselves a job, essentially. So you're taking a step back, and saying don't worry about pushing that growth as high as you can, in that first 100 days, just take that step back. It's understanding if there's a particular problem, or there's a particular service that one of our clients needs, who can we trust?

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held in Manly Beach in Sydney, on Friday 16th September. In this episode I speak with Andrew Locke, Co-Founder & Partner at Ambit Partners. Andrew is an experienced investor, advisor, and board member. Before founding Ambit Partners, he worked as a Private Equity investor and management consultant, focusing on high-growth and emerging markets. At the Forum, Andrew will be hosting a session to explore the unique aspects of Search Funds as an asset class, when compared to other options, including Private Equity, Venture Capital and listed equities. He's already developed a deep experience in global Search Fund markets and in this episode he shares some of that experience with us, including what he is seeing in a range of global markets right now! Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Tickets available at: www.etaforum.com.au Connect with Pete: https://www.linkedin.com/in/peteseligman/ Connect with Andrew: https://www.linkedin.com/in/andrewtlocke/ What we discussed: 02:46 Andrew fill us in on how things are going at Ambit Partners 05:43 Pete asks Andrew what he is seeing more of - partner searches or more solo searches? 07:28 Andrew discusses what he has seen in the last 24 months in relation to the expansion of search as an asset class globally 09:36 Andrew talks about how fundamentals translate to new markets, not only across language boundaries, but also across cultural boundaries 13:15 Andrew tells us what we can expect from his session at the EtA Forum 20:23 Pete asks Andrew what are the biggest detractors that might stop an investor from getting involved in search? Quotes: We're generally comfortable investing anywhere where there's a really talented searcher, search pair, and a compelling commercial argument for the country itself. It's a lot of highs and lows, successes and failures every day. So it's it's nice to have a partner I think, just to manage that. When you're going for the first time in a new market, it's very unlikely you're going to find a partner at the right time by person, right skill set, it's easier to find that in a more crowded market, where there's more people who want to search to find that appropriate partner. So we're comfortable doing both, but we certainly see kind of in our day to day the advantages of partner search. It's great to see the type of person that can go into search and the type of geography that investors have appetite for expand and grow beyond the original kind of boundaries in North America and Western Europe. So we say that the best searchers they're far more exposed to any geography than we are as as an investor with a portfolio of investments. Each geography each country, and each economy has a different set of characteristics that makes different types of businesses more attractive in that space. Even if you can speak the language doesn't mean you can speak the culture. People think that because you're speaking the same language, that actually everything's just going to translate perfectly. But there's a very different culture, and also very different business culture in many ways, between Australia and the US, for example, but even between Australia and various states within the US. If you do want to build your own private portfolio, make sure that you understand how to access kind of the best deal flow essentially to the top, top talent and making sure that you're building a great portfolio for yourself, and then you bring them real value add to the search, that will attract the best searchers to you. So many businesses fail, or they try to find a product market fit. That's why startups are so so difficult.. We get to work very closely with the searchers to understand their quality as well, and how we see them as CEOs post acquisition. So a lot of value is actually exposed and directed during that search period And we're seeing more diversity in the profile of searchers. So older searchers, more operational experience. So it'll be interesting to see how those profiles work out.

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held in Manly Beach in Sydney, on Friday 16th September. In this episode I speak with Richard Hernan, Co-Founder and Managing Director at Broadleaf Financial Group. Richard runs the day to day operations of the Broadleaf Financial Group including engagement, financing and project management of the acquisition of equity stakes in financial planning businesses. At the Forum, Richard will be hosting a session focused on the Four Seasons of Search, in which he'll walk through some of his experience navigating the Searcher journey from search, through acquisition, into operation and ultimately exit. It's a varied, challenging, exciting and rewarding journey, so we're looking forward to sharing Richard's experience at the Forum in September. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Tickets available at: www.etaforum.com.au Connect with Pete Connect with Richard What we discussed: 3:03 We learn about Richard's background and experience in the corporate world 09:32 Richard tells us what led him to go down the path of buying businesses 16:46 Richard discusses the topics for his session and what we can expect to hear from him at the EtA Forum 20:33 Pete and Richard discuss the many different hats worn during the entrepreneurial journey Quotes: The whole time there was this juggle between, do I start something? Or do I buy into an existing business? I felt like I'd built a background where people would trust what I do. And I had a track record of actually delivering, and not not just talking, so from that, I did a lot of research around the structures of how you finance that sort of business. I sort of had this eureka moment of, oh, well, I'll just do this. This will be easy. If you don't enjoy the climb, you're never gonna make it. You actually really need to enjoy that struggle and get maybe not enjoyment, but fulfillment out of that struggle. There's a lot of lessons there that I think people can look at what I did and maybe hopefully not make the same mistakes. Talking around here's what I went through, you guys don't have to do the same things. Here's the resources that are out there that are fantastic on the funding side. In our model we never plan to completely exit the business, we have a wide range of shareholders, so people can get on and off the bus at any point. And as we have next generation leaders coming through, often it means that we will sell down some to make sure that there's an ideal point where people are incentivized to be genuine owners of the business. We refer to it as hats now. What are we wearing at the moment? And there's this hat dizziness if you're doing all sorts of different things.

