Summary

In this conversation, Jon Stoddard interviews Kevin McArdle, the founder of Big Band Software, who shares his journey through the tech industry, including his experience at SureSwift Capital where he acquired 45 companies. Kevin discusses the importance of building a positive work culture, the principles of successful business operations, and his vision for Big Band Software as a holding company for B2B SaaS businesses. He emphasizes the significance of relationships in business and the strategy of focusing on profitable growth without distributing dividends to investors. In this conversation, Kevin McArdle discusses his approach to building a holding company, navigating the complexities of private equity, and the importance of understanding growth metrics in business acquisitions. He emphasizes the need for open conversations with potential sellers and the challenges of business valuation. McArdle also highlights the significance of respecting the efforts of entrepreneurs and shares insights on current deal flow and future prospects in the M&A space.

Takeaways

Kevin's journey began unexpectedly in tech after teaching math.
At SureSwift, Kevin acquired 45 companies over seven years.
Finding financing for acquisitions often comes from personal connections.
Kevin prefers to secure cash before making acquisition offers.
The importance of treating people well in business operations.
Creating a positive work culture is essential for success.
Learning from past leadership experiences shapes Kevin's approach.
Influential business literature includes works by Peter Drucker and Mark Leonard.
Big Band Software focuses on acquiring profitable B2B SaaS businesses.
Partnerships are built on trust and long-term relationships. Building a business plan requires collaboration and input from partners.
Private equity firms have specific timelines for returns, but flexibility can exist.
Growth metrics are essential, but even modest growth can be attractive.
Conversations about selling a business should start early, not at the last minute.
Valuation expectations can often be unrealistic; education is key.
Churn rates are critical in assessing SaaS businesses, but context matters.
Respect for entrepreneurs' efforts is crucial in M&A.
Deal flow is vital; more options lead to better decisions.
AI is seen as a significant disruptive force in business.
Music serves as a metaphor for collaboration and unity in business.

 

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Transcript:

JON STODDARD (00:01.402)
Welcome to the top M&A entrepreneurs today. My guest is Kevin McCardell. Kevin is from a company called Big Band Software. It's an acquisition platform to acquire companies. Before that, he worked at a stealth startup. We'll talk about that. And then before that, he worked at SureSwift Capital where he was CEO, founder, and acquired 45 companies. But he's taken everything he's learned from that and brought it to Big Band. So welcome to the show.

Kevin McArdle (00:31.67)
Thanks, John. Great to be here.

JON STODDARD (00:33.582)
Let me, all right. Kevin, so let's start back this. You've been in tech all your life. It looks like you were actually at Cerner, a software company that was acquired by Oracle just recently.

Kevin McArdle (00:47.57)
Yeah, that's right. And I should clarify, I spent one year as a high school math teacher right out of college, because that's what I thought I wanted to do for the rest of my life. And I was not tech savvy at all. And so I sort of stumbled backwards into working at Cerner in a sales training program, and that's where I, you know, cut my teeth on software and technology and learn the ropes of how the tech world works.

JON STODDARD (00:55.382)
Yeah.

JON STODDARD (01:10.842)
Yeah, and then you started sure swift capital where you went on to acquire 45 companies What was what was the platform for that the kind of companies and just trying to get understanding what you learned from?

Kevin McArdle (01:26.01)
Yeah, well, the idea was pretty simple. And, you know, I was the operator and I had some people backing me financially. It was their idea actually, like, let's just go acquire profitable companies. And to narrow the scope, we said, let's make them internet based. And so that was the idea. We started small, we grew bigger and yeah, grew to, you know, do 45 deals in a period of seven years. Uh, and just recently, as you mentioned, the open, I've taken everything I've

better with Big Band software.

JON STODDARD (01:57.842)
Yeah, so you've taken some lessons for that, but I do have to ask you about the sure swift. How did you find people to say we're going to back you to acquire companies? Did they just write you a check and here's a million dollars or did they say go find a great deal, bring it to us, we'll finance it and then start them?

Kevin McArdle (02:16.69)
Yeah, no, it's a great question. And I know a lot of your listeners, like that's the million dollar question, right? Like if I want to buy things, who do, how do I finance those things? And, you know, candidly for me, I wish I had been exposed to your podcast and others back when I was deciding to make this leap from corporate America, which. You know, isn't for everybody, but I had a really nice cushy executive job, you know, good comp, good perks. And I was like, okay, I'm going to leave all that behind and not pay myself for a

JON STODDARD (02:27.351)
Yeah.

Kevin McArdle (02:47.15)
and go buy businesses, which I didn't even know was really a thing that people did on the small scale. So the reality was I ran into my original business partner through personal connections, and he had said he'd been working on this idea for a while. He knew there was a lot of money to be made on the internet and knew in the right circumstances, you could buy a company that was already successful. And so we just pooled our money in.

JON STODDARD (02:53.166)
Yeah.

Kevin McArdle (03:16.65)
and got started. So it wasn't like, hey, let me find a deal and then we'll decide and let me round up cash. I know a lot of people listening to this are probably gonna be like, well, either Kevin's an idiot, like how did he stumble into this situation? Or like he's the luckiest guy in the world because he didn't have to go through the heartache of either finding money or finding a deal first. It just sort of like came together. And like we incorporated on July 4th of 2015, which I consider my Independence Day

And by the end of July, I was closing a deal. And honest to God, it all feels like just dumb luck in circumstance now, because I know there are people in the search world or building holding companies that spend years trying to build it up. And by the way, it was a pretty small deal that I found on a marketplace. It wasn't like it's some magic there. But yeah, it all sort of came together well. And now all of a sudden I'm operating and I had to figure the rest out, you know, as I went forward.

JON STODDARD (04:16.022)
Yeah. How did that first deal go? I mean, not financing. You brought money together, but was it... I'm hearing more and more deals where it's just 100% cash.

Kevin McArdle (04:28.81)
That's how I've operated from the beginning, John. And I know that's maybe not normal, but I love being able to write a letter of intent to a founder and say, I'm the decision maker on my side. If you're the decision maker on your side, let's do a deal. And I know it works and people make it work and there's nothing wrong with it, but I don't like the idea of, hey, John, I'm making this offer to you without knowing that I have the cash rounded up. And I've been fortunate to not be in that scenario. Like, you know,

JON STODDARD (04:31.304)
Yeah.

Kevin McArdle (04:59.411)
I've always had the cash secured and then bought 100% in cash. And then you can add in debt later after the fact on a profitable operating portfolio.

JON STODDARD (05:03.704)
Yeah.

JON STODDARD (05:09.702)
Yeah, as long as it's got the margins. When did you start realizing, like, this is gaining some speed with your acquisitions? I mean, it looked like 45. That's a freaking like, who's that? Tiny Capital guy who's got 40 something up there? I mean, you were doing it before Tiny Capital was.

