Callum Laing Entrepreneurial investing and agglomeration

Entrepreneurial Investing and Agglomeration with Callum Laing

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    Imagine being offered a chance to invest in a solid, debt-free, profitable company that was going to go public tomorrow at below market rates. Now imagine getting that offer twenty or more times a year. This is the model that Callum Laing and his team have been working on since 2015. By marrying the capital markets with the small business ecosystem, he shows you how you can start investing today in projects that have the fast growth of a tech company, the dividend policy of your favorite cash cow and the job impact that most governments can only dream of.

    And for entrepreneurs, he demonstrates a unique rollup strategy that has allowed him and his company to build a 9 figure business in less than 18 months in a very unique and innovative way. They call it “Agglomeration”

    This episode is one of the most advanced interviews I've done on the subject of acquisitions and the absolute definition of creative deal-making. After reading his book, “Entrepreneurial Investing: Connecting Sophisticated Capital with Talented Small Business” (which you can download for free below) I reached out to Callum so he can take me further and answer some big questions I still had. He answered each of them clearly and succinctly.

    If you're looking to really expand you mind to what's possible with creative dealmaking make sure to listen to this interview (or read the transcript below).

    Entrepreneurial Investing shows investors how to:

    • Connect with good, profitable small businesses
    • Ensure that your capital investment serves to grow business and invest in its people
    • Profit from small businesses while having all the liquidity and risk mitigation of a big PLC

    Meet Callum Laing

    Callum Laing is the co-founder and CEO of MBH Corporation PLC, a publicly traded company that acquires small businesses around the globe, leaving the founders in place.

    Callum has more than two decades of experience in starting, building, buying, and selling businesses in a range of sectors, including recruitment, sport and lifestyle, information technology, and telecommunications.

    He has published three best-selling books on business and investing, has interviewed and published more than 1,000 interviews with entrepreneurs and sits as High Commissioner to the World Business Angel Investor Forum, representing Singapore.

    Laing is also one of the pioneers behind the ‘Agglomerate’ methodology, which helps small businesses gain access to capital markets and connects investors with small profitable businesses.

    Links from the author

    Once you've read them, if you have got any value from them and are open to leaving a book review on Amazon.com, Callum makes a monthly contribution of school books to developing countries through b1g1.com for every review he receives (good, bad or ugly). So your review can make a big difference to a kids life.

    This is how Accretive acquisitions work

    This is the Agglomeration workshophttps://www.unity-group.com/agglomeration-workshop

    Get in touch with Callum…

    Callum Laing Entrepreneurial investing and agglomeration

    Illustration Courtesy of @EricBakey

    Read The Transcript Below

    Brad Costanzo: All right, welcome back to another episode of Bacon Wrapped Business. This is Brad Costanzo and we are gonna have a very interesting, show today. It's, definitely not going to be for, the most absolute beginner of the audience out there. But this is an episode I've been really looking forward to because it's, it's a guest that I've been following for a while, I've read a couple of books now and, been following kinda his journeys, ups and downs and some of the really innovative strategies that he's using to, build very, very big business, public business as well.

    So today I'm interviewing Callum Laing and Callum is the author of a book that I just read, you can go check it out, called Entrepreneurial Investing. And as you know if you are a listener to the show, I talk a lot about acquisitions and creative deal making and just thinking about business in an innovative way that a lot of people don't necessarily approach it. And when I read Callum's book I, I've got the whole thing just about highlighted and I couldn't put it down. I got through it, I recommended it to like three or four people. I said, “You have to read this. This is really innovative.” And, I'm not going to try to tell you exactly what this means but I'm going to have Callum do it. Callum, welcome to Bacon Wrapped Business.

    Callum Laing: Thanks, Brad, its yeah great to be on and great great to hear that you got so much value from the book. That's excellent.

    Brad Costanzo: Yeah, I sure did. So, as I said this is a, it's, it can be a complex subject to, you know, people new in business. But what you're doing is taking a very, tried and true, strategy and I, you know, call it a roll up strategy for people who are used to acquisitions and roll ups. But you're doing it in a way that, as I said it's really innovative. But, kind of take me, or take the, take the listeners who haven't read the book yet through-

    Callum Laing: Yeah.

    Brad Costanzo: -kinda the basics of what you guys are doing and kind of why you know, your approach is so unique and innovative.

    Callum Laing: I think people tend to get a little freaked out when you start talking about the public markets because its so far away from what most small businesses know and understand. And yet, actually, when I explain what we're doing to an entrepreneur they get it straight away and they can't understand why everyone doesn't do it, it makes so much sense. actually the people that struggle to understand it are the ones that come from the traditional finance world.

    Brad Costanzo: Um-hmm.

    Callum Laing: The one's that come from sort of investment banking backgrounds, you know, private equity and I'll kind of explain why. But basically, for readers that, that are not familiar, what we do is we create a publicly listed holding company, exlusively for the use of good, well run, profitable small businesses. And in effect, what happens is that small business swapped it's private stock for public stock but carries on running the business exactly the same way that they always have done. So, yes, it's their brand, their culture, their hiring and firing. And, yeah, for, for an entrepreneur, as you know, retaining control is incredibly important. We, you know, the problem for a lot of small business owners and who- by the way, we, we're talking, our market is well established, traditional, good, small businesses, kinda the back bone of the economy that everyone talks about. this isn't sort of high tech, crypto, Instagram yeah nor yeah, yeah, or distressed stuff. This is you know, the landscape gardening company that's been going for twenty years. The air condition maintenance company, the carpet cleaning company, the quite frankly very boring businesses, but just keep… They understand their clients, they deliver great results year on, year out. they're pillars of their community and they spit off profits.

    But the challenge for these businesses is, if there's something that, that we'd call a scale paradox. So, they are too small to go from really big contracts and because they can't get really big contracts, they remain small. Which is always frustrating for any entrepreneur with ambition. and then you get this very weird scenario around the value creation. So, you know, Brad, as an entrepreneur… the whole heart of entrepreneurship is creating value front so… Imagine that you've had a bit of success, you, you're one of these businesses, you're doing 20 million, 30 million, 40 million a year.Um, to the outside world that's a very successful small business. And as the owner of that business, you're creating a huge amount of value in the world. And, massive amounts of value to your clients, clearly. value for the hundred plus staff and their families. The whole ecosystem of suppliers and partners and landlords that all extract value because you get up and go to work every day.

    And yet, typically there's only one person that can't extract a commensurate amount of value from the business and that's, that's you the business owner. You're probably drawing a nice salary and probably taking out some decent dividends at the end of each year, but compared to the economic footprint of your business it's negligible what you're able to, to actually monetize. in fact, the only way you really can monetize some of that value is to sell the business. but there's a couple of problems with that. Firstly, not every entrepreneur wants to sell, most of us actually, despite the grumbling  we quite like our business, we like our clients, we like our team most of the time. and we like the challenge of growing our businesses. So we don't really want to, to sell it, we kind of have to.

    But the bigger challenge is who's going to buy it? You know, there's just not that many buyers out there for small businesses. So, kind of the default option becomes to sell your business to a, a trade sale, a bigger player in the market place. invariably, those deals are always structured as a three or five year earn out. Because small businesses are often, very centered around the owner.The acquiring company wants you to come with it, and wants you to guarantee numbers for the next few years. the problem with that, as you know Brad, is that once we've been entrepreneurs we are pretty much unemployable.