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held at the Manly Pacific Hotel, on Manly Beach in Sydney, on Friday 16th September. In this episode I speak with Michael Chew, Managing Director at Flywheel Effect. He is leading a self funded Search based in Melbourne, Australia and will be hosting a panel at this year's EtA Forum. The focus of Michael's panel will be deal structuring, which is a topic that quickly becomes an important skill set for all Searchers to acquire. No two deals are exactly alike and there are definitely no two vendors who have the same needs, scenarios nor aspirations! So how is it best to attack this challenge, multiple times, for multiple opportunities throughout your Search? Michael will be exploring this with a panel of experts to deliver the audience some food for thought on their next deal. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Tickets available at: www.etaforum.com.au Connect with Pete : https://www.linkedin.com/in/peteseligman/ Connect with Michael : https://www.linkedin.com/in/michael-chew-3028b61/ What we discussed 02:40 Michael gives us an update on his experience over the last 12 months running his own self funded search 05:29 Michael tells us what he is currently seeing in the market 08:43 Pete asks Michael what he has planned for the EtA Forum panel in September and what kind of approach he is going to take with the panel discussion 12:52 Michael explains how he engages with vendors in the market and the dynamic of different deal structures. 16:01 Pete & Michael discuss the importance maintaining and managing the relationship during deal structuring 24:55 Michael tells us why attending the EtA Forum is important for him and what he is most looking forward to Quotes: It gives them a chance to reflect and say, okay, maybe we should do something and they spend the next six months kind of getting ready. Sometimes they could use someone to help them with that. One of the things I'm learning personally, this is more about my journey and growth is that you can't have a perfect business. And I knew that early on. But what it means for me in real terms now is you've got to find the things you've prepared to live with. As long as I'm transparent, I feel like I've not broken the relationship with them, and vice versa. I'm happy for the competition, the competition is going to be there anyway It really just comes down to timing and kind of fit that determines whether you get a deal done. Our main objective is to share insights with people who are in the search process for how you can go about managing the different parties that are involved, and managing risks and managing value. I certainly think there's an education piece for sellers and it's not comfortable for them to start but you've kind of got to help them understand why it's important. This isn't an abnormal situation, this is all normal part of this process. And you can be comfortable that you're not being exposed unnecessarily. It's having really plain English conversations about what's important to each party in a way that helps them understand the other person's side. And it's that work and through time that builds the relationship, because it's more than just shaking hands and having your coffee, it's actually getting into the details. It is a relatively lonely space, and just having real interactions with the community is by far my most important driver for attending the events. I have no doubt there'll be lots of insights and learnings and new people that I meet, which will influence me.

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held at the Manly Pacific Hotel, on Manly Beach in Sydney, on Friday 16th September. In this episode I speak with Paige Kohalmi, Founder at Greenstorm Capital. She will be hosting a panel discussion at the forum, with a focus on how Searchers can make their deals more backable… and find those backable businesses in the first place! Paige will interrogate a panel of investors to learn exactly what they're looking for in a deal and how best to get them over the line. Paige is six months into her own Search and has recent, relevant experience sourcing, assessing and pitching potential deals to investors, so she is perfectly placed to get to the bottom of investor expectations for the benefit of the Forum audience. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Tickets available at: www.etaforum.com.au Connect with Pete: https://www.linkedin.com/in/peteseligman/ Connect with Paige: https://www.linkedin.com/in/paige-kohalmi/ What we discussed: 02:55 We learn about Paige's background and how she became a searcher 06:51 Paige discusses the learnings she has extracted in the last 6 months 11:25 What can we expect from her panel session at the EtA Forum? 20:24 Paige tells us about the different methods of engagement she's been using with investors 24:05 In what ways will the Forum in September be useful to the search community? Quotes: I think a big learning has been, how to use the different investors that I have on board and the different people within the community at large and where they can come in and be useful at different stages as well There's another part of me that kind of thinks that rite of passage is something that's almost necessary as part of your evolution as a searcher as you're thinking through these things, and probably makes you stronger for it. What has definitely evolved in the last six months is getting a much better understanding of how to come up with that perfect deal. That is that unicorn that kind of suits everybody. The key message there is that there are multiple ways to look at an opportunity and consider a deal. And not only that, but there are different levers that can be pooled and changed and dynamics of that deal structure that can make it more attractive, and or less attractive, and how you can change that. Because you do have to, as the searcher, balance all of these different opinions and take them into consideration. So you don't want to get through the process and then not have that support at the end of the day. And also being reflected back to myself as well and constantly checking in with - is there still a deal that that I want to back myself in and that I want to potentially relocate my family for and change my life. I think that community pot has just it gave me the confidence first and foremost to even do what I'm doing.