Kevin McArdle (05:11.914)
Yeah.

Kevin McArdle (05:25.912)
Oh, Andrew. Yeah.

Oh, I don't know about that in terms of timeline. I'll let Andrew speak for himself on that. But yeah, we got to know each other a little bit because we were living in the same town. I was living in Victoria, BC. Uh, when I, when I started sure Swift. Um, yeah, it's a high pace. And when, um, you know, there was, I tell you, like the inside baseball, my conversation with my wife was like, Hey, I think this is working. I, or I think this is a good idea. I would like to leave my cushy job and try this and not pay myself for a little

if it works. And we had lived below our means for a while, saved up a nest egg so that I could put my own cash into this thing. And it was always sort of this like monthly check-in, like, is this working? Is it not? You know, was this, are we still going to go with this? And yeah, about, you know, probably six months in, we were just finding like great deals all the time. I was able to operate them when I needed to hire somebody to replace me to go operate the company. I was able to find the people.

want to make it sound like any of this was easy. It was not easy, especially early days when I was the only person day to day in the business. But I got to be where business is business to some degree. I had moved from the business of selling big enterprise software and taking care of those customers to buying small scale technology businesses and SaaS businesses. And my customer

you know, treat people well, do what you say you're gonna do, and generally good things happen. And so I took that approach into this new venture that I was working on, and it turned out like, hiring great talent in a big software company is not that much different than hiring great talent in a small business. You know, you have to be thoughtful, you have to ask the right questions, you have to vet the people, and when you make a mistake, which I made some mistakes, you have to cut bait with those people and move on and find somebody else. And so I was fortunate that,

Kevin McArdle (07:28.97)
kind of brushed over. I spent 15 years at Cerner and along the way, I got an MBA, but I like to say I got a PhD in how to business through working at Cerner. Like it was a very disciplined company that does a lot of things well, high culture place to work. And so I was able to take those learnings into this new thing and we were only buying profitable businesses. So once the portfolio got to be a certain size to answer your question, I was like, okay, this is going to work.

Now, you know, the idea has merit. Now we're just down to execution risk and how big can it get and how do I not make too big of a mistake going forward?

JON STODDARD (08:08.982)
Yeah, how big were the companies you first started with? Let's say first five, 10.

Kevin McArdle (08:13.53)
Yeah, low six figure checks. And as you pointed out, all finance with cash. Pretty quickly, we brought in more money and got into where we were writing checks, $1 to $3 million. And then by the time I left SureSwift, our general buying range was still $1 million at the low end and $5 million at the high end of enterprise value.

JON STODDARD (08:16.004)
Yeah.

JON STODDARD (08:37.961)
So what happened there when you say brought in money, did people start knocking on your doors based on the success you have? Or did you go out and say, you know, we could probably make this happen faster and bigger if we had more money.

Kevin McArdle (08:50.25)
Yeah, a little both. So our first fund was people that me and the original partner were close to. And then we had a second fund with also like pretty, pretty close, you know, just total five individuals. And we were getting inbound from either people in my network, you know, along the way I moved to Minnesota where I'm based now, got to know the tech community. I'm like, Hey, I'm Kevin, this is what I do. And people that got it, especially SaaS entrepreneurs were like, I would

Kevin McArdle (09:20.39)
raise a bigger fund, it was a combination of like go to our immediate network and the people that had already expressed interest, build some momentum. And then I ended up raising money from total of 67 people that were then two and three degrees removed from my immediate circle.

JON STODDARD (09:39.764)
Yeah. What does that look like? Your 25k to 100k checks and something like that?

Kevin McArdle (09:47.65)
Yeah, I probably a bit way bigger checks than that. So you and I shouldn't disclose the very specific I shouldn't disclose too many details about that fund because I'm not operating that company anymore. But no, that the checks were, you know, six figures and greater and there were a couple of investors that were in the million dollar range. And it was based on the track record that I had built up as an operator and like, if you can find deals, if you can operate them, people are going to be interested in investing.

JON STODDARD (09:58.826)
Yeah.

JON STODDARD (10:08.406)
Yeah, well what do you...

JON STODDARD (10:15.522)
Yeah, that is my feeling. I'm getting more and more questions around that. It was like, John, how do I raise a fund to buy more money? I mean, Warren Buffett started that by raising a fund to buy companies.

Kevin McArdle (10:27.03)
But he also had a track record of being an amazing investor early.

JON STODDARD (10:31.146)
Yes, pinball games, you name it, to all kinds of stuff.

Kevin McArdle (10:35.37)
Right, so anybody asking me, I would say like, go prove that you can do something before you ask people for money. Yeah, yeah, and usually you have to start small, but that's okay. Like, you know, that way if you fail, you're failing small too. And if you succeed, you just go a little bit bigger. Yeah, so yeah, I'm not the expert. I guess I'm an expert on some things, but you know, whether somebody raises money and then finds a business or find a business and then raise money,

JON STODDARD (10:40.802)
in a smaller scale. Yeah.

JON STODDARD (10:50.642)
and your own money.

JON STODDARD (11:04.269)
Yeah.

Kevin McArdle (11:05.35)
different ways to do it, but I just think like, if you have no track record of knowing how to operate a business, I would fix that first before you go ask people to give you money to go operate a business.

JON STODDARD (11:16.582)
So what are your tenants for operating a business? I mean, hiring great people, just growing the business or what? Or making it more profitable, what is that?

Kevin McArdle (11:28.89)
Yeah, I mean, unfortunately, I'm not going to give you any like pixie dust that you haven't heard 100 times like basics. It's complex, but I try not to make it complicated, right? So I think of the analogy being cable television, which are Netflix, to use a more modern example. It is super complex. I have no idea how it actually works, but it's not complicated. I pick up my remote and I hit power and it works. Right. So while yes, business is complex.

JON STODDARD (11:33.342)
There is, yeah, there's no, there's a, it's complex and there's a lot of different levers, yeah.

Kevin McArdle (11:58.77)
there's all these moving parts and factors that can make any situation very hard to deal with to keep it simple and not complicated. Treat people well, create a culture that people want to work in, measure and monitor everything, be disciplined, don't get too high with the highs, don't get too low with the lows, address problems that are problems, don't conflate people with problems. Right? So if you come to me, John, and you say, Hey, Kevin, here's a problem with the business,

problem together, I would never attack John for, you know, because that's not what that's not my job as a CEO to, you know, we got to develop people. Yes. But, you know, all these things that you read about in every business book.

JON STODDARD (12:41.503)
Yeah, it's another Warren Buffett temperament, right?

