Callum Laing's 27 Acquisitions Formula EXPOSED

 Summary

In this conversation, Jon Stoddard interviews Callum Lang, the founder of MBH Corporation, a unique holding company that focuses on agglomerating small businesses. Callum explains the structure of MBH, its benefits for small business owners, and how it compares to traditional models like Berkshire Hathaway. The discussion also covers cash flow management, the importance of community among business owners, and the challenges faced by small businesses in securing contracts and funding. Callum shares insights on the creative problem-solving abilities of entrepreneurs and the investment opportunities that arise from this innovative business model. In this conversation, Jon Stoddard discusses the evolution of business models, the motivations of business owners, and the challenges faced in the market. He emphasizes the importance of understanding the unique needs of small business owners and how his company, MBH, aims to provide a supportive environment for growth. Stoddard also shares insights on navigating financial markets and the significance of transparency in investor relations. The discussion highlights the value of experience and the right environment in achieving success in business.

Takeaways

MBH Corporation is designed for small business owners.
The agglomeration model helps small businesses overcome growth barriers.
Business owners retain operational control while gaining support.
Community among business owners enhances collaboration and success.
Parent company guarantees provide leverage for winning contracts.
Small businesses face unique challenges in accessing capital.
The investment landscape for small businesses is evolving.
Entrepreneurs are often better suited to run their businesses than hired managers.
MBH aims to create a supportive ecosystem for small businesses.
Creative problem-solving is key to delivering on large contracts. We evolved and iterated as we spoke to business owners.
It's about de-risking it for the business owner.
Business owners are concerned about their legacy.
Our model doesn't make sense through the lens of a balance sheet.
We thrive on growth and opportunities for expansion.
Our target market is experienced business owners.
The average age of principals is early 50s.
We focus on being the most transparent public company.
Environment dictates performance in business.
The biggest hurdle was understanding financial market dynamics.

Watch the Interview:

Transcript 

Jon Stoddard (00:03.19)
Welcome to the top &A entrepreneurs. have Callum Lang all the way from Singapore. He runs a business called MBH. And MBH is quite an interesting, it's an agglomeration of companies. So welcome, Callum. Thanks, John. It's pleasure to be on the podcast. tell us a little bit, United States, we don't really know a lot about this agglomeration. I know it's

I don't know if it's an invention of Jeremy Harbor, who's your business partner, but tell us a lot more about the structure of this and how it works. Yeah. So look, agglomeration is, it's a derivative of conglomeration and it's about bringing companies together basically. what we are, MBH Corporation, PLC, it's a holding company. It's a UK based.

PLC, we're listed on the Frankfurt Stock Exchange. We're also listed on the OTCQX in New York. And we're a holding company of small businesses. I guess the difference between our model and most is that we designed it from the bottom up. We designed it for business owners like us. both myself and my partner, Jeremy Harbour, that you've mentioned, we come from a small business.

background. And so we were trying to solve problems that we had had as small business owners. So for example, you know, small business owners often hit a glass ceiling where they can't win big contracts because procurement best practice is never to give big contracts to small companies. But because you can't win those big contracts, you remain a small company. So you kind of get stuck in a bit of a rut.

Same when it comes to recruiting top talent. It's very difficult for small businesses to compete on a level playing field with big companies. So basically what we decided to do was create a holding company exclusively for the use of good, well-run, profitable cash generating businesses. And in effect, they come in, they sort their private equity for public equity or our bonds. So they get some consideration.

Jon Stoddard (02:26.648)
but they keep full operational control over their business. They're not leaving, they're not exiting. This is, their brand, it's their hiring and firing, it's their culture. But now when they go and pitch for business, they're pitching as part of a global agglomerate of businesses. When they come to recruit talent, yeah, they can offer actual tangible stock options that people can track the price of.

And if they want to do their own acquisitions, know, a lot of the companies we deal with, I think the average age of the companies is about 22, 23 years old. So they understand their industry. They know the good players in their industry. They know the bad players in the industry. And they've probably thought many times about maybe acquiring a competitor or a supplier to take their business to the next level, but they haven't had the know-how or the resources to do that.

And so oftentimes they will join us specifically because they want to go on an acquisition spree and use us to help them do that. So the companies today, we listed the holding company pretty much as an empty shell three years ago. We've now got 27 companies in the group. Like I said, they're all profitable. They're all cash generating. We've been a dividend yielding stock every day since day one.

And actually what you mentioned is kind of a new invention or a new innovation. It is in so far as we've really focused on delivering a solution to small business owners. And ironically, that has created a unique investment product for investors because investors, as you know, are very nervous about investing in small business. It's incredibly illiquid, it's risky.

