00:00:00:00 - 00:00:42:29 Unknown Welcome back to the amazing weekly podcast for search funders, acquisition, entrepreneurs, cocoa builders and more in the UK, Europe and beyond. I'm Gareth Hawkins and I am honored today to be joined by search fund royalty. It could be said that if the Gilded Age was defined by the writings of Mark Twain and the stage in the life of F Scott Fitzgerald, then the search fund era is personified in one man.

00:00:42:32 - 00:01:06:19 Unknown If I haven't built him up too strongly. Bradley Johnson, it's an absolute pleasure to have you with us. gosh, that that's quite the intro. I appreciate. I'm glad to be here. I may be my father, but I will be a lot more humble on that one by said very much. Thank you. Your humility is one of your greatest charms, but I think it's fair to say you've seen you've seen it from the inception, right?

00:01:06:22 - 00:01:33:06 Unknown Born to a family that was heavily involved in such funds. And you've the apple hasn't fallen far from the tree you former director of the International Search round center up till very recently you've done your your own search you run some investment firms, you back some searches. And now with Victorian equity, you're launching a sort of investment vehicle, specifically for searches in Europe, which is which is fabulous.

00:01:33:07 - 00:01:52:22 Unknown But get into all of that. But yeah. Am I too far off the mark? No, that's that's that sums it all up. All of that is true. And and it's been quite a journey and I've stayed in it because I love the community. It's just such a great community to be part of. And I and I hope it stays the same way for many, many years.

00:01:52:25 - 00:02:21:20 Unknown Likewise. I mean, you've seen different sorts of investor community and as have I, you know, done some time in venture and private equity and property. And I, I can't help but feel a love for this space. The collaboration, the the you know, the bias for action, the the sheer intelligence and capability, it's all very addictive. So, yeah, I think we're united in that sort of kinship over the greatness of this space.

00:02:21:23 - 00:02:50:11 Unknown So let's get into it. Family. Your your family's involvement in search funds dates back to the 1980s, when, of course, back in the UK brought it to the world for us to share Any reflections on how you've seen the model specifically evolve from those early days to where we are today in 2025? Sure. I mean, so we go back to Jamie Turner and Kirk Reeder, who were some of the very first searchers out there to acquire and grow a business and and we've since done a lot of firsts.

00:02:50:11 - 00:03:17:03 Unknown We invested with Simon Webster, the first international searcher ever. Part of me is very Spanish searcher. And so we've taken a lot of those boxes and we've seen the community go from a very small group to exploding really in a massive way. When I did my search 100 years ago in Los Angeles, I was one of maybe Chako was maybe 12 people or something along those lines.

00:03:17:03 - 00:03:36:23 Unknown I'd venture to guess there could be 12 and just neighborhoods of L.A.. I don't actually know the numbers, but there's there's an enormous amount of searchers, dozens and dozens in California and all over the country. And we've certainly seen that explode here throughout Europe. So we're seeing a lot of things flood into the into the ecosphere. And it's been good and bad.

00:03:36:23 - 00:04:00:03 Unknown There's been pros and cons on both sides of it. But I think the biggest thing has been trying to stick to the traditional model. It's something that when I was at the international search fund Center working with Simon and John Simon and Juergen, really we wanted to make sure that the traditional model was something that was really focused on at the conferences and really sort of repeated over and over because it works.

00:04:00:04 - 00:04:17:06 Unknown We have this model, it really works. It's worked for several decades now. There's no point in reinventing the wheel. And as with everything, I think you get people that come in to a space and they think they can do it better, so they try and adjust things here or there and that kind of stuff. And and so our focus was to keep it the same.

00:04:17:06 - 00:04:43:32 Unknown But, but there's been a ton of changes and talks and things like that that we've seen tweaks and tricks and everything else that we've seen through the process over the years that do. And then for better and for worse in some cases, yeah, I think most investment products, if we can call it that, are iteration, it's not evolution and you've got to stay ahead of the curve.

00:04:43:33 - 00:05:13:24 Unknown Times change. I mean, I'm for one saying, does it really take to yes now in this modern era to, you know, to find a company, get it over the line? Often it does from a relationship building perspective. But, you know, with the tools we have available to us today, that that could be more expeditious. So what what can you speak to about why it was an attractive proposition back then and that's why it still remains So now, you mentioned if it works, it just works well from an investor standpoint.

00:05:13:25 - 00:05:44:21 Unknown What what specifically works about it? Yeah, you know, well, I think it's the key is that all interests are aligned right. Everybody is aligned. The seller, the the entrepreneur, the searcher and the investors are all aligned in the same goal to be able to maximize this sort of company and grow it. And they understand sort of the there's there's at least wasn't the windows of like okay now we need to exit now and to do this it was a lot more flexibility in the ability to do to to build this company and and ultimately it was the searcher who provided it's metrics.

00:05:44:21 - 00:06:01:00 Unknown Everything else really comes out on top. So they really do run the business. They really are in charge. They really are the CEO. There's no boss. And I think that's really important and key when we're seeing a lot of these new that come in and they want to take, you know, 40 or 50% of a deal or more or they want to do the entire thing.

00:06:01:00 - 00:06:14:07 Unknown And I see this a lot where they're like, I'm going to raise, you know, $100 million. I'm going to go out and find these business and I'm at six CEOs in them. And it's like, all right, well, that's private equity kind of thing. That's not search. And that's not the point to search, because they're not really the CEO.

00:06:14:13 - 00:06:31:08 Unknown You're the boss. You can fire them whenever you want. Now, of course, we can fire CEO if we need to in a search fund acquisition. But all the investors need to come in on that. They need to agree on that. And you get a room of 12 investors in a room, you're going get 12 different opinions. Right. So it's not always that easy.

00:06:31:08 - 00:07:05:23 Unknown And you really need somebody to be doing something egregious. Of course, the last thing we really want to do is fired a CEO anyway because it's, you know, we have to replace that. It becomes a real problem. And you can see the negative issues that would happen within a company. So, yeah, I think I think that good, I was going to just drill into that a little bit because there there is a kind of an emerging noise that it seems to be kind of getting the occasional repost for want of a better phrase about incidents of firing search fund CEOs.

