Buying in a Small Market, Building a Regional Powerhouse

Summary

Podcast Summary: Acquiring Minds – "Buying in a Small Market, Building a Regional Powerhouse"

Episode Details

• Title: Buying in a Small Market, Building a Regional Powerhouse
• Host: Will Smith
• Guest: Jonathan Bornagol, President of Bunker
• Release Date: March 3, 2025
• Podcast Description: "Buying a business is an amazing path for many successful entrepreneurs. Learn how to buy a business from the entrepreneurs who have already done it."

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Introduction

In this episode of Acquiring Minds, host Will Smith delves into the unique journey of Jonathan Bornagol, the President of Bunker, who successfully acquired and transformed a small document storage business into the leading provider in the Caribbean region. The conversation explores the intricacies of acquiring businesses in non-traditional markets, the shift from leveraged buyouts to growth equity, and the vital role of networking in deal flow generation.

Guest Background

Jonathan Bornagol embarked on his acquisition entrepreneurship journey over a decade ago in the Dominican Republic (DR), marking the country's first search fund. His background in investment banking and his MBA education at Babson College equipped him with the financial acumen necessary for evaluating and growing businesses through acquisitions.

Notable Quote:

Jonathan Bornagol [07:10]: "I never knew I was a salesman until I had to sell because my life depended on it."

Adapting the Search Fund Model to a Small Market

Initially, Jonathan anticipated finding retiring baby boomers seeking to sell their businesses, a common search fund thesis in the US. However, upon returning to the DR, he discovered that this trend was nonexistent. This realization forced him to pivot his approach significantly.

Key Points:

• Market Thesis Adjustment: Transitioning from a US-centric search fund model to one tailored for the DR's unique market conditions.
• Focus Shift: Moving away from family-owned businesses ripe for succession to opportunistic acquisitions involving multiple partners or foreign owners.

Notable Quote:

Jonathan Bornagol [01:05]: "The 3-4x that we talk about so often."

Acquiring the Document Storage Business

Jonathan leveraged his networking skills to identify and negotiate the acquisition of Bunker, a small document storage company partly owned by a friend's father. Despite initial resistance, his persistent and transparent approach eventually secured an 80% stake in the business.

Key Points:

• Networking Over Cold Outreach: Emphasizing relationship-building in smaller markets where reputation is paramount.
• Deal Structure: Maintaining the existing operator in a rollover equity arrangement to ensure continuity and leverage their expertise.

Notable Quote:

Jonathan Bornagol [36:34]: "Because in small markets, reputation is everything."

Growth Strategy: Four-Pronged Transformation

Jonathan implemented a comprehensive growth strategy focusing on four main areas to transform Bunker into a regional powerhouse:

1. Infrastructure Enhancement:

   • Warehouse Expansion: Constructing a state-of-the-art 50,000 square foot facility to overcome capacity constraints.
   • Real Estate Partnership: Collaborating with a local real estate partner to build the new warehouse without upfront deposits, securing a 20-year lease.

   Notable Quote:

   Jonathan Bornagol [52:49]: "We thought we were going to own multiple sites, but ended up building one large, efficient facility to centralize operations."

2. Building a Middle Management Team:

   • Hiring Key Personnel: Recruiting skilled managers to delegate operational responsibilities, thereby scaling decision-making capabilities.
   • Zero Attrition: Achieving a stable management team with high retention rates, fostering a culture of accountability and growth.

   Notable Quote:

   Jonathan Bornagol [75:31]: "We have zero attrition and amazing growth both financially and personally for our managers."

3. Refining Product Offering:

   • Customer Segmentation: Shifting focus to high-value "cold storage" clients, ensuring recurring revenue and strong client relationships.
   • Service Diversification: Introducing just-in-time storage solutions to enhance client dependency and satisfaction.

   Notable Quote:

   Jonathan Bornagol [79:06]: "We needed to get into the just-in-time model to strengthen our client relationships and add more value."

4. Digital Transformation:

   • Implementing ERP Systems: Upgrading to an enterprise-grade warehouse management system to streamline operations and improve accountability.
   • Data-Driven Decisions: Utilizing technology to monitor and optimize the storage processes, enhancing efficiency and scalability.

   Notable Quote:

   Jonathan Bornagol [80:37]: "Implementing a top-class warehouse management system transformed us into a digital native again."

Challenges of Small Market Acquisitions

Jonathan highlights several challenges unique to smaller, less mature markets like the DR:

• Cultural Dynamics: Family businesses often have deeper roots, making acquisitions more complex due to multiple stakeholders.
• Limited Deal Flow: Scarcity of opportunities aligned with traditional search fund theses necessitates creative sourcing strategies.
• Pricing Expectations: Sellers may overestimate the value of their businesses due to a lack of active market mechanisms for price discovery.

Notable Quote:

Jonathan Bornagol [22:18]: "In small markets, the cultural ties and family involvement can complicate the acquisition process."

Growth Equity vs. Leveraged Buyout

Jonathan diverges from the conventional leveraged buyout (LBO) model prevalent among search fund entrepreneurs, opting instead for a growth equity approach. This strategy focuses on reinvesting profits to fuel business expansion without incurring significant debt.

Key Differences:

• Debt Utilization: LBOs rely heavily on debt financing, whereas growth equity emphasizes equity reinvestment.
• Value Creation: Growth equity centers on organic growth and operational improvements rather than financial engineering.

Notable Quote:

Jonathan Bornagol [67:40]: "Growth equity is about high growth and reinvesting capital to scale, rather than juggling debt obligations."

Exit Strategy and Return Expectations

Jonathan discusses the importance of aligning exit strategies with investor expectations, especially in small markets where multiple expansion is challenging. He advocates for focusing on Multiple on Invested Capital (MOIC) rather than solely relying on Internal Rate of Return (IRR).

Key Points:

• MOIC Over IRR: Emphasizing absolute returns without the constraints of time-bound IRR hurdles.
• Market Limitations: Recognizing the difficulty of achieving multiple expansions in smaller markets due to limited buyer depth.

Notable Quote:

Jonathan Bornagol [84:35]: "Always think about MOIC as it provides a clearer picture of your investment's success over time."

Lessons Learned and Advice

Jonathan offers valuable insights for entrepreneurs looking to pursue acquisition entrepreneurship in non-US or smaller markets:

1. Embrace Networking: Building and leveraging relationships is crucial in markets where formal deal flow mechanisms are limited.
2. Be Adaptable: Adjust search fund theses to fit local market conditions rather than rigidly adhering to US-based models.
3. Focus on Growth Opportunities: Prioritize businesses with high growth potential and operational efficiencies over those with high entry multiples.
4. Understand Cultural Nuances: Recognize and navigate the cultural and familial dynamics that influence business ownership and succession.

Notable Quote:

Jonathan Bornagol [71:51]: "If you're a good salesman, don't be scared of a small deal. You can grow into it faster than you think."

Conclusion and Future Plans

Jonathan's success with Bunker has positioned him as a budding private equity investor in the Caribbean region. He plans to raise a fund focused on acquiring and scaling businesses across multiple countries, leveraging his entrepreneurial mindset to drive growth and value creation.

Final Thoughts:

• Entrepreneurial Spirit: Despite transitioning towards private equity, Jonathan remains committed to the entrepreneurial aspects of acquisition entrepreneurship.
• Continuous Learning: Emphasizing the importance of becoming an expert in diverse business models to effectively scale and manage a portfolio of companies.

Notable Quote:

Jonathan Bornagol [103:12]: "I love becoming an expert in new industries and morphing into different roles to drive growth."

Notable Quotes Recap

• Jonathan Bornagol [07:10]: "I never knew I was a salesman until I had to sell because my life depended on it."
• Jonathan Bornagol [36:34]: "Because in small markets, reputation is everything."
• Jonathan Bornagol [67:40]: "Growth equity is about high growth and reinvesting capital to scale, rather than juggling debt obligations."
• Jonathan Bornagol [71:51]: "If you're a good salesman, don't be scared of a small deal. You can grow into it faster than you think."

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For Further Engagement:

• Live Q&A with Jonathan Bornagol: Scheduled for Wednesday, March 19th. Register Here
• Connect with Jonathan: Follow his journey on LinkedIn Jonathan Bornagol.

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This episode provides a compelling narrative on navigating acquisition entrepreneurship in challenging markets, underscored by Jonathan's strategic pivots and commitment to growth. Listeners gain actionable insights into adapting traditional models to fit unique market landscapes, emphasizing the power of networking and strategic reinvestment.

Transcript

[Will Smith]

Today's guest returned home to do a search on the assumption that there would be a cohort of baby boomers looking to retire. Sound familiar? That's the trend that Jonathan Bornagol heard about during his time here in the US. It's the trend we still hear constantly. But when he started searching at home in the Dominican Republic, he found that retiring baby boomers wasn't really a thing on the island. He he was going to have to adjust his approach by, among other things, leaning heavily on that discipline that every searcher with challenge Deal flow eventually turns to networking. It worked and Jonathan bought a small document storage business partly owned by the father of a friend. And today we learn how he transformed that little business into the leading document storage provider in the entire Caribbean region. We cover lots of ground. Here are a few key themes Thinking about the multiple you pay to buy the business in terms of the exit multiple, as opposed to being anchored to.

[Jonathan Bornagol]

The 3-4x that we talk about so often.

[Will Smith]

Putting the entrepreneur in Entrepreneurship through acquisition Jonathan bet the company to take it.

[Jonathan Bornagol]

To the next level.

[Will Smith]

And on that point, the value creation model here was more growth equity than leveraged buyout. The latter, lbo, is how most searchers create value, buy business with big loan, pay loan down with profits of business and improve and grow business along the way. In the growth equity model, by contrast, there's no debt and it's all about reinvesting to grow, grow, grow Real Estate There are pros and cons to having.

[Jonathan Bornagol]

Real estate included in your acquisition.

[Will Smith]

You've heard how you can get more favorable SBA loan terms when real estate is involved. You've heard how Carlos Santelli used the real estate owned by his target business to execute a sale, leaseback and generate the capital to buy the business. But others will say that you're not in the real estate business, so real estate shouldn't be an asset of the business that you buy. Jonathan is in that camp even though his business model is leasing space. We discuss and of course buying in a non US Market How Jonathan found capital, how he found deal flow in the Dr. Please enjoy this ride through building a regional powerhouse from a small platform business with Jonathan Bornagol, President of Bunker. And if you have a question as.

[Jonathan Bornagol]

You listen to his interview, we're excited.

[Will Smith]

To introduce a cool new feature here at Acquiring Minds live Q&As with our guests so that you can come meet them virtually and ask your questions directly in a zoom call. Jonathan's live Q a is Wednesday, March 19th. Register for that at the link in today's Show Notes or in the YouTube notes. If you're watching on YouTube or at acquiring Minds co come to Jonathan's Live Q a on Wednesday, March 19. Register at the link in the Notes. Announcements this Thursday, Heather Anderson will host an SBA and Lending Office hours. Heather's a prolific SBA loan broker, a name many of you recognize, and she's going to lay out the process of.

[Jonathan Bornagol]

Getting an SBA loan step by step.

[Will Smith]

There are many moving pieces, many stakeholders in an SBA acquisition, and Heather will show you how to fit them all.

[Jonathan Bornagol]

Together to successfully close your deal.

[Will Smith]

That's this Thursday, March 6th at noon Eastern. Register at the link in today's Show Notes or on the Acquiring Minds homepage. Acquiringminds Co Also M and A Launchpad is Back for its spring show M and A Launchpad is a one day event that brings together searchers and independent sponsors, seasoned business buyers, owners and private equity investors to go deep on buying businesses, finding financing and closing acquisitions, meeting investors and lenders, learning value creation from those who have done it. These are just a sampling of the workshops and panels that are packed into a very full day and that day is May 3rd. The show is in Houston. The organizers are running a promotion just for us. $200 off with the code acquiring minds. Go to malaunchpad.com and use the code acquiring minds. All one word or use the link in the Show Notes. And finally, in case you missed it, my partners in Mind's Capital and I have launched a new podcast, Meeting of the Minds. It's a weekly show focused on independent sponsors. Now as you know, the independent sponsor format of buying businesses is quite different than that of search larger businesses, much more outside capital, strict expectation of an exit by investors. But for some searchers, it's where their business buying careers might take them. Last week's interview was with Azar Quaider, who bought an 850 unit hair salon chain during COVID and turned it around to spectacular success. So as you can tell, not exactly a self funded search story, but tons to learn from nonetheless. The podcast is called Meeting of the Minds. It's on YouTube, Spotify, Apple, every Wednesday.

[Jonathan Bornagol]

Please join us.

