Nick Bradley's $5 Billion M&A Secret

 Summary

In this conversation, Jon Stoddard interviews Nick Bradley, an expert in mergers and acquisitions (M&A), who shares his extensive experience in helping business owners scale and exit profitably. They discuss the importance of having a clear exit strategy, leveraging other people's money for growth, and the mindset shifts necessary for business owners to think bigger. Nick emphasizes the role of private equity in business exits and the significance of networking and creating a pathway to exit. The conversation also touches on the challenges faced in private equity transactions and the strategies to navigate them successfully. In this conversation, Jon Stoddard shares insights on navigating the private equity landscape, emphasizing the importance of strategy, confidence, and understanding the emotional aspects of business transactions. He discusses consulting models for business growth, the significance of personal development through masterminds, and the mindset cultivated through endurance sports like ultra marathons. Stoddard also reflects on his long-term vision of owning the Boston Celtics, highlighting the importance of networking and personal growth in achieving ambitious goals.

Takeaways

Nick Bradley has sold 26 businesses worth $5.2 billion.
Many founders lack the fundamentals for a successful exit.
Private equity firms are key players in business acquisitions.
Leveraging other people's money is crucial for growth.
Mindset shifts are necessary for scaling a business.
Defining a life-changing number can guide business decisions.
Networking with the right people can open new opportunities.
Creating a clear pathway to exit is essential for business owners.
Acquisitions can significantly accelerate business growth.
Understanding the acquisition process is vital for success. There are ways out of the private equity process.
Never give the first number in negotiations.
Building trust takes time and emotional connection.
Most founders get emotionally attached to offers.
Confidence in negotiations can lead to better outcomes.
Understanding the private equity landscape is crucial for founders.
Consulting models can help businesses scale effectively.
Personal development is key to business success.
Endurance sports teach resilience and focus.
Networking is essential for achieving big goals.

 Watch the Interview

Transcript

Jon Stoddard (00:00.12)
Cloud. Welcome to the top &A entrepreneurs. This episode is brought to you by DoDilio. That's D-U-E-D-I-L-I-O.com. DoDilio is a &A due diligence marketplace of service providers. It's free to use. Sign up. Only pay when you engage with the service provider. It's for online and offline businesses. If you're financing an acquisition,

Lenders are going to require due diligence. So hire due diligence on demand at due diligence. And I want to bring on my guest. is Nick Bradley. He helps ambitious business owners scale fast and exit rich. He's host of Scale Up with Nick Bradley, the UK's number one business podcast. He's an investor, &A entrepreneur, business mentor. He sold his first business at 21 years old.

He's bought and sold 26. He just corrected me this morning. He needs to update his website was 25. It's now 26 worth $5.2 billion in value. Welcome Nick Bradley. John, it is a pleasure to be here. Yeah. That last one was a Monday deal. We're recording this on a Wednesday. you know, not to say it happens that quickly all the time. They do, you know, exits build up, but you know, there we are. That's, that's the figure.

Well, that's wonderful. mean, what of business was that? What kind was it? And let's just talk about that. Yeah. So said, so to put some context to it. So just so people kind of know all of these companies I'm talking about, they're not all my companies, right? I've had a few exits myself, but my background is a good stint in private equity, a good stint in corporate. And through that journey, I was involved in lots of acquisitions and lots of exits. So it's 117 acquisitions if you go over my career.

and 26 exits. So this last one, I was working with a technology business in the education space. One of my last big exits was a business called Ascend Learning that was sold to Blackstone in 2017 for $2.2 billion. I was running their international division at the time. So I've got a good knowledge of that space. And yeah, this was an interesting one because

Jon Stoddard (02:16.77)
You know, a lot of the time when you meet a founder or a founding team and they're, they're saying, listen, I'm building this to exit. And not enough people think like this. And we can get into the reasons why a little bit in this call. And, and, know, when they start with that as an ambition, a lot of them don't have the fundamentals in place, let alone the foundations of how you would actually do that successfully. And quite often things happen. And in this particular situation, one of the founders passed away. This is over the course of about three years of me kind of working with them. We had to, you know,

pivot around that, which is just challenging emotionally as much as it is from the business context. And for this particular one, we positioned it out very specifically, a little bit like, instead of going out there with a net trying to fish and just whatever you get, get, this is like sniper rifle stuff. We positioned the whole business, the product story, the journey, how value was created for a very, very specific number of potential exit categories.

And then we went out there and we have a very, very clear process of how we start to work those possible opportunities. And so that's what we did. And then eventually we had three interested and one decided to buy it. And there we are. And you coach the seller through this process. You knew exactly what type of PE firms to reach out to or? This was a strategic. this was a PE backed strategic.

It's funny, right? Like people say to me, you know, how do you exit a business? Right. And there's only a few ways, right? It's not like there's a whole heap. The market right now is either a PE firm, if your business is big enough. So mid-market PE, and we can define that. Or it's businesses that are backed by PE. Because as you would know as well, John, you know, if a PE firm buys another business, the only thing they care about is buying other businesses and scaling them all together and providing groups. Yeah. And they have so much capital too.

The money out there is crazy at the moment. So yeah, so this was a strategic off the back of that, but it's funny. I've been involved in a few exits where the vision of the business at the very beginning needs to change through the conversations that I'll have, as you said, coaching and mentoring the founders to say, well, listen, if you keep going down this route, you're going to build a pretty good business, but it's going to take a bit of time.

Jon Stoddard (04:31.317)
Why don't we think about what the market's doing? Let's look a little bit bigger. Let's go to 30,000 feet. Let's have a look at the transactions that are going on here. Let's have a look at the strategies of these other companies. And why don't we try and think about your growth strategy that could be complimentary to one of these other companies. And then there's a very clear process of how we bring them together. So that, you know, it's called synergies as you would know, but you kind of bring them together in a kind of less obvious way. And then when the two businesses connect,

It's like, obviously we can go one plus one equals 11 here. So why don't we do it? And all of that, all of that is orchestrated. It's not just random. What level of revenue EBITDA are you talking to them about this conversation? So from my sort of, I spent a lot of my career in mid-market private equity. So they're deals that are being done in the eight figure range. So you're usually buying businesses for eight figures.

