Summary

In this conversation, Andrew Swiler shares his journey of acquiring a software SaaS company called Lanteria. He discusses his background in private equity and technology, as well as his decision to transition to search funds. Andrew explains the process of choosing a software company and negotiating the deal, including the challenges faced during the acquisition. He also shares insights into raising funds and closing the deal. Finally, Andrew discusses customer acquisition strategies and the importance of understanding the market. In this conversation, Andrew Swiler discusses the challenges faced by his company, Lantaria HR, and the motivation behind selling it. He talks about the process of rewriting the code and building a new infrastructure for the product. Andrew also shares his acquisition strategy and goals, focusing on the Microsoft space for growth. He emphasizes the importance of people and self-management in building successful companies. The conversation concludes with discussions on raising funds for acquisitions and the lessons Andrew has learned throughout his journey.

Takeaways

Transitioning from private equity to search funds can provide opportunities for acquiring and growing software companies.
When acquiring a company, it is important to thoroughly evaluate the target's financials, market position, and growth potential.
Raising funds for an acquisition requires reaching out to a large number of potential investors and effectively communicating the value proposition of the deal.
Closing the deal involves navigating legal and financial processes, as well as addressing any challenges or risks that may arise.
Customer acquisition strategies should be tailored to the target market and may involve leveraging existing platforms or partnerships. Building successful companies is about people and self-management.
Rewriting code and building new infrastructure can be a challenging process.
Focusing on a specific niche within a larger market can lead to growth opportunities.
Raising sufficient capital is crucial for successful acquisitions.

 

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Transcript:

Jon Stoddard (00:04.646)
can't access my video, why not? Hold on.

Andrew Swiler (00:09.062)
It froze for a second. Yeah.

Jon Stoddard (00:10.274)
It did. All right, thanks for watching. Welcome to the top M&A entrepreneurs today. My guest is Andrew Swiler, who just recently back in June, 2022, bought a software SaaS company doing $2.2 million revenue. It's called Lanteria. It's an HR package, runs on SharePoint. So welcome to the show.

Andrew Swiler (00:33.494)
Thanks, John. Thanks for having me. Excited to be here. Excited to share the story.

Jon Stoddard (00:37.242)
Yeah, let's kind of rewind about what you were doing before you decided to purchase this company. I mean, everybody can go to LinkedIn and see what he did, but it looks like you worked for a number of companies and tried to fix Polaroid.

Andrew Swiler (00:53.198)
Yeah. I mean, I started my, I started my career in private equity. And I guess my claim to fame would be in the first three years of my career, I worked for two different companies that acquired Polaroid. Um, so very few people can say that they, that they were part of companies that acquired Polaroid, but I did it twice. Uh, so I did that for about five years. Um, it was mostly in turnaround work. So it was pretty, pretty grinding. Uh, and I ended up.

leaving that to go travel. So I told my boss I was going to go to Europe and go right for six months and he was like, okay, you're clearly burned out. You need to get out of here. So I went to Europe and I ended up meeting my wife actually when I was in Europe. I was on a kayaking trip in Croatia. I met this woman on the beach on this little island in Croatia, ended up traveling with her and then I convinced her to move with me to San Francisco after that.

So we moved to San Francisco. I knew I didn't want to go back into private equity. I wanted to work in technology, something that was growing. And I became like a fractional CFO for software companies. And after a couple of years, my wife, uh, decided she hated San Francisco and said, I'm moving back to Barcelona where she was from and you can come with, or you can stay here and I made the hard decision and we moved back here to Barcelona. I didn't speak the language. You didn't know what to do. Um, and at the same time, my wife had started this eyewear company.

And I joined her in the Iware company. I helped her raise some funding, helped her with some of the marketing stuff. And six years later, we sold that company. And after that, I was just kind of looking like, what was I going to do next? What I did a little bit of venture capital work, worked, uh, worked for a family office, worked for a venture capital firm. And I had always known about these like search funds. I had known, you know, obviously coming from private equity, I had known people that were buying these like smaller companies, not in like the private equity world.

And I thought it was interesting and decided like, I'm going to try this out. I'm going to see if I can do this too. And obviously living overseas in Barcelona is super hard for raising money. Uh, but luckily COVID came around and made things much easier for me. Now I'm just a guy on a screen, just like you and I are right now. Exactly. So it made, it made a huge difference and basically changed my life. Like I was able to talk to investors that.

Jon Stoddard (03:03.39)
Yeah, I can't travel. Yeah, I get it. Okay.

Andrew Swiler (03:12.618)
before would have been like, yeah, flying out to San Francisco, let's have a conversation. And now we just sat and talked about the deal and we ended up closing it pretty quickly. I mean, it was a good enough deal from a price perspective that the investors that we brought on understood it right away. They're like, great deal, great price, big opportunity. I'm in.

Jon Stoddard (03:33.99)
Yeah. I'm going to ask you about some details on that, but I have to go back to, when we were raising funds for our startup Turbosquid, a investor tagged along with us that came to the meeting and we asked, so where are you from? Intel brought and Advantage Capital brought somebody in. We asked him, where are you from? He goes, we're from Kodak. Like why are you interested in this deal? Because like we're trying to diversify before we die or something.

Andrew Swiler (04:03.702)
Yeah, Polaroid, wish they would have done that as well, instead of just turning into a piece of intellectual property.

Jon Stoddard (04:06.866)
Yeah.

Yeah. So let's get back to this deal. So tell me when you say search fund, were you a, and I talked to self-funded searchers, there's independent sponsors and there's search funds. Where were you in this?

Andrew Swiler (04:20.024)
Mm-hmm.

Andrew Swiler (04:25.158)
I was a self-funded searcher, I guess you would call it. I mean, I would like to be in the independent sponsor space, but unfortunately, you know, until you have a little bit more credibility and a little bit more history, it's harder to play in that game. I mean, that's a higher league. Those are deals that, you know, you're looking to raise 20 to $50 million and it's a little more complex. So I would call myself a self-funded searcher. I was out there looking, I just liked doing it. I like...

Honestly, you'd get to look at Sims, you get to look at confidential information memorandums and read about businesses and learn about industries. And for me, that was just fun. So I would have done it for free. I don't know the searchers that take money to go search. I always tell them like, you guys are, you guys are wusses. Like you guys should be doing this for fun. Like if you like doing this, you shouldn't be taking a salary for doing it.

Jon Stoddard (05:12.666)
Yeah, yeah. I just had a guy on the phone earlier today. He was trying to raise a fund for a search. Look, I don't have any experience helping you raise $150,000 so you can look for companies to look at. I don't. I don't even know what the proposition would be to invest.

Andrew Swiler (05:27.188)
If you

Andrew Swiler (05:32.082)
I don't get, I mean, for the investors, it's great. So I know some people that are search fund investors. I mean, they get this, they get the step up with it. It's like, you know, they put in 50 K and all of a sudden that 50 K is worth 150 K. And they're able to, you know, invest in these deals, get first look, negotiate the terms a lot of times. So it's, it's attractive and you know, there's debt on it. There's, there's certain things that make it attractive, but I don't get. The idea of, I mean, I get you like just got your MBA and you're, you know, you've got to pay off the debts and things like that, but

I feel like there's just other ways to make money in the meantime, like through consulting or something that it's like, okay, I'm going to consult and on at nights I'm going to read Sims and you know, send emails or I'm going to hire a guy in India to send a bunch of emails for me and I'm going to write the copy. Like.

