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[Music] my earliest entrepreneurial memory is my mom had a beauty salon so and my first memory was must have in about seven years old and I'd cut all the flowers down in the garden which my parents weren't too happy about put them in jam jars and I was selling them to the ladies that were coming to my to my mom's salon but my first real business was actually when I was about 14 so I'd been buying and I've been buying bulk wholesale things anything that came up as a there's a disposal that was going cheap I would buy and then sell them a car boot sales at the weekend and then when I was 14 I turned that into a proper business and I had a market stall I was selling you know watches and jewelry and and all sorts of stuff and actually I left school at 15 to pursue that business service wholesaling items then to other market traders and yeah went off on my my kind of entrepreneurial dream from from 15 so quite an early starter and obviously missed out on the traditional education which was which was a tough discussion with my parents because they were both the first in their families to get degrees so both of them had gone through to the highest level of education in fact my mom was a teacher and my dad had a master's in organic chemistry and so me deciding to leave school early was a little bit frowned upon but they went to see the school career guidance counselor and he said that he'd never met a child before that actually knew what they wanted to do so perhaps they should just let me do it when you learn the most when you fall flat on your face and I mean a from a character perspective it teaches you a bit of humility you know when you first start in business that's the day you think you know the most about business and then every day is a is a new lesson and some of those lessons come with some pretty painful school fees so you have to get through the you know the mistakes and things not working as you would expect and business is illogical you know when you look at it on a blank sheet of paper it should be easy and everything seems to make sense and then when you actually try and execute a plan it never really works the way that you expected and so that's the that that's the kind of the rite of passage that you have to go through as an entrepreneur is experiencing that full range of pain that you have to go through to get something off the ground how to deal with staff have to deal with customers creating a product marketing and marketing is just a constantly evolving thing and then you know that the next step for me after you know spending decades or a couple of decades doing that was then to move into the kind of next rung of the entrepreneurial ladder and how how you buy a company and how you sell a company so moving I guess from customer value into shareholder value in 1997 I had a telecoms company telecoms is very acquisitive so people are always trying to buy you so my earliest education in M&A was being pitched by these companies that are trying to acquire my business interestingly the kind of thing they all had in common was that they weren't going to give me any money so I pivoted that to the idea that well I don't have any money I'll go and buy a business myself so I'll be the buyer instead of the seller and so I went looking for other telecoms companies I could buy I I did my first deal it was a huge epiphany we grew by a year's worth of sales in an afternoon and we hadn't had to invest any money in marketing it was a no-money-down transaction we didn't have to borrow money from the bank it was a distressed deal that I bought for $1 basically and and I suddenly realized that you don't have to run the marathon you could just run the last ten yards and you still get a medal after a number of years of growing that business and we grew quite rapidly through acquisition after that I decided that I would sell the business and when I sold the business in 2006 and was kind of thinking what do I do next I realized that the bit I really enjoyed was the deal it was the buying and the selling of business is not necessarily the staff and the customers part in fact I often joke to people that business would be great if it wasn't for staff and customers try not to say that in front of my staff and my customers but so I then decided just to buy and sell companies and I decided to de-risk that activity if they call it a symmetric Riskin in the hedge fund world which is don't put any money in and then you only leave room for upside so basically I did a lot of distressed and motivated transactions where I would effectively buy all of the equity for a dollar restructure the balance sheet will do some kind of turnaround dressing up of the business and then sell it sell it on again quite quickly and I did that for a number of years I probably did about 50 transactions like that on the buy and sell side over a 10-year period but while I was doing that I noticed this huge gap in I call it the mid market but I think in financial circles they probably call it like the nano micro market because these are companies that are profitable debt-free well-run typically a million to five million of EBIT and what I noticed was that they they're incredibly underserved so the banking industry doesn't like to fund those kind of businesses unless the owners willing to bet their house so everything is tied up with lots of personal guarantees private equity and VC aren't interested because they're too small or they're not in a particularly sexy industry and yet these are a huge part of the economy in fact small businesses generally are a massive part of the economy if you look at every mature market 50 percent of GDP comes from small businesses and they're a huge percentage of the private sector workforce as well and yet they're basically left to rot and actually if you look at asset management companies who who kind of pride themselves on their diversification and you look at the asset classes they are invested in they're invested in everything they've even got a crypto allocation now and you know gold and silver and equities and debt and all of these things and yet they're not invested in small business [Music] basically I looked at that and I thought well why is that why why is you know money is smart money likes to him likes to be diversified why is it ignoring half of the economy and it really comes down to three key reasons and the first one is small businesses are still too risky you lose a couple of key staff members or you lose a couple of customers you have a terrible year they suffer from their scale so scale from an investor standpoint you can't put enough money into them so if you're a fund or a family office small businesses just can't take ten million dollars or five million dollars that you want to invest it would be more than the whole businesses is worth sometimes and then also just scale in terms of the businesses approach to the to the world you kind of have to be big to get bit you can't win big contracts until you're already big