[Will Smith]

Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs and on this podcast I talk to the people who do it. The team at Aspen HR recently published a short white paper targeted at searchers Entitled A New CEO's Guide to Human Resources. It lays out the key items you should be thinking about as you transition into CEO and owner of the business you bought.

[Jonathan Bornagol]

The link to download it is in the show notes.

[Will Smith]

Aspen is a professional employer organization or peo, run by a searcher for searchers. Search fund veteran Mark Sinatra runs the company, which provides HR compliance, flawless payroll, Fortune 500 caliber benefits and HR due diligence support for your acquisition, all for a fraction of the cost. Go to aspenhr.com or contact Mark [e-mail].

[Jonathan Bornagol]

Jonathan Bornagol welcome to Acquiring Minds.

[Ignacio]

Hey Will, pleasure to be here. I'm a avid listener of your podcast and honored that you got interested in my story for me to come on.

[Jonathan Bornagol]

Well, it's a great one. Jonathan. You were the first search fund in the Dominican Republic. That journey started over 10 years ago. Today you've owned and grown multiple businesses.

[Will Smith]

And see yourself as an investor more than anything.

[Jonathan Bornagol]

We're going to hear the story and.

[Will Smith]

Learnings from a decade of fascinating work. Start us off please, Jonathan, by explaining.

[Jonathan Bornagol]

How you decided to do a search fund in the Dr. Back in 2013.

[Heather Anderson]

Sure.

[Ignacio]

So I never knew about the search fund model until I went to business school. And that's ultimately when I connected my past and my training, which was investment banking, understanding how to run an M and a deal, what valuation is and everything. And quite frankly, being from the Dominican Republic and growing up, I always wanted to find myself way back to my country. Had no idea of how to do it. I had almost been in the US for about 10 years and when I heard of the search fund model it I quickly connected the idea of it's.

[Heather Anderson]

Not that I should be looking for.

[Ignacio]

A job, it's I should be creating my own job. And so that's, that's how I it clicked. Every, everything clicked after that and I understood that I had to go out and you know, create my own destiny, if you will.

[Jonathan Bornagol]

And Jonathan, remind me, your 10 years.

[Will Smith]

In the States that that went back to high school, right?

[Jonathan Bornagol]

Because. Because I you've got essentially no accent. So how is it give us a little bit more there on your piece of your backstory.

[Ignacio]

Moved around between Dr. And the states during my early childhood, so I learned I actually got alphabetized in English before I did Spanish. So English is quasi my first language. So that's why you probably don't don't hear much of an accent and how I became fluent in it. Ten years was actually the the time between me going to undergrad. Then I did four years of investment banking and then I did two, two years of mba. So when you all. Add all that up, it would have been 10 years.

[Jonathan Bornagol]

Great. And banking in New York?

[Ignacio]

Yes. I worked at Citi. I did Citi M and A. I covered financial institutions for latam.

[Will Smith]

Okay.

[Jonathan Bornagol]

And so you had a pull to go home. Maybe you always assumed you'd go back to the doctor. You didn't know how, but you were going to have to create your own job or create your own destiny to make it happen. Why entrepreneurship through acquisition as opposed to starting a business in the doctor?

[Ignacio]

I don't know. Listen, I went to undergrad for Babson College, and that's obviously a really big entrepreneurship school. And the idea of starting and going from zero to one, it never really connected with me. I always saw myself as somebody being, you know, very finance driven, understanding, you know, looking and analyzing a financial statement, a business. And so I was more than an analyst, than a builder, I would say. So it never really never crossed my mind besides a couple of, you know, trying to do entrepreneurship and startup idea.

[Heather Anderson]

Exercises, which in 2012, 13, when I.

[Ignacio]

Was in business school, obviously everybody had to go through that motion just to make sure they got it out of their system. But for me, the idea of buying and the whole, you know, branded way of calling it entrepreneurship through acquisition, it kind of, you know, made me feel like I had found my, my mold because it was, I was entrepreneurially trained.

[Heather Anderson]

At Babson and then I was acquisition trained at banking.

[Ignacio]

So it really just, it was a.

[Heather Anderson]

Let'S say a search or market fit.

[Ignacio]

If you want it.

[Jonathan Bornagol]

Well, I'm glad to hear that because it is, I think of the label while, while it does do the things you do that you just described that kind of perfect Venn diagram for, for people who buy businesses, but the entrepreneurial element to it, it's a mouthful. So I've never loved, I've never loved. I, I've always kind of wished there were a different way to put it than entrepreneurship through acquisition then. And then, of course, the, the ETA abbreviation is an unfortunate one because most people see that and they're like estimated time of arrival, what the symbol of. Of waiting.

[Ignacio]

I've actually run into a harder time explaining what a search fund is. A lot of people think it's executive search and that you're a headhunter.

[Jonathan Bornagol]

Yeah.

[Ignacio]

So I love the idea of ETA search fund.

[Jonathan Bornagol]

I have to say though, interesting point that, yeah, it sounds like recruiting, but it is punchier. Search fund has, has a certain ring to it. Anyway, okay, so. So this seems like the path. How does your search or your thesis take further Shape.

[Ignacio]

So like I said, I learned about the, the business model second year of my MBA and I went headfirst. Luckily, I was able to take Rick and Royce's, I know you've mentioned him before, course. So I was able to dive completely into how it works. What's the model have good, you know.

[Heather Anderson]

Mentors, advisors during the process.

[Ignacio]

At that point, I guess the first thing you have to decide is, you know, are you going to do a self funded or you're going to do a funded search? For me, it was clearly the idea was to do a funded search. And so at that point I had two choices.

[Heather Anderson]

Do I try to bring established search fund investors, AKA the search fund mafia.

[Ignacio]

To new markets that would be Dominican Republic, or do I look for local investors and try to do the inverse.

[Heather Anderson]

Of how do I sell them on.

[Ignacio]

This innovative, you know, investment model that they've probably never heard of? I went for the latter. You know, I thought investing in a small country that maybe, you know, traditional.

[Heather Anderson]

Search fund investors didn't have the experience.

[Ignacio]

Might have been a little bit uphill. They might have, you know, asked a lot of questions that were just going to be complicated answers and not, and not be, you know, a quick fundraising process. And the other thing, ultimately I wanted angel, like search fund investors. I wanted people that knew the, you know, the lay of the land that I was going into, having not ever really operated in a professional manner in the country. I wanted to have a great, you know, a plus investor list that could help me, you know, navigate the peaks and troughs that it is in acquiring.

[Heather Anderson]

In operating and obviously in growing a business.

[Ignacio]

So I went down that route. Luckily for me, it was one of those things where they, they loved the idea right away. Right off the bat. One of the things I learned was and really resonated with them. They were the type of businessmen that.

[Heather Anderson]

Would field a lot of investment opportunities.

[Ignacio]

So a lot of people would pitch.

[Heather Anderson]

Them businesses to buy. And the one thing that they lacked.

[Ignacio]

Was, was probably somebody to actually take.

[Heather Anderson]

Care of the businesses after they were invested in.

[Ignacio]

So the idea of saying, look, I'm looking for a business to buy and to run was like, was perfect for them. They said, finally we have somebody that can operate something that gets purchased and invested in. And it was pretty easy, I'd say. Also, I think the funded search model with the Stanford Primer that had just.

[Heather Anderson]

Recently come out was a very simple way of also documenting everything and saying.

[Ignacio]

Okay, this is the, the cookie cutter model.

[Heather Anderson]

Let's just go and, and do this.

[Ignacio]

Without having to adapt it too much.

[Jonathan Bornagol]

And so that, that the benefit there of the cookie cutter model is that the terms are prescribed. They're well documented. 25%. Eight, eight and a third. Eight and a third. Eight and a Third. Listeners who don't know the model can go chat GPT it, but we've covered it here many times. But point is you didn't have to get into the weeds about what the term should be. It's just like, hey guys, there's this very mature model that I'd like to bring here and I'd like. And here we hear what the terms look like. I'd like you to invest. Interesting point, interesting point about that. How, how the missing piece of so many investment opportunities they saw it's the operator. Um, which is perhaps not surprising finding, you know, it's always, it's always thus that these good businesses can be great but without a strong operator at the top, they can not be so great after being acquired.

[Will Smith]

Well, I guess Jonathan, one question would.

[Jonathan Bornagol]

Be so, so one thing we'll return to over the course of this conversation which I've done with with many guests who are based outside the US where search is less well established, is try to, you know, extract from your experience what people buying in non US markets can learn from your experience. So this group of investors is I guess, was it, was it, is it very particular to your situation? You just happen to know these people already and requested a meeting and kind of pitch them in the meeting and bada bing, bada boom. Or is there anything that people in other markets who are trying to bring search to their markets can learn from how you, how you found access, found the capital capital providers and then also convince them of the, the model in the, in the pitch.

[Ignacio]

They were existing relationships. I wouldn't say they were deep relationships, you know, but had been developed probably during my early years of being a professional. A couple of them actually were the type of people that when they heard I left the bank and heard I was going to go do an mba, said keep in touch. We love to know what you do after you finish business school.

[Heather Anderson]

So that was a great transition into.

[Ignacio]

How to bring, you know, the model.

[Heather Anderson]

To them and ask for their investment.

[Ignacio]

To be honest, it was, I was lucky really to find such great investors and that I think my hit rate.

[Heather Anderson]

Was like five out of six or something like that.

[Ignacio]

So you build a pipeline thinking you're going to have to pitch 100 times. But I was lucky enough to, to.

[Heather Anderson]

Find interest in the few that I.

[Ignacio]

Pitched first, which obviously were the highest.

[Heather Anderson]

Quality ones and the ones that I.

[Ignacio]

Wanted to close on. So I'd say it was, it was a little bit of, of existing relationships. A couple of them actually brought in.

[Heather Anderson]

Other investors as well.

[Ignacio]

Kind of doing like a club deal. Hey, I'm investing in Jonathan search fund. How about you? You come in as well and you know, it's funny how those things happen. I think 20% of my fund actually.

[Heather Anderson]

Was just a forwarded email with a.

[Ignacio]

Reply that said, count me in for my 20%.

[Jonathan Bornagol]

Oh wow. Wow, love to see that. And other than them recruiting people that you didn't even know was there also, did they all know each other essentially? Like was this a domino effect thing where you tip one domino in, the rest fall? Like, like so often it is in capital raises.

[Ignacio]

A lot of capital raising is about having an anchor. And so as soon as I had an anchor, you get momentum and when you have momentum, then you know it's pretty much sailing, smooth sailing from there.

[Will Smith]

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[Jonathan Bornagol]

About companies to buy? How did you like, how are you thinking that you'd tackle finding a business in the Dr. What, you know, what were you looking for, et cetera, given this kind of the parameters of the search itself?

[Heather Anderson]

Sure.

[Ignacio]

So this is one of the difficult.

[Heather Anderson]

Things I think searching in a small.

[Ignacio]

Market because you get, you know, the whole search fund thesis is around retiring baby boomers because it's a very, I think it's a very US constructed investment thesis. And so obviously you've got millions of baby boomers that are retiring every day in any market with a bunch of, you know, businesses. And so you kind of try to adapt and pivot your equity story to what you feel, what you think, because obviously you have to make the thesis your own. And so given that we don't have.

[Heather Anderson]

Really baby boomers here in Dominican Republic.

[Ignacio]

The thesis started off as being, you.

[Heather Anderson]

Know, we're going to look for family businesses that are probably in a generational point where they might be considering exits.

[Ignacio]

I think I told you this in the pre call that was a huge, I'd say investment. There was an investment thesis that didn't really hold hold water or translate as easily as one might think. Because family businesses are extremely different than.

[Heather Anderson]

A solo owned and operated business who.

[Ignacio]

Might not have succession or is just looking to either close or, or sell it to some, you know, young, young guy or gal who is looking to buy the business from them. So that was, that was complicated. Other than that I think.

[Jonathan Bornagol]

Wait Jonathan, why, what was, Sorry, what, what is different there? So these. So the family businesses in general do like in the doctor for example, the son or daughter will want to take over the business more commonly than in.

[Will Smith]

The US Is that what you're saying?

[Ignacio]

Or, or absolutely. I think a lot of times in family business context the future generations are kind of trained and expected to be.

[Heather Anderson]

Part of the family business in some way, shape or form, even if it's not on a day to day basis.

[Ignacio]

So let's say it's almost like a plant that spreads deep roots which then is difficult because you have to unroot everything in order to make a deal happen.

[Heather Anderson]

So that probably means convincing, you know.

[Ignacio]

Maybe you're the family business now in second generation there are four brothers and sisters. Well, you have to convince four people. It's not the same as convincing one sole owner of a business who can make, you know, a decision on a whim and actually engage with you and.

