How 1 SBA Loan Brought Down 2 Businesses

Summary

Podcast Summary: Acquiring Minds

Episode: How 1 SBA Loan Brought Down 2 Businesses
Date: July 30, 2026
Host: Will Smith
Guest: Edgar Galindo, entrepreneur and former co-owner of Structure Landscapes

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Episode Overview

This episode is a cautionary tale about the risks and complexities of acquisition entrepreneurship, particularly when using leverage (SBA loans) to buy small businesses. Guest Edgar Galindo shares the full, unfiltered story of how his and his partner’s ambitious expansion—acquiring two landscaping businesses via SBA loans—ultimately led to the collapse of both. Edgar’s frank account covers financial, legal, and human ramifications, including personal bankruptcy, and provides valuable lessons for would-be business buyers.

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Key Discussion Points & Insights

Edgar’s Background and Entry into ETA

• Early Career: Grew up near New Orleans; started in a family-owned construction business; spent five years in various roles culminating in project management (04:00).
• Pivot to ETA: Sought greater flexibility and ownership; pursued an MBA at UT Austin (06:00); brief stint at Google (so brief, he calls it a “Google-funded search”) provided severance and capital to self-fund a search (06:31).
• Entrepreneurial Influences: Family background in small business—dad owned a roofing company, mom a cleaning company—gave Edgar familiarity and comfort with small business ownership (10:00).
• Search Strategy: Focused on construction-related businesses in Austin, excluding industries like healthcare and restaurants; mostly broker-led outreach (12:10).

Partnering with Matthias and First Acquisition (Austin)

• Meeting Matthias: Connected via Search Funder where Matthias sought an on-the-ground operator with Edgar’s profile (13:15).

• Deal Structure Evolution:

  • Initial plan: Edgar earns up to 20% over 4-5 years, no cash down, no personal guarantee.
  • Bank required more “skin in the game”—Edgar to invest $50K, receive 25% up front, personal guarantee on SBA loan required (17:23–21:18).
  • Option to earn up to 50% equity by reimbursing partner's equity contribution at any time (22:01).
  • Notable Quote: “It was not a self-funded search. It was a Google-funded search.” — Edgar (06:31).

• Acquiring Structure Landscapes (Austin):

  • $4.8M revenue, $900K SDE, purchased for $3.15M with $500K seller note (24:37).
  • Healthy, project-based, high-end customer base with minimal seasonality and limited customer concentration.
  • Quote: “If you’re going to serve consumers, serve the affluent ones.” — Edgar (28:45).

Second Acquisition (Dallas)

• Deal Rationale: Expansion into Dallas six months later; complementary service mix (Austin: landscaping, Dallas: outdoor living/maintenance), potential for cross-pollination, process improvements (31:55).
• Dallas Business: $6M revenue, $950K SDE, well-developed office and systems, but manual/analog processes (34:48).
• Edgar’s Role: Maintained 25% ownership via Structure’s capital investment, assisted on site as needed (38:32).

Collapse in Dallas: Red Flags & Downfall

• Undisclosed Liabilities: Shortly after close, star salesperson revealed $100K unpaid commission, previously concealed by seller; led to legal conflict and mistrust (43:01).

  • Quote: “We can’t work with people we don’t trust. We let them go.” — Edgar (45:20).

• Legal Entanglements: Seller pursued wrongful termination claims, demanded payment, initiated litigation; $160K spent on legal fees with no resolution before shutdown (47:30–51:15).

• Employee Exodus and Theft:

  • Key employees collaborated to siphon leads and start a competing business, directly violating non-competes and non-solicits; evidence discovered via resigned bookkeeper’s unused company computer (53:35).
  • Quote: “It made me question myself... Am I the common denominator?” — Edgar (58:54).

The Domino Effect: Dallas’s Demise Sinks Austin

• Financial Realities: With Dallas failing, its debt service shifted to Austin due to cross-collateralization and personal guarantees; model proved unsustainable (63:58–67:42).
  • Quote: “We evaluated [servicing Dallas’s debt in Austin] for a short time. But... there was just no way... it was double the debt.” — Edgar (67:26).
• Personal Fallout: Filing for bankruptcy, asset protection (e.g., homestead exemptions in Texas), 7 years bad credit, emotional toll on Edgar and family (68:17).
• Shutdown Decision: After growing Structure to $6.3M, the capital meant for Austin’s growth had been diverted to Dallas’s problems and legal fees, making further operation pointless (76:28).

Lessons Learned and Reflections

• Due Diligence: Strongly advocates talking to key employees pre-close; overly seller-restricted diligence process concealed material issues (82:09).

  • Quote: “It should be a red flag if someone’s really adamant about you not talking to the employees.” — Edgar (45:43).

• On Process Improvement: Tech/digitization helps, but only moves the needle if it fundamentally enhances existing processes, not just digital copies (37:47, 83:07).

• On Culture and Change: Introducing too much change too quickly, especially remotely, can demoralize teams and erode trust (62:22).

  • “You can drive efficiencies... but the change management that comes along with it... is really the challenge.” — Edgar (75:18).

Life After Loss: What’s Next for Edgar

• Edgar will help run his father's insulation business in El Paso and may attempt to commercialize the custom app he built for Structure Landscapes (91:30).
• Remains philosophical and resilient, seeing failure as a learning experience, and values the impact he had on employees (89:08, 90:46).

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Notable Quotes & Moments (with Timestamps)

• On Google-funded Search (06:31):
  “It was not a self-funded search. It was a Google-funded search.” — Edgar

• On Equity and Risk (21:18):
  “Your deal got sweetened, but also you now have more risk. A lot more risk. You’re risking $50,000 and the biggest of all, the personal guarantee.” — Will Smith

• On Employee Betrayal (58:54):
  “It’s really disheartening... at some point you’re like, wait, is it me? Am I the common denominator?” — Edgar

• On Red Flags and Diligence (45:43):
  “It should be a red flag if someone’s really adamant about you not talking to the employees.” — Edgar

• On Impact of Entrepreneurship (90:46):
  “One of the things I found most rewarding is taking a step back and being able to see that you’re not just providing for you and your family, but, but all of your employees and their families. And that is super rewarding.” — Edgar

• On Cross-collateralization (79:03):
  “The Dallas loan was personally guaranteed by myself, Matthias, and it was guaranteed by Structure.” — Edgar

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Timestamps for Important Segments

• Edgar’s Early Career & Google Layoff: 03:18–06:31
• Approach to ETA, Search Process: 10:00–13:10
• Meeting and Structure of Partnership with Matthias: 13:10–23:40
• Acquisition Details: Structure Landscapes: 24:35–31:15
• Rationale and Details of Dallas Acquisition: 31:55–41:18
• Collapse of Dallas Business (Legal, Employee Issues): 43:01–57:53
• Emotional and Human Toll: 58:54–63:27
• Bankruptcy, Asset Protection, Aftermath: 63:58–70:05
• Day-to-Day Owner Reflections: 73:18–76:28
• Decision and Rationale for Shutting Down Structure: 76:28–79:52
• Edgar’s Advice & Looking Forward: 82:06–92:48

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Major Lessons for Acquirers

• Diligence and Transparency: Push for maximum access to employees and vendors; don’t accept seller excuses about confidentiality.
• Beware Cross-Collateralization: Linking business debts can expose your initial business to catastrophic risk from a failed acquisition.
• Culture Change is Hard: Remote or absentee ownership, especially combined with rapid change, can alienate existing employees.
• Legal Battles are Costly and Rarely Satisfying: Even “slam dunk” cases can burn capital and drain morale.
• Personal Guarantees are Serious: Bankruptcy is a real possibility—fully understand what assets are at risk.

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Conclusion

This episode illustrates both the promise and peril of acquisition entrepreneurship. Edgar’s openness about his missteps and wounds—financial, emotional, and operational—provide invaluable insight for anyone contemplating leveraged buyouts or multi-unit expansions in small business. The cautionary themes: relentless due diligence, caution with debt and cross-entity guarantees, and the unpredictable nature of non-owner-operator transitions, serve as sobering reminders for all in the ETA space.

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For more interviews and episode summaries, visit acquiringminds.co.

Transcript

[Will Smith]

Regular listeners of Acquiring Minds have heard

[Podcast Host 2]

a number of difficult stories of failed SBA loan acquired businesses and the personal bankruptcies that ensue. Well, today's story feels doubly tragic as two businesses were ultimately brought down. Edgar Galindo and his partner Matthias bought a landscaping business in Austin with an SBA loan. Just six months later, a another highly complementary acquisition opportunity in Dallas came across their desks.

[Will Smith]

They jumped at it.

[Podcast Host 2]

Well, as you'll hear, the situation in Dallas declined quickly. Undisclosed liabilities, employees stealing customers to launch a competitor, and legal action. The business became unviable, which meant that its debt service shifted over to the Austin business, which was now carrying effectively two high leverage SBA loans. That is one too many and the partners have just decided to shut the

[Will Smith]

Austin business down as well.

[Podcast Host 2]

Edgar tells the entire painful story. Listen for his transparency on personal bankruptcy. He lays out the dollars and cents of exactly how it affects his assets today and what it will mean for

[Will Smith]

the next seven years.

[Podcast Host 2]

We thank Edgar for the transparency there and in sharing the whole story. These cautionary tales reverberate around the ETA ecosystem, helping business buyers avoid pitfalls and reminding us all of the grave downsides. They are so valuable and so generously shared by their protagonists. Here is Edgar Galindo, co owner of Structure Landscapes. Welcome to Acquiring Minds, a podcast about buying businesses.

[Will Smith]

My name is Will Smith. Acquiring an existing business is an awesome

[Podcast Host 2]

opportunity for many entrepreneurs and on this podcast I talk to the people who do it. The team at Pioneer Capital Advisory has started offering peripassu debt for SBA business buyers. That means they can help unlock up to $3 million of conventional debt on

[Will Smith]

top of the $5 million limit of

[Podcast Host 2]

SBA 7 loans so Pioneer can structure larger, more complex acquisitions. Listen to our story with Anika John

[Will Smith]

for one of their clients who did

[Podcast Host 2]

just that, buying a $10 million business. As a first time self funded searcher, the Pioneer team has closed more than 100 SBA loans, averaging timelines well below industry standards.

