$1B AUM in Private Equity: Launching Your First Private Equity Fund

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

Joe is the Chairman and CEO of a $1 billion AUM firm known as Axxes Capital. What's more, Joe also serves as a chairman of private equity firm DaGrosa Capital Partners LLC, a private equity firm focused on making control and influential minority investments into exceptional companies located throughout the United States, Western Europe and Latin America.

So what does this mean? Well, it means that Joe understands private equity, closing deals, raising capital and exit strategies, and he's about to teach you, and I am master class on all of it.

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• 9:45 (Cont.) $1B AUM in Private Equity: Launching Your First Private Equity Fund

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  

Private equity is changing for the better, gone are the days of investment bankers over leveraging companies and flipping businesses. My next guest has built a $1 billion fund from disrupting the private equity industry. Join us as we cover the new economy and the rise of the rest all this and more coming right now. Here we go. 

Ryan Miller  

Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller, and today I have my dear friend Joe DaGrosa. Joe is the Chairman and CEO of a $1 billion AUM firm known as Axxes Capital. What's more, Joe also serves as a chairman of private equity firm DaGrosa Capital Partners LLC, a private equity firm focused on making control and influential minority investments into exceptional companies located throughout the United States, Western Europe and Latin America. So what does this mean? Well, it means that Joe understands private equity, closing deals, raising capital and exit strategies, and he's about to teach you and I a master class on all of it. So Joe, welcome to the show, man.

Joe DaGrosa  

Ryan, thanks, thanks so much for having me, I'm super excited to be here and privileged to talk to your audience. I respect them, any group of folks that are looking to improve themselves. Great in my book, I started the same way too many years ago, but you know, it's all about investing in yourself, and that's what your show is all about and love your show and love your audience. So I'm very, very happy to be here.

Ryan Miller  

Yeah, and it's an honor to have you, man, we've been fortunate enough to be in the top 2% in the world, and it's all because of amazing guests, just like you, man, so it is our honor that to have you here and talk about all the cool stuff on private equity and alternative investments, we got a lot of stuff to get into. So with that being said, you've been a beginner, I've been a beginner. You know, in those early days you can, it's important to get some early wins, and it's important to avoid making rookie mistakes. So from your perspective, what would you say are the keys to putting early points on the board when you're entering into alternative investing?

Joe DaGrosa  

Well, I think, I think the key is building a track record and you know, when you're on your 8th deal or 10th deal, you know you can, you can have a deal go sideways, you can't afford to let that happen in the early going. So it's very key that you get it right and what does that mean? It means that you have to invest upfront, not necessarily money, but your time and your brain power, to make sure you've done the due diligence right, that you checked all the boxes. You know, it's one of those things that's, you know, it's like being up at the plate you name, you never get called out for strikes that you haven't swung at. You only get you only strike out if you swung and missed. Last thing you want to do is swim is swing and miss on your first couple of deals. So, you know, right up front, you want your first couple of deals to be great. You want to show people you did your work, that you're prepared and you know, that's that's a key to success. Now, some of us luck, but, you know, luck is all about when opportunity meets preparation and I'd emphasize preparation as a key part of, uh, of being successful.

Ryan Miller  

Brilliant. You know, when starting out you know, sometimes capital is constrained, unless you're emerging and you've been in the business for many years, and you kind of go out on your own. But for people who don't have that luxury but still understand real estate or private equity or whatever it might be. How do you feel, what deal size do you recommend people focus on, maybe, from an EBITDA standpoint?

Joe DaGrosa  

Sure, sure. So EBITDA is usually a measure for private equity, as opposed to real estate. So I'll start with private equity, although we do a little bit of both. On the private equity side, I'll tell you where I started, really deals in the 4 to 10 million in EBITDA range. And I specifically referenced that range, because the challenge is, you know, a lot of businesses under 4 million in EBITDA are really mom and pop businesses. And you know, when that founder leaves, the customers leave, and there's a lack of infrastructure, you know, in place to help continue that business grow and thrive. So any I bought companies below 4 million in EBITDA, you know, with 1 in 2 million in EBITDA, and I regret it. I did it when I was young, and, you know, I learned from that mistake. So I want to pass that, you know, sort of life lesson, you know, on to your audience. The other end of the range is interesting, when you get past 10 million, you start to encroach on the institutional crowd, and what happens, competition goes up, multiples go up. So what you really want to do is find a proprietary deal in that four to 10 million range where you're not inviting you know, the the institutional guys you know to compete against you, but you have a business of sufficient size and scale that you start with a firm base, and you can grow it from there.