You know, usual transaction size, let's say 30 to $70 million. And then you're looking to compound those up to a bigger exit, usually in the nine figures sometimes can be higher. Okay. So if we go back to the founders of these businesses, well, if you want to be a portfolio company, so you want to be the acquisition by a PE firm, that's going to be the platform, the platform that will then be grown through other acquisitions, the minimum usually is around about $5 million.

that's low, usually someone would look at that and go actually closer to 10 in EBITDA, we're talking about here, is the range. But if you're at 5 million EBITDA, right, which probably means you're at sort of 20 to 25 or 20 to $30 million in revenue, you're a nice little, like what I call portfolio play or platform play for private equity firm, okay? If you're smaller than that, let's say you're making somewhere between

two to three million EBITDA, you might be a small bolt on to a platform play where they might be making somewhere between three to five acquisitions. But all of the deals I get involved in, and the ones that I'm sort of more excited about are profitable businesses, or certainly very, very much run rating to a profit, and can then be sort of co joined into, as I said, that private equity platform. Yeah, I got a question for you, because I have a lot of conversations with business owners on

Jon Stoddard (06:50.623)
LinkedIn about, you know, growing through acquisition. And I got to tell you what happens is they kind of come to a block because they spent five, 10 years growing to $5 million. And then you kind of insert the idea in their head that, well, you know, you could double your size in one year, like, Whoa, whoa, whoa, you blow my mind. I, do you cross that chasm? You're like, you know, my idea was like, look,

The thinking that got you here is not the thinking that gets you going to double your size. I mean, you just have to start hanging around people that have been in 25, $50 million businesses. That's my... mean, it's funny you bring this up now because I'm in the process of writing a book at the moment, more of a guide. And the title of it is, the six reasons why your business will never get to eight figures and how to fix it fast. Right? That's the title. I'm going to be on the list to buy that. It's only a small thing. It's like, I'm going to send it out because people...

But the reason is I get asked this question all the time, right? And it's funny, I've got it here in front of me now. And reason, here it is, let's talk about it. Reason number four, right? I'll read it out to you, because I think it's a relevant part to your question is, you don't know how to leverage other people's money to drive growth. It's reason number four. And this is the thing, right? People's minds are blown because you're putting something in front of them, acquisitions, which first and foremost, people think is done by big companies, right?

I'm a small business. I'm doing less than 10 million in revenue. I can't buy businesses. I haven't got the money to buy businesses, right? Or, I don't know where to start, right? All of that is just limiting belief stuff because, know, of those 117 acquisitions that I mentioned beforehand, not one, not one of those was all cash upfront. They were all leveraged in various ways.

Even the 10 % down or the equity down somehow. Yeah, there's always something like, you know, a lot of people go out there and say, you know, no money down deals, no money down deals. I'm not an advocate of that dialogue, right? So, you know, I know that those deals happen, I've been involved in two. But when when those deals did happen, there was a very extenuating circumstances to why they happen that way. What is realistic?

Jon Stoddard (09:00.723)
is 10 % down, 15 % down. Again, you can get investors to help you with this. It doesn't have to be all your own cash. But you're leveraging the rest of the deal. You're leveraging the assets off the balance sheet. You're negotiating deferred payments in whatever form that is. And in small business acquisitions, again, this thing that's often mentioned about the retirement age stuff and all these small businesses going bust because people haven't got succession plans, all of that is true. So you have

As the buyer here, you have your own leverage to negotiate the deal. So to your point, right? I've got a business, you know, I've built it through blood, sweat and tears up to 3 million, $5 million, all organic, one customer at a time, high risk, high costs, right? And then, you know, you and I turn up and say, yeah, but just go and buy your competitors or, you know, go and create a group where the synergies between the various products and services can be sold into the customer base. This is how you do it. This is how you get the money to do it.

This is the timeframe. This is how you source deals. All of it is just, right? All of it is just a process, right? Knowledge process, execution. And, you know, I've got a client quite recently, she was doing $2 million. We got her up to $5 million in just under 18 months, all through acquisitions. And none of it was her own cash. mean, like, like small amounts of money, like the stuff that she would have spent on a normal marketing in a year, we deploy to acquisitions and she just got it done. What kind of business was she?

She was in a recruitment space. So it was basically acquiring other recruitment firms. Interestingly, she built her business by being super niched. And we just said, well, hold on, know, what other products and services are required within your niche? So therefore what talent is required and how can we do that? But final point I'll say on this, it was a mindset shift. It was a thinking bigger shift.

And also the idea of going to 30,000 feet and looking at the landscape of the market and where she was playing, and then knowing the process after that. But she had to make that mindset shift first before it was even going to compute to get into the weeds, if you like, of how to do it. What kind of stories do you tell to help them with a mind shift to think bigger? I had a conversation with a guy and he tells himself,

Jon Stoddard (11:22.477)
always when he's looking at opportunity, add a zero. Nice. I like that. I haven't heard that before. Very good. Yeah. I mean, I, for me, it's, it's great to be able to set the intention. So, I mean, I, the methodology that I propose teach, whatever you want to call it is very simple. have three things, right? The first one is clear end game. So whether that's adding a zero,

or whether that's defining your life changing number, whatever that is, there's a process to do that. So the first thing you've got to do is you've got to have a clear end game. If you haven't got a clear end game, you're not going to get to anything, right? It's the number one, sounds so simple, but it's the number one thing that can unlock, you know, what you mentioned, the mindset piece. I love it. There's a book out called, start at the end. just starts backwards. And Rob Durdick, the skate guy, he said like, Hey, I built my a hundred million dollar fortune with clearly setting out goals.