    Brad Costanzo: Yeah, we don't like to be under the thumb of someone else telling us what to do and what number to

    Callum Laing: Exactly. Yeah, we, we're just not very good at things I would like to do.  So, yeah, invariably that structure rarely works out for the entrepreneur. You know, they're normally fired from their own company within six months or twelve months. Or they leave in disgust. and yeah, if you spend twenty years creating value from others, that's a pretty rubbish ending to this venture. So, yeah, basically what we said is look, we'll create a publicly listed company. We will do it exclusively for the use of good, well run, profitable small businesses. but the key function is that those businesses retain control. So what I'm talking about, it's investors. It's- you know the distinction that we have, we work with businesses all over the world. we got companies right now in the US, UK, Australia, New Zealand. across multiple different industry sectors.

    But the one distinction is that these companies aren't for sale. you know the founders wouldn't want to sell them to anyone else. They're coming in to join us because they keep autonomy. And they can, you know once they're part of the group they can go for bigger contracts, they can incentivize their staff with stock options, they can use our stock as a currency to go and do their own merges and acquisitions. so yeah, it's a, it's a very it's a relatively simple concept. Obviously, the, the devil's in the details of making it… I'm happy to drill into some of that

    Brad Costanzo: Right, well let me, let me, let me try to make sure that- I want to make sure that I got this and-

    Callum Laing: Yeah.

    Brad Costanzo: – kind of also be the advocate for my listeners if their the lease bit confused. So one of the concepts here, as you said, these are… You're not looking for companies who are for sale, distressed, et cetera. Like the one's who are trying to get out. This are well run businesses, but they want to be able to really realize the value they are creating and, and have a chance to get a, a bigger piece of the pie. And, you know, their other options are just like, you know, sell their business to, to somebody, maybe they make a few times, like you know, if, if the smaller you are, like a small business is going to get, let's just say- depending on how small you are- two, three, four times EBITDA,

    Callum Laing: Yup.

    Brad Costanzo: Just in general, and the bigger the business is, the- you know if you got a business doing ten, twenty, thirty million dollars, et cetera- you typically are going to get a higher multiple. But, you know, you know unless you're going to grow from let's just say you are doing five million a year to something higher, you know, good luck getting that. So you come along, you got a publicly traded vehicle publicly traded company, like a holding company if you would, that then says, well look, if you join us and correct me at any point if I'm wrong, swap your shares for shares of ours and you know, that's a very, very, very basic version of it. And we've got, we're bringing in other companies to do this.

    So if we bring in other companies and we create many more, we're actually being able to add all of the earnings together and all the revenue. We're making a bigger company by bundling them but you remain in control. And then ideally, if the aggregate of these companies are going to trade for a higher multiple in the public markets than you would ever get if you just tried to sell on your own. And the pubic markets are liquid so after awhile you have the ability to not only grow because you, you know, have the resources of a public company but because, you know, you have the ability to liquidate shares and, and as the entire company grows so does the value of your shares. Did I, did I kind of get that right or did I miss any-

    Callum Laing: Yeah, it, that's right but, but one, one of the I guess key distinctions is it's not ah, it's not an exit. So basically, the way that we structure for companies coming in, they'll get multiple of EBITDA on day one. But it's a perpetual earn in. So the more profit that company contributes the following year, the more shares they earn. And so on, and so on. Which basically means that regardless of share price- can you imagine the share price stays flat for the next twenty years, but your company is growing, you're able to go for bigger contracts as you part of a PLC

    You're constantly earning more shares in that equation. Which means that the companies in the group, and yeah these are small businesses, they are across multiple different industries and countries. There will be peaks and troughs, The companies that do well in the given year get a bigger slice of the pie. companies that plateau or go backwards- there's no penalty for that but obviously that year they wouldn't additional stock. So it's a very equitable solution. and I think the, the other really key element to this is, this isn't something that we've built with a, a desire to sort of sit and run the holding company and these companies sit underneath us.

    When a company comes in and joins us, when it swaps it's private stock for public stock, that owner now becomes a significant shareholder in the PLC. They join, what we call a senate, which is kind of the, the principles from each company. And so the, the founders of those companies together make up 70 percent of the owners of the PLC. So they're always in control of the PLC. If they don't like the way the, the direction the ball is going, if they don't like any decision, they can always fire the board or put their own board in place. So, so yeah, we, we've built this very deliberately from day one, not for us to have control, but for the, the principals coming in to, to really own their own, yeah their own group, PLC.

    Brad Costanzo: That, that makes sense. And one of the things you said that it kind of flipped my mind too and I like that which is there's two ways to kind of really profit here. Obviously, one of them is, you know, I get, I get X amount of- Like, today I join your agglomeration, I join the PLC and I get a million shares or whatever, you know whatever that's worth.

    Callum Laing: huh.

    Brad Costanzo: and obviously if the, if the share price goes up, my million shares become worth more. But even if they don't, if I, you're saying that if I… like twelve months from now, if if I had a really good year and, you know, my, you know, the profits of my business contributed to the profits of the PLC, even higher, I'm earning more shares that way. So even if the stock is flat, I'm making money there.

    Callum Laing: Correct, yeah, yeah.

    Brad Costanzo: Now what about in case- I'm maybe jumping the gun here, but, I mean, it's kind of the elephant in the room. If the stock price goes down, which when it does and your stock fluctuates, et cetera-

    Callum Laing: Yeah.

    Brad Costanzo: But if the stock price goes down because the stocks- you know stocks are valued in a lot of different ways, but ultimately it's supply and demand and if somebody gets in there and starts-

    Callum Laing: Okay.

    Brad Costanzo: -dumping stocks, which has obviously happened in the past do you guys-

    Callum Laing: Yup.

    Brad Costanzo: Or, or there's a market fallout, or if just anything else goes wrong,

    how do you overcome that? Because I would imagine that's got to be one of the big, you know, questions and objections that people have right away. Well what if the stock price goes down?

    Callum Laing: Yeah, it's interesting, you mention that we, we've kind of dealt with this previously, so, I'll make a complimentary copy of my book available to, to your readers, And in that I talk about the first one of these that, that we did. we, so we've been working on this for about five years and kind of had most scenarios thrown at us and sort of had some, some learning along the way.

    One, one of the key things that, that we learned from, from the first experience is that actually talking about the stock prices is really the wrong the wrong metric to focus on. when, because it's the one thing that we can't control. We can control the fundamentals of the company, we can keep adding debt free, profitable, cash generating businesses into the group. now obviously we can market the stock and try to get the word out to as many people as possible. but you're absolutely right. Basically the share price on a given day, it's not a reflection of the business. It's a reflection of the buyers and sellers in the market. and if- and with any small camp stock, i- it doesn't take a lot of buy-side pressure for the share price to shoot up, it doesn't take a lot of sell-side pressure for the share price to s- sell down and, and that's- you know, for some people that's the appeal of, of playing in that micro and that small cap space. Because the the multiples can be, can be so attractive.

