James Rose: From Founder to Employee to Agency Acquirer

Episode 105 - James Rose Transcription Jason Kirby (03:38.862) Hey everyone. Welcome back to a hundred million dollar exits. Today we have James Rose on the show, who is the CEO and founder of Inflective Group, a platform and holding company for acquiring marketing and communications companies. James, welcome to the show. James Rose (04:08.245) Hey Jason, great to be on, thank you. Jason Kirby (04:10.605) So James, I want to start with your first business and the story that really helped shape you into what you do today. was a classic boom and bust story. Tell us a little bit about what that business was doing and how that shaped you ultimately. James Rose (04:25.049) Yeah, absolutely. So I left university and got a grant to basically fund a new business. And at the time, there was a significant foreign investment into Bulgaria, about 20 billion over a five year period. And so I went out to Bulgaria and what was really interesting was about 50 % of that investment was going into property related services. So offline developments, land acquisitions, commercial projects. And I bought a small apartment to kind of get on the property ladder over there and realized there was no furniture companies that spoke English. Literally it was impossible to furnish an apartment. And obviously with hundreds of thousands of units being built, it was an opportunistic time to get into the market. So I launched an online furniture company. I was fortunate to find a local business partner to manage suppliers and staff, which was critical really. over there. yeah, it was a classic, you we grew really quickly, turned on ad campaign on Google and literally the phone started ringing and grew, you know, from sort of zero to three million over a two year period. And just thought everything was easy, to be honest, you know, first business, this is all sailing, spent six months of the year out in Bulgaria. And We had a really good run of things for about four or five years and extended into other areas. So we started acquiring land. We were planning an off-plan development next to a guy play golf course. And we had a property brokerage business. so we were extremely overexposed to the global financial crisis, obviously 2008 to 2010. It was a huge learning curve. So going from a kind of fast start like that. and never having run a business before, to then going into a huge decline very quickly, like literally 80 % drop in a year in terms of sales. We had to respond to that. And my response at the time was to get creative and to continue pushing. I never knew that an economic crisis would last five years or more and that credit would become impossible to obtain. James Rose (06:40.94) And so, you you had all these off-plan properties that people had put deposits into and they were just throwing the keys back. They didn't want to furnish them. They didn't want to, you know, even finish the purchase. And so we pivoted, we went to Russia where there was still some demand. We went and did an exhibition in Moscow and through luck really, we managed to meet somebody who's quite influential. We set up a network of sub-agents throughout Russia and Ukraine. And instead of building around development, which we were just launching at the event, we had to kind of pull back on that. So we took deposits from clients for off-plan development. Our funders got pulled, because obviously there's no development finance. We were overextended. had salaries to pay for, revenue was dropping, and it was a pretty brutal time, to be honest, to go through that, having... felt that everything was easy and then running into those roadblocks. And so it was probably like two and half year period of trying to push against that before I realized that like, this just isn't going to work. we, you know, the market's finished. It's going to be a long time before it comes back. And I'm glad we put things on hold. You know, we didn't have any disasters where we actually got like land repossessed or developments collapse or anything like that. But I had to come back to the UK. I was getting married at the time and, um, you know, I had to get a job essentially. And I think that was the biggest pill to swallow was having like seven or eight years of, uh, entrepreneurship to think, right. I'm now going to go for an interview. Um, you know, and it was tough, you know, when people look at CV and all you've done is your own business that actually you're a high risk, you're a flight risk as well. You know, how's this guy going to fit in? Is he really going to be one that's sold what to do? Um, so it was definitely a sobering, um, part of my career, had to kind of swallow my pride and, and just knuckle down and I was fortunate to join a really high growth digital marketing business and got into sales and, and ended up doing, doing well there. But, but yeah, it, it's, takes its toll. Yeah. Sorry. Yeah. Jason Kirby (08:45.773) Actually, James, if you don't mind, I kind of want to talk about that transition because I talked to lot of founders and not all of them become massive successes where they make millions of dollars and they can then do whatever they want. Some run into challenges like yourself