Ryan Miller  

Brilliant. So, so 4 to 10 million in EBITDA for private equity, and that allows you, you're not it's the Goldilocks zone, we can call it, where you're not too big, you're not too small, you're just right. What other strategies would you recommend when people are starting out? So we're defining our Buy Box, we're going to be between four and 10 million, what about raising capital? I mean, at the end of the day, and I hate to use this crude term, but we're building a deal that we're gonna have to sell, right, right? And so we're gonna have to convince someone to say, this is a really good idea for you. What's your perspective as far as building deals that sell? I mean, I'd love you to unpack that a little bit.

Joe DaGrosa  

Well, look, people always want to think they're getting a good deal, and so I mentioned a few things. One of the things that I always tried to do before I talked to investors was write down as many as 100 questions, and I asked close friends to hit me with questions that if they were an investor, what would they be asking me? And that list can be, as you know, as few as 50, there's at least 50 questions are going to be asked on every deal. Could be as many as 100 so think of 50 to 100 questions that you have to be ready to answer to, and if you're able to do that, trust me, 99% of the questions will fall within those 100. It's rare that you're going to find an outlier if you spend time upfront thinking about what questions you're likely to be asked. And I found that to be a very successful strategy, because you only had one chance to make a first impression. I'll also mention something else which I always found interesting, which is I called the the two unique selling proposition approach. So I always found that the deals I was most successful to raise capital for when I was doing deals on a one on a one off basis, were deals where I could say there are two things going for it. So, for example, Burger Kings and bankruptcy. So we were buying franchise, Burger King franchises everyone knows Burger King, so it gives them a level of comfort and we were buying these stores out of bankruptcy. And so all of a sudden, you marry, hey, this is a great deal, we're getting something out of bankruptcy with a brand, and it's a powerful one, two combination. I'll give you another example. We built a Ripley's Believe It or Not Museum in Times Square when I was young. Times Square Ripley's, believe it or not, two unique selling propositions. So when you start to think about what sort of deal would you like to pitch to investors, see if you can identify at least two unique selling propositions. Because what I like to say is, one is necessary but not necessarily sufficient. Two is both necessary and sufficient. 

Ryan Miller  

Brilliant. I love that. So the USP, the unique selling preposition, I love that. Now when, when starting out raising capital, I always say quadruple F, friends, family, fools and followers, maybe that's a good place to start, or, as I like to say, everybody that shows up to our house for Thanksgiving. So with that, that's a great place to start but what would you say is the next place or pool of capital that beginners can start to go through after they've been through all their friends and families and followers. Where do you go after that? 

Joe DaGrosa  

Well, it's interesting. I think family offices is a great market to break into. You know, back up 20 years ago, family offices, first of all, they were few and far between it was relatively new concept. Fast forward, today, there are family offices. And, you know, they're investing in the public markets and they're investing in the private markets. There is no excitement investing in the public markets. I mean, the strategy you know du jour right now is, you know, index everything, and get your alpha from private investments. And so what do family offices look for? They look for proprietary, you know, non shop deals that they can participate in and let's face it, they want to have bragging rights at the country club. So once again, I get back to that, you know, two unique selling propositions you want to give a family office bragging rights for, hey, I got into this deal and you didn't almost like they're getting me getting me getting in behind the velvet rope, but family offices, I mean, just about any part of the country, certainly, if you're on the East Coast or West Coast, probably within 100 miles of you, there's billions of capital among family offices that are looking for opportunities. And so I'd say, I'd say that's a ready mark, market to go to, very tough to raise capital from institutions in the early days. I wouldn't waste any time, because they want to see that track record. If you got that track record, and you think you can raise institutional capital, hire a placement agent, and they'll tell you very quickly whether or not you can, if they take you on as a client. That means you can, if they don't take you on, that should tell you something. 

