Private Equity Secrets: Buying Your First Business

Hey welcome to another episode of Making Billions, I'm your host, Ryan Miller and today I have my dear friend Brandon Knapp.

Brandon is the founder and managing director of a buy side investment bank called Evercap Advisors. He has successfully sourced and completed numerous proprietary M&A and recap transactions in the software, business services, consumer, industrial and distribution industries. 

So what does this mean? Well, this means that Brandon understands how to find companies and convince them to sell to you, and he's about to teach you private equity carnivores how to do the same.

Subscribe on YouTube:
https://www.youtube.com/channel/UCTOe79EXLDsROQ0z3YLnu1QQ

Connect with Ryan Miller:
Linkedin: https://www.linkedin.com/in/rcmiller1/
Instagram: https://www.instagram.com/makingbillionspodcast/
Twitter: https://twitter.com/_MakingBillons
Website: https://making-billions.com/

[THE GUEST]: Brandon is the founder and managing director of a buy side investment bank called Evercap Advisors. 

Everyday AI: Your daily guide to grown with Generative AI
Can't keep up with AI? We've got you. Everyday AI helps you keep up and get ahead.

Listen on: Apple Podcasts   Spotify

Chapters

• 10:49 [Ad] Everyday AI: Your daily guide to grown with Generative AI
• 11:37 (Cont.) Private Equity Secrets: Buying Your First Business

Transcript

Ryan Miller  

My name is Ryan Miller, and for the past 15 years, I've helped hundreds of people to raise millions of dollars for their funds and for their startups. If you're serious about raising money, launching your business or taking your life to the next level, this show will give you the answers so that you too can enjoy your pursuit of Making Billions. Let's get into it.

Ryan Miller  

Do you want to buy a business just like the private equity carnivores on Wall Street but you don't know how well, I've got a treat for you. My next guest runs an investment bank that does just that, and he's about to reveal the private equity playbook on what tech to use in this business and how to get those hard to reach business owners to talk to you and sell all this and more coming right now. Let's get into it.

Ryan Miller  

Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller and today I have my dear friend Brandon Knapp. Brandon is the founder and managing director of a buy side investment bank called Evercap Advisors. He has successfully sourced and completed numerous proprietary M&A and recap transactions in the software, business services, consumer, industrial and distribution industries.  So what does this mean? Well, this means that Brandon understands how to find companies and convince them to sell to you, and he's about to teach you private equity carnivores how to do the same. So Brandon, welcome to the show man.

Brandon Knapp  

Awesome. Thanks, Ryan, very excited to be here. Big time fan of the show, I've listened to many of them. Love that there's a place for people like me to go where you can get value learn about private deals. And I'm excited to drop a little bit of value to your guests, and hopefully I can contribute to the pot that so many awesome guests have donated to already. 

Ryan Miller  

Yeah, thanks, man, it's good to be here, and this is definitely your place. So we have a lot of family offices that listen to the show, investment bankers, fund managers, everybody that's concerned about doing private deals, and as we know, billions are made before that. IPO, this is where we focus a lot of our attention, doing deals, and especially private equity carnivores, investment banking. My goodness, this is my first love that I've had since I was 12 years old. So yes, I was one of those weirdo kids, and actually want to be an investment banker, can you picture me in a suit? So in elementary school is a good time. So your specialty at Evercap is buying companies and helping other people. So you get hired to buy companies. Let's start with just the beginners. Maybe they want to buy their first company, whether they work with your firm or do it on their own, whatever it is, whatever suits you. We're just here to talk about the industry, not give you financial advice. But what I would like to know is, when people are starting out in this industry. You're an expert. What could you tell people as far as how to get some early points on the board and just trying to chalk up some wins when buying a company? 

Brandon Knapp  

Yeah, so to kind of give a lay of the land, I think there's two directions to go. One is to start networking with sell side investment bankers who represent businesses that are coming to market, and they will show them to many different buyers. So those are competitive processes, but those are actual deals. And so just a matter of getting out there, getting on those lists from those bankers, letting those bankers know which industries and which industry niches that you're particularly focused on and sizes, so they can keep you in their databases when they're bringing those companies to market. The other way and what we specialize in is the proprietary deal, which I'm sure a lot of the listeners are going to be geeking out on here, but proprietary, when I say that sometimes, you know, jargons flipped around too, too quickly and flippantly, but what we're talking about is one on one deals where it's not as sell side bank or shown it to 100 different buyers, it's you as the investor talking with one business owner about doing the transaction. And so when you're doing the proprietary side, you can either go and make your own and hopefully we can share some insight into some tips and tricks there, or hiring a firm like Evercap, who can help you with that sort of process of reaching out to businesses. 

