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[00:00:00] Colin Keeley: Hello and welcome back. This is Colin Keeley here.

[00:00:02] Brent Sanders: I'm Brent Sanders

[00:00:04] Colin Keeley: and we are two guys buying and building wonderful internet companies

[00:00:07] Brent Sanders: and it's basically summer is on its way 2024. Like we it, we're recording this in the early June, and I don't know about you in Texas, but it is like paradise here in Cleveland, Ohio.

It's so nice to have some normal weather. Outside doesn't hurt to go outside anymore.

[00:00:26] Colin Keeley: Yeah. People don't generally call Texas Summers Paradise, so that doesn't come out quite as often. I was about to say,

[00:00:34] Brent Sanders: how's it by you?

[00:00:36] Colin Keeley: It's getting hot. So the people say, Austin is perfect weather for nine months of the year.

And then those other three months, it's like, I think last summer was over a hundred degrees for 40 days in a row. And we're just getting close to that now. Yeah. But like, I don't know. I lived in Minnesota for almost a decade and, and the worst of it, you just can't go outside. Like your skin hurts immediately upon going outside.

This is nothing like that. I mean, you could still spend most of the day outside around like a body of water in the shade and it's, yeah. Perfect. So yeah, the neighborhood pools just opened up. The splash pads are open, so we're having a good time here.

[00:01:14] Brent Sanders: Good. Glad to hear. Yeah, same deal here. Just spending a lot of time at the pool as, as many, like, it's funny, it's, it's light out later.

School's just let out. So my son who's still school age, he just finished up school. So, every day when I get home, I, I take the kids right to the pool until seven 30 or so. Tire 'em out. And they're both like little swimmers. It is unbelievable how for a 2-year-old and a 4-year-old, how well they're getting comfortable with going underwater.

Definitely advocating if you're out there. . My daughter, when she wakes up, she'll say, okay, are we going to the pool now at like, six 30 in the morning? And so then it's just, no, no, not now, after work. And she'll go, why?

Why? No, it's, they're, they're addicted to it. They love it, and it's such a great, like, I don't know, it's such a great way to get energy out.

[00:02:01] Colin Keeley: Awesome. Yeah. We're just getting into it. After you turn like 12 months the pool becomes like a big hit. So this will be the first big summer with it? Yeah. Okay.

What, what do you wanna talk about first here? Cool. We haven't done an update in like a month.

[00:02:12] Brent Sanders: Yeah, you went to Capital Camp. Why don't we talk about that?

[00:02:16] Colin Keeley: Nice. Yeah, so this is my second time going. I, I did a, a bit of a recap last year, but basically this guy, Brent Bisho and Patrick O'Shaughnessy, and they host this camp, like it's a conference, but it's supposed to be like a, a cool conference of sorts.

So it's like a bunch of activities and small group discussions for, private equity LPs and like VCs and exited founders for the most part. But it's cool going back, for the second time it's like you're seeing a bunch of the same people. I, I heard it was 50% returners this year.

So it becomes almost like a reunion of sorts. So it's really cool catching up with folks, for us it's useful to meet these family offices and spend time with them and like build relationships over a period of time. But you kind of start to feel that compounding as you do it year after year.

Then it took a bunch of notes,

[00:03:04] Brent Sanders: the. These types of events are, are so much better when you're returning. You know what I mean? It's like, it, it's strange in this world, in like the world of, I guess, investment to kind of show up for one year and not not come back. Right? It's like, it goes against the whole concept of like, are you actually doing this or you just, did you just buy a ticket?

And I know it's somewhat exclusive, but, I think it's, it makes a huge difference to like, Hey, nice to see you again. How have things been, what has changed since the last time you spoke? I'm curious to hear like how sentiment has changed and how, maybe less so of the topics, but I. You know how like the overall landscape feels in contrast to last summer?

[00:03:46] Colin Keeley: It is funny. You could feel like the waves of it, for sure. And the joke this year was that there were way fewer VCs because they don't have any money anymore. So that came up a few times. But like nice. Last year there were, crypto people kind of dropped off. So there's only one guy that even mentioned crypto, and it was like, kind of unrelated.

They used it, but they don't, put it consumer facing. I guess other things that are hot topics is like everyone's trying to figure out ai, so people are using it different ways, some really clever ways around like sourcing and analyzing deals. The difficulty of trying to get your team to use it when the team is concerned they're gonna get replaced effectively.