Whereas they can invest in a publicly listed company. They get all the liquidity of a big fast growth PLC, but they get this portfolio of small businesses and get all of the benefits that come with that as well. And each of the elements of what we're doing have all been done before. mean, one of the early media jokes when I was doing a lot of media was some journalist.

Jon Stoddard (04:45.216)
rechristened us. So MBH actually stands for multiple business holdings. And after hearing our story, this journalist rechristened us Mini Berkshire Hathaway because it's a very similar philosophy in terms of what Berkshire Hathaway was doing certainly a few decades ago. They were seen as a safe pair of hands for family owned businesses because Warren wouldn't try and mess around with those companies. You've also got other companies like

Constellation Software that's listed on the Toronto Stock Exchange, which is really an agglomeration of 500 small software as a service businesses, which has a very similar ethos to us, has outperformed Amazon over the last 26 years in terms of stock profile. yeah, we're sort of drawn on different areas, but hopefully offer a unique solution to small business owners that aren't looking to exit.

Let me, what's the comparison between Berkshire Hathaway? Because when he first started Berkshire Hathaway was he was the holding company. If he bought the furniture company in Nebraska, he'd buy 81 or 90 or 100 % of the business. How is that different or the same with the businesses you had? Yeah, so the difference is, and I can't remember her name, the woman that was running that company. Ruby.

That rings a bell, yeah. But basically the philosophy when he bought that company is I'm not going to interfere. You carry on running it. And I think, yeah, she was 83 years old and she ran it until she was 103 or something insane. yeah, very early on, like if you were a family owned business in the US of a significant size, the attraction of being owned by Berkshire Hathaway was that the board of Berkshire would give you

full autonomy to keep doing what you were doing. Warren's philosophy is very much, buy companies and let them run the way they have, because they're clearly doing something right. Now, Berkshire has to change as they've got bigger, but that was very much the early ethos and it made them a very attractive company for business owners to want to join.

Jon Stoddard (07:11.629)
Right. Well, the cashflow, he would own the business. Now, do you guys own most of the business or? 100 % of it. Every company that joins us swaps 100 % of their private equity for either stock in our company or bonds in our company. So they have a stake in that. And actually, interestingly enough, so about 27 companies, those 27 business owners,

make up more than 60 % of the shareholders of the PLC. So they have that level of control. And look, most PLCs would die to have that level of engagement of their senior management team. So, you know, we've got that diversity across the group. They've all got a very, very vested interest in the success of the group and in the success of each other, which is...

is pretty unique. Being a small business owner can be quite lonely. When they join us, they still have full autonomy in their company. They can't tell any of the other companies how they should be run. No one can tell them how they should run their company, but they all have a vested interest in each other's success. So it's like the ultimate mastermind group because you actually have that.

you've got skin in the game when you give advice. And so that's incredibly powerful. And I think very quickly becomes one of the most beneficial reasons for companies joining once they're in. mean, often they'll join for external reasons, like I need to retain or attract more senior staff or I want to go and do acquisitions. But once they're in, being part of that community,

is incredibly compelling. Where does the cash flow go? Let's say, let's take an average business, two, five million, somewhere in there. Does the cash still go on their bank account or do you send the earnings to the holding company, NVH? Yeah, so all of the companies that we bring into the group are profitable and cash generating and each company pays a management fee every month to the holding company.

Jon Stoddard (09:32.289)
the companies themselves decide on what that management fee is and how it's distributed. And they also pay a dividend up to the holding company. And that dividend is what we can then use to pay out to all shareholders. So, and again, that's kind of, know, our CFO will take a look at the cash in the group and make a suggestion. And then the principals will vote on it. And remember they own 60%. So it's very much in their

their interests. But one of the key things that we were keen to implement is, so when a company joins, on day one, it gets an initial consideration, but it's also joining as a perpetual earning. So every business owner in the group is incentivized to increase profits that they're sending up to the group. And the more profits they send up to the holding company, the more shares they earn.

over time. So there's a strong incentive for them to do that. One of the things that we were keen to avoid is there's a big difference between the financial markets and the way small businesses operate. Look, these surveys come out very regularly. I think the last one I saw was in either London or New York, but something like 93 % of publicly listed

company directors freely admit to sacrificing the long-term growth of their company for short-term results, because there's so much focus on quarterly results, by annual results, that sort of thing. Yeah. so you end up doing things that are not beneficial for the long-term health of the company to appease immediate shareholders. Now, the people that do the exact opposite of that is small business owners. Small business owners

by definition are constantly sacrificing short-term wealth for long-term value. mean, any business owner you meet is just constantly making those decisions because they want, you know, they're building something and they want to support the staff and the community and what they're trying to create. And we didn't want a business owner to join our group and jettison that value system and that belief