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held at the Manly Pacific Hotel, on Manly Beach in Sydney, on Friday 16th September. In this episode I speak with Luke Taylor, Founder at Acheron Capital, who is hosting a session focused on the unique role of Investors in the Search Fund model. It's a great opportunity to hear a bit about Luke and his journey in Search, along with his thoughts on what he'll aim to get out of the panelists during his session at the Forum. He reflects on his own experience working with Investors who are very much motivated to support Search, which inherently attracts hands-on investors, who like to give advice, give back and mentor Searchers through their journey. And from the investors perspective, Luke comments that there's a real opportunity if you're an investor and considering funding search to work alongside somebody, to give them the benefit of your knowledge. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Tickets available at: www.etaforum.com.au Connect with Pete: https://www.linkedin.com/in/peteseligman/ Connect with Luke: https://www.linkedin.com/in/luke-taylor11/

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held at the Manly Pacific Hotel, on Manly Beach in Sydney, on Friday 16th September. In this episode I speak with Jake Nicholson, Managing Director at SMEVentures. I asked Jake about his experience with bringing a search fund based business model to a new market and why he chose Australia. Jakes tells us that in all the markets he explored, they needed to line up with the 3 pillars of capital, deal flow and talent. The answer came clearest and quickest from Australia. You can hear more from Jake at his session at the EtA Forum as he reveals how the Australian market is doing compared to the US and how we can identify some early indicators of where success and failure might be. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Forum tickets available at: www.etaforum.com.au Connect with Pete : https://www.linkedin.com/in/peteseligman/ Connect with Jake : https://www.linkedin.com/in/jakenicholson/ Pete's first podcast interview with Jake : https://www.peteseligman.com.au/blog/search-funds-101-with-an-industry-veteran What we discussed: 03:53 Jake talks about the process of bringing a search fund based business model to a new market 11:16 Jake tells us what he is currently seeing in relation to the talent in Japan 13:03 Pete asks Jake his perspective on Australia when it comes to search fund, and is it an environment that's appropriate for search fund activity? 14:47 Jake talks about what we can expect to see from his session at the EtA Forum and the comparison work he is doing with US market. 21:06 Pete discusses potential challenges in Australia right now and in particular, talent. #capital #search fund #dealflow #searcher #australianmarket #talent

This year the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum will be held at the Manly Pacific Hotel, on Manly Beach in Sydney on Friday 16th September. In the lead up to the event, I will be interviewing the speakers and moderators to give you some insight into the experience, capability and knowledge that will be on offer when we all come together for the first time. In this first episode, I interview Jake Nicholson, Ak Sabbagh, Michael Chew and Nick Bamford. These are the guys whom I've been working with over the last few months to bring the EtA Forum to life, so what better way to start this Season than with a chat to them! I get their thoughts on Search / EtA in Australia and what they hope to achieve through the Forum itself. Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved. Forum tickets available at: www.etaforum.com.au

Steve Ressler is an entrepreneur and an experienced investor and advisor in the Search Fund space. He's originally from Ohio and presently based in Washinton DC. Steve was attracted to the Search Fund model because it had similarities to private equity, where you buy great businesses or invest in one at a fair price, but also having the responsibility of an entrepreneur, where you reform and manage a business to reach new heights. Steve is now backing over 30 searchers and has followed on into over 30 individual acquisitions in the small business space in America. In this episode, I had an interesting conversation with Steve. Having heard of Steve's experience and background, I used this opportunity to ask him a lot about the investor's perspective; what do investors look for in a good Searcher? What do Searchers typically learn during their Search Phase and into their operation phase? I gleaned some insights from his experience that can help anyone that is thinking about coming to Search and the ways in which they can test whether or not it might be a good fit for them. Show Notes: 02:46 – Steve talks about his history from being a government employee to being involved in startups, and how he got into the Search space. 05:41 – Steve talks about his experience in dealing with other co-investors in the Search space, and having invested in different kind of businesses such as first-generation businesses and talks about the difference between private equity and the Search Fund model. 11:48 – Steve shares his thought about typical things that he is looking for a Searcher in which he could determine whether or not that person is going to have a successful time being a Searcher 15:52 – Steve talks about what Searchers learn during the Search Phase and operation phase, and what are his insights and experience from these phases in the search fund procedures. 29:37 – Steve talks about the skill set that a Searcher must-have, and he shares his tips for new emerging markets that would make sure they are on the right path for growth. Connect with Pete: LinkedIn Connect with Steve: LinkedIn

