Peter Lacaillade

You had the Garnett Station guys on who we're both good friends with.

I think they have been inspirational for a next generation

of leaders, that is an area that we're spending a ton of time.

So we've been backing lower middle market firms for a long time.

Since I started in 2011, the majority of our buyout investments were in these smaller cap businesses or firms that were going after smaller cap businesses.

And when I say that, maybe just to back up for one second.

What's the thesis around why lower middle market versus mid market versus large cap?

Lower middle market, this varies depending on the business model and industry dynamics and growth, et cetera.

But say a typical small business will trade for say five to six times EBITDA on the low end.

Maybe if it's a really great business with high growth, maybe it's say five to eight times EBITDA.

Whereas when you scale that and you take that from

somewhere in the two to seven of EBITDA grows to 20 plus, then that is valued by the market somewhere between 12 to 16, 18 times.

The multiple you can sell that business at is twice as big as what you paid or

significantly ahead.

Now, why is that?

You professionalize the business.

You put in financial reporting systems.

It's hard.

Yeah, it's really hard work.

And why did it grow?