And, people could be more productive so that there's a lot of folks trying to do like hackathons. The funniest one was one guy matches his ordering heart rate data. To his meeting schedule and then analyzes like which calls he should discontinue from that. That's great. But yeah, so this year it felt a little more like, money making endeavor last year.

In previous years it was like more extravagant. Like they're really cool events. Like you go shooting with Navy Seals or something. This year was like, I played tennis with the Mizzou girls tennis team like every day basically. 'cause it's one of the few physical activities that were offered.

Cool. That worked at like 6:00 AM. But it was super fun. And then some of the best talks, they're like, they're not really talks, they're like small group discussions. It's like, anyone in the room could give an interesting talk. But it's just around topics. So one of the best one was this guy, I think Jeff Sands is his name, and he does like complicated turnarounds and so he.

Is half the time he goes in and buys the business. Half the time he is brought in as a consultant and it's often these companies with like tremendous amount of debt and like all these different obligations and he has to reorganize them and like, basically beat 'em down. And so what he does is he does the threat of.

Bankruptcy and he like holds that over the debt holders to get them to accept a deal. 'cause apparently otherwise in bankruptcy the court will effectively rightsize the debt and they'll just, beat it down to whatever the, business could reasonably pay. Then some of it just gets thrown out.

So he often will get it to be like, look, I'm not gonna pay you for like two years, and then over the next two years I'm gonna pay you 43 cents on the dollar with no interest. And so he has these like amazing value creation situations where, seemingly the company was dead and worth nothing.

[00:06:13] Brent Sanders: Interesting. Yeah, I mean, I, I have a, a cousin that does like debt restructuring and, and it's very interesting to hear her perspective on similar, I mean, it's all turnarounds, it's all companies that are essentially like applying for financing, like bankruptcy financing, like that's the other option.

And they're gonna go through debt restructuring and that's what it kind of. Seems like it's, are you willing to go to the brink? Are you willing to go, turn your back on the entire thing? Because it's like the underwriting is already done. The funny thing she was saying and I don't want to attribute it directly 'cause I, I didn't tell her I was gonna talk about it on this podcast, whatever, but she was saying part of what she does when she decides to loan is like.

Really get a sense for the company and the owners that they won't go bankrupt, right? Like, that's her number one thing is making sure that she was talking about doing a deal with like, I don't want to go into the industry, but basically doing a deal and, and meeting. The owners in understanding like their religious beliefs and understanding their, ethics as best you can pull that off and, and having that been, be like a major factor in the, in the restructuring deal, like a major factor in her.

I. Decision making. So it, the more you learn about this, the more you realize it is a little bit more of like a wild west, right? It's not so like, well, you owe this and going to pay it. It's like when shit hits the fan, it's like, well, we gotta figure this thing out. Which I never really appreciated the difficulty or I guess the.

The, like what debt providing like the risk associated with it. Like obviously yeah, you're loaning a lot of people money and they might not pay back, but like everybody could not pay you back. Right. It's like, so I appreciate the people that can, can. Move to their spreadsheet and, not have to meet every person they loan to.

But yeah, it's, it's a very interesting subject and it makes a huge impact, especially in B2B SaaS. Like, I mean, any, any acquisition like debt, we've talked about it a ton in the past. Like debt can turn like an okay outcome, growth wise into an amazing outcome if properly leveraged. So yeah.

Interesting stuff.

[00:08:22] Colin Keeley: He is super funny guy, really good storyteller, really optimistic, and he's only ever had to go to court once. So he tries to negotiate this all basically with the threat hanging over everyone's head of like, Hey, this is what a judge is gonna determine and would you like to accept this now?

Or do you want us to like continue down this path? And then I didn't realize it was like depending on exactly what the debt is called and how it's like. Instrumented depends where it falls in the stack of like, for example, wages, they always get paid. Like that's the number one thing. But there's all these different types of like, senior secured, junior secured, vendor suit, class action leaseholder, broken contracts and this all like, kind of falls in a, a perfect line and depending on where you are in that line is like, this is the deal you're gonna have to accept or you're getting nothing effectively.

[00:09:13] Brent Sanders: Yeah. Have you been following like the, the FTX sort of call it a turnaround?

They put a CEO in place that I think. I could be wrong on this, but I feel like he also took over after Enron, who basically was exposed for their financial issues. But, they put a CEO in place and he's trying to, or maybe it's a COO and he is trying to like. Deal with debtors and same deal.