Ahron Oddman is the CEO of PSS, a small business he bought in early 2020 that provides software and learning on demand for school students in America. Ahron has a diverse background, including spending 15 years in the military as a Marine and five years working in sales for a startup. He's also done an MBA at Harvard. Through all of that experience, he concluded that the next step for him was to commence a Search. He did a self-funded Search in late 2019 and acquired his business in early 2020, an interesting and challenging time as the world was dealing with the start of the COVID 19 pandemic. In this episode, we dig into Ahron's journey and how he came to Search in the first place, where he thinks his attributes and aspirations were a good fit for the model, and a little bit about his experience during the search process. We also discuss some of the lessons he's learned during the first 18 months in the hot seat running the business that he acquired. It's a great conversation. I enjoyed speaking to Ahron. I look forward to catching up with him again in another 12 months when his business continues to grow and even starts to launch some new products. Show Notes:02:03 – Ahron talks about his journey coming to Search, coming through the military, and getting a degree in business.11:29 – Ahron talk about what are the necessary skill you must develop if you're planning to start a search in a couple of years, such as Sales, Operation, Accounting, etc.17:24 – Talks about a leader's standpoint in changing operation, to not have a debate but rather an interactive conversation on what are the steps that would take the business to new heights.19:26 – Ahron talk about his business and how he ended up buying the company.28:03 – Ahron talk about taking steps in the Search process and not just waiting on a perfect business and having another opportunity to pass by.Connect with Pete: LinkedIn Connect with Ahron: LinkedIn

Alex Simmons is the founder of Voyager Equity, Australia's first traditional Search Fund launched in early 2019. Before launching that fund, Alex was a manager with Partners in Performance in Sydney and prior to that, an investment manager in the UK. He's had some interesting experience across management, consulting, and also private equity. In this episode, I get Alex's perspective on the search phase as he prepares to complete an acquisition later this year. We discuss in this conversation how he's used a steady approach to ensuring that he doesn't just buy any business, he wants to buy a good business with which to build value.Alex gives us the highs, the lows, some of the challenges, and also talks through some of the attributes that others might need to think about if they're considering Search for themselves. I hope you enjoy it. Show Notes:01:44 – Alex talks about how quickly you can connect with people in a range of other markets. How culture affects different kinds of markets, and how a lot of things might work in this country but don't work in other countries.04:24 – Alex talks about how he got involved in the search and what really took him to the point to decide that it is the right path to take for himself and what are the important things you need to ask yourself before taking the searchers path.11:34 – Coming to the end of his search phase, Alex talks about his experience and some key take-outs, good and bad, that might help reflect what he's been through in that search journey and what he would tell people considering that in mind.16:57 – Alex talks about his expectation coming to the search on the marketplace in terms of vendor and vendor response and his current perspective of the vendors in the Australian market and the market itself. 26:09 – Alex talks about his priorities what he would be focusing on in his six to twelve months of acquisition.Connect with Pete: LinkedInConnect with Alex: LinkedIn

Paul O'Farrell is an experienced banking professional and chartered accountant with over 30 years of international banking and risk management experience with companies such as PwC, National Australia Bank and Bankwest. He has an in-depth understanding of the issues facing businesses when applying for finance and a strong network of relationships throughout the banking industry. Paul's blend of corporate banking, credit risk, and business assessment across a range of industries provides an interesting perspective for those looking to be proactive with their financial position and also their banking options, including funding for growth. It was really fun talking to Paul. We had a chat about the Australian debt markets and what they mean for small businesses. He helped me understand the lens that banks apply when assessing debt and lending for small businesses. And he also discussed the ways in which you can integrate the debt process with the rest of your search and acquisition processes to remove any perceived hurdles in leveraging your acquisition. Debt can be quite an unfamiliar thing for a lot of people that are considering search or are already going through a search process because borrowing money for a small business is quite a unique process. It's important to make sure that you understand it's not as much of a hurdle as what you might first perceive. It's actually something that can really supercharge your deal and also help with the returns from an equity perspective. Show Notes:02:05 – Paul talks about his background and experiences and what exposed him to the search fund model. He also talks about the succession aspect of the Australian market as the prior generation (Baby Boomers and older Gen X) will have their retirement in 5 to 10 years.06:20 – Paul talks about his perspective on small business lending and small business debt markets in Australia, and what bankers are looking for in a searcher and the business that he is operating. 16:57 – Paul talks about how much of a hurdle debt is for small businesses and how the search process will put you at an advantage over others. 28:27 – Paul talks about what should be the right thing to do for those people starting their search journey but are not very familiar with the debt process from a business perspective. Connect with Pete: LinkedIn Connect with Paul: LinkedIn