    So basically, when we have the conversation with business owners, we always do it on a zero share price [inaudible 00:16:31] So when we take them through, when we look at their numbers and we model out for them, based on their own forecasts, this is how many shares you would have over the next five hears, ten years, you know, whatever, as far out as you want to go, we always do it on the basis of the share price being flat over a five year period. Now, that's pretty unrealistic the reality is as an incredibly fast growth, 'cause athough all the companies in our group are generally not that fast growth. you know they might do five, ten percent a year which is kind of a good year.

    Our PLC's incredibly fast growth so the, the vehicle that we've got at the moment, it's called MBH. It's a UK PLC. We are listed on the German stock exchange which is one of the most liquid, money market sin the world and very flexible for what we do. and within the last 18 months we've gone from an empty shell doing zero revenue to eleven companies in the group, doing 125 million pounds of revenue. 11 million pounds of EBIT sitting on about four and a half million in cash. which makes us one of the fastest growing small cap stocks in, in Europe in terms of the underlying fundamentals of revenue.

    So, yeah we, we are incredibly, fast growth. We, we make a lot of on, on this. But  consequently when you're fast growth and small cap you, you do get a lot of volatility in the stock. I mean we, our share price has been up for two years. It's currently down at, at 50 cents. so really we, we just kind of say, “Look, let's focus on, on the earnings per share.” Which is the metric that we can control. every deal that we do is earnings per share are created, which means that we're buying profit using our shares at a lower multiple than the multiple that we're trading at. and I've actually put together a, a very simple animated video, again, which I'll, which I'll send to you.

    Brad Costanzo: Oh, that's great. Yeah, I'll definitely put that, the next one.

    That's for sure enough.

    Sure.

    Yeah.  it's a bit of a confusing concept 'cause the, I guess people's tendency when, when you think about small business percentage is really, really important. If you create more shares in a small business, you get diluted. And therefore your share of the profits gets diluted. but percentage in a PLC is almost irrelevant. It's the value of those shares that's, that's the, the key metric.

    And so, yeah, that, that's basically what, what we focus on. We se- we sel- we, the bit that we can control is the value of the sha- yeah, the earnings per share. The share price will go up or go, go down. But if your fundamentals keep going up month on month, year on year, the, the share price will, will reflect that. And actually for us, that was kind of a really important distinction to make because it's, it's this, this sounds hard to believe, but it's almost as challenging for us when there's a run on the stock and the share price goes up very high, which again, it's pretty easy to do with a small cap stock.

    Sure.

    you know, a lot of people go into the market suddenly and start buying it. And, and suddenly we go from 50 cents to five euros, which is not kind of unheard of in our world. But then we've, we have the same conversations with people that go are like, “I don't want to join because you're overpriced right now. Hang on, I'm gonna join- …

    at this price and share price go down.” and so basically there's no, you, you can't win that game when you start talking about share price. So, yeah we just had like let's, let's focus on, on the, the, things we, we always say to the businesses coming in, forget every- everything else, forget the share price. you know, you can, you can factor into your own calculations. We won't, we will always assume a 0% growth. but does the deal still make sense for you in terms of being able to have some liquidity in your stock? That, yeah, take some cash into the table. Being able to incentivize your staff with, with actual tangible stock options, yeah. Being able to go out and do your own  acquisition, all of these, these things. If it doesn't make sense from those, then don't do it 'cause you think you're gonna get rich off, off a share process. That's, that's one of the reasons.

    Right.  You talk about the, the first experience in the book where there were some  unscrupulous players who, who were  holding onto a lot of stock and then they just decided to dump it in the market. And, and I, I mean, this is obviously a thing where, you know, stock manipulation, especially of, microcap stocks, like this can be, a thing of like, but is there a way, like, is there first, I guess the first question was, is there a way to help prevent what happened before from happening again? And is there  like, let's just say that, you know, a couple of years down the road, you know, we're past this, hopefully past this virus, recession, depression, whatever's going on. you know the stock price is now at five euros. Maybe it's at 10, and somebody decides to, go in massive shot in and just really, really suppress it,  you know, down. So it's one thing to say, “Well, don't worry too much about it.” But I would think that, that's a  really, a really valid concern that well wait a minute. Like I could swap all my shares with you right now and just because of the market, I could get de- like couldn't I get decimated if, if things go wrong  in the market that I have no control over, even though my business is growing, my wealth is now evaporating. Like how do you, how do you really overcome that? Very rare it is-

    Callum Laing: … so there's a, there's a, there's a lot to unpack in, in, in all of that. But, sho- short answer to the last part of your question is, one of the tools that we use to protect downside for companies coming in is they can take up to 50% of their initial consideration in a bond that, that we issue. So basically it says, yeah, say they, say they're due to get $1 million, dollars worth of shares on day one. they can elect to take half a million of that in our bond, which is a five year bond that pays 5% a year. So that just kind of protects the downside and, and the other 50% protects the upside. without kind of going into too, too much details on,  of the, the first one. But yeah, I mean, fundamentally what happened was somebody broke, broke the law and illegally dumped shares. we can't he- yeah, somebody chooses to break the law, again,

    Brad Costanzo: It happens, yeah.

    It

    Callum Laing: happens. There's a limit to what you can do. I think there's a couple of things. We, we learned, you, you know, always sounds a little bit, lame when big companies talk about their values. But we took the, you know, one of our core values is trust. and yeah, our whole model is based on we trust small businesses. Somebody that's spent 20, 30 years building their company, is not gonna destroy their own company just to get one over on us like you know, that's, that goes against the inherent DNA of, of an entrepreneur. and the mistake that we made through a naivety was when we went into the public markets, we kind of had that same, yeah, we came from the world of small business where small business owners create value for others and then figure out how they're gonna get rewarded at some point down the future.

    We suddenly moved into the capital markets where, the vast majority or a, certainly a large amount of people have no interest in creating value. It's just about, stock and, and, yeah, getting in and getting out. And yeah, if you can spread rumors on an online forum to manipulate share price that's, that's what you'll do. and we, we were new to that world and, and kind of it came, came as a bit of a, a shock. And so I think one of the things, that we learned from that was, first of all, you know, small businesses often tends to look at invest, the investor community as one homogenous group. You know, if you are an investor, you've got money to invest. And, I, I should go and pitched you my, my product, yet that kind of neglects the fact you've got angel investors that have a very different remit from hedge funds.

    They're all investors, but it's a completely different, world. And so what we discovered was, you know, it was very enticing when we first got into that space because everyone was offering throwing money at us. And so whereas we were very selective with the businesses that we brought on, we weren't as a tool selected of the investors we bought on and we paid the price for that.

    consequently, sort of five years later and we've discovered that actually there are some investors out there with values. there are investors out there that are patient capital that love the small cap space that love what we're doing. you know, family offices, high net worth, smaller institutions that really like our innovative model and, and, are willing to back it for the longterm because, you know oftentimes they've got companies that they want to bring in to us as, as well.

    Brad Costanzo: Are these the, are these the new backers who end up funding what you referred to in the book as the accelerated venture fund or?

    Callum Laing: Most the acceleration venture funders is actually a completely sort of separate entity. And, and so some of your, more astute, listeners will have already pegged that while our, while our model, the agglomeration model, is a great solution for small businesses to get them scale and liquidity there's nothing in that model inherently that injects capital into the business. It was never designed to do that yet. if you're a small business and you swap your shares or public, you, you're owned by a public company, you suddenly get access to much, much bigger contracts. problem is you still got the same resource space.