[Heather Anderson]

Take something to closing right away.

[Ignacio]

So taking it into then operating terms, the sales cycle is a lot longer too. Yeah, you have to, you have to.

[Heather Anderson]

Sell upwards and downwards across the capital.

[Ignacio]

Structure to actually get a deal done.

[Will Smith]

So.

[Jonathan Bornagol]

So in the world of small businesses, in the market of small businesses, many more as a percentage have a succession plan where it goes to the next generation in your market than in the US you'd say there is succession, Succession is much more a thing.

[Ignacio]

And I think, I think there's, it's not just small market dynamic. I think that's also a little bit cultural. You know, in the US a lot of times after you go off to college, families kind of get dispersed. You know, everybody, you know, maybe you're east coast growing up and now you Live in the west coast. So it's really, you don't spend so much time with the family and within the family business. Once you become a professional in small markets, especially Latin American markets, where you probably, you know, I live three blocks from my mother's house, you're constantly, you know, in the business and, and a.

[Heather Anderson]

Lot of life revolves around the family business.

[Ignacio]

So I, I, you know, you grow up going to the office, you, you know, your first job is likely at that family business. And so it's a lot easier and a lot more common to get, you know, tucked into the family business than probably in the US Market where everybody, you know, follows their, their own way. I'd say.

[Jonathan Bornagol]

Yeah, yeah. How fascinating. Great.

[Will Smith]

Okay.

[Jonathan Bornagol]

And so when you realize that that kind of, that kind of conventional look at the market was inaccurate in, in the Dr. How did you pivot your approach?

[Ignacio]

So I'd say the funny thing is the two, three businesses that I bought, I actually bought them all from, from foreigners or from businesses that were not, let's say, operated with family relationships. One of them was a multiple partner.

[Heather Anderson]

Business where only one of them operated.

[Ignacio]

So I'd say I, I stopped, I.

[Heather Anderson]

Stopped trying to convince myself that I was going to land a big family.

[Ignacio]

Business and just started looking at other situations that might look a little bit more opportunistic. So partnerships that, you know, Maybe it's a 50. One of them was a 50, 50 joint venture where they wanted to split up.

[Heather Anderson]

Another one was a foreigner who was.

[Ignacio]

Actually Florida based, who owned a business in Dominican Republic and he was about 75 years old. So he was somewhat of a retiring baby boomer, but with a business in the doctor. And then lastly, another situation that I found was, you know, five, six owners.

[Heather Anderson]

Of a business, everybody trying to get.

[Ignacio]

Some cash out of the business, but.

[Heather Anderson]

Only one of them operating.

[Ignacio]

It was a little bit of convincing the operator, hey, maybe you should change your partner base because we're just going to reinvest and reinvest and, and you're going to have a lot more leeway.

[Heather Anderson]

And a lot more ability, let's say.

[Ignacio]

To build the business that you've always wanted to build with us as partners rather than the ones you have. So you could call it special situations, but I'd say it's different shareholder dynamics is what I learned to have to look for.

[Jonathan Bornagol]

And how did you look for that at that point? What does deal flow generation look like when you're not leaning on the baby boomer thing?

[Ignacio]

So it's a small market. Let's Stop there for a second. I think the search fund model, they typically tell you call on 200 businesses everywhere and anywhere. A lot of times you're supposed to.

[Heather Anderson]

Be calling and not really even knowing what the business does except for what.

[Ignacio]

It says on the website. That's not how you can go through a search in a, in a small market. Your reputation as a tire kicker can kick, can come in pretty quickly if you start doing that. So you have to be very targeted, you know, very curious into how you research opportunities and get a little bit more backdrop into what is actually happening at the shareholder base. You have to get creative. So one of the things I tried.

[Heather Anderson]

Initially was obviously the advisor network.

[Ignacio]

So you know, lawyers, you know, boutique.

[Heather Anderson]

Bankers were trying to get transactions done.

[Ignacio]

Consultants. I didn't really find a lot in, in those situations.

[Heather Anderson]

I found a lot of businesses that.

[Ignacio]

Have been quasi for sale for some time. I like to call it a little.

[Heather Anderson]

Bit of window shopping.

[Ignacio]

Sometimes they put a price tag on it and see if somebody bites, but they're not really actively selling the business. And so those situations, I'd say I navigated a little bit through that. But to be honest, proprietary deal flow.

[Heather Anderson]

Ended up being the key to the game.

[Jonathan Bornagol]

It's funny based on networking. You're not blasting out cold emails or are you?

[Ignacio]

No, it was pure networking. Um, I, I like to joke. So when I started searching I was about 28 years old. My dad was a cardiologist and my dad had a lot of friend friends.

[Heather Anderson]

Who were his patients.

[Ignacio]

So they were older people.

[Heather Anderson]

And a couple of times I remember.

[Ignacio]

On a Friday night my father would say hey, you want to come with me to Mr. Such and Such birthday? And I was like jackpot. Because I was going to 75 year old's birthday and you know, I was 28. I was asking everybody what they were doing, you know, what they planned to do with their business. It was a perfect situation. But it's small market, it's almost, you know, you have to think about. Dr. Economy is the seventh largest economy in Latin America. It's equivalent to probably the last five states in the US So you really.

[Heather Anderson]

Have to understand that you are looking.

[Ignacio]

In a very shallow moment market and.

[Heather Anderson]

Constraining yourself heavily to geography.

[Jonathan Bornagol]

I, I think it was Rhode island that you compared it to on the pre call. This is essentially like looking in Rhode island and not being able to look anywhere else. It is an island after all. Literally. Not Rhode island which is not an island. The doctor is a literal, literal island. Okay, all right, so well what did you find after this, after this, create creative and networking. Creativity and networking, sure.

[Ignacio]

So I ended up buying two businesses that were three months apart. One was, the first one was a document storage business called Bunker. I had, I had never learned about.

[Heather Anderson]

The document storage business.

[Ignacio]

I was tapped into the regional like.

[Heather Anderson]

Broker models that existed at that time.

[Ignacio]

I don't know if they still exist, but I got a, you know, I found a deal in Panama where they.

[Heather Anderson]

Were selling the largest document storage business.

[Ignacio]

And as soon as I went through.

[Heather Anderson]

The, the, the business model I fell.

[Ignacio]

In love with it. What I did realize though, it was.

[Heather Anderson]

A very high multiple business.

[Ignacio]

So these were the types of things that don't trade for 4x which kind of is one of the pitfalls. I think that in studying the search fund model too much, they ingrain in.

[Heather Anderson]

Your head that you're supposed to buy.

[Ignacio]

At 4x and if the market isn't.

[Heather Anderson]

There for 4x you might just spend.

[Ignacio]

Your whole time making offers that get rejected. So when I, when I learned about this document storage business I quickly one of the, and I just want to make a parenthesis, I realized I'm supposed to be looking for, you know, maybe.

[Heather Anderson]

10X businesses and try to be buying.

[Ignacio]

Them at 5 to 7x which is a little bit outside the search fund model.

[Heather Anderson]

So I ended up buying that business.

[Ignacio]

It was really small at that time.

[Heather Anderson]

So it was a nation market in the Dominican Republic.

[Ignacio]

It hadn't really even been developed even close to what it had been developed in Panama. The second business, which actually was one and a half businesses was a billboard business in Dominican Republic. I actually bought two. And then, you know, while I was buying those two billboard businesses, I met.

[Heather Anderson]

With two other billboard businesses and we.

[Ignacio]

Agreed to merge them.

[Heather Anderson]

And my contribution to the four way.

[Ignacio]

Merger was this two businesses that I bought. So they're both very. So if you look at comps on.

[Heather Anderson]

Document storage as well as billboard businesses.

[Ignacio]

They'Re usually double digit EBITDA businesses. And so I was focused on doing a good deal where I could grow.

[Heather Anderson]

Rather than, you know, just get fixated on. I can't pay more than four times and just have that resonate over and.

[Ignacio]

Over in my head.

[Jonathan Bornagol]

Let's unpack that a little bit. Jonathan. Okay, so yeah, so forex, first of all, why are multiples higher in this market? I'd think, I would think they'd be lower because demand for these businesses is lower.

[Will Smith]

Or maybe not.

[Jonathan Bornagol]

Maybe I'm wrong. Yes, supply is way, way, way less. But if supply just all depends on what supply and demand is so maybe demand outstrips supply and drives driving multiples up. Point is, I would expect in a less, less evolved, less developed market multiples would be lower. But I'm, I'm clearly wrong. Why, why do you think Forex was just not going to happen?

[Ignacio]

I've thought about that a lot and I think ultimately it's tricky, I think because of the shallow supply and probably there isn't a cultural M and a market.

[Heather Anderson]

So people don't really think and understand that they can sell a small business in Dominican Republic. And so a lot of times they aren't actively for sale.

[Ignacio]

So I think it has to do a lot with price discovery.

[Heather Anderson]

Maybe you can get something at Forex.

[Ignacio]

But at first brush, especially in proprietary deal flow, when you approach somebody and you offer them something like that, it.

[Heather Anderson]

Might be a turn off for them because they're not actively selling the business.

[Ignacio]

Because they didn't know that there was.

[Heather Anderson]

A market to sell their business.

[Ignacio]

So I'd say the lack of liquidity in the market actually puts, pushes expectations higher, not necessarily clearing prices, but it can take time to really, you know, take the seller and, and coach them to where they actually can sell the business. For Forex, if you're looking to do a quick deal, then that might be, you know, a tough sell and you might just go on and look for other things.

[Jonathan Bornagol]

I think you nailed it, Jonathan, because one of the things that we see here in the US is is that sellers often overestimate the market value of their business. They, they think it's a lot worth, worth a lot more than, than the 3 or 4X that it probably is would trade for. And, and so in a market. But they eventually learn their broker coaches them or they, you know, they go to market and they start to see the offers that are coming in and eventually their expectations have to come down to earth. Well, in a, in a far less liquid market like what you just described, maybe those expectations just never come down to market because there isn't that, there isn't that market telling them, you know, forcing them to reality a discovery, a price discovery thing like you said.

[Ignacio]

Yeah, and I think also it's one of those things where in a small market a lot of people think that all businesses trade for the same multiple. You know, you're supposed to get 6x.

[Heather Anderson]

Or 7x for your business and it.

[Ignacio]

Kind of just goes, you know, mouth.

[Heather Anderson]

To mouth and it becomes one of.

[Ignacio]

These things where everybody, that's, that's the number they have in their head, you know, because my friend Sold his business. And he told me that was, that was the number. And so like I said, when I realized that, I said, all right, we got to look for very, you know, cash flow generating businesses, which usually is the driver of why something will trade higher. So even does a proxy for cash flow really what it is? But not every business has the same EBITDA free cash flow conversion. And so that's what really drives a multiple. You know, how much of your EBITDA goes to free cash flow and then what level of, and also how capex intensive is it? So the average business will have average, you know, conversion metrics on it.

[Heather Anderson]

But if you can find a very.

[Ignacio]

High cash flow generating business with small or modular capex, those are usually the very high multiple businesses. So I said, all right, if everybody.

[Heather Anderson]

Has seven in their head, let's look.

[Ignacio]

For 10, 10x businesses instead of trying to convince a five, you know, four.

[Heather Anderson]

To five times EBITDA business that they.

[Ignacio]

Weren'T supposed to be worth that. So I said, let me get arbitrage instead of coaching them down, which is really the billboard businesses and the document.

[Heather Anderson]

Storage business are really those types of.

[Ignacio]

Business that I just described.

[Jonathan Bornagol]

Great. So, so just to be clear, you, you, everybody, no matter the type of business they own, is fixated on 6 or 7x or something. So instead of trying to talk them down, you look for the opportunities where that was actually an underestimate of what their business is probably worth. It's, it's, it's more like a 10x business. So you were still getting a low entry multiple for that sliver of an indus for that, for that particular, of the market for that particular industry. So it wasn't that you still believe in getting a low entry multiple. It was just, it was just shifted. It's all relative.

[Heather Anderson]

I learned about a deal in Panama which made me learn the business model. And I turned around in Dr. And.

[Ignacio]

Said, well, I couldn't buy the Panamanian one. What do we have here in Dominican Republic? Do we have a player that can operate in this space? And so I, I, you know, found two or three of the players, did a little bit of, you might want.

[Heather Anderson]

To call it social due diligence.

[Ignacio]

Who are they?

[Heather Anderson]

Who are the partners?

[Ignacio]

How do I get to them on a, you know, credible warm lead basis? And so I met them, I how.

[Jonathan Bornagol]

Did you get to them? How did you get them to get them on incredible warm lead basis?

[Ignacio]

So I remember that the one that I ended up buying, Bunker, I literally googled the company name and I found a Article in the newspaper on the.