Nima Sedaghat is the co-founder of Wayfinder Capital, the first institutional fund of search funds and searcher-led transactions in Australia and a partner of Australian law firm HWL Ebsworth, a full-service commercial law firm with offices all around Australia. He's been advising business owners, executives, Australian and foreign investors, as well as sponsors on restructures, mergers, acquisitions, and investment transactions for almost 15 years. Since 2017, he's been active in the Australian search fund ecosystem. He was introduced to the search fund model by a well-known person in the Australian search community Nick Bamford. He has continued his journey in search and met a lot of interesting people in the community. In this episode, Nima shares with us his knowledge not only in relation to legal and structuring issues but also in relation to the Australian search fund ecosystem. In this conversation, I had a great time getting into a bit of the nitty-gritty detail from a legal perspective in relation to the search fund structure. This is something that can be an unnecessary hurdle for those people thinking about search as a career path. Trying to consider the legal and tax implications of the search fund structure can be daunting, so it's great to know that there are people in Australia that have considered the application of the commercials of a search fund from a legal and tax perspective. It's really great to have people like Nima in our community who are helping people come to market. I hope you enjoy the conversation. Show Notes: 02:08 – Nima talks about his previous career and how the Search fund model was introduced to him by Nick Bamford who is a well-known personality in the search fund community here in Australia. 07:25 – Nima talks about the key attributes of the search fund structure from a legal perspective, the Australian search fund structure itself, the investor's rights, and the technicalities of tax implications on searchers in the Australian market. 16:05 – Nima talks about the foreign investments into the Australian-based search vehicle and what are the factors that would affect the Australian market and the hurdles that it is dealing with. 18:16 – Nima talks about the search community, the people he met along the way, the current activities that the Wayfinder Capital is working on, and how local investors give comfort and confidence to searchers in the market.26:30 – Nima discusses the next stage for the Australian market, what to look forward to in 2022 and how raising awareness about the model would greatly affect the community. Connect with Pete: LinkedIn Connect with Nima: LinkedIn

Frank Versace is the Chief Risk Officer at Judo bank, one of Australia's newest banks. Judo is taking on the long-established big four banks in the Australian market, with a focus on Small to Medium Businesses... and they're doing a great job at it, too!Through his broad banking experience and first hand involvement building Judo, Frank has a wealth of knowledge and insights in relation to Small Business Lending, including the things that Searchers should consider when preparing for those initial discussions with a bank.I was excited to have Frank on this week's podcast because of the clear overlap between Judo's target market and the kinds of businesses that Searchers typically seek to acquire. In this conversation we cover a whole range of things from the early days of Judo, their own startup experience and vision, and importantly, their approach to the Small Business market.Show Notes: •03:14 – Frank shares about his Judo Bank journey and how it came to life in the first place a few years ago and how it's evolved over the last couple of years.•06:36 – Frank talks about what Judo is trying to bring to the Australian market, what is approaching that Judo bank is taking to try and fill the gap.•09:27 – Frank and I discuss the search fund model in terms of not only finding a business to buy but then leading, operating, and growing it over time.•13:10 – Frank gives some knowledge of how you'll understand why your business is different, how it's uniquely positioning in its market.•15:54 – Frank shares about how you can conduct a relationship with your customers.•22:08 – Frank talks about how to prove the sustainability of the earnings profile.Connect with Pete: LinkedInConnect with Frank: LinkedIn

Rob Gaunt is the Chief Executive Officer of Ace Training who recently took on that role after successfully completing an acquisition of it as a searcher (potentially Australia's first traditionally funded successful search!).Through his time searching, Rob had the opportunity to look at a whole range of businesses across Australia before pinning one down to acquire, so he has plenty of great insights to share.In this episode of The Next Step Podcast, I speak to Rob about how he came to search in the first place, what his reflections on the search phase were, and what it looked like to actually work through a deal and get it to completion. For anyone out there that is thinking about taking on a search, Rob delivers some raw, recent first-hand experience that I'm sure you'll find very valuable.Show Notes•01:30 - Rob shares his journey about the last two weeks of being in a training company as the CEO.•02:45 – Rob talks about his career before search and what it was about search that made him interested.•07:11- Rob and Pete talk about search, how to build, own and operate a business.•09:37– Rob shares about his experience in SME ventures and how that helped him search his journey.•13:48 – Rob and Pete discuss what a partnership can do to a search and how it can help you become successful in a business.•16:36– Rob shares tips on how to determine what type of search to do.Connect with Rob: LinkedInConnect with Pete: LinkedIn

In this episode of the Next Step Podcast, I speak to Jack Lancaster. Jack's currently the director and CEO of Evolution Surgical, a business he acquired as part of a self-funded search. Jack's got a broad and diverse background, including spending time studying in the UK and even attempting to start up his own business from scratch. Jack went into search in early 2020 (an interesting time to start a search with COVID 19 hitting!) and successfully acquired Evolution Surgical in October 2020. I spend some time with Jack talking around the different aspects of search, with most of the discussion revolving around his first nine months in the hot seat of operation. Jack shares some amazing insights straight from the front line around what it looks like in those first three months after buying the business, what people should be aware of when they first get their feet under the desk, and the kinds of things they should look out for in that those first 12 months of operation. Connect with Jack: LinkedInConnect with Pete: LinkedIn