00:07:05:23 - 00:07:22:16 Unknown I don't if you've seen some of the apocryphal kind of stats where they really are legit stats or not. But, you know, like I say, no one wants to fire the CEO unless it's really tanking. I can't for one minute believe that there's that many that are tanking that badly that are going to require that sort of intervention.

00:07:22:16 - 00:07:45:00 Unknown But do you see it happening frequently? No, I don't see that effect. I have been in one deal personally, and I can't speak to my father just when I was younger, when he was doing things in the nineties and whatnot. I was not obviously intimately involved in those, but from the deals that I've been in, there's only been one case where we fired the CEO over all the dozens of deals that we've done and who wants to.

00:07:45:00 - 00:07:59:23 Unknown I mean, it's it's not good for the business. It's a headache for everybody. You don't you don't know who you're getting in. I mean, one of the big things that I in this goes to Victorian and what we're doing is Victorian. Is it? I always try to explain to people that the baseline of your investment is the company, right?

00:07:59:23 - 00:08:13:12 Unknown So the assumption is you're buying a company you consider a good company, right? This is not a turn around. This is not something where you you're like you've got issues of these kind of things to fix. I mean, obviously there's there's low fruit and everything else, but it's not you like the company is solid. It's got a lot of great memories that it makes.

00:08:13:12 - 00:08:30:26 Unknown So what are you really investing? You're really investing in the CEO and that's really what you're investing in. That's that's the person you really want to put your money in and that's who you're going to grow. And that's how one of the things we talk about picking out searchers is I try and figure out and utilize that two year window to decide, is this somebody I really want back as a CEO?

00:08:31:00 - 00:08:56:08 Unknown Is this a person that I really believe can run it and more cases than not, luckily, it's always somebody that I really like. And occasionally they'll be somebody it all back. And I'll say, gosh, you know, I don't really know if I'm going to back this person as a CEO. So but that's really where you're putting your putting your eggs into that basket is sort of the baseline being the company and then growing from there with the CEO.

00:08:56:11 - 00:09:22:02 Unknown Yeah. I guess how much growth is growth? You know, the IRR that is being generated in this space has been quite admirable by comparison to other asset classes. And so, you know how bad behavior is. Bad behavior is it if if you're getting a sort of 10% per annum growth, you're doing all right, Right. Yeah. You know, I think I think you're right.

00:09:22:03 - 00:09:53:20 Unknown I think that it's just one of the things that, you know, who wants to get involved in the middle of sort of firing somebody and going through the process and everything else, unless they are doing something is really egregious. Look, there's all kinds of things that happen with searchers where and I just had this conversation with another searcher about the difficulty of searching is that I know great CEOs, some of which are strategic advisors for Victorian who for no fault of their own, have had really a rough time going through the process of their business fit be COVID or, you know, Brexit that happened, that caused a lot of issues or whatever it was, things

00:09:53:20 - 00:10:18:19 Unknown along those lines. We have a we have a strategic advisor in the United States whose lead customer stole this IP and just simply said the lines here. So the whole business sort of crumbled in on itself. It's, you know, someday you should have him on the podcast. He's he's got an amazing story but but there's nothing to be done and he licked his wounds after after they sold it for parts and everything else and then decided to go back out and raise another one because we love what he did.

00:10:18:19 - 00:10:34:21 Unknown And he raised in a week because everybody loved him as the CEO. They said, of course, you grooms, so you don't want to fire these individuals. And then for the most part, you actually really end up becoming friends. And it becomes great relationships and lasts for many, many, many years and decades and everything else. So I think it's greatly exaggerated.

00:10:34:21 - 00:10:52:11 Unknown And I certainly it doesn't surprise me because the individuals who get fired are going to go around screaming about it, and particularly to any searcher who will listen. Right. But the reality is it's a very small, small fractional percentage of individuals. Yeah, probably. I think you might have hit the nail on the head there, sir. And thank you for setting the record straight.

00:10:52:11 - 00:11:18:22 Unknown And it's really helpful to have that straight from, you know, someone who's seen across the ecosystem. So turning back a little bit that you mentioned an increasing number of searches coming into the space in some sort of innovation or iteration around the model. And of course, there's new money coming here as well and new investors coming to the scene and sort of hopefully keeping step with the increase in the number of of acquisition entrepreneurs.

00:11:18:25 - 00:11:42:15 Unknown But what do you think are the primary opportunities and potentially the challenges of that kind of expansion in this ecosystem was ever meant to be so big? Could it get bigger? And if so, what? Where might it start? CREAKING Well, I mean, I personally don't believe it scales right? I don't think it's designed to scale because it's built on individual entrepreneurship.

00:11:42:20 - 00:12:02:00 Unknown It's not built on the idea of creating these massive portfolios. And, you know, if you're raising $100 million fund, how in the world, even with you, even when you build a team, are you going to give real personal support and real mentorship and guidance to every single searcher you're not? And it's a portfolio approach. And yes, there is a portfolio component to this for investors.

00:12:02:00 - 00:12:25:22 Unknown Absolutely, 100%. My father wrote a really great art of cool on it forever through essay that I think it just called a note to new investors. It talks about the portfolio approach. But I think one of the key things is these search funds are successful in my opinion, and sort of the core of what Victorian really is is the idea of mentorship and guidance and hands on experience with these individual entrepreneurs who need that.

00:12:25:22 - 00:12:47:13 Unknown I mean, the the model essentially is taking a in it. Yes, it's deviated now because you got a lot of older searchers now, but originally it was taking a newly minted MBA with very little to no experience and sticking them at the front of the train and letting them drive it, essentially. And the reason that they were able to do that and become successful is because they had this group of mentors behind them.

00:12:47:21 - 00:13:11:29 Unknown The ability against the will soar. Next, the Peter Kelly's you know the the on Simons all those individuals behind that into that entrepreneur that made it so that they could be successful and they could make errors and adjust and everything else and go from there. And so what you're losing with a lot of these individuals flooding into the space and investments is you're losing that one on one connection that I think the guides, the mentorship that these individuals need.