[Heather Anderson]

Day they launched in 2005. And in the picture where they launched.

[Ignacio]

Was one of my friends father. And so I called, I sent him the picture, I said, hey, can your father make me an intro? And he told me two things. He said, one, my father is a.

[Heather Anderson]

Partner in the business and two, they're.

[Ignacio]

Never going to sell it to you. And I said, and I said, I didn't ask you that part, those two questions.

[Heather Anderson]

Can you get me the intro?

[Ignacio]

And so he effectively, you know, told his father, hey, I've got a friend, you know, he's got this weird search fund model. He wants to meet the, the partner that operates the business and met with him. He told me, you know, you got to be quick on the, on the.

[Heather Anderson]

Trigger as a searcher.

[Ignacio]

You got to be really forthcoming. I've, I've asked for this meeting because I want to analyze, potentially buy your business. And the answer right away was no. And so I went through, you know.

[Heather Anderson]

Two, three meetings of getting no's. Eventually what ended up happening in that.

[Ignacio]

Business, I like to say that the operator realized the trade. Can I get, you know, very high.

[Heather Anderson]

Net worth individuals to be my, my new partners.

[Ignacio]

That will really help me fuel the.

[Heather Anderson]

Growth of this business. And it also comes with this young.

[Ignacio]

Entrepreneur entrepreneur who was going to be.

[Heather Anderson]

With me side by side because what.

[Ignacio]

We ended up buying was 80% of the business. The, the partner that operated the business ended up rolling over coincidentally with my.

[Heather Anderson]

Father'S friend, which I told him then.

[Ignacio]

You know, tell your dad that he's staying in the deal because I like him.

[Jonathan Bornagol]

So you wanted to keep the operator. You were not going to become the operator.

[Ignacio]

I so the initial idea was we're going to keep them. You know, I think every searcher goes through a, a very scary moment when it's one of they're going to hand over the keys. You know, you don't know how you're going to really operate the deal or the business after you close. And so a lot of times you'll.

[Heather Anderson]

See transitions earn outs and existing owners rollovers of their part.

[Ignacio]

So the idea wasn't necessarily we're going to keep them on forever, but I did, let's say putting it in terms.

[Heather Anderson]

Of a document storage business.

[Ignacio]

I needed to have somebody who knew where all the boxes were. So it was an idea of having them roll over and you know, transition lightly.

[Heather Anderson]

One of the things that also happened.

[Ignacio]

During my, you know, search, let's say search agreement as you said, we did modify it a little bit when I took it to the investors and one of my investors said, listen, I don't like the idea that just because you bought the business, you run the business. We feel like there are handcuffs there.

[Heather Anderson]

As investors and we're not being good.

[Ignacio]

Fiduciaries in making you operate a business that you might not be the best one operating.

[Jonathan Bornagol]

But Jonathan, I thought that was the very thing that, Listen, I think this just. Am I not clear?

[Ignacio]

Yeah, but I think you also have.

[Heather Anderson]

To think as a fiduciary of your.

[Ignacio]

Investor capital and it made total sense. What if I buy a business that is better suited for somebody that we can hire to operate? The flip side was I said, well.

[Heather Anderson]

You can't make me operate it either in case we find something that's too small and we end up pulling the trigger.

[Ignacio]

Anyway. Anyways, so we, when I acquired this, this document storage business, we kind of found ourselves on, you know, this is a little bit of a relatively smaller business that we had gone out to buy. And so I knew that the company couldn't, you know, couldn't pay me what, what, you know, what I was expecting.

[Heather Anderson]

In terms of salary.

[Ignacio]

So I was half halfway in the, in the door. And that's why I had to look for another way to get income, which ended up being buying the next business, which was pipeline that I had built during the whole search phase.

[Heather Anderson]

So I immediately ended up being kind.

[Ignacio]

Of, you know, the business development chairman.

[Heather Anderson]

Like role in the business.

[Ignacio]

But it was great to have somebody that knew how to operate it with the interest of continuing to operate it, you know.

[Jonathan Bornagol]

Jonathan, what it, what if, if you.

[Will Smith]

Do a search fund with search fund.

[Jonathan Bornagol]

Economics, where your equity will amount to, let's call it 25% maybe there was fluctuation there and you're not going to be the operator that starts to look and smell a lot just like independent sponsorship because those are kind of the, the terms of, of independent and also with the kind of a mandate to buy, grow and then ultimately exit. What was the understanding there? First on, on exiting was this, was, was that going to be the mandate that, that you exit the businesses or was this a long term hold or either or.

[Ignacio]

I'd say I, I'd say it was clear that we were going to search for an exit. I think any search funder, especially a, a, you know, funded search, has to exit. You have to, it's just, it's impossible. Why do you say that for, for two things. One, in order for you to actually get your liquidity, it's not the same of, you know, if you're a self funded search where you might end up after you pay off your SBA loan or whatever, where you still, you know, you own the cash flow of the business and, and you can do what you please with it. Let's say as a, as a searcher you ultimately are a minority owner in a business. So unless you find a way to get, to get yourself liquidity, you might find yourself in a, you know, continual.

[Heather Anderson]

Reinvestment situation which isn't bad.

[Ignacio]

You end up being, you know, equity value for yourself. But I think everybody really understands the idea of liquidity. The second thing is the last tranche.

[Heather Anderson]

In the search fund compensation model.

[Ignacio]

The funded search is, is you know, performance based and it's, and it's upon liquidity. So it's basically an IRR hurdle. And the IRR hurdles in the you know, original at least when I did it in 2013 started at 20% IRRs and so and went all the way.

[Heather Anderson]

Up to 35% IRR.

[Ignacio]

One thing that I you know reflect on a lot is that is close to impossible to sustain in a you know, 7 to 10 year hold period. So earning 20% IRR for a 7 to 10 year period, it's literally talking.

[Heather Anderson]

About 4 and 5 Xing.

[Ignacio]

A business where on your 6th or.

[Heather Anderson]

7Th year, if I, if I recall.

[Ignacio]

Correctly, you basically have to grow in value the value of the business that you purchased.

[Jonathan Bornagol]

Yeah.

[Ignacio]

So unless you're on this growth rocket ship, it's unsustainable for your IRR hurdle.

[Heather Anderson]

And you should be looking for exits around 4 year, 4 year 5.

[Ignacio]

Which I will say is not something that I did but it's something I.

[Heather Anderson]

Guess one of these lessons that I.

[Ignacio]

Have today which goes for fund, you.

[Heather Anderson]

Know for also for private equity and unfunded sponsors.

[Ignacio]

You know, never try to hold your, your investment past year seven. It's just it destroys your, your IRR.

[Heather Anderson]

And what the way it should be.

[Ignacio]

Looked at is let's look more at MOIC on multiple investment capital rather than.

[Heather Anderson]

IRR at that point if you're looking.

[Ignacio]

To hold for that long.

[Jonathan Bornagol]

Well we're getting into fascinating territory. That's more that is definitely something the investor class and PE class will will be familiar with less so searchers maybe we may return to it. I want to understand why never to hold for over seven years. But but we got to put a pin in that particular sure. In investing philosophical investing point the when I said that this starts to look and feel like an independent sponsor deal. You you made a face like you don't you didn't agree. Why, why is doing a search fund with performance based, with hurdles? You know, the max, you know the max you're going to get is about 25% you as the sponsor searcher and you're not operating the business. Why, why is that not basically the outline of an independent sponsor deal?

[Ignacio]

I'd say two things. One, I wasn't, let's say I wasn't.

[Heather Anderson]

The general manager of the company per.

[Ignacio]

Se, running the internal operations, but all the growth fell on my back. And this is the entrepreneurship part of the ETA, which is the growth of this business depends 100% on me. This is a business that I had.

[Heather Anderson]

Been, that existed for 10, 12 years. And so they had maxed out their.

[Ignacio]

Probably their, their sales effort. And so it's just really understanding what role you play in the business. You know, where do I add the most value? And you know, I quickly realized and.

[Heather Anderson]

And I sat in the general manager positions in, in the billboard business for.

[Ignacio]

Maybe a year, two years. At one point during our, our about eight year hold period, I came back.

[Heather Anderson]

As interim general manager to get a.

[Ignacio]

Couple things done when we lost one of our general managers. But ultimately I think it's, it's two things. Where does the buck stop? Is it on the general manager or is it on me?

[Heather Anderson]

And then I was clear, it was on me. I was the one that got capital.

[Ignacio]

I was the one that you know.

[Heather Anderson]

Promised that we were going to create returns.

[Ignacio]

And I felt that I was the one that probably had the, the new juice, let's say, to take these companies to the next level. So it's, it's, I think an unfunded sponsor is more, you know, trying to create arbitrage in transactions, you know, grabbing real assets and doing maybe a sale leaseback, trying to create, you know, asset backed liability facilities and trying to piecemeal out a deal. But at the end of the day.

[Heather Anderson]

The strategy here was grow, grow, grow.

[Ignacio]

And so you know, there's, I think that's the most important thing in operating.

[Heather Anderson]

A business and feeling like the owner.

[Ignacio]

It's do I feel like the boss?

[Heather Anderson]

The buck stops with me.

[Ignacio]

And for me, both businesses, the answer was always yes.

[Jonathan Bornagol]

This fascinating distinction Jonathan, between, because I was looking at it through the prism strictly of kind of the outlines, the structure of this arrangement. But what you just articulated, if I, if I may, is basically you feel like a search fund even as not the day to day operator, but you felt like it felt more entrepreneurial. It was basically about growing this business. Whereas maybe an independent Sponsor as you see them. I'm sure many independent sponsors would push back hard on this, but as you see them, it's more of a financial engineering play. How to figure out better capital allocation and often inorganic assemblage of a larger business. But you were going to do that too, were you not? You were going to acquire other document storage businesses. That was a big part of the thesis.

[Ignacio]

It was. But go going to the point, I'll put it this way. If you have maybe an unfunded sponsor, maybe it's okay for one of your deals to die, you know, one of your portfolio companies. You know, it's just one of those things where maybe you'll do 10 deals and you know, part of the business model is let's, let's, it's okay to.

[Heather Anderson]

Lose money on one of the deals.

[Ignacio]

There was no way I was going.

[Heather Anderson]

To lose money on this.

[Ignacio]

You know, I was all in. I was signing PAs on debt. So. RPG, sorry. On. On debt even as a small owner of the business. Because I was, I was all in.

[Heather Anderson]

Failing was not an option.

[Ignacio]

So. And I spoke to my general managers three and four times a day. So I wasn't, maybe I wasn't sitting the place where they were signing the checks because I had somebody else signing the checks, but I was making sure.

[Heather Anderson]

That the cash register was ringing all day long.

[Ignacio]

Okay. And I knew that was my role.

[Jonathan Bornagol]

Yeah, yeah, great. And just for the audience, when, when Jonathan says unfunded sponsor, that's the, the earlier term for independent sponsor. So same, same thing there.

[Will Smith]

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[Jonathan Bornagol]

You said that this business and we're going to focus our attention here on the document storage business. If we have time. We'll get to billboards. What did you say it was a.

[Will Smith]

12, 13 year old business.

[Jonathan Bornagol]

When you, okay, and, and that, that you thought that they had maxed out their own ability to grow it. How did you grow it or how, how did you envision growing it? How, how did you actually grow it?

[Heather Anderson]

Sure.

[Ignacio]

So the idea of, of storing your.

[Heather Anderson]

Documents somewhere else was a very novel.

[Ignacio]

Idea in a market like Dominican Republic. It's something super common in the US It's a huge industry, especially anywhere where real estate is expensive. But it was very unknown here in Dominican Republic. And so when I found the business, I remember having looked at the second player as well and I remember looking at the, you know, the book of.

[Heather Anderson]

Business they had, who were their clients.

[Ignacio]

And I quickly realized one of the.

[Heather Anderson]

Two companies had like the AAA rated.

[Ignacio]

Clients and the other one kind of had everybody else. And so I ended up buying the.

[Heather Anderson]

One with the AAA rating.

[Ignacio]

But what I realized were two things. One, they had a very good client.

[Heather Anderson]

Base which kind of meant they had.

[Ignacio]

A little bit of what you call product market fit. You know, they were servicing a need in the market. The second thing I learned was they were capacity constrained. So this is, this is a real estate business.

[Heather Anderson]

You need space and racks.

[Ignacio]

You know, you need floor space and racks to put up a box and.

[Heather Anderson]

Store it for somebody.

[Ignacio]

And I realized that they were pretty much at capacity, no plans really to expand.

[Heather Anderson]

And so the company was kind of.

[Ignacio]

And the business owners were taking, you know, cash off the table each year. So there was no real plan to expand their capacity.