    So, how do you scale up to, to serve these big contracts? So what we did last year is we created a, a venture capital fund, completely independently, arms like for us. But the venture capital fund only inject capital into small businesses that are about to be acquired by our agglomeration.

    so, and this was actually, this solved a couple of problems. It solves, solves a big problem for small businesses. And it makes it even more attractive for, for a small business joining us because they now basically get, an equity injection of cash allowing them to go out and win bigger contracts and, and s- scale up. but it also solved a problem that we were seeing with bigger institutions that like our model, but because of the size of their ticket, their, their typical ticket size. So if a company, you know, if a fund comes to us and says, ah, so we've got one at the moment we're talking to that's yeah, their typical ticket size is 40 to 50 million. now they couldn't just invest 40, 50 million into our PLC. It would, it would smash the share price through the roof.

    Brad Costanzo: Right.

    Callum Laing: … yeah, wouldn't, wouldn't make sense for them to do that directly. But what they can do is they can invest that money into the venture capital fund. Venture capital fund can take that 50 million and divide it into 10 lots of five, in an, and invest 5 million in the next 10 companies that, that we acquire. and then the venture capital fund basically gets, can get in and out of those. It's, it's like, it's, it's like being able to invest in, in Uber the day before it went public basically.

    Brad Costanzo: Right. Yeah, I really liked that chapter in the book where it described that the whole thing was really good and I got to that, I was like, “Oh damn, that's, that's really, really innovative.”

    Callum Laing: But it takes it all up a whole nother level. So, it's fun.

    Brad Costanzo: Right. one of the questions I told you I was gonna ask, profit, way, the way profit gets distributed.

    Callum Laing: Yes.

    Brad Costanzo: So, you know, I'm a, I'm a business owner and a, I make a salary, but then I obviously have my own profit and distributions, et cetera. So now whenever I, merge this with the, with the PLC, I mean, I assume I still get the same salary. But now you guys as the collective own my profits, how to dividends, get distributed, they're retained, you know, what, what does that protection I have to, to realize, okay, well at least I'm, you know what I'm saying? Like, how do you answer that?

    Callum Laing: Yeah, well, so the first of all, your salary is probably gonna go up. Because  my, my small businesses, business owners pay themselves a rubbish salary, and take what they can in dividends. And that makes perfect sense in a small, small private business. so basically what we say is like before you come in and normalize your salary. you, you need to be comfortable that you're on a salary you're happy with.

    that moment you come in, basically the group is being, the public markets are valuing the company based on the, on an earnings metric. So the more profit that we've got in the group the, the higher the, the valuation. now there's obviously there's a significant difference between profits and cashflow, and, and the EBIT and cash. so typically what happens is when a company is part of the group, they will earn the bo- bonus shares, you know, that's the perpetual earning I talked about, at around 300% of every incremental dollar of profit that they contribute.

    but they only push, around 22% of their cash also off that profit in cash up to the holding company. and that goes to, covers, yeah, things like the market costs, the investor relations stuff and, the issuing of dividends. And, and we've always made it very clear that our belief is that business, one of the key premises of the business is, to return capital to, to shareholders. And, and so we want the business to be dividend yielding, because, a couple of, couple of reasons. First of all is the business owners themselves, they're all used to receiving dividends and-

    Right.

    … yeah, w- we would rather they held onto their shares 'cause they get dividends from them rather than sell them. Secondly, the minute you become a dividend yielding stock, it attracts a different type of investor into your stock. They tend to be more patients anyway that yields people that are after you. but, but interestingly as well, it, it puts us in a very small, niche of companies that are fast growth and dividend yielding.

    Normally as, as an investor, as you know, you kind of make a decision between do I go high growth or do I go yielding? yeah, the, the fast growth ones typically they're throwing all of their cash at fast growth. the yielding ones tend to be pretty slow burn, but they er- a nice dividend. So if we can combine that fast growth because every month we're adding new companies and new revenue and new EBIT into the group, but also pay a dividend each year. that does make us a fairly, a fairly unique option for investors, which, is always good.

    Brad Costanzo: Okay. Yeah, that so, so that makes sense. One of the, one of the questions I got here on the, 'cause I, I just looked up, you know, the stock on the bloo- on bloomberg.com- is it, is it true that because it has like zero dividends. Like the, the numbers just kind of look a little bit out of whack.

    Callum Laing: so, so, one, one of the perpetual challenges of being a, a small cap, listed company is first of all, until you get to 100 million market cap, most of those big guys like Bloomberg and Yahoo, they just can't be bothered to do, do the work to, to get you  into their system accurately. also until they see your first year's numbers, they, they don't have a lot of data to work on. So, for us, I'm not sure when this, podcast is going out. But of, we're announcing our first, our 2019 numbers on April the 30th. and yeah, after, after that you should see Bloomberg and, and Yahoo as the, the worst,  trying and to get them to, update our information.

    Brad Costanzo: … so my, my, suspicion was right. Don't trust the, the, the numbers. Besides the stock price, don't trust all the various financial numbers on here 'cause I was like, “That doesn't make sense.”

    Callum Laing: It's, yeah. So, just, just as a rule of thumb, a company in its first year, especially if it's below 100 million, it's nearly impossible to kind of get those accurate numbers out to the big, the big guys. It's, it's very frustrating.

    Brad Costanzo: Right. I can imagine. shifting gears, another question I had, so when, when you guys started to do this, the, obviously you, you have to have a public vehicle. Did you, did you buy a, a first, like an empty shell in order to, go public right away? Or did you actually start a business and then take it public? Like what was the, what was the route when you guys decided, all right, we're, we're doing this.

    Callum Laing: Yeah, there's, there's a few ways that you can do it. with this particular one, we started with, with a SPAC, a Special Purpose Acquisition Company, which is, an empty shell. we, we had a very specific desire to get onto the  Frankfurt Stock Exchange. And, and that's because they… Frankfurt is fairly unique in, in that, actually it's… Frankfurt and New York are quite similar in terms of their flexibility from a model like ours which is why, Berkshire Hathaway is listed in New York, for example. However, unless you're a kind of at least a billion, preferable two billion, you're gonna get eaten alive in, in New York, as a smoke house stop. You just can't  short of beaten up. whereas Europe is a lot more, it's a lot less kind of that negativity but that you get in the US market. so we wanted to be on Frankfurt. Frankfurt doesn't allow you to list the spot directly, an empty vehicle directly. So we found a, a secondary market in Europe actually, Dusseldorf. we, so we listed the spot there, we backed in the first three companies.

    So a construction company and a couple of education companies. We then did a full prospectus, with the UK listing authority because we're a UK PLC. And that gave us our European passport which allowed us to get onto the Frankfurt market, which is, which is where we wanted to, to get to.

    Brad Costanzo: Got you.

    Callum Laing: It's very… yeah, so it's it, it's in the book that we wrote, which also happens to make, make available to your readers. a few years ago. It's called Agglomerate and-

    Brad Costanzo: Oh, yeah.

    Callum Laing: … Agglomerate was basically that was written for the small business owner, whereas Entrepreneurial Investing was written more for kind of investors looking at this model and trying to understand it. and when we wrote Agglomerate, which a led- yeah, it's a little bit out of date but it's still a good read if you want kind of get more [inaudible 00:38:06] on this model from the business line of perspective.

    when we, we wrote the book we really wanted people to read the book and go out and create their own agglomerations. that, that was our, our thinking is that let's share our intellectual property unless, because there's so many good businesses out there that could be better businesses if they were part of a group.