Jon Stoddard (06:16.542)
That's it. Fine, fill out that, have them fill out the NDAs, get the SIMs and ask for the financials if you like the deal. And then what's about that? Yeah, I had a more deep into the conversation. I also was talking about, well, you know, if you do these step-ups, which is two and three X, sometimes it creates this entanglement three to five years down the road that looks like a balloon payment to your business that you're not gonna like.

Andrew Swiler (06:46.694)
Yeah. No, some of the structures, I mean, some of the financial structures inside of search funds, you know, the, whether it's the debt structuring, whether it's the, you know, the preferred shares, the coupons that go with it.

It definitely eats into the economics for the searcher and for the buyer. I mean, we've gotten to the point. So we raised, you know, one of the mistakes that we made was we didn't raise enough capital. So we raised enough money, basically to close the deal, which was really stupid in hindsight. Uh, we had some opportunities to bring in extra capital that would've helped us with working capital. And I was like, no, this company's been profitable for years. We got plenty of room here. And I really didn't put the calculations correctly of, you know,

that debt that we're paying off, and especially now that interest rates have gone up, you know, the preferred shares that we have with our investors that we don't have to pay them if we don't want to, but that, you know, compounds. And there are certain things that I wish at the time we would have raised, but, you know, we plan, we're like, let's close the deal.

then we'll put together sort of like this restructuring because it was a, it was a turnaround. So we said, we'll restructure it a little bit. And then in six months, we'll go back out to the market and raise the rest of the money. What happened was the market tanked.

And six months later, instead of going out to the market for that, we were basically scrambling to figure out how to bootstrap this company, which we've done. I mean, we've grown it. I'd say, I think 35%. Uh, we've grown revenue, but a lot of that has just been, you know, tapping into current customers and being like, Hey, what do you guys need? What do you need built? We'll buy that. We'll build this. We'll do that. So it deviates from our plan and deviates from our focus, but it gives us cash and it has, you know, 60 to 75% margins on it. So.

Andrew Swiler (08:31.495)
It's hard to say no.

Jon Stoddard (08:33.402)
Yeah. Let me go back to how you started and did you decide we're going to go software versus we're going to go by boring essential business products, needs or.

Andrew Swiler (08:46.254)
was, I didn't have a lot of choice because I live in Barcelona. I did, I did look at a lot of boring businesses, like the typical sweaty startup type of businesses. I tried to convince my brother, who is my brother's a chef. He's actually a very good chef, but he's a very good like operations guy. And I tried to convince him to buy a dumpster company at one point during the pandemic, like in 2020. I called him up, like, let's buy this dumpster company. It's in Minneapolis. It's across the street from where you live.

Jon Stoddard (08:49.373)
Yeah.

Jon Stoddard (08:56.347)
Yeah.

Andrew Swiler (09:13.422)
I was like, get out of the restaurant business. It sucks. The restaurant business is terrible. Let's do this. And he was like, what are you talking about? He thought I was absolutely insane. He was like, this is the craziest thing anyone's ever said to me. He's like, something's wrong with you. So when I realized that he... I mean, but like nothing. I tried to convince him. I was like, but dude, you're really good at...

Jon Stoddard (09:22.055)
Uh-uh.

Jon Stoddard (09:30.302)
They'd rather put stuff in their mouth than deal with the stuff that comes out. So get out of here.

Andrew Swiler (09:39.654)
operations, let's buy a company together and I'll run the finance and the marketing and sales and you run the operations. And he was like, what, how, how do you even buy a company? Like who, who would buy, how are we going to get the money? And I told him like, don't worry. Like we'll find a good business and we'll get the money, but I couldn't convince him. So for me, the only thing that was really an option was to be remote. And I've always worked remote. I've worked remote for 12 years. So.

For me, managing remote teams and running remote teams has been something I've done for a long time. And I knew that was really my only, my only path here was I had to buy a company that was fully remote, uh, and then we can continue to be fully remote. Otherwise I really wasn't going to have an option. So I looked at some e-commerce businesses, but e-commerce I've done e-commerce in the past and it's a grind. I mean, SAS is a grind, but it's a grind that has better margins and it's location independent all the time.

Jon Stoddard (10:33.148)
Yeah.

Andrew Swiler (10:34.306)
But e-commerce, it was too tight. I didn't want to get back into that.

Jon Stoddard (10:37.894)
Yeah. How many companies did you look at before you selected or landed?

Andrew Swiler (10:44.062)
So I don't know the exact number, but I calculate about 2000 Sims or companies I looked at. I would say I looked at 2000. I was on Axial. I was on BizBiz. For me, it was just reps. I mean, it was just looking at these and you would triangulate around the market. So when Lanteria came, I knew it was an interesting business because it was a business that didn't have a lot of.

Jon Stoddard (10:49.662)
2000 Sims

Jon Stoddard (10:58.96)
Yeah.

Andrew Swiler (11:10.79)
It had a big tam, which is pretty rare. Usually you get into these types of, uh, total addressable market. Sorry. So, I mean, you get into a lot of these businesses, if you look on acquire.com or if you're looking on biz by cell, a lot of these businesses have a top. They're like.

Jon Stoddard (11:15.206)
By the way, folks, that's total addressable market. Yeah.

Andrew Swiler (11:26.75)
You're in a very, very niche market and maybe the margins are good. Maybe the business is growing, but like, you're usually in a very niche position or you're buying a product that competes with everyone. It's like there's a million marketing SaaS products that are, you know, trying to sell Instagram likes and that, that type of crap is for sale everywhere. Like there's people that spun up businesses, made a decent business, but. As a purchase, it's a terrible purchase. Like you're going to get slammed if, if that's what you're going to try and buy. But.

Yeah, I was, I looked at probably 2000, I would say across all the different platforms. And so when Lantaria came, it was like a blinding red light. It was like, this is, this is outside the curve. This was something that I hadn't seen before and we needed to take a swing at. And the original terms that the guys were proposing were not very good.

But I knew from a product perspective, it was interesting in the situation that they were two guys in Ukraine. Uh, the situation in Ukraine was deteriorating. They were becoming motivated sellers and eventually we were able to push them to, you know, a multiple that was very attractive.

Jon Stoddard (12:33.754)
Yeah, so what did it start out at?

Andrew Swiler (12:36.79)
They started, I mean, they wanted, when they first went out to the market, uh, they had a really good 2020, like COVID gave them a huge bump. And so they went off to the market looking for basically three X, uh, ARR. So they were looking for about 3 million, something like that, 3.2 million. Um, and then 2021 went back to, they reverted to the mean, like this is a company that's been pretty much flat in sales. They've done between 1.5 and 2 million for.

six, seven years. So they reverted back down to the 1.5 million in 2021. And we just said to them, like, forget about 2020. That just was a COVID bump. We're not going to, we're not going to take that. And as the, the war in Ukraine got closer,

There were more things that were negotiable. I mean, Lantaria takes all the contracts or one year contracts. So they had a lot of deferred revenue. And when we started talking about deferred revenue, they're like, what are you talking about? Like, what is deferred revenue? And I was like, all this revenue that you're collecting isn't revenue. This is debt that you're getting from your customers are giving you a loan. And then you are paying them back with services throughout the year. And they were like, what are you talking about?