[Jonathan Bornagol]

Why, why do you think they hadn't wanted to?

[Ignacio]

I think, I think ultimately they, the next step was a big capex step.

[Jonathan Bornagol]

Yeah.

[Ignacio]

And I, I, I, I think they, they were just complacent with, you know, rather than look around the table and.

[Heather Anderson]

Say and see how we're all going.

[Ignacio]

To put our pro rata up, let's just milk the cow a little bit. We came in the complete opposite mindset. Our idea was there's product market fit here, this or what we need to, I like to say we need to.

[Heather Anderson]

Refine product, product market fit and we.

[Ignacio]

Need to kind of change a little bit what's happening. So in terms of infrastructure, it was a very old, very odd warehouse where they were storing.

[Heather Anderson]

It wasn't built for document storage. So it was low ceiling.

[Ignacio]

It wasn't, you know, uniform, let's say aisles where you can pretty much max out capacity. And so what we realized very quickly was going to have to build out. And what we designed was the infrastructure.

[Heather Anderson]

For a business that was probably worth.

[Ignacio]

5 or 6 or 7x the business.

[Heather Anderson]

Because we said maybe we can move.

[Ignacio]

This business once more and never again because logistically it would just be a nightmare to do. And so we set out and we really, you know, said this is one of these, you know, go big or.

[Heather Anderson]

Go home moments for this business where.

[Ignacio]

You have to accept that the business.

[Heather Anderson]

Model isn't a niche little service provider.

[Ignacio]

This is real estate and infrastructure. And so that's, that's how we went about thinking of the business and the actual, the course that we took. I don't know if I went on a tangent. I kind of know.

[Jonathan Bornagol]

This is awesome. You didn't, you didn't know that was. You nailed it.

[Ignacio]

Jonathan Another important thing in refining product market fit, one of the things I realize is the biggest players in the industry were not clients. They were actually unvended, which a lot.

[Heather Anderson]

Of those players are financial services companies. So maybe health insurance banks, regular insurance companies. And one of the questions that I asked quickly was why?

[Ignacio]

And the answer was, well, the physical.

[Heather Anderson]

Infrastructure where you're storing isn't very different than what we're doing in house.

[Ignacio]

You know, we also have this small.

[Heather Anderson]

Little warehouse that's kind of inefficient.

[Ignacio]

And when you're really a bpo, a business process outsource operator scale is king because you basically pool everybody's size and operate it yourself as a way to be able to give back efficiency to everybody. So when we started building out this 12 meter, which is I guess 40 foot high warehouse in probably about 50,000 square foot facility. As soon as we started building, I started taking these potentially large clients to go see it. And I will take them first. I would take them to where we were. I like to do a little bit of before and after and then I.

[Heather Anderson]

Would take them to the construction site.

[Ignacio]

And you know, maybe we still didn't have walls, but we had the, the.

[Heather Anderson]

Columns and the roof.

[Ignacio]

And I would just sell them the idea of can you imagine this full of boxes? And everybody started to realize two questions they would ask, when is this ready? And what's it going to cost me? And so one of the beautiful things about the BPO space was I was.

[Heather Anderson]

Basically going to give them 40% savings and they were going to end up.

[Ignacio]

Storing in prime storage conditions, which ended up being the. The you know, easy sell or the. Or the way for them to pitch. You know, this just works for us.

[Jonathan Bornagol]

Yeah, there was a lot there. Jonathan, that was awesome. Let me respond to a few things. First of all, the previous ownership kind of milking the company. That is a common pattern. Doctor us wherever that. That the. The current owner is often the founders. Just taking the business to the next step would require a lot of energy, a lot more risk. And if they're maybe at the. Toward the end of their careers or maybe they've expended all of that, all of that energy in. In risk in just getting the business off the ground for whatever reason, they just don't want to take it to the next step. But that doesn't mean that the business itself, that there isn't a next step to take. And so it takes new blood, I. E. You, business buyer to come in and do that. So that's a very common pattern.

[Ignacio]

One good question to. To let's say in diligence is ask.

[Heather Anderson]

The owner if they had unlimited capital, what would they invest in for the business?

[Ignacio]

Like, how do you double it? You can ask those questions. And I think ultimately that's how my current, you know, partner, because he did roll over his equity, how I kind.

[Heather Anderson]

Of got him to make the sales.

[Ignacio]

Pitch to his partners of, you guys need to sell because, you know, you're holding me back. And it was because I asked him that, you know, unlimited capital, what would you build? And he said, you know, we would.

[Heather Anderson]

Build this huge warehouse where we would.

[Ignacio]

Have, you know, we would comply with all the, you know, fire safety and everything. And we basically said, all right, let's put, you know, pen to paper and let's. Let's figure out how to do that.

[Jonathan Bornagol]

I loved how you put. How did you put it? That was it. Was it that in business process outsourcing, basically what you're doing is all these companies will be doing whatever the process is themselves. And what you do is you pool all of that. And because you're doing it at scale, you can offer the same thing they're doing internally more cheaply to them and probably much more value. Exactly what you did. All these, these unvended. Never heard that word. Love it. These unvended businesses were doing their own little, you know, crappy document storage in house. And you could do it better and for cheap if you pooled doing everybody's. I've never. It's such a good articulation of much of business, really. I've never, I've never heard that. And then, and then you've just revealed what a salesman you are. A little show, a little show and dance, a little before and after. So you must like that.

[Ignacio]

I love selling this. One of the things I didn't know.

[Heather Anderson]

About myself going into the search process.

[Ignacio]

But I then realized that when you're.

[Heather Anderson]

An investment banker, you're always selling.

[Ignacio]

You're either selling the buy side or the sell side, but you're constantly pitching. That's what an IB analyst does all day long.

[Jonathan Bornagol]

Never heard that.

[Ignacio]

Interesting. I never really knew that I was a salesman until I had to sell because my life depended on it. But yeah, and that's one of the reasons why I didn't push to then become the general manager.

[Heather Anderson]

I said, no, I need to be.

[Ignacio]

Selling all day long. I can't be, you know, running day to day operations. This is a pure growth, you know, kind of a growth equity play.

[Heather Anderson]

And so the, the growth needs to.

[Ignacio]

Come from me selling all the time.

[Jonathan Bornagol]

Jonathan. So let's turn to your life depending on it. So when you, you really bet the company here, I mean, it was all about building this giant new facility. How did you decide how, I mean, I guess basically how did you decide how big a facility to make? And, and the way you do that is you'd correlate it to how big you thought the actual market was. May maybe it was just a kind of a rigorous financial analysis that isn't that interesting for a podcast. But can you say something about me like why didn't you build the facility twice as big as you did or half the size that you did or.

[Will Smith]

Because you said yourself, you, you only had one shot at this.

[Jonathan Bornagol]

You, you weren't going to move after this.

[Ignacio]

So, so this is, this is funny. I'm going to go back to the business that I did not buy in Panama. I remember they had three sites and they were scattered around Panama City. And so when I learned of, when I, when I went to buy Bunker, I said in diligence, I said, we'll.

[Heather Anderson]

Just rent more warehouses.

[Ignacio]

You know, you can do that.

[Heather Anderson]

And it's part of the business model multi site.

[Ignacio]

You know, you say it and you believe it, but I remember the first two weeks we had owned the business. We, you know, we ran out of space and you know, I had to scramble to find where we were going to store the next box because you can't stop your clients in the document storage business, your existing clients, they grow and they Expect you to take the boxes and they expect you to store them. So the idea of we're out of space is unacceptable.

[Heather Anderson]

And I remember, luckily one of my.

[Ignacio]

Investors know they had real estate and they, they had a warehouse that was maybe a couple miles away from my, the, the warehouse that we had. And I quickly called them up. I knew it was an, it was a warehouse that, that, you know, wasn't being used. And I said, hey, can I do a short term rent on this warehouse? And they said, yeah. And I swear to God for the.

[Heather Anderson]

Next three to four months. It was a logistical nightmare.

[Ignacio]

The idea that maybe Will has one.

[Heather Anderson]

Box stored in site A and his.

[Ignacio]

Other box stored in site B.

[Heather Anderson]

And he asked for both of them.

[Ignacio]

And I have to somehow centralize, you know, that is a logistical nightmare.

[Heather Anderson]

Unless you are a logistical operator, maybe.

[Ignacio]

Like a FedEx where you're taking everything.

[Heather Anderson]

Centralized and then distributing.

[Ignacio]

You do not want to live that. And so at that point, the thesis of we will own multiple sites, it just crumbled and crumbled quickly. And so at that point we started looking for the idea of we need to build, and we need to build somewhere we can grow. Just one of these coincidences. In life as a searcher, you're always out there, you're always pitching your, you're, you know, find a business to buy, find a customer, the business that you have. And so I, I developed a relationship with somebody that's about my age who.

[Heather Anderson]

Fell in love with the idea of Jonathan searching. He had bought his own business. And I remember his family owning a.

[Ignacio]

Piece of real estate that was in the, the main highway here in Santo Domingo. And I called him and I said, hey Marcos, what are you guys going to do with this 300 square foot of plot of land? Because I could really, you know, I'm looking for something like that. And he said, let me call you back. And all of a sudden he called.

[Heather Anderson]

Me back and he said, listen, I.

[Ignacio]

Talked to my family. We actually own the 300,000 square feet behind that doesn't access the highway. And he didn't even know it, that they owned it. And he said, and I said, that's interesting.

[Heather Anderson]

Let's get together.

[Ignacio]

We ended up. Why am I saying this? We ended up sitting down and saying, all right, we have 300 square feet of land. What do we build? We sat down with an architect that.

[Heather Anderson]

Had a lot of experience in industrial.

[Ignacio]

Real estate and we did a build to suit. We said, what does this building have to look like? And I swear to God, it started off with to comply with the National Fire Protection Association we need 170,000 gallons of water in a cistern to be able to run inrex sprinklers.

[Heather Anderson]

And so if the building is built.

[Ignacio]

Already it's impossible to put the cistern because it goes under the warehouse. And so luckily this was a know Greenfield opportunity where we're going to, we will build this to spec. Why is, why are they so important in my story? They literally built the entire warehouse.

[Heather Anderson]

So they, they became our real estate partners.

[Ignacio]

They put up the warehouse, the entire building and they gave me a 20 year lease without me having to give them a deposit. So again, you know they were kind of this another investor that I had or this partner that I could, that I picked up along the way that is invaluable I to this day.

[Heather Anderson]

And I will say, and I know he will hear it, he will laugh.

[Ignacio]

I have still not given him a deposit after eight years. That's, that's how much trust base this was. And it was a warehouse where going into it we were losing money because it was too big for us. You know, we built something that, that we needed to fill up.

[Jonathan Bornagol]

So you never bought the building. In fact they built a spec. You were going to be the tenant. They built it for their tenant basically.

[Ignacio]

And my investors at one point, some of them had never gone to the old warehouse. They just trusted along the process. And when the new warehouse was ready.

[Heather Anderson]

I remember I did the before and.

[Ignacio]

After and they said one, you have an amazing eye and you, you know your risk appetite is a lot larger than we thought.

[Heather Anderson]

And then the second thing, a couple.

[Ignacio]

Of them said if you would have.

[Heather Anderson]

Taken me to the old warehouse during.

[Ignacio]

Due diligence, there's no way we would have let you buy that business.

[Jonathan Bornagol]

And so the, the answer to the question of how big to build was basically determined by the available parcel that you. That you found through Marcus, his family.

[Ignacio]

Yeah, it was. And it was big enough. I mean we're talking about we still have land. So we've already built the second warehouse. That's basically just a continuation of the first. We've about 6x the company in terms of boxes stored and we still have land to probably you know, 2 or 3x that where we are today.

[Heather Anderson]

So it was very big piece of.

[Ignacio]

Land for us to really be ambitious.

[Jonathan Bornagol]

Really exciting. Good for you Jonathan. It's really, really cool story you, you relationships and kind of working the phones. I feel like this keeps coming up. It is a stereotype of smaller markets. I don't even Mean countries, but smaller cities, smaller towns, that it's all about, you know, relationships and networking and business gets done that way. Kind of old school, if you will. Am I, is that accurate or am I reading into it 100 accurate?

[Ignacio]

So I mentioned my father was a cardiologist, right? He passed away a couple years ago at a young age. But like I say, he's my, he's.

[Heather Anderson]

Still to this day is my best salesman.

[Ignacio]

People trusted him with their heart, their life. And so when I came up to them, you know, maybe he would do.

[Heather Anderson]

A couple introductions like, hey, meet my kid.

[Ignacio]

He's got this, you know, either he's a dog, he was a doctor, he.

[Heather Anderson]

Didn'T really understand what I was doing.