Kevin McArdle (12:46.73)
Right, right. And you mentioned profitability, like I love profitable businesses. And I think the world recently in like 2022 has gotten a wake up call that like at the end of the day, you have to provide value and make more money than you spend. And that is a healthy business. And especially in the venture community, like things got a little, you know, astray. And I get that it's different. But you know, I want to I want to profitable growth is the is the goal for my whole portfolio.

JON STODDARD (13:16.122)
Yeah, yeah. It's just to remember a long time ago with this business unit, general manager, we were working on a startup and he goes, I don't really care about profitability, I just care about growth. Okay. Good luck with that. Yeah, when you say you take care of people, you did mention one example where, you know, you attack the problem, not the individual. What other, what do you mean take care of people? You want them confident, you want them

Kevin McArdle (13:27.71)
Yeah, good luck with that.

JON STODDARD (13:46.444)
You know with like there's purpose and there's unity

Kevin McArdle (13:50.17)
Yeah, I mean, so I'm a big believer that culture drives results. And a business is nothing but a collection of people trying to work on one thing together. I also think like, as much as I'm a fan of life work balance, and I say it in that order purposefully because I think life is more important than anything that we could possibly work on, we spend a lot of time at work if we're full-time employed people. And so shouldn't that be like,

pleasurable or maybe fun every once in a while, not that it won't be hard. Like the reason we get paid to do work is that things can be hard. But I would not want, I have worked in toxic environments where the culture is bad or I don't enjoy the people I work with and it is miserable. And so I don't ever wanna be a part of that for the rest of my career. I want to build a culture and a place where people enjoy working

they feel taken care of to answer your question. What does that mean? It means I'm working on something that I'm in the right spot for. I'm being compensated fairly for it. And I have balance between my life and my work and I'm not being asked to either do something I'm not capable of or work 80 hours a week or do something that's gonna take too much stress and bleed it into my personal life. Just like the,

I think what we all want work to be is something that's healthy and positive. That's what I mean by taking care of people. Let's create a healthy and positive work environment and recognize that every once in a while, something's going to get misaligned and then we go solve that problem, whether it's a people problem or the work that they're being asked to do and so on and so forth.

JON STODDARD (15:25.283)
Yeah.

JON STODDARD (15:39.182)
Let me ask you about that because, you know, for an employee to see some policy in the company that you don't like, it creates friction in your life, whether it's family or politics or ethics or whatever it is. It's easy to see, but now the shoe's on the other foot. You're the boss. And how is it, is it hard to see or you don't see what you don't see? Right? You could be driving something and you're at

Kevin McArdle (16:04.11)
Yeah. So are you asking like, I may be doing something that other people see as a challenge or problem. Yeah. So I would set aside like ethics. I think that's table stakes and like should never be a problem. Well, not in my world. I mean, I realize it exists, but not in my world. Like those are black, those are black and white issues. Yeah, those are black and white issues. Now, there's a whole bunch of gray issues that I totally recognize, like I may have a

JON STODDARD (16:10.842)
It creates friction somewhere. Yeah

JON STODDARD (16:18.562)
That's never compromised. Agreed.

JON STODDARD (16:25.727)
Indeed it does, right? Yeah.

Kevin McArdle (16:34.11)
idea that I think makes perfect sense, but it may not make sense to somebody elsewhere in the company, right? And so part of what I believe is a good, healthy culture is a culture where anybody in the company can come to me and say, Hey, Kevin, I'm not sure I agree with what you just said here, or what this policy is, or what our strategy is with this thing. And again, we attack issues, not people. I will listen to that. And I will not get up. Try not to get upset.

it, though I'm imperfect, right? And so there might just be a misunderstanding of, and I'm trying to think of like a real example to make it more concrete.

JON STODDARD (17:13.761)
I'll give you an example. This is when I was an employee working for Autodesk. And the VP came in and said, hey, we're going to be changing the comp plans. Three people ran out of the room immediately. It was such an emotional charged conversation that they didn't even want to hear it. They just ran out of the room.

Kevin McArdle (17:27.292)
Mmm.

Kevin McArdle (17:34.99)
Mm. Yeah. The comp is super, super personal and super important to everybody. So not knowing the details.

JON STODDARD (17:40.842)
Yeah, especially if it's a gravy frame for a while and all of a sudden you're going like well we can't keep doing that

Kevin McArdle (17:44.63)
Yeah. So not knowing the details of that, I could predict like a couple from the leadership level, they might be saying like, hey, we have to make this change for X, Y, Z reason. And we have a broad view of what's going on in the company and the external, you know, threats and opportunities and workforce. Like how are we doing hiring and retaining people? And are we, are we at market levels for other people in our industry? A whole bunch of factors that maybe the three people that

aren't aware of or aren't thinking about, right? So there may be a disconnect between awareness, not smarts of those people, but just what is their awareness of all of the issues involved? There may be trust issues where the last time the VP walked into that office, really bad things happened, and I don't want to be a part of that again. Again, I don't know in your example, but like in my world, if somebody gives me feedback that is critical,

JON STODDARD (18:38.582)
Yeah, yeah, I just, uh...

Kevin McArdle (18:44.91)
and we try to work through it. And I'm not gonna criticize somebody for giving me feedback because then what happens? They stop giving you feedback and then you get these pockets of problems that nobody wants to talk about because otherwise the boss is gonna get mad and fire somebody. Do you know what I mean? So unfortunately, I think a lot of work culture is not positive.

JON STODDARD (19:03.462)
Yeah, it's trying to create the culture and the environment where there's not fear from people that work below.

Kevin McArdle (19:13.714)
100%. Yeah, I mean...

JON STODDARD (19:14.962)
I mean, you don't want your, it's like your kids. You don't want your kids to fear you when you're trying to share a lesson or a story.

Kevin McArdle (19:22.19)
Exactly, or if they are in trouble, if there's a problem, who knows what that problem could be with kids, but kids can get into big problems. I want them to call me and say, dad, I need help with this thing. I don't want them to be afraid to call me because then that problem could get worse. So, yeah. So things like that, I just, and I've been fortunate to have some really great managers and leaders and executives in my life. And I've,

JON STODDARD (19:39.407)
It definitely gets worse.

Kevin McArdle (19:52.37)
but you still get benefit from learning how not to do things. Like I've had the boss in my corporate career where you try to bring up a challenge or a problem that you need help with and you get attacked. And so I learned, well, that doesn't feel good and why would I bring him challenges anymore? I'm just gonna brush him under the lug or try to blame somebody else. And learning what works and what doesn't has helped me in my entrepreneurial career in, okay, this is what I think a good leader can and should be from,

having examples of it and reading every business book I can get my hands on and so on and so forth.

JON STODDARD (20:25.883)
Yeah, who do you like in business books?