It's like, hey, this is a company that is embroiled and fraud, or at least the ex leaders were, and what do you do with the remaining assets? Like there still were some assets there and there is, there is still a business to be, to be run there. I don't know what's going on with it, but it sounds like very similar sort of real time process that's going on right now.

[00:09:53] Colin Keeley: Yeah, I, so I try not to follow crypto or that stuff too much, but my understanding is actually that you, they made stupid, illegal mistakes. But I think that everyone should be made whole just 'cause crypto's so crazy and with the runup and everything, I think it's actually in like their investments in some AI companies.

I thought everyone would be made whole. 'cause there's like real significant assets there still.

[00:10:16] Brent Sanders: Yeah, they, they did file bankruptcy, if I'm not mistaken. I think they did that a couple years ago, but, or when this all kind of happened, but still, yeah, it's interesting thing that like, yeah, when the payments stopped coming in, then it's like, okay, let's figure this out and let's do something reasonable.

So that is interesting. I mean, what were some of the strategies that he was saying? 'cause it's like you can't just be the guy holding their grenade. Saying I'm, I'm gonna drop the grenade. Like nobody wants to negotiate with that person. I'm curious how he's able to sort of endear himself with his deal partners in a way that like, that's sort of an insinuated.

I don't know, men, like, Hey, there's this theoretical grenade that I could be holding that I might drop in the room and we'll blow this whole thing up. It, it just, it's very delicate. I would imagine those conversations. He, in order to not lose faith,

[00:11:08] Colin Keeley: I mean, he walks in there, he actually makes it sound super easy.

I can't imagine those discussions are as easy as he makes it seem, but. He very much is like a mediator of like, he is coming from the outside. It's not his company that got into the situation. So he's like, this is the situation. Let's all look at it realistically and, see what the best we could do here is, or else the alternative is, this all gets tied up for years and no one gets paid for, indefinitely effectively.

[00:11:36] Brent Sanders: Yeah. Cool. Yeah. What else you learned at Capital Camp?

[00:11:40] Colin Keeley: I would say a lot of people are, into debt, into cash flow. VC is very much on the outs. Bootstrapping is in, a lot of people are figuring out like, how do you protect your time and say no to things and try to focus more. So it's really funny how some people say no to meetings or emails or like a lot of the ones that are the most.

I don't know. Popular is the right word, but, most sought after, they don't even give reasons. Like they just, they focus on their like core relationships and their core work, and they just don't take any outside meetings. They don't reply to any emails. Like they're very much people don't, I. Like, have any claim at my attention or my time.

So seeing how hardcore some people are about that was interesting.

, the one other takeaway is like, tons of people fly private there and fly private back and it's like, wow, these people really aren't any different.

I. Then you or I, and they just have reached this like, crazy level of success where they own planes and stuff. I, I think that's just useful to see how close, periodically, meet these people and be like, it's not terribly harder to do this at a 10 times bigger scale. They're no different than anyone else.

[00:12:48] Brent Sanders: Yeah, I mean, so there's more to that though, right? There's gotta be more right there. I mean, otherwise is it just luck? It's like those people work as hard as I do and they're just lucky they're. Right place, right time, or is it, is there, does success leave clues? And it's like, oh, well, I was, I don't know.

Right. It's like that I always, I have had friends that have been in that position and there's usually a reason, right? There's like. Oh, like this person's lucky sperm club, or they made an amazing trade that one day and it, panned out or something like that. Or they, they made some sacrifice, but yes, they're still people.

I don't know. I mean, it's like we're all doing the same things and getting up in the morning for a lot of the same reasons. But they get to to fly , a lot more comfortably than, than I do. But, yeah. I'm curious if, in those. Environments. It's just sort of a, a side effect of the industry of like, Hey, if you're a capital provider, odds are you're, you're, you've seen your track record is such that, $30,000 for a flight from wherever to, to Missouri's, no sweat.

[00:13:57] Colin Keeley: Yeah. It's also great because Columbia, Missouri is a tiny airport. And so I flew out of there both times and on the way back it gets delayed. Of course, it's a tiny airport and then you just get screwed 'cause it's Memorial Day weekend and like every subsequent flight is also booked. So there's a huge reason to fly, your own plane there for sure.

But yeah, most of these people, yeah, like the wild successes for the most part, he. LPs you have either had a successful business or they came from family with money or the rest of 'em, for the most part are just, they started, way earlier and then have just, scaled up since then.