00:13:11:32 - 00:13:45:20 Unknown And that was the impetus for starting Victorian when Carl and I for connecting that to the international search for the center. I brought him on as a sponsor through Charles Edelman and we really got along. So we started investing together side by side. And after a year and a half or so, closer to two years maybe of doing that, we sort of had a conversation about this and I said, you know, we can keep doing what we're doing with our little dry powder and being sort of these players that are somewhere in the middle cap table, or we could actually do a fund and bring back what I really think is sort of absolute crux

00:13:45:20 - 00:14:00:21 Unknown of what made this really successful and gave us those numbers that we see in the United States, which was this mentorship and everything else. And in part a lot of that was generated from my conversations with searchers that I was having, where I was asking him, you know, what are you getting from your investors? What what do they really bring to the table besides a checkbook?

00:14:00:21 - 00:14:17:12 Unknown And and in many cases, the answer was, you know, not much or it was, yeah, you know, when I get on a phone call that great. But I have to be I have to 100% be proactive with them. I have to 100% be the one to follow up and do all the activities which, you know, look, it's definitely on the searching to be the proactive, and I don't doubt that.

00:14:17:12 - 00:14:35:00 Unknown But when I was 30 and you go back to, you know, Mark at Craig who I had a conversation with not too long on the United States, we both agreed that much, much earlier on you could call up an investor like a whoever I picked like a kid weaver out of the blue to call him up every other week.

00:14:35:00 - 00:14:51:19 Unknown If you wanted to have a conversation, he would take the call and have that conversation. Now, if you have 200 plus searchers, you're not going to be taking 200 phone calls every every week. Right. So it's it's not something that's really feasible in a way that really work. And so that's that's what you think, that there's no real way to scale this.

00:14:51:19 - 00:15:12:25 Unknown And there are other things that I think of go around it around the scale. But for the most part, that's what I really think is what is going to be lost. And it can grow like that. Yeah, like you say, inherently the owner operator model kind of clipped your wings anyway, right? Because you're immersed building this company. So it's not like you can necessarily build an empire in that time.

00:15:12:28 - 00:15:29:05 Unknown I think people have gone on to have sort of serial acquisitions and holdco's, etc. from search. But like, you know, you've got your work cut out, clearing the senior debt, getting the seller's note away, you know, and delivering growth for your investors over that kind of 5 to 7 year cycle. So, you know, that is going to keep you busy.

00:15:29:08 - 00:15:51:01 Unknown But to your point about like saturation. Yeah, I've seen kind of these institutions, you know, you think of Ambit and Istria and Relais and they've become they professionalized in the way they do their investment management and board meeting attendance and that, you know, they've had to swell the numbers in terms of the staff in the funds. But frankly, yes, there's a there's a point, right.

00:15:51:03 - 00:16:17:14 Unknown There's a there's a constructed portfolio and that reaches its peak. So, yeah, interesting point that it's not necessarily meant to scale, but of course, we're faced with this other side of the coin where there's an abundance of businesses that need to be bought and, you know, acquisition entrepreneurs are getting, you know, spun out of the sausage maker with MBAs, etc., and they've got to go somewhere.

00:16:17:14 - 00:16:40:31 Unknown So it's not where, you know, I mean, yeah, I think I think it's like I said at the beginning, I think there's a lot of searchers who are coming in the space. It probably wouldn't be searchers if there wasn't this flood of money into the space with this new with this huge amount of investors that are now in the space allowing individuals to raise.

00:16:40:31 - 00:17:00:23 Unknown I think people are willing to sort of spread their money around and say, okay, we'll take risks on, you know, more and more and more and more searchers and not the kind of driven down depth there was way back when where it actually was difficult to raise. I mean, you know, it was common to take 4 to 6 months to raise.

00:17:00:23 - 00:17:22:08 Unknown That was not an unheard time. Now, you talk to people at month four and you'd think that they'd been, you know, spending the last six years trying to raise the way, exasperated by by the process. And and now there's there's and this happened in the US and I certainly was probably guilty of it back in the day. But now there's a whole, you know bragging rights fee to raise Can they go I was able to raise, you know, X amount of time.

00:17:22:10 - 00:17:42:28 Unknown And I have to remind people all the time, constantly when I talk to searchers, there's absolutely no correlation between speed of raise and success of search. But there is an enormous correlation between quality of cat table and quality of board that comes from that cat table and success of search. And so it's far, far, far more important for searchers to build that cap table.

00:17:42:31 - 00:17:59:08 Unknown Very specifically, spend the time interview the investors that you're talking to. It's a two way interview. Yep, you're the one asking for the money. So obviously the are really the best that the one who is getting interview. But you are interviewing them to a degree and get a sense of what they're really going to bring back to the table for you and then build your capital based on that.

00:17:59:08 - 00:18:20:16 Unknown Knowing that the next 5 to 10 years these people are going to be the people you're working with, This is going to be your board and they're going to the quality of how well you do is going to be from directly from that. Yeah, I love that. I mean, to your point, the speed of raise is often a proxy for size of network or activation of manage part of your network.

00:18:20:16 - 00:18:50:10 Unknown I mean, we're seeing, you know, tech excited tech entrepreneurs raising very quickly from sometimes VCs that they return some capital to from their last exit, for example, to back them as they move in search and great you know that that's fabulous that momentum to get them out there and searching quickly fab but like you say, no correlation between that and a successful acquisition or a successful onward, you know, return distribution from the acquisition.

00:18:50:13 - 00:19:10:07 Unknown So, yeah, like, well, no, you know, I was going to add one little other touch is that it was something that Marc Egan and I were having discussion on. And I agree with this in terms of this flooding, this space of both searchers and money is doing two things. We're also seeing is deal quality is starting to go down substantially.

00:19:10:07 - 00:19:28:25 Unknown And and it used to be that when you'd see a deal and we all know that there are these metrics that the companies got a tick, you know, recurring revenue, low CapEx, you know, fragmented market, all these things that are in Dan's book and that kind of stuff, you know, they would take five or six of those boxes or, you know, four or five or whatnot of them.