Kevin McArdle (20:28.95)
Oh man, I, so as we're recording here, I'm 46 years old. So like, I was brought up on like old school Peter Drucker stuff. And so, you know, a lot of your current listeners may not have heard of him, but that stuff is classic and never goes out of style. I'm a student of Mark Leonard as, you know, I hope anybody listening to this podcast, I'm not the first time they've heard that word, but I read his president's letters.

JON STODDARD (20:33.042)
or any, you know, anybody out there that's got.

JON STODDARD (20:40.645)
Yeah, yeah.

JON STODDARD (20:54.882)
No, no, the introvert and very difficult to find and accept in his annual reports.

Kevin McArdle (21:02.43)
Yeah, you get one letter a year and it's usually filled with really good details. Yeah, obviously.

JON STODDARD (21:10.302)
You know what I like about those reports is it's almost like the Warren Buffett reports. It's like, hey, we tried something, it didn't work, this is what we learned.

Kevin McArdle (21:19.43)
Yeah. And yeah, he's, he Leonard has earned the right to be very open and honest and transparent, but even his earliest letters, he's not, he's not selling. You know what I mean? He's giving the honest truth of what he believes is going on in his company. And he's not really interested in what the analysts think of his company. Do you know what I mean? Where a lot of other

JON STODDARD (21:39.162)
Well, it's to me, it's always like never round up. You know, like Warren Buffett says, like, never round up. Like it is that our revenue is 3.7. It's not 4 billion. It's 3.7, 6, 5, 5, 5, 4. Yeah.

Kevin McArdle (21:45.171)
Yeah.

Kevin McArdle (21:49.071)
Right.

Yeah. And just, just speak the truth and let the results speak for themselves. And so that's what I'm a fan of his for sure. And also I, you know, I'm candidly not a reader. Like I love podcasts because I learn better that way. And I love Twitter because it's little bits and bytes of learning. And so that's how, but you know, I, the shelf behind me, you can't, you can't really read it, I'm sure, but it's all, it's all business books. And so I don't have like a single favor.

JON STODDARD (22:17.383)
I can't see it.

Kevin McArdle (22:22.132)
author that I could share.

JON STODDARD (22:23.682)
Yeah, yeah, there's a little bit. So from each one you take, yeah. So you left SureSwift. You went to a stealth startup. We're not talking about that because that's not what this show is about. Now you started Big Band Software, which is a company to acquire software companies. So what, but you do need to tell me what happened there. I was like, you know what? I'm really good at taking one to two to two to,

Kevin McArdle (22:26.772)
Exactly. Yeah.

Kevin McArdle (22:43.434)
Yeah.

JON STODDARD (22:53.983)
2 to 3 and 2 to 4. I'm gonna go duo 0 to 1. No, maybe not.

Kevin McArdle (22:58.29)
Yeah, well, no, let me clarify that. So the stealth startup was actually just what became Big Band. I was in a short non-compete period where I had left SureSwift, hadn't formally started Big Band, and I happened to... I don't remember why. Like a friend sent me my LinkedIn profile, and they're like, hey, this still looks like you worked there. You might want to update that. But I didn't have like a new job.

JON STODDARD (23:05.305)
Oh, okay, okay, okay, okay.

Kevin McArdle (23:28.39)
period, right? So I'm like, all right, I found a couple other people that I knew were in similar circumstances or got some advice. And so it's sort of a default in LinkedIn. If you don't want to say what the company is, just self-start. So it was definitely not like a true startup. It was just sort of a placeholder before I formally started Big Band.

JON STODDARD (23:37.882)
Yeah, yeah, yeah.

JON STODDARD (23:48.702)
Yeah, so I don't really know what the circumstances you left sure so if we're not really going to talk about that But obviously you said hey We're gonna start something new and here's how it's gonna be different and what's that different?

Kevin McArdle (24:02.07)
Yeah, so really Big Band is taking the not just the lessons learned of how to business and that business PhD that I feel I got at Cerner. Also, all the lessons learned good and bad from seven years of running sure swift and acquiring 45 companies and seeing what works and what doesn't. And so the vision for Big Band, which started late 22 is a software holding company. Find great B2B SaaS businesses.

that are still considered small, but have some upside. So right now we're looking for businesses in the million to 10 million annual recurring revenue range. We want them to be growing. Yes, yeah, top line. And so we want them to be growing. We want them to be profitable. We want them to be B2B SaaS, but they don't have to be rocket ship growth. We just want good solid businesses, right? And then we're gonna pair those

JON STODDARD (24:43.462)
Is that top line?

Kevin McArdle (25:02.01)
founder wants to step away and go do their next thing, we're going to pair those with great CEOs, provide the right incentives for everybody, and have no intention to pay dividends to anybody. It's a single holding company, not a series of funds. And we have... Yeah.

JON STODDARD (25:17.602)
Well, let me stop you on the dividends. Why did you say no dividends?

Kevin McArdle (25:22.89)
Well, because our investors are aligned with that and have no need for dividends to come out of the company and that just creates, you know, taxes.

JON STODDARD (25:31.562)
Are they looking for a higher multiple on invested capital? Yes.

Kevin McArdle (25:36.01)
Yes, yeah, everybody is on board with compounding is the name of the game, right? So that's why it's not a fund, it's a holding company. We're not paying out distributions. Any cash from operations gets rolled back into the holding company to make more acquisitions. And we're gonna compound this sucker for as long as we can.

JON STODDARD (25:41.363)
Yeah, okay. Okay.

JON STODDARD (25:56.742)
Yeah, and you obviously that's different from sure swift. Was that a challenge with because I could see if it were for distributing incomes, usually it's for a mature company who are very so profitable. They don't see the growth rate ever happen again like it did for the last 10 years.

Kevin McArdle (26:17.27)
Right. And small technology businesses, you have to reinvest bottom line. And even if there's profits, the market can shift and, you know, all of a sudden it can become less profitable or your market position could become worse. And there's a lot, I don't want to say that there's anything wrong with paying distributions. It's just not what I wanted to do. Like I had the opportunity to create a vision of what I thought I wanted to do for the next 30 years of my career. And that was,

JON STODDARD (26:21.426)
Yeah.

Kevin McArdle (26:47.25)
studying Buffett and Munger and studying Mark Leonard and another book that if your listeners haven't heard of, they should go read right now. It's called The Outsiders. Will Thorndyke. Yes. Yeah. I assume. Yeah. And so in the middle of running, SureSwift, which was a series of funds that was paying out distributions to investors and it was fine. It was successful. It was working. There were other challenges.

JON STODDARD (27:00.163)
The eight unconventional ATO. I recommend that to everybody. It's on my desktop. I keep it on my desk

Kevin McArdle (27:17.33)
you know, we don't need to get into. Um, I'm reading that book and I'm like, Oh, we're, we're doing things differently than all of these successful people. And like, there is a different way to do this. And so, um, yeah, just excited to kind of build, build a new way with the, this really long-term view.