Ryan Miller  

Brilliant. So you guys do more the buy side advisory kind of stuff. I can imagine trying to get a hold of people, because not every business is for sale. Well, at least maybe they. The owner doesn't know it yet, but I've known each other for a little bit, and we've talked outside of this interview. You've got some pretty impressive strategies to really get people to respond to you. And I know as a capital raiser, as a fund manager, investment banker, getting that response rate can be a challenge. On the buy side, trying to get a hold of somebody that may not be selling their company yet, but you want to try to have a conversation to see if that's a possibility. What are some of those things that you guys do at your investment bank that maybe you can share with people around the world is just getting a better response rate? 

Brandon Knapp  

Yeah, well, the first step is finding the businesses to go after. And so I think one of the best ways to do that, you can always go on Google and try to find a list yourself, but really subscribing to one of the most used private company databases is a great place to start. So if someone's beginning or has a smaller budget, there's a couple ones called Apollo, very well known. Another one called Inven or Comer, both and I want to say budget friendly, but on the cheaper side of things, and then more expensive you go look at things like SourceScrub, Grata, Syndex, there's a few more. Anyone wants to nerd out on which one does what best? Feel free to reach out to me. But once you do get that list to go after, what we do to stand out is we start our process by sending a hand signed letter in the mail. And so it's a letter that's very descriptive. It tells who our client is, and mostly we don't like you like to build a little intrigue there. It also says why they're interested in the industry that they're looking at, and then also the owner's business in particular. So the story is not just about how great the private equity firm is. We want to put focus on the loan and what a great business he or she has built, and that we understand some of those facets of the business that are especially compelling and unique, and that's why we're interested. 

Brandon Knapp  

And so like I said, it all comes into a letter. It's hand signed. One thing that I've noticed over the course of my career is that when we first started sending letters, we'd follow up on them and owners would be like, No, I didn't get your letter, but let's talk. So I was like, why aren't they getting the letter? And it's like, when you're reaching out to a business owner who's got 100 million revenue business, and you're just sending a postcard in the mail. You know, they probably get 50-100 different random things in the mail, and it gets lost in the shuffle. So what we did to stand out was send it via FedEx. So you say, what the full size FedEx envelope and on a nice piece of letterhead, and then you send it with signature required for delivery. So what that does is, if the next person goes there like he's delivering an Amazon box or something, the admin us to sign for it. This must be important. Cost 15-20, bucks to send this thing. Looks like there might be legal documents in there or package. So she puts it on right on the CEO's desk, or the owner's desk, and that's what the whole goal is, to get something that shows that we're genuinely interested, we're different in the hands of the CEO's so we're proving our interest. And so we don't get a lot of responses off of the to be honest. But what it does is it warms our subsequent outreach efforts. 

Brandon Knapp  

So the next step that we do is we send an email saying, I'm following up on my letter. Great subject line, by the way. It's different that doesn't come across very often on voters desks. And then it's, you know, we try to keep it fairly short, since the letters a little bit long, and then if they don't pick up on if they don't answer the email, we'll go to LinkedIn. So another tip on using LinkedIn is you can use the premium version of LinkedIn to get those in mail credits. But kind of like we were discussing earlier, that feature is a little bit nerfed, in my opinion, in that it's if you go, you're listening to this podcast, just go to your own LinkedIn and go to the email section, you probably see a bunch of spam. For lack of a better word, people trying to sell you stuff. So the better route, in my opinion, is to just send them a connection request. And you have a very large thing, it's 500,000 maybe it's 300 to 1000 a day, probably not reaching out to that many healers in one day, anyway. So you have plenty of credits to use on the connection request, and you can include a node with them as well. So we like using that with all business owners in our in our outreach. And then there's a little bit of a bifurcation. So we got the letter, talked about the email, got the LinkedIn message, and then the bifurcation really occurs. If the business is more industrial, blue collar, maybe residential service or something more like healthcare, high technology software. And so for the former category, the more blue collar industrial, the phone call cannot just dial in the owner the company works for beats. For this, you can usually get through. Admins usually let you through and in just a great way to actually reach an overview and reach their voicemail. It's like people get 1000 emails a day, but they probably get four voicemails, so you're just in a different pond there. And then for the more sophisticated, maybe sophisticated, not the best word, but more heavy tech businesses that you're going after, we they don't, you can't get through to the phones on those they have set up systems where they're not reachable by phone. That's not how they do business. And we are tech enabled. And so what we've done there is we use a service called Vidyard, where you can record a video of yourself, you can do a screen share, and then you can say, Hello, Mr. Miss. Business Owner, wanted to check in on letter and email I sent you, and just kind of walk through. I know he does get lost in the shuffle, but here's the particular aspects of business that were uniquely compelling to our client, and here's why we think our button be a great fit for your business. 