exactly what I want to do. Exactly what I want to Did you see my speech in Tampa last year, which was how to sell your business for life changing money? you seen? No, I haven't seen that, but I will. Yeah. Okay. Now I bring it up because in that speech, I asked three really important questions and I think those questions are relevant to the people listening to this. First question is what is your life changing number? And I joke saying it's not a billion dollars, by the way, life changing is the number that gives you time and money freedom.

quite often that's a figure that's somewhere between 10 and $20 million. So I always say, if you haven't exited a business before, set a marker around that number. Because if you've got 20 million in the bank, even if you just invest that money in like a 7 % Vanguard account or something like that, you're going to be getting something like 80 to 90,000 of income a month just off that very passive investment. Right? So I don't know how many people need 80,000 a month to live on. Maybe some, not me. I'm not happy with my houses and cars, but...

But the point I'm making here is define the number. Second question is why does that number actually matter? So what's it going to do? Right? Is it about, you know, inspire family to think, you know, to do something different or supporting them? Is it about going on to make a bigger impact? Why do you want to do it? And then the last question, which I think is probably the most important one that business owners don't ask, which is, is what I'm doing now in my business going to get me there? Yeah. And that question normally

Jon Stoddard (13:47.211)
people go, you know what, it's not. And that's the thing that I said to the lady I mentioned beforehand that got her to change her mindset, which is just trying to grow one customer at a time in a recruitment business that's getting consolidated by acquisitions. I'm going to become obsolete. Yeah. So let me ask you a question. When you asked that question, did you pause and let her think about it? Or did you say, Hey, okay, think about it. I'll come back in a day. How was that? I mean, I think it's really important what happens next and what you say next.

I made a write it down. So so and for me, it's about you've got a journal on this. There's a really have you ever read any of Keith Cunningham's book books? Have I read Keith Cunningham? Good. Okay, so we are in we are in. Have you got the road less? They've got the road less stupid there. I love this guy. This is so used. The sheets are pulling out. Yeah. So he talks about thinking time, right? And you know,

scheduling something like 45 minutes to an hour once a week where you sit in a chair and you have a journal. But before you go into that session, you ask yourself some powerful questions. And one of the questions he says is like, what am I not seeing in my business? in this situation, what I say to people, when this kind of scale up phase is what we're talking about is here are three questions. I want you to go away and sit for a couple of hours with a journal and I want you to write the answers in paper.

digitalize it, write it, the answer to those three questions and really go deep into them. And normally out of that, they have a bit of an epiphany and they go, know what, everything I've been doing right now is not, is not right. And then they'll say to me, how do, what do we do now? But, but I can't help someone really, unless they go through that mental journey, somewhat emotional journey first, because otherwise any of the stuff that I can teach them is just not going to land. Yeah. And let me, let me ask you about that.

How many people do you think you have this conversation with that they actually take advantage of? Because I imagine some people goes, you know what? I want to get off the merry-go-round. Well, there's two ways of exiting a business here, right? So let me, so I, there's an exit, which is your life changing number exit, right? Which is the capital event, zeros in the bank account, like amazing stuff. And then there's you exiting the business, but you keep ownership and you just keep the cash machine.

Jon Stoddard (16:09.751)
you know, popping out every month and paying you, right? They're both exits. They're just different types of exits. So what I found, what I found to be true, right? Not a waste, but what I found to be true is that different business owners will gravitate towards one of those. And quite often it's pretty, there isn't usually a middle ground. It's not like, I just want to be stuck in my business forever. And I want to make money running my business. No one ever says that. And I wrote a quote that I put out.

when I was speaking at this event and I said, you don't make serious money running a business, you make serious money, right? Or serious wealth, if you like, from scaling and exiting. And that's what I mean by that. And most people get that. But most people aren't building back from that outcome. Yeah. I agree with that. Yeah. What kind of numbers do you see? I mean, if you have this conversation, you say, Hey, it's one out of 20, two out of 20 or

What do you think that is? mean, you, if a guy, if somebody was to come here, it's like you're teaching somebody how to do this. They're going to be, I don't know, the numbers are going to be a more lopsided 50 out of one out of 50. Now you've been in it for many, many years, 26 bought and sold. You have an ability to kind of do sniper rifle type stuff. I have a belief that any business can be sold. Yeah.

I believe that any business, and maybe not when we first look at that business, right? But you can build the business for exit. I think in terms of numbers, I I've spoken to hundreds of entrepreneurs about this. Most of the ones, okay, people who have very, very limited, limiting beliefs about their ability to actually achieve this are the ones that will tend to move back into themselves, okay? Without getting too mindset here.

they just don't believe that they can create that type of events. Okay. And quite often in a situation, if someone comes to me like that, I will often say, well, it either doesn't mean enough to you. Okay. It's not, it's not, you know, the reason the Y isn't big enough, or you've got so much fear and uncertainty in your ability to do this. You know, you need to think differently about kind of what you're doing, because you're just going to be on the merry-go-round. I mean, I've had, I've had people come to me who have been in this kind of stuck

Jon Stoddard (18:33.421)
place for over a decade. I'm not kidding, right? Like, like, I thought that I would have, I thought I would have finished by now. Okay, well, let's, let's evaluate why you haven't. No, they're still on a treadmill. they're getting older and they're getting tighter, right? You know, and the energy is not there anymore. So my, my belief on this is that if, if, you know, one of your highest values is freedom, you know, the ability to do what you want, whenever you want that sort of thing.