JON STODDARD (27:36.562)
Let me ask you about on your website, Big Ben Software, you brought in Tally's Man, Private Equity, and Parker Gale. Now these are partners, were they with you before? Or they just find them and just tell them? Because those guys, I read on their sites that they also acquire companies too. So are they allocating percentage of their fund to somebody else doing these acquisitions? Yeah.

Kevin McArdle (27:57.27)
Yeah.

Kevin McArdle (28:04.71)
Yes. So, yeah, I'm glad you asked, you know, how, how we, I know them. And the thing that I, one thing that I love about Big Band Software is it is a relatively new company as we're recording, but it's based on relationships that go back years. So Talisman Capital was an investor of my old company. Parker Gale, I've known for four or five years before we ever thought we might get

Kevin McArdle (28:34.85)
liked talking shop together, built a personal relationship. And so there's trust built up there. My two co-founders I've known or worked with for a minimum of five years. And so going into it this time, it is much more of a right combination of people and culture. And so, yes, those companies do acquire businesses. Parker Gale is a traditional private equity firm. And they looked at this

And they, you know, said, well, there's a whole bunch of deals that are a little bit smaller that we can't do because of our fund size, but they're really great businesses. And so Devin, the managing partner there, you know, we, we talked over a beer. Two, three years ago. And he's like, Kevin, I want to go down market. You're in that space. Like, why don't we partner together and do this? And at the time it just didn't make sense because of where I was and, you know, so forth. But then, um, when I decided, you know, I was going to leave sure Swift.

I say, hey, Devin, do you still like that idea? And maybe we should talk about this again.

JON STODDARD (29:39.083)
How long did that incubate?

Kevin McArdle (29:43.95)
Um, it came together pretty quickly because I knew, I knew he liked the idea. It was just like an update. Like, do you still like this idea? And I had spent a lot of time thinking about what, what I would create if I were to do it again. And so I had a pretty good plan. He added some, he and his partner, Ryan Milligan added some, you know, helpful tweaks to the plan. Um, you know, Talisman Capital, we had been talking at, because they were investor, you know, we built up a relationship and, uh, they love the

JON STODDARD (29:56.767)
Yeah.

Kevin McArdle (30:14.13)
model and they've done so in like multiple different industries. And so yeah, it came together relatively quickly once we all committed that this is what we're going to do.

JON STODDARD (30:24.902)
Let me, am I misunderstanding something? You know, private equity has to turn their money five, seven years, kind of, what?

How is that their money that they deploy with you and you want to buy and hold strategy? No dividend.

Kevin McArdle (30:39.41)
Yeah, that's a great question. And that was my one reservation in, I had no reservations about Parker Gale as a team, their approach, their track record, our personal working together as we were talking through this, but yeah, they're a private equity company. They gotta pay off their investors with their current fund. And so I can't really get into a whole lot of the details, but we've solved for that, right? Like if they have to pay off their fund, it doesn't mean they have to take their capital away from me.

JON STODDARD (30:58.546)
Yeah.

Kevin McArdle (31:09.77)
And so that was the, you know, when I said I want to build a holding company and I don't want there to be a term, we had to talk through that. And it was really just like a healthy discussion of like, okay, if this, then that, and what if this happens and sorry, I have to be vague on that, but there's certain parts of our business agreement that are not public.

JON STODDARD (31:26.982)
Somebody's going to come to you asking for how'd you solve it, because I see that question coming up again.

Kevin McArdle (31:31.57)
Yeah, and like a one-on-one conversation with somebody I can be a little bit more specific about, but probably not on podcasts.

JON STODDARD (31:38.602)
So I gotta tell you, so you're in the one to 10 million range, that sounds like constellation software territory.

Kevin McArdle (31:45.77)
Well, you know, I'm shocked by in the, you know, constellation letters, they still talk about doing one and $2 million deals.

JON STODDARD (31:52.982)
Yeah, how many they did a hundred and something deals? 123 deals? Yeah, 160?

Kevin McArdle (31:56.25)
160 last year is what I think I read. So yeah, it's, I mean, they're a machine. And I know in past life, we've come up against Constellation and either won or lost. And when they've got, I think I also read or heard, they've got 400 people with either M&A or Biz Dev in their title. Like, I think if...

JON STODDARD (32:20.782)
Yeah, they're responsible. They don't have to get a veto vote from Mark Leonard to acquire a company.

Kevin McArdle (32:27.05)
Correct, right. So, you know, if you think you've uncovered a software deal that Constellation doesn't know about, you're probably kidding yourself. Like they're that good, they've been doing it for that long. Anybody, right. And if you're a founder who's looking to sell a business, doesn't have to be that smarter to look that hard to figure out who Constellation is and put in a phone call if they're not already on their list. So, and in addition to Constellation,

JON STODDARD (32:36.562)
Yeah, yeah, I mean it's not that hard to find all, you know, yeah.

Kevin McArdle (32:57.05)
dozens of other, whether private equity firms that are looking for bolt-on acquisitions or people that are trying to build holding companies or searchers, there's no shortage of competition in this space, John, let's not kid ourselves, right? And that's okay. My old CEO at Cerner used to say, I love competition and I hate losing, so bring it on. And there's room for all of us. There's room.

JON STODDARD (33:09.787)
Yeah, yeah.

JON STODDARD (33:20.135)
Yeah.

There is, the reality there is, right? Because they're only gonna, you know, if there's two, 10 offers on the table and five of them are all cash, asking price or a little bit more, the seller is gonna pick the personality will he feels right about.

Kevin McArdle (33:26.033)
Yeah!

Kevin McArdle (33:39.17)
Yeah, it's about fit and business fit. And there are tens of thousands of software companies out there in the world and new ones being built every minute of every day by new entrepreneurs. And so I don't think any of us are gonna run out of deals to do if somebody tries to get into this business and they can't find a deal and it doesn't work out. It's not because there aren't software companies that are transacting. It's because their idea or their model wasn't a fit for some reason.

JON STODDARD (33:41.446)
Yeah.

Kevin McArdle (34:08.59)
Either they couldn't find the deal flow or they couldn't round up the capital or any number of reasons why it might not work out, but it's not because there's a lack of software companies or too much competition. Well, it's been built up over years and years of being in this business and trying to be a good human and treat people well. And so I have something of a reputation in this space. When we announced Big Band, my LinkedIn inbox and my actual email inbox got full really quickly with people.

JON STODDARD (34:17.163)
you creating your deal flow.

JON STODDARD (34:36.822)
People who want to sell you their company or know of other companies that want to sell. Yeah.