Jon Stoddard (11:59.021)
to now start kind of trying to hit crazy targets or, know, unfortunately that short-term focus tends to incentivize negative behavior. So basically when a company comes in, they're all cashflow positive, they set their own targets. And as a CEO of the overall group, I can go out to market and I can be quite aggressive with our growth forecasts, but we achieve that growth through acquisition of new companies.

not through putting pressure on the individual companies to change their behaviors. And we know that some of those companies in the group are going to outperform. Some of those companies will underperform, but it's a portfolio effect and it will balance itself out. And we've seen that, you know, we have within our group, we have eight different industries or across five different countries, including the US. And look, some companies thrive during...

COVID, other companies struggled. When we went into COVID, we had a lot of construction companies and obviously lockdowns made that incredibly difficult for them. But equally, we had adult vocational training companies and a lot of people wanted to retrain. So those businesses have thrived. This is an example of getting a little bit lucky, but in March 2020, just before COVID hit, we bought a

caravan company like in the US called Motorhome companies, which in the UK at least is very unsexy. This is typically caravans were what pensioners would tow behind their cars, little country lanes, massive traffic jams behind them, very slow. so I got no end of stick from my friends about, know, there's so many.

cool crypto projects and marijuana plays and all of this sort of stuff. And I'm buying a 60 year old caravan company. In the United States? Was that United States? This was in the UK. And then of course, lockdown happened and all the international travel bans happened and caravan sales in the UK, motor home sales in the US had just gone ballistic.

Jon Stoddard (14:20.981)
It's five years, a five year waiting list on some of these RV companies. It's crazy. And the advantage that our caravan company had was because it was part of a PLC, it was able to negotiate better deals with suppliers to try and fulfill that demand. But yeah, they had their best ever years. And so now we look like geniuses.

Quite frankly. How did that, do you negotiate? What's the power and leverage you're bringing to a supplier? What are you saying to them? I mean, do you own another caravan or RV company in there, or is it just because you have the financial, you know, an OTC listing with, you know, the last I'm looking at the OTC markets.com 12 31 20 total revenue, 82 million. That's pretty impressive. That's awesome.

Yeah. And look, this is, mean, that's just for the first half of the, the, I'm not sure. Maybe that's last year's numbers. yeah. OTC market is so far behind on updating all their numbers. Yeah. So, but, we released our half year numbers, back in September, we'd had a good, good first half year, but they, yeah, the full year numbers are from 2020, which, you know, due to COVID, was tricky. I think we're, the big company.

I think a lot of people that are not in the small business space are just not aware of how difficult it is for small businesses to break through that glass ceiling. It's, you know, so I'll give you an example. I mean, obviously we had the advantage and I think it's more kind of credibility, but also definitely that caravan company is looking to bring on more caravan companies.

But oftentimes you'll see it on the supply side. So for example, we work with a of construction companies and increasingly big projects will ask small suppliers to give a bond because they don't want to give a big project to a small supplier and then risk that company falling over.

Jon Stoddard (16:41.677)
If a parent company like us can step in and give a parent company guarantee, that allows those businesses to win bigger contracts. In education, we can give reassurance to government so that the government gives bigger contracts to smaller companies. And that's incredibly powerful. It it puts small businesses on a level playing field with big companies. Or another way of looking at it is it gives our companies an unfair advantage.

over their competitors because they can kind of leverage off the balance sheet of MBH to go and win those bigger contracts. And we've won tens of millions of dollars of contracts purely because we were able to write those parent company guarantees. Yeah, I get it. I mean, was a locally, I had a buddy that owned a spa jacuzzi, but because COVID hit and

it affected the suppliers. He didn't have the cash flow to be able to buy inventory, but the next biggest company doing $13 million had no problem putting up the cash to do that or just showing that they had the wherewithal to do that. it's tough and I don't think people outside of the small business understand how difficult it is. mean, I hear a lot of

comments from people saying, why don't they just get loans? And well, it's just not that easy for a small business. And look, that's another thing that we do. A lot of the companies that come into us, the principals have had to put, they've had to do personal guarantees. They've had to put their house on the line in order to build their companies, which big companies don't do. Like it's just the whole point of having

a company as a legal entity is so that the director doesn't have to put that much at stake, but in small business, it's the only way you're going to get access to overdraft facilities and other benefits. yeah, again, it's just really trying to help small businesses level that playing field. And consequently, we get about thousand applications a year from companies that want

Jon Stoddard (19:05.975)
to join us now, a lot of them aren't right. A lot of them are too early stage or the founder wants to exit, which we're not interested in. But then we will whittle that down to around 40 or 50 that are going through due diligence at any given time. And then circa 10 to 20 that we look to add each year. Yeah. How did you find this? How did you guys, I mean, how long have you known Jeremy and did you guys start that?