[Ignacio]

But he would say he would, you know, open doors for me, get me.

[Heather Anderson]

Meetings all the time. Until this day, about six years after.

[Ignacio]

He passed, he's still my best businessman. People trusted him and by association, now they trust me. And then when I say trust, you know, document storage, it is a storage business, but you're storing people's information, so there is a lot of hesitancy to outsource that. And so I am not only the sum of my relationships, but also everybody around me's relationships. So you need to really cherish that and protect it because in small markets, reputation is everything.

[Jonathan Bornagol]

Great, Jonathan, now you just characterize this as a growth equity opportunity. I want to hear a couple things. First of all, for, for people probably understand what that means, but contrast that. What did you mean by that and how is that different than a typical search opportunity?

[Ignacio]

I'm going to compare it more to.

[Heather Anderson]

Let'S say LBO or buyout and private equity.

[Ignacio]

You're usually buying in those situations, stable cash flow businesses where you're doing a.

[Heather Anderson]

Little bit of financial engineering, how much.

[Ignacio]

Debt, how much equity you, you take.

[Heather Anderson]

On, and, and maybe they're mature businesses.

[Ignacio]

That don't grow at very high, you know, high rates. I'd like to describe growth equity as those situations where you're going to experience high growth, but you're probably going to have to put more capital to work. It's where it's not just let's buy the business and, and internally generate cash flow to operate, but rather we're going to have to probably deploy more, more and more funds to keep feeding it.

[Heather Anderson]

Until we feel that we've reached some sort of steady growth business.

[Ignacio]

So I'd say that's the distinction and.

[Heather Anderson]

How we saw the opportunity.

[Ignacio]

You know, we bought something small, but we're going to, we're going to Grow it a lot bigger. I'll take it to maybe ETA comparison. A lot of times when you're a funded search, you know, you love to.

[Heather Anderson]

Say I'm looking for a business, it's.

[Ignacio]

About $2 million in EBITDA. Well, but what if that business is just growing, you know, 7 or 8% a year.

[Heather Anderson]

How does that compare to a $500,000 EBITDA business that's growing 20% a year?

[Ignacio]

Yeah, ultimately you can create the same amount of absolute return in both scenarios.

[Heather Anderson]

You just have to understand they're a.

[Ignacio]

Little bit different playbooks.

[Jonathan Bornagol]

Yep, yep. No, it's, it's for non people without finance backgrounds. They won't know this stuff. And, but it is so important and it is a way to think about an opportunity. And so that your first example of growth equity versus the LBO model in search land, that is what dominates by.

[Will Smith]

Far is the LBO model.

[Jonathan Bornagol]

Leveraged LBO model, leveraged buyout. You're using a lot of debt in the case of an SBA deal, maybe 90% debt, which in private equity land is unheard of. But, but, but a whole lot of debt. And the reason debt that you then pay down of course with the, the.

[Will Smith]

Proceeds of the business.

[Jonathan Bornagol]

Everyone listening will understand that because that is the search model. But the reason that you can, you know, lenders only lend when, against an opportunity, when it's generating enough cash flow to support that debt service. And in a growth equity context there isn't that because you may be just reinvesting, there may not be profits to show you're reinvesting everything into the growth of the business. And so debt as an instrument to fund the acquisition and growth of the business is all but unavailable. And it's actually people, if this people of course be saying this sounds like venture capital and it's not unlike venture capital, but it's not. Venture capital is at a whole different scale and it's generally new technology. And so you can have other businesses that are kind of not so where the chances are not 1 in 20 that it actually works out, the chances are better but that basically all the money going into the business is cash, not debt.

[Ignacio]

That's correct. It's just in the, in between, between venture and pe. It's just the corporate life cycle ones, you know, be born, the other ones grow. These are teenagers, if you want to put it that way. Instead of adults. They, they still need, you know, they, they, they still make you put up cash to send them to college. So it's, it's that type of the. The corporate life cycle.

[Jonathan Bornagol]

So venture capital is investing in infants or fetuses, and growth equity is investing in teenagers. In LBO private equity, traditional search is investing in adult businesses. I've never heard it put that mature.

[Ignacio]

Industries, mature cash flow. The one thing I would say, just as a piece of advice, if I can offer to potential searchers that are surely listening to this podcast, will, if you are a good salesman, do not be scared to do a smaller deal. There's one of these things in growing businesses that I feel that, you know, sales will cure. They won't cure everything, but they'll cure a lot. So high growth will cure.

[Heather Anderson]

Overpaying in a deal.

[Ignacio]

High growth will cure, you know, dysfunctional partnerships. It'll. It'll cure a lot of things. Yeah. And so sometimes, you know, when you're sizing your deal up, you might say.

[Heather Anderson]

This is too small.

[Ignacio]

But, you know, having reflected on this, don't be scared of a small deal. If you're a strong salesperson, you'll grow into it and you'll grow into it quicker than you think, says the salesman.

[Jonathan Bornagol]

Speaking of size of business numbers, we didn't get any. Can we have some about the size of the business that when you bought it and, and terms that you bought it at?

[Ignacio]

I can't. I don't think I can get into specific numbers, but like I said, one of the. We found very. It was a small deal. It was definitely on the, on the. Maybe we. This is, this is a lot smaller than we thought we were going to find. Amount. So below a million dollars of EBITDA business.

[Jonathan Bornagol]

Okay.

[Ignacio]

And like I said, we've been able to grow it at multiples on an absolute basis. So now, now it's, you know, it's a, it looks literally physically and internally, it looks like a totally different business to the point where I could, you know, easily say we're about 85% of the Dominican market and probably the largest operator in the Caribbean region, which kind of makes us, you know, the, the entry point into, into any international player looking at the region. By the way, we, I still operate the document storage business. I don't know.

[Jonathan Bornagol]

But in case anybody's listening that wants to enter the Caribbean market, you know how to reach. Jonathan. Okay, so less than a million in ebitda. And, and. But the multiple was. Can you. The multiple was this 6,7ish.

[Ignacio]

Yeah. Yeah, that was the arbitrage.

[Jonathan Bornagol]

We were looking for A couple other things on this, Jonathan. The so, so growth equity was, was how you saw this opportunity. One of the things that is the opportunity for more traditional searchers. Conventional searching is when it's a mature business. LBO model is making doing what the business does, but better. In other words, you know, pulling the levers is the cliche getting in there and improving processes, et cetera.

[Will Smith]

So was that at all part of your thesis?

[Jonathan Bornagol]

Was there, was there that kind of conventional stuff to be done and if so like maybe. Is there anything to say there or was that a small part of this story?

[Ignacio]

No, no, absolutely. I like to describe.

[Heather Anderson]

It was a four pronged transformation what.

[Ignacio]

We did in the business.

[Heather Anderson]

So the first one, and we already talked about it, which was physical real.

[Ignacio]

Estate and the infrastructure we were offering, that one was relatively clear and straight cut. The second one was the company didn't have a middle management system. It was literally kind of one of these businesses where the partner that operated the business, it was him. And then it was know I, I listen to a lot of your episodes. Imagine like these H Vac businesses where.

[Heather Anderson]

Then it's just, you know, field technicians.

[Jonathan Bornagol]

Yeah.

[Ignacio]

So there, there wasn't real management team. And I was lucky enough to the first month I said all right, I need a project manager if we're going to grow. I need somebody after I, you know, land a sale.

[Heather Anderson]

I need somebody to onboard the client.

[Ignacio]

And bring the boxes in.

[Heather Anderson]

I was lucky enough. I told my brother in law, here's.

[Ignacio]

The relationships, you know, know you were an industrial engineer. Can I meet a couple of your, your classmates that you think could, that you would recommend.

[Heather Anderson]

And I met Helen and I'll shout.

[Ignacio]

Out to Helen because she's still with me and Helen, you know, signed up to the business the next day and it started one of these situations where Helen came on board.

[Heather Anderson]

Caroline, who is our finance manager actually came from the family office of one of the investors.

[Ignacio]

They were nice enough to, you know, give it, to give us one of.

[Heather Anderson]

Their finance managers as a growth opportunity for her.

[Ignacio]

We plugged into their ERP system and she was already fully trained on, on the system. So it was, you know, it was literally plug in and we're operating on a new erp which implementation for those things are, are, you know, a torture. So that was one of a huge win. And then ultimately I ended up finding.

[Heather Anderson]

Another operations manager whose name is Millie. Three women, three managers. They were the core of the middle management team from going there on out for the last eight years.

[Ignacio]

Everybody was young. One of the things that happens a lot in markets like Dominican Republic, a lot of really good young talent, a lot of Times they don't get opportunity. And so I, I'd like to think that one of the things that we.

[Heather Anderson]

Were clear upon from the get go.

[Ignacio]

Was if we do not build a middle management team, we cannot grow exponentially. I like to say when you're an owner, operator, sometimes you make all the decisions and there are only so many decisions you can make in a year. But if you build out a middle management team and you empower them, then the amount of decisions that get made.

[Heather Anderson]

During a year are exponential and that just compounds year over year.

[Ignacio]

It's just like an irr. And ultimately that's one of the things we did. I told them, listen, you've been hired, you make decisions and you are accountable for them at the year end and we'll just take a look at it. And so we, we did that and it was, it was a home run. Yeah, literally all eight of them stayed on with us. So we have zero attrition and amazing. They've grown, they've grown themselves a lot.

[Heather Anderson]

Both financially and personally and professionally.

[Ignacio]

So that's one of the non monetary, I think benefits of being a business owner.

[Heather Anderson]

You see the people around you grow.

[Ignacio]

As well, and I love that. So that was two. Number three in our transformation was product offering. You know, we, I remember when we closed on the deal, or at least.

[Heather Anderson]

Prior to closing, already had signed the spa.

[Ignacio]

One of the conditions precedent was to get, I think it was the top 10 clients had to sign an assignability.

[Heather Anderson]

Clause and change in control of their contract.

[Ignacio]

And I remember having to do that round with the nacho, which is the partner who rolled over and who still.

[Heather Anderson]

Is my partner and the general manager of the business. And I remember going to the meetings.

[Ignacio]

With him and putting out my hand.

[Heather Anderson]

And saying, nice to meet you, my name's Jonathan. And then he would say, nice to meet you, my name's Ignacio.

[Ignacio]

And I would look at him and say, you're selling me this book of business. Are you telling me the clients don't know you?

[Heather Anderson]

And he was like, well, this client signed the contract eight years ago.

[Ignacio]

You know, they send more boxes, they pay their invoices, they're low maintenance. You know, I hadn't met the counterpart.

[Heather Anderson]

And, or maybe they changed them a.

[Ignacio]

Couple years ago and you know, we don't have to really put that much effort into them. And at that moment it clicked and I realized something and I said, let me look at how the growth rate per client per vintage was looking like.

[Heather Anderson]

In terms of the year of the box that I was storing.

[Ignacio]

And I Realized we were doing a lot of what, you know, later age storage is. So just. I'm going to go a little bit technical, but Iron Mountain, which is the.

[Heather Anderson]

Largest document storage company in the world, says that the median box has been stored with a 16 years.

[Jonathan Bornagol]

Wow.

[Ignacio]

So yeah, it's.

[Heather Anderson]

And we'll hopefully we'll get into recurring revenue later.

[Jonathan Bornagol]

Yes.

[Ignacio]

But that just means that, you know.

[Heather Anderson]

There are documents that are right off the printer fresh and there are documents that have been stored a long, long, long time that nobody's touching.

[Ignacio]

You might want to call it cold.

[Heather Anderson]

Storage almost if, if you want to talk about in a digital fashion now.

[Ignacio]

That they're calling, you know, when the.

[Heather Anderson]

Data center puts it away.

[Jonathan Bornagol]

Yeah.

[Ignacio]

And so of keeping it in the cloud. And so I realized we had a lot of cold storage. And I said, this is a risk. If we don't have strong client relationships, something can happen. So we need to get into the.

[Heather Anderson]

Just in time model.

[Ignacio]

I want the paper off the printer business. And so we designed how we were going to build the business in order to strengthen the relationships and add more.

[Heather Anderson]

Services and add more value to our.

[Ignacio]

Proposition to make our client relationships that much stronger. So that was number three.

[Heather Anderson]

The fourth one was digital transformation.

[Ignacio]

So similar to clients that are unvended, we had a Excel which was the.

[Heather Anderson]

Treasure map of where everything was stored.

[Ignacio]

Combined with this inefficient storage method where every box had a forever place. So our barcodes would know, say this box will be stored in warehouse number one, row number four, you know, module five, position six. But obviously once that box went out, because maybe the client asked for it just to, you know, work with the documents.

[Heather Anderson]

That was a position that had to.