00:19:28:26 - 00:19:48:14 Unknown And now we're seeing one or two and I'm seeing deals that wouldn't have stood a chance back then getting done. And again, I think it's the fact that people are willing to say, well, I can put that in my portfolio. And if it does well, it's more of that sort of blockbuster mindset of, look, I only need three of ten to do really well and then I've covered everything right kind of stuff.

00:19:48:18 - 00:20:12:07 Unknown goodness. The parallel. Yeah, exactly. So I don't know that first thing because I don't have luckily we we're not running into a ton of like bad deals on that level. But I do see a lot of deals, particularly the gap deals that come along where people are trying to fill a gap where I'm like, this is, you know, it's heavy manufacturing, there's no recurring revenue.

00:20:12:07 - 00:20:37:03 Unknown It's that it added all these kind of things that just don't fit the model and and they're getting those deals done. So I think that that's another element that goes into it. I think competition has got a big part to play in that. I think, you know, here we are, 2025 lower mid-market private equity is coming further down the ladder, further down the value chain, more searches, more capital needing to be allocated.

00:20:37:05 - 00:21:01:07 Unknown Yeah, the quality of deal, I think the sort of buy box gets constrained a little bit, but let's hope that there's, you know, a way around that. For want of a better phrase. Could we speak a bit to your search selection? What do you think makes it good? So what kind of traits and qualities do you look for?

00:21:01:09 - 00:21:27:17 Unknown Maybe not just in the search, but also in the deal? While we're on that topic, I get asked it a lot. Well, national search consider what what can I do to make myself stand out? What can I do to make this different? And without without being too negative on it? And there's still so some worse some other investors.

00:21:27:23 - 00:21:43:33 Unknown There is a much of it is a dart throw to pick out searchers because you really spend it's kind of average like, you know, like 3 hours maybe talking. Then over the course of interviews, maybe you spend a total of five or whatever. I hate some of the big funds have a longer process that they run through in that case.

00:21:43:33 - 00:22:00:31 Unknown But at the end of the day, you're you're sort of judging somebody pretty narrowly in terms of whether or not you think they can be good. And there have been individuals where I sort of said, well, I like him and I'm not 100% sure I'm going to take him on. They've turned out to be amazing. And that other ones that that, you know, I thought were going to be real home runs and they were not.

00:22:00:33 - 00:22:24:14 Unknown So there's no way of knowing two things, whether somebody's going to be a good searcher. And the only way you're going to know if they give you a good SEO spend in real time with them is through the search process and really understanding whether they're going to be a good SEO. And so in terms of quality that I look for, I mean, I like to see things like, you know, human capital management, you know, people management skills, essentially, which is something that I wholeheartedly believe.

00:22:24:17 - 00:22:45:09 Unknown Whether or not that is it is innate to people. I think you can learn some things about it. Some people just go with people, some people just aren't. And I don't think there's authentically yeah exactly that it you you could sound like you just you know regurgitating theory or you can actually live it and breathe it and it comes from the heart.

00:22:45:09 - 00:23:11:21 Unknown Right. And I think you can tell that after precisely, precisely that's 100%. And, and so I like to see a lot of that. I really like to try and find the individuals that have the tenacity and drive to be able to go to the go. And they really want to do search for the right motivations. I mean, that's a big one and that one's one that I really try to suss out that they didn't just see some numbers at some meeting of the board and said, you know, the average search fund, the CEO leads with 5 to $8 million or whatever the numbers are.

00:23:11:21 - 00:23:32:24 Unknown Now, it's something ridiculous and it's completely wrong. I just want to get that out there to everybody. Those numbers are absolutely wrong and incorrect. And yes, if you if you throw in all the top performers and everything else and all that kind of stuff in pilot on top, sure, you can get to those numbers. But I know plenty of searchers who did excellent jobs, who were great CEOs that did not walk away with those kind of numbers.

00:23:32:26 - 00:23:52:17 Unknown Yeah. So certainly whenever I model it, it doesn't look like that's the level of return for the manager for the right operator. Yeah, exactly. And so I really want to see that they are doing these for the right motivations. And, you know, you want to find people who are willing to stick it out like, like the mark part of Macy's who took three and a half years to find his company.

00:23:52:20 - 00:24:27:22 Unknown The scheme on sorry, who's been going out with a really wonderful business in the UK but was hurt by COVID and then Brexit, a whole bunch of other things and what not is strategic advisor of ours is an excellent CEO. So you really want to find individuals like that. And look, if anybody had the secret sauce, if anybody specifically makes a real is or handicap, is it whoever it was had the secret sauce, they could sell it to all of us and we buy it up, you know, tomorrow and God knows what inflated prices they could sell for that because no one has been able to solve the riddle of how to pick a searcher.

00:24:27:22 - 00:24:54:11 Unknown Right. And and the search process in and of itself, fundamentally, I always believe and I still believe this is 70% luck, 30% opportunity means preparation, you know, and there's just so much blind luck in to be in the right place at the right time talking to the right seller and the right mindset with the right company, Right. I mean, stars sort of do align, you know, and a lot of people do buy companies and you think, maybe it is easier.

00:24:54:11 - 00:25:13:18 Unknown Well, the problem is that a lot of people buy the wrong companies and so they buy a company that either is not going to do great returns or at the end of the day, they bought themselves a job. And, you know, it's sort of rough from the investor point of view to look at it because you're looking at it as a portfolio play and it's like, well, you know, that's that's just what am I many as well for that one individual searcher.

00:25:13:18 - 00:25:33:22 Unknown That's their career. They're going to spend the better part of their years doing it. So it's why it's so important to make sure that you get the right business at all costs and you avoid rose colored glasses. When you're looking at deals. Wise words, very wise words. Thank you very much. And that spoken to somebody that, you know, ran a search and has looked at a lot of businesses over the years.

00:25:33:22 - 00:25:53:10 Unknown Right. Yeah. So I imagine a number of our listeners will be familiar with your journey from listening to a founder of foundations. You know, when you were appearing with Tom, just to your earlier point, Yeah, it's impossible not to love. CO He's, he's a fantastic human being and I can totally see where you guys are or are pursuing victory equity together.