You know, you've got to have an exit plan. You've got to think of your business as a wealth creation vehicle, wealth in terms of time and money. You've got to think like that. And so as soon as you get that in your head, and I think everyone, and this is my experience, everyone reaches it at some point. Sometimes people don't do anything about it. That's a different thing. But most people get to the point where they just don't want to be a slave to their business. But it's the ones that then start to look outside of themselves, get help.

you know, support, join masterminds, I've done all these sort of things myself. And then they start to get exposed to the strategies, the ideas, which are going to allow that to happen for them. Yeah. And they usually don't do it by themselves. They usually bring on somebody that can do it a lot faster. Well, you know, back to my little book that's here, because I was writing it before joining. So reason, here we go, just to have some fun with this reason number, there it is, reason number five, your environment.

and the people that you surround yourself with are holding you back. Look at that, man. I've already talked about two things in your book. you go. We see. it's like, I'm no genius here, right? It's obvious stuff when you think about it. the playbook to creating the stuff that you and I talking about, Thinking bigger, getting in bigger rooms, learning proven processes, executing, having the discipline to execute, right? Not give up all that. This stuff is not rocket science.

I have I got to tell you, man, hanging around people that have built hundred million dollar businesses. I mean, it's like an opening a door to a new dimension. I mean, I can't believe how many pianos are tied to my legs. And I just cut that off. When I hear somebody talking about, yeah, we just you know, I was doing 2 million, I bought a business for $30 million, because the guy wanted out and the bank said, hey, the business is going to pay the debt. And he's now a

Jon Stoddard (20:57.901)
you know, an $80 million business because of that first acquisition. Yeah. I mean, one, one deal can change your life. Right. And, this is like, you know, when people sort of come to me and say, cause I focus on scale up to exit, right. As we said, scale, fast, extra rich, but the jewel in the crown of all of that thinking, right. Is acquisitions. Yeah. Right. Cause it's the, it's the, it's the playbook of private equity. It's the stuff that I was involved in for so long. And so, so I sort of say, listen, if you know, it depends on what you want to do, but you can get there so much quicker. You can get there within.

I've seen it happen within 12 months. On average, it's 36 months maximum from beginning of the idea to the end. I can sell your business in three years if you're intentional. Tim Ferrars calls that ask, the question he asks is, can you do it in six months? Well, it depends on where you're at. I always say, once you start to get the momentum around the scale and the value,

You kind of want to have a timeline on it, but you don't want to do it too quickly. So, so this is the way I, the way I teach it. Right. So first and foremost, you know, do you want to learn how to scale your business via acquisitions? Do you want to learn that? Right. Because it's just a process, right? It's quite simple. It doesn't take too long. Do you want to add that to your repertoire of knowledge? You know, that's the first thing. Yes, I do. Great. Cool. Awesome. Okay. So let's do that. The second thing is once you've, once you've learned how to do that, right.

Do you want to learn how to scale to kind of compound on that thinking? So, so how do I then rinse and repeat that build value in the, the group that I'm creating, take out costs, keep doing that position. And that process usually takes about 18 months if you do it properly, because you're not often going to just do one acquisition. can do one acquisition, but more often than not, there's, always say, look, look for two or three.

you know, that are going to create something compelling because the exit is going to be to someone like a private equity firm. And they want it to be something where the strategy is super clear. And once you've done that, I have, I have a thing called pathway to exit, which is in the last 12 months. we're going to, you know, in 12 months time, you're going to, you know, open up your, your online bank account and you're going to count some zeros. Okay. Right. So that's what's going to happen in 12 months from today. Right now, quite often. And here's the trick, John, it's a little bit quicker than that, but, that's what I say.

Jon Stoddard (23:16.557)
Okay, so we're now on the pathway. You've done some acquisitions, you've got value, you've got money, you know, it's all there, the cash flows there. We're now going to go out there and we're going to do some clever things. And one of the things I get people to do is we pinpoint where the exit could be, like a sort of long list, a short list. So there might be 20 companies or 20 PE firms that we think are interested in the sector, the type of business that we've created. Then we go to the events where they are, right?

a little bit difficult. This is 12 months in advance. So we do two things. I'll give this because I think it's an interesting thing for people here. So you go to the events where they are at. if you can get on stage virtually or live at an event where some PE guys are and you just kind of tell your story, right? Nothing cooler than starting to sort of, you know, raise your awareness on the precipitate of this stuff, right? Because all those firms are looking for a deals.

all they're looking for. So they're hungry, they got to have deals, they got to spend money. So you want to go out there with the best pitch you've ever done. But it's not a pitch to sell the business. It's a pitch of how great our growth strategies are what we're doing. It's a it's an ego pitch. But the point is, it doesn't matter, right? The other thing you do is you go out to all the companies that you think could acquire you and you start to open up the joint venture and partnership route. Because you know, you'd know this, John, as well. More acquisitions are done from partnerships and joint ventures than anything else.

When you start, whether it's upstream or downstream and then in your ecosystem. We've got one at the moment. So this hopefully will be my 27th exit. This one's a nine figure. I can't talk about it, obviously, but I'll tell you what's happened. We looked at a company that was just acquired about 24 months ago by a P firm in the US. We got a fair amount of data about their strategy. We reached out to them to form a partnership because we thought that,

the product and service that we had would be complimentary to their customer base. Built some rapport with both the PE firm and the CEO of that company. Found out through those conversations what their exit strategy is and what their numbers are. And also how many acquisitions the PE firm would like that company to make versus the organic growth. And could you not, this is true. We didn't even get into a partnership conversation. They went straight to let's have an acquisition conversation.