[Ignacio]

Be reserved for them. And so when I went in, I told Nacho, we need to, you know, we need to buy enterprise grade warehouse.

[Heather Anderson]

Management system for this industry.

[Ignacio]

Said, you're crazy. That costs so much money. We're going to. We've actually been trying to build our own software. And I said, all right, open mind, Nacho. We went to the International association, which.

[Heather Anderson]

Is mostly us driven their conference. And I remember the first thing we did, we went straight to the booth.

[Ignacio]

There were two vendors that the whole industry uses and we went to two vendors. And I basically said, hey, this is our situation. Pitch us.

[Heather Anderson]

By the end of the conference, when.

[Ignacio]

We landed back in Santo Domingo, Nacho was all over me saying, when are we going to buy the software? When are we going to buy the software? And that's what we did. You know, we implemented, you know, the Top class warehouse management system which basically is what everybody, the big players use. Where you know where a box is, is at every moment, at any moment in your chain of custody responsibilities. And it really transformed us because it was luckily we. We bought it just when we were going to move which is one of the challenges because or the opportunity was we will be able to scan every box and make sure we onboard not.

[Heather Anderson]

By data migration but by actual physical.

[Ignacio]

Audit 100% and it was the best way to start the business kind of.

[Heather Anderson]

To restart the business into this new digital reality. So we kind of became digital native all over again.

[Ignacio]

So those were I guess the four things of growth. The other one and I know you're a little bit interested in talking about was through acquisition. I guess this was kind of how we prepared the company to be able to acquire. And after we had these four things in line it was a lot easier.

[Heather Anderson]

To actually think about strategic M and.

[Ignacio]

A because we were just running with different systems, different teams, different everything.

[Heather Anderson]

Where acquiring a customer was not only just a huge upgrade for any of.

[Ignacio]

Their clients but it was easy to digest for us as well.

[Jonathan Bornagol]

Well Jonathan, we're actually not to have time to hear about the inorganic growth because there's so many other topics I want to get to and we're bumping up on time already. One thing I want to hear about a little bit is just how going back to the giant facility that you built but as a tenant just because in search self funded search generally there's. There can be real estate involved and the business owns the real estate. The searcher will buy it as a package and they're off. And there always seems to be this debate of like well should you own real estate as a package or should it be carved out because it's in some sense real estate is its own business, frankly a single asset business. I heard you mention sale leasebacks earlier. I aired a recent episode with an independent sponsor who had an incredible sale leaseback deal. We're going to be doing a sale well webinar on sale leasebacks.

[Will Smith]

So anyway it's just cracked open my.

[Jonathan Bornagol]

On what I thought I understood how to think about owning real estate versus not I would take it in your business where you yourself have said that you're basically a real estate business that you, that you of all people would want to own it but your tenants. So how should people think about that?

[Ignacio]

So I bought the first warehouse. So we, we had to buy it in the deal.

[Heather Anderson]

Okay.

[Ignacio]

And I'd say it was maybe it.

[Heather Anderson]

Was about 20% of the value of.

[Ignacio]

The, of the, of the transaction. Yeah, I, it was one of those things I immediately regretted because I realized I had to shed, I had to shed the old warehouse and move on to something new. And it took me a while to move, you know, the trend to sell the, the, the, the real estate, the, the warehouse that we, we had purchased. And it was a very big distraction and it was, it was even a.

[Heather Anderson]

Distraction in conversation with my investors.

[Ignacio]

It became one of those things where it took me so, just so you know, it took me maybe it took me about five years to sell. Yeah, well, you had to, you had.

[Jonathan Bornagol]

To build the other one first. So that was going to take a while.

[Ignacio]

Yeah, no, that, that, that was, that was good. That was one of the reasons where we ended up, why we ended up buying it. It's because we had to have it until we were going to move. Yeah, but it, it wasn't prime real estate. And so it kind of became one of those things where at the end of the year, you know, you have your shareholder meeting and did we, did we sell the real estate? No, we had, you know, a couple of offers. Nothing fell through. From an, from a returns perspective, sitting.

[Heather Anderson]

On the real estate and then selling it for less than we purchased it.

[Ignacio]

For five years later, complete value destroyer.

[Heather Anderson]

Unless you're sitting on prime real estate or very strategic real estate for what.

[Ignacio]

You'Re going to do next, I'd say try to, not try to carve it out and have somebody else own it. Now the difficult part is how much.

[Heather Anderson]

Of the transaction is the real estate.

[Ignacio]

Worth and how is the seller looking at in terms of their liquidity event? Are they interested in keeping some rent generating asset?

[Heather Anderson]

Are they, is it going to be.

[Ignacio]

A liability for them? You know, can you find alternative uses like sale, leaseback or you know, maybe, maybe you just buy it to resell it or something. So I don't think I have a straight cut answer to you. Except, you know, if it's not really strategic for you to be there and.

[Heather Anderson]

You might end up moving your business.

[Ignacio]

Then absolutely don't buy it. And if it becomes a, you know, a, A, an issue in terms of negotiation with the seller, try to find ways around it, I'd say, and then also ultimately understand what are you buying?

[Heather Anderson]

Are you buying an operating business or are you buying real estate that has.

[Ignacio]

An operating business within it?

[Jonathan Bornagol]

So and so, and you're strong on the fact that people should just basically they, their first reflex should be not to buy it. And that's because it's a distraction. It's fundamentally a different calculus and how you optimize the capital that goes to real estate. You've basically bought. It's basically like I said, a mini business. And so now you've bought too many businesses. Get rid of the mini business, I. E. The real estate.

[Ignacio]

It's a distraction, it's a return diluter as well. So I don't know many real estate.

[Heather Anderson]

Businesses that might be growing at a.

[Ignacio]

20, 25, you know, percent IRR for, for that long a time unless you're in this like really hot real estate market. So when you're looking at it as well, it's probably, it's probably dilutive to your, your incentive to return returns, I guess to, to your investor base.

[Jonathan Bornagol]

Great, thank you.

[Ignacio]

It's a different asset class in all of, in and of itself. Actually.

[Will Smith]

One thing we touched on before we.

[Jonathan Bornagol]

Leave this Jonathan, is going back to the fact that this was growth equity and you bought, you, you did not take debt to grow this business. We had talked about that. There are unique challenges to that that many searchers might not anticipate or be used to. What were those?

[Ignacio]

So I didn't take on debt at acquisition. I'd say that I did take on operational debt, if you want to call it that. So rent, a big rented warehouse might not look like debt, but ultimately I guess if you start doing capital lease versus operating lease accounting you can understand, well, is this a burden on the company? And a 20 year lease where you pay rent the first of every month is, is a financial burden just like any other debt. So we did get that benefit of, of a debt that didn't look like a, you know, traditional debt. But you know, when, when I bought the business, I thought I was going.

[Heather Anderson]

To be able to finance a little.

[Ignacio]

Bit of it, maybe 50% of the transaction. And pretty much up to the month.

[Heather Anderson]

Before closing, I had lined up financing.

[Ignacio]

With a specialty finance company that, that does business in the Caribbean and they gave me term sheets, you know, I was literally ready to sign except we got hung up on one clause which was how many days late is a default? And you know, the standard language at.

[Heather Anderson]

Least here in Dominican Republic was usually.

[Ignacio]

You know, five days, maybe a little bit more. And it's permissive. And they were adamant, one day late and you're going to have your shares as guarantee and we can execute. And I remember at that moment I got cold feet with the debt and I said, these guys, they're not giving.

[Heather Anderson]

Me the good vibes.

[Ignacio]

They're sounding kind of Sharky, there are worse deals to do than a full equity lower return transaction, which could be, we did a great deal for some crazy reason we might have missed payment.

[Heather Anderson]

On one day and then we're, all.

[Ignacio]

Of a sudden we're in this legal disaster where if a shark wants to foreclose on you.

[Heather Anderson]

And I remember I had to pull.

[Ignacio]

The plug on the debt.

[Heather Anderson]

It was a weird situation, a very uncomfortable one. I had to go back to my investor. I said, hey guys, I need double the amount for the acquisition.

[Ignacio]

Thankfully, the support that I got with them was. And because this was relatively small for.

[Heather Anderson]

Big, high net worth individuals, the answer was no problem.

[Ignacio]

We're here for you. And we were able to close the M and A. The benefits of being all equity, you get to sleep at night a lot easier. I mean, you get to use your free cash flow, the cash flow that.

[Heather Anderson]

You'Re generating to reinvest it. It gives you a lot more.

[Ignacio]

It's a different mentality. I think a lot of times if you're levering 90% of your deal, a lot of times you're trying to play, I don't say games, but you're trying to juggle cash flow to meet debt obligations.

[Heather Anderson]

And a lot of times you don't focus on how do I grow this while if you're very heavily equity funded.

[Ignacio]

Which I do think businesses that are going to go through, you know, high growth situations might need to be you, you're, you're able to be a lot more creative and a lot more, you can explore a lot of things when you have cash that isn't earmarked to go either to debt, a dividend or you know, earnouts, whatever you want to call it. So I do think that even though.

[Heather Anderson]

You always, in hindsight could look at your, your historical performance and be like.

[Ignacio]

Oh, what was my, my cash flow? I should have levered all of that.

[Heather Anderson]

And it would have juiced all my returns.

[Ignacio]

Well, well, in hindsight, you know, everything's 2020 and you only get to play the, the, the cards you got dealt. But you know, that's, that's my perspective on, on leverage, especially in growth situations.

[Jonathan Bornagol]

But, but also you had said to me that, that to get really outsized returns, leverage usually has to play a role.

[Ignacio]

Yeah. Yeah. So when we talked originally, I told.

[Heather Anderson]

You there are four ways of creating.

[Ignacio]

Returns by choo, cheap grow, lever and get multiple expansion on your exit. And it's tough to create high returns.

[Heather Anderson]

In an unlevered scenario.

[Ignacio]

Just so for people that like accounting.

[Heather Anderson]

And financial accounting there's something called the dupont model.

[Ignacio]

I don't know if you know it will, but it's basically a shorthand way of calculating your return on equity.

[Heather Anderson]

And literally the amount of leverage you have on a balance sheet is a multiplier of those returns.

[Ignacio]

So your return on assets, and this is book leverage accounting, but your return on assets multiplied by your book leverage.

[Heather Anderson]

Equals your return on equity. So you can imagine if your return.

[Ignacio]

On assets is, you know, equal to return on equity.

[Heather Anderson]

You, you don't have this leverage component which is a multiplier, literally a multiplier of returns.

[Ignacio]

So if you're missing one of these four legs to the, the stool, it's, it starts creating difficult situations to, to return these sometimes, you know, very outsized.

[Heather Anderson]

Returns that the search fund model tries.

[Ignacio]

To, to predicate on. I think a lot of times.

[Jonathan Bornagol]

Happily, in your case, you haven't sold the business, but you, you grew enough that it overcame the fact that there's no leverage in it.

[Ignacio]

Yes, yes. And I did exit one of the businesses. I told you, I already exited the billboard business. And so the other thing that I did learn was multiple expansion is tough in small markets. Usually, you know, the, the ETA thesis is by the time I'm done growing.

[Heather Anderson]

This business and that I'm done owning.

[Ignacio]

You know, my hold period, I will find smaller mid market PE to come.

[Heather Anderson]

In aggressively and take this off my hands.

[Jonathan Bornagol]

Yes.

[Ignacio]

And that usually that usually means I.

[Heather Anderson]

Bought at 4 and I sold at 10.

[Ignacio]

That multiple expansion is just as equally a multiplier than financial leverage is when.

[Heather Anderson]

You'Re operating the business.

[Ignacio]

So what I found is also in small markets, the depth isn't there and a lot of times you're waiting for.

[Heather Anderson]

The international strategic to want to come on your market.

[Ignacio]

And what I've learned is those strategic.

[Heather Anderson]

Are very disciplined in terms of multiple.

[Ignacio]

The multiples they pay. So if you're one of these, you know, global businesses, a lot of times you have these M and A departments that their job is literally to have.

[Heather Anderson]

The pulse on every single country in the region. And they have conversations once or twice a year with you.

[Ignacio]

They'll ask you, you know, how the business is going, where you guys are at, are you thinking of selling? And ultimately what they do is they try to give everybody offers, but they're.

[Heather Anderson]

Low offers because they play the numbers game.

[Ignacio]

You know, we throw out 30 offers.

[Heather Anderson]

And maybe one of them bites and that's the time we enter that country with the market leader at a cheap price.

[Ignacio]

So multiple expansion is really tough in small Markets. The second reason why it's small, if you get into niche businesses like the ones that I got into, you might actually be the market. So who's going to acquire you if you're the big one in the room?

[Heather Anderson]

And ultimately if you grow the business.