[Will Smith]

Founder and owner Matthias Smith and COO

[Podcast Host 2]

Valerie Stash bring over two decades of SBA lending experience. Matthias and Valerie have a full bench of analysts and associates who work your deals with them. A true deal team.

[Will Smith]

Not just a single point of contact. Visit pioneercap.com or click the link in the notes. Edgar Galindo welcome to Acquiring Minds.

[Edgar Galindo]

Thank you, thank you for having me. Super excited to be here Edgar.

[Will Smith]

We met at UT's ETA event in Austin in February and I have since been eager to share your journey with the audience. And that was even before some of the dramatic events that have happened since. We have a lot of story, a

[Podcast Host 2]

lot of themes to cover today.

[Will Smith]

Let's get right into it. Some background on you to start, please, Edgar.

[Edgar Galindo]

Yeah, for sure. I won't take you all the way back here, but I grew up right outside of New Orleans. I went to undergrad for math. I thought I wanted to be an engineer and that kind of path led me down a construction path. My first job was for a family owned construction business ran out of New Orleans. They were much larger, I think they were probably 80 million a year revenue, but that was kind of my first, my first job, first introduction to a family owned business. Right. Much larger operation. Got to work across the Gulf coast on different industrial installation projects and cut my teeth there for five years. Everything from field engineer to planner, scheduler, estimator, and finished out at project manager. And yeah, about five years in I realized that the ceiling was kind of very near me. The guy I reported to, he reported to the owner. So there wasn't going to be much opportunity or growth. That led me to exploring different options and decided to pursue an mba, which is why my wife and I ended up moving to Austin where I got my MBA in 2020 at McCombs Business School and went into Deloitte Consulting. Spent two years there, did a ton of really cool work, really enjoyed my time there. Worked a lot, but worked with construction clients also everything from procurement to data strategy. And ultimately decided that in order to have the life I wanted, which was mostly more time to start a family, I really needed to pivot, started to look for a business and actually took a brief detour to Google where I spent, I want to say like two months before being laid off, before I actually acquired a business. And those two months were very short, but it gave me a great opportunity. Google gave me a great severance package. They vested some of my equity ahead of time and I had just got a signing bonus. So that was actually the capital that I used to do a self funded search. I spent 10 months looking for a business and used some of that as well as for the, for the down payment.

[Will Smith]

So two months at Google.

[Edgar Galindo]

Yeah.

[Will Smith]

Got you a signing bonus, some vested equity and a generous severance package. That is the way to play it.

[Edgar Galindo]

Yeah, yeah. You know, I, I, it was very strange. Too much. And it was during the holiday season too, so it was like November through January. It was like half the time. It was, it was holidays. Yeah, I like to joke around that. It was a, it was a, it was not a Self funded search. It was a Google funded search.

[Will Smith]

Yeah, no kidding. And why did you end up at Google? A guy with this kind of construction, construction, engineering background.

[Edgar Galindo]

Yeah, so I actually had a search partner who's at Deloitte at the time. He's since gone on and bought his own business out in Nashville. Glass installer. But we started searching together and he was the one that, that I was, he had just had a child and I was talking to him about struggling with the idea of starting a family while working so much, and he said, dude, I think you would love this. You need to go read this book, Buy, then build at the time. And I, I think I read it in one sitting. But I came back and I was like, yeah, this is what I want to do. This is it. This is exactly it. And if we had worked together, him and I, we knew, we, we got along very well. We were really good friends during business school and so we started to search together. But we realized that, hey, it's really hard to search properly when you have such a, you know, a demanding job. So we both started looking for opportunities to pivot, something that would give us more time to, to search on the side still, because we both still obviously needed income. And I got an opportunity to join Google, which definitely did provide me with much more time to search on the side.

[Will Smith]

What in your background were you hired to use at Google?

[Edgar Galindo]

You know, I think one of the best benefits of working in consulting is that you just do a bunch of different projects that are applicable across a very wide set of industries. So the data strategy project that I worked on for a construction company, I had done another project for a Fortune 500 tech company that was applicable as well. They were taking some new things to market. So those specific experiences in consulting were very applicable to the role that I was at, at Google.

[Will Smith]

Gotcha. And what was that role for those?

[Edgar Galindo]

It was a partner strategy. So for a Google workspace. So Google, you know, Google Workspace, Gmail, Google Docs, the whole kind of that suite, there's a lot of resellers. So when you make a website on Wix, for example, they'll say, hey, do you want a business email? So my job was to represent our partners. Whenever Google was making changes to their, to their workspace offering, it was my job to say, hey, well how is this going to impact our resellers, our partners, and make sure that, you know, they had a voice.

[Will Smith]

Gotcha. Gotcha. Great, Edgar. Okay. And so your, your falling in love with or love at first sight? With eta?

[Edgar Galindo]

Yeah.

[Will Smith]

Was because you saw flexibility in the lifestyle. So you were working hard at Deloitte, 70 hours a week and, and buying and owning a small business. Of course, you're not the first to say this. You probably anticipated hard work, maybe the same number, maybe more hours per week, but on your terms, sort of analysis.

[Edgar Galindo]

Yeah, no, certainly, yeah, it was. I more flexibility, a bigger sense of ownership. And personally I, one thing I really enjoyed about construction was the tangible nature of it. Right. Like you look outside and you see the building get taller, you see the different components going in. I love the intellectual rigor that goes into consulting and the deep thought that it requires. But after working three months on something really hard and then all you have to show for it is a PowerPoint or PDF, it felt a little defeating. Right. It wasn't as tangible. So that also kind of shaped the type of businesses that I was searching for. But that was kind of the, the third component. So a little more time, more flexibility, a sense of ownership, which I had really enjoyed. My dad, growing up. My, my dad owned a roofing company. He, my mom owned a cleaning company. So she, she would go and, and do commercial cleanings of mostly banks. My dad is mostly residential roofing. Then my first job was for that larger family owned business. It was kind of, I'd seen it before and I like it. I knew that eventually entrepreneurship was in my future. I just didn't know how. And so all of those things kind of said, hey, push me towards eta.

[Will Smith]

Well, unlike a lot of people that might listen to this and have a similar resume background as you, consulting white collar stuff, you had really been exposed to small business ownership, small business culture, the trades, even your dad owning a roofing business, much more so than, than many searchers. So you probably weren't, it felt familiar to you in a way.

[Edgar Galindo]

Yeah, no, for sure. I spent a lot of my summers on top of roofs. Yeah.

[Will Smith]

Yeah. Okay, great. Edgar, you meet Matthias. Yeah. Is there anything before we get right into that, is there anything to say about your search or can we just jump to that moment?

[Edgar Galindo]

No, I, I mean the search was, I think very much what it was. A, like I said, self funded search. I did mostly broker outreach both with my, my, my previous partner and then on my own kind of during that 10 month work window I gave myself. But yeah, very traditional. Looked at a ton of different businesses and yeah, I don't think there's anything.

[Will Smith]

You were geographically constrained. You wanted to stay in Austin.

[Edgar Galindo]

I do, I do. I did want to stay in Austin. I, I, it was Easier for me to say what I didn't want to do than. Than what I did want to do. Right. So I knew that I didn't want to go into, like, professionals. I didn't want to buy an accounting firm or anything like that. I. I knew that I didn't want to go into restaurants or healthcare, so kind of narrowed it down that way because I think a lot of people, I think when they're searching, they're like, you know, what do I want? And sometimes for me, I find it way easier to say, what do I not want?

[Will Smith]

Yeah, yeah, well. And obviously you were drawn, though, to, I guess, construction in that sort of big universe of companies, landscaping, which is where you ended up. So happily. That is a big universe and a universe where there are a lot of small businesses for sale.

[Edgar Galindo]

We.

[Will Smith]

We often see landscaping, of course, being the example. Lots of searchers about landscaping businesses. Okay, great. So what is this Search Funder post you see from Matthias?

[Edgar Galindo]

Yeah, so it was actually another classmate from. From a Combs, who I hadn't been on Search Funder for a minute. He reached out and he's like, hey, you need to check out this post on Search Funder Matias, who's my business partner in both acquisitions, which we'll get into, he had a business in Austin under loi. It was a landscaping business. I didn't know at the time, but the post essentially said, hey, I am looking for an operator in Austin. At that point, it was important to clarify in person. Someone with a construction background, Ideal consulting background would be great. Someone who speaks Spanish would be another big plus. And sort of the more I go through the list, the more I'm like, man, he might as well have just put my name on this. Like, I fit the criteria very well. This is exactly where I want to be. It was a construction based business. So I reach out to him immediately and I'm like, hey, man, we should meet and talk. This is my background. He happened to be in town that I think I messaged him on, on Friday afternoon, and he just happened to.

[Will Smith]

Let me pause you. So he was looking at buying this business in Texas. In Austin.

[Edgar Galindo]

Yeah.

[Will Smith]

And. And owning it remotely.

[Edgar Galindo]

Yep.

[Will Smith]

And looking for an operator to be on the ground. Operating partner, so.

[Edgar Galindo]

Yeah, exactly. Yeah.

[Will Smith]

Keyword there. Partner, meaning that you'll have some equity.

[Edgar Galindo]

Yep.

[Will Smith]

Looking for an operating partner to run the business there locally. In Texas. In. In Austin. Okay. And so the operating partner piece, so that's different than being the primary owner. How did you react to that opportunity, given the difference between Maybe what you envisioned for yourself as being the primary owner now looking at being an operating partner which is going to be yes, you're going to have equity but you're likely to be the junior partner.