Brandon Knapp  

So we send that, and it sends it in a thumbnail, so you can see the little preview of the video. It's got the owner's website on the background and just has a little playbook, kind of like you're sending a YouTube video via text. You can see a little outline. And so owners, of, you know, tech businesses are quickly going through emails, but then they see their website and there's a play button. What? What is this? You just have a little bit of an intrigue to hit play now they're listening to your message. We get a lot of replies just on Wow, what an interesting way to go to Marketing. How do you use this tool like we're interested in using in our own processes? You get the dialog open. Maybe it's not the right time for a transaction, but you stay in touch and you never know what happens later down the line. So that is our cadence. And I would say that if I could give a piece of advice is, don't be afraid to use a lot of pennies to have a story. There was one owner on a thumb on that points 15 to 20 different times, five calls, five emails, you know, LinkedIn requests. Send them the email on LinkedIn too, just for good measure. And finally got a hold of him, and he's like, Sure, let's go meet for lunch your private equity clients interested in buying my business. That's three we're all in Houston at the time. It's all gonna go get lunch at pop videos. And so we went there. I was like, I wonder if this guy's gonna grill me in front of the. Fly and just say this guy literally wouldn't stop spamming me. And it was quite the opposite. He said, hey, just let you know no one gets on my calendar unless they're very persistent, and that's how I do. What's important is people let me know by their persistence, and this is why we're here. And the deal actually ended up progressing quite a bit. It hasn't gone through by you know, some of those things are longer term for nature, so more of the story is that it gave me more conviction that persistence is okay and actually a good thing to do when you're trying to get owners on the line to do a potential deal.

Ryan Miller  

Awesome. I love that. And, you know, I have a lot of friends who are in private equity, and obviously I bump up to it as well. A lot of them will have like a two to 5% kind of open rate, response rate about what what would with all of these strategies? What have you found to be your metrics in that?

Brandon Knapp  

Yeah, we have right now, it's between 20% response rate to 65% on high end. 20% is for businesses that are larger, almost 50 million plus in enterprise value and also platform investments. So those tend to be on the lower side of the 20 to 65 on the higher end thing, something we'll probably get into later, is the smaller businesses, like there's less competition over there, and also for add ups. So if you have a platform in the space, owners are curious of if you have a valve manufacturing firm, Hey, someone representing valve manufacturer trying to acquire you another valve manufacturer they're interested in seeing who's trying to roll up the industry. You want to be part of it, or just trying to get some competitive Intel. Once they hear the opportunity, a lot of times, they want to jump on board. So that's what our first response rates look like. By you know, 3x from 20% to 60-65 is quite a difference. So it really is varies per industry and per size.

Ryan Miller  

So from 2 to 5% to 20 to 60% so folks, you can see the difference. And this is why Brandon is who he is. Is he professionally helps to people, to find and acquire businesses. And we're just getting started. This is literally the first thing we're talking about, and he's just added all this value. I love it. Thank you, Brandon, you, you're you're a brother indeed. So you know, that's how we get some early points on the board. If you're trying to acquire a company, you got to have a conversation. In order to do that, you got to be persistent and get on their calendar. Trust me, I'm a CEO of many companies, and the persistent ones do make it through. No, I'm not soliciting for people to email me incessantly. I'm just saying people are busy. And if you stick with it, don't take no response as no response. Sometimes people are just busy. You keep at it, and they're like, Oh, I totally forgot. I gotta. I do want to talk to this guy? He's emailed me a bunch of times. This is, this is great. I finally, you know, I was caught up. I was closing something. Now he's here. So persistence matters. And at a 20 to 60% 65% open rate, it starts to make a difference. So all of those tools are great ways just to get the conversation started, but we're not done. So starting out, you can put some points on the board, but also beginners, you can really screw this up. Can you right? And so there are some ways that you can fumble and make these mistakes, whether it's contacting people or whatever it is, what would you say? What advice can you give people with all of your experience? What would you say are some things that they should be wary of, just to not screw things up in the beginning? What would you say? 