Kevin McArdle (34:39.39)
Yeah, or people saying like, hey, I know a founder who's thinking about selling, he's in a process, let me introduce you. Bankers saying like, glad you're back in the arena, let's talk deals. People that wanna come work for Big Band because I think not just me, but my co-founders, Jason and Chris also have reputations of being like awesome operators and great human beings. That's why I brought them onto the team. And so, having done this before, I know what to do. And so,

the deal flow engine. Nothing's easy in business, but I've seen how this movie ends one time. Just trying to take all those lessons and do it better the second time.

JON STODDARD (35:14.682)
No, that's not first deal, it's art. Yeah.

JON STODDARD (35:21.982)
I have to ask you about disruptive events. You know, I'm old enough to be on the planet where the internet came around and it really disrupted a lot of businesses. What do you think about the AI happening? I mean, I use Jasper AI for content to help, but it still needs a lot of massaging when I use it. Is that? And I noticed that Microsoft is adding that to all their apps. Chat, GPT.

Kevin McArdle (35:41.171)
Yeah.

Kevin McArdle (35:49.77)
Yeah, to me it feels significantly disruptive. And so I don't think that I'm the smartest guy in the room ever. And so I try to learn from people who are smarter than me. And I think when people put it on the scale of the internet itself, and then mobile being a dramatic shift in just life and business, and people smarter than me think AI, it might provide that sort of shift.

I believe it. And because I've studied enough to think like, yes, there's obvious ways that AI can start to replace human work, even if it's 80% of the human work and you have to step in and clean up 20% of the content, that's still a meaningful shift. And I think all the opportunities, even just embedded in a software product, like, you know, if we can get a really good AI chat bot to answer support requests,

need fewer people doing support or those people can do the harder problems that the bot can't figure out. Like simple examples like that to me. And this is what I, this is what I, what gets me excited about AI is there are simple use cases like that, that a non-technical business person like me can figure out and try to execute on a plan. And in contrast, um, you know, I never bought into, you know, uh, crypto and blockchain and NFTs. I know a lot of people.

of money in a hurry on that thing, but to me, it never seemed like it had any like actual long term useful application. Which I'm sure there's people listening to this who are like, Kevin, you're an idiot. You're just missing the boat. But

JON STODDARD (37:31.682)
I don't know. I've been saying for a long time. I follow what Charlie Munger and Warren Buffett said about crypto and Bitcoin, which is just trash.

Kevin McArdle (37:40.27)
Yeah, well, yeah, again, those two are smarter than me. And like they, and it's not because they don't get it. It's not because they're old, which is what the, yeah. Yeah, exactly. They've been proven right. And you know, there's probably some really cool applications of crypto that do have, you know, some long-term merit. I just think that the hype cycle was way out of control on that a couple of years ago.

JON STODDARD (37:45.604)
Yeah.

Oh, they were saying that three, four years ago, and look at them now.

JON STODDARD (38:03.302)
Yeah, way out of control. The reason I brought up the chat GPT was that I was having a conversation. I have some students, you know, and they were looking at this chat application. And I said, look, I'm not saying it's a good deal, bad deal right now. I'd have to think about it. But if you have chat GPT coming into here, and this is old code, and they can't add that onto that, this might be a dead product in a year or two. I'm just, I don't know if that's correct, but I just,

Kevin McArdle (38:33.31)
Yeah, 100%, I think if you're in the M&A space and you're not adding that to your deal checklist or your diligence checklist, and it doesn't have to be the answer, but does AI change the trajectory of this business? And the reality is you probably don't know the answer to that question with a whole lot of certainty because this is still so new and emerging. But if you're not at least trying to go through the thought exercise of, okay, what might happen? How might this business be disrupted?

JON STODDARD (38:33.848)
possibility.

Kevin McArdle (39:03.49)
What are the opportunities that might be coming from AI or chat GPT or any of the other competitors there like it needs to be part of your conversation either with your partners or in your own head of like and if you're just ignoring it I think you're you're you're doing yourself a disservice.

JON STODDARD (39:14.844)
Yeah, yeah.

JON STODDARD (39:20.242)
Yeah, and it's well in software. There's always these disruptive waves that come in that give your software product a lifecycle. And if you're not aware of that, it's you're going to hurt yourself down the road. So let me ask you about your criteria again. 1 to 10 million, it's growing. What are you looking for in growth? When you make a call, is it growing? Sometimes the owner is tapped out. There's no more gas in the tank or just

Kevin McArdle (39:28.371)
Mm-hmm.

Kevin McArdle (39:32.551)
Yeah, for sure.

JON STODDARD (39:50.202)
breadth of knowledge to grow it bigger but you you see opportunities for growth or does it need to be growing 15 20 30 percent a year?

Kevin McArdle (40:01.95)
All of the above is the short answer to that question, John. So like to me, the best way to operate a growing business is to have it be growing before you started operating it. Like the founder figured out something, they've got growth, whether it's 5% or 40%, obviously the bigger the better, but then you get into a valuation challenge. Like if a business is growing 100% per year, that founder has lots of opportunities and...

JON STODDARD (40:02.983)
All of them.

JON STODDARD (40:24.002)
It's gonna be off the charts. Yeah.

Kevin McArdle (40:27.65)
Odds are somebody's gonna pay more for that than me. And that's okay. So yes, we like to buy businesses that are growing. They don't have to be growing 100% per year. We're happy with like modest growth, but just showing like they have product market fit. They know how to get customers. They're losing customers, slower than they're gaining them. Just good, strong business is what we're looking for. And yeah, you brought up sort of founder reasons for selling and I've said before, like there's a hundred reasons

why people sell a business and only one of them is money. You know, conflict with co-founders. I'm tired, no more gas in the tank. I've hit my ceiling professionally and I don't know what to do next. I'm sick of dealing with all the people issues on my team and I just wanna, you know, write code or I wanna go do zero to one again cause that was more fun than what I'm dealing with now. Yeah, unfortunately I'm sick. My partner or spouse is sick and I need to remove all distractions

my business. That's a reality of why people have come to me to sell a business. And it's sad and terrible, but it's just the reality. And so all of those reasons are good reasons to initiate a conversation. And I would tell anybody looking to sell a business, don't wait until you hit that point to initiate a conversation. If you think someday you might sell your business, which includes everybody, because either you're going to choose to sell it or you're going to be put in a box and somebody else has to run your business.

JON STODDARD (41:35.087)
Yeah.

Kevin McArdle (41:58.11)
So pick your outcome by putting a box, I mean, you die, right? So like somebody's going to be running your business someday, or you're going to go out of business. So if that's a fact of life, you might as well have some casual conversations with people who might buy your business someday under you're not obligated to sell it. Just have the conversation so that when you do hit that point, you're not starting from scratch on like, how does that process work?

JON STODDARD (42:06.076)
Yeah.

JON STODDARD (42:21.945)
Is this the conversation you have with sellers? Does it sound like that?

