Eric Van Dam
speaker
94 appearances
1 recordings
1 series
first heard Nov 2024
last heard Nov 2024
Eric Van Dam’s voice in public audio — every appearance, attributed to the second.
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Yeah. I mean, it's going to sound really similar to Rob. I started my career out in New York. So I started off at Lehman Brothers and Barclays Capital on the investment banking side. From there, I went to a private equity firm, Vestar Capital Partners, when they were investing their fifth fund, which was a $4 billion fund.
And then rounded out my tenure at a $2.5 billion hedge fund called Kingdom Capital doing long short equities. And
similar to rob my wife and i are both from michigan originally wanted to get back to the midwest be closer to family and friends and ultimately raise our family there so back in 2013 i moved back to michigan and joined the firm that rob had co-founded court and partners and we grew the firm tremendously you know from 2013 to 2018 when cowan had acquired us and now we're making the move over to piper but it's it's interesting over that evolution
Our first residential HVAC services business was in 2015 when there was very little interest in the category. Today, we've done 16 HVAC and plumbing services deals. We've expanded that really across the whole residential services spectrum. We've done pest control, lawn care, roofing, siding, windows and doors, garage door services, and
One of the most rewarding experiences for me was supporting you on the A1 transaction. I think when me and you first met, you were a $4 million EBITDA business.
I was fortunate enough to join your advisory board and watch you really grow that business from four of EBITDA to 28 of EBITDA and seeing what you guys are doing today and how much success you are having post-transaction with the right partner has just been really rewarding. So congrats on all your success.
I think the other thing that I would just build on Rob's comments is there's real economies of scale. And what I mean by that is one plus one equals a lot more than two. So when you're doing add-on acquisitions, when you're getting more scale, you can get better purchasing contracts with your suppliers.
You can add more sophistication around your digital marketing strategies, which can help you grow leads and accelerate revenue growth.
helping companies with recruiting, training, technology, the sales process, building in consumer financing, implementing technology into those businesses, you can really help a lot of maybe smaller mom and pop companies that are really good businesses, but make them great by adding that value creation playbook and those economies of scale into those businesses as well.
Yeah, well, maybe I'll start with EBITDA. So EBITDA is a terminology that gets thrown out a lot. And what it stands for is earnings before interest, taxes, depreciation, and amortization. And the other thing that business owners should think about is, you know, what are your ad backs to get to an adjusted EBITDA number? So anything that is non-recurring in nature,
Maybe business owners are running through personal expenses that may not exist going forward. But it's really important to understand what is your EBITDA because that is the baseline for how businesses are valued at the end of the day. And so certain companies may look to be growing. Are you growing your business profitably and really kind of expanding your EBITDA and your earnings power?
Because companies are valued based on a multiple of that EBITDA. So I'd probably start there. and really encourage your listeners and your audience here to really understand their numbers and understand that EBITDA because it isn't, you know, that isn't a terminology that when you look at your income statement from your accountant, you don't see a line item that says EBITDA.
You have to calculate it and really kind of understand that. But that's the baseline that businesses are valued off of.
I think the sooner the better that you can do it because really any investor or any buyer, if it's a strategic buyer, they're going to be using accrual-based accounting. And so if you're having reviewed financial statements or audited financial statements, they're even going to be wanting to see you on accrual-based accounting.
Because ultimately, that is the best representation of where your true earnings of the business are. Because if you're prepaying expenses or you're not properly accruing for bonuses that are going to hit in December, you could artificially inflate or maybe have an earnings number that's too low at the end of the day.
So the sooner that you can get to accrual-based accounting, the better because it's the best representation for you to track your business and really kind of understand your numbers.
Yeah, absolutely. So a SIP stands for confidential information presentation. So if we were selling somebody's business, we put this document together that will ultimately go to buyers once that they've executed a confidentiality agreement. And this document really serves as the baseline for why somebody should pay a great valuation for their business.
And it goes into detail around the investment highlights, being a market leader, having sophisticated digital marketing strategies, being an employer of choice, being an acquirer of choice, kind of dominating your market. It goes into the growth strategy of the business.
So as important as your historical financials are, it's even more important, what are you going to do the next five years and how are you going to get to your goals? And then going through the business overview, the history, service offering, customers and markets, employees, management team, as well as the financial side of the business.
And at the end of the day, it's, you know, that document is probably somewhere between 50, 60, 70 pages long, if not longer, but that serves as, you know, for the investors, their first impression of the business to submit what we would refer to as a first round bid or an indication of interest to kind of get into the next round. So we may contact a hundred different buyers,
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