Brandon Knapp  

Great question. And not the number one mistake I see, not just from beginners, but maybe just people who are too busy to put thoughtfulness into their outreach is just using the same copy paste email that you send to every single business owner and focusing on quantity rather than quality. So hey, we're a firm. We invest in two to 10 million EBITDA businesses and these three verticals and stuff you want to talk send it to 10,000 you're not going to get the best owners and the ones that you want to respond to that? 

Ryan Miller  

I get those all the time.

Brandon Knapp  

And even the 2 to 5% that you were talking about, I think people do that. It's going to be more in the basis points of half a percent that they're going to be talking about. So that's the one that I see commonly used, and hopefully people are getting away from that. But there's just so much leverage with tools like MailChimp and some of these private company databases that I referenced earlier that you can download 10,000 emails. And you know, it's tempting to just say, Oh, I'm going to get a half a percent response rate. It's still hundreds of replies. So it's not the right way to think of things. 

Brandon Knapp  

The other thing is just to be mindful of the conversation that you're having with an owner to do a deal. And so you were asking an owner, owners to sell the business, you're not asking their employees, and sometimes that can spook them so making sure that you really have the right owner. And there's some things that private company databases list the owner, where you can also look at Secretary of State, Better Business Bureau. Sometimes the CEO is not the owner. If there's a CEO and a president, sometimes the result will which one owns it. So it's good to do a little bit of research, but for sure, not like, you know, Director of account, or something like this, or even a CFO. Even though they might end up a CFO might be the one leading the discussion, at least on the on the front end, it's better to let the owner bring in a CFMO or their director of something else, where they're administrative assistant, but you don't. To reach out to those people and act like you're investing in the business acquire it, because they might take it the wrong way and think that they're, you know, being hostilely taken over. There's still a little bit of, you know, the 1980s bad taste and people smell here 40 plus years later. So just be mindful of that. 

Brandon Knapp  

And then have a funny story actually on that that was, I personally violated that rule somewhat unknowingly, actually, completely unknowingly, with, I'll use a fictitious name, just so we don't blast any business winners or situations here. But is that my prior firm where I was doing a similar buy side sourcing role, and I was trying to reach out to like, I mentioned fictitious name a business called Duncan manufacturing. Let's say the owner's name was Bob Duncan in the business after his last name. And so I sent an email to bob.duncan@duncanmanufacturing.com. That was one that my tool said was email address. It came back undeliverable. And so there was another email address that said, you know, we're only this is maybe going to be deliverable. Maybe not. We'll try on air on the side of persistence, right? So it was called Duncan at Duncan manufacturing.com, sent and it went through. So I thought never statement was good. About 20 minutes later, the founder of the investment banking firm I was is working at comes and marches into my office and says, so I just got off the phone with a very angry business named Bob Duncan, who is somewhat threatening legal action against our firm. And he was very upset that you contacted every single person at his firm, saying that you had someone who was trying to buy out his company, and that caused a bunch of unrest and distrust in the business. Everyone wondering if they were still gonna have a job. And so I think for a second I was like, Oh, I did. I sent one follow up email. I go check my sent emails that put two and two together that, oh, duncan@duncanmanufacturing.com It was probably a group email that sent it out on a mass blast email shake to every single person. So be careful if you ever should run into situations where it's voters last name and you're reaching out to an address at a similar format, for sure.

Ryan Miller  

Awesome, man. So don't send those blanket emails. And yeah, the horror stories from the 80s, sack and the Wild West, days of Wall Street, if you want a movie on hustle takeovers, a classic is barbarians at the gate of KKR's hostile takeover Jr to Bisco, legendary deal, maybe a little dramatized as well, but still a classic one to kind of give you a sense of the olden days of finance and how wild those days were. So yeah, be careful of mass contacting. And so just because you're reaching out to the company doesn't mean you don't have to take care. I think is, is your point here? I One of my roles. I was an executive at a company, and I was brought in as CFO to help prepare to sell the company. And I can tell you, when the word gets out that the company's getting sold, or even thinking about getting sold, everybody's on edge, because most people think I'm going to be the one that gets fired, right because they're not going to have two directors of this, or two executive secretaries, or whatever it is, and so people really get nervous. So do take care that Brandon does, and just make sure. And the Duncan manufacturing can be our warning story of what can go wrong. So I love that. So you know, we haven't, we wouldn't have a show about Making Billions if we didn't talk about the markets, my man. So I'm just curious. You know you're on the buy side, and you're buying companies. Private equity is really high right now, right? A lot of people, there are a lot of influencers that are getting famous from telling people to go buy companies, the silver tsunami, all of these things that you're starting to hear about buying companies. Now you're you've been very generous in sharing some strategies that can just help people get started, to start having a conversation. Now, that's one strategy, but also aligning with the markets. And so I'm just curious, like, what are you seeing on in your world? What's going on in the market? What are you seeing out there? 