00:25:53:10 - 00:26:26:19 Unknown So that's obviously come to the fore, come to come to pass since you were on Kelly's podcast a few months ago. So we bring everything up to date what's, what's Victoria Equity and you know you're effectively talking about going back to the root of search funds. With that. I'd love to get into it. Yeah. So, you know, as I mentioned before, Karl and I, we saw this and we said we really there's an opportunity here, maybe not even just an opportunity, but it's something that we wanted to give back in terms of community to be able to go back to the idea of saying, you know, what made search, in our opinion, successful.

00:26:26:19 - 00:26:49:27 Unknown Was that true mentorship and guidance and support that that I think is now sort of shifting away with all the new investors and the tons of money flooding in for for searchers. And so we discussed it. And so we put together a Victorian with the idea of saying this is what we're going to do, we're going to attach to this is a smaller funding by design so that we can really support these individuals.

00:26:49:27 - 00:27:07:09 Unknown And, you know, if our theory proves correct, hopefully our returns reflect that as well for our both our LP's and our searchers. And so, you know, one of the things that we're trying to do is build out a back end for searchers to be able to support them, as well as being readily available for searchers, you know, to be able to sit around and have conversations.

00:27:07:14 - 00:27:26:03 Unknown Having gone through the search process myself and having not acquired, I like to think that that gives me a little street cred in terms of with searchers to say, look, I've been in those trenches and I actually understand what it's like to go and search day in and day out and really grind away at it, which is can be really brutal, especially if you're doing it as a solo searcher.

00:27:26:03 - 00:27:43:16 Unknown I mean, it's a it was a tough thing to do. And so I bring a lot of sort of that history experience to the table and understand different ways to get around certain things. And and processes have made things better for me, as well as knowing like what I would have liked back then that I didn't have that we can bring to the table.

00:27:43:16 - 00:28:01:19 Unknown So that's really what we're trying to do with Victoria, is to sort of bring a lot of that sort of older, sort of, well, the sort of founding principles, I guess you'd say, or whatnot into Victorian that and I think some funds definitely have it. Don't get me wrong, there are definitely some great funds out there and I don't want to knock the funds.

00:28:01:20 - 00:28:25:02 Unknown There's some really awesome funds that really do a lot to support their search and do a good job. I just think that you've got, with all the new money flooding in individuals who don't really understand search and are only three years or five years or two years into the process of learning about search and everything else have not really dove in and understand that really the whole point of this is to back these searches and to really not just be a blank check for.

00:28:25:04 - 00:28:52:01 Unknown Yeah, absolutely. That's not money. That's active investor, active able piece. That was one of the roots of search and hopefully you can bring it back Great Again. God don't you have to edit that one out again? I can't be the American with that on there. No. Well, thankfully it was the Englishman saying it. So that's fine. Sorry.

00:28:52:01 - 00:29:20:22 Unknown Round. So what you mentioned there about stuff that was missing previously that you wish you had when you were searching it. Could you speak a bit more about that? Yeah, well, I mean, things that were missing and I think there was a lot of it was sort of on my shoulders. One of the things that I want to do with Victorian is to offer that that sort of sounding board to searchers.

00:29:20:22 - 00:29:38:13 Unknown And it wasn't so much missing. I certainly had some great investors that I talked to regularly and had it, but it was certainly something that I probably didn't utilize enough, which was to be able to go and talk with them. So one of the things that that I think searchers find is there's an intimidation factor, right? You have yourself and then you have your investors.

00:29:38:13 - 00:29:56:23 Unknown And while they're not your bosses, they sort of are you know, they're giving you money. And some of them have these just resumes that are just absolutely, you know, breathtaking, like, you know, Will Thorndyke anything. And it's guy's taxes certified genius if he's not. I think so. But, you know, he was the kind of guy that do I want to call up and just sort of spitball an idea at a company?

00:29:56:23 - 00:30:12:15 Unknown Probably not, because I'm too nervous. What if he's like, God, I just put money into this kid? He's looking at that. This is I made a huge mistake here. So you you wanted somebody that you could really have sort of a sort of a good conversation with easily. And it's not true. Where would be willing to do that.

00:30:12:15 - 00:30:30:14 Unknown But it was the intimidation factor from my end that was sort of the worry of going there. So for Victorian, what we want to offer to our searchers is the ability to say, Hey, give us a call, you know, give me a call, let's let's chat about anything you want. You want to knock around an idea, You want to discuss the company before you take it out to the wider investor base.

00:30:30:17 - 00:30:47:33 Unknown It's something that I've done with countless searchers at this point, something I've done with lots of them to look over deals and to discuss, you know, how to put it together or what the problems is or, you know, well, will people actually look at this and and think I'm crazy and, you know, was discussing things before because of the wider, wider base.

00:30:48:02 - 00:31:04:28 Unknown The other thing I guess I could point to is this sort of ramp up time. It's something that that I would have liked to have known about it. Everybody, I think no matter what goes into search, thinking it's easier than it is, even if they know it's hard and they fundamentally like us, it's going to be hard. It's harder than you can realize, I think.

00:31:04:28 - 00:31:30:17 Unknown And so it certainly was for me. And, you know, I didn't realize how difficult it was going to be simply just sourcing the right companies and finding that sort of needle in the haystack. And so there's a ramp up period from when you start out searching. And my recommendation searchers is always start like even when you before you're raising or right when you start raising, start searching, get out there, start pounding the pavement, get a lot of those sort of bugs out of the system and sort of figure it out.

00:31:30:17 - 00:31:53:07 Unknown Don't wait until you raise a start. Okay. Day one, we'll do you know, is the first day. Now I'm going to build my CRM and I'm going to build my outreach machine and bring on Intern Start it sooner than later. And and certainly I would have liked to ramp up, ramped up faster, I think, from my search, which is now can anybody, you know, anywhere from 3 to 6 month period, six months out of two years is significantly on time.