    Right? yet having been through this a couple of times now, it's really difficult to do. It's  yeah, there's so many different moving parts that say. Now we just say, look, if you, if you're thinking of finding an agglomerate, come and, come and join, you know, work with us first, come and do a year introducing companies to us, working with us to, on the investor side. come in to our realm of expertise for a year or so. And then once you come and learn a little bit behind the scenes of how it works, and you wanna go and set one up, we'll probably back you to do it, because ultimately we'd love to have lots of this agglomeration out there.

    But yeah, very, very difficult to try and do it from scratch. I mean, on your own it's…

    Brad Costanzo: No, that's great. That… yeah, that's smart. So that's, and you know, that actually brings me to one of the topics that you mentioned and you talked about this in the book as well. So you guys have, done several workshops on this model.

    Callum Laing: Yeah.

    Brad Costanzo: Tell, tell me a little bit about that? Like, wh- what are some of the reasons for the Agglomeration workshops? Are they, are they kind of to really help people understand this so that if they really like it they can do kind of what you said, it's like, you know, in essence work with you guys to help source deals and be a part of this and get kind of a over-the-shoulder view? Or is there som- or are there some other, aspects-

    Callum Laing: Yeah, no, I'd say, , pandemics aside-  we had been running these workshops I think the plan this year was still about eight in Asia, Europe and, and the US. In fact I just finished running one, in LA  a few weeks ago. just, just got back to Singapore in time.

    but yeah, that's… So this is this started off as a workshop that we ran for business owners coming at, really to teach them the difference between being a small private entity and what it's like to part of a public entity and kind of, yeah, making sure people don't accidentally incite the trade stock or make a stupid announcement to the press that would, would impact the share price.

    So, yeah, ho- how to get their financial reports. All that kind of the, the meaty gritty of, what it means to be a part of the group. And then what happen is we starting having investors asking if they could come along 'cause they wanted to, to be a part of it. And then we had people that wants to introduce companies or introduce investors to us, wanting to come along 'cause they wanted to, to know more.

    and what was happening is we're running more and more of these and I was getting more and more bored of the sound of my own voice saying the same thing over [laughs] and over again. and I also notice that people weren't really… you know, the business owners were coming in with their own pre-conceived ideas. The investors were coming in with their own pre-conceived ideas and, and it was very difficult to kind of get people to acknowledge each other's world, which is really important in what we do, 'cause we're gonna sit with a foot in each can.

    so fortunately at that, that time I was spending an awful lot of time on planes flying around the world. So I re-design the workshop from the, from the bottom up and turned it into a game. so basically now what happens is you come in at 9:00 o'clock in the morning. It's a long workshop. It goes to 10, 10:00 PM at night.

    You come in at 9:00 o'clock in the morning and by 10:00 PM at night your aim is to build an agglomeration to a billion market cap. And, and so we spaced that as a, as a three-year period over that 13 hours. So you come in, you, you join a board. Your director, and you have to pick which market you're gonna go on. You have to start pitching to small businesses. You have to start pitching to, you know, who are the, who are the investors that will invest in you and your [inaudible 00:42:36] 100 million. Who are the investors who will invest in you when you're more than 200 million?

    so you kind of go through this whole gamut of how do you pitch to small businesses, how do you pitch to, to investors. and then all the way through it, I'm, I'm basically this, e- evil [laughs], evil chair master who throws real life scenarios at, at you. So…

    … you know, just before you're about to go up on stage and do a presentation to, a financial market announcing your numbers, somebody hands you a note that says, you know, one of your directors has accidentally been doing insider trading and the market just found out about it. The SEC,   wants, wants to know more. and so you like, it is all stuff that, you know, we have dealt with… companies like ours have dealt with ov- over the years. but it, but it makes it really interesting. And of course what happens is obviously you, you learn a ton, you learn way more when you're kind of back, back to being involved and making this decisions.

    But a big part of the learning is not from us, it's from the other people in your, in the group. And, you know, finding out how people react under fine pressure and under stress, is a, is a really big learning curve for people. So yeah, so it's a lot of fun and-

    Brad Costanzo: That so-… yeah, I remember reading about that.  is it still like biz owners, investors, and potential bird dogs for these? Or the, you know, the people-

    Callum Laing: yeah, the, there tends to be the, the ones. We, we, we've had quite a lot of appeals to, to open it up to a wider market. but I, I'm not really, like I don't particularly want to be in the events business and it's like being in the event business.

    Brad Costanzo: Especially right now.

    Callum Laing: yes, especially right now.  So, yeah, it's kind of I mean if you've got a genuine interest in, in the agglomeration model, then, then I definitely recommend it. And I think it's probably the closest you'll ever come to understanding what it's like to be a director of a PLC short of actually being a director of you know.

    Brad Costanzo: I can imagine that. you know, backing up, one of the things I, I had asked you about you know, prior to me hitting record and I said one of the ways that I found out about you, your friend, Jeremy Harbour, and some stuff, 'cause I've read I read it in an article on the concept of a virtual merger. I think you called it-

    Callum Laing: Yeah.

    Brad Costanzo: … it's stopped short of going, of going public. And it was… you're obviously familiar with it, but the for my audience who might not be… the, the basic concept was, was buying multiple companies, like maybe ideally the same vertical or niche that you could-

    Callum Laing: Yeah.

    Brad Costanzo: … it, they, they would be exit minded, you would get an essence and option to purchase the company, roll that, roll that up in to, you know, your, a holding company. And then now that you got the options you go take this to a bigger potential acquirer, like a private equity business or somebody else. And now you're selling what amounts to, like several different contracts to buy these businesses. Right?

    One of the things, and I know that's, that's one, model that I remember. I just read a brief article and it kind of got my, my wheels are turning. and I, I guess the first question I got, just, just right there, is backing up the agglomeration model. Do you have, do you personally have experience with that? And was there a part of that that was like, yeah, that sounds good in theory but it's actually harder to pull off because of X.

    Because I know that… the reason I bring this up is the agglomeration in publicly traded businesses, like that's a, that's a infinitely more complex type of a, a model. And I was just kind of curious in kind of how those two differ, just a personal curiosity.

    Callum Laing: Yes, so, I mean if anyone is interested in kind of small business merge and acquisition journey however my business partner has been teaching on that topic for 10 or 11 years. and he, he discovered way, way before I did that it's much easier to acquire a company than it is to market your own company up to a certain bit the equivalent revenue.

    Brad Costanzo: Yes, it is.

    Callum Laing: Double a size of your business in one deal rather than trying to roll organically. and I, I went along, I met Jeremy, about 10 years ago. It's like it's a second ever event that he, he ran, that just five, five people spent a weekend learning about strategies that he had used to, to build companies.

    we, we stayed in touch and, and then five years we start working together. But basically the agglomeration concept was an evolution of that virtual merger, concept. And what he had, what, where he was getting to with that was small companies don't really have a lot of value. They're, they're very difficult to monetize. the bigger you are, the more valuable you become.