Jon Stoddard (13:49.554)
They'd pay, your customers would pay upfront. You'd have it on the deferred revenue and the liabilities. Yeah.

Andrew Swiler (13:54.686)
So they didn't book it like that. They just booked all revenue as revenue. And so when we came to them and we were negotiating, we were like, well, this isn't revenue. Like this is deferred revenue. This is a liability. And we couldn't get them to agree to that. They were like, no, this is money. Like we take this money and we get it.

Jon Stoddard (13:59.174)
Yeah.

Jon Stoddard (14:12.382)
Because they don't use generally accepted counting principles in Ukraine, I guess.

Andrew Swiler (14:16.798)
Well, they were running a US based LLC, but I know SAS companies that are doing the same thing Like I know plenty of SAS companies that they just book, you know cash in is revenue But people don't realize that there's you know Certain tax advantages to of booking deferred revenue that it can be attractive for you But we had to we had to go back and forth them on that in the deal and then as the war

got closer, then they started seeding these, like they started saying like, okay, whatever.

Jon Stoddard (14:45.682)
So some outside pressure is going, oh my God, we're lots of things going on. Yeah.

Andrew Swiler (14:52.614)
Yeah, they had, I mean, their employees were concerned. They had us based employees as well. And the us based employees were concerned. Clients were concerned, very concerned. I mean, they were, they were getting clients weekly, you know, saying like, Hey, what's the plan here? They were, they were requesting information about where their data was. Uh, you know, getting detailed information about like where the employees were. And so it was, it was a big deal. And I mean, even we had a lot of risk when we took, took on the company.

Jon Stoddard (15:16.594)
Where was their data?

Andrew Swiler (15:19.122)
Everything's in Azure cloud. So I mean, either was on-prem. It's in Azure. So it's on Microsoft's Azure cloud. So it's for our European customers, it's in Ireland. And for US based customers in the US and for our Australian customers in Australia. So the Ukraine war had absolutely nothing to do with where the data was. But obviously people are concerned about that.

Jon Stoddard (15:21.346)
Oh, so it's a, it's on Amazon somewhere, somewhere. Yeah. Microsoft's excuse me. Yeah.

Jon Stoddard (15:40.23)
Yeah.

Yeah. And they, uh, all the developers, they, what was the kind of questions you ask? I like, are you staying on board to continue to develop this or do you, did you have the skills to go find somebody to replace them?

Andrew Swiler (15:57.606)
No, we didn't. I mean, it's built on pretty antiquated technology. It's built on VB.net, which is a pretty antiquated Microsoft tech stack. So we did not have a backup plan. Our bank, our SBA lender, when the war, we were actually in closing when the war started and

Jon Stoddard (16:05.807)
Yeah.

Andrew Swiler (16:15.266)
The lender called me and was like, what's your plan? And I was like, oh, cause my two of my partners are from India. And I was like, we've got these guys in India and they've got it under control. We got a whole pipeline of talent that we can bring in. And they were like, oh, cool. All right, sounds good. And, but we really, we did not have a very strong plan for if people left, if people disappeared, we.

Jon Stoddard (16:38.088)
Was their code well documented? You could see notes in there.

Andrew Swiler (16:42.098)
It's okay. It's documented. I wouldn't say well-documented. I would say it's okay. It would have been, um, it wouldn't have been disastrous for the company because I mean, most of the company, the product is built. Uh, there's not like a lot of active development going on. It would have been more of like a slowdown for six to nine months to like actually to get the roadmap. Like if we were to develop new things for the product, it would have slowed us down a lot.

Jon Stoddard (16:54.696)
Yeah.

Jon Stoddard (17:04.858)
And some of your guys coming in there and breaking a couple of things and having to fix it real fast. Yes. Yeah.

Andrew Swiler (17:10.002)
Yeah, yeah, exactly. It would have been some issues, but it was more of just a slowdown than anything else. But there were two guys that are still based in Ukraine, that are sort of critical pieces of infrastructure for us that know the product inside and out. And even after we acquired it, like last December and November, there was a lot of issues with electricity, and these guys were disappearing for weeks at a time.

and like one of our head of support that basically handles like all the tickets. And that was, that was a key, key difficulty that we, that we had to deal with.

Jon Stoddard (17:46.182)
I'm curious about this because you said, you know, they're in your crane. I tried to buy a business. It was a portfolio of courses on Udemy and it sold a million courses, really profitable, and I tried to find an SBA lender. I swear, nobody wanted to send money, SBA lenders over to the UK. I got rejected by probably out of the, I don't know, 30 or 40 SBA lenders. I talk to them and go, no, it needs the money needs to stay on the side of the United States. Yeah.

Andrew Swiler (18:13.97)
These guys, so it was an LLC. These guys were running everything in the U S. So the company that we acquired was a U S based LLC and we paid the money to the LLC. So the money did not go to Ukraine. So the purchase was of the assets and we purchased it from the LLC. So the transfer went directly to the LLC.

Jon Stoddard (18:34.654)
So they had a bank in the United States.

Andrew Swiler (18:37.406)
Yeah, I mean, they, they work with Chase. It was an LLC that had been around for 12 years, uh, in the U S so it was, and they ran their whole business through the U S. So that was really the only reason that we could do it. Like if, if they had been running the business through Ukraine, we would have never been able to do the deal, but it was a U S based business.

Jon Stoddard (18:54.91)
Yeah. So you had some macro force majeure pressures moving the multiple down, uh, to, you know, to whatever it is at 1.5 million revenue at 2021. Um, and you guys, how long did it take you to get to that point? Do they, they agreed on that multiple and say, yes, we'll do it.

Andrew Swiler (19:16.926)
It took nine months. It was from June. Yeah, so we didn't even go back and forth. Yeah, we didn't go back and forth. We just told them from the beginning, we would pay them this. We said, we pay you one X revenue. We said, whatever trailing 12 months revenue is, we'll pay you one X. And they disappeared for a while. That was in...

Jon Stoddard (19:19.274)
Nine months to agree on that back and forth. From the start of you were asking that SIM and getting that information.

Jon Stoddard (19:36.317)
Yeah.

Andrew Swiler (19:42.09)
Yeah, in August, I remember was on vacation in August, 2021. I was talking to those guys. We made the offer. Didn't hear from them again until like October. Uh, they said, no, they came back in October. We chatted again. It came back in December. We chatted again. Then the war was starting to sit on top. And in December, they said like, okay, we can agree on, on this.

And then it was again, in February, we went back with some of the things about like deferred revenue, some of the things that were still sort of like floating around in the deal and the deal points. And we basically just said like, everything that's still floating around, you either take our deal or we just walk away. Like we're taking on way too much risk here. And they said like, okay, that's fine. And we had gotten investor money. Like it was December is when I started calling investors. Um,

basically just cold called every investor that we got, talked to them, I live in front of this park and I would walk up and down the park every night and talk to people on the phone and convinced five people to give us.

Jon Stoddard (20:43.822)
Is this in Spain or is this in Barcelona or was this in United States? In Barcelona? Yeah.