Kevin McArdle (42:26.61)
I try to initiate those conversations because there's so many times, John, where I'll be like out in the world and people find out what I do or at a conference of software founders because I like to support those communities. And people come up to me at the cocktail hour and say, I'm not looking to sell my business, but how does it work? What do you do with the team? What happens to me in my job? How do you treat the customers? They've got all these questions that are really good questions, but they feel like they have to have the preamble of like, I'm not looking to sell. And I just told people,

JON STODDARD (42:29.326)
Yeah.

Kevin McArdle (42:56.05)
That's not necessary for you to tell me. I don't, if we just met, I don't care if you're trying to sell your business or not. Like, you know what I do, I now know what you do, but let's just have a conversation like normal human beings and I'll tell you what I know and try to help make you successful. And if I buy your business someday, cool. Odds are I won't though, because there's only one of me and you're you and you've got a lot of options. And so I like, I just like to encourage people to think about it before it's time, however you define it's time. Because I'm tired, I'm sick, I want to cash out, whatever.

Because if you're starting to think about how to sell a business three months before you want to actually sell the business, you're either not going to sell it or you're going to get way less value than you could have otherwise. And so a lot of what I try to tell people and the content you'll see from me and from Big Band is sort of like, here's when to think about this thing or that thing, or here's how to prepare 12 months in advance versus three months in advance. Here's the conversation to have with somebody like Kevin or John.

JON STODDARD (43:38.769)
Yeah.

Kevin McArdle (43:57.19)
two years before you want to sell a business. Here's what makes a business more attractive to people like John and Kevin, et cetera, et cetera. Because I like to be helpful to people and it's not self-serving because I, literally, I have conversations with founders dozens of times a week and I can't buy all their businesses and they're not a fit for me, but I still want to be helpful because I know being an entrepreneur is really hard. And so if I can give people some tiny little bit of advice

or empathy to try to make their life a little bit easier, like that's a win for me, whether I buy their business or not.

JON STODDARD (44:33.962)
Yeah, I got a question about the valuation. I had a conversation with the CEO of the FE International. He's done 1200 deals. So he can refer to comps to temper the enthusiasm of sellers. And you've done 45. How does that conversation go when they, hey, you know, I've been working 90 hours a week on this for five years. I think it's worth more. Right.

Kevin McArdle (44:48.071)
Mm-hmm.

Kevin McArdle (44:59.59)
Right, yeah. Those are tough conversations and I know the FE guys and have done some business with them. I like referring, if somebody has unrealistic expectations about what their business is worth, I like referring them to content written by other people, whether it's FE in a broker space or on your podcast. I haven't listened to the episode yet, but I heard you reference Andrew Gazdecki from MicroAcquire.

JON STODDARD (45:29.169)
Yeah.

Kevin McArdle (45:29.55)
of con they have a high volume of deals. They put a lot of content about like here's multiples that we're seeing. And it's all you I like to take that with a grain of salt because like it's not the stock market, right? There's no check. Anybody can claim they got whatever multiple they they wanted to. And there's a there's a incentive for a banker or broker or marketplace to elevate those. And I'm not saying they do, but like you just got to take it with a grain of salt.

JON STODDARD (45:54.002)
No, Woodbridge is a broker. They're a middle market, and they are in a little bit lower middle market, but they don't put prices on anything. So yeah.

Kevin McArdle (46:03.01)
Right, right. And a lot of times those are like contractually confidential. So, but it is something of a reference check for people. If somebody just says wildly unrealistic expectations, I will usually say like, hey, go read this link, go follow this person, go study this thing, go talk to this community who talks about these things and see if your expectations change. And if they don't, that's okay. And I hope you get every penny you're looking for, but that's just not gonna come from me.

JON STODDARD (46:32.622)
Yeah, we're not overpaying. Is that rule number one or two or three? We don't know where pay or is it okay to overpay for something that's growing 40 50%?

Kevin McArdle (46:32.97)
What I, what I.

Kevin McArdle (46:36.672)
Um, I mean, I...

Kevin McArdle (46:42.65)
It depends on what you think overpaying is. Like I have sometimes been the high bidder on a deal and I knew after the fact I was a high bidder and I don't feel like I overpaid, you know what I mean? Because I either had an angle or I knew there was value there or I was just doing the math differently than other people. I don't like getting in a bidding process and just saying I'm gonna win this deal no matter what. I like saying, you know, me and my team, study the business, get to know the founder or co-founders if there are more than one, you know, understand what they're looking for

JON STODDARD (46:51.803)
Yeah.

JON STODDARD (47:03.206)
Right.

Kevin McArdle (47:12.65)
or think through like, how would we operate this business? Is there opportunity and come up with a price and generally like that's our price. It's not like I'm rigid about it, but like if you think I'm gonna double my first price, that's not gonna happen because I've studied, I'm not gonna.

JON STODDARD (47:27.302)
Yeah, well, what if they come back with 15% higher? You're...

Kevin McArdle (47:31.13)
I've done that in certain cases and usually it opens up in a negotiation, right? So like, okay, John, you're selling me your business. I've given you a price. You want 15% more. Okay. Well, help me get there. Like, are you going to help me earn that? Are you going to stick around for a while and help that revenue growth to get there? Or do you want to like wash your hands of the thing and get 15% more and not be accountable to help delivering those results? Like, let's discuss. I'm all for getting you the money you want, but you got to help me understand how am I going to bake that into my evaluation.

JON STODDARD (47:53.204)
Yeah.

Kevin McArdle (48:01.41)
So it's not like I'm unreal. I built up a career of being pretty easy to negotiate with. And that doesn't mean I just fall over and give people what they want. But like, I'm happy to listen and, you know, be creative on how to get people what they're looking for, as long as it helps get me what I'm looking for too.

JON STODDARD (48:17.382)
What's that kind of the red flags were SaaS businesses that you, you know, Warbuffet will look at the income statements, three to five years. You'll look at the balance sheet, two of them 12 months apart, exact same day. Uh, SaaS businesses is it the churn? What is it that that's like

Kevin McArdle (48:37.69)
Yeah, I don't think there's a magic single metric that is the one to rule them all, but churn is pretty important. And churn, it's like, you can come up with a number for churn, but then if you dig into the details of cohort analysis and which segment of customers are churning more than others, you could spend a day trying to understand the churn of a single business. But if you get a good...

JON STODDARD (48:45.488)
Yeah.

JON STODDARD (49:00.402)
Is it fixable? If you see something with, you know, by itself, there's no context, but compared to somebody else, it's a high number. And can that be fixed?

Kevin McArdle (49:09.93)
Yeah, I am a believer that anything in business with the right attitude and approach and measurement and monitoring and people, almost anything can be fixed. But that's not our thesis of like, let's go in and fix churn. I also think some, you know, if I'm able to give a little bit of advice to people listening to your show, hoping to go acquire other people's businesses, don't think you're smarter than the founder. You know, if you're buying a business and you look

JON STODDARD (49:25.726)
Right.