[Ignacio]

Into something that's too big, it's almost undigestible for anybody other than a strategic. So a lot of times you might think maybe I can sell to another searcher, maybe I can sell it to.

[Heather Anderson]

A high net worth individual.

[Ignacio]

But if the business gets so big, nobody has in their portfolio allocation a.

[Heather Anderson]

Sleeve of capital that's so big to go something that is non core. Assuming that you are the big player.

[Ignacio]

In the market, you're non core to everybody. And so the only way you can motivate somebody might actually be let me reduce price. And so that, that you know, kind of shoots your operating, I'm sorry, your.

[Heather Anderson]

Multiple expansion in the foot as well.

[Jonathan Bornagol]

So with all of that in mind, how, what would you tell people in non big mature markets where there's always a larger PE buyer up the chain? What would you tell them? How would you tell them to think about multiple entry, exit, multiple or exiting at all?

[Ignacio]

Even so I think let's go to Genesis and let's go to the search fund model where so much of, you.

[Heather Anderson]

Know, a third of your compensation is.

[Ignacio]

Driven by the returns that you, you.

[Heather Anderson]

Give on an IRR basis.

[Ignacio]

So I would say literally irr. So let's call them legally defined as irr. I think the first thing you need to do is talk to your investors, really understand who is putting this idea of liquidity, the liquidity pressure on the table. Is it you, the searcher, because of.

[Heather Anderson]

The things that we already spoke about?

[Ignacio]

Because, because it's the way of you to get liquidity? Or is it the investors that actually.

[Heather Anderson]

Want their capital back?

[Ignacio]

Because you know, they, they're thinking more institutionally like funds who recycle capital and give back capital after about a 10 year period. The answer is, you know, as investors.

[Heather Anderson]

We'Re okay with owning a business as.

[Ignacio]

Long as it starts generating cash flow maybe and comes into a dividend play. If they're okay with that, maybe put some consideration into that in your search contract. What will the business look like if we hold this for 20, 30 years? Because if not all of a sudden.

[Heather Anderson]

You'Re going to find yourself in a.

[Ignacio]

Situation kind of what happens in startups that where everybody's options are underwater. What's gonna, what, what is this gonna.

[Heather Anderson]

Mean all of a sudden?

[Ignacio]

If you're never gonna be able to.

[Heather Anderson]

Hit your IRR hurdle and you're still the owner operator of this business.

[Ignacio]

It's not good for anybody. You're not incentivized to keep putting, you.

[Heather Anderson]

Know, as much as you might, you.

[Ignacio]

Might need a refresh comp package and maybe you end up having to look for other, other avenues of creating wealth.

[Heather Anderson]

For yourself that maybe you do get.

[Ignacio]

Your, your let's some sort of very big variable compensation tied to it. The other thing is, I'd say break away from the idea of the irr. Think about multiple uninvested capital. So multiple uninvested capital is literally how many X you did on the, on your capital. As simple as that. So let's take this to maybe stock market terms. I bought a share at a 100, I sold it for 500, I did.

[Heather Anderson]

5X on my multiple uninvested capital.

[Jonathan Bornagol]

It's a fancy, it's a fancy acronym for basically how the lay person thinks about investments. I doubled my money. Great, you got a 2x moik.

[Ignacio]

Exactly. The difference between that and IRR is time.

[Heather Anderson]

So how long did it take you.

[Ignacio]

To make that 5x? Did you do it in a year? Because if you did it in a year, then your IRR is 500. Did you do it in 10?

[Heather Anderson]

Because if you did it in 10, maybe your IRR is closer to 16, 17.

[Ignacio]

So I think what ends up happening, the two biggest differences is probably on the investor side.

[Heather Anderson]

So when you're a high net worth, or maybe you're a family office or.

[Ignacio]

An institutional investor, you probably are looking for situations that are more managing portfolio, generational wealth and situations like that where 10x in 10 years is phenomenal. A lot of times also these, these in types of investors, they might not.

[Heather Anderson]

Want their money back. They might have already gone through liquidity events where their problem is to deploy.

[Ignacio]

Capital, to not have them sit, you.

[Heather Anderson]

Know, in T bills while they're able to deploy large amounts of capital. So they actually might like the reinvestment rate that you're generating.

[Ignacio]

And so that being said, Maybe at.

[Heather Anderson]

Year six or seven, they're happy with a 15% return that year.

[Ignacio]

But if you sign with blood on day one that it's a 25% hurdle rate on an IRR calculation, you find.

[Heather Anderson]

Yourself in this weird no man's land.

[Ignacio]

Where you're pressuring yourself because your vesting went underwater. But they're still happy with the return that on a yearly basis their asset is generating. So I think when you look at the MOIC or multiple uninvested capital post year five. It's a lot more honest on what the relationship should be looking like. Can you find a vesting scenario where.

[Heather Anderson]

The searcher operator gets some sort of.

[Ignacio]

Liquidity, keeps operating the business and is still motivated without feeling that their IRR.

[Heather Anderson]

Hurdle just you know, landed and squashed.

[Ignacio]

Them because the incentive were designed really.

[Heather Anderson]

For a four to six year hold period.

[Jonathan Bornagol]

Great. I got to let you go Jonathan. We've gone over but, but close us out by telling us about what you're doing now. We, we. You still own bunker. There's a whole story of the billboard business which obviously we didn't get time for. You got, you're doing other stuff as well which you and I talked about in the pre call. But, but fundamentally I, I think it's. Is it fair to say that you've pivoted to kind of private equity? What, how would you describe.

[Ignacio]

I'm in process, in process of morphing into some sort of private equity investor. Although I like to say that the entrepreneurial part of ETA I will always hold dearly. I look at opportunities based on what.

[Heather Anderson]

I can bring to the table and not just how I can financially construct.

[Ignacio]

Or deconstruct an opportunity. So I think reflections after being in business, you know, eight, nine years, I do not like operating.

[Heather Anderson]

I am not a day to day person.

[Ignacio]

I do not like repetitive functions which a lot of times is in running a business that's what you need. You know, you got your sales teams that you have to, you know, keep tabs on. You've got, you know, operating and if.

[Heather Anderson]

You'Re in a factory environment then obviously every day you're pumping out that the same product.

[Ignacio]

You said it. I'm a salesman and I love selling.

[Heather Anderson]

Anything and everything that I believe in.

[Ignacio]

And so I, I, I truly love.

[Heather Anderson]

Every time I learn a new business.

[Ignacio]

Model I am, I, I like to become an expert in new industries and morph into. I can put on a document storage hat today, you can take me to.

[Heather Anderson]

The room next and I can put.

[Ignacio]

On a billboard hat on and truly.

[Heather Anderson]

Become an expert in each one of.

[Ignacio]

These new industries that I learned. So what I've understood is the, the place where I add most value besides.

[Heather Anderson]

Deal making because it is my training.

[Ignacio]

Is to be, you know, an, an a, a helpful partner of another operator. And so, and, and that really just means helping them do business development, acquire, partner, sell. And so knowing that my job now is to really morph into a portfolio approach and be able to buy more businesses. But I, I truly think that the ETA in me will never come out. I, I will get elbows deep into.

[Heather Anderson]

The businesses we operate.

[Ignacio]

It's not hands off, you know, let me know how it goes.

[Jonathan Bornagol]

And so are you raising a fund?

[Ignacio]

I am finishing structuring a fund that I will be fundraising soon and I.

[Heather Anderson]

Hope my lawyers don't tell me that.

[Ignacio]

I was not allowed to say that.

[Jonathan Bornagol]

And it'll be focused on the Caribbean just. Doctor or what?

[Ignacio]

No. So the idea of being geographically constrained is probably not good if you're trying.

[Heather Anderson]

To look for larger businesses, which I.

[Ignacio]

Am now, and if you're trying to.

[Heather Anderson]

Create a portfolio approach.

[Ignacio]

I think one of the ways to shake the, the idea of a small.

[Heather Anderson]

Market, a Rhode island sized market is export businesses.

[Ignacio]

So I think by now I've built the relationships I feel comfortable in looking.

[Heather Anderson]

At business models and new businesses in more countries that are just not my native one.

[Ignacio]

So we're probably going to look for a regional approach, although very doctor focused.

[Jonathan Bornagol]

Great Jonathan. And for the audience of people in who are in eta, what's the profile of somebody you might be able to help, A, a searcher, somebody who's not.

[Will Smith]

In the U.S. who, who, who where.

[Jonathan Bornagol]

Do you think you could add value if, if somebody who's the best type of person to reach out to that you could add value for?

[Ignacio]

Well, I think I, I'm in having spoken to a lot of searchers because I have the, I think during the.

[Heather Anderson]

Search and right after acquisition is probably.

[Ignacio]

The moment where at least I felt that I've added a lot of value. So I have a friend, a good.

[Heather Anderson]

Friend who searched right after me here.

[Ignacio]

In Dr. And I remember I would.

[Heather Anderson]

Tell him six months in advance what.

[Ignacio]

He was going to go through literally while searching and after he searched. And one of the things, and this might sound a little bit unhuman, I.

[Heather Anderson]

Told him the day he acquired, I.

[Ignacio]

Congratulated him and I said get ready, you're going to, you know, you're going to fire everybody.

[Heather Anderson]

You're going to cycle through human capital.

[Ignacio]

Now because you're going to build a different organization.

[Heather Anderson]

And it was this whole middle management philosophy.

[Ignacio]

You might have found somebody that just didn't align with your mission.

[Heather Anderson]

And I remember he called me the.

[Ignacio]

Day he ended up having to let go. The last person he called me and he said I can't believe you were right. I should have let those people go sooner. And I really didn't believe you when you told me that I was going to go know full cycle on, on.

[Heather Anderson]

Human resources and that was the case.

[Ignacio]

So I think a lot of searchers, we have common experiences and getting good.

[Heather Anderson]

Advice during the part you're searching, which.

[Ignacio]

Is lonely and right after acquisition, which is, you know, scary. Reach out to as much searchers as you can.

[Jonathan Bornagol]

Yeah, well, Jonathan, on that last point, you, you probably made a few people uncomfortable who want to be able to say on day one in their announcement speech, nobody's losing their jobs. You know, we're gonna get, we're gonna continue on. They don't envision themselves turning over their, their staffs altogether. And I, I, I actually just had an interview last week where that happened to somebody. But I think also in this world it's considered not a failure because this person, it was appropriate that they do it and it's. And with the new team now he's, you know, cooking with, what is it? Cooking with gas. But, so it was the right thing to do. But, but still it's terribly painful and I think most people would consider it not a failure. But they don't want to think that that is the business they bought where the entire team needs to be replaced.

[Ignacio]

I'll tell you this, transparency and honesty go a long way. And so if you don't lie that, that idea and nobody's going to lose their job, it might be a lie. You might better say, you know, we are looking to build and grow exponentially and we want, and we.

[Heather Anderson]

Part of what we did in due diligence was study you as a team.

[Ignacio]

And we bought the business because of you. Now if they don't align with you.

[Heather Anderson]

A lot of times they'll raise their hand.

[Ignacio]

And you need to know that quicker.

[Heather Anderson]

Sooner rather than later.

[Ignacio]

And I actually had a situation.

[Heather Anderson]

The first person I had to let.

[Ignacio]

Go, you know what they said after I let them go, they said, thank you. Yeah, I don't think, I don't think I would have been successful in this mission that you are on. And we gave each other a hug and you know, then they become promoters.

[Heather Anderson]

Of the business because they, they still.

[Ignacio]

Feel that they spent part of their career there's.

[Jonathan Bornagol]

Fantastic interview, Jonathan. Thank you so much. I'll link your LinkedIn. Is that the best way for people reaching. I'll put that in the show notes.

[Ignacio]

I'm a salesman. Well, you know, I'm heavy on LinkedIn.

[Jonathan Bornagol]

Right. How we first connected. Good stuff. Jonathan Bornagol, thank you so much for your time and congratulations on all your success.

[Ignacio]

Thank you. And thank you for the time and opportunity.

[Will Smith]

I hope you enjoyed that interview with Jonathan Bornagol. If you want more Jonathan if you have a question for him, come to the live Q and A that we're doing with him by Zoom on Wednesday, March 19th. Jonathan will come just to answer your questions, direct questions from you, the listeners of his Acquiring Minds interview. Register for that at the link in today's show notes or in the YouTube notes.

[Jonathan Bornagol]

If you're watching on YouTube or at acquiringminds.co.

[Will Smith]

Come to Jonathan's live Q and a on Wednesday, March 19.

[Jonathan Bornagol]

Register for that at the link in.

[Will Smith]

Today's show notes, in the YouTube notes, or at acquiringminds.co.

[Jonathan Bornagol]

See you there.