Andrew Swiler (20:46.558)
In Barcelona, yeah, I was in just in my, I would walk and walk and talk on the phone. They're all, I mean, all of our investors are American. Um, like we're invested tiny seed capital. Uh, they gave us money, smash VC. And then, uh, no, uh, I NAR and, and Rob Walling from tiny seed capital. They're similar to similar name, but a different group.

Jon Stoddard (20:58.61)
Yeah, Andrew from Tiny Capital gave you money?

Oh. Oh, okay, okay.

I was like, I know that guy. I don't know him, but I know of his little, yeah.

Andrew Swiler (21:14.307)
No, they're, I mean, they're famous like angel investors. They invest in small SaaS companies. This was their first sort of deal in like this type of, this type of space. But yeah, we closed the deal pretty rapidly with them. Then we had to convince an SBA lender to help us out. I actually got an intro, you know, Xavier Helgeson from Enduring Ventures. Yeah, he,

Jon Stoddard (21:19.186)
Yeah.

Jon Stoddard (21:35.654)
Yes, yeah, in San Francisco area. Yeah, yeah.

Andrew Swiler (21:39.686)
Introed me to his to an SBA lender. He was like this guy I'll get the deal done like he'll move fast He'll get the deal done and he was right like I've been dealing with these SPL enters are like dragging their feet Taken forever to get back to us

Jon Stoddard (21:50.43)
Can I ask for one more piece of documentation? Yes. It's like a financial proctology. Ha ha ha.

Andrew Swiler (21:53.534)
Yeah. These guys in from introduction to closing was in three weeks. I was introduced to them.

Jon Stoddard (22:04.325)
So who, can you name the guy and what bank?

Andrew Swiler (22:06.546)
Yeah, he so they were they used to be at Dogwood State Bank. They're not there anymore. Now, Ben, hang on, I'll if you want you can put it in the show notes, but Ben, who's awesome. Now they work at another bank, what's it called? Veritex Bank seems Ben Terry. So I'll share Ben's information with you. So Ben is awesome. Ben and john who's sort of his partner in the group. They do

Jon Stoddard (22:15.782)
Yeah, I'll put in a shout out.

Andrew Swiler (22:36.558)
They were insane. Like I had a lot of the documentation prepared because I'd been dealing with these proctologists for, for months of, you know, trying to earn for weeks, trying to get the data. So I had figured out like, what does everyone need? So when he and I had an intro call, he was like, all right, I need this, and that I said to him in like 15 minutes, I was like, here's everything that you need and.

We went back and forth and I mean, there was issues because I live in Spain. I own no assets in the U S. So those were two things that he was like, how do you expect me to do this?

Jon Stoddard (23:06.287)
That's not working. That's how like your balance sheet sucks.

Andrew Swiler (23:09.638)
Yeah, my balance sheet's terrible. Like everything in the US that I have is in an IRA. So he was like, we can't even collect anything that you own here. So, and they didn't make, they were like, they just, he said, this is an air ball for us. He's like, you either just totally lose all this money and we can't really do anything about it. And he's like, it'll just be a pain in the ass for you to go through like bankruptcy court.

Jon Stoddard (23:31.955)
you're only going to lose 25% of the money. So let's kind of move on. We know that government's back in 75% of it. Okay? Yeah, please.

Andrew Swiler (23:34.278)
Yeah.

Andrew Swiler (23:38.39)
Yeah. So he was fantastic. His team was fantastic and they got us into closing and then the closing took another three to four weeks. Actually the thing that took the longest was I needed to get health or to get life insurance and getting life insurance abroad is very difficult. Life insurance abroad that the US will cover that a US bank will accept. So I found one company that would give me life insurance in the US. And

Jon Stoddard (24:06.562)
What kind of premium was that?

Andrew Swiler (24:07.69)
That was, it's not a crazy pre, I pay $130 a month. I mean, I'm a healthy, relatively young person. See, I pay 130 bucks a month, but it was very hard to even find anyone that would do the deal.

Jon Stoddard (24:15.899)
Yeah.

Jon Stoddard (24:26.17)
Yeah. So you offered, I don't know, it's like one time for revenue, 1.5 or something, whatever that was, 1.6 million. And what did that cap stack look like? Is it was going to be 90% SBA, 10% down payment? What?

Andrew Swiler (24:34.122)
Yeah, 1.6 million.

Andrew Swiler (24:43.102)
No, it's, uh, it was, so we got a million. The SBA was 1.1 million and then we raised, uh, 650 K in, in 670 K.

Jon Stoddard (24:49.426)
Uh...

650K through from investors that how many, this is kind of an effort that I'm working on teaching people how to raise money, but how many investors did you have to talk to raise those funds?

Andrew Swiler (25:08.454)
I contacted 500 investors. I probably talked, I contacted 500. I mean, like typical, like cold email, like using Apollo, cold emailed 500 investors. Probably talked to, I would say 50 of the 500. I ended up like getting into a conversation with. And of those 50, there was probably 10 that were.

Jon Stoddard (25:11.474)
500 investors. Casting a wide net.

Andrew Swiler (25:34.898)
interested that wanted to go further into due diligence. And of those, we had six that invested. I think there was six, a couple of the guys put in like 25 K like they were, they were more of just, they wanted to come along.

Jon Stoddard (25:44.782)
Yeah. And what were you offering them? I mean, you know, there's the participating preferred liquidation preferences, step up and some kind of IRR. What did that look like?

Andrew Swiler (25:58.53)
So we offer just 8% preferred shares. So they would get their capital back plus 8% annually is what we offered. Yeah, it was a reasonable deal. So we kept and the split was, so we basically valued the company at 2 million for their shares. So their shares were valued at 2 million even though we bought at 1.6 million. So we got a good deal.

Jon Stoddard (26:07.002)
Yeah, that's reasonable.

Yeah.

Andrew Swiler (26:28.278)
because the deal was already good. Like our pitch to people was like, listen, we've negotiated a really good deal. Like we, we can't let you guys just participate in this deal as you know, one to one investors will give you the 8% preferred shares, but you're going to get at a.

you know, a little bit higher valuation so we can keep, you know, some of the, some of that premium from the good part of the deal that we've sort of sliced out here. And they were fine with that. I mean, a 2 million valuation for a software company doing 1.6 million in revenue for software investors. They were like, yeah, sounds great.

Jon Stoddard (26:52.316)
Yeah.

Jon Stoddard (27:02.266)
Yeah. What was the retention rate on the customer?

Andrew Swiler (27:10.858)
It's high. Like we've, since we've taken over, I think the churn rate is, it's like 8% annually, 7% annually.

Jon Stoddard (27:18.246)
Yeah, that's fantastic. And it's like 13,000 a year. It's like a thousand a month or something. Or is that?

Andrew Swiler (27:24.31)
Uh, our, it depends. I mean, our contract value kind of why it's a pretty wide range, but it's anywhere from we've got the smallest customers have been eight K a year. And our largest customers are paying 80,000 a year. So it's a pretty wide range. We don't have any customer that makes up more than 5% of the revenue. Um, but it's, it's a pretty wide, pretty wide range of customer sizes. Just.

Jon Stoddard (27:37.615)
Oh wow, yeah.

Jon Stoddard (27:49.17)
Did you know these investors before you asked for money from them or just it was a cold email that you got from what, Angel List or some list you had or what?