[Edgar Galindo]

Yeah, no, for sure. I think at that point I, I, I was totally fine with it. Matthias and I have that in common that were very much like incentive aligned and I, I, after, you know, I hadn't looked at the business but assuming we were still in, he was still entering due diligence. So I figured hey, if I'm going to get to look at this business and I believe in it and I believe in myself, like I'm certain that I can, you know, grow it and make something of it. So I was totally fine with the idea of especially if I didn't have to put in much, much money at all then like hey, then I get to keep my savings and you know, deploy that elsewhere. I had so many friends buying businesses that it would be fun to just invest with them. So I was totally open to it especially after that first meeting when I saw, met Matthias and realized that we kind of had our, our values were aligned. Right. We both wanted to, to hold it wasn't going to be a quick flip and we both had kind of, you know, our values aligned on like taking care of the people growing in a, in a scalable manner and yeah that it made sense to me for sure.

[Podcast Host 2]

If you ask owners in the ETA and search community which insurance broker provides highest quality work, great outcomes and has a practice dedicated to searchers and acquisition

[Will Smith]

entrepreneurs, one name comes up again and again.

[Podcast Host 2]

Oberle. Oberle Risk Strategies has worked with hundreds of searchers over nearly a decade and is in fact led by, by a two time successful searcher, August Felker, which makes Oberle a specialty insurance brokerage for searchers by a former searcher. And if you've got a business under Loi, Oberle will provide complimentary due diligence on that business's insurance and benefits program. An easy no risk way to get

[Will Smith]

to know August and the team at

[Podcast Host 2]

Oberle to take advantage. Check out oberle-risk.com that's O B E R L E- risk.com link in the

[Will Smith]

notes and your point here about whatever was going to be required of you for ownership, whatever equity cash of your own was going to be required. What did that look like? What was the offer on the table?

[Edgar Galindo]

Yeah, so initially it was, I want to say we could, I could earn up to like 20% equity some I think it was like 5% right at closing and then depending on, on certain growth targets, could get up to 20 over. I think it was like over four years, maybe five years. But I wasn't going to put any, any money on the table. So that, that kind of was the, the original structure. Matias was going to take care of the entire down payment. And we were both taking out an sba. Well, he was taking on the SBA loan. I wasn't even gonna have to be do the personal guarantee there, which kind of brings in like where we kind of ran into, into some issues, right. So we're diligencing the deal. The numbers look good, the business looks great, looks healthy. We knew we were going to do it. Matthias knew he was going to do an SBA loan. And once we started talking to different banks is where he started to get a little pushback in terms of like, and this is like kind of a side tangent here, but my income the year before was through the roof. It was absurd. It was because I left Deloitte after they reimbursed me for my second semester year of business school. I got my Google signing bonus. I had a pretty healthy salary at Google. And then they vested a bunch of my equity. So in my W2, it looked like I made like over $300,000 that year. So the bank, to their cons, their initial concern to Matthias was, hey, you don't have a construction background. Like, why are you going to be able to run this business? And that's actually the impetus for Matthias going and searching for an operator with this specific set of qualifications. Once we submitted, kind of myself, we added me to the deal. The bank essentially said, hey, this is great. Yeah, Edgar will work, but he needs to have more skin in the game. He's the kind of guy that could easily go and get a, you know, $400,000 a year job somewhere else. Like, that's definitely not the case, but on paper it just looked that way because of my earnings the year before. And so they wanted me to have more skin in the game. And so that changed the, the structure for Matthias and I. At that point, we had got to know each other even better. And so I was going to put in some equity. I think I ended up putting in like $50,000 and I got 25% of the business right off the bat and I could earn another 25. But this, this, it was no longer sort of hit these thresholds. It was like, hey, repay me. The difference between what I put in and what you put in, there was no really time limit. We I think we both figured, you know, it would take a few years, but. But yeah, that, that's.

[Will Smith]

And would you. Were you required to do that or it was at your option?

[Edgar Galindo]

It was at my option, yeah. I mean I was gonna do it. It was the plan. Yeah.

[Will Smith]

So you, you originally it was going to be earning 20% over four or five years. Just time in roll was going to earn you. Your tenure was going to earn you your 20%.

[Edgar Galindo]

Yep.

[Will Smith]

Then it changed when the lender was like this Edgar guy earns, has earned too much. Hist believe that he's that committed to this project.

[Edgar Galindo]

Right.

[Will Smith]

So. So that, that meant Matias had to sweeten the pot for you. And the outcome of that was you were going to get 25 right off the bat and now. But you were also going to have to put in some money now. $50,000.

[Edgar Galindo]

Yeah.

[Will Smith]

Still $50,000 for 25%. That's a value at a valuation of the business of 200 grand. I assume what you guys paid for that was more than 200 grand. So you were get. You were getting in well below market. You were buying your equity well below market.

[Edgar Galindo]

Yeah.

[Will Smith]

Another way of putting that is you had an incredible step up.

[Edgar Galindo]

Yeah. Yep. And then the, obviously the, the big change personally for me was, and I think the bank kind of was hinting at this was we want Edgar to have to sign a personal guarantee. So that 20% threshold was kind of at least had to be 20.

[Will Smith]

Yeah, yeah, yeah. So it's interesting. So it's. Your deal got sweetened, but also you now have more risk. A lot more risk. You're risking $50,000 and the biggest of all, the personal guarantee.

[Edgar Galindo]

Yes.

[Will Smith]

And then the, then the other piece of this was the, the, the tail. Your.

[Podcast Host 2]

Right.

[Will Smith]

Your option to buy another 25% of the business.

[Edgar Galindo]

Yep.

[Will Smith]

For basically reimbursing for whatever Matthias paid. Yeah. His purchase price, is that right?

[Edgar Galindo]

Yeah. So I can't remember. I think, I don't remember how much he put down. It was, it was, I want to say somewhere around 300,000. So if he put in 300,000 and I put in 50. So it was like 350. So let's say we both should have been putting in 175.

[Will Smith]

Yeah.

[Edgar Galindo]

So I would have had to, you know, pay him the 125.

[Will Smith]

Yeah, 125. But it was again, it was at your option. So you would only exercise that option if you'd be in the money doing so.

[Edgar Galindo]

Yeah.

[Will Smith]

And at that point you are. Would have already been in the business for some amount of time, years maybe, you would have been the operator. So you, you really would know. You would be, of all people on the planet, the one to know whether or not it was. It was a good.

[Edgar Galindo]

That's. That. That was exactly my logic. Yes.

[Will Smith]

Yeah. Very, very interesting. Okay. Yeah. And so. And then finally, then there's a path for you to own fully half this business now. 50. 50 ownership, of course, we're always told is. Is a bat, is a. Is a recipe for dysfunction. So you guys were cool with that?

[Edgar Galindo]

Yeah, yeah.

[Will Smith]

He let you go all the way to 50, not 49. 50.

[Edgar Galindo]

No. Yeah, we were. We were. We were cool with that. I think we, we obviously spent a lot of time together during that due diligence period. I know it sounds just short. It was, it was like three or four months because of some delays. But I think we both got pretty comfortable with the idea of that. I don't know that, like, we haven't had any issues. We're still invested in a couple other business together. We chat daily, but.

[Will Smith]

Yep.

[Edgar Galindo]

I don't know that I would recommend that to somebody just for. For the same reason you. You suggested.

[Will Smith]

Yeah. Yeah. Returning to the story now, we've gotten really into the weeds here, so. So let's quickly just get through the. The acquisition. You were going to say that he was in town and he invited you to. He was going to meet the seller, invited you along.

[Edgar Galindo]

Yeah, yeah. So we had coffee, we chatted and he said, hey, actually the reason I'm in town is because I'm meeting the seller. Like, do you want to come along? So I, I tagged along. We went. We met the sellers over at their construction yard. It was actually two partners. Um, and yeah, he introduced me as someone who was helping him, advising him on. On the deal and the operations and that someone that might be interested in joining, but wasn't sure yet. And yeah, that's kind of the. The first meeting. Met the broker, the sellers, and then we went from there.

[Will Smith]

And you liked what you saw? Tell us about the business.

[Edgar Galindo]

I did. I did. I liked what I saw. So Structure Landscapes is the name of the business in Austin. The. They. They did about 4.8 million the. The year before we bought it. That. About 900,000 in SDE. So it was, it was. It was a good performing business. I think we paid. I want to say the Multiple was like 3.25 or something like that. We bought it for 3.15 with about a $500,000 seller note. It was two seller notes. Because it was two sellers, but it did well. It performed really well. It didn't have the ton of seasonality because they had a really good split between now it's project based work and not. They didn't do maintenance. There was no recurring revenue. They had what I guess we would call like reoccurring revenue. Where a lot of their work was for custom home builders who would just say, hey, we have a home, we're building, come through the landscape and then homeowner. So that healthy split between home builders and homeowners and pretty, I mean the average project at that point was like $80,000. So you know, pretty high end stuff. The, the seasonality was. It was actually pretty well adjusted for, because of the customer concentration. So home builders here in Austin build a lot during the summer in preparation for a lot of people moving in, wanting homes, wanting to buy homes before school starts. And then during the fall, in the spring, homeowners are kind of building a lot more. But during the summer, homeowner work goes down a lot because at least our clients are, you know, in Tahoe or Telluride or Jackson Hole or wherever they go spend the summers because it's way too hot here. But then the builders pick up. So not a lot of seasonality. I kind of like that. Not a lot of customer concentration whatsoever. Yeah, it was, I think the business was, was really good.

[Will Smith]

And now that you are on the inside, how do you reflect on the quality of revenue? The fact that it's reoccurring or, or project based. The fact that, that it's discretionary at least when you're selling to, to the, the residential customers. Big spends. Discretionary spends. Yeah, that's always, that's always a tenuous way to make money.