Jon Stoddard (25:41.869)
Hmm. That combat process is happening now. Well, the conversation. Did you know the CEO, the PE firm partners? Not beforehand. I knew I know the PE firm, but that that that wouldn't have swung this. It was a well orchestrated approach. Yeah, I know. It's nobody's going to buy a business just because you know, it's the synergies in the business that makes it where you can see the growth. Yeah. I mean, what's what's interesting here? If you think about

how this works, you know, if there's a business owner founder listening to this, it kind of works like this, right? So as soon as you start to create scale and you start to remove yourself from the day to day of the business, in other words, you have the resources to be able to have an integrator or a CEO running the business for you or a COO, whatever it is, you can then step away and be strategic. You can look at the landscape, as I said, at that 30,000 foot view, and you can see who's buying businesses. You can look at your competitors. You can do some desk research.

Now, of course you could outsource that to someone, but I think, you know, quite often if you've, if you're the founder of the business, going in there and doing that work yourself is going to get you so much clarity, right? And then, and then you can start to think, okay, how am I going to do this? Right. And so what I tend to do is I help guide and mentor these people on that, you know, the sound, the board of how it needs to be done. But quite often that's, that's, that's the role that happens for the founders once they start to get the machine working properly. And that's why that.

very clear pathway, as I mentioned before, is defined as it is. Yeah, I love that. With the end goal in mind. I mean, you're forming that relations early on. Hey, I got a question. Maybe you can clear up. And I've seen this more than a few times. PE firms are kind of notorious for looking at a business, really quick look and just, you know what? I'm going to write an LOI.

And then they say, I'll give you this. And then they take 60, 90 days and they whittle away, whittle away. And goes, and the guy's locked up. And then they give them a much lower number. Is that, have you come across that? Yeah. God. Yeah. We used to, we used to do that, John. That's, that's the strategy, right? It's partly, it's partly the reason why I don't work in private equity anymore. Cause it depends on what your values are. Right. And what you, what's important to you. But yeah. So.

Jon Stoddard (28:03.157)
So what you just defined there, I mean, there are ways out of this and there's a little technique that I advise my clients on to use. Right. So remember how P E Firm works. You're going to have a person in the front who's your rapport guy. Good cop. Right. And their job is just to build a relationship. And so that first discovery call or approach is going to be, you know, schmoozing like really full on. Right. It always is. Then, then what they want to do.

or is the thing is they want to lock you into the due diligence process so that the exclusivity timer is pressed. So quite often they'll do a shadow valuation and say, we think the business is worth about this on the premise that that's a number. you're not attuned to how to do this as a founder, most founders might even say what they think the business is worth. Don't ever do that. Don't even give a number.

Just say, well, what do you think it's worth? Give me a number. Never, ever, ever give the first number, no matter what. Right? So, so then the number is put down. Then you're locked into this crazy due diligence process. As you said, you know, 90 days is about the average. Then they find something wrong in the business. Right? This is where the spreadsheet jockeys get into it. And then all of a sudden, you know, the, the valuation going out. The other thing that's really clever here as a, as a technique.

is over that 90 days, there's a thing called the trust timer. And the trust timer is a little bit like an egg, sorry, like a sandglass thing where you spin it over and the sand runs through. The more time that you spend, right, with someone over that period of time, the longer that trust timer. So if I spend time with you, like trust between you and I might be for another half an hour once this conversation is finished. If we spent weeks together, like that trust timer might be hours, weeks, months, okay?

So the PE firm is really just trying to get you emotionally connected to the outcome over time. Yep. Right. See what's gonna happen here. I'll give you an example of this very quickly, just for fun. So a friend of mine, not a client, a friend of mine sold his company last year and went off and bought the Aston Martin, the 150 grand car. Now, before he did that,

Jon Stoddard (30:19.745)
Right. He thought he was going to sell the business to a PE firm and he actually went shopping for that exact car. Okay. And I had a coffee with him and I said, firstly, you're an idiot, right? Don't go and shop for the car because most deals fall down. Right. But he did it anyway, got really attached. You know, the deal fell through because they tried to really lobe all the number. He started, you know, he got really, really upset. Anyway, great outcome because he learned the lesson and then he sold the business about two years after that conversation.

But the point being here is most founders, they see the money, they go and buy the big house, buy the car, they get the offer, right? And they go, that's not what it was, but they're so emotionally attached at that point that they say yes. And that's all the plan, all strategy, all done. The way you get out of it, just to finish, right? Is in that first...

sort of meeting where you have the guy who built rapport with you, you have the spreadsheet guys, you'll have the principles of the PE firm. You're always sitting around, you might have a nice lunch and a wine bar or whatever else. You go up to the most senior guy, you put out your hands and you kind of whisper like no one else hears it. You lean forward and you say, you know how, you know that number we spoke about like, you know, just a few minutes ago? That's the number. If the number ever goes below that, I'm out.

So I want your commitment today that that's the number.

Right. And there's a power frame that happens in that moment. Yes. All right. And you have to be, have to have the confidence to do that. But if you can do that, I tell you what will happen. The number may not be the number, but I can guarantee you it won't be as low as it potentially was going to be without that guy's commitment to you. Absolutely. He's going to go back and go, this guy's good. What's it? mean, it's a relationship business. If word gets out that he's screwing people, he's just not going to buy a lot of businesses.

Jon Stoddard (32:19.467)
It's just, it's a bad, it's a massive power frame. If you ever watched the series billions, right. With Bobby Axelrod and all that, it's a massive power frame. And it's just, you've got to deliver it well. But if you do it early, when everything's going on, they just know that you're not one of those business owners that's naive to the process. And they don't like it. that. But the point is you are going to get a better outcome as long as you deliver that professionally with confidence, with conviction, et cetera. Yeah. So that's.

buying a business? Have you ever bought a business from a PE firm or family office? Kind of a reject, it's not meeting up to expectations? I have I haven't personally the businesses that I buy now are all off people retiring. So I use I'm focused 100 % in that. So my whole strategy personally is buy businesses that are doing sort of around one to 2 million EBITs. So I look at that sort of size of business because I want to create a group structure to build into the threshold and then sell to private equity.

but I have done deals where businesses have been sold off, if you like, from both private equity and corporate beforehand as well. And that's not a bad strategy. If you've got a business and you're trying to scale via acquisitions, that sort of de-investment strategy is quite powerful. I wonder if you could apply the same techniques to the pre-E firm that they do to you. Yeah. Get an LOI on them and go.

