The Origins and Future of a 9-Figure SMB Holdco

I completely agree that we'll see more of the holdco over time, especially as it takes time. But I think that the permanence of the hold will be tested because everyone with these businesses, if they're going really poorly, you'll be challenged to start a holdco. If they're going really well, you'll be tempted to not have it be permanent because there is always that potential exit.

I mean we own all of these companies within the family and they could be listed for sale at any time. And so there is that temptation for the new folks. And I think, you know, one thing I've thought a lot about is that long term hold takes patient investors and patient capital.

So you're incredibly aligned. Most people I would expect out there, if they're not bootstrapping like a Chenmark, they maybe had to go to multiple sources and then that becomes a very difficult thing to do. And so I think that's one of the hangups of doing it.

But that's a natural one. And it's not to say one model is better than the other, but we certainly love doing it this way.

And the liquidity constraints become real. Of oh all my. I supposedly have good net worth but it's all tied up in this business and we take below market salaries of what we could do other places and. But we don't see a lot of liquidity because we're reinvesting and growing and doing all those things.

So you have to really have the mindset for I want to go built.

I'm reminded Matt of something you said but to this point Gantt, you said Matt, in the pre call that that just a lot of people in their careers they, they, they need to get that first liquidity event there. There's this, this strong pull two on the board and so if they have, if they bought an SMB that is generating free cash flow that could could be sold for 3 million or $4 million, they're very…

To.

To. To what? To what? Why, why, why wouldn't they do what Your dad did Gant and be like, I don't want to sell this million dollar annuity ever. Nobody can pay me enough. Why not do it that way?

Why. Why is the temptation so hard to get 3 million in the bank versus 1 million in perpetuity?

Just as my dad struggled and needed someone to say, go hire a manager, they don't, they don't think about, I can do that and then I'm going to go reallocate my time and, and work that way. That's a hard, it's hard to give up control of your small business that you've taken from the owner that you bought from and grew it and made it better. Like it's, it's emotional.