Tim Moore and Jake Maisey run Dorado Capital, one of the few Australian family offices actively investing in search funds. Dorado has invested in traditional and self-funded searches both in Australia and overseas. Tim has an MBA and is a chartered accountant who started his career in investment banking and led a self-funded search that resulted in the acquisition of Surpac, a software business servicing the mining industry. Before joining Dorado capital, Jake was at KPMG in corporate finance for five years and spent several years in the UK with Stenprop (a Real Estate Investment Trust).In this episode of The Next Step Podcast we cover a range of topics, but particularly on the themes that bring a good perspective on what investors are looking for when they consider searches and backing searches. We also touch on what investors should be thinking about when considering search as an asset class. I hope you enjoyed the episode.Show Notes: · 01:35 –Tim and Jake talked about how they come across search and asset class and what are the things that they have been doing to really get themselves up the curve of what search is as an opportunity.· 6:17– Pete and our guests discussed investments offshore, particularly in the UK market, comparing the Australian and UK market's maturity and the opportunities that are coming for the Australian market. · 09:07 – Pete and our guests talked about the range of structural options when it comes to establishing a search in the Australian market.· 13:28- Pete and our guests discussed the increase in the volume of searchers, executives, and operators that are thinking about coming to market, whether it is a self-funded or a funded vehicle model of search.· 18:39- Pete and our guests talked about the kind of characteristics of a searcher that is defined to be backable by investors and the necessary steps to continue in order to keep lighting a fire under the Australian search market. Learn more about Search Fund and entrepreneurship through acquisition and connect with Pete, Tim, and Jake: Connect with Pete: LinkedIn Connect with Tim: LinkedIn Connect with Jake: LinkedIn

In this episode, I talk about the four seasons of search. I think the seasons of the year are a great metaphor to help searchers understand their own journey and the different 'seasons' they will find themselves in along the way. This episode is for all those people out there that are thinking about taking the search journey. If you are someone that's is just about to start a search or have already begun, but you want to get a better context of what's that journey look like holistically, then this would be a really valuable ten minutes of your time. It will give you a helpful overview of the search experience, from start to finish, and a few pointers along the way as you find yourself in each of these very distinct phases of the search. I also highlight some of the questions you should be asking your investors at each of those stages too. I've been through this process many times both as a search and an investor, so I have shared some insights on how you can leverage your relationship with your investors in such a way they can help you through each stage of the journey. I hope you enjoy the four seasons of search and find it useful when framing your own journey and what to expect along the way.

Lui Pangiarella – founder of WayFinder Capital and Second Squared. Both of these companies are active contributors and participants in the search fund ecosystem here in Australia. Lui co-founded Second Squared a couple of years ago to help build the community of searchers here in Australia. They've just recently founded WayFinder, Australia's first institutional fund focusing on the search fund model.In this episode of The Next Step Podcast Pete and Lui have covered a whole range of things and discuss a lot of exciting themes that relevant to investors and searchers alike. Lui has a depth and breadth of understanding of search and search fund asset class and as an opportunity for searchers and operators. We delve into a bit more the concept of the fund that he's raising and how that will contribute to the growth of the model here in Australia. Show Notes: · 01:32 –Lui talks about what brought him to search and his journey on search. · 03:08–Pete and Lui talk about what are the attributes of a market that is appropriate to search and what are the fundamentals of the Australian market that lean towards the model of search.· 07:00 – Pete and Lui talk about how he founded Second Squared and made it a vehicle to run searches in Australia, and talk about the characteristics of searchers in Australia. · 11:40-Pete and Lui talk about searchers' development and pattern recognition and what are the attributes that makes them a good searcher. · 16:13-Pete and Lui talk about the Wayfinder and what it means for the market and how it helps the search community. · 21:55-Pete and Lui talk about the view and reputation of the Australian search to the international community of search fund. Learn more about Search Fund and entrepreneurship through acquisition and connect with Pete and Lui: Connect with Pete: LinkedIn Connect with Lui: LinkedIn

Show notes· 01:40 –Heather talks about her how she came across and embraced the search model and its community · 04:19 –Heather talks about how the SBA (Small Business Administration) helps the search community in the U.S.· 07:42 – Pete and Heather talk about the capabilities and coachability of the searcher have an impact on his/her success· 12:05- Pete and Heather talk about the structure for bigger banks to lend to smaller businesses and its ability to invest on the search model· 17:10-Pete and Heather talk about the process of communication after having debt on a bank, what is in the U.S. market and how it is different from the Australian market and the future of Banks involvement search fund businesses? Learn more about Search Fund and entrepreneurship through acquisition and connect with Pete and Heather:Pete Seligman: LinkedIn Heather Endresen: LinkedIn

On this episode of "The Next Step", I speak to Michael Chew, who's the Managing Director of Flywheel Effect, which is a self-funded search vehicle based in Melbourne, and looking for deals across Australia. I've known Michael for about six months, since he first thought about starting a search. It's been great to get to know him and his approach to this challenge of search, because I think it's a really thoughtful approach. I've seen him evolve his thinking around the model as he's gone through his search, both in terms of what it means for him, and the businesses that he's seeking out, but also as it means for the search model more broadly. Given that he is a self-funded searcher, I've used this opportunity to really dig into that model, as opposed to the traditional model. In the episode, we look at the pros and cons of each and tried to understand what might make a searcher select one model or the other, but also what the pros and cons might be for an investor of those two models. We cover a range of ground. Over the past few months, I've spent a bit of time talking to him about his search along the way, and this was a great opportunity for us to explore some more kind of conceptual aspects of the search fund model, self-funded search, what it means for you, and in particular, your family and the impact of that. We also look at the way in which his thinking around search and his approach has evolved over the last few months. I hope you enjoy the episode.Connect with Pete: LinkedInConnect with Michael: LinkedIn