You know, three 90 days later, it's not 10 million, it's worth 6 million. I tell you how that works just quickly. Remember, the difference between VC and PE is venture capital will go out there and speculate, you know, 30, 40 investments or more. Yeah, they need to unload that crap, they're dogs. but a lot of those businesses aren't profitable, so you're not getting much value, right? So you're buying the revenue or the customer basis. In private equity, particularly mid-market,

there are fewer transactions. So you might have a fund of let's say 400 million. And from that, you're to buy 10 to 15 businesses, something like that, maybe less. Okay. One thing you want to look for, and this is another bit of a trick is what the only thing that private equity firms really care about having multiple funds over time. So they want to deploy their first fund so they can raise the second fund, et cetera, et cetera. And they make quite a lot of money out of the management fees and things. Two and 20. Yeah.

Jon Stoddard (34:48.225)
Yeah, so one of things you want to look for here is if a private equity firm is raising for a second fund, let's say, and they're trying to just close out the first funds, if they've had a big exit from one or two of the businesses, that's absolutely adhered to the expectations of their investors, quite often, they kind of just want to exit the other ones.

just so they can move up the chain and do bigger deals. So you can buy businesses that are just problem childs, if you want to call it that, for lower multiples off private equity, because they've already got the success that they expected through their other investments. you've got to, all of this, you've just got to understand the landscape and you've got to have your ears to the ground. And back to that point around, you're not in the right environment, you've got to be in the right environment.

Just to have- Just to see that it's possible. Like if you're not thinking about it, hey, look at that, just press release. just signed, sold this. If you're not thinking, there's an opportunity, let's jump on it. Let's have the conversation. Yeah. Yeah. There you go. So let me go back to that training you do or the consulting. I mean, do you charge somebody saying, hey, I need to know that you're a qualified customer willing to listen to what I'm telling you? Do you charge?

a certain amount or is it consulting for equity? I have a pretty kind of defined model with it. So we only work with businesses that are doing, as I said, seven figures. That's the key thing. And the whole thing is about how can you get to eight figures quickly? we have different training on how to scale via acquisitions. So people kind of...

buy into that program for 12 months, which is a combination of a playbook plus also group coaching. So we do it that way because it's accessible as well. that's something that anyone can, if you've got a seven figure business, you should be looking to make that investment. Then we have a mastermind which runs for 12 months, which is called exit for millions. And that is specifically, you've now got this sort of business and you've got

Jon Stoddard (37:07.245)
you know, acquisition, you know how to do acquisitions, but you want to be around other business owners who are in the same journey. Quite often in that mastermind, people are partnering, right? And as part of that, we also have a summit, which is called scale to sale. It's in Tampa in September. And that's where we bring together investors as well as business owners, because a lot of the deals can get done. So there's private equity in that room. And then if someone wants to work sort of one-to-one where we go into the business and we literally guide them.

That's the very last thing we offer. That's called the MVP, the Maximized Value Partnership. And that is partly consultancy, but it's also a percentage of the deal. So we either take a success fee for the successful exit, or we take some equity depending on how the deal is structured. The way I kind of frame that, John, is we're not cheap, right? But our success rate on the outcome is there. And if you think back to, like, if you're going to walk away with 10 or 20 million,

Right. The value of that, you know, having the right team around you to do that is priceless. And so that's how works. Especially if you were just doing a couple million EBITDA at that point and you've gotten them to a 10 to 20 million exit. Yeah. And we build back from that. So, you know, just to give you this, the life changing number. So one of the things we do when we work with a founder from the first sort of engagement is we say, current EBITDA of your business, EBITDA that's required for an exit.

based on what we understand about the industry multiples and what's going on within that sort of corporate private equity. So we have an idea of that. Then we overlay life changing number. So you wanna make this amount of money. We don't get into the tax side of that. We have people who can help with that, but we get into the kind of high level principles. So you wanna make this sort of money. The exit valuation of your business based on these kinds of characteristics of this is this. Your current EBITDA is this.

your Delta to get to the EBITDA that you need to, to sell the business for those different things is this. What percentage of that growth can you do organically? What percentage of that growth can we do strategically through joint ventures, acquisitions, partnerships? And then how long is it going to take to bridge the Delta? That makes sense. It's quite scientific that simple, but quite scientific. So, so then the business owner, the founder comes out of that going, I know exactly what I need to do. I need to get the EBITDA from

Jon Stoddard (39:32.493)
2 million to 3.8. I reckon I can do that in 18 months based on this. And then they structure the team or whatever resources they need internally to be able to focus on those growth drivers. Yeah, well, I love the way you said that knowledge process execution. Yeah. Yeah. So it is simple. Yeah. Let me ask you, you have set these business owners up in a mastermind and peer groups. mean, who do you?

go to for role modeling mastermind? Yeah, so I invest a heap of money. Well, I'll tell you the story very quickly again, because I think it's interesting for people to hear my journey. So when I was in the world of private equity, I built my lifestyle around the money. So I joked before about billions and Bobby Axelrod. I had two Porsches, million buck houses, all this sort of stuff. And then I had this kind of weird awakening.

which was, I don't really want to be in this environment anymore for some of the reasons we actually discussed earlier. And so I thought, well, how am I going to do this? I need to get myself into some different rooms. I've got a really good knowledge of how to scale and exit businesses, but I'm not going to do it in the way I used to do it. So, so I went and got a heap of coaches. So initially I got, I got involved in sort of the whole Tony Robbins stuff and got involved in kind of some mindset stuff. Cause I just needed to think of it differently. And then

worked with John De Martini also on some mindset and just getting who that is. Yeah. Yeah. Do you know John? Yeah. So he's, he's really good on, the why, the why we do what we do and the why we think how we think. And a lot of it is, is that you've got to get the mind clear so that you can, you know, get out of your own way. so I still invest, in one-to-one coaching for myself. and then I get involved in, various masterminds around the world.