Andrew Swiler (27:53.522)
No, totally cold. I did, I scraped, uh, search funder.com. So I scraped on search funder. I posted on search funder as well. And then I scraped, uh, I scraped on angel. I scraped some like family office, uh, websites. I still scrape. I'm still scraping websites and getting guys in India to scrape things for me. But yeah, it's, it was pretty.

Jon Stoddard (28:02.607)
Yeah.

Jon Stoddard (28:17.338)
Yeah, yeah, yeah.

Andrew Swiler (28:20.922)
nose to the grindstone like finding context.

Jon Stoddard (28:24.182)
You did it. Yeah. How long did it take to corral them into like, hey, we've got to close this on the state? I mean, how did they commit their money? So y'all commit a hundred thousand, but some of them back off or what did that look like?

Andrew Swiler (28:37.946)
No, nobody, surprisingly, there was one guy that almost backed out, uh, at the last minute, but after we taught, like, so we had talked to these guys in December. Most of the guys that have been investing was like December and January that we talked to them, then we had to go find the SBA, then we had to like, go kind of close the deal because the SBA, you can't get the SBA without the cash. Like the SBA needs to know who's committed, you know, how much money they putting in, what's, what's their ID. Um, so we had to get that wrapped up first.

The people that invested in us, I talked to them for like 15 minutes each. Like that was it. The people that, the people that were like those 10 that wanted to go further into due diligence, there was a handful that I talked to them for hours. Like some of them, like three, four or five hours, they wanted to go into like every aspect of the product and then they didn't invest every person that invested. It was a 15 minute phone call. Yeah. It was like, what's the price? Okay. That's it. Like.

Jon Stoddard (29:11.602)
That's it.

Jon Stoddard (29:26.918)
It was a quick write. Yeah.

Andrew Swiler (29:33.674)
Nothing else. They went into due diligence afterwards. Like a couple of them did like legal due diligence for the company, but nothing significant. And then there was one that when we were in the closing phase, I sent him an email and because of the Ukraine situation, he was like, I don't know if I feel comfortable with this deal anymore. Thinking about backing out. And I was like, let us get on a phone call with you and talk to you. And we were able to convince him to stay in the deal.

Jon Stoddard (30:02.086)
Yeah. God, that's a, I love the way you'd be able to raise that money. Did you need any kind of special SEC documents to play, a private placement memorandum, or how did you take the money? Yeah.

Andrew Swiler (30:13.539)
We, our attorney drew up, uh, I don't know. He's from, he's from Harvard and I don't know if we needed to have it this long. If it was just a Harvard kind of thing, but he, he drew up these like 70 page, like SEC regulated, uh, documents. I think so. I forget what it is. It's now it's been over a year, so I can't remember the documents, but we had these super long.

Jon Stoddard (30:28.53)
506C or something or 506REGD or something for yeah

Andrew Swiler (30:37.942)
documents for them to fill out and they had to check boxes. Yeah, nobody reads, they had to check the certain boxes and fill it out, but he did a great job, our attorney putting all that together for us.

Jon Stoddard (30:39.186)
that nobody reads. Yeah.

Jon Stoddard (30:46.286)
Yeah. And then, so you collected this money, you had this in escrow, then you're, then you're ready to go to the, Ben, which is at Veritek now, which is pretty cool. How fast he was able to get this deal done. You guys raised the money, issues cleared. How long did it take you to close with, who are the two founders? It was a Sergey, uh, Balog and Sergey and Turin. Yeah.

Andrew Swiler (31:10.414)
Sergey and Sergey. Yeah. It was, like I said, the closing of the SBA. So like it was April 1st when the SBA went into closing. And the biggest issue was my life insurance policy. Like the, we probably could have closed it in three weeks and ended up taking about two months because I needed to get life insurance. And the life insurance took...

Jon Stoddard (31:32.338)
and you couldn't find anybody to underwrite you in Spain. It's like.

Andrew Swiler (31:35.638)
I couldn't get them to underwrite me. And then when I did, it took weeks because I had to go get blood tests. I had to send them over. I had to get, I had to get all this documentation took weeks. And so it was just on hold for probably three or four weeks because I was just getting life insurance, which was something stupid that I just didn't think about beforehand, like until you're like doing the process, you're like, you just don't think about it.

Jon Stoddard (31:52.551)
Yeah.

Jon Stoddard (31:56.434)
That was the longest process. It wasn't the raising money or getting approved by SBA. It was getting insurance. It was $150 a month. Yeah.

Andrew Swiler (32:01.074)
Yeah.

Andrew Swiler (32:04.654)
Yeah, yeah, that was that was what that dragged things on probably longer than anything else.

Jon Stoddard (32:09.722)
Yeah, curious, was there any special ask by the founders, like, hey, get me to America or something, sponsor me, say get me to America.

Andrew Swiler (32:17.734)
No, no, they, I know, at least one of them lives in Canada now. I know one of them has, has moved to Canada. Um, I don't know. I think the other one might have moved to Canada as well, but yeah, I don't, I don't know what their situation is. I mean, getting any man out of Ukraine, like we have, I think we have six employees and four of them are men that are in Ukraine or five. Um, it's, it's impossible.

Jon Stoddard (32:24.007)
Okay.

Jon Stoddard (32:43.174)
Yeah. Did either one of those stay on? I think one of the guys I looked on LinkedIn is as a new HR company.

Andrew Swiler (32:52.674)
They had already started that company. That was a spin-off of that was part of really the only special part of the deal was that they had started basically like an applicant tracking system inside of Lanteria and they'd called it talent area. Uh, and basically the only thing that they stipulated was like that was going to be their new company and they were going to spin this off and do that, which we were fine with. They they've been really great guys and, and super helpful and, and fantastic to work with.

Jon Stoddard (32:55.258)
Oh, okay.

Jon Stoddard (33:21.318)
Yeah.

Jon Stoddard (33:29.67)
sure I write this time down.

Jon Stoddard (33:36.294)
I mean, they did pretty good job of customer acquiring customers to get to, um, what is it? It was like $2 million in 2020. What were they doing that to acquire these customers? I mean, PPC, organic growth, what was it? It seems like they were doing a pretty good job.

Andrew Swiler (33:49.247)
In 2020, yeah.

Andrew Swiler (33:58.574)
They were doing okay. They were doing PPC was mostly the way they're acquiring customers. So I mean, a lot of the customers that they had were acquired in, I would say 2014 to 2017. And they were offering these perpetual licenses to customers at the time. And the perpetual licenses were very cheap. Like I've had some customer interviews with people where

you know, I'll talk to them about like, so what do you, how do you use the software? What do you like about it? And like one of them is the San Francisco, I forget what the name of our client is, this client San Francisco, that they're a public entity. And the guy just said to me, he was like, I like that it's cheap. And I was like, what do you mean? He's like, we pay you like nothing. He's like, we would pay. He's like, if I go to any other provider right now, I would have to pay probably 30 times more than what I pay you.

And because they bought these perpetual licenses. So a lot of the customers were in there with perpetual licenses. The other ones, what they were doing was, you know, they were getting PPC and getting some organic, but there was a big boom of SharePoint in like 2013 to 2019 where Microsoft was pushing SharePoint. Now that after that, they started pushing teams, then SharePoint online and now Microsoft Viva. So, you know, Microsoft kind of moves to certain things that they push.

Jon Stoddard (34:50.427)
Yeah.