Did somebody start this first, he come in or what was the story on that? No, so I've known Jeremy for well over a decade. He had figured out way before I did that &A was a great way to grow a business. I was still trying to start everything from scratch.

But we we've done a few things together. kind of you know, we would talk to each other regularly. And one one Christmas, actually, we were talking about launching a project in Asia. And he was talking about a couple of people that we knew had recently sold their businesses into bigger companies. And it worked out really badly. So the problem when the way most small businesses exit is they sell to a bigger

player in the industry at a trade sale. And almost all of those deals are structured as a three year or a five year earn out. And the problem with that is that us entrepreneurs make terrible employees. We're just not very good at being told what to do, especially when it comes to our baby. And so, you you basically tend to have six to 12 months of the founders fighting to protect their clients and fighting to protect their staff from their new overlord.

and then often either get fired from their own company or quit in disgust. And this has happened to a couple of people we knew in rapid succession. And so Jeremy phoned me up and he said, look, I've got this idea. Like this is a really rubbish way to end a career. Like if you've spent 20 years building value for your employees, your customers, your community, to then get spat out at the end.

Jon Stoddard (21:23.181)
often leaving most of the value in the deal because you haven't fulfilled your three year or your five year term. That's terrible end. So what about if we put together a group of companies and take them public, which is the original idea. And he had worked out, I think years before that just grouping companies together allows them to win bigger projects and there's a lot of economies of scale there.

but the taking them public was the key thing. And then, yeah, we've really kind of spent, I guess, six years now working on the details because, yeah, philosophically, it all makes sense. look, if I pitch this idea to anyone in the small business ecosystem or with entrepreneurial experience, they get it straight away. They can't understand why everyone doesn't do this.

If I pitch it to traditional investment banker, private equity, they don't get it at all. The first question I'm always asked is, would you trust the entrepreneur? Why wouldn't you fire them and put a real manager in place? And to them, a real manager is a 32 year old with an MBA who's never risked their own money in their lives. But that's their model and that's what they're comfortable with. give me the...

60 year old woman that has been running this business for 30 years knows everyone in our industry has had a couple of near misses, a couple of bloody noses along the way. But, you know, we'll put our body on the line to save that business when things get tough. That's who we want to bring in. So I think the nuance and the subtleties of what we're doing is very, critical in terms of

how we position it to entrepreneurs and then how we position it to investors because this is really the first time that investors have had an opportunity to invest in this asset class. 50 % of the world's, or developed world's GDP comes from small business and 90 % of private sector employment comes from small business. Yeah, as you know,

Jon Stoddard (23:41.269)
if you're a family office or an institution, you can't invest in a small business because for an entrepreneur, by default, they'll tell you we're going to exit in three to five years. That's kind of a... Exactly. There's just not that many options out there. Eschew investors know that. So the only way they're going to invest is if they can have control over that exit process. Well, entrepreneurs don't want...

that because next year is going to be their best year ever. That's what gets us up every morning. So you've kind of got this clash and the problem is investors are missing out on huge opportunities because you're in this space, you know, small businesses this year and next year are going to massively increase their profits because there's huge demand.

There's been a stop start thing going on for the last year and a half. But the nice thing about small business is that one contract can double or triple their profits for the year. And yet investors have completely missed out on that because it's too liquid, it's too risky. And so by bringing them all into this portfolio and providing a investment product in effect, we let investors put their capital

where hopefully you've got the people that actually are delivering the real value in the world. Let me ask you about that. now that you have economies of scale to say, go for a bigger project, but you still have a small, let's say you want a $20 million business, a $20 million contract, but you still have a two to $5 million business. You're biting off more than you can chew. So they're going to need more capital, CapEx to be able to,

do that business, how do you manage that? Yeah, so look, I think the interesting thing about entrepreneurs is small business owners by definition are great problem solvers. Like I said, the average age of the companies in the group is more than two decades. They've solved a lot of problems in that time. The problem that small business owners like more than any other problem is

Jon Stoddard (26:03.277)
how do you deliver? Having a big contract and struggling to find a way to deliver it is infinitely more preferable than- That's a great problem. But it can also kill your company if you didn't have the resources. It can be a problem. look, the nice thing about it is that first of all, they are part of a bigger group. So potentially there's resources in the group that they can call on.