[Edgar Galindo]

No, for sure. And I will say like this past few months, like it was something that was definitely felt with, with what's going on on a, on a macro basis. With that said, I, I like that. I think reoccurring revenue is something that's overlooked in acquisitions a lot. People really want that recurring revenue. It seems to be, I think for various reasons. Right. Really hyped up and that's great. But when I think for landscaping, do I want the guy that has a $50 lawn every week or do I want the guy that gets a hundred thousand dollar project every month from, from the builder? Right. It's, it's not under contract, but it's, I mean the history shows for the past few years this is what's happened. And then in terms of the, the, the Project based work. I think their customer demographic has a lot to do with it. I mean, being on the, on the high end, high end side of things. Like, I really like the fact that our clients were quality driven and not price driven. It was more of like, do it right, get it done right. Don't, you know, don't cut the corners. I will pay what it takes to, to get it done right. I'm not gonna, you know, nickel and dime or. But on the other hand, you know, sometimes they're like, hey, I want a couple extra plants here. You have to become with a mindset that's like, I'm not gonna send them a $100 change order. When they've spent $100,000 with me, I'm just gonna say, oh yeah, don't worry, I'll take care of those plants, keep them, keep them happy. But yeah, I, I, I think it's a, I think it's a good setup. I still think it's a, it's a good setup.

[Will Smith]

So takeaway there. If you're going to serve consumers, serve the, the, the affluent ones, the well to do ones.

[Edgar Galindo]

Yeah, that's, that's my take for sure.

[Will Smith]

Okay. And, and so just again, it was a doing 900,000 of SDE, 4.8 of revenue. So what is that? Just a little bit shy of 20%?

[Edgar Galindo]

Yeah. Like 18.5. 18%? Yeah, yeah.

[Will Smith]

It's an SDE number, of course.

[Edgar Galindo]

Yeah.

[Will Smith]

And then you bought it for 3.15 million.

[Edgar Galindo]

Yep.

[Will Smith]

Which was a, I think whatever, 3 1/2x or 3.

[Edgar Galindo]

3 1/2x x is pretty sure it's what it was.

[Will Smith]

Yeah.

[Edgar Galindo]

Great.

[Will Smith]

And how many employees, how old was the business and why was the seller selling?

[Edgar Galindo]

So the business had been around for 20 years. Very well established, four full time employees, designer, a couple salesperson and project manager, and then a revolving cast of subcontractors. Um, many of whom I eventually learned are like 80% of their income came from, from structure. Both sellers wanted to retire. They were kind of done with it. I later, you know, once you get into the business, you start seeing what they were doing and you kind of like, oh, I, it was a lot for two people to do and I think they, they just kind of hit their stride. I think there was also a huge growth. They experienced a ton of growth during COVID People are home. People are like, you know, going outside in their backyard, staying home, and they're like, oh, I should fix this. So they had a ton of growth those, those previous years, but it was also Very stressful and very taxing. And I think they had a sort of like, we just made a really good amount of money. We can sell the business now. This is. Even if we had four or five years left in us, like, let's just. It's not, it's not going to get much better than this.

[Will Smith]

And did that bite you in some way? Did it. Did revenue then recede or demand?

[Edgar Galindo]

We know we, we. We definitely looked at that. We didn't look at it as much as. As perhaps we should have. We actually continued to grow. It took a lot more effort, but I think I just. We were pretty confident, and we still are. I mean, I'm still very bullish on the Central Texas area. It's just growing so fast. We have so many people moving here that we fig there is some sort of hump because of COVID Like, we're still good. There's still a lot of people moving in and there's a lot of construction going on.

[Will Smith]

Yeah, no, we hear it over and over from people in geographies that are growing, North Carolina, Texas, that particularly if they're in home services, that that's an incredible tailwind that can correct for a lot of, you know, weaknesses in your own operations sometimes. Okay, Edgar, thank you for all of that. Now, let's. As I said, there's a lot of story here. There's the kind of the story of two businesses or two acquisitions in one. Let's hear now about the second acquisition. This was in Dallas, please. Yeah, begin.

[Edgar Galindo]

So about six months into running Structured Landscapes, we came across an opportunity for a business in Dallas. Very similar sort of setup or demographic, or so we thought initially. Turns out high end. And Austin is a little different than high end in North Dallas, but, yeah, residential, a little bit more outdoor living. So while structure down here really focused on landscaping, think plants, grass, turf, artificial turf. They did that, but they also did a lot more of like, covered patios, outdoor kitchens, more of the outdoor living, which is something that the owners down here had stayed away from. I think they. They had like one bad outdoor kitchen, and they were like, we don't do that. And. But we had customers on here always saying, like, hey, we have outdoor kitchen. Like, we want this. We want a covered pergola, we want, et cetera, et cetera. So we saw that as an opportunity. The Dallas business didn't do nearly as much landscaping, and we thought, hey, we can kind of cross pollinate these two. There's some opportunity there. Another thing we'd really been exploring in Austin was Maintenance. So we, we don't do, we don't do maintenance down here. But they had a maintenance arm up there and we figured, okay, we're going to learn some things there. We already knew what you hear about, you know, maintenance, landscape maintenance, super low margin, kind of race to the bottom, very price conscious customers, but it keeps the lights on. Like if projects slow down, you, you at least have this sort of more, more steady, reoccurring revenue. So we thought there was really good opportunity to, to cross pollinate these two. The Dallas business was a little bit bigger. They had done 6 million the, the year before the acquisition. Their EBITDA was slightly larger than structure. They had 950,000 in SDE. So it's like a 16% margin. They had a much more robust team in terms of operations as well. They had a bookkeeper in house, they had a couple designers and full time salespeople, like base and commission salespeople. Down here, we were just commission only salespeople. They had an actual office with. Not that the office was like super necessary. They had a really nice showroom. And so what really appealed to us was them bringing clients in, showing them like, you know, the showroom actually had an outdoor kitchen built in, being able to sit them down with big screen showing them their 3D model. And they just had what seemed to me like a very much more robust operation, like sales operations specifically.

[Will Smith]

Sounds like it.

[Edgar Galindo]

Yeah. So we, we, we liked what we saw. The, the owner there was much younger than the owners here. I think he might have been mid, mid-40s, whereas the sellers here were, were early 60s. And he had done a great job growing the business. Again, there were some tailwinds with COVID and all of that, but he was kind of local to that area, had done a great job building a community around his business, sponsored different events and had really done a great job making that business sort of like the local hero. The, and he, like this reason for selling was like, I'm, I'm exhausted. Like, this is as far as I can take it. Like, I've done everything I can to grow this and kind of, this is where I'm stuck. So he was really interested in bringing in some, some new people who had done things differently, who had some more ideas and rolling over some equity and potentially sticking around a bit longer. This was right around the time the SBA had sort of changed that rule where they could, you know, you could roll over equity.

[Will Smith]

Yes.

[Edgar Galindo]

And so that was really appealing. We ended up not going that route to kind of get the Financing done a little bit faster. But we did have an agreement with them where, hey, like, you know, things work out, we maintain these kind of metrics, then, then you can, you know, be awarded some equity or even buy. Buy some equity back. He was going to stick around as the general, sort of a general manager. Less responsibility and, and more input from Matias and I. Matias actually was moving to Dallas to sort of run that while I was just going to stick around in, in Austin. Yeah. And so that was kind of the rationale for, for buying that, that particular business. We, we saw a lot of opportunity. We thought it would be a great fit. And just like the one here in Austin, they had great processes, but they were all very manual. So it was like manila folders everywhere. Sure. Like, I mean, and, and the, the joke here in Austin was that the seller here had been in business for 20 years, and I'm pretty sure he had killed more trees than he planted just from, like, he would get an email printed, he would reply and then print out his reply, and everything went in a manila folder and very well organized. Like, he got custom stickers for the manila folders, were like, have I ordered the plants? Have I got the permit? And he would just check it off as he went. So it was a great process, but it was just super manual. And I think I hear a lot about that in, in eta, where it's like, hey, we're going to come in, we're going to bring in tech, and we're going to like, make things super efficient. And it's not that things are inefficient. Like, there's a lot of these guys have processes. They just don't have it, like, digitized, which I think is different than bringing in tech to make things efficient and bringing in tech just to digitize what already exists. And one will reward you more than the other.

[Will Smith]

If there are processes in place that are pretty good, but analog. You don't think introducing digital is that much of a needle mover.

[Edgar Galindo]

It'll. It'll help you for sure. Yeah. But it won't. It's not like you're in terms of creating enterprise value. Like, you're not really, you know, doing much different. Like, you'll take a few hours worth of workload off of people. And sure, you minimize phone calls of like, hey, where is this file? Like, just check the drive. But it's not. You're not fundamentally restructuring the business in a way that's like, really much more efficient. Yeah.

[Will Smith]

Interesting.

[Edgar Galindo]

But, yeah, so we bought the Dallas business Matias moves.

[Will Smith]

And Edgar, what is your participation in that deal? Are you an owner in that business?

[Edgar Galindo]

Yeah. So still 25%. Same structure. Like, Matthias wants my input.

[Will Smith]

He.

[Edgar Galindo]

I'm going over, like, initially I was over there every week to kind of get things going again. Just bringing my sort of construction background. Structure landscapes also put in money into the deal. So inherently I was going to keep 25% of whatever that money that went in. There was some additional capital that went in, but we just kind of kept it at 25% with the same structure. Like, hey, you know, keep Matthias, put in more money. If at some point you're interested in and owning more of this business, then, you know, same idea. Just. Just paid. Pay the delta. The difference here.

[Will Smith]

Interesting. Okay. All right. So you. You had a line to owning half of that business, but out of the gate you own 25% via structures. Ownership of it. Structure put in the money. Interesting. Okay. And is that to say that structure was generating a lot of cash?

[Edgar Galindo]

Yeah, structures was doing well. We were. We. I think that first year, we. When we bought it, it was 4, 8. That first year we finished at 6.3. I think it was a little around. Whoa. Yeah, it was around 24, 20% growth. Top line, right now you look at, like, the bottom line and you're like, whoa, where did all that money go? You're like, okay, yeah, well, we spent a lot more on marketing. We bought new equipment. We. We hired a new crew.

[Will Smith]

Yeah.