A lot of the ones I'm involved in now are eight figure masterminds. They're sort of invitation only ones, as opposed to ones you can just go and find a website about. But there are people who are trying to build empires off the back of what they're doing. that's how I do it. And the other, just to give people a kind of strategy for this, if you like, I work on what is called a 90 day cadence. So I set my goals or my intentions for the year, but I break it down into 90 day blocks because you can take action on that.

Jon Stoddard (41:53.631)
At the end of every 90 days, try and, I used to do this all the time. I try and get on a plane, fly somewhere, go to an event that I think is interesting where I'm going to be meeting different people, not just because I'm trying to grow my businesses or find other deals, but because I want to change my thinking. And I'll go and put myself in a room for a couple of days in those environments. And then I'll feel refreshed, energised, new ideas, come back, and then I'll go again for 90 days. And I try and do that, as I said, four times a year. And I think that one thing.

has probably been the biggest game changing thing. really struggled actually, you know, through the lockdown when I'd have to try and do that virtually. I still did it virtually, but getting into a room in a different country, just really powerful in terms of just evolving your thinking, your mindset, all of that stuff. Yeah. I got a question about your, I know that you run, got the medals over there. yeah. How many freaking marathons have you done? 67 marathons. Yeah, quite a few.

Yeah, is it? Is that you just want to be in good shape? Or is that clear help you clear your mind you get in the runners zone? Combination of things combination of things. There's a great it's a great question actually to delve into. So I specifically do ultra marathons, which are built. What's an ultra marathon? Well, technically, it's longer than a marathon. you know this guy? Yes, I think he's coming on my podcast actually very soon. Nice. Yeah.

So, so I, I have quite a few, ultra endurance athletes on my podcast, as well as I talk about business because, cause I think there's a certain degree of, grit, discipline, resilience that comes from putting yourself through hard things. So I, I run because it is about sort of meditation and I get a lot of thinking time when I run particularly long runs. I do it to stay.

fit and healthy as well, because I think energy management's important, even though sometimes the endurance stuff can be the extreme of that, because you get quite tired, but you feel quite refreshed as well. But the main reason I do it is when you put yourself through something as challenging as that, physically, mentally, the whole piece, probably spiritually too, if you get into it, any challenges that you find in the world of business, you know, this idea of doing big deals, working with big numbers, the stuff that we've been discussing.

Jon Stoddard (44:14.061)
kind of becomes secondary. And you just kind of, know how to put yourself in a certain state of focus. And you learn that because if you're running an ultra marathon and you're at mile 70, right? Some people can't even comprehend this, right? You're in a shitload of pain. And the only thing that's going to get you those last 30 miles, right? Which is in itself, like another marathon is, is

where you can take yourself mentally and doing big deals and being involved in some of those, it takes a very similar mindset on occasion. So I do it for those reasons. You know, I have been studying this and thanks for sharing that with me. like how do people, some people are able to just look at as a game and just keep playing over and over, you know, and I see, you you can see immigrants from other countries that came from a

know, totalitarian type environment, just excel like the yogurt guy just takes takes off. I've seen I got a buddy that was in Afghanistan as a Marine near death experience and he just looked and he's acquired 100 businesses. And it's just how he sees it like just a game and what's the worst could happen if I go bankrupt? Yeah, right. Well, that is true. There is there is sometimes you've got to go there because

If you're getting up every single day thinking, you know, I've got to survive, if I don't survive, what's going to happen? There's that whole saying that, why worry twice? Right? We're programmed to experience fear to protect us, but it doesn't always serve us. So you've just got to kind of think about what's the worst that can happen. And the worst that can happen isn't usually that bad. It's why you also see like...

entrepreneurs who take big risks go from bankruptcy to life, or more than life changing money, some of them, because they don't get attached to either the success or the failure, right? The failure being bankruptcy or the perception of that, or the success being I'm worth hundreds of millions. They just stay focused on what they can affect in the present moment. And so if you think back to the ultra running, just to draw a line under this, you're never more present, right? Than in the sort of mile 70 of an ultra marathon.

Jon Stoddard (46:33.997)
Right? You know, it's bloody painful, right? You just trying to survive. Right? And if you can kind of, if you can kind of work within that space and what it teaches you, it can open up many other channels. That's, that's, so that's what I found from it. So I got to go. So what's an ultra marathon versus a marathon? yeah. What's an ultra marathon?

Technically, okay, so I'll give you the I'll give you the pussy definition and then I'll give you the real definition, right? Like the it's technically anything over a marathon. So if a marathon is 26 miles, you know, 42 odd kilometers, like if you do another, you know, 100 meters, you've done an ultra marathon, right? But most people would say so if a marathon is 42 kilometers, right, to use the metrics, the first proper ultra marathon is about 50, 50 case. So

So you're another eight kilometers, which is about another five miles, right? That's challenging. Personally, I think it's when you get into the 50 mile and upwards that you're really challenging yourself. That's effectively like a double marathon. You're out running for anywhere between probably eight to 10 hours. And that's proper challenging stuff. Yeah, that's David Gargan's. Yeah, it's all that sort stuff. I mean, he does 200 miles, right? I've never, you know,

there's a point where I like to do these things, but I wouldn't, you know, kill myself in desert at 140 degrees, right? Yeah. So I've got a friend called Frank McKinney, who's in the real estate game and he builds very, very amazing high spec homes in Miami. Each home is a big home. And he goes and runs the it's called the bad water ultra marathon, which is in it's in the desert somewhere. I can't remember exactly where it is near Mount Whitney, wherever that is in the US.