Ultimately, and we're not there yet, but ultimately the idea is that MBH would have a pool of capital at the holding company level that companies could lean on in order to basically take a soft loan from the holding company in order to deliver on a project or invest in new technology. And that would be, there'd be an investment committee of their peers that would determine that.

So I'm hoping that, you hopefully by this time next year, we should start to have that sort of facility in place. But actually it's even without that, you would be amazed how creative companies can come at solving problems to deliver on big contracts. And again, because these are their companies and their brands, you know, they're not gonna walk away from these problems, you know, that they...

they stand by it and they see the opportunity and they have huge incentives to deliver on these projects. yeah, that's probably not high on my list of concerns. So what was the first acquisition you guys executed on? And how was that story? And then like, what was the feeling afterward? my God.

It worked for this one. Let's see if we can do it again. Yeah. It's great question because it's, it's easy to look at where we are now. And, and quite frankly, the conversation with businesses today is, is a trillion times easier. many pitches have you given a total to get 27 companies? How many pitches? Say myself and Jeremy were joking about this the other day. think, you know, we, since in the last six years we have given

Jon Stoddard (28:26.315)
thousands and thousands of pictures. There is not a single question that someone can start asking that we don't know how that sentence is going to finish. It's almost scripted for you. Yeah. And look, I mean, this is, as any entrepreneurial endeavor, we had the idea and then we went out and pitched it. And quite frankly, our first pictures were pretty hideous. was like,

I'll tell you what, you give us 100 % of your company, we'll take you public, we promise, even though we've never done this before, and it will work out great. Yeah, let me close it. Next. So look, we basically kind of evolved and iterated as we spoke to business owners, it was clear that what we were offering

was attractive. We were solving a lot of problems that small businesses had, but there was a lot of risk in trusting us, quite frankly. And so what we did is we de-risked it for those early companies. And this is even before NVH. This is sort of way back, sort of six, seven years ago. So we would have conversations with companies and we'd say, look, this is what we're to do.

we will put together a contract and we will sit there with you and write out what are the things that you're concerned about? And they say, well, I'm concerned that you're not going to list within 12 months. Great. Okay. We'll put that in the contract. If we haven't listed within 12 months, we'll give back the shares or the control. And I'm concerned about what if I don't like one of the other companies? Cool. Okay. So we'll put in, if you don't like one of the other companies,

you can walk away from the deal. So we put in place a lot of clauses to give that principle, that business owner, that reassurance and that peace of mind that they could walk away from this deal at any time. But then of course, once we've got that first signature, we could leverage that to get the next deal done and sort of it gets progressively easier.

Jon Stoddard (30:46.059)
And even though that was years and years ago, when it came to MBH, a lot of those principles, lot of that kind of ethos is still very much in place. It's about de-risking it for the business owner. And it's about understanding that what's important to them. know, again, I think from the outside world, people tend to look at business owners, especially the finance community where

value is created by how much money you make. When you're in that world, you tend to assume everybody else is in that world. So they tend to look at small business owners and think that small business owners are mercenary and adjust trying to get the best price for their company. And while I'm sure there is an element of that, that's not the business owners that we're working with. Our business owners are more missionary than mercenary. What they're concerned about often

is their legacy, is the legacy of what they've created in terms of, you if you've spent 20 years building something, often your clients are your best friends, your family, your staff are like your family. You know, a great example of this disconnect is because we offer companies the opportunity to carry on running the way they've run, that attracts lots of companies to us. When...

when an investor looks at us and looks at us through the lens of a balance sheet, our model doesn't make any sense because they'll say, well, look, you've got 27 businesses. You've got 22 finance people or CFOs in those companies. Why don't you just fire all of those, consolidate the finance function, and you would save yourself $2 million a year in salaries. And yes, if you're looking at it through the lens of a balance sheet, you're

absolutely correct. But if you're looking at it through the lens of a small business owner, yeah, nine times out of 10, the CFO is the most trusted person in that organization. In fact, half the conversations I have that the CFO is the guy's wife or the brother-in-law of the CEO, firing them would cause way more damage than paying that extra premium and cause all sorts of

Jon Stoddard (33:09.099)
disruption. So that's really what makes this such an attractive model for business owners to come and join us. you find these businesses, so you first started out and you know, it's the same process. You got to find somebody that's interested in selling a motivated seller, right? What are the characteristics of that person? Not the business like the metrics. I'm talking about is it