Andrew Swiler (35:13.67)
And when they were pushing SharePoint, these guys were sort of riding the wave and bringing in clients. And that's been one of our biggest issues is, you know, we're taking a company that's been sort of flat in sales. And now we're figuring out like, what can we do? And our thing is to go after like the wider Microsoft user base. So go after Microsoft teams users, go after office 365 users where they were just going after SharePoint and they were one of the niche, they were offering, they were one of the few companies offering

Jon Stoddard (35:30.363)
Yeah.

Andrew Swiler (35:40.27)
On-premise in like they could install into an on-premise SharePoint server, which almost nobody else was doing. So they did have like this niche inside of a niche of their product. But yeah, I mean, they, they did a pretty good job, but I think it re one of the reasons they wanted to sell is they'd sort of run into this creative wall. It was like, well, what do we do with this now? Like, how do we kind of expand this? And I think they just didn't feel motivated to, to kind of do that next move. And they just were out of gas seemed like.

Jon Stoddard (36:09.282)
Yeah. Do you have to rewrite the code to go broad and not make it, you know, dependent on SharePoint? Yeah.

Andrew Swiler (36:16.458)
A little bit. There's definitely a lot of reworking and we're working a lot on version 2 as we call it. Building a new infrastructure, building a new architecture. So that was part of the reason the product was cheap too. You don't buy something at a cheap multiple for no reason. You know what you're getting into. We knew we were getting into a turnaround. We knew we were getting into a space where we're going to have to fight pretty hard. Where if you were paying a premium.

Jon Stoddard (36:24.219)
Yeah.

Jon Stoddard (36:34.907)
Yeah.

Jon Stoddard (36:41.853)
Right.

Andrew Swiler (36:44.49)
you'd be getting into a company that was just growing and all you have to do is just, you know, add gasoline to the, to the marketing and sales mix.

Jon Stoddard (36:51.802)
Yeah, just curious, what do you think it's going to cost and time it's going to take to rewrite?

Andrew Swiler (37:00.13)
So we've asked, I mean, we brought in a new CTO based in Indy a few months ago and he's working on that. We're not gonna have to do like a full rewrite. What he's doing is just working on bridging our current offering into new modules. So like we'll take the old modules that were built out and start building new ones sort of on top of them or what we're focusing on a lot is like building new Microsoft Teams, a new Microsoft Teams app and adding, you know.

some of the basic things like they didn't even have like an API layer for this come for this product So some of the things we're doing is just trying to separate the front end of the back end and have an API layer Where we can get data pulled in from other sources So he's working a lot on that. I'd say our estimate is probably it'll take if we want to rebuild the whole thing It's about a million dollars to rebuild from scratch. Like you just said, hey, let's just start from zero but you know that was

Jon Stoddard (37:54.266)
Yeah, make sure you use the R&D tax credits. Heavily documented, it's first time it's ever been built. Yeah, so what do you feel about this acquisition? Is it, like, hey, let's do it like this again where we're doing a rehab. You know, I always liked reading the story about Warren Buffett when he bought Berkshire Hathaway. It was that textile company. It was like, it was, you realized it's a cigarette butt.

Andrew Swiler (37:57.19)
Yeah, exactly. We're document, heavily documenting our things.

Andrew Swiler (38:21.355)
Yeah.

Jon Stoddard (38:23.798)
only has a few pus on it. And then he goes, just go for value. Just go for value. Right? What you're feeling about what you did here is it would you do it differently? But now your balance sheet, a couple of things have changed. Your balance sheet's better, your cash flowing a lot better. You can buy differently.

Andrew Swiler (38:24.383)
Yeah.

Andrew Swiler (38:44.978)
Yeah, I'm so what I love is I love the HR space. Like I'm fully committed to like whatever I continue to do is going to continue to be in the HR space. So I'm, I'm committed to like, I would like to acquire more companies, uh, but specifically focused on HR software companies. Um, that's a goal for me, but I like the Microsoft space too. So like what we bought into is for me, two areas that were

Jon Stoddard (38:54.94)
Yeah.

Andrew Swiler (39:13.562)
that are ripe for growth, like Microsoft's doubled over the last two years, their user base. So, I mean, their user base is a rocket ship and their user base is people that spend money and care about security. So for us, our key, like our strategic goal now is we wanna be the number one HR for HRMS for security obsessed Microsoft users. So that's our goal for this current company.

Jon Stoddard (39:16.922)
Yeah, it's a trillion dollar company. It's a, yeah, yeah.

Andrew Swiler (39:41.114)
And, you know, whatever it costs, like we know it's going to be costly, but we have good revenue coming in. We can reinvest that into the product. We have good margins, you know, we have decent salespeople. So we know there's a product and there's a market niche for this inside of the Microsoft space that we can go after. And for me, the key is leaning into Microsoft, like getting them to sell for us, like getting them, when they're running demos, they say like, Hey, look at this cool thing that you can do with this app called Lantaria in Microsoft teams. So that's one of our biggest goals.

There's a complimentary product called LMS 365 that they just have an LMS and they're just focused on the same type of niche. They're doing 20 million ARR and they only sell one thing that we sell. We have a module that's LMS. So I think we could easily be getting to 20 million ARR just like they are.

Jon Stoddard (40:23.547)
Yeah.

Jon Stoddard (40:27.214)
And how are you going to do that? Get in front of them to help you sell or to toot your horn or get more customers? Just curious.

Andrew Swiler (40:35.694)
I mean, it's basically, so we've talked to the people at LMS 365. They were actually very open with us because they don't view us as a competitor. We're sort of a complimentary product. And what they do is they just ride whatever Microsoft's riding. So right now they're all about Microsoft Viva. And when we said to them, like, show, so what does your Microsoft Viva app do? And they showed it and it was like, it doesn't do anything. And they were like, yeah, it's just kind of like, it's something Microsoft's pushing, so we built something and it gets us SEO juice.

It gets us where Microsoft is showing our product when they're demoing Viva for potential customers. And they'll show our products. They're like, Hey, look at this cool LMS that you could be using inside of Viva. And so that's kind of what we're leaning into. Microsoft does have like in dynamics, they have an HR product. And Microsoft Viva is sort of a performance management or a employee engagement product, but they don't really have like a hired or retired HR system in their offering. And so.

I mean, ideally, what can we do? We're going to try and get in front of them, build out our product, better, make it a better Microsoft teams experience. So they're showing this product for us. And then at the same time, we're reworking, you know, all of our PPC and our positioning to focus on that sort of broader Microsoft space. And, and grow us within there. It's not easy. Like I've basically turned over our whole marketing and sales team, uh, from when we took over and.

We've basically started from zero because we said, you know, whatever they were doing to not grow was not the right direction and we needed, we tried different iterations with the same team. And eventually I just said, like, it's not working. Yeah. And that was my gut feeling from day one. And frankly, one of my biggest learnings was to, I should have gone with that gut from day one and said, like, these just aren't the right people.

Jon Stoddard (42:11.614)
It's not working where you weren't getting the results that you were trying to do. Yeah.

Jon Stoddard (42:22.81)
Yeah, but you don't want to upset the boat. This is right after your choir. He goes like, you know, this could be the Jenga block way down to the bottom. But.

Andrew Swiler (42:26.626)
Yeah.