    So if you can kind of get your ego out of the way and start merging with other companies to become a bigger entity, the value of all of them become much bigger. Now I give you a, a classic example, that I've run into many like this but this was three guys that each ran a hosting companies, and yes, web hosting and in, this is in the days before Amazon, Google and Microsoft dominated.

    Brad Costanzo: Mm-hmm [affirmative].

    Callum Laing: and for five years they had been meeting up about two or three conferences a year. and they got on and they would go out, drinking at, at night at these conferences and they would always get into discussion. You know, we'd be making so much more money if we just merge together. Okay. We'd be so much more profitable, so much more valuable. and then they would constantly just get into a battle about, you know, which brand did we use and if I wanna be the CEO of the whole group and… Yeah, they just get into fishing contest about whose brand is better.

    And and then what they were missing was if they all just threw their shares into virtual company above that, you know, they can all keep their own individual brands, but the value of that holding company that now own three companies and had that combined revenue and combined profit would be, significantly more valuable, than any of the individual companies on, on-

    Brad Costanzo: And more visible to bigger buyers. Bigger buyers, they don't, they don't wanna buy doing like two million dollars a year.

    Callum Laing: Exactly, exactly. So yeah, that, that was really the you know, Jeremy had already started working on that. And he had been you know, he'd been acquiring distressed companies for no money down and then working out, you know, fixing them and working out how to sell them and, and realizing he couldn't get much for them but if you put them, group of them together he could get much more for them.

    then kind of the evolution of that was, well actually I can get an even better price for them if I'm willing to take public stock rather than cash. So, so people would pay a premium, if, if I'll accept their stock rather than their cash. and so that seemed like kind of a, a good idea. But then what he realized was that once these PLCs have bought these small businesses, they then destroyed them [laughs]. Basically said that, we're, we, we wanna buy you 'cause you're entrepreneurial and you're in the business and you've got a great little business, we love your culture. but now we've bought you, we're gonna teach you to be like us.

    So you know, and you need to put all of your employees on the same con- contract, we need to re-negotiate all of your client contracts on our standard template. We might as well re-brand you 'cause our brand is better. And, and at which point all the time, all those small business leaves 'cause it's not-

    Brad Costanzo: Yeah, exactly.

    Callum Laing: … that's not what they signed up for. and, and so that, that was kind of the the, the catalyst to Jeremy going with why don't we create our own PLC, and not do that? And

    Brad Costanzo: That's kind of the evolution- Now that's, that's fascinating. As I mentioned off line I've gotten involved, I've got I'm a partner in a, in a company. We're doing a more, a, a non-public roll up. The, the basics of it, if you know, in a curiosity or, I haven't even-

    Callum Laing: Yeah.

    Brad Costanzo: … talked about this to my to my listeners yet too much. But you know we, we, we realized that one of the, the hottest products out there right now is CBD, you know, kind of a dial, settlements. And it's going like crazy. It's, it's an extremely, I guess, I don't know if fragmented market is the thing to, to call it, except there's no real, major brand leader. There's no brand who just completely dominates. Like, it's a household name in that, in that space.

    Callum Laing: Mm-hmm [affirmative].

    Brad Costanzo: And there's a lot, but there's a lot of people that… they'll hit a, a, a revenue plateau because advertising for CBD is so limited, on Facebook, on Google et cetera. So you've got a lot of companies doing two, three million dollars a year, and they'll… you know, there's, there's more but they'll hit a, a plateau. ‘Cause yeah, you just can't roll that organically.

    So what we've been doing is we, we go to one of them for instance, and we are buying, we're raising capital and then we're buying a minority. And it, the, the percentage differs but we may buy… Let's just say 49% of your business at-

    Callum Laing: Yeah.

    Brad Costanzo: … a lower end of the market multiple. But we're, we're [inaudible 00:53:16] with cash, we buy it at the lower end of the multiple and the, and the much lower end. But then what we've got is over the next, over the course of the next year, if you hit certain performance benchmarks and if you're able to you know, maintain profitability et cetera, then we will buy for you remainder of your, of your company with our stock. as a swap at the high end of the multiple.

    So we'll buy at the high end of the multiple with our stock, we'll buy the low end of the multiple with cash, and then that, you know, that puts cash in, in the bank et cetera. That's, that, I mean you, you understand what we're doing. The goal, ultimate goal here, and we've done this three times is to package up, I don't really know exactly how many, five, 10, maybe even mo-

    I don't really know exactly how many. five, 10, maybe even more of these brands that, are doin' some really good revenue. And then obviously the economy's a scale of working with a, you know, bigger company and havin', more access to capital, et cetera, that we would-

    Callum Laing: Mm-hmm [affirmative].

    Brad Costanzo: … then be acquired by, like, a private equity company or somebody else, or a bigger strategic buyer. Granted, that's all … You know, we hope that happens, but it's not, it's not as liquid, right? We'd still have to go-

    Callum Laing: Yeah.

    Brad Costanzo: … find a negotiative buyer in the, you know, in the private markets to take that, unless we decided to go public, which I don't, I don't necessarily think we would do unless somethin' else happens.

    But, … Yeah, so this is definitely … it doe-, it doesn't have the same complexities as a, as starting up a public company. But at the same time it doe-, it also doesn't have the- the sex appeal, [laughs] or and the, you know, of- of being able to say, “Well, look, this is … You know, you're trading, our shares. These are the value, this is the, this is-

    Callum Laing: Yeah.

    Brad Costanzo: … the liquidity, et cetera. So, like, I- I'm really lookin' forward to sharing this episode with, my friend and the CEO of, Citi Capital Group on this.

    Callum Laing: Hm.

    Brad Costanzo: But, yeah. So as I said, this, this- this came at just a really good time, 'cause we're, I'm watching closely based on what we're doing and what you guys are doin'. And I remember I got off the ph- … I- I- I got … I finished the book, and I called him. I was, like, “Go get this on Amazon today.” [laughs]

    Callum Laing: [Laughs] Huh, thank you for that, hm.

    Brad Costanzo: But … And I-, and I-

    Callum Laing: Hm.

    Brad Costanzo: … just wonder. I don't know if it's, … You know, we've got a little bit of momentum granted this- this market has just put us into a deer in the headlights a little bit. But, you know I'm, you know I'm just curious, if we start to continue down this route, at what point it may or may not make sense to go the model that you guys have been doing with, you know, the Agglomeration and saying, “Well, let's make this public.” So I- I don't, I don't really know. I don't know if we're at that inflection point yet. Sorry.

    Callum Laing: Yeah, I mean, I think, you've- you've already touched on the- the advantages, that the … being- being public gives you the creditability. I think gives you the, that, sort of, that tangible currency that- that people are more trusting. So it's easier to do deals and they can see exactly what's underneath the- the bonnet.

    and … But, yeah, like I mean there's, you know, in business there's a million different ways to skin a cat. and, they, kind of, go- go with what- what works for- for you, …

    Brad Costanzo: Yeah, exactly. Now are you guys, are you guys right now out there just continuously looking for good companies that, kind of, fit your mold? Because you mentioned that it's not necessarily in a specific industry you're looking for. but, … Like, wh- what- what are some of the businesses? And they, you know, there … I may even have some listeners on this who think, “Wow, this- this sounds great,” and after they read your book they'll really get it.

    what- what are some of the, kind of, businesses you guys are looking to continue to acquire, besides, like, you said, you know, profitable, well-run, et cetera. Are they any certain verticals you're looking at or looking away from, or?

