Rob Parker

The other thing they've done is these really great ERP systems that are dedicated to the home services industry allow companies that have traditionally been very localized, very local, advertised on the radio and in the yellow pages, support the local little league.

It allows these kinds of businesses, when you have a good ERP system that's tracking good data and keeping good metrics, then you can scale beyond just your own local market

It allows these kinds of businesses, when you have a good ERP system that's tracking good data and keeping good metrics, then you can scale beyond just your own local market

And that's how, that's really been, as Eric said, it has really been revolutionary in terms of letting private equity come in and say, okay, I can take a business with great sort of local economics and I can scale it and I can manage that business now because of these great ERP systems.

And that's how, that's really been, as Eric said, it has really been revolutionary in terms of letting private equity come in and say, okay, I can take a business with great sort of local economics and I can scale it and I can manage that business now because of these great ERP systems.

Yeah, so, well, leverage can be a very powerful tool, both in a good way and in a negative way, possibly, too. And if you use a simple example, so let's say your company's bought for $100. Those $100 all go into your pocket, every one of them. Well, let's say the PE firm that bought your business for $100 provided $50 in equity, $50 in debt.

Yeah, so, well, leverage can be a very powerful tool, both in a good way and in a negative way, possibly, too. And if you use a simple example, so let's say your company's bought for $100. Those $100 all go into your pocket, every one of them. Well, let's say the PE firm that bought your business for $100 provided $50 in equity, $50 in debt.

Let's say you want to take $10 of your $100, so you've got $90 in your pocket. You take $10 and put it into the deal. You don't own 10%. You own 20%. You're 10 of 50. There's only $50 of equity. So that's the power of leverage. You put $90 in your pocket and you still own 20% of the company. So leverage can be a very powerful device that these firms will use.

Let's say you want to take $10 of your $100, so you've got $90 in your pocket. You take $10 and put it into the deal. You don't own 10%. You own 20%. You're 10 of 50. There's only $50 of equity. So that's the power of leverage. You put $90 in your pocket and you still own 20% of the company. So leverage can be a very powerful device that these firms will use.

And if you think about the private equity business, it's a tough business in a lot of ways. There is a lot of capital. that's been allocated to the private equity world. There are a lot of those firms out there. There's family offices. There's all sorts of these private capital pools.

And if you think about the private equity business, it's a tough business in a lot of ways. There is a lot of capital. that's been allocated to the private equity world. There are a lot of those firms out there. There's family offices. There's all sorts of these private capital pools.

A lot of those will do direct investing. That's right. And they're all competing for a lot of the same deals, which drives up valuation. So for the price that they have to pay to buy a great business, for the investing window that they have, typically four to six years, That's a short window to try and double or triple your investment. So leverage is a powerful way to do that.

A lot of those will do direct investing. That's right. And they're all competing for a lot of the same deals, which drives up valuation. So for the price that they have to pay to buy a great business, for the investing window that they have, typically four to six years, That's a short window to try and double or triple your investment. So leverage is a powerful way to do that.

Another powerful way to do that is by doing a lot of acquisitions, which you see a lot of these firms do. You mentioned delayed draw term loan, a DDTL. That's a lending facility that gets put in place by a bank at closing that you can then go tap into to do acquisitions.

Another powerful way to do that is by doing a lot of acquisitions, which you see a lot of these firms do. You mentioned delayed draw term loan, a DDTL. That's a lending facility that gets put in place by a bank at closing that you can then go tap into to do acquisitions.

So using leverage can be very powerful in the private equity world, both for the private equity firm and their investors, as well as for the entrepreneur that rolled equity into the new deal.

So using leverage can be very powerful in the private equity world, both for the private equity firm and their investors, as well as for the entrepreneur that rolled equity into the new deal.

yeah so a platform if you think of a platform platform is sort of as the name implies it's a a platform is a structure that can support a lot of things on top of it so in the private equity world in our world a platform is the initial investment that a private equity firm will make it is the sort of the anchor investment or the platform investment it's the original one that they will then use

yeah so a platform if you think of a platform platform is sort of as the name implies it's a a platform is a structure that can support a lot of things on top of it so in the private equity world in our world a platform is the initial investment that a private equity firm will make it is the sort of the anchor investment or the platform investment it's the original one that they will then use

to add companies onto. So go do acquisitions inside of that platform. So maybe it's a roofing platform or an HVAC platform or garage door services platform. There's the initial core company with a management team and ERP system, processes, technology, all of those foundational things that you need.