[Edgar Galindo]

So bottom, like, bottom line, we're like, whoa, my God, this. This is scary. But we. We knew that going in, like, this was our plan, sort of, hey, we're gonna. We're gonna grow this thing aggressively. Focus on growth. Year one on two, year. On second year, we're gonna focus on, you know, efficiencies, sort of optimizing cost procurement. I mean, we bought stuff from the same vendors for the past 10 years, and I never questioned it. That first year. We're like, buy from them. It wasn't until year two that I'm like, hey, why aren't we looking at different options here? And. And sure enough, There was like 10% savings in plants or other things just by shopping around a little bit more. So that. That was kind of where we focused on on year two. But yeah, we had great growth. We. We felt very confident what we were doing.

[Will Smith]

What was the name of the Dallas business?

[Edgar Galindo]

The name of the Dallas business was. It was actually two. He had split it up into their sort of install side and their maintenance side. It was complete exterior solutions And RW Blue was the maintenance side. We bought them, combined and combined them as one right off the bat. But yeah.

[Podcast Host 2]

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[Will Smith]

so now you have two businesses. You've got Austin, you've got Dallas. You're partnered with Matias, he's moved his family to go be the operator in Dallas. You're operating Austin.

[Edgar Galindo]

Yep.

[Will Smith]

These two businesses are similarish in size. Dallas is a bit bigger, they've got very complimentary offerings. And so if the cross pollination thesis was that the weaknesses or things that Austin isn't doing, it can learn from Dallas and vice versa. All sounds great on paper. Yeah, it really seems like a good strategy. Okay, so what happens?

[Edgar Galindo]

Yeah, so I think this is kind of where it all goes south here. A couple of months, maybe less than a couple months, a month and some change into the Dallas acquisition. The one of the sales guys there, the sales guy, in terms of like driving revenue, maybe 60 or 70% of the revenue came from him, approached Matthias and was like, hey, so you know, now that the transaction is closed and everything, are you going to pay me the commission that I mowed from last year or is the seller going to be paying me the commission from last year? And that was kind of a surprise to both of us. Especially because during the negotiation there was like in construction there's this whole. And this is like the messiest part of buying a construction business. The work in progress component of the transaction. The seller negotiated to keep 5% of the work in progress that should have come to us for commission. And we said okay, for the commission, sure. Like you sold that. That was the commission structure. 5%, you know, whoever sold it is kind of the assumption. But I guess the understanding for him was for him. So we felt that. So we already paid that commission for the work in progress. Um, and he felt that he hadn't. So that was kind of the, the first kind of Red flag for us was, okay, this. This sales guy is not happy. He's owed actually quite a bit of money. It was somewhere around a hundred thousand dollars.

[Will Smith]

Wow.

[Edgar Galindo]

Which it's $100,000 right off the bottom line. And it's $100,000 times the 3.5 multiple that we paid. Right. So we're exactly. We're already. Now we're in the hole significantly. So we approached the seller about the situation and want to understand, hey, what's going on here? There was a little bit of he said, she said, in terms of the commission wasn't earned. We looked at the books ourselves, and we were pretty convinced that this was a very valid claim for commission. We presented that to the seller. He didn't want to pay it, and that was it for us. Like, we had a pretty hard line of, we can't work with people we don't trust. We let them go.

[Will Smith]

And do you. Did you feel that the seller had intentionally. Intentionally hidden this?

[Edgar Galindo]

Yeah, I. I think so. I personally think so. For sure. This is.

[Will Smith]

Yeah.

[Podcast Host 2]

Because he.

[Will Smith]

He wouldn't have. He would have well, well understood that this. His leading sales guy had yet. Had yet to.

[Edgar Galindo]

Right, right.

[Will Smith]

Had yet to have been paid his commission.

[Edgar Galindo]

Yeah.

[Will Smith]

And would want that commission.

[Edgar Galindo]

And. Yeah, of course. And. And there was, you know, and I. This is where I kind of go back and kind of kick myself a bit. Here is the sellers who don't want to let you talk to their employees because they, oh, I don't want them to find out that I'm selling. Like, what if they leave and this transaction falls through? We went with that and we said, yeah, fair. I understand. We don't need to talk to them. Like, I don't believe in that anymore. I think you should definitely 100% talk to as many employees as you can. And it should be a red flag if someone's really adamant about you not talking to the employees. I'm not sure that these are related here, but in hindsight, like, talking to him ahead of time would have easily surfaced this. So, yeah, we end up parting ways with the. With the seller.

[Podcast Host 2]

The.

[Will Smith]

This claim. Is that not contractually protected against by you guys? Because then anybody from the previous owners, the seller's history can surface and say, you owe me money.

[Edgar Galindo]

Yeah. So I think. I think this is kind of where I guess it gets into the next part of the story here, where this turned out to become a very long, expensive, lengthy legal battle. Probably after letting go of the. The seller before we even get into, like, you know, our own Hiring a lawyer and looking into this. We were served with papers for like wrongful termination. And the seller was like demanding like the, the extent of a seller Note which was $600,000, $680,000 he wants.

[Will Smith]

So he, so he had a seller note of 680. And when you terminated him, terminated your relationship with him, and you also said, we're not paying you any of the seller note.

[Edgar Galindo]

No, we, we hadn't said that it was our intent to then go to our lawyer and say, hey, there's only $40,000 in escrow. That's not going to cover the 350 we overpaid, plus the hundred or whatever amount we have to pay to the sales guy to keep them happy. Because if he leaves, then it's like game over here. So that's kind of what we were looking at, right? Going to the, to lawyer, hey, the asset purchase agreement is violated, but instead we were served first. So now we're defending a wrongful termination thing. We're filing counterclaims that he violated the asset purchase agreement. He's asking for his full seller note, like up front, one year salary plus a year's long bone. It was like a million dollars essentially. He's demanding a court hearing in, in Denton County, Texas, are contract specifically said we would go through arbitration first. So we end up filing to go through arbitration. We end up deciding, hey, let's try mediation first. Media. We go through mediation. That doesn't work. We had come to no agreement. And as we're moving towards the, as the battle continues, at some point that's, this is kind of. There's other stuff that happens in the background which we can dive into, but that, that we never saw the end of that. We ended up closing the business before all that litigation ended. I think we ended up spending like $160,000 in, in lawyers and never really kind of got resolution there because.

[Will Smith]

Yeah, well, let me just follow up questions here. Edgar, real quick. Just on the point I made earlier about this commission and who, who owes the salesman, there must be some standard language in an asset purchase agreement. And so maybe that's what you're saying was violated.

[Edgar Galindo]

Yeah, yeah, exactly.

[Will Smith]

I should know this and I don't.

[Edgar Galindo]

No, no, no worries.

[Will Smith]

What is, what, what is the language that's like, you know, anything that the seller or the, the entity under the seller's ownership owes stays with the seller. We're not going to inherit that liability.

[Edgar Galindo]

It was an undisclosed liability.

[Will Smith]

Okay.

[Edgar Galindo]

Undisclosed liability that he was aware of. You know, I think the language and sellers will 5 like sometimes something might come up where. And this. Actually I believe it now I didn't believe it at the time, but vendors like I've got invoices from vendors like hey, I meant to send you this like six weeks ago and I never sent it.

[Podcast Host 2]

Right.

[Edgar Galindo]

That is one thing. Right. I didn't know that I owed this money like fair. But an undisclosed liability for which you do know it is, you know, a broader violation of the, of the asset purchase agreement.

[Will Smith]

Wow. And so it would say, you know, this is one of these where it's like, is it worth it in the end to, to, to go legal to lawyer up. And the answer is almost always no. But in your case we, you know, as you pointed out, this hundred thousand dollars is. It's a one time amount of money that you have to cough up, come up with and structurally revalues the business because it's a hundred thousand dol profit of earnings on an ongoing basis. Assuming whatever the sales commission that was earned in that year is, is kind of earned in future years for the, the key sales guy. So that's where you're getting the $350,000 overpayment of the business. $100,000 in earnings less times the multiple you paid three and a half is 350,000. So the sum here is significant and that's why you decided it was worth going legal.

[Edgar Galindo]

Exactly, exactly.

[Will Smith]

Yeah. And yet still. And also you had just had what seems to me to be a pretty open and shut case. Like you had the law on your side, it would seem. But no, it doesn't sound like you won.

[Edgar Galindo]

Yeah, I mean there was no closure. So I wouldn't say we didn't win or we didn't or we lost in any way. We went through arbitration which is just, hey, can you guys talk it out? We were not able to talk it out. I think you're not like presenting hard evidence there. And then once we are done with arbitration, then we filed, I guess we filed a lawsuit with the state of Texas to go after this money. And then you go into a lengthy process of discovery where it's like, show us the documentation, show us this. And the arbitration itself took several months. The discovery was just about to start. And at that point we decided to close the business. There's a lot of other evidence that we have that was just kind of. I'm pretty confident he also violated his non compete. He registered a business, a competing business actually like during the time we were in arbitration, which is crazy to me. Wow. So it I think that the lesson here was, and I've heard this so many times, but it's just hard to see it while you're in it. But like you can't do a good deal with, with someone who's bad intentions. Right? It's.

[Will Smith]

Yeah.

[Edgar Galindo]

The business itself I, I believe in, I think they, they were great. The numbers worked out well. They had a grid market, fast growing area also just like Central Texas, like the Fort Worth area is crazy. So yeah, we're, we're kind of in the process of that.

[Will Smith]

And, and Edgar, so your conclusion is that this guy, your seller was basically a bad apple?

[Edgar Galindo]

I think so. That's, that's for sure. Kind of my, my take here.

[Will Smith]

You just a second ago talked about the non compete that you think he violated the non compete that and also I think a non solicit which is more enforceable than a non compete, but I think he was flagrantly violating both. Tell us a little bit about what you found there on that front.