Brandon Knapp  

I think the trend that has been happening for decades now has been just the influx of capital into private equity, and just to focus on what a great asset class it is, and a lot of people trying to work in it, a lot of investors trying to invest in funds that do private equity, and just a lot of money coming in. And what that has been really driven by is private equity as an asset class has done really well historically, and especially if you look at, you know, top core talent funds, they're doing 15-20% plus returns. You know, on an annualized basis, it looks really good. And so you have a lot of money saying, I don't want to get 7% stock market. I want to get 15 to 20% this fund. And so more and more money has been coming in, and more and more funds have been popping up. Bigger funds have been popping up to meet that increase in demand on the money side. 

Brandon Knapp  

And so how that kind of trickles down into Evercap's world, in the business development world, is finding the right deal. There's still a similar number of businesses, but more capital chasing the same amount of deals. It's just going to increase competition. And so what the industry has responded with is really the rise of the business development professional at the private equity firm. Was, let's say, call it, 10 years ago. There was not, it wasn't very common to have someone whose sole focus was business development, whereas you fast forward to today, and you'd be hard pressed to find any fund private equity, maybe even venture capital, that has 15 people or more, that doesn't have someone whose main role is business development, and usually some of your Senior Principal, hardware major director, some of that sort of title. So the rise of the private equity, Business Development Professional is definitely on the rise. The other thing is just the proliferation and more thorough utilization of ISEF like Evercap advisors. And so the industry terms for what fee agreements look like had been standardized, not just in terms of fee percentages, also on track, links and other terms, there's been more firms popping up, and then also the bigger firms have been growing and doing significantly more volume as well. So that's the first trend that I've noticed. 

Brandon Knapp  

The other trend that kind of plays on increased competitiveness as well as private equity firms have becoming more and more specialized, and so what they used to say is, we're software investors. We like anything software now they are. They're more thematic in nature. And they say we are very interested in daycare management software business, so software that is needed to manage a daycare clinic, checking kids in and out, making sure they have their flu shots, dietary restrictions, several men can monitor to make sure the kids are playing okay. And the parents can live stream in make sure the right parent checks out the right kid, not give it away. So much shots of software to manage, long and short of it is people are getting more specialized and smarter on those industries too. Usually firms like GLG and other types of networking calls, where they can talk to experts and really develop a thesis on space. 

Brandon Knapp  

And so, kind of going off of that specialization trend, private equity firms have also been hiring experts to join their firms that are on the operation side. So operating partners have been becoming more and more common. Remember, even some of our clients are like, Yeah, we don't do the operating partner model. And a lot of them are switching over to the, you know, having operating partners. And so from our let to what we see the operating partners doing is they're either industry C suite executives who used to be execs at larger companies, and what they're looking to help now. So maybe the Republic companies now, they're looking at 100 million dollar businesses. And so it helps from the sourcing side, of course, when you say, Hey, we're working with the ex CEO of this industry, ex CEO of this of this business. And they, of course, knowing Him, to, like, you know, hardware supplies business, and I can talk to the ex CEO of like, Lowe's like, sounds great. And then we also see it too, on a functional basis. So having someone at the firm who's an expert at HR, expert at finance, M&A integration go to market strategy or sales, so they can come in both and from the industry side or from the functional side on an as need basis, and really help grow businesses. I think the days of buy a business, lever it up with a bunch of debt, and we're gonna make a return by just paying down or done. And you really have to grow a business and add value. And so really getting smart by specializing the industry and bringing people in who can actually add value to the business outside of just a private equity lens, and bring the operational expertise really, really helps.

Ryan Miller  

Okay, so there's two things that are happening if I'm hearing what you're saying. So number one, there's a little bit of a capitulation, but also they're niching down into more of a specialty. So instead of these broad stroke advisory firms, they're specialty advisory firms. They're highly precise daycare software, management software, for example, right? So I think, you know, I don't know if that's a real thing or not, but it probably is. But what I think the point you're trying to say is, like, this isn't like these big, broad things where you're buying, you know, widget manufacturing, it's highly specialized banks, highly specialized deals, and they're bringing in special lists. So everything's really starting to step it up, right? There's, there's levels to this game, and that's certainly one of them. I love it. So, you know, for the private equity carnivores out there, I see you guys, where do you see the smart money going? 