    Callum Laing: No. We're- we're- we're pretty in- industry agnostic. I mean the- the stuff we tend to steer away from is anything that's- that's too sexy. So-

    Brad Costanzo: Yeah.

    Callum Laing: … cannabis right now is pretty- pretty sexy. … And- and general rule of thumb, if it's … If anything tech related, my first question is “Do- do you read TechCrunch?” And if the answer is yes, then- then that, kind of-

    Brad Costanzo: [Laughs]

    Callum Laing: … politely end- ends the conversation, 'cause it's-

    Brad Costanzo: Yeah.

    Callum Laing: … not- not for us. but, yeah. I mean the … Our sweet spot is, kind of, traditional load economy businesses. the average age of the companies that- that we work with is 20 years. … Yeah, this week we just acquired a caravanning company in the U.K., it's 53 years old. And- and-

    Brad Costanzo: Oh wow.

    Callum Laing: … and- and the average age of the- the guys running, all the guys, the women running it is, sort of, in their 50s and 60s. You know, they're- they're- they're still willing to … They've still got about three to five years in them at least. … And, yeah, they're not looking to exit.

    Brad Costanzo: Uh-huh [affirmative]

    Callum Laing: and like the companies that don't want anyone that's gonna destroy them, yeah. Even if they were big enough to sell to private equity, I like to think my [inaudible 00:58:22] are too sensible to sell to private equity. And- and the idea-

    Brad Costanzo: Yeah.

    Callum Laing: … of having some 32 year old, come in and, yeah, with an MBA and tell you how you should run your business fir-, and fire-

    Brad Costanzo: yes.

    Callum Laing: … half your staff. Just settle it with tons of debt just doesn't really resonate with-

    … with our, kind of, [inaudible 00:58:40]. …

    Brad Costanzo: I get it. And it doesn't … Does- does it matter at all what country somebody's in? If they're in the U.S., U.K., you know [crosstalk 00:58:47]?

    Callum Laing: No. We've got, we've got some, … So between, myself and Jeremy … So Jeremy runs, … It's a … Just touching on that and going back to that. So he runs an event called Harbour Club Events. so if you just search for harbourclubevents.com.

    Brad Costanzo: Mm-hmm [affirmative].

    Callum Laing: and, you know, pandemic aside, we normally do, Miami, LA, and Boston, but also Europe and- and, Asia. and- and that's a- a great three-day, course. but … And that, kind of, gives us a lot of our deal flow, and along with the introducers, and my time on the Agglomeration workshop on that.

    But we've got some fantastic companies coming through the U.S., Canada, New Zealand, Australia. Tend- tends to be English language, English rule of law, is,

    Brad Costanzo: Mm-hmm [affirmative].

    Callum Laing: … is the low- low hanging fruit for us.

    Brad Costanzo: Makes sense.

    Callum Laing: but- but, yeah, we get … we get [crosstalk 00:59:43] …

    Brad Costanzo: Are there revenue, are there revenue minimums that you're lookin' at?

    Callum Laing: so small EBIT. We're- we're tending to favor companies that are doing at least a million of EBIT and above.

    Brad Costanzo: Gotcha.

    Callum Laing: You know, but that's, kind of … Yeah, normally by that point gets sorted out, along with the internal staffing.

    Brad Costanzo: Staffing.

    Callum Laing: What I wro- … When we wrote the Agglomerate book, we had a lower target. I think we were saying, like, $400,000. And we were getting companies that were $200,000 and we're, like, “Yeah, okay, we'll- we'll bring you in.” But, what you find with those smaller companies, is the CFO is also the HR manager, the IT manager, the coffee boy.  [

    Brad Costanzo: Laughs]

    Callum Laing: … [laughs] and- and- and trying to produce accurate financials on a monthly basis was nearly killing them. … So, yeah, normally [inaudible 01:00:31] companies got a million in EBIT. But, they- they tend to be f- fairly grown up.

    but yeah, like when we … We get inundated with, deals, like, uh-huh [affirmative], … So, I mean for a couple of years I've been saying we get about a thousand a year. So, like-

    Brad Costanzo: Wow.

    Callum Laing: … two or three, two or three a day. but actually in the last three to six months, I'd say it was, kind of, closer to five to 10 a day. … Now not- not everyone is right and we, we probably end up doing 15 to 20 acquisitions, of deals a- a year. and basically anyone that applies, we send them a copy of the Agglomerate book. … that gets rid of everyone that can't read, which is,  [

    Brad Costanzo: Laughs]

    Callum Laing: … [laughs] a good start. But it also gets rid of anyone that's, kind of, yeah, thinks this is an exit or-

    Brad Costanzo: Yeah.

    Callum Laing: … can I get it to a early stage for us [inaudible 01:01:24], yeah, with the wrong- wrong space. So,

    Brad Costanzo: How long between-

    Callum Laing: … yeah [crosstalk 01:01:29].

    Brad Costanzo: … some … When somebody applies, when they're a really pretty good fit, how long does it typically-

    Callum Laing: Hm.

    Brad Costanzo: … take between application, due diligence, and, maybe, closin' the deal. I mean, just I … Obviously-

    Callum Laing: Yeah.

    Brad Costanzo: … it will take longer than others. But is it a …

    Callum Laing: Yeah, of course, we've got … We typically have 30 to 40 going through due diligence at any given point, and that-

    Brad Costanzo: Yeah.

    Callum Laing: … can, … You know, we've had companies in that pipeline that we started contacts in 18 months ago. And, yeah-

    Brad Costanzo: Hm.

    Callum Laing: … it's just stuff- stuff keeps coming up.

    Brad Costanzo: Hm.

    Callum Laing: I think the quickest- quickest from first phone call to announcing to the market that they'd gone public through us was 10 weeks.

    Brad Costanzo: Okay.

    Callum Laing: but that was because they had all of their due diligence, kind of, set up and- and ready to go, because they … and they'd been doing another deal, and then they saw us and decided that we were a much better option for them. but they were already, kind of, set up and- and geared to go.

    well I'd say three- three to six months is probably, the- the, kind of, time frame. And- and basically this … The only cost that the company will incur is, … And it can even, in, occur after you've joined. So we can announce and get you into the group. But at some point, you have to have all of the financials, 'cause you're compensation is based on

    Brad Costanzo: Sure.

    Callum Laing: … all of the financials. And- and most small businesses don't have that. it … But that's the only cost that you incur, prior to- to coming in.

    Brad Costanzo: Nice.

    Callum Laing: Hm, hm, yeah.

    Brad Costanzo: So now has there … I mean, are there any, … With this, with this existing climate right now, obviously, you know-

    Callum Laing: Hm.

    Brad Costanzo: … there's a whole bunch of unknowns. But has it-

    Callum Laing: Yeah.

    Brad Costanzo: … has it really pushed pause on some of the stuff you guys are doin'? Is it still …

    Callum Laing: No, actually, it's … I posted about this on- on LinkedIn recently. It's … Yeah, for five years people have been … One of the big questions is always, from a company coming in, “Well, what happens if there's another global downturn?” now I was a small business owner that went through the global financial crisis. I- I had to lay off 38 to 42 staff. And it was-

    Brad Costanzo: Hm.