In this episode of The Next Step, I speak with Greg Green, director of Single Trail Capital. We focus a lot of the conversation around the search phase and shed some light on what it's actually like to be in the trenches of conducting a search, what things need to be considered, and what might not turn out the way you want? Throughout this episode, Greg shares some great insights into what he has learned through his journey in search and where it has taken him.Show notes: · 01:14 –Greg talks about his journey and what brought him to search and how he started his search phase, and what he did to improve along the way. · 08:15 – Pete asked Greg to talk about the challenges in the search phase and differentiating the opportunities by quickly filtering through them and rejecting more than saying yes to it.· 10:20-Pete and Greg talk about the proper mindset in growing your business on the search model and how to engage and get your message across to a vendor or a business owner.· 18:07-Pete asks about the things Greg expects to experience during the search phase that turns out to be completely wrong and what are the things he learns during the search phase that he did not anticipate. Learn more about Search Fund and entrepreneurship through acquisition and connect with Pete and Greg: Pete Seligman: LinkedIn Greg Green: LinkedIn

Enrique Chamorro is passionate about the search fund model. Before learning about search fund, Enrique was a full-time private equity lawyer. He heard about search through his friend and client and fell in love with the concept, thinking it was the best example of a win-win partnership and became an investor right away. In this episode of The Next Step Podcast, I talk with Enrique about the Spanish market as one of the countries that stands out globally as a hotbed on search fund. We also discuss what the Australian market should do to emulate the growth of search fund in Spain. Also, in this podcast, Enrique talks about the things that a searcher should think about when recruiting their team members and what are the things you should look for and how you should pick the best advisers and some of the things you should consider in being a searcher.Show notes:· 01:43 –Enrique talks about how he fell in love with the search Fund concept how he becomes a search investor to working as a private equity lawyer and becoming one of the few search fund lawyers in Europe. · 06:57 –Pete and Enrique talk about an investor as being a searcher themselves before and helping the new generation of searchers today. They also talk about what are the differences in the search fund market in America and Europe.· 09:34 – Pete asked Enrique's insights on what it is about Spain that has made it a market where search has seen to be relatively successful and what impact COVID has made to Spain's search fund market.· 11:15-Enrique talks about the origin of searchers in Spain and how the support network or the advisers could have an impact on the success of the searcher.· 21:35-Enrique and Pete's thoughts about what makes a good searcher. Learn more about Search Fund and entrepreneurship through acquisition and connect with Pete and Enrique: Pete Seligman: LinkedIn Enrique Chamorro: LinkedIn

Shownotes: · 01:28 –Andrew talks about his background and career in international development and how he comes to meet the search fund model and build a partnership in South Africa.· 4:50 –Pete and Andrew talk about how search fund focuses on the people and the talent, also talks about the other process such as reverse search and building capabilities.· 9:26 –Pete and Andrew talk about how search investors choose which to invest in and how they see the market.· 13:00 –Pete ask Andrew the U.S. market as the most developed market for search fund, how search investors approach that market, and how searchers compete for investors.· 17:47-How Pete and Andrew describe the attributes of a good investor and the different processes of investing.Learn more about Search Fund and entrepreneurship through acquisition and connect with Pete and Andrew: Pete Seligman: LinkedIn Andrew Locke: LinkedIn

Nick Bamford is the Managing Director of SRO Technology. SRO is actually one of my own companies (that I purchased as a self-funded searcher many years ago) so it's really exciting to be able to interview Nick and let him share some of the backstory on how he began as a searcher himself, what led him to join SRO Technology, and his learnings from the process.In this podcast, Nick and I talk about the frontline of search funds and what it's like to go through the process, and what are the things that really stands-out from a searcher's perspective, as well as what are the characteristics for a good searcher? It's a great interview with a lot of valuable takeaways. Show notes:· 2:02 – Nick talks about his journey on Search Fund. How he came across the search fund concept and how he helped his father grow their family business.· 08:47 – Pete askes Nick about his transition period in consultancy and what are his views on bigger businesses. Also, they talk about what makes a good searcher and what it takes to be a searcher from his experience.· 13:00 – Pete and Nick talk about self-awareness as a search operator, how to build a team around you, and how you should learn necessary skills along the road and fill the gaps.· 14:28- Pete and Nick talk about the thought process and expectations upon hearing about the concept of search funds, and doing the search fund itself.· 21:00- Pete and Nick talk about what sort of question should you ask yourself in managing a search fund, what are the motivations and how to determine if it is the right path to take. Learn more about Search Fund and entrepreneurship through acquisition and connect with Pete and Nick:Pete Seligman: LinkedinNick Bamford: Linkedin