Andrew Swiler (42:30.278)
Yeah, that's how I felt for a long time. I until we hired Chris, our CTO, I felt like I couldn't pull the Jake, the certain jingo blocks out because it's like one of these everyone's just going to revolt and just fall on top of you. Yeah. No, you're right. That's the right analogy.

Jon Stoddard (42:43.674)
I just don't know. Yeah. So, are you simultaneously organic growth from this, but are you looking for other acquisitions and right around the same investment thesis, revenue size, or what are you finding?

Andrew Swiler (43:03.486)
I mean, right now I'm trying to find investors to both for Lantaria, but also for the larger, I'm trying to talk to some family offices to say like, Hey, there's an opportunity right now. VC is slowing down. There's I've already gotten inbound from just being on HR podcasts and in HR blogs. I've gotten inbound from HR founder, from founders that think that I have money to acquire their company.

reaching out to me saying like, Hey, uh, this is really interesting. Your thesis on HR, you know, we have this great product where we're doing, you know, two, 3 million ARR and we can't raise our next round. And I think there's going to be.

Jon Stoddard (43:37.518)
Yeah. So they're tight. The VCs are tightening. They're kind of reinvesting in their winners or something. Yeah.

Andrew Swiler (43:42.462)
Yeah, they're reinvesting their winners and these small, these, these companies are sort of like small market, you know, I'm doing two to 3 million ARR and maybe they're super niche and maybe their max is maybe 10 to 15 million ARR. They're just not that interested. I mean, they just want to reinvest into the companies that are going to become, you know, the next lattice or, you know, the next work day. Yeah. And so some of these companies are great. Yeah.

Jon Stoddard (43:58.982)
Yeah, they're looking for the next unicorn. Yeah. That's the only way. That's not the only way they make their money or make money for their investors. Did this Lantaria HR, did it have any seed investors or VC funds? No. Yeah, that was made it good for you guys.

Andrew Swiler (44:15.101)
No, they were bootstrapped from day one. It was just the two founders.

Yeah, made it easier. I mean, I think from the ones I've talked to already for the future acquisitions, it's definitely more complicated. Everyone wants to get out, but nobody knows how they're like the board members and the investors are like, yeah, we don't care about this investment. The founders have all these liquidation preferences on top of them. So they have no incentives.

Jon Stoddard (44:41.395)
It's like a surgically implanted cancer with these trying to buy a VC funded software company that's a dog.

Andrew Swiler (44:44.981)
Yeah.

Andrew Swiler (44:51.174)
Yeah, yeah, it's very strange. You would think that everyone's incentives would be like, hey, let's just write this off and move on, but nobody really is motivated.

Jon Stoddard (44:59.31)
As soon as you, yeah, here's the problem. As soon as they get a phone call, somebody's interested in buying us. They'll go, oh really, how much? Ha ha ha.

Andrew Swiler (45:07.571)
Yeah. Like for nothing. What? Yeah. It's

Jon Stoddard (45:13.102)
Yeah, no, you pay me back in a loan. Whatever, I don't know. They changed that, yeah.

Andrew Swiler (45:18.686)
Yeah, it's unless there's debt. I mean, when there's debt involved, then they do get more motivated. But from what I've seen, the conversations I've had, it's like, you know, if this dies, it dies. Like if you want to buy it out of bankruptcy, go ahead. But until it gets there, we're not really going to do anything. And obviously, once it gets to bankruptcy, then you're dealing with a whole other host of issues that come with it.

Jon Stoddard (45:32.904)
Yeah.

Jon Stoddard (45:41.138)
So did you have any problems signing the personal guarantee?

Andrew Swiler (45:47.014)
No, because like I said, they don't really can't really take anything from me. Like I don't own anything in the US. So for me, even the bankers were like. Whatever.

Jon Stoddard (45:51.005)
Yeah.

Jon Stoddard (45:55.63)
You just had to come up with these investors to put some kind of money in a dash, cross them.

Andrew Swiler (46:00.726)
Yeah. I mean, we needed, we, you know, they weren't going to do like the 90, 10 LTV type of thing. They said like, we originally, they wanted half, they wanted us to put in half and the SBA would fund half. Midway through the deal, we convinced them to add more because we had built up a little bit of relationship with them, like during the closing. And they actually increased the value of the loan during closing because they said, because I just said, we need some more working capital. Like, otherwise we're just going to fall in our face. And they were like, all right, cool. Well.

Jon Stoddard (46:30.074)
Yeah. Did the sellers keep the working capital when you bought the assets? Or this is a problem. I see this so many times. It's like the seller, go, I'm keeping the working capital. Like, well, that's the blood of the business, man. Like you're taking Nate Pines up out of my body. What do you think is going to happen? Right.

Andrew Swiler (46:30.751)
We'll bring in more.

Andrew Swiler (46:36.447)
Uh... Cough...

Andrew Swiler (46:42.983)
Ah yeah.

Andrew Swiler (46:47.794)
Yeah, no, they, they got to keep, they got to keep the working capital in this deal. They kept the cash they had to leave. Um, I'm sorry. They had to keep, uh, we, we agreed on a working capital peg, which was their, their typical, like their, their median, their median ARR, which was about 200 K. Or I'm sorry, not their era, their median accounts receivable, which was 200 K. So the day we took over the business, there had to be 200 K. Uh,

in the business and if there wasn't they you know they had to compensate us for that.

Jon Stoddard (47:18.75)
Gotcha. What was that? What's the kind of reps and the warranties? Did you have any reps and warranties insurance?

Andrew Swiler (47:25.01)
Uh, no insurance. No, we had reps and warranties on, you know, whatever they had put in front of us. Uh, but we also hadn't, we didn't pay them the full amount. We paid them out over this year as well. Uh, we were paying them out some deferred payments. So they had a lot of incentives to also be upfront and, and make sure there weren't any issues because they were getting a significant portion throughout this year too.

Jon Stoddard (47:48.574)
So what are you trying to do with this new fund? You want money in your pocket to go buy something fast, right? To be able to, and how much are you trying to raise?

Andrew Swiler (47:55.842)
Yeah.

Uh, I mean, ideally what I'm trying to raise is 20 million. Yeah. I mean, originally when I went out, I was thinking 10 million and try and do maybe one or two more deals. Uh, but what I've seen is that anything under 20 million people really aren't paying attention to you. So.

Jon Stoddard (48:01.574)
20 million? Okay.

Jon Stoddard (48:15.742)
It doesn't move the needle.

Andrew Swiler (48:17.866)
Yeah, it doesn't move anything. So I mean, part of this is it could be an exercise just talking to people and then on a deal by deal basis, you know, if we do find something, go out to them and say, hey, we found this deal, you know, do you guys want to join us? That's potential situation too. But ideally, I would like to have committed so we can get it in there. I would ideally like to have just a holding company with someone I've said to some of these family offices, like I'd like just a partner that brings in the capital.

Jon Stoddard (48:32.955)
Yeah.

Andrew Swiler (48:45.766)
And, you know, we'll bring Lanteria and we'll bring that as, as one of the assets in the deal. But to like come up with a financial split and basically based off of, you know, whatever the multiple of, of returns that we can bring in, we would get more inside of that, uh, capital structure, but find a partner that we can just do like a really capital efficient, uh, holding company would be great. But from what I've seen is people basically just would prefer to do funds because it's much easier for them to understand.

