Graham Weaver
speaker
351 appearances
1 recordings
1 series
first heard May 2025
last heard May 2025
Graham Weaver’s voice in public audio — every appearance, attributed to the second.
Trend
recordings per month · last 12 monthsNo recordings in the last 12 months.Older appearances are listed below; set an alert to hear about the next one.
Appearances
The way I like to think about it is I like to think about the world in like endogenous, winnable games, and then ones that might be a little more exogenous and or unwinnable or hard to win. And so I don't wanna just go full on brute force in a non-winnable game.
So for example, in private equity today, it wasn't like this in 1984, but today if you have a big business, you're gonna hire an investment bank, you get the game, you're gonna show it to 55 private equity funds. For me to just go brute force in that red ocean as there's a great book called Blue Ocean Strategy, so they would call that a red ocean. For me to go brute force in that
I think, isn't a good exercise. If I have 100 units of energy, I want to use 25 of those units to go try to find a winnable game to play. And then the other 75 would be like the brute force endogenous path.
So maybe using that, I like that framework. If we think about today's private equity landscape, where there are many, many funds that command huge sums of assets, my understanding, it's not the style of investing I'm in, but My understanding is if there's a good high quality asset, it's an auction process in many cases. It's a bidding war.
And there are lots of great, highly professional, super talented investors and firms that can buy private business. Maybe describe the state of the market and what the characteristics might be of like winnable games within that broader market.
I mean, I think there's 5,500 private equity funds at any given great high quality business like you're describing, particularly like take just the extreme high quality business, ERP subscription software business. I mean, it doesn't get any higher quality than that. There's a lot of people that can buy that.
There's a lot of people that can see what that's worth and do some calculation and come up with a value for that. And by the way, it doesn't necessarily go to the smartest person. it goes to the highest bidder. So it's a little bit different where that doesn't mean that they were the smartest person necessarily. It's just a really, really tough game.
And conversely, the winnable game that we're engaged in, and we learned this over the first 10 years of Alpine when we were really hands-on with these businesses, is we're going and finding a $20 million revenue plumbing company in Ball, Louisiana, where the owner's retiring and they need a new management team. There's just not a lot of people that want to sign up for that game.
It's a lot of work. I mean, we're putting in a new CEO in a small company. We're putting in new IT systems. We have a whole new playbook we're putting in. Godspeed if you want to play that game, particularly at scale. That's an endogenous, winnable game where it's just a ton of work. But then the investment decision ends up being pretty easy.
When someone brings a deal to you and they say, okay, here's a business you're paying eight times EBITDA. With the playbook that you have, you can blend that down to five times EBITDA. You can borrow at five and a half and your platform's going to trade at 18. The investment committee decision there is not the hard part. The hard part is getting the CEO in place and the IT systems and all that.
So maybe walk us through the earliest days right before and right after the start of Alpine. What was going on? What was your goal in your journal? Give us this window into that period of time.
I was at Wall Street, and then I got into Stanford Business School. I deferred for a year. I eventually went. I show up, and once again, I had that feeling of being unshackled again where someone wasn't telling me where to be when when I was at business school. So I decided I was going to start buying companies out of my dorm room. That was really the beginning.
And my dad, he always wanted to name his company something that started with an A because of the yellow pages and start with an A and come before the word American. And so Alpine was a great, I thought a great name. And I lived on Alpine Road. Funny story about that. One time I sent a letter to a banker and I had my address and he said, oh, wow, they named the street after you.
Meanwhile, it's like one guy, you know, with no money. Anyway, so we didn't have class on Wednesdays at Stanford. So I'd take a red-eye flight Tuesday night and then go visit these little manufacturing businesses in the Midwest and then go to bank meetings and try to get them financed and then fly back and then try to take my exams and stuff.
So that was kind of how I spent the two years at Stanford. Keep the story going. So you come out of that. Did you buy anyone while you were there? Yeah, I bought a total of three companies. I was 25. So I had no idea what I was doing. And that's not false humility. Where did you get the money to buy them? So these were like half a million of EBITDA businesses that I bought for 2 million.
The seller would finance 1 million. They had some equipment. So I get the equity, literally get the equity down to like 100 grand, which I also didn't have. So part of it was I had some people on Wall Street who put in 10,000 here, 5,000 there. And then... At this time, Capital One was just starting.
Get an envelope in your mailbox and say, write yourself a check for $25,000 and pay no interest for two years. And I did that. I was like, okay, great. That was where I contributed my equity to those deals. And then later on, thank God, you get another one that said, roll your balance and pay no interest for another 12 months. So I was playing a very high wire act, which I do not recommend.
Did those three businesses work?
No, they didn't. Those three collectively ended up at a one X. I had one deal I did right after business school in the same industry that worked out really well and thankfully helped fund a bunch of the early part of Alpine. But the first three were, I did literally everything wrong.
So what did you most learn from those three and then the one that worked right after?
Showing 81–100 of 351 · page 5 of 18
← Previous
Next →