JON STODDARD (49:37.223)
Yeah, no.

Kevin McArdle (49:39.99)
and you study their website and you get their prospectus or whatever, and all of a sudden, you think you've got this silver bullet idea that's going to make that business grow or reduce churn. That's offensive, right? Because if somebody's been running their business for years and they fall asleep every night thinking about it, and they wake up every morning thinking about it, and they get advice from their peers, and they study everything, and they try different things, and some work and some don't. And then you, Mr. Or Ms. Newly minted

JON STODDARD (49:52.282)
and we'll see you in the next one. Bye.

Kevin McArdle (50:09.87)
MBA with a search fund thinks that you're going to swoop in and solve all the problems and fix that business.

JON STODDARD (50:13.622)
and scale it 200%. That's what I was like said to one of my students, I said, well, whoa, whoa, whoa. Like before you purchase this, I dropped that notion of scaling it because they built it over 10 years, right? You can.

Kevin McArdle (50:16.371)
Yeah.

Kevin McArdle (50:26.11)
Right. And it happens. You can go in and accelerate the growth of a business and solve churn. And like, but it is not easy. And I feel like a lot of people in the M&A community, especially people new to the community, it's like, oh, well, I'll take all the things that I learned from these books and I'll apply them to this business because this lazy entrepreneur hasn't done all the things yet. And oh, yeah, exactly. Exactly. So, you know, I don't mean to be negative.

JON STODDARD (50:48.143)
Oh, he completely missed that one. You don't think he's you don't think he's trying it, right?

Kevin McArdle (50:56.29)
But I do, I just have immense respect from entrepreneurs who have been in the arena for years and years. And I just assume they've tried everything, they've done their best, they've built to something that is great. And my job as the custodian of their business is to not screw up the greatness that they've built. And then yes, let's try to improve upon it, listen to their ideas, because they surely have some ideas, listen to the team's ideas, because they surely have ideas. And let's incrementally try to build something and grow it and improve the business, which

possible, but there is rarely a silver bullet or pixie dust in business where you just snap your fingers and great things happen.

JON STODDARD (51:31.822)
Yeah, let me ask you a question about this. I had one of my students take a look at a business. It was an e-commerce business. And I know that's not what your criteria is, but they only spent $3,000 a month generating 300,000. I said, well, we kind of need to look at that because they're turning $1 into $300, which is kind of like printing money, right? So what are they doing to do that? We have, you can't just buy the business

Kevin McArdle (51:43.971)
Mm-hmm.

Kevin McArdle (51:58.281)
Mm-hmm.

JON STODDARD (52:01.922)
until you understand what they're doing because they had a million drop from the previous year. I said this could be an SEO business. It's got old domain, lots of backlinks, and now you've got all kinds of competitors coming in putting out more content, which pushes him down. And turning that around is not going to happen in the first 90 days.

Kevin McArdle (52:20.471)
Yeah.

Kevin McArdle (52:27.03)
No, I think attribution of paid advertising is still murky and you can spend a lot of money and not get the success. It's a super complicated thing and that's why I think software and tech businesses are super popular with the new M&A crowd for good reason, but it is

more complicated than buying a manufacturing business or, you know, a brick and mortar thing where you put together the widgets and you sell the thing because the internet itself is just infinitely complicated. And so that's why this stuff's hard, man. Like your student and you, like that conversation is helpful, but like you could talk about it for a week or two weeks and still not have like a super clear answer. And even if you have the answer for today,

JON STODDARD (53:22.402)
Yeah, we don't have...

Kevin McArdle (53:27.57)
with an algorithm change or somebody new starts dumping money into the same keywords or yes, it will change. It's infinitely complicated and it changes every day. So, buyer beware.

JON STODDARD (53:40.546)
Yeah.

Yeah, so where are you at with your deal flow? I mean, you've got an acquisition in you're still working on your first one or was it look like

Kevin McArdle (53:50.67)
So we haven't announced any acquisitions. The company launched just a few months ago. Deal flow has been amazing. We're looking at all the deals we can handle. And in terms of pacing, I'd be thrilled if we could do six to 10 deals a year, which is not unlike what we've done before. Know how to do it. Got the right team involved. Got the right extended team of investors and people that want to come help work on Big Band.

So yeah, that's kind of where we are today. But I was talking to a friend in a similar business and like there's no such thing as too much deal flow, right? Like I'd rather pick the one out of a hundred deals that I looked at that's the one best one than the one out of 10. And then once I'm at one out of a hundred, I'd rather get a thousand deals to look at and pick the one that is my favorite and just keep stacking the odds that way.

JON STODDARD (54:32.245)
Yeah, yeah, that's right.

JON STODDARD (54:44.302)
Yeah, I like the Warren Buffett punch card. Like if you only had 20 punch card, which is a very antiquated way to look at it. But if you only had 20 punch cards, your whole life to choose from, you better put some time and energy in to making sure that's a good decision. Kevin, thank you so much for being on my show. I really appreciate it. Yeah, I wish you the best of luck with the big one. Yeah, big band.

Kevin McArdle (54:50.275)
Yeah.

Kevin McArdle (54:55.413)
Use them wisely.

Kevin McArdle (55:02.43)
Exactly, I like that analogy too.

Kevin McArdle (55:08.471)
That was a good time, John. Thanks for having me.

JON STODDARD (55:14.79)
Why Big Band?

Kevin McArdle (55:14.95)
All right. Well, you know, we went through a lot of different potential names and Big Band sort of clicked with all the co-founders. You know, the idea of lots of people that are specialists in one instrument or one thing coming together to make a beautiful big noise. And also, you know, in a world that can feel more and more divided every day, I still believe that music unites all of us. And it doesn't matter what genre of music you like or what artists like. Everybody loves some kind of music.

music theme. And, you know, there could be no stars because of constellation, no bodies of water, no streets, because that's what most of private equity does. And so we started to narrow the field and we wanted to go opposite of what most people think of. Not required, not required at all. And if somehow we find some human that doesn't like music, that's not going to rule them out either.

JON STODDARD (55:55.112)
Hahaha!

Yeah, yeah, yeah.

Do you have to play an instrument or sing to be in a big band? No. No requirement.

JON STODDARD (56:09.002)
He goes, no, but I listened to Rush and ACDC. Is that OK? You go, yeah. Yeah, you're in.

Kevin McArdle (56:14.714)
Yeah, I don't care what you like, just as long as you're a good human being and like to do good work with other people.

JON STODDARD (56:20.802)
Oh, good deal. Thank you. That was an end on a great note there. Thanks very much. Hold on one second.