Jon Stoddard (49:08.38)
Yeah.

Jon Stoddard (49:14.714)
Yeah. Have you talked to Kevin McCardell over at Big Band?

Andrew Swiler (49:14.914)
They have more analogous.

Andrew Swiler (49:20.358)
Uh, no, I know I've met Kevin because he's from Minneapolis, but I haven't talked to him at all about how he's structured that.

Jon Stoddard (49:25.978)
Yeah, he raised 50 million.

Andrew Swiler (49:28.242)
Yeah, I know. He had a much bigger track record than I did because of his experience at Cher Swift. Yeah, for sure. They were successful. He's based in Minneapolis. I grew up in Minneapolis, so I've been connected to him through some of the people that I know there. But I didn't know he raised 50. It's the same team that was there last year. They just were way luckier. Yeah.

Jon Stoddard (49:32.734)
20 plus acquisitions, yeah, at the previous company, yeah.

Jon Stoddard (49:46.242)
Yeah, what the hell's happening with your Minnesota Vikings this year?

Jon Stoddard (49:55.514)
God lucky. Yeah, I don't.

Andrew Swiler (49:58.006)
They suck. They always suck.

Jon Stoddard (49:59.974)
Oh, come on. I like that quarterback. I like that, uh, Netflix, uh, episode on the quarterbacks. Kurt Cousins. Yeah.

Andrew Swiler (50:04.17)
Kirk Cousins. I'm Kirk Cousins neutral. I haven't liked any quarterback that the Vikings have ever had. So I'm probably, well, yeah. Well, Fred Tar, I wasn't alive for Fred Targanton, but I mean, yeah, I would say probably since Dante Culpepper, I don't remember a quarterback that I liked from the Vikings team. I mean, we had farm for a year, but that was ridiculous.

Jon Stoddard (50:16.446)
Except Fran, Fran Tarkington maybe a long time ago.

Jon Stoddard (50:31.322)
Yeah, that was the end of his career, right? That's like he was 20 concussions in.

Andrew Swiler (50:33.378)
Yeah. Yeah, it was. I don't know. The Vikings are they're always the most Minnesota sports teams are sort of just middling crappy sports teams. That's that's true. That's true. The card is at least it's warm there.

Jon Stoddard (50:45.138)
Hey, I live in Arizona with Arizona Cardinals, man. I know it was like, yeah. So how do you, how do you like, yeah, that's true. How do you like living in Spain and Barcelona with your wife? When we're football is football, football.

Andrew Swiler (50:58.894)
I love Spain. Yeah, football. I like Spain. I mean, it has its ups and downs. I mean, their tax situation is very complicated. And

Jon Stoddard (51:10.41)
I have a question for you. Do you have to pay taxes in Spain and the United States?

Andrew Swiler (51:17.286)
Up to a certain, yeah, you could have to do that. If you don't structure things correctly, there's a thing called the tax, I forget what it's called, the US tax exemption for, so up to like 150K of income, yeah, of income, you just get taxed in Spain and everything over 150, you would have to get double taxed but I pretty much run everything through like a company and then pay myself out based on what I need.

So we're able to sort of skirt some of that, but it's, yeah, you basically just have to live below your means a lot. Otherwise you're gonna get double taxed if you try and get a salary that's over 150K.

Jon Stoddard (52:02.576)
Yeah. Have you learned to speak Spanish?

Andrew Swiler (52:04.702)
Yeah, I learned, I speak Spanish and I speak Catalan, the other language that's, that's locally here. See, I learned that probably a year and a half, two years after I moved here, I was pretty fluent. It was, it was tough.

Jon Stoddard (52:15.142)
Yeah. So what is it this whole process taught you about yourself? Like, you know, the story of the hero's journey, you know, you go through this process, like who is the, who is Andrew after he's gone through these trials with his Darth Vader and yeah.

Andrew Swiler (52:25.389)
Yeah.

Andrew Swiler (52:36.798)
I would say one of the over the past year I did a course here actually in Barcelona. There was one of the top MBA schools did this course for scaling entrepreneurs, for entrepreneurs that were like scaling up companies. And you know, what I realized what I've come to like learn because they did like these amazing seminars with like Vern Harnish and.

and some other like famous coaches came because they were friends with the guy that was running this course. And what you realize is this whole thing isn't, it's not about like finance, spreadsheets, about tactics. It's all about like people and yourself and like how you manage yourself and how you manage like your mental capabilities and stability. And so I went into this course and you're like, all right, we're gonna learn about like all these tactics and you know, the things that like Vern talks about in these books.

And everyone's just talking to you about like your personal, like your, your ability to lead your ability to stay calm, your ability to be a good person, your ability to understand yourself. And that's what I've learned the most is like the building companies is about people and about like the people running them and the people that are actually like in the company and I meet searchers. I was with a guy a few weeks ago. He sent me a 120 page document about his.

company that he was acquiring. He was acquiring a great company. And I said to him, you do not mention people one time in this document. Zero times do you mention the people that will run this company. He was like, well, I mean, the company's been running for 30 years and everything's totally fine. I said, who are you? Who's gonna run it with you? Who are the people? What is your plan to run all these people? They don't run themselves. And...

He had no answer. He was like 26. He had no answer for it, but he'll find the answer. I told him like, you know, the journey will come to you. And you'll realize, yeah. I mean, it's all, it's a battle with your own, your own consciousness and your own self. And you have to know what you're good at, what you're bad at and admit to yourself and find other people to fill those roles.

Jon Stoddard (54:33.397)
He's gonna meet his Darth Vader. Yeah.

Andrew Swiler (54:47.262)
And I know what I'm luckily I'm I don't have a lot of ego. So I'm okay. Like I think I suck at a lot of things and I'm good at a few of them. And so I just try and find people to fill that role and then figure out ways to. For me, what I've really tried to learn about is like communicate expectations and communicate, um, you know, goals and I'm still struggling. I mean, I grew up in Minneapolis, so it's Minnesota's, uh,

Jon Stoddard (55:09.854)
You're kind of cold, you know, cold shoulders.

Andrew Swiler (55:11.498)
Well, Minnesota is famous for people not being very confrontational or very upfront with each other. So yeah. Yeah. So I'm, I'm dealing a lot with like my own inner demons of things like that. Like how to confront people, how to deal with things. So that's most of the journey for me has been outside of like excelling money. It's just about yourself and like what, how to overcome certain difficulties and become a better person, become a better boss.

Jon Stoddard (55:16.818)
Yeah, it's the Finnish stuff. It's the Sweden Finnish stuff. It's... Yeah.

Andrew Swiler (55:41.694)
So yeah, it's, it's an interesting journey that I would recommend anyone to do it for that. Like you, you really grow. Yeah. Grow, try and become somebody else. Like you become a different person and that's, that's cool. Like to shed some skin and do something, be someone else.

Jon Stoddard (55:47.366)
Yeah, we don't have a long time on this planet. You might as well try. Yeah.

Jon Stoddard (55:58.906)
Yeah. Andrew, that was a great episode and a nice way to end it. So thanks for being on my show.

Andrew Swiler (56:04.206)
Thanks. Thanks, John. It was great to be here.

Jon Stoddard (56:07.23)
All right, I'm gonna stop this.