They're exhausted, they're stagnant, they want to grow more, divorced. What is that? Because it sounds like your USP, when you get to the point of saying, you know, give us 100%, we'll exchange it for shares. That's a different person that stays around. Yeah, so I think first of all, if somebody's already decided that they want to sell, normally that's not our target. Now, having said that, we've had plenty of people

that have wanted to sell because they thought that's the only option. They are tired, they are exhausted. And look with small business owners, entrepreneurs, when your business starts to plateau, that's like going backwards for a small business owner. What we thrive on is growth. And so oftentimes you see people that have built companies for decades,

will start launching little side projects just because they want to capture that growth again. So we do occasionally have people come to us and say, look, I want to sell. And then when they learn about the model, they realize they don't want to sell. They want to come in because suddenly they can grow again. Suddenly they can start looking at acquisitions. Suddenly they're part of a PLC. They've got bigger opportunities. They can look at international expansion.

They can win bigger contracts, they can incentivize their stuff. Suddenly business becomes exciting again. So occasionally we bring people back from the brink, but generally that's not our target market. Our target market is companies that are, the founders are already doing well and sure, look, yeah, 70 % of small businesses are run by baby boomers. Retirement is definitely on the radar, but the ones that we end up with normally feel like they've got another

Jon Stoddard (35:30.765)
three to five years and they want this opportunity to grow. And I think in terms of your question about what, I guess the values or who they are, it's quite self-selecting. One of the things that we have learned is, for example, I think the average age of the principals in the group is early 50s. We learned very early on that

that it doesn't matter how smart the entrepreneur, how good the business is, it's really not worth pitching this to a business owner in their 30s or early 40s. And while there are some exceptions, the reality is that for most people, most business owners in your 30s and 40s, you're still trying to prove to the world that you can do everything yourself. And you got a big ego. lot of trying to get listening to things usually doesn't find its way in your head.

put my hand up completely where that was me. I said to somebody the other day, as you know, when you, one of the big differences between being a small business and being in PLC and a small business, a dollar is a dollar. I buy something from you, I give you a dollar, I sell something, I get a dollar. When you get into the PLC realm and suddenly everything's multiples of profit, that dollar can now be worth $20 on the share price. I was like, my

why did nobody explain this to me years ago when I first got into entrepreneurship? It completely changes the way you think about things. And then I realized, I'm sure plenty of people tried to explain it to me. just wasn't listening. like, it's always been there. The arbitrage, you know, it's, keep this P multiples EBITDA 2.5, your seller discretionary. And so then you move up, you move up in your

you know, a $10 million EBITDA business, you're in double digits, 15 X probably. Yeah. Yeah, exactly. It's a very different way of thinking. And yeah, it's a big learning curve for companies coming into us. So yeah, I think what we end up with is very experienced business owners. Like I said, they've had a few...

Jon Stoddard (37:52.193)
bloody noses along the way. So when the COVID first struck, all of the business owners, so I mean, we talk regularly, we're all on Slack, we have monthly meetings, but we decided to move to weekly meetings because the situation was so dynamic. And one of the first conversations was, you know, it doesn't feel like the global financial crisis was actually that far away. Like for most of us,

it was still pretty fresh in our minds. So one of the questions we asked was, what do you wish you had done sooner in the last global financial crisis? And that kind of sharing and people shared what they'd done right, what they'd done wrong, what they wish they had done. And that determined a lot of the way the companies reacted. And I was so grateful that they had that experience. There was no...

I saw other companies outside of our network run by younger entrepreneurs or less experienced entrepreneurs that were really kind of just in freefall trying to figure out what to do. Whereas none of the companies in our group did that because they had experience and they could lean on each other and share what was working and what wasn't working. So we do kind of get these like-minded business owners together. And I think that gives me

more confidence than anything really on the long-term future of MBH because I think regardless of, we have a very long-term plan. This is designed as a multi-generational holding company. So I'm not always gonna be on the board. The current board will change over time. But I think as long as we can continue to attract great experienced business owners into the group that all have that stake in the future,

then it's a pretty safe long-term project. I got a question about some of your acquisitions. Do some of your acquisitions come to you and say, look, if I acquired this company, could be 30 % more profitable. Is that a bigger niche or was it to keep growing wide or keep growing each little ecosystem larger?

Jon Stoddard (40:12.159)
No, great, great questions. I think it's actually we've got two things happening at the same time. So firstly, we will continue to bring in what we call strategic acquisition. So find a good company that fits the group. We bring them in. And look, there's no shortage of good profitable cash generating small businesses out there that are looking for an alternative to being subsumed by a big corporate.