Yeah. You do bigger deals and your, your businesses compound over time. I wouldn't say there's any like you Wild Secrets. The one guy that's like super impressive. Yeah, Thomas. Is so he was this, somewhat successful founder. He is young, I know him. He's, in Austin. He's probably like 40 or maybe even less, and he has done.

55 acquisitions in the last five years as a non-finance guy. He's like a marketing guy. And I think he has wow. 10 platforms and like $80 million in EBITDA across all these acquisitions and his talk, oh, I knew 'em before, but like him going through the details is like, holy shit. That is a unbelievable pace for a non-finance person to achieve.

Yeah, so much. So it's like, how is this even possible that a non non-finance person put this all together? To do 55 deals in five years in like, all independent sponsor style. Yeah. That's really, so every rollup is its own thing.

[00:15:27] Brent Sanders: That's killer. Yeah. Well, those are great stories. I mean, that's, that's kind of the thing. If, if somebody like that's giving a, a, a talk and kinda laying down. They're, just like, how do you, how do you see the world? How do you see work? How do you see lifestyle? Like those are interesting things to, to try to kind of get that perspective.

So it's, that is super cool. So yeah, it's kind of, it's sounds like it's, it's almost like rockstar camp. You get to go and, jam with people that are, at, at a way different level. It, it's nice. I mean, it's, that's the only way to get better, right? It's like you, the two things that I've learned, it's like you, you practice, right?

And you mimic. And you do what the, the people that you think are successful or in whatever realm. Like if you're playing sports, you're, you're picking up styles from people that you see that are pros and then, you of eventually keep, keep going, keep putting in reps, keep working and you, you will get there.

Right? Or you'll, be a product of the people that you study roughly. So, I don't know. It is, it is encouraging to like, hear that. It's not, oh, I just did one deal and I was lucky and I, blew it outta the water. So, just keep, I think as, as I reflect back on, the work that we've done, the stuff that we've we're definitely starting small, but I, we are kind of continuing to trend in the right direction of like moving up market, doing larger deals.

And you can see it compounding, right? So. Like it. Does that seem like what you observed with some of the other peers there? It's like they started small or they, maybe they started at a certain point, but they continue to grow and it is that like compounding deal size, compounding scale. I.

[00:17:02] Colin Keeley: A hundred percent.

It's almost like you, you earn the right to play the next game of like, you people start small, they start an agency or something, or they buy some small business and then they, they sell it or it compounds and they move to the next thing and the next thing. So yeah, the division at the camp is like, some people did that and continue to bootstrap and then you have.

Would shop their own acquisitions, which is great if you have some like crazy cashflow machine that you could do that. Other ones, went the other people's money route and scaled up that way. And they seem to run ahead, far ahead over time as they keep scaling up the deal size.

Just the leverage of using other people's money and doing bigger and bigger businesses is just so substantial. Yeah, the, a lot of them like, yeah, Andrew Wilkinson was there. He's a perfect example of like, at 18 years old, he had a wildly profitable agency and that just, he did that forever.

And so at a pretty young age, he was making like $5 million a year that he could plow into acquisitions. And so that's how you know now that he's like 40 ish. He has this like empire. But he has the advantage of doing it for effectively like 20 years at a pretty good scale.

[00:18:10] Brent Sanders: Yeah.

[00:18:11] Colin Keeley: Cool.

[00:18:12] Brent Sanders: Yeah, that's, that's promising.

[00:18:15] Colin Keeley: I, I guess one other update over here that's shocking. It's super weird. I told you about it yesterday a little bit, but, so I had lasik. 10 years ago, 2014. It was amazing. I was like Superman. I had, 2012 vision, basically like, perfect human vision. But that has, gotten worse over time.

And I started wearing glasses maybe three to five, yeah, like three plus years ago. And I've gotten a new prescription and I've been wearing glasses and contacts. I was looking at getting LASIK again, so I went and, been doing all these dilated eye exams, which kind of knocks me out for a day because if you have really light eyes, you become super sensitive for a way longer period of times.

So I basically just have to hide inside and listen to an audiobook. But through that learned some interesting things yesterday. So. Do qualify. If I want to do it again, my corneas are thick enough, but what is super weird is I don't have to do it again. So when they paralyze my eyes, my, they do the whole eye test again, and my vision is effectively perfect and my right eye.