00:31:53:12 - 00:32:27:03 Unknown So it's really refreshing to hear you saying that because we're still in a contingent of stats and investors that believe you should focus on raising your search first, which I mean, the differentiator surely is going to be your ability to find good deals, right? If we if we are reaching a point where we've got more searches in the sense then than there is money for them, I'm hearing reports that the traditional investors are taking a bit more time to make that decision because they've got more options and that's not so bad.

00:32:27:06 - 00:32:57:03 Unknown But if you're going to them with a deal or some real candidates that you can have a proper grown up conversation about, then that's a different type of interview than just, Hey, can I have your money for two years? What I look I mean, yeah. So that's why why we built this country is to kind of galvanize that process and expedite that process and make it kind of feasible to put your search almost on autopilot to some extent, and then focus your efforts on having those seller conversations carved out from time that you'll be having those investor conversations.

00:32:57:03 - 00:33:28:01 Unknown And I think there's mutual kind of exponent to that where, you know, one will drive the other and vice versa. So I'm open to your earlier point about the giving the permission to kind of have these conversations and to be a supportive investor, something I saw working really well in the in the venture space is office hours. And I don't know anybody that's really doing office hours where people can collectively learn from each other and from other people's questions to kind of an expert.

00:33:28:03 - 00:33:52:00 Unknown They tend to be these kind of closed shop 1 to 1 conversations, which are neither time, time efficient nor exponentially beneficial for the community because everybody's asking the same question and no one's learning other people's answers, which kind of seems to be inefficient. So, you know, have you contemplated you and contemplated office hours? Yeah. I mean, you're talking for community of researchers.

00:33:52:02 - 00:34:12:01 Unknown You tell me. Well, so for our searchers, we certainly will have something. And I'm actually a wayfinder in Australia. I do a great thing where I think once a month they give their searchers and their CEOs on calls together to just sort of talk and spitball about things are to discuss problems or to do these kind of whatever it was.

00:34:12:01 - 00:34:31:24 Unknown And back when I was a searcher, we had like a happy hour meeting once a month that we'd all get together and cry and I'd be here about the deals that got away. And we certainly will do the same kind of concept here with Victoria. We'll certainly have some of that back end elements to have everybody together to learn from one another or to be able to discuss anything.

00:34:31:24 - 00:34:48:23 Unknown One of the things I like to remind searchers, no matter who you've got in your cap table or whatnot, and it's grown a lot, but for the most part, you're not competing against each other. You know, you're going back to the same wells for money. So I don't want to find out that somebody bidding my deal up against some other searchers.

00:34:48:23 - 00:35:02:29 Unknown But in the deal up, Right, it doesn't make any sense. And so one of the things was it at least when with my cohort, we were all sort of, you know, brothers in arms, if you will, You know, people will kick each other deal sometimes. Like I don't really this is not really for me. It's not my wheelhouse.

00:35:02:29 - 00:35:22:31 Unknown Right. I don't you know, but you could take a look at it, you know, or I've got a great intern, you know, you should use this intern. And they work together and it really sort of created created a great community. I see a lot of researchers now sort of talk about things in a much more competitive tone. And I think, you know, you're not competing and the odds of you guys even ending up on the same deal are so infinitesimal that you guys are really small.

00:35:23:00 - 00:35:48:13 Unknown Yeah. So I don't see that often at all. And most of time you're running up against trade or you're running up against private equity. Very rarely against another searcher. Exactly, 100%. So to answer your question, yes, I think we would. And I know that we've talked about some other elements of doing some other things for the community that would be I don't know if they'd be sort of office hours kind of thing or not or how we put it together.

00:35:48:13 - 00:36:07:07 Unknown But certainly I would love to do stuff for the community. We will have like a back kid area for our Victorian searchers, which we're building out now, which will be a resources and and different support elements for them that will include outside that. So yeah, I'm excited about a lot of that. That's, that's going to be a game changer Bradley because I mean what a differentiator I'm afraid.

00:36:07:12 - 00:36:31:14 Unknown Wow. Hopefully. Right. Okay. Thanks. Good. No doubt you set a high bar. So thesis do you do you want. I don't want to dwell on any kind of metrics or anything like that, but do you have anything you want to share at a high level about thesis, maybe in terms of verticals or geographies or any particular impact missions that Victorians own?

00:36:31:17 - 00:36:51:32 Unknown Well, I mean, we don't have anything that I would say that, you know, where this sector that such a we're certainly, you know, agnostic in terms of we look at, you know, anything that the search has been the table. What I like to do is, is again, because we want to work sort of more granular with them is to almost already know a lot of the deals before they've even been announced.

00:36:52:00 - 00:37:12:02 Unknown Did the broader cap table has sort of good sense of what's come to the table? I feel like the more that I can be involved, hopefully bringing more value the searchers more value to the deal in the deal than reflect on that. And we'll see the see the success reflected as as they move forward. So we don't have anything specific that we're going to say, you know, this industry or that.

00:37:12:05 - 00:37:29:01 Unknown And in terms of searchers, I'm not a believer that a searcher needs to tick certain boxes. I know that some people say if they don't have an MBA or they don't have this or they don't have a financial background, I'm not going to invest with them. You know, they're they're investors. I know only invest in graduates of certain universities and things like that.

00:37:29:01 - 00:37:49:09 Unknown I think that's just a way of weeding the field, to be quite honest. So they just don't have to field, you know, endless amount of searchers, you know. Yeah, I, I think you may have been robbed from Ambit. I was speaking at one of the conferences recently and he pointed out, which is very true. You know, they're seen as six, six searchers a week sometimes or when it used to be six a month.

00:37:49:09 - 00:38:04:11 Unknown And back when my career, it might have been two or three a month kind of that an investor would see. And then a lot of times it was in person. You had to go in person. So that was part of the real thing. There was not a lot of the zoom and everything else where people were willing to give you sort of search.

00:38:04:14 - 00:38:28:14 Unknown So you were crisscrossing the United States, going to Boston, in New York, in Denver, in Los Angeles and San Francisco to meet up with all these individuals, you know, to be able to try and raise your search capital. They'll be a hell of a lot of emails if Rob was to be going in meeting all of his prospecting searches because he's leading the four in all these emerging markets like, you know, India and Singapore and, you know, South Africa and places like that.