So we'll continue to do that. what's more, as we get bigger, the size of our total revenue and our market cap increases, you'll see bigger and bigger companies joining us, each of which kind of move the needle that bit further when we acquire them. But equally, we've got companies that join us specifically because they're looking to do acquisitions. And we call those tactical acquisitions.

Sometimes it's as simple as, you might have a supplier that's a two or three man business and the founder wants to quit and you say, well, okay, look, I'll take that over. I'll bring that underneath me. And that company is responsible for it. So MBH would pay the consideration in stock or bonds again, but that the existing principal is the one that's responsible for that company and consolidating the financials underneath them.

You've got, mean, increasingly, so we had a taxi company in the UK that had been trying to put together a nationwide network of taxi companies for about five years. And everyone agreed it was a fantastic idea, but nobody wanted to be the first company in. They joined us in August of last year, and within nine months, they'd acquired three more taxi companies to start to build this network out. I had a company in...

I won't say what state, but a state in the US that does landscape gardening. And they had a shopping list, literally a shopping list of around 160 mom and pop owned landscape gardeners that all were looking to retire over the next five years. And in this guy's words, none of them had updated their website or answered an email in years, if not decades.

Jon Stoddard (42:30.765)
They basically each had sort of a dozen consistent clients. They're nice little businesses, but nobody could ever sell them because they were, each one made 100 or 200,000 profit. It was just too small. Whereas what he could do if he came and joined us was kind of hoover up all of them, put a layer over the top, keep their clients, but just deliver better customer service and reach out to a wider audience.

We are starting to see companies joining us specifically because they want to grow through acquisition and leverage us as the tool to do that, which is fantastic for everyone. I have to mention something about the landscape. This is actually the third time it's been mentioned in an acquisition strategy because the dynamics or characteristics of the business, if you get the right clients, it's reoccurring business. You just send people out, they do the job, they get the paycheck. Monthly, monthly. It's like a SaaS business.

Yeah, yeah, yeah. No, look, I mean, one of the one of the perks of my job is this opportunity to meet and learn from from all of these different businesses. And, and it's so diverse. I mean, last month, we brought in a company called approved air, which looks at air filtration systems for hospitals, which, needless to say, has been

much in demand over the last couple of But a great, fascinating business, really looking at the molecular level of getting air filtration. then half an hour later, I'll be talking to Kevin at 3K Engineering in Wales, which does heavy engineering.

projects and they were just retooling a 72 ton pair of tongs which basically pick up these huge that and yeah, like the difference in these companies and the way they run and the cultures but it's fascinating to see that there's so many different niches out there. So what did you

Jon Stoddard (44:54.497)
I mean, you've been doing this for over almost 10 years plus. So, I mean, this, particular strategy we've been working on pretty much full time for six or seven years now. or seven years. What do you think, what kind of, what was your biggest obstacle as far as let's say just in turtle obstacle, like you believing you could do it or, or not, you know, it's like,

A lot of people have this like a, know, some people say imposter syndrome until they do it. And then it just keeps snowballing. What the feeling keeps snowballing? look, I think the biggest hurdle for myself personally was

really understanding the difference between the value systems of small businesses, which is what I had grown up in. And then moving into the world of the financial markets, where I just found it so frustrating at the beginning that they couldn't see what I could see. it took me, and quite frankly, I think we did a very bad job at the beginning of understanding

financial markets because in effect the financial markets become your customer. And so really it was a huge learning curve and yeah it can continue as you can always do better to understand what the financial markets are looking for in companies and how you communicate with them. I think

I struggled at first because there's a huge mistrust in the financial markets of micro cap, small cap companies and small businesses. And I think I probably got quite defensive because I was like, but these guys have spent 20 years building it. They're not just in walk away from it. This is their lives. But that didn't really make any sense to.

Jon Stoddard (47:07.901)
a trader that's in and out of a position six times a day. I need see earnings increase. I need to see liquidity and trading volume on this. Exactly. a lot of that and kind of basically what we realized also was a lot of people have had bad experiences with micro caps and small caps. Thanks for Yeah. Street. Thank you. Yes.