And my left eye is like 0.25, which is so low to not even be like a meaningful prescription. And so what has happened was I was given glasses that were too strong, and so my eyes are effectively strained at all times, and I've been looking at screens too much, and so they're like effectively tense, and that is giving me, screwed up vision.

So it doesn't require an operation. Whoa. Yeah. So like when they paralyzed my eyes, it was almost like I had the procedure again and I could see , clearly and drove home, with sunglasses on, but without glasses. So yeah, I have to look at screens less, so I have to figure out how to do that.

What they recommend is they call it the twenty twenty twenty rule. So every 20 minutes you're supposed to take a break and then look at something over 20 feet away for at least 20 seconds to effectively relax your eyes. So not, stare at screens all day.

[00:20:04] Brent Sanders: Oh, wild.

[00:20:05] Colin Keeley: Huh. That is my plan.

That is

[00:20:07] Brent Sanders: interesting.

[00:20:09] Colin Keeley: Yeah. So careful, I guess, with getting the wrong script or prescription on your glasses, and then you don't stare at screens all the time, or you give yourself this issue.

[00:20:18] Brent Sanders: Yeah, I feel like people will always warn you. People always warn you about that. Like, don't you know, don't wear glasses when you don't need 'em.

And that's always the thing, man, that, so what are you gonna do?

[00:20:29] Colin Keeley: I have to get a much, so I guess backing up my eyes used to be bad. It was 4.5, which is a substantial prescription. That was 10 years ago. I got it. It was perfect. And then now my contacts and glasses are like 1.5. It turns out I probably need like 0.75 or less.

So I have to get, I'm just not wearing glasses. It, I have to get new, much lower prescription glasses. And I don't know if functionally like, I wish I could not stare at a screen, but I also have to do work. So I've just been like you. Yeah. Setting a timer on my phone of every 20 minutes. Like, hey, put the computer down, go walk outside and look up and down the street.

[00:21:08] Brent Sanders: That's hard to do when you're like deep in work. If you're like in the middle of something, I have a very hard time peeling away and like, yeah, that's, that's like I do the pomodoro technique, right? It's like 20 minutes, five minute break, 20 minutes, five. It's, it's like a regimented thing and it, it's so hard to, like, if you're in the midst of something and you have it in your mind, what you.

Doing and you're focused to like break that state and then go outside 'cause you just, you're in the, in that flow state. But that's a bummer here. One thing I'm realizing is I never quite realized, did you rock the rec specs through your basketball career then? Is that what that means?

[00:21:43] Colin Keeley: No, I always had contacts.

You, I, I knew just a handful of people that ever did that. Oh, okay. But yeah, contacts are what most people do. Or a lot of NBA guys do get lasik. Nice. But yeah. Contacts otherwise.

[00:21:54] Brent Sanders: Yeah. Cool. Well, it's a good update. I mean, I think in terms of, what's going on on our end, do we want to talk about anything related to the portfolio or anything related to new deals?

Just kinda leave those things out for now.

[00:22:06] Colin Keeley: Can't talk about new deals. Have, exciting updates there, down the line. We're happy to share, but I don't know anything of existing companies you wanna talk about.

[00:22:16] Brent Sanders: Just no, I mean, things are going really well. I'm just trying to think of like, interesting subjects around what we're doing.

I mean, I think new features are continue to come out and we've been talking about ways of marketing them. Maybe we'll kind of dedicate a future episode to kinda what that process is like. We were talking about on our meeting earlier this week of like, we've started to kind of branch out. Scout, go away from, not go away, but like append grooming and boarding and training use cases into the walking app in order to try to, get more market share essentially.

And so now that we're at the point where, hey, we have these case studies, we have this functionality, we wanna figure out, okay, what are the techniques to, to kind of promote that and, and go after a new customer base. But that sounds like that might just be more interesting for a future. A future episode.

[00:23:08] Colin Keeley: Yeah. I, I think we alluded it to the PA in the past, but it's like moving up market more. So, so we've been doing that with trial customers and, well, I guess it's probably worthy of its own episode in the future.

[00:23:19] Brent Sanders: Cool. But yeah, that's all I got. Thanks for listening everybody. Have a. Have a great, wonderful weather summer, if you're listening from the Northern Hemisphere.

[00:23:29] Colin Keeley: Yeah, from the Midwest. All right. Take care. Bye-Bye. Yeah.

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