Ryan Miller  

So that's fascinating. In private equity, there's so many things, and you've done such a great job at outlining that. I'm just curious, when also putting early points on the board, maybe talk a little bit about governing from the balance sheet versus the income statement, or trying to buy businesses based on balance sheet versus based on income statement, what's your position on that?

Joe DaGrosa  

Well, look, when I first got into the business, and I hate to date myself, but I've been in the capital markets for 38 years, 10 of those in the public markets, 28 years in private equity. When I got into the private equity business, it was all about the balance sheet. It was leveraging, leveraging, leveraging, putting in as little equity as possible, borrowing as much as possible, and relying on multiple expansion. You did not have to grow the business, meaning you really didn't have to focus on the income statement. You just wanted to make sure no one screwed up the business. The world has changed dramatically. Banks have gotten a lot smarter. Multiples are as high as they've ever been, and the equity check as a percentage of the capital stack is well over 50% now in most cases. And so it's all about the income statement. The world has gravitated from. From being balance sheet experts to being Income Statement experts. What does that really mean? It means you have to have an operational capability. Now, by the way, the early days of private equity was the exclusive purview of, you know, investment bankers who came from Wall Street. If you look at all the founders and private equity firms, they weren't really operating guys. There's a huge opportunity for individuals out there who have gotten that operating experience, they've run a P and L they you know, they know the inner workings of a business, they can demonstrate that they've grown a business. Maybe they've been in a marketing role, maybe they've been in a CEO role. But operating experiences is paramount. You know, Wall Street guys, they're a dime a dozen, but operating guys are worth their weight in gold. So if you're an operating guy, and most folks are in one, you know, way, shape or form, they've got a leg up now, you know, relative to the Wall Street guys.

Ryan Miller  

Yeah, that's brilliant, and that's what this show actually stands for, as I like to say, it's about the rise of the rest. And so, you know, no more of the Wall Street Stranglehold and I'm being a little dramatic. There's nothing but love for that industry, but it's expanding and I think what you're saying is actually the industry to emerge as an emerging manager used to mean you're emerging from Wall Street, and to some degree it still means that. But I think what you're saying, and you keep me honest here, Joe, but I think what you're saying is actually if you're emerging from operating and not Wall Street, but actually running a business, and now you want to turn everything you learn in operations to asset management. Now's a great time to do that.

Joe DaGrosa  

That's so true. Absolutely, I've really repositioned key leadership in my firm from balance sheet guys to operating guys. It became painfully apparent to me 10-15 years ago that I needed operating guys, guys who knew how to grow a business, because that's how money is going to be made in private equity, you're not going to make it by just buying a business and hoping for the best. 

Ryan Miller  

Yeah, brilliant. Now it's not enough to get some early points on the board, although that does feel good to win, it's another way to really understand some of the downside. And just being new to this industry, there's probably unknown risks that you're dealing with, for those people who may be just starting out or looking to jump into private equity, how do they not lose when really rolling out their first deals? What would you say?

Joe DaGrosa  

Well, I'd say due diligence is absolutely key in making sure you have good advisors. And when I say good advisors, you know, think legal and accounting that's that's absolutely necessary, and you want a quality of earnings report done by by, you know, decent accountants. I mean, you don't have to go out and necessarily hire BDO or KPMG, but, you know, find a, find a good, strong firm that's done quality of earnings reports, because understanding the drivers to how a business makes money and generates cash is key. So we've touched so far on the balance sheet, the income statement, I would argue that the most important financial statement is the cash flow statement. It's the least understood and most often neglected. But at the end of the day, I mean, you can grow a business, but if your receivables are growing faster than your business is, you're going to run out of cash sooner or later. So understanding the cash flow cycle the business is very key, and that's something a lot a lot of people ignore, to their, you know, to their great regret down the road. So I'd say, make sure you have, you know, great support. Get a quality of earnings done, work with, you know, good law firm so that the deal is structured right. They'll point out, you know, maybe some things that you haven't, you haven't thought of, and ideally, get an industry advisor. So whatever industry you're buying into, even if you think you know it, there's so many guys who are in their 60s and 70s who people treat them like they're dead weight. They would love to help a young person, you know, navigate, you know, in industry, it's something that you know, I've begun to do. I remember my father did it when, when he retired, I know a lot of people who do it now. There's a lot of guys who just, you know, don't want to be sitting around the country club all day long. They want to be engaged, they want to have a reason to get out of bed. And they're 30 tremendous resource, and they're relatively easy to find online these days. 