00:38:28:14 - 00:39:02:16 Unknown And in a way, he's almost part of the kind of crusade or mission to bring it to those searches. And so, yeah, I mean, no wonder he's seeing that many searchers because, you know, he's at the forefront of opening up these new territory. So great. Okay. So no specific limitations, which is great to hear. I just want to analogize slightly or adjacent sea to some of the activities that you spearheaded when you were at the International Central Center and obviously throughout your career.

00:39:02:16 - 00:39:35:25 Unknown But like the European CEO Summit Women in Search Forum, you have been kind of blazing trails to try and make search accessible to a wider audience, one of Africa's wider participation. So if does that in some way play into Victorian today? Yeah, I mean, you know, I certainly am proud and thrilled with those. They turn out to be great events and and you know I would love to have Victorian continue to sponsor the community and to be active about it.

00:39:35:28 - 00:40:00:08 Unknown The Women's Search Network, Sarah Rosenthal is a wonderful network. I'd like to support that. I think we'll hopefully be doing still work with them that both the CEO Summer and the Investor Summit with the SCA, I think have proved to be wildly successful for both investors and CEOs. And we'd love to, you know, you know that women and and coral continue to sponsor and back those kind of events.

00:40:00:11 - 00:40:18:02 Unknown I can't tell you what the new things will be down the pipe, but I certainly hope and look forward to putting together some of some more events for the community as well. I think it would be great to have I think it'd be really beneficial to have something along the lines that is a little bit more of the realism of search for potential searchers.

00:40:18:02 - 00:40:41:07 Unknown It talks a little bit more about the nitty gritty and, you know, not necessarily all the positive spin or anything else, but really talks about sort of the pitfalls in the end and the trials and tribulations individuals go through and what it looks like when you don't succeed on either your search fund or whether you don't succeed in terms of hitting the metrics with your company or having a company that completely falls apart and no funding, no fault of your own.

00:40:41:10 - 00:40:58:05 Unknown So I think it'd be good to have a lot more of that. And we we may dive into that a little bit more, so. yeah, please do. I think you can't do enough of that or too much of that rather. I mean, you know, there is this kind of rose tinted glasses possibility, particularly for folks coming out of business school where the reality hasn't yet set in.

00:40:58:11 - 00:41:25:11 Unknown We ran a symposium last week and we overindex on the warts and all kind of stories about, you know, what's it like in the trenches, post deal reality, you know, because it is an old land of milk and honey, you know, that there's there's some dragons that you've got to fight along the way. So to that end, I mean, if you've got one pearl piece of advice for us, sort of an emerging searcher embarking on a journey today, you know what?

00:41:25:11 - 00:41:44:18 Unknown What would you want to impart so that they could avoid the landmines that maybe we've all stepped on and. Well, one piece of advice. You know, one of the key things I think, in something that I waste time I wasted time when I did my search and I know a lot of other searchers is is really know your owner and really know why they're selling it.

00:41:44:18 - 00:42:08:26 Unknown Make sure that they're real sellers have seen this happen time and time again and have it myself where the seller really wasn't a real seller or they really weren't ever going to let go of that business, or they really didn't understand like what they were what they were offering. You know, my one of my thoughts, one of the one, the big one, I had several deals that failed, but the big one that failed, actually, the seller came back at the 24th hour and said, I don't remember.

00:42:08:26 - 00:42:27:24 Unknown That is too long ago. I don't remember the specific numbers. I'm sort of making it up. But he said, you know, I want 3 million more dollars on this deal or whatever. It was great. Long story short, it was very suspiciously close to the amount of money he had to pay in taxes in the US. And so he had done and this is pure theory and conjecture.

00:42:27:24 - 00:42:47:31 Unknown And if he sees this, he'll probably say it's B.S., although I doubt you will, but you never know they'll get sued. I know. Yeah. I think he'd spent the money in his head and realized that he had to pay this huge tax bill and also covered the tax bill and sort of went back in and won this money.

00:42:48:00 - 00:43:09:22 Unknown I don't know if that's the case, but either way, the whole point is that he he really had not thought through the whole process. And in the 25th hour, all of a sudden it came flooding to him and he wanted to change the deal. And I've seen that same similar thing happen time and time again. I had an associate in my cohort as well who had a deal that blew up with him in the last minute and the sun came out of nowhere and said, Actually, dad, I want this company.

00:43:09:22 - 00:43:26:27 Unknown And the whole time he knew about the sun, it was floating around in the ether. He really didn't do anything. He had no real direction. And and then the searcher knew this. And I think unfortunately for him, it was only seeing things where the sun was like, my God, you know, that's my gravy. It's gravy. Train, reins, leaves.

00:43:26:27 - 00:43:52:16 Unknown I'm not going to get anything. And so all of a sudden he wanted back on board. So I think it's he's got to find these little tweaks and I intel searches all the time to ask your seller over and over and over again, why are they selling and make sure that the answer is consistent. And then the second thing is, make sure they do it, even though I've told this about my deal where they already spent the money, have them spend the money in their head, and then spend the correct amount of money in their head.

00:43:52:24 - 00:44:13:05 Unknown But I didn't spend the money in their head and know what they want to go do. You know, like if they ever won a sale, the world would go on some sort of crazy trip or whatever and get excited about that so that the idea of losing their baby, you know, that they're going to have to sell on is not quite as painful as it could be, where they're like, I'm going to sit at home all the time and put on my thumbs now and in order to be like that.

00:44:13:05 - 00:44:38:16 Unknown So I think that's the top pieces. A neat trick to mitigate for that. Here's a hack for you. Introduce it to a wealth manager. Okay. No, seriously. I mean be plenty going them want to meet them. But while that's well they're emerging and becoming this like, you know, this liquidity event is happening this world this wealth event is happening introduce you to a wealth manager and they will help them imagine their life post deal setting on your behalf.

00:44:38:18 - 00:45:03:28 Unknown Yeah, absolutely agree. That's a good one, right? Cool. And you've also mentioned like previously in advice, like kill your deals, kill your deals early and you're qualifying it to your point there about the sellers mindset, are they intellectually, emotionally committed to be parting with their baby? Like, you have to cut off that too many times, I mean, ad infinitum, but hitting the deals piece, I'm really curious about that.