[Edgar Galindo]

Yeah, so the reason we learned about the. Him starting a new business was that a few months, I mean as we were going through this whole process a few months later we, we experienced like a, we started feeling like we weren't performing like we used to be. This is in, in Dallas we had, we used the same marketing people for, for both Austin and Dallas and we were getting significantly better results in Austin, which was a little odd to us. And the revenue just started dropping and so we had to make some tough decisions and let some people go. In Austin we, we outsourced bookkeeping and over there we had a, we had an in house bookkeeper. I don't remember what they call it, $80,000 a year. We had an in house designer. We had an in house designer here, but we also used, we outsourced some of our design work, like the 3D renderings and whatnot to different third parties. They weren't doing that there. So we started looking at how can we cost cut to adjust for this drop in revenue. Let me take a step back here. The designer that we had up there when we bought the business was an hourly employee making like I don't know, $60 an hour, which is market for landscape designer. By the time she was working 20 hours a week, by the time we had kind of got there, the hours were up to 40. So with overtime at that rate, it ended up, I don't know, being something like 130, 40 plus thousand a year, which was much above market. And we knew this because we had a in House designer in Austin who's probably a little more qualified, but making significantly less. And so we gave her the opportunity to say, hey, we're gonna drop you to a base salary, but we're also gonna give you commission. And if you sell what you sold last year, you should be exactly where you're at now. But at least this way we get some peace of mind that, hey, things are. Are, you know, selling. She ended up deciding not to stay with us and. And resigned a couple of weeks later. After that, we. We let go of the bookkeeper. And I remember driving up there and talking to the sales guy, like, hey, why is. Why is like, our cells are dropping. What's going on? What's on the pipeline? Let's talk through this. And then he had a healthy pipeline. And this is just like, hey, I'm gonna close this one. It's just taking me a little bit longer, blah, blah, blah. And then he ended up putting in his two weeks notice. By that point, we had just. Matias had just had a child, so he moved to be with his kid. And we hired an operator there. And a couple weeks in, he had to. He needed some bookkeeping stuff. So he went on to the old bookkeeper's computer, and he logged in and he learned that he could still see text messages on, like, the. I guess she had her messages linked to her computer, and they were pretty bad in terms of. It turns out that the designer that had resigned, the sales guy in her, had started a competing business while still working for us. The reason the leads had dropped is they weren't really making it to our system because they were, like, screenshotting them and sending them to the person that had already left. They were reaching out to clients and saying, hey, we know you have a meeting with this. You know, give us an opportunity. And I think that was kind of the. The dagger for us. We were like, oh, my God, we've lost everything. Like, the employees, like, what's, you know, going on here? And. And going through those communications, that's where we learned that they had set up a meeting with the old seller. And he showed up in a vehicle that belonged to a competitor. And then we looked at who, like, owned that competitor, and he was one of the owners. So that's how we realized, wait, when was this company even registered? Oh, my God. Like, there's. He's been. He's been doing this for a while. And that was the. That was kind of the. The. The downfall of the Dallas business that we. We weren't really able to Recover from. From that.

[Will Smith]

But yeah, so four people. The seller, the designer, one of the salespeople, and the bookkeeper were all in cahoots to stand up.

[Edgar Galindo]

Not initially, for sure. The. The seller was. When we let go of the seller, he went, did his own thing. Everybody else that. That stayed was really with us until, I don't know, something flipped and. And they decided to start their own thing, because in the communications, they were like, should we tell the seller that we're doing this? Should we not? Like, so they weren't in cahoots initially, but at some point they were like, hey, we should talk to this guy, and. And they had this meeting, and.

[Will Smith]

Yeah, it must have just caused you to doubt human nature. Like, I mean, to. Just to see that level of sort of betrayal and intrigue and kind of behind your back. I know they don't know you. They don't necessarily have loyalty to you. It's not like you've been their boss for years and years. But, yeah, it's still.

[Edgar Galindo]

No, it's. It's really disheartening. And, you know, like, frankly, at some point you're like, wait, is it me? Like, am I the common denominator? Am I doing something wrong where I'm, like, turning all these people away? Yeah, but, yeah, and then you just kind of, you know, kind of talk yourself out of that, Especially when you have another business that is doing well, where the things you're doing are working and you're doing the same things over there. I think the change was maybe a little drastic for everyone there, but. Yeah, no, it was. It was. It was a big bummer, like. Yeah, for sure. It made me question myself why I was doing this. I know Matias definitely struggled. I mean, a lot of the comms and the messages were just putting us down, like, you know, we're gonna. We're gonna screw these guys. We're gonna. You know, we're gonna make this work.

[Will Smith]

Was there something in the nature of their criticism about you guys that listeners could learn from? Were they like these private equity guys? Was it something where it was like, because you weren't native to the landscaping business, they saw you as interlopers and. And. And didn't know what you were doing or something like that?

[Edgar Galindo]

Yeah, I think it was a little bit of that. I think some of the messages reflected. We put in HubSpot as a solution there, so just better track leads pipeline for us to better have an idea of what's working, what's not. And we put in other tech, and I think that's what I mean with maybe too much change too fast or like, why are they making us do this? We haven't done this before. The manila folders work just fine, but for us it was about visibility and data tracking. Like, sure, the data exists, but if it exists in a manila folder, I'm not going to be able to properly find trends and diagnose what's working and what's not. And that's something we had done in Austin that was working pretty well. I could tell you what keywords were leading to sales and which ones weren't.

[Podcast Host 2]

And.

[Will Smith]

And what about the remote nature of your ownership? Matias was there, but then he wasn't after a while. Yeah, you were coming and going from Austin. Did that, did that, did that feature figure into their criticism of you guys or. That wasn't really an issue?

[Edgar Galindo]

Yeah, no, I, I think, I think that's definitely part of it. We, I definitely, I definitely think so. I think the, the old seller, he was, he's a vet, very regimented. It was, it was great. I actually really. Adm. Where like 7:00am Meetings, stand up meetings every day, like, who's going where, what's happening today? We didn't see, like, I mean, in Austin, everyone here is remote and we get stuff done just as efficient. And we were like, okay, let's earn some trust by like, hey guys, you don't have to come in at this time every day. Or like, hey, maybe we can adjust how we do this so that it's a little less taxing. And I think maybe that was misconstrued to some extent. The, the other big thing that that kind of played out was that when Matias was moving back, his intent, his intention was to move his family, his new kid to Dallas.

[Will Smith]

Yeah.

[Edgar Galindo]

But while like those first couple of months he was going to need. They were going to need all the family support they could get, which I totally understand with a one and a half year old myself.

[Will Smith]

Yeah.

[Edgar Galindo]

So we hired an operator or a CEO there and there was definitely some bad emotions about like, wait, why didn't he ask? Why didn't they interview any of us to see if we could run the business? And maybe I think what we could have done a little bit better was to have. Have them be more of a. I don't think any of them were qualified to really run the business, but for them to have a little more buy in, maybe participate a bit more in the interview process or the selection instead of being like, hey, surprise, this is your new boss. I think that's something we could have definitely done. Done better, made them feel more involved instead of just like, hey, this is happening. Like, you know, deal with it.

[Will Smith]

Yeah. Yeah. Well, those points, those self criticisms, Edgar, all resonate. They all sounds like they may be true, good insights, but certainly don't seem to rise to the level of, like, gross mismanagement or something, you know?

[Edgar Galindo]

Yeah, no, I've. I don't think I've gone through this in my head a million times, and I don't think so. Yeah, okay.

[Will Smith]

We still got a ways to go here, Edgar.

[Podcast Host 2]

That was.

[Will Smith]

So that was the collapse, frankly, of Dallas before we leave that piece. So what does it look like to shut down the business? Like, what are the financial implications of that? Servicing the debt going forward? Losses, no more profit coming out of the business. I mean, what was that analysis?

[Edgar Galindo]

Yeah, so, yeah, it's pretty rough. So we ended up filing for bankruptcy. So the bank is not going to get paid. At least the SBA will cover whatever, 80% or something. Matthias making the decision was we were always modeling out what our Runway is and what our burn rate is and how much we're spending versus how much is coming in. The sudden drop in sales kind of was hard to plan for. And so the decision came, like, pretty abruptly, like, hey, this is not going to work. Matias actually put in additional capital, not to mention the fact that the attorney's fees for the prior case was way more than. Than we ever anticipated, needing to spend or wanting to spend. And so it. It's one day, hey, this isn't working. We're gonna. We're gonna shut. In fact, actually, we. Matthias was willing to put in an additional. I don't remember, maybe $200,000 to see us through for a period of time. And we had a conversation with the then CEO, and we're like, hey, is this enough? Like, what do you think? And he was very honest. He was like, I don't think that's enough. And so we said, okay, then there's no use, you know, throwing good money after bad. We shut down. There's things I wish we would have been able to plan for better. We left a couple of projects unfinished, which I think is ultimately really unfair to the client, the homeowners who. Who had nothing to do with it. Yeah, some got a good deal in the sense that we were 70% complete, but we had only collected a 50% deposit. Others got paid a deposit and didn't get anything. Yeah, then, you know, obviously they become creditors, and that goes through the trustee, the bankruptcy process is painful. There is some sort of like sense of relief to where once the trustee takes over, you hand them all the documents, you answer all their questions and they just kind of take over and they're, you know, gonna sell whatever needs to be sold to, to take care of whoever can be taken care of. So you don't, you're not actually constantly involved. After a few weeks you're just kind of stepping aside. Regarding the SBA debt though, we always had this. We knew that structure had, you know, signed the, for the Dallas acquisition and structure was the businesses were cross collateralized. Our lawyers had a hard time expl. They're like what happened? Like what happens? And they were like hey, well structure can take on the debt of the Dallas business and just continue to pay it. That's something we, we evaluated at some point. We felt like it was, it was possible or yeah, you, you know, you just, the banks are going to fight it out. It's going to be weird having the Dow because there was different lenders. The Dallas bank saying hey, Structure, we want all of these assets so that we can be made whole. And then the Austin bank saying hey, those are actually our collateral for our loan and they're actually paying. So like I, I don't know how it was going to play out. And honestly our lawyers seem to not have that super clear cut also.