Ryan Miller  

All right, so little, little online dating, I guess, really see if we can close the relationship here. That's awesome, and that is literally my dream, is have some success and then see what I can do to help the next generation. So I'm kind of building that as we speak. So I get why it just, you reach a point in your career where you're like, you know what I've learned so much how do I give back? Like, you're just, that's your way of showing gratitude, or at least that's how I do it. So I love that about you, man, that's, that's one of the, one of the many things I love about you. So, you know, don't rush due diligence, have good advisors, get a quality of earnings report. What about working on your first deal? What are some of those things you mentioned law like non compete? I mean, maybe speak to a little bit about, what are some of those key things that you need to have in place when you're processing your first private equity deal?

Joe DaGrosa  

Yeah, it's very interesting. You know, I'm down here in Miami, and I've seen countless deals in the medical space. You know, for example, buying doctors practices. It's a running joke down here, guys will sell their doctors practices. They'll make, you know, $50 million on the sale. They'll have a three year non compete, and three years and a day later, they're competing against their old business, stealing the doctors that they just sold three years ago. So non competes are very key. So when we talk about the types of businesses to buy, I'd rather buy business from, I never want to buy a business from a guy in his 40s, because I know we're just debating when, when is he going to come back to compete. You know, I like to buy businesses, I've always targeted businesses where guys are in their late 50s, early 60s, and they just want to cash in their chips and call today. So it's very important talking about non competes as being important, you know anyone who says they will only sign a three year non compete? I would not walk away from the deal, I would run from the deal, because they're just setting you up. They're they're looking at you as the Patsy, and I've seen so many guys down here and plan to get burnt, you know, buying a business only to find out that they've got competitors three years later. 

Ryan Miller  

Man, yeah, so that the phase of life someone is in is also a very important part of your due diligence.

Joe DaGrosa  

Is what I'm it's absolutely right. What is the motivation of the seller?

Ryan Miller  

Yeah, to make you the Patsy and get a big payday and then just pick up where they left off again. And yeah, so I get that now. Okay, so that has been absolutely brilliant. How to win, how not to lose, doing your first deal, that is absolute gold brother. Now let I'd love to switch gears a little bit, and I'm just curious, from what you're finding out there, maybe talk about, what are you seeing in the market, and then we'll move on to maybe where you think it's going. But what are you seeing out there? 