And you're running through literally salt basins in, you know, 100 degrees Fahrenheit. Yeah, I think that's a salt flats. Yeah, yeah, yeah. So he does that. Same reasons I do it really, you you kind of you learn a lot about yourself when you put yourself through those extremes. Yeah. So where are you at right now? What don't you know the answer to that? You know, like, hey, I got to get myself to a trade show. I want to go to a convention.

Jon Stoddard (48:49.493)
I got to read this book. What don't you know that you need to go to the next level? So I said a 20 year vision. I'm now 48 and I said a 20 year vision when I was 40. And one of the things I wrote down and I've got it on my screensavers here and all that was I want to buy the Boston Celtics. I'm a massive basketball fan. No way. Yeah, I've got you can't see it but below the medals there is a signed Larry Bird.

poster, right just there. And, Lick Indiana. There you go. Right. So I even, I went as far as working out what they were sold for when they were last on the market, which was around $350 million. I know the valuation at the moment somewhere between three and $4 billion. And, I even reached out to Jesse Itzler and had a call with him because he owns the Atlanta Hawks. Mary to the banks. Yeah. So I had a call with him.

about it. And like, I'm not a billionaire, right? Let's be super clear to everyone listening here. But, you know, what does it what does it take to do that? Right? And I'm not I'm not the guy who's going to go and do sort of tech startup. And there's a lot of billionaires that have been created from &A and private equity. So I'm still trying to understand what that looks like, you know, trying to get around people, you know, spending more time with billionaires. That's interesting. That's you really want to blow your mind up. Gary Benayer trucks trying to do the same thing.

He wants to own, I think, the Mets? Yeah, the Jets. That's right. NFL team. Yeah, I mean, for me, it was just putting out something big, right? The reality of it is I'm not that attached to the outcome of owning the Celtics. It's more about who do I need to be to be able to do it, right? So what's the growth that has to happen from a mindset, skill set, network perspective to do it? a zero to a couple of zeros.

You know, Bob Proctor, this guy, he's another mental guy. He talks about it. goes, look, everything is already there for you. You just got to have the knowledge process and then execution. And I believe that. And someone said to me the other day, and I thought this was a brilliant kind of line as well, is that, you know, when you wake up in the morning, somewhere, somewhere in the world, there is a person who has the resources, whatever that is, the knowledge, the money, the network again.

Jon Stoddard (51:17.109)
to bring you closer to whatever you're trying to achieve. So your job is not to focus on how the hell am I gonna buy the Celtics? My job is to focus on who do I need to connect with, right? Or, you know, what do I need to learn? You know, those sort of things today, which is gonna take me closer to that outcome. Yeah. Get past that first question and then start asking the other right. So, you know, for me, as I said, my process is, you know, get into rooms, meet different people.

So the big thing for me in 2022 is one of my goals is to speak more on stages, particularly in North America. So I did a number of different speeches last year. was in sort of in Tampa doing one to different investor groups. So I've got a number of different speaking events that I'm booked in to do. And I'm doing that for a couple of reasons. A, I like to educate and I like to help people through what I've done, right? So I enjoy the process of speaking. But I also know that, you know, by going to those

those stages and then speaking on bigger stages, my network's getting bigger. And it's bringing me closer to the people that I need to meet, not even knowing who they are yet to achieve some of those big goals and that bigger vision. Yeah, it's an interesting behavior that happens the more you share what you've learned, the closer you get to the people that you want to do the next thing with. And that's what I found with podcasting, right, as I'm sure you have, John. so I'm I'm connected to some

some quite interesting groups off the back of this, some quite high profile names. And like I mentioned, Jesse Itzler and those sorts of things as others, but that came from putting yourself out there in a form of media as we do. And it's funny, I'll sort of finish with this piece is that a few years ago when I was doing the private equity firm, I was traveling around the world, but I could go to like any city and I wouldn't know anyone. So I'd go and stay in a hotel.

I go out for dinner, you know, maybe work related or by myself, you know, these work trips, how they used to be. When I went traveling in September, I went to Dubai, Canada, the U S I'm doing, there wasn't one city. I ended up going to four countries, nine cities in something like 25 days. There wasn't one city that I couldn't have stayed at someone's house, gone out for dinner with multiple people. Right. And all of that was created through the podcast and.

Jon Stoddard (53:42.829)
you know, having these various platforms that we all have access to right now. Yeah, I love doing the podcast aside from getting smarter every time I talk to somebody like you. And then sharing this with my network and they love it. So thank you so much. So we're at the hour already. This is Nick Bradley, definitely a top &A entrepreneur. He's helps ambitious business owners scale and fast and exit.

host of scale up with Nick Bradley, watch that, get on that podcast. Is it on YouTube too or? Yeah, YouTube, there's a little bit on YouTube, but we're, launching the YouTube channel, I think in March. So people can find it, but it best just to listen to the podcast now. Yeah. I, I got to tell you, I get almost five times more views from my YouTube channel than I downloads audio. Yeah. Well, I've done a, I've done a partnership with a guy called Evan Carmichael.

who's got something like three million subscribers to his YouTube channel. Yeah, he's the guy that does the list like eight top things I learned. he's helping me with that. So yeah, so I've got that. So the best way to reach me is you have a listen to scale up with Nick Bradley for sure. I've got a group on Facebook, which people come and they can kind of ask questions and get involved, which is build your business empire. And that's specifically for people who are trying to do scaling acquisitions, trying to build something substantial. It's that type of thing.

So yeah, if people want to reach out to me or get in touch with me, they're the places that I hang out and then they can kind of become part of the stuff that I'm talking about. Ladies and gentlemen, Nick Bradley, thank you so much for joining us. Great, John. Thank you. I appreciate this.