[Will Smith]

Edgar, the idea was that Austin was going to take over the debt service on the SBA loan.

[Edgar Galindo]

Yeah, we, we, we evaluate that, evaluated that for like, I don't know, a short term. But it became very clear that like while Austin had grown, was growing like there was just no way the, it was double the, the debt.

[Will Smith]

Exactly.

[Edgar Galindo]

No, it was double the debt. It, this, it. Even if Austin could, could do that, the, the financial, the fight, it just didn't make sense for Matthias and I to, to continue to, to, to work towards like what would eventually be just like staying afloat. Right. Or just treading water. Yeah, but yeah.

[Will Smith]

And, and, and so when you, when Dallas files for bankruptcy, what are the implications on you guys? On personal guarantees.

[Edgar Galindo]

Yeah.

[Will Smith]

Etc.

[Edgar Galindo]

Texas is great protections for bankruptcy. Like I'll speak personally. I live in my primary residence, so my homestead protections like the bank cannot come after my house, which was like the most important thing to me. I think that's like the biggest risk people take. Now if I had a rental property, yeah, that'd be fair game. But, but I don't. All of our money. By that point my wife and I had put into retirement accounts minus you know, a few thousand Dollars here and then whatever. Some stocks or funds, they. They don't come after retirement accounts. And then you get to keep one vehicle for every licensed driver in the household. We only have one vehicle, so, you know, it's. It's not worth much anyways. But so we got to keep that. And then the last thing was I want to say, and people should fact check me here. This is kind of the gist of it, but it's like a hundred thousand dollars of personal possessions. So I like, I remember like at one point walking through my house and being like a hundred thousand dollars, and I'm like, looking and I'm like, what do I have that's worth? I don't have like expensive watches or anything like that. I remember like looking at the TVs and I'm like, the team. Like, that's nowhere. Like, TVs are like $300 nowadays. I think the. The. Our fridge was like our most expensive asset that we. So that gave me some peace of mind. Now what I would get is seven years of bad credit.

[Will Smith]

Yeah.

[Edgar Galindo]

And. And you know, that's not nothing, but my wife wasn't involved in the acquisition, so she. If we ever need to buy a new car or something, she's gonna have to buy it.

[Will Smith]

Okay, Edgar.

[Podcast Host 2]

Well, that's.

[Will Smith]

And so bankruptcy Dallas closes, and the plan though, is to continue on its structure.

[Edgar Galindo]

Yeah, we keep chugging along down here in Austin. Had a pretty decent year last year, so we grew that to 6.3 the year before. This past year we were pretty stagnant. I think we were like 6.1 or something along those lines. But our bottom line drastically increased. So kind of those efficiencies that we had been talking about, we. Yeah, just honestly, like, that first year gave me insight into how much money we were spending on things like equipment maintenance. And it turns out we had like very old skid steers that we were fixing all the time, and buying new ones was actually going to be less like the payments for those. We got new trucks. We moved to a new construction yard that had much more space. We had outgrown the smaller one where we actually had to stagger when people came in because we just couldn't fit enough vehicles in there. So some people came in at 6:30, some came in at 7:30 to where we were able to just have everyone come in, get out the door. We also tried to concentrate our operations a little bit more in Austin. We still do a ton of work out in the Hill Country, Horseshoe Bay, a bunch of different areas further out west. But we're really trying to consolidate, you know, so that we weren't driving as much, which was ultimately a cause for rework. We had one project manager who was driving everywhere, just missing things, not his fault at all. We ended up hiring another project manager. This was actually the quickest ROI I can imagine. Here we had a $480,000 landscape going on that we projected to make about 25 to 30% gross profit on. We hired a new project manager at like $60,000 a year. And our more experienced project manager just devoted himself. We devoted him to that project. We're like you, you just run this one and a couple other small things nearby, but you're focused on this project. And he was able to hit 40% gross profit which was just a big wake up call to like he covered most of the other project managers salary just in that one job.

[Will Smith]

Yeah.

[Edgar Galindo]

And, and it was just a big wake up call for like how and this is stuff you, it's much more obvious in hindsight but the idea of like spending money can actually save you money. It's, it's not like super intuitive. But that's exactly what happened here.

[Will Smith]

Yeah. What else can you tell us Edgar, about just the just being a small business part owner, operator. And I know that it was challenging because I heard you on stage. We were, I interviewed, I moderated a panel that you were on talking about this.

[Edgar Galindo]

Yeah.

[Will Smith]

So share, share with us about the kind of the day to day and how it contrasted with your, you know, cushy job at Google. Albeit it was a short lived job, but still.

[Edgar Galindo]

Yeah, yeah, no for sure. So I think one of the like I'll, I'll talk about the, the, the flexibility component and my feelings versus my spouses. The whole rationale for doing this was again my wife and I wanted to start a family. We wanted to have children. And I, she, super smart, was like, hey, I know the kind of dad that you want to be and you're not going to be able to be that kind of dad working this much. We need something different that gives you more flexibility. I feel as though even though I, I, that structure is still working 70 hours a week. I, it doesn't feel like 70 hours to me. It's much more rewarding. I get to, hey, I'm gonna go over here today. I'm gonna go check this out today. Today I'm locking myself down on my computer and gonna crank out paperwork. I doesn't feel like 70 hours to me. It's interesting. I'm learning new Things if you were to ask her, she would say there's not much of a difference between how much he was working before and how much he's working now. So yeah, it feels better for me, but if I think back to the rationale why I did this, I don't think I necessarily met, met that flexibility criteria, even though it feels better to me. The other component kind of talk on the same thread of flexibility is you get to make your own hours, you get to make your own out. Like I get to go pick up my little girl from daycare every day at 4:30, but it's like make your own hours but you have two hours a day to make. So there's still a ton of work there. On the operator side of making things efficient, I knew this from consulting, but it's even harder I think in more blue collar fields is you can drive efficiencies like any, anybody can come in and say, hey, we're going to start using this tech solution that is really going to save us time and is going to be great. But the change management that comes along with it, like getting the people who are so entrenched in the way they've been doing things for a decade or more, that is really the challenge. That is really the hard part. So the, the thought of like, hey, I'm gonna go in and make things more efficient. There's tools and there's processes, but there's also people. And the people are really the, the

[Will Smith]

hard part in my opinion, the realities of being an owner. So was it, aside from this whole debacle in, in Dallas, was it what you wanted? I mean, other than, other than maybe you didn't get as much time with your family as you had hoped. Was it basically what you wanted? It's, it's sounding pre, with challenges, but

[Edgar Galindo]

no, yeah, for sure. It's, it was more challenging than I expected. I, I don't regret it. I don't, I don't wish I could go back. I think I, I've learned a ton. I think my, my next pursuits will be better because of, of kind of my experience and I guess to close the loop on structure.

[Will Smith]

So we haven't, we haven't dropped the, the second shoe needs to drop now.

[Edgar Galindo]

Yeah, yeah, exactly. So we are closing structure down because of that kind of same liability that we talked about. I think structure is very promising. We have a great pipeline, great set of employees. Our initial plan for Structure was to invest. We were always going to invest the first two to three years for the growth, for the Efficiencies for what have you. And without that investment, it's just not as peeling of an opportunity. And that investment, when Matthias and I talk about it, it went to lawyers in Dallas. It went to making some things right. Like we ended up putting more money when we closed, we put in more money to make sure that all of the employees were paid. We didn't want anybody to have to go to bankruptcy court hearings to, you know, for their last check. So. Yeah, so it doesn't make financial sense for us anymore, I think especially with the, the potential, even if we wanted to put more money in, I think the looming idea of like, what are the banks going to say about this? Is the Dallas bank going to say, no, that money actually should come to us. There's too much risk in, in continuing to run, to run it the way we are. So a few weeks ago, we, we decided that, that we're going to shut down structure as well. We're doing things a little differently here since we have more planning. We're finishing out all of our projects so that, you know, everyone who's paid for something kind of is, is made whole. But yeah, we're, we're winding down and, and should be wrapping it up in the next few weeks, which.

[Will Smith]

Edgar, wait, so let me understand it.

[Edgar Galindo]

Yeah.

[Will Smith]

So Dallas has, has brought, brought down Austin because the debt service of Dallas flows to Austin.

[Edgar Galindo]

The debt service. Yeah, as well as the, the additional capital that we had invested into Dallas both in terms of, of like, hey, how can we save this business that is, is kind of sinking is capital that, that we had initially, you know, planned to use for, for Austin. Right.

[Will Smith]

No, but I'm, I'm trying to understand why Austin doesn't survive or why it doesn't make sense.

[Edgar Galindo]

Oh, yeah, yeah.

[Will Smith]

Because the debt, sir, because you basically have to keep service it because Austin, the structure entity, was an investor.

[Edgar Galindo]

Yeah.

[Will Smith]

In Dallas. It now needs to service this big SBA loan.

[Edgar Galindo]

The Dallas loan was personally guaranteed by myself, Matthias, and it was guaranteed by structure.

[Will Smith]

Okay. Okay. So the banks are to come back, come after all three entities, two people in, in structure.

[Edgar Galindo]

Yeah.

[Will Smith]

And so. Okay, so it's basically just going to come after structure for all the money or to continue servicing the debt. And with that debt service, it just, you can't. There's no free cash anymore coming out of structure and it doesn't make sense to carry on.

[Edgar Galindo]

Exactly. I, Yeah. I don't remember what our debt coverage ratio was for structure, but gets shot when you double the, the debt.

[Will Smith]

Of course. Yeah, yeah.

[Podcast Host 2]

And so is there, is there some

[Will Smith]

lesson here in like linking the two businesses, that structure was somehow guaranteeing Dallas or.

[Edgar Galindo]

Yeah, I don't think we should have, we should have done. I think like the whole idea at one point was like kind of doing this little mini roll up, right?

[Will Smith]

Yeah.