Joe DaGrosa  

Well, you know, we spent a lot of time talking about, time talking about private equity, but I've been repositioning a good portion of my business into real estate, you know, for a couple of very simple reasons. First of all, let's talk about private equity versus real estate. Private equity, when you buy a company, you have to learn the industry, and ideally, you come from the industry, and if you don't, as I mentioned, you bring in an advisor. But every time you buy a company in a different industry, you have to spend three to six months to get a whole lot smarter on that industry. You don't want to walk in and be unpleasantly surprised. You know what I found about real estate, which I got into five or six years ago, in a very big way I'll talk about in a moment. But I realized I only had to learn real estate once, and there's not all that many moving pieces. And I would further add that as particularly for a young person looking to go out and raise capital for deals, real estate deals are a whole lot easier to explain when we talk about those two unique selling propositions, real estate and getting a good deal on the dirt. You know, you've already solved for one of the two unique selling propositions, almost invariably. The other thing is, you'll find, over time, that real estate is an asset that everyone, everyone feels comfortable with. No one feels like they're going to lose money over the long term in real estate. So, you know, if I had it to do over again, as I said, I've been in the six years old. I've been in this business for, you know, 38 years now, I would have gotten into real estate much sooner, and that's the very advice I've given to my own boys. You know, who are, you know, 33, 30, 29, I mean, they're not kids anymore, and that's the same advice that, you know, I'd give to your audience. I mean, think about real estate as a place to be, it's a multi trillion dollar asset. And if you look at the billionaires, the list of the, you know, 400 wealthiest people in this country, well that wealth was created with real estate. So you know, if you had to pick private equity or real estate, I'll be honest, I pick real estate, and I'm been in the private equity business most of my, you know, adult career. So in terms of real estate, I happen to be in one of the hotter markets in the United States, probably in the world. In Miami, we're experiencing a great, you know, net migration into the state, into the city. So I feel like we have the wind in our sails here. And so when I think about opportunities, particularly if I was starting out all over again, it's whole lot easier to pitch people on a real estate deal than is on any other type of deal. And I know there's a lot of lot of folks out there that you know want to believe that the next Elon Musk will wait until you make a few bucks in real estate, and then you can, you can take some of that excess cash you have and and found one of those companies.

Ryan Miller  

Brilliant. So real estate tends to be really close on your radar, it seems like the market is favoring that. And me, not being American, I'm from Canada originally and but I spent a fair amount, about a decade in the US. And I can tell you, even the taxes and just living life, it just with a little finance training, you can see it like the US system is built to very much favor people who are willing to build the cities and invest in real estate. When you compare it to other countries a little jealous to you all get to write off your interest on their mortgages and all that. So, I mean, it is really built to favor people who are willing to roll the dice and take the shot on, on building real estate investments, I love that.

Joe DaGrosa  

Yeah, we've, we've lost, you know, some of the tax benefits, but certainly not all the tax benefits of real estate. And I will say, you know, overlaying, you know, what I've said about real estate, in terms of where I wish I had been 28-30 years ago, but even today, when I look prospectively, you know, starting with a blank sheet of paper, you know, notwithstanding a 50 basis point rate cut and the fact that interest rates are likely to go down a bit more. Maybe another 100 base points over the next year or so. You know, over the medium to long term, you can see a lot of inflationary pressures building, really, from at least two factors. One is the, you know, on shoring of manufacturing away from China, back over to the Western Hemisphere, specifically the US and Mexico, in some extent, Canada as well and that's clearly inflationary. By the way, I don't think it's bad for the country at all, I think strategically, it's a good thing to do, but it is inflationary. And, you know, we've got a national debt problem where, you know, right now, 23.4% of our spending is being spent on interest and principal payments, and that's not sustainable over the long term. So I see a lot of pressure on rates. You know, 2, 3, 4, years out, I think we're going to have a great time if Trump gets elected. It's going to be a party for the next two years. I think rates will come down, stock market will go up, but then the pendulum is going to swing in the other direction, it's just a matter of time. So that's another reason to think about real estate. It's the ultimate inflation edge.

Ryan Miller  

Yeah, brilliant. And I do think of it that way, and thank you for mentioning that, because that is an important thing to think about, is, not only is it the right move, but it's the right move at the right time, which is also a definition of the right move. So we're right back to where I started. Now, where do you so we talked a little bit. So we're in an election year, certain policies tend to move the needle in certain directions, depending on who it is, and what you what everybody finds important. Let's talk about the future, that's a big part of finance as we look at the data, we try to predict the future as best as we can, or at least have an opinion on it, not financial advice, but just from your opinion. Where do you think this is going? Where do you what do you think the, where do you think people are putting the smart money?