and this keep this creates a bit of a glass ceiling for these businesses that they can't break through they can't grow beyond a certain size and then the final one is liquidity small businesses are horribly illiquid so when you invest your money in them it can take a decade before you get your money out and smart money nowadays wants that liquidity to be able to jump in and out of different investments so basically when investors look for you know risk scale and liquidity they find derivatives bonds and stocks a much more easy thing to to invest in and therefore that area of the market has ballooned particularly with quantitative easing and the small business sector is still completely devoid of capital so I decided if I could solve the problems of risk scale and liquidity in the small business world we could effectively unlock a global capital and get it into small businesses and I think that that would have what a you'd create small business as an investable asset class and if you could do that then you would have the potential to democratize wealth because effectively those asset managers would want to be diversified and would want to have exposure to such a huge part of the economy traditionally private equity when it wanted to solve those problems of rescale and liquidity would do a rollup and they would put loads of businesses together but in my own experience of dealing with owner-managed small businesses i know that there is a kind of culture that's been created within those companies it's a culture with their staff and with their customers that you can't just jam together and end up with with more than you started with so we created our own governance structure and we call it agglomeration an agglomeration is a is a trademarked structure that we've we've developed and effectively it allows small businesses to collectively own and control a fully reporting public company so it's a way for small businesses to effectively collaboratively IPO so they can get together as a portfolio of businesses and access the capital markets and that solves the problem of risk because it's now a diversified portfolio of small businesses so diversified across countries and currencies and products and services it has the scale issue resolved because it now has a huge profit and loss and balance sheet that they can point to and it solves the quiddity because people can invest in divest from the business very easily one of the challenges when you run a small private company is the illiquidity of your own shares so typically what happens with the small business is that when you sell a company it's kind of a binary decision you sell or you don't sell and there's never a right time to sell or it's very hard to pick the moment to sell in fact most people get it disastrously wrong and that kind of run-up to sell can be two to three years so from deciding you want to sell to actually selling can be quite a long time horizon and an awful lot can change in that time both politically macro economically in your industry Google could start doing it for free and decimate your business you know there's there's so many headwinds that or Black Swan events that can potentially interfere with the the exit of a business and in fact most people don't have that luxury of choosing the three-year run-up there's some health issue or some other issue that forces them to have to take some action sooner and then the decision is out of your hands and the ability to get the maximum value for the business is out of your hands if you've already gone public and your shares are now freely trading public stock it takes away that binary nature on the exit you could exit the operations of the business but still be a shareholder you could exit the shareholding that still be operationally involved so it gives you a lot more options as a as a business founder [Music] we've got a really big vision hell that we've got you know that the bit between our teeth when it comes to agglomeration and this idea of democratizing wealth we see we we believe there is now a decade or more of what's been described by many pundits as the largest transfer of wealth in history which is you know tens of thousands of baby boomers retiring on a daily basis it's ten thousand a day just in the US people retiring in every major economy now adult diapers outsell baby diapers so in Australia New Zealand Japan UK US Canada there are more adult diapers nappies now sold and children's ones which is pretty a pretty scary statistic but small to medium-sized businesses are by and large owned by those baby boomers and they are looking to succession plan and they have slightly different motivations than previous generations have had because they're not going to get great multiples for their businesses like you could before because there is an oversupply of businesses in fact for every hundred thousand businesses advertised only twenty twenty thousand and not advertised the following year so not all of those have sold some of those has just given up so so there's not a lot of those businesses closing and the multiples of small businesses have been getting squeezed down and down and down and down to the point where more and more people are choosing to Winder the business down I mean just close the doors to suck as much cash out of it as possible over a period of time than to actually seek a sale and also most of the time they hate their big competitor so they won't sell out you know it's like do or die they won't sell to be to the competitor the next generation aren't interested they want a blockchain marijuana app you know they want something that's that's trendy they don't want an air conditioning company or a lift installation business so so all of these really great businesses that are generating good profits need to be transferred to someone what I'm looking for is the pinnacle of that pyramid the businesses that are generating seven figures plus of annual profits that we can take into that public environment and create an awful lot of share the value and and yeah like I say democratize wealth would be there would be the big vision so I really see myself in the next five to ten years being pretty much on as I am now a non-stop Roadshow of meeting with these business owners pitching these business owners dealing with investors taking companies public and and executing on this this vision that we have I think there's been a I've been quite lucky with you know Lucky's an odd word with the weird path that I've taken in my life as an entrepreneur it has kind of culminated in a moment where I now have 20 years of experience buying and selling small to medium sized companies I've taught hundreds of people how to do it I've worked on joint ventures with hundreds of people who I've taught how to buy small businesses so there there's not many people in the world that have that level of experience in that very specific niche or area and it happens to be a huge part of the economy and now we're arriving at a time where that skill seems to be very very necessary [Music]