Rick Ruback

I agree with that. And dealing with the other part of your question, Patrick, I think when you list off the businesses that you did, and Rick and I could list more, but just for our listeners, roofing, HVAC, veterinarian services, there are a whole series of these that have attracted the interest of searchers. And when Rick and I look at them, the services are all different at a superficial level,

I agree with that. And dealing with the other part of your question, Patrick, I think when you list off the businesses that you did, and Rick and I could list more, but just for our listeners, roofing, HVAC, veterinarian services, there are a whole series of these that have attracted the interest of searchers. And when Rick and I look at them, the services are all different at a superficial level,

You're fixing your roof or you're taking care of your dog. But when you look beneath that, the reason the searchers are attracted to them is they all look alike when you're looking at the economic characteristics. They have recurring or reoccurring revenues. They have a very diverse customer base, vendor base.

You're fixing your roof or you're taking care of your dog. But when you look beneath that, the reason the searchers are attracted to them is they all look alike when you're looking at the economic characteristics. They have recurring or reoccurring revenues. They have a very diverse customer base, vendor base.

They're not economically cyclical because you have to purchase that service when something prompts that. And that's why searchers are drifting into these areas. And it turns out that amazingly, despite all these smart people looking for these opportunities, it seems like every year or two, there's a moment of epiphany and, oh my goodness, there's another area.

They're not economically cyclical because you have to purchase that service when something prompts that. And that's why searchers are drifting into these areas. And it turns out that amazingly, despite all these smart people looking for these opportunities, it seems like every year or two, there's a moment of epiphany and, oh my goodness, there's another area.

There's overhead garage doors or there's automotive repair. And a new area becomes hotly pursued like HVAC began to be five or seven years ago. I think it's these businesses that have these characteristics that are being unearthed.

There's overhead garage doors or there's automotive repair. And a new area becomes hotly pursued like HVAC began to be five or seven years ago. I think it's these businesses that have these characteristics that are being unearthed.

I would say that's extremely rare, but I would say what's not rare is if you persistently invest in this space, you will get money multiples of like 3X, 3X, 3X, 3X, 8X, 3X, 3X, 3X, 10X, 3X, 3X, 3X, 7X. You can make a living doing that. That's really okay. You might have some 1Xs mixed in there too. Rick's right. You'd have a few 1Xs mixed in there too.

I would say that's extremely rare, but I would say what's not rare is if you persistently invest in this space, you will get money multiples of like 3X, 3X, 3X, 3X, 8X, 3X, 3X, 3X, 10X, 3X, 3X, 3X, 7X. You can make a living doing that. That's really okay. You might have some 1Xs mixed in there too. Rick's right. You'd have a few 1Xs mixed in there too.

But I think that is much more representative of the space. I think any private equity firm in the world would love to hang their hat on those kind of multiple of invested capital.

But I think that is much more representative of the space. I think any private equity firm in the world would love to hang their hat on those kind of multiple of invested capital.

It's the nature of the professional investment management industry that you're basically paid... very much by the amount of money you manage. And so you enter at the bottom end because usually you can raise a small amount of money because that's a very fruitful part of the market. Those people who go in there and do a great job have more money offered to them and they raise a larger fund.

It's the nature of the professional investment management industry that you're basically paid... very much by the amount of money you manage. And so you enter at the bottom end because usually you can raise a small amount of money because that's a very fruitful part of the market. Those people who go in there and do a great job have more money offered to them and they raise a larger fund.

And to make sense of that portfolio, they buy bigger companies. And so it goes. The most talented teams just move up in assets under management. They move up in investment size and they leave that space that they were so good at making it available to new entrants in the market. It happens in no other industry, right?

And to make sense of that portfolio, they buy bigger companies. And so it goes. The most talented teams just move up in assets under management. They move up in investment size and they leave that space that they were so good at making it available to new entrants in the market. It happens in no other industry, right?

I mean, Coca-Cola executives don't wake up and say, oh, we've done a fantastic job here. Let's make garden furniture and give this up. But private equity does that all the time.

I mean, Coca-Cola executives don't wake up and say, oh, we've done a fantastic job here. Let's make garden furniture and give this up. But private equity does that all the time.

I'd say it's a job, not a company. You misjudge something about the owner, CEO, where it's a set of personal relationships or personal expertise that is really driving the company. And it's not really a business. It's too much her or him. That would be a red flag that you don't pick up in the numbers.

I'd say it's a job, not a company. You misjudge something about the owner, CEO, where it's a set of personal relationships or personal expertise that is really driving the company. And it's not really a business. It's too much her or him. That would be a red flag that you don't pick up in the numbers.