Joe DaGrosa  

Well, I think smart money over the next, you know, 5 to 10 years. And if you're thinking about building a business, about where, where, where's the money going to be made over the next 5-10 years, certainly on infrastructure, commodities and real estate, those are the three key areas. And for you know, someone looking to get into the asset management business, you know, not sound like a broken record, but the real estate is the, you know, the area to focus now, if you're in the northeast, move, if you're in California, certain parts of it are good, but you really want to be and, you know, sort of the smile states, you know, from North Carolina all the way down to Florida, over to Texas, Arizona, California is pretty rough. The Northeast very rough, you're going to be swimming against the tide. So we're not when I, you know, swim with the tide, which is takes you to the south. I mean, just you got to follow the demographic trends. There's a housing shortage of, you know, 5-6 million homes, and most of those homes, a majority of those homes, can be built in the south. And you just follow the trends. And it's very clear that, you know, housing stock is a problem, inflation is going to be an issue. All roads lead to, you know, real estate in the southeast, all the way up to Texas and Arizona.

Ryan Miller  

So real estate's good. It sounds like, if you unwind what you're thinking, it's more of saying, we expect inflation to be a bit of an issue, not bone crushing, like hyperinflation. But it sounds like you're seeing the world is inflation is going to be an issue. How do we position our portfolio to be on the right side of that issue and the answer comes back to real estate. One of the things that we're looking at on our side, and I think you'll find this interesting, is where I know we've spoken offline. I was telling you some of the stuff that I'm working on. So data centers, energy development, those are very exciting. And then obviously, as we follow policies, as anyone should, if you're serious about this business, is, it seems like exactly what you said is industrial is coming back, which is inflationary, so industrial real estate, data centers, energy development, so we're developing a lot of those as well, not soliciting investment, we're just talking about it is to say, I agree. I think there are a lot of things that are changing, which is exciting. And so if you can get ahead of these changes, or at least ride the wave of change, you might have yourself a pretty good investment fund or syndication. Can you add anything to that on what you're seeing as far as that goes? 

Joe DaGrosa  

Well, you know a couple of things. The only way to, you know, to address some of these issues at a national level, the one lever that very few people are talking about is productivity. And when you think about data centers in the context of productivity, you know, the ability to house data so that AI can access the data and make decisions, or make help people make better decisions. You know, based on data, I think, you know, housing that data, overlaying AI for that data, it's the only thing that's going to move the needle in terms of productivity. So I'm actually both productivity. So I'm actually bullish over the long term, because productivity, I think, is going to be our Savior ultimately. And our productivity levels are well below where they were 10 years ago, but I'm hopeful that AI will start pulling them back up. So, you know, 10 years ago, productivity was growing at 2.4-2.5% a year, down to about 1.6% now, but we get back to that two and a half to three, and, you know, things look a whole lot better. And that's the potential that AI has to deliver to our economy, and data centers are going to be a big part of that.

Ryan Miller  

Yeah, absolutely. So it sounds like, in context of everything we're talking about, where you see the market going, the things that we talked about, data centers and energy development, industrial real estate, and pretty much across the board, anything that improves productivity. I couldn't agree with you more, Joe, all of these things, you and I are completely aligned. I think we're at least arriving at the same conclusion, but we're really starting to see that. So make sure that if you agree with everything that Joe and I were speaking about, just make sure that you're paying attention to inflation and where that's going, the debt to GDP, we're either getting a handle of the debt and we're pushing that down, or we're improving it. And likely that's where they're going to focus is not necessarily austerity, but probably, how do we have growth? Let's grow our way out of here, rather than cut our way out of this mess. And so AI, data centers, energy development, they're all related, and that, at the end of the day is going to help improve GDP, and anything that's going to help the US? Well, hopefully, cross your fingers, we might see some tax codes, maybe some better write off, I don't know, but I think you're going to be on the right side and Joe seeing it, I'm seeing it. You're going to be on the right side of history on this one again, we'll see we don't have a crystal ball, but we'll certainly try to polish the one we've got and see if we see something useful in it. So awesome. Now, that being said, typically at the end of the show, one of the things that we do is we want people who spend the time with us to feel like they gained a competitive edge. Now, brother, you've been in this industry almost four decades, man, so I guarantee you got a lot of wisdom, and we could probably talk about it for hours, but we don't have hours, we got work to do. So wonder maybe one or two competitive edges that you may have that you'd be able to share with our fans around the world. 