    Callum Laing: … the most brutal, painful, lonely period of my entire life. It was just horrendous. and it all … I always say, “Well, you know, if you're gonna go through a downturn, I'd much rather be in a group of companies that have a vested interest in my success then sitting on my own tryin' to figure this stuff out.”

    Brad Costanzo: Mm-hmm [affirmative].

    Callum Laing: now I was, kind of, hoping we weren't gonna test it quite so soon.

    Brad Costanzo: [Laughs]

    Callum Laing: [Laughs] but- but it's been fantastic to- to- to see the way the companies … Just 'cause they- they do. They all have a vested interest in each other's success, so … And they're all going through the same thing. And- and, so, every day we're all on Slack and Zoom, and, jumping on calls going, “Okay, look …” yeah.

    I've just gone out to my staff and said, you know, “We need to do a 15% salary cut across the board, so- so I don't have to lay anyone off.” That's- that's our plan for this month, and- and this is how they reacted to that. And all the people are going “Great, yeah, that's a much idea than- than what I was looking at. Okay, let me try that.” And, yeah.

    the- the communication from government is not always that clear. But, … And so, you know, those companies that have got lawyers, it's … And- and, you know, I got- I got the time to, kind of, pull it through the- the new regulations. And I've done that and then put it into English speak for, others-

    Brad Costanzo: [Laughs]

    Callum Laing: … and, yeah. So it's-, so it's really the, … It's, it's really great to see, how those companies pull together. And- and, actually, we're not seeing … We've had a couple of deals that were, kind of, close to announcing, and they stepped away from it. And in- in both cases they said, “Let … I would much rather be in the group than out of the group, but I don't feel comfortable coming into the group until I've secured a couple of big deals that- that are currently on hold.”  [

    Brad Costanzo: crosstalk 01:05:48]

    Callum Laing: … so, and again that …

    Yeah, and- and look, again, it's that, kind of, that, sort of, moral, values that- that, … It- it's fairly unifying that- that all the businesses that- that we end up working with, yeah, that they're just good- good people. They like the model, … regarding, you know, in- in any … Yeah, the money hasn't gone away. in fact quite … Yeah, there's a lot more being printed.

    Brad Costanzo: Yeah, yes there is.

    Callum Laing: … so it- it- it's just shifting into other places. And- and, you know, for example one of the businesses that we've got trains care staff. and they're getting in- in the U.K. And they're getting absolutely inundated with people that have been laid off from their- their jobs, and want to- to help in this challenge, and want to be trained up as care staff so that they can go and- and help.

    So, you know, with- with- with every, kind of, with every, dark cloud, there's a silver lining. So, … And I guess that's the, that's the value of a portfolio,

    Brad Costanzo: Yeah.

    Callum Laing: … approach for- for investors.

    Brad Costanzo: It really is. So, do you, … You don't know what you guys are gonna do on the new, on, the next workshops, et cetera? Is that still, kind of, to be determined based upon the coronavirus?

    Callum Laing: Yes. I think we're- we're [laughs] we're pretty much, canceling everything over- over the summer. I think, … I-

    Brad Costanzo: Yeah.

    Callum Laing: … I- I'll send you the links. You can stick 'em in the- the show notes. But I think-

    Brad Costanzo: Yeah, that'd be great.

    Callum Laing: … the next one in the U.S. was scheduled for something, like, September in Boston? …

    Brad Costanzo: Mm-hmm [affirmative].

    Callum Laing: And, so who- who knows.

    Brad Costanzo: We'll see.

    Callum Laing: [Laughs]

    Brad Costanzo: We will see.

    Well tell …

    Callum Laing: But- but we're putting out, we're putting out lots of content on line. So, yeah, follow- follow me on LinkedIn, answer your, questions.

    Brad Costanzo: Yeah, so, obviously this brings us, kind of, to the end of this conversation.

    Callum Laing: Hm.

    Brad Costanzo: But, man, I've- I've really- really enjoyed it. It's- it's always fun to be able-

    Callum Laing: [crosstalk 01:07:47]

    Brad Costanzo: … to, to read a book. Be … You're just completely mesmerized by it and with a lot of little epiphanies goin' off, like, ding- ding- ding. It's … that- that's one of the rare things where, like, most of the business-related books I read, I'll get a little incremental knowledge. Like, oh, that's an interesting insight. But yours definitely had-

    Callum Laing: Yeah.

    Brad Costanzo: … that- that, “Oh wow, I never thought about it like this before. Like that's really [crosstalk 01:08:09].

    Callum Laing: Yeah, like, oh, I appreciate that. It means a lot.

    Brad Costanzo: Now you mention, a link for people to, or somethin' that, you know, get the book.

    Callum Laing: So, I will, I will set something up so they can download a free copy of the book. I'll send that over to you.

    Brad Costanzo: Yeah, cool.

    Callum Laing: … and- and- …

    Brad Costanzo: And that'll be in the show … There'll be a link for that in the show notes guys. We don't have that set up, but we'll make sure that if you, click the link on the, in the app, or in the, on the blog, wherever you're reading it, we'll make sure we get that to you. And I can't recommend it highly enough.

    are there any other, are there any other big nuts that you're tryin' to crack right now? Is there anything that, …

    Callum Laing: Hm.

    Brad Costanzo: You know, it sounds like-

    Callum Laing: there's no …

    Brad Costanzo: … this was … Might be able to be, like, “Hey, maybe we can help?”

    Callum Laing: no. Though, the … Once- once you download the- the book, we are gonna do an online summit for- for anyone that's interested in- in- in the book. And it talks about three areas, which is alpha, which is, like, getting- getting great returns on your investment liquidity, and so the small cap, my cap space. And, then, impact, … So how you can actually do good with your investments.

    and I think on May the 11th and 13th, we're gonna do, 11th through the 13th, we'll do an online summit. so, yeah, you'll have a chance to get a free, free ticket to that as well. So,

    Brad Costanzo: Beautiful.

    Callum Laing: … I will …

    Brad Costanzo: Yeah.

    Callum Laing: Look out for that.

    Brad Costanzo: I love it, I love it. Well, Callum-

    … it's, … What time is it over there where you're at? You're over in Singapore right?

    Callum Laing: Yeah, it's, s-, 10 crack it is. We've we've been talking how much? it's, 10- 10 to 11:00 in the morning.

    Brad Costanzo: All right. Well it's, it's 10 til 8:00 p.m. here at night on the other side of the world. But I really-

    Callum Laing: Yeah.

    Brad Costanzo: … appreciate you spendin', an hour or so with your morning with us and,

    Callum Laing: Well it's been fun.

    Brad Costanzo: … and sharin' this. I'll … I- I really look forward to, and staying in touch with you and, you know, maybe, maybe we'll end up doin' a deal one of these days together, you never know.

    Callum Laing: Yeah, I hope so, I hope so.

    Brad Costanzo: Thank you, Callum, have a great one. And for everybody else listening, if you like this, check out the links in the show notes. Make sure you subscribe to the show so you don't miss this. And if you have any questions at all, if you want any further clarification, or if you have any ideas, or even, you know, suggestions for other topics or guests, please shoot me an email to askbrad@baconwrappedbusiness.com.

     

     

     

     

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