Brandon Knapp  

Yeah, what we've seen is private equity coming down market. So some firms used to have a 7 million minimum EBITDA investment threshold. Then it went to five. Now they're at three. I'm not seeing very many people dip down below three at the private equity level. I think a lot of businesses that are 1 to 2 million EBITDA and below just might not have the infrastructure or level of professional processes in place that warrant that type of risk. But with that, I think there's a huge opportunity those businesses. There's not a bloodbath of interest going after them, so it's a lot less competitive. Valuations come down quite significantly if you're looking at 3 million EBITDA business or some 1 million EBITDA business. So if I were to start a fund, that's where I would be playing sub 2 million EBITDA deals. Maybe one, maybe 500k and then putting them together. So doing a couple add ons, put two, 1 million EBITDA businesses together, grow it 50% boom, you're at three, and all of a sudden you've tripled your business, and you've also increased your multiple probably. Couple turns maybe three as well. So I think that's where I don't know, I don't say, not saying smart money's not going down there. But I think especially people who are smaller or starting out, I think to add more into the market is a great place to play.

Ryan Miller  

Brilliant. So the 1 to 2 million EBITDA valuation are the place to go. That's a great strategy. So there's always money to be made. I'm not saying there is or isn't in this area. I'm just saying maybe one of the things you can do is put your step one. So if, if you're an early person, and you want to do it, and you're want to climb that ladder of private equity, it's helpful. If the first step isn't 30,000 feet above you, if it's only three inches, you can make a three inch step, 30,000 feet, that's a big jump. And so doing these one to 2 million EBITDA companies and acquiring those, that's a great place to start. And nobody's looking there, right? So you can find value in many ways. And so overturning some of those rocks that are out there, you can start to find these gold nuggets. And so doing these in the sub 2 million EBITDA markets. Now we can start to acquire a lot of these companies however you do it. You know, through whatever cap stack that you want to deploy, if you're heavy on debt or all equity, you're doing it through a fund, or with a fund, or whatever it is, there's always ways to make money. And what you're talking about Brandon is that, hey, these markets, nobody's touching them. It's like leaving nickels on the ground. It's free money, so to speak. That's a bit of a stretch, but we're saying, hey, there's money that's out there.

Ryan Miller  

And, you know, it reminds me of a story, and I'm totally gonna make fun of myself on this one. Okay, so here's, here's a sub 2 million, sub 100,000 so when I was in undergrad, we're college boys, right? So we joke around. And I had this good friend, and she was dating this guy who just dropped out of college to be like, a delivery driver for, like, FedEx or UPS or something like that. And we were, you know, we'd give her a hard time, and we're like, Hey, how's your delivery driver and boyfriend? And she's like, Guys, it's really good. And, you know, we're just all playful stuff. And we're kind of like, that's weird. You would drop out of college to be a delivery driver. Like, how hard was your class, dude? And we, you know, this guy, and I remember seeing him driving like, Oh, that's my friend's boyfriend. And you know, we would kind of joke and give him jabs. And you know, we were decent friends over there. We would all show up at the same places. And little did I know that this guy was about to leapfrog all of us, and we were the idiots. So let me, let me explain. So he would go out and he would buy these delivery routes. So I didn't even know you could do that. So he would go out and buy these delivery routes, and he bought his place, and then he bought the next one in every adjacent route. And then he owned the city. Then he owned multiple cities, and he had these like tri City area, where he bought up all of these delivery routes for FedEx, we'll say. And then he sold it to this like group of doctors who wanted to buy it. 