Joe DaGrosa  

Well, you know, number one, it's all about preparation. If you're new to this game, the one way you can really stand out is to be prepared. And I gave, you know, one, one, you know, example of how to do that, which is prepare. That list of 100 questions and that's a heck of a good starting point. It served me well and I started doing that about 20 years ago, and I wish I had started that 30 years ago, because it's a very, very useful tool. The other thing is, you know, people make investment decisions, particularly when they're dealing with folks starting out, you know, based on qualitative factors, by the way. You know, I just listened to a pitch yesterday with a room full of, you know, very large investors, and you know, guys came out of the military. And you know, for anyone who has a military background, they start with a leg up. Now, you either have it or you don't. I mean, I was not in the military, but there's a tremendous amount of respect for the discipline that is instilled in people who've been in the military. So if you've been in the military, you have a leg up when you're, you know, making a pitch. I also say, you know, we all have heard, you know, no one wants to deal with an asshole, pardon my french, as the saying goes, but you know, I certainly have a no asshole rule most people do and, you know, just be a nice person. People are not looking to necessarily do business with the smartest guy in the room, but they want to do business with the nicest and most trustworthy guy in the rule room, and if you can demonstrate that you you're surrounding yourself with smart people, good lawyers, good accountants, you know, good advisors. You know people know you've checked the box. If you're a nice person and you're trustworthy, you know, that goes such a long way. And I know it's, you know, it's like mom, apple pie and Chevrolet, but I got to tell you, it's extremely important. And so many times I've been in a room with with guys, I just go, ah, I just would die before I did business with this person and they could be the smartest guy around. Doesn't matter. So, you know, check your ego at the door. You know, don't disagree with people in the room. Be as respectful as possible. And you know what? It's gonna go a long, long way. And you know, it sounds like a cliche, but it really isn't.

Ryan Miller  

Brilliant. You know, there was, I think there was a recent study where psychologists to compliment your point of the no asshole Rule. So people found, like, what were those core personality attributes that made you really I believe it was trust, right? And trust is kind of the currency in this in this industry. And it was saying, what is it about people that makes other people trust them. And what it came down to was two things, warmth and competence. And so someone who has a, we'll say, warm personality, and most people somewhat would understand what that might look like, or what that experience would be like, dealing with a warm person and competence. So it's saying, okay, you're not an asshole and you're also quite bright. Yeah, I'm not letting you out of my sight, you're easy to work with. You're gonna make me money like I'm not not letting you out of my sight. You know what keeps for you emerging fund managers out there, I see you out there. You know, you know what gets an investor to not let you out of their site, your warmth and your competence and how do they keep you close with their money? Which is so they're saying, look, if you are who I think you are, that you're great to work with, and you're really smart, and that's going to lead me to have a great experience, both personally, I'm gonna have a great experience with you, and financially, I'm gonna have a great experience with you. Now from a personnel standpoint, like you said, some of these qualitative metrics, they matter a lot in the beginning, and so showing warmth and competence, I think, at least for me, when people pitch me, I was like, seems like a great guy, and he really knows what he's talking about, yeah, let's do this. Anything you can add to that?

Joe DaGrosa  

You know, Ryan, you summarized it perfectly, that's what it really comes down to. People want to do business with nice people. And I can't overstate that enough. It's, it's very, very, you know, critical, particularly in the early going. And people will respond if you respond to them.

Ryan Miller  

That's absolutely brilliant. So you know, we've, we've reached at the end of our conversation. Is there anything else that you'd like our fans around the world to know? Any ways to contact you or the firm to learn more, anything at all? 

Joe DaGrosa  

Look, I, you know, be delighted to hear from, from any of your any of your listeners, viewers. And I, you know, I can be found on LinkedIn, Joe DaGrosa, feel free to reach out and be delighted to touch base with people.

Ryan Miller  

Awesome brother. So just to summarize everything, don't be an asshole, demonstrate warmth and competence, and also make sure that you are prepared. Be the most prepared person in the room, build lists of questions. Really make sure that when you walk in you feel absolutely bulletproof. There's nothing better than to go into a pitch absolutely prepared. You do these things, and you too will be well on 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.