00:45:03:30 - 00:45:30:13 Unknown I advocate for the same, but I'm just interested if our reasoning correlates. Yeah, so we have on the back end of Victorian a quick kill list that we give searchers where they can go through and they can see reasons to sort of eliminate deals and eliminate sellers pretty quickly. And you really to sort of identify what is it about, you know, either a company or a seller or anything else that that would make it sort of a quick kill.

00:45:30:13 - 00:45:51:02 Unknown And and there's lot of them. There's a whole bunch of them. I you know, the number one thing I always say is it's got to check some of those boxes. Right. And if you go TCR did a brilliant presentations is proprietary to them on the top performing search fund areas. And and one of the key things was they all had very similar characteristics across the board.

00:45:51:02 - 00:46:09:11 Unknown And so I always say that you want to see things with recurring revenue or meaningful repeat, right? And that will give you the ability you know, I'm going to use Mark Burnham's words here, but I probably got butchered. So forgive me, Mark, but, you know, he had 70% revenue that was coming in that he he could know was going to arrive there.

00:46:09:11 - 00:46:34:03 Unknown So it allowed him to focus more on areas that he really had to sort of change and adjust as he was going forward. And and so you really want to see that sort of revenue coming in that you can rely on. And then you want to take a lot of those other little boxes that go into it, whether that be fragmented market or local low, low CapEx or, you know, I like to see simple businesses, I like to say simple, boring businesses.

00:46:34:03 - 00:47:04:18 Unknown I like to see those kind of things. You know, that's usually that means that you've got something you can really sort of grow, you really focus on and get your hands dirty. The learning curve is not too steep for for the new CEO. So along those lines, so some of the things that I think you'll want to see in the businesses, yeah, I think it's important that searchers realize they've got the permission to to kill deals early like yeah, I think often people are emotionally attached like, I found one, I must make this work.

00:47:04:26 - 00:47:25:23 Unknown But well, no, because there's about 75,000 more where that came from far more than there are people that want to buy them. So, you know, the the you have the whip hand ultimately as the buyer to decide whether this is really one you want to devote your your days and your investors funds to. So I love that list of like, does it fail at these points?

00:47:25:23 - 00:47:44:09 Unknown If so, if in doubt, throw it out. Exactly. And and, you know, one of the things that is really easy for search is to get deal fever and you can and I look I can't fault it because I've been there done it I know exactly how it feels and it's you look at it sometimes, especially if you're 12 months, 14 months in your search.

00:47:44:09 - 00:47:56:15 Unknown You say, is this the last one? Is this the last one? I'm going to have a line. Is this last? This is going to you know, how much longer I got and run away, you know, and you start sweating bullets and you start sort of really feeling it and it starts to become easier and easier to overlook things in the deal.

00:47:56:15 - 00:48:10:08 Unknown And you have to remember that your investors are going to do their diligence, but they're not going to do your work for you. They're going to believe you did your diligence. And so if you haven't done your full diligence, it is possible that things are going to come through and they're not going to get picked in the QE.

00:48:10:11 - 00:48:30:19 Unknown I mean, it's you know, look at your QE when you get it. There's the whole huge two, three pages, the front that says we're not liable for anything. And this all wrong like this is your show, like we owe you. And so it really is a search. And I always have to sort of impress it on them like, you know, do your diligence, find reasons, you know, since they find reasons to kill the deal.

00:48:30:19 - 00:48:49:00 Unknown But make sure that you've checked those boxes in that they you're not leaving anything in there. You're not hedging something, saying, well, you know, this could be if I do this and that, it just this, maybe it'll find the good ones. Because what makes the difference between a okay search for an acquisition or a bad one and a great one is them acquiring the right business.

00:48:49:00 - 00:49:10:10 Unknown It's really down to getting that right business. Yeah. I mean, just interested in the queue of a piece, you know, the whole massive disclaimer also that typically you're signing a client care letter with a lot of these professional service providers, which pretty completely absolves them of responsibility for, you know, the outcome of their advice. So, you know, it is entirely on you, my brother.

00:49:10:13 - 00:49:44:08 Unknown And that's the process part of the journey, right? Yes. Remy, I've really enjoyed this conversation. It's been fabulous and I think the listeners will find this super insightful. Is there any particular takeaway that you'd like them to have in terms of, you know, engaging with Victorian on how, how to contact you, etc.? Sure. Well, I mean, so for searchers, if you're interested in in connecting with us, you can always send an email to Searcher at Victorian Equity Icon and schedule a meeting with myself there.

00:49:44:09 - 00:50:00:14 Unknown We can have a conversation go from from there we are. Our focus is European and North America. I certainly am always happy to talk to anybody in the community. And even if you just want to discuss advice, I've I've done that for many searchers where, you know, I'm upfront say, look, you're not in our wheelhouse, but happy to talk.

00:50:00:14 - 00:50:20:28 Unknown And we get on a call and we have a great conversation. And if you're an investor and you're interested in talking about the call, you can always send an email directly to me. Just Bramley at Victorian Equity dot com and we can connect on that one. And obviously you can visit the website if you want Victorian Equity Dotcom to speak a little bit more about our thesis and whatnot.

00:50:20:31 - 00:50:43:23 Unknown Yep. And the debt is great and I think you're making some real headway with it, with your commits from El Pais. So only a matter of time now before you're allocating. So I'm really excited for the kind of subject you're going to back in, the kind of funds you going to bring to this space. So and of course, all the massive support that you're going to bring to this space through the sort of return to the Roots model here, I'm loving it.

00:50:43:23 - 00:51:09:14 Unknown Very excited. So our listeners and viewers are excited, too, and will join me in saying a big thank you for your your candor and your ongoing undying support of the space. So thank you again, Brownlee, so much, folks. We'll wrap it there and we'll tune in next time for another interview. Compromise will be as insightful as this one, But, you know, bear with us.

00:51:09:17 - 00:51:25:08 Unknown But to keep on crunching by for now.