Ryan Miller  

And so I remember hanging out with a bunch of friends. And then him and his friends leave this place that we were at, and they hop into this Range Rover. And I was like, What the heck? I'm like, How good do they pay for delivery packages? So I asked my friend who was giving a hard time, who, you know, was laughing at us now. And so what he did was he bought all of these delivery routes and then sold it as a package to an investment firm. And so the guy, you can literally start acquiring delivery routes. You can own your own, these small businesses that just deliver packages, for example. And you just a little ingenuity, and you start getting these mini monopolies, you know, whether you decide to do it or not do it, but you can maybe own the market share of a college town, right? So what? What I'm saying, folks, is that you don't have to do these big hostile takeovers worth hundreds of billions of dollars that's plastered all over Wall Street. You could go buy a delivery route for heaven's sakes, and just start acquiring the market share where you can command a premium and and building that out. And people love these tiny businesses. And I think back then, the delivery route was like 80 grand. That was it, like 80,000 bucks. And you just kept buying them and reinvesting the profits until he had about probably 10 of them and made buckets in like and he was, like, 24 years old. So wherever you are, I hope you're doing great. I won't say his name, but certainly, when I saw him get in the Range Rover and I had to hop into my rusted beat it up, F1 50, I was like, I feel like a schmuck. So the finance major still had some grown up to do. But the point is, so yes, you can make fun of me for that. I could take it. But buying these small businesses that nobody's looking at, there's still money to be made. So I hope someone out there that heard this story that Brandon and I are talking about has really started to spark up ideas. And above all else, I know Brandon and I have the heart of a servant. We just want to say, you can do this. So can you add to anything on top of that?

Brandon Knapp  

No, I love the idea, and I love that he's going after something that's not, quote, unquote sexy. It's like, who's passionate about doing driver delivery things? And I was listening to something today on LinkedIn, and they were saying the word, what is your passion? Is maybe not the right question. I was like, what can you do that you enjoy doing, that you can have autonomy at. That you can grow and challenges you and something like that, like, Hey, I enjoy doing this. I enjoy trying to buy one. It's my own high degree of autonomy. I need to figure all this out. And now the challenge is to go get another one. And so it's great. I mean, kudos to your friend for looking at something that's, you know, a little under the radar, if you're doing what everyone else is doing, then usually that doesn't pay well, so.

Ryan Miller  

Yeah, yeah, that's awesome. So you know, a lot of people come to the show, and we obviously save the goods to the end. So those of you really big Making Billions fans who would hold on to the end, because we know we always do something to say, what can we do to give you an unfair competitive advantage? And so if we haven't already just tune in, we still got more. So what are say two or three things really quick takes that, if you're able to take someone under your wing and mentor them in your field, what's some unfair advantages that you can share with our audience around the world?

Brandon Knapp  

I think the main one, whether they're wanting to be a buy side advisor or trying to source a deal themselves, or they're a private equity business development person, they're working for themselves. Is really to go to conferences. And it sounds pretty simple, but when you think about it, it's such an easy way, people go. Business owners go, and they go with the intent of meeting. A lot of people in the barrier for a conversation goes down significantly. They're going to go and we're going to have 50 conversations. They have 51 great that 51st meeting can be, can be you. The other thing is, you're going to get a lot of quality and quality and quantity with that approach. But the other thing that is such a valuable asset is just time, and this really speeds up the process of reaching out to the owner six times to get a response. And when you're reaching out that many times, I recommend not doing it every single day. When you are going to come across a little spammy and aggressive space. It out a couple of days. So maybe it takes two weeks to get a hold of an odor. You know, even it takes a week they want to get an NDA. Want to get some financial information. They want to see evaluation before they, you know, meet you in person. And so all that picks up. Maybe it's two months down the line before you're actually getting on flight and going and shaking hands with some which is how deals get done. I was on a more advanced diligence call. Not sure. Hey, I want to know is a billion dollar private equity group just yesterday morning. Yeah. Well, obviously, as Next up, I'd want to get on plane flight and fly down and meet you guys. To my knowledge, there hasn't been a single deal that's gotten done during zoom, except maybe during covid, and so you use those exact words, I think that's very true. Deals are not getting done virtually. So you can really speed that up and get in person at a conference, and people can see what you're like, and you can see what they're like. I think they're the human element of someone that your business owners team they're going to be partnering with. If it's a majority recap transaction where they're selling 60% to the business owner, staying on, retaining 40% they want another partner. And then if they're selling the whole thing, like 100% they want to know that their company's in good hands, and it's not someone who's, you know, devious or untrustworthy. And there's just something and neatly, as humans, as human beings, that, you know, it's kind of animalistic, I guess, but like instinctual to be a better word, that you can just get a vibe of a person when you're meeting face to face. So that's the first tip I would have. 

