Royce Yudkoff

If people are doing a national search, it's a very different process, but again, it's heavily brokered or maybe it's direct outreach in an industry. But what I think doesn't work is theorizing what industry might be exciting in the future and spending six months theorizing about an industry before you actually call.

If people are doing a national search, it's a very different process, but again, it's heavily brokered or maybe it's direct outreach in an industry. But what I think doesn't work is theorizing what industry might be exciting in the future and spending six months theorizing about an industry before you actually call.

So when we work with new searchers, we say, your goal for this week is to have an owner's meeting. Just have a telephone conversation with an owner. Just do that. That leads to something.

So when we work with new searchers, we say, your goal for this week is to have an owner's meeting. Just have a telephone conversation with an owner. Just do that. That leads to something.

I wanna just think a little bit more about your example because everything you said made perfect sense, but that's not the way the empirics look. What looks is that people buy their businesses and then they all project five or 10% growth in their conservative case their first year, and they all have five or 10% losses their first year. It's 5% worse than their base case year.

I wanna just think a little bit more about your example because everything you said made perfect sense, but that's not the way the empirics look. What looks is that people buy their businesses and then they all project five or 10% growth in their conservative case their first year, and they all have five or 10% losses their first year. It's 5% worse than their base case year.

Some of that's because sellers sell on good years. And so this averaging central limit kind of thing But it's also learning the business and meeting customers and distraction and the seller's distraction and the business has some degradation during the sale process. All those things happen. But I think the idea is that what you said is right. The first two are about getting to the transaction.

Some of that's because sellers sell on good years. And so this averaging central limit kind of thing But it's also learning the business and meeting customers and distraction and the seller's distraction and the business has some degradation during the sale process. All those things happen. But I think the idea is that what you said is right. The first two are about getting to the transaction.

That is getting the transaction. Talking to the customers happens often during that first year, but you're not able to capitalize, make good on those ideas, usually for a year or two. So what we see is year three, the really good year.

That is getting the transaction. Talking to the customers happens often during that first year, but you're not able to capitalize, make good on those ideas, usually for a year or two. So what we see is year three, the really good year.

Yeah, I think it's diversification. Diversification issue. Thank you. As another way of putting words in Royce's mouth, some investors are willing to recapitalize and re-incent the CEOs. It's a cumbersome thing because you don't really know what the value of the business is. It's really hard. And a lot of it depends on the business.

Yeah, I think it's diversification. Diversification issue. Thank you. As another way of putting words in Royce's mouth, some investors are willing to recapitalize and re-incent the CEOs. It's a cumbersome thing because you don't really know what the value of the business is. It's really hard. And a lot of it depends on the business.

CEOs, because they're so focused on their business and have such a concentrated position in their portfolio, they may have a key contract, three-year contract, and they won each of the last three years, but they get convinced that the next one they won't be able to win. And I don't think it's because the facts on the ground have really changed that much.

CEOs, because they're so focused on their business and have such a concentrated position in their portfolio, they may have a key contract, three-year contract, and they won each of the last three years, but they get convinced that the next one they won't be able to win. And I don't think it's because the facts on the ground have really changed that much.

I think it's that they look and say, oh my word, if I don't get that contract, it's to my personal wealth and I don't want to be at that risk. So I think as you have more to lose because you've accumulated wealth and you have an illiquid, undiversified position, I think that tends to drive people to sell.

I think it's that they look and say, oh my word, if I don't get that contract, it's to my personal wealth and I don't want to be at that risk. So I think as you have more to lose because you've accumulated wealth and you have an illiquid, undiversified position, I think that tends to drive people to sell.

Whether they sell too early or not, I don't know, because I think from an investor standpoint, they might be selling too early. From an entrepreneur standpoint, they might be selling at just the right time because they're living with this really high cost of capital because they're bearing all this total risk, not just the diversifiable risk.

Whether they sell too early or not, I don't know, because I think from an investor standpoint, they might be selling too early. From an entrepreneur standpoint, they might be selling at just the right time because they're living with this really high cost of capital because they're bearing all this total risk, not just the diversifiable risk.

Well, that's a hard question. And I think I'm not the best person to answer that because I'm really limited by my experience because I'm not a very techie guy. I mean, I can log into my computer and I got a new phone. I don't even know how to shut it off. So I don't know. I'm not a person who really thinks deeply about how AI is going to change our educational experience.

Well, that's a hard question. And I think I'm not the best person to answer that because I'm really limited by my experience because I'm not a very techie guy. I mean, I can log into my computer and I got a new phone. I don't even know how to shut it off. So I don't know. I'm not a person who really thinks deeply about how AI is going to change our educational experience.