Jake Nicholson is considered one of the leading figures in regards to Search Funds in the current generation. He's been in the field for more than a decade and has a reputation globally for being one of the real experts in the search fund, entrepreneurship through acquisition and all things related to that community. Together with Insead professor Mr. Timothy Bovard, they built and run the world's first accelerator for search funds SFA (Search Fund Accelerator), and ran that for a couple of years and now running a different platform for search fund entrepreneurs in Australia. Given his experience, he is well recognised as having a deep understanding in the market for search fund, globally. At the moment his focus is on the Australian market, which is very useful to the region. In this podcast, Pete speaks to Jake about the fundamentals of search funds, entrepreneurship through acquisition, how Search Funds is different from start-ups and focusing on how to build the marketplace for Search Funds in Australia. 01:20 –Jake talks about his journey on Search Fund and how search funds is different from startup. 06:49 –Pete and Jake talks about what the search fund model actually looks like from the investors perspective and the searchers perspective and how the Search fund model mechanics works? 18:27 –Pete asks what is Jake's impression of the Australian market compared to the US, UK and Spain and How Generation and Culture have an impact to the Search Funds in the region. 25:46-Jake talks about how business owner, searchers and search investors help each other to work to grow the search fund community. Learn more about Search Funds and entrepreneurship through acquisition and connect with Pete and Jake: Pete Seligman: LinkedIn Jake Nicholson: LinkedIn

Hi everyone and welcome back to The Next Step Podcast. In this season, season two, I'm going to be focusing on search. About 10 years ago now I left corporate life to acquire my first business in partnership with my good friend Iain Morris. Over the last 10 years I've acquired four more. I've done three tours of duty as a CEO of those businesses. We've exited two of them and sold down partial stakes in the other three. I'm currently sitting as a non-exec director on two broad platforms and remain a material shareholder in those businesses. It's strange to think that it's only really been in the last six to 12 months that I've learnt about this concept in this model of search and entrepreneurship through acquisition. Even though it's actually what I started doing about 10 years ago today. The exciting thing about search is that it's owner operator and entrepreneur led, it's people first and business second, and that's what attracts me to it the most. It's also focused on the smaller end of the market, businesses that are turning over or have earnings of somewhere between half a million and 3, 4, 5 million is usually what you'll find. Employee bases of 15 to 100 people. These are the businesses that have probably been around for quite a while. They've got great cash flows, they've got really good foundational customer basis, they've got good employees, great teams. And they've got really passionate founder owners, who are potentially getting to a point where they are ready to exit but they don't have a succession plan, and they need that next generation coming through. Search is one of the models that can provide exactly the structure that they are after. It's also a really exciting model for the operator or the searcher, the individual that wants to get into a position of ownership and operation of their own business. It's where I was 10 years ago coming out of corporate and just wanting more autonomy and more accountability, wanting to have something of my own that I can lead and drive. I also want to know that I can make a real difference if I put my energy and passion and sweat and tears into this business, it can make a difference to its growth and its future. So, I think there's a model here that I'm confident has legs given the amount of traction that it's got globally. And I think it's a model that can really suit the Australian market. Now in the Australian market, you know, there's probably only been two or three traditional search funds raised and those have only been raised in the last couple of years. There is probably been another handful of what you'd describe as self-funded searches over the last decade, but it's still very, very new and I think we've got an opportunity right now if we focus on removing the friction in that market to enable searches to come to market more freely and educate the people in that ecosystem whether that's lawyers, accountants, bankers and even business owners around what this model means, we can really create some amazing opportunities. And fundamentally if you think about the bigger picture, start to facilitate that transition of ownership, that intergenerational transition of ownership, from the baby boomer generation across to the next generation of business owners. So it's a really exciting thing for me, I'm very passionate about it.I'm actively investing in searches at the moment and supporting those searchers through their initial phases. And I'm really excited to try and identify all of those people I can speak to and bring into these episodes of this podcast, to help everyone understand what is search? What are the pros and cons? What does it mean to be a searcher? What does it mean to be an investor? And how people can get involved? So I hope you enjoy this season of The Next Step!

In this final episode of the season, I chat with Paul Taylor, principal consultant at Catalyst6 Consulting, leadership expert, and someone who I've known for some time. Paul has played a positive part in my own development as a leader and communicator, and in today's podcast, he shares some fascinating insights into what makes a leader influential and how we can all become better leaders in our individual roles and lives.

In this episode, I talk with Ush Dhanak, a thought leader in the EQ space. Ush helps business owners and leaders become more self-aware and resilient, by enabling them to bridge the gap between knowing and doing, whilst removing the fear of success which leads to higher emotional intelligence. I learned a lot in this interview, and I'm sure you will too.