Brandon Knapp  

The other thing is, when you are reaching out to owners, big fan of being organized and not just kind of blasting things, forgetting where you are, have I sent that guy an email, should I follow up? What do I do when really getting a good CRM is critical, and I think that's step one. Step two would be getting a sales enablement platform, and some of the CRMs have that functionality built in where you can do the actual outreach via the CRM. But from my experience, if you get a sales enablement platform that sits on top of the CRM that really helps, they specialize in the outreach, and it really helps just make it more organized and neater that you have one system where you're sending emails, calls, LinkedIn, messages, letters. We try calling there, and then when they respond, then that's when it goes into the CRM and you can see your opportunities there a little bit more in depth. So those are the first two. The last one we'll touch on is really just manners. And so many times I'm trying to go wheel and deal and get the deal, and I'm flying to this and I'm talking to this person, they can kind of be an afterthought. But one thing that I see violated many times is that when you're asking in order to meet, it's polite to offer times for the club in a very organized format. I like doing bullets. You put the day. You put which day. So if we were doing today be Thursday, you know, August 8. And then you put the time frames there. Make sure you put which, you know, Central Time, Eastern Time. Include the time zone on there. Just make it very organized and neat. And then let the owner pick one. Because if you say what works best for you business owner, they want to be point to likely. And they, you know, it's hard for them to go look at their probably very busy calendars and see, hey, let me go try to pick a few three hour slots here and there. And it's just becoming somewhere so much easier. News points say, Oh yeah, you're right. I'm not doing anything Tuesday at 2pm let's deal with that. So just a quick little tip, but something to just also have, like, more of a, you know, folks on and not to sign up. It's just. This, small things like that really help.

Ryan Miller  

Wow, I love that. So, man. So this whole show, you've really cracked open on, really what it's like is, is, you know, we've dispelled the mystery of a lot of investment banking, particularly in this sector. Obviously, that's a very broad sector. There's many things and very talented people, including yourself, in the sector. But one of the things is, how do we get a conversation? How do we convince these people? What kind of businesses do we look for? What kind of finances do we look for? Boy, we've had a great ride. So before we wrap things up, is there any final remarks? Anything else you'd like to say? Maybe ways to get a hold of you or anything at all?

Brandon Knapp  

Yeah, best way to get a hold of me is brandon@evercapadvisors.com feel free to reach out on LinkedIn. My last name is spelled K, N, A, P, P, let's have a contact form on the website. Feel free to do that. I'm the one who checks those so but yeah, the last thing I'll say is, thanks again, Ryan, for having me on the show. Love that there's a platform like this. And you know, appreciate your graciousness and having me just having a platform that adds value to a lot of people. Know, you've got quite a few businesses that you run, consulting, fundraising, organizing, events, that isn't just one more thing, and I think it comes from a very altruistic perspective, and that your audience notices that picks up on it, and one of the reasons, but he had such a great ball. So I really appreciate it. 

Ryan Miller  

Thank you. You're very kind. Yeah, we just want to help man. We want to dispel a lot of the mystery around making money and Making Billions and helping people the helping Main Street, so almost like Promethea springing the fire from Mount Olympus to the commoner. So we, and I've been that commoner. Trust me more than more than admit but the great thing is, is this show and wonderful, generous people like you and all of our other guests have come on the show. We really want to help. We really want to help people to get that and just in a unified voice in the show is just to remind people you can do this. 

Ryan Miller  

So just to summarize everything that Brandon and I spoke about, get good at reaching out to business owners. For goodness sakes. Don't have that 2% open rate. Why not move it to 20 to 65 my goodness, that's way better. Exponential growth in that just from leveraging better strategies. The other thing that we talked about is a great place to close your deals is a sub 2 million EBITDA companies start looking there, especially if you're doing your first deal, those are great places to do it. Even if you're the guy who wants to buy a delivery route for delivering packages. There are so many ways that you can unlock wealth. And if he can do it, and I can do it, you can do it too. Next, just go to trade shows if you want to really just start building deal flow. So if you have a particular interest in, say, veterinary medicine, and you want to buy vet clinics, or you want to invest in HVAC, there are trade shows for everything. So going to those trade shows, you typically do get to meet the owner, or at least people who can get you in touch with the owner. And then the next one is as you go out, just be sure to leverage technology, specifically in CRM and sales enablement platform, get yourself organized some some technologies have those combined. But either way, don't just wing it. People can tell that you're winging it. They can also tell that you're organized. Why not be the guy who shows up to the meeting, well organized, and they know it, and then get the call by just offering times. Don't say what time works for you. Say this is the time that works for me. You do these things, and you too will be well in your way, in your pursuit of Making Billions.

Ryan Miller  

Wow, what a show. I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better. And make sure to come back for our next episode, where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends, stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.