[Edgar Galindo]

I don't know what the proper way to do that is. Like, are you automatically linking them? I think there's some value in keeping things separate until you kind of are fully in a, in a steady state flow or operations. There's also the, the like the kind of elephant in the room here. We bought the Dallas business six months after structure. It was a good opportunity. Perhaps we should have waited a little bit longer and then made sure we understood things much, much better. Cyclicality, seasonality. I think there was maybe some haste, maybe just the. One of the things I learned here is like once you have one business, like the opportunities to buy others are much easier. It's that first one that kind of is. Is really hard.

[Will Smith]

A common pattern on acquiring minds, the searchers. It's so hard to get any toehold in a market, get, have sellers get back to you, be treated seriously as a buyer. But once you're on the other side of a transaction and you are an owner, you're in the club and, and all of a sudden opportunities come to you. Yeah.

[Edgar Galindo]

And I think knowing that is, is huge for people. Right. I think we were still in the like, mindset of like, oh my God, like do these opportunities come. Come about.

[Will Smith]

So you felt you needed to jump when Dallas.

[Edgar Galindo]

Yeah, exactly. Yeah.

[Will Smith]

As an opportunity. Because you didn't realize that now as owners you might be seeing a lot of opportunities.

[Edgar Galindo]

Yeah, exactly. Or you, you just have more opportunities in the sense of like, you can take a little more, you can buy a smaller outfit fit. Right. You can buy a $300,000 SDE business and fold it in. Whereas before a 300,000, like you don't have any wiggle room if you're buying that, that small of a entity as,

[Will Smith]

as the first acquisition, right?

[Edgar Galindo]

Yeah, exactly. Yeah.

[Will Smith]

What, what other, any other learnings from this?

[Edgar Galindo]

Edgar, Talk to employees, especially key employees, I think is kind of one of the big ones. Just keep in mind the whole driving efficiency thing. Like are you actually restructuring the way the business does things or are you just digitizing? Because then the ROI is going to, is going to be different on those investments.

[Will Smith]

Well, I want to, I want to dive into that. And I, and I have another question for you. And then we got to start wrapping up because we're over. So on this tech piece, Edgar, you actually had said to me in the pre call that you, you do think that this opportunity for efficiency is, is, is vast that so many of these businesses maybe don't have processes, although it sounds like yours did and are just begging for technology and that that's. And, and then you proceeded to talk about some custom code that you built with the help of AI and the efficiencies there. Like talk us through how you think about that and what you built.

[Edgar Galindo]

Yeah, so what I built was a very niche piece of software. It's a web app done almost exclusively with the help of AI. And I think where the value in this is, it's not in that it's digitizing existing processes, but it's actually creating new workflows for how things should work or how things should done. So essentially grabbing that handoff from the manila folder from the sales guy to the estimator to the construction guy is kind of not fully reinvented but optimized in a way that it's not just now digitally, but it's more structured. The documents are found in the right place, the right people have access to the right data at the right time. And it's insane to me that I was able to do this just with, with AI. I think there are a lot of blue collar individuals who can build custom app just for their business now. I think where people will run into issues is building things that are scalable if they want to sort of sell it or commercialize it. But in terms of solutions for yourself, there's no better time right now I think it's. We're in a unique sort of inflection point with how democratized AI and the solutions that it can come up with are the issue with and I see this and I've talked to other operators who have this issue here is that they will use QuickBooks is almost like mandatory. Then you have some CRM, whether that's Monday or Trello or HubSpot. Then you have your kind of project management which is like Jobber or Service Titan or LMN, whatever it might be. And what I find myself very frustrated about was that I'm paying eighteen hundred dollars a month for HubSpot and I only use their CRM and they have other great marketing platforms and they can record your calls and go through your email and do all of these cool things. I don't need that. I'm like small enough to where all I need is just who's calling me? When did they call Me, like, where am I in the sales process? And in talking to my rep, like, how do I, you know, do this? And it's like, no, you, you have to, you already have the most basic package. Right. So that's a little frustrating. I feel like I'm paying for features that I don't need or don't use. But when you have some, something like Jobber or other applications that are private equity backed, it's like, hey, reach the broadest audience as possible, as much as possible. So you end up with a product that is not built for landscapers. It's built for landscapers, H vac, plumbers, roofers, fence builders, deck builders, you name it. Right. And so you end up with something that's like kind of, it's got features that are built for, for something that you don't use, but you still have to pay that basic price.

[Will Smith]

And you built this app over some number of weeks. I mean, you didn't bang it out one Saturday afternoon.

[Edgar Galindo]

No, no, no, no, no. It was a number of months and I had some help, right? It was months, but it was not months of full time. Like I was still running the business. It was, it was, yeah, it took a while.

[Will Smith]

Yeah. And. And so this point about it saved you money, saved you $50,000 a year. That's a salary. But it also, it sounds like it also caused you to kind of refactor some processes because the, you're going back to your theme that it's not. It shouldn't be just about digitization of existing processes. It should be kind of a reevaluation of the best way, the first principles approach to the processes of the business.

[Edgar Galindo]

Yeah. I can give you a very quick example. The designer works on the design, does it? Hands it off to the estimator, the picture manila folder. Right. Hands off the manila folder to the estimator. The estimator prices it, gives it back to the salesperson. Salesperson is a manila folder to the client. Client revises it, some changes. Now we can do some things in parallel. Right. So as the designer is creating the design, the estimator can start seeing what's happening at the same time and can start either providing feedback like, hey, that wall that you're designing is going to require a footer or start estimating it at the same time. So by the time that the salesperson or the designer is done and says, hey, I'm done with this design, the estimate is almost, you know, 80% done. And sure, there's some back and forth and then fixing things but things that were sort of in series can now be in parallel. It's that kind of sure, because in physical form, like there's only one manila folder, but in digital there's copies of it. So you can kind of have things going on at the same time.

[Will Smith]

Yeah. You know, Edgar, I'm getting the impression that you're rosier now on just the, the day to day life of being the owner and primary operator of the business. Then the last two times I talked to you at, at Austin, you were on stage and the panel was kind of like a, kind of a war stories panel and it was talking about the hardships, the realities of this path. Then when we connected, I guess a couple weeks ago, you similarly were kind of pining for your white collar cushy consulting days, which were hard work but you know, didn't come with all of the emotional, psychological burden of this. But today I hear, I hear your, your, your tune is a little brighter maybe when, maybe those previous times you were really going through it with the decision, with this decision of to shut down Structure. And I of course didn't know then what I know now anyway, if you would react to, to that, you know, what, what do you tell people out there about the reality, the day to day of the this path?

[Edgar Galindo]

Yeah, no, I think, I think that probably had a lot to do with it last time we spoke. It's definitely been an emotional roller coaster, as you can imagine. Ultimately, what I, what I don't want to do is discourage people from, from looking at this as a, as a path for them. But I also, like, I also think they really need to be aware of like, it's hard. It's really hard. It consumes a lot of time. It's not just hard on you, it's hard on your family, but it's also very rewarding. I think it's something I mentioned in the panel was that I did this to be able to provide for my family. And one of the things I found most rewarding is taking a step back and being able to see that you're not just providing for you and your family, but, but all of your employees and their families. And that is, that is super rewarding. And I think that's probably something that was really front of mind last time we spoke, like what's going to happen to, to, to the employees, to, to everyone that, that you really grow to care about. And so what's happening with Structure is that my sales woman, who's an all star, she's been in landscaping for forever she actually worked for the previous owner for 14 years doing design work and sales. You know, once I broke the news to her, she, she was like, hey, this is, this is all I know. This is what I've been doing. I will kind of start my own thing.

[Will Smith]

Well, that is a pattern on acquiring minds. That many people, entrepreneurs get into this path for a number of reasons, but like the gratification of being able to impact their employees lives is not among them, frankly. And then they get into the seat and they find that that actually jumps to near the top of the list, if not the top of the list of. One of the most gratifying parts of the journey is, is the impact you can have on your employees. Thank you for, for answering the question of what, what happens to the folks at Structure now. Now that with your decision. Great. That, that they're going to land on their feet or some of them are going to land on their feet.

[Edgar Galindo]

Yeah.

[Will Smith]

Last question for you, Edgar.

[Edgar Galindo]

What's next in terms of what's next? I'm actually going to go and help my dad run the family business. Right. He's, he's had his own business that he's been asking me for help with for a long time. And no, this is actually different. He's out in the El Paso now. It's, it's an insulation services. So they install insulation for oil field equipment.

[Will Smith]

Okay.

[Edgar Galindo]

And you know, kind of full circle. That was kind of the first job that I kind of worked for. It's small business. Going to work with my dad. That's going to be great. Get to spend some time with him. I'm staying in Austin, which kind of ties into the. How can you run things remotely? I'll probably have to spend a lot more time flying back and forth, but I don't shy away from sort of small businesses, I guess is the point here. And then obviously I think the application that I built for Landscaping, it could help out a lot of people. So I think I might try to commercialize that as a sort of side project while kind of running my dad's business.

[Will Smith]

And you're, you're the personal bankruptcy piece of this. You've processed it?

[Edgar Galindo]

Yeah, moving on. I'm. It's gonna happen as a matter of like timing. I'm. I'm not sure yet. That's something I, I need to kind of nail down with with my lawyer. But yeah, I think I've, I've come to terms with it. It's. I again am lucky that I have other opportunities, like a dad who has his own business who wants help.

[Will Smith]

Well, Edgar, thank you for sharing. What a journey. Painful, but you do sure seem to have a philosophical approach about it and it sure helps when going through something bad that they're, you know, it's helpful that the future appears bright or that you have prospects waiting for you so that you know, you can feel like you land on your feet. Thanks very much for for sharing this. We talked offline about given the news of of shutting down structure, whether or not it made sense for an interview anymore and I said it makes even more sense for an interview now and you said and you agreed. So thank you for joining us on Acquiring Minds.

[Edgar Galindo]

Thank you for having me.

[Will Smith]

Hope you enjoyed that interview.

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[Will Smith]

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[Will Smith]

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