Yeah, yeah. But I think when I started to look into that and try and remove that, what I realized as well is it's, you know, even the good guys, even the really good smaller micro-cant businesses, it's incredibly difficult for investors to try and figure out what's going on. Because

for a CEO of a small company that goes public, that CEO has got a full-time job prior to going public. Yeah, they're already a hundred percent of their time is based with their clients and with their team. And suddenly they go into the public markets and now the investors want a hundred percent of their time. And so typically what happens is the CEOs of these small caps

just return to default to what they know best, which is working with what they know. And consequently, the investor relations of most companies is incredibly poor. And it's very difficult for investors to try and figure out what's going on. So one of the things that we have focused on relentlessly with MBH is to be the most transparent public company that you will own. And what that

means is that we are constantly putting out content. We're constantly answering investor questions. We put together quarterly webinars where the investors can meet with the principals and ask them questions about their businesses. I do a monthly video with one of the other board members where we talk about any questions that have come up during the month, any recent acquisitions and just put some more color to it. And that I think is important, but it also

Jon Stoddard (49:27.701)
it's a recognition that 60 % of our shareholders are the business owners themselves. And business owners are used to having full transparency in their company. So they don't want to be part of a group that they can't figure out what's happening as an outsider. I do kind of, yeah, that was all part of a learning curve. And I think that was probably the hardest thing for me personally was trying to shift

from that kind of value creation small business world to creating value through investing, which is what the investment community does. So yeah, that was the shift. I think you can do as much as you want to put out and be transparent and content with your business. I think the problem for United States markets is the OTC.

I mean, it's essentially a bulletin board right now. It's going through its 15 C 211, which is getting rid of 3000 companies with, know, there's no where there's no there there where there's just people on day trading. And it's becoming much more expensive for a broker dealer to want to sell that stock to somebody. I think it's like 200. If you wanted to list on E trade, somebody buy it and you listed like it's 250,000.

If I wanted to buy the stock, would cost me probably $5,000 open account and 25. I mean, you are qualified with the assets you have and the revenue to be an ASDAC or a New York Stock Exchange. Yeah. So I mean, very good point. And I think a lot of people outside of the industry aren't aware of the challenges around different markets.

And look, there's another thing with OTC that we weren't aware of until we went on it, which is that if you, John, today wanted to buy stock in MBH in the US, you can go to your broker, you put in MBH CF, you buy it. If there's nobody in the US market selling on OTC QX, it will go through to Frankfurt and we have the market maker that does that.

Jon Stoddard (51:45.453)
But that trade, because it's gone international, will not show up as volume on the OTCQX. So people are looking at the volume, our daily volume trading on OTCQX and saying, it's really low. And actually it's not low. They're just not showing anything that's international. Whereas in Frankfurt, we're kind of doing 100, 200,000 trades a day on OTC. It's like...

five, 10,000. Today, an investor would look at that. If you don't have that liquidity, trading volume, they're going to go, look, I'd love to give you 50 million bucks, but you have no trading volume. not going to do it. exactly. And so it's a little bit misleading. look, there are those challenges. To be honest, when we look at markets for different reasons, we obviously as a UK PLC would have done the London Stock Exchange, which would have made sense. We wanted to be on a main market.

The problem with the London Stock Exchange and actually quite a lot of main markets globally is that they want to, you need to be able to demonstrate a centralized management function. So all decisions go up to the top and back down. And we are the ultimate in decentralized management and very proudly so. So that wouldn't have worked. Actually, so we went on Frankfurt. Frankfurt's an incredibly liquid, very flexible market, great for our needs.

And then the challenge that we had was when we were talking to an increasing number of small businesses in America, the first thing they do is they check for your ticker and a lot of US brokerages just won't cover anything outside of the US. And so our reason for going on the OTCQX was less about reaching a new investor community, although I'm very grateful to say we've met some brilliant investors through it.

but it was more about the business owners being able just to check and see us on their existing platform. Yeah, I do work with the OTC market. I could tell you even, I know a business owner doing $5 million and $3 million in cash and there's no trading volume, but he checks the symbol like twice a day. Look, I tell you when it's going well, when the...

Jon Stoddard (54:07.531)
the price is going up and the volume is crazy. It's better than Netflix. It's, you know, it's pretty crazy. I, Callum, I asked for hours worth of your time and I'm almost out of that. So I want to ask you last question.

over the course of this, what is the best investment that you've made to get to where you are? In yourself or Benjamin Franklin say the best investment is education, right? Yes, think, look, I think one of the philosophies that guides me a lot is

environment dictates performance. So if you put yourself in the right environment, automatically your performance changes. you're trying to motivate yourself in the gym, that's one thing, but if you're with a group of people that are all working out, you're going to work out that much harder. So I've constantly tried to put myself in environments, whether that's with sophisticated investors, whether that's with

great successful small business owners like we are now. So yeah, that's, I guess that would be what's made the biggest difference for me. Beautiful. Kyle, I appreciate your time. really do. It's been a pleasure. Hey, yeah, I can talk about this stuff all day. So do I. That's why I do these interviews. I love talking about &A entrepreneurs. Well, let's keep in touch. Thank you so much. right. Thanks for your time.