where the business didn't become what they expected it to be and they're faced with that dilemma. Do I try to swing again and do another startup and be two years of living on ramen kind of thing? James Rose (09:06.49) Mm-hmm. Jason Kirby (09:14.507) job. And for those that may be married and or have kids, the job is often the path that must be chosen. So I'm kind of curious, like, you kind of brushed it off a little, you swell your pride, but like, how did you swell your pride? And like, how did you position yourself as employable? James Rose (09:26.874) Well, firstly, it was due to necessity. I had a huge business overdraft that we now couldn't service very easily. We had commitments. So the idea of a new business was just kind of felt like we'd done everything we can in the area that we knew and the market that we knew. And so it was, it was literally just looking for any kind of, mean, I think I naturally started quite high. was applying for jobs. I thought, you know, I would easily get, obviously got no response whatsoever. It's like, you've got no management experience. You've got no whatever. So, I think sales is one of those, one of those paths, which actually can open up a success for anybody. You know, you can learn it, you can be coached, you can overcome resilience and, and, And so I was just fortunate to that they took a chance on me. They were growing really quickly. and I think they could see that, I was either going to, it was either going to work or it wasn't. you kind of get a month, you only get a month to preview self writing sales. So it's not like you get a very long runway, but, but yeah, it was just, it was just putting the CV together, trying to make it as, agnostic as possible and not just like some Bulgarian, ex-pat who's, who's trying to pivot his career. Jason Kirby (10:52.896) And so when it came to like the jobs that you shot for, like whether it was like VP, director level type jobs or bigger companies, like what are the jobs that got denied? James Rose (10:56.878) Yeah. James Rose (11:01.566) Not quite that high. I mean, I was looking regionally to where I was based. So I wasn't at the time willing to kind of have a massive commute into London and things, which I did later in my career. So the circle of kind of opportunities was within like a 20 mile radius of where I was. And it was kind of mid-market, sorry, mid-management level roles initially that I was applying for in companies that I thought were of a significant size. But... I was kind of still led to smaller businesses. I didn't apply for any big conglomerates. it just, couldn't see myself going to work at like an Experian or a bank. just, that was never going to happen. So it was like, who are these kind of SMEs that actually at the time I still thought I could bring a lot of value to through my experiences. But what I found was that they didn't value any of that experience. They were hiring people that had done seven or eight years in a similar career, essentially. Jason Kirby (11:54.829) Yeah. So that's a, it's a painful pill to swallow and yeah, you built multimillion dollar business and managed it and probably had tons of people that you were managing and sales contracts, all that kind of stuff. And basically start over, um, you know, the career ladder, uh, you know, it's pretty humbling experience. And I guess what, kind of success did you see? Cause you know, it took you, you basically did sales and business development for years before kind of now taking a swing, uh, again at the founder role. So kind of what was that journey? James Rose (12:06.215) Yeah, yeah. James Rose (12:17.68) Mm-hmm. So, yes, so in that agency, I was fortunate to become one of the top, top tiered like salespeople in the business, generate a lot of revenue for the company. Personally, I was able to kind of get myself out of the hole that I'd created, know, repay off like the business overdraft starts to get some stability. We had our first child. And so I was just super motivated. Once I saw that actually, this was a no caps bonus structure, and people were earning very high six-figure salaries. I was like, actually, this isn't as bad as I thought it was going to be. But it was really tough. It was 150 calls on a Monday, sit eight meetings all week, go and try and close a small business on a search campaign. It was tough, but I learned actually a lot of resilience. I actually started to learn how to sell. And overcame my personal resilience with sales because I always has this stigma in my mind that sales wasn't really a career that you should follow. It's like you're taking money from people. It's all these kind of psychology, et cetera. But once you realize you're solving problems and you've got happy customers that you're doing a good job for, that then starts to become exciting for me. So from there, I did quite well and then wanted to get into an early stage company. I wanted to start to get some equity. which was obviously the original play with my own companies was I'd kind of been taught from an early age that you have to be a shareholder to really make some money. And so I joined a FinTech business, wasn't able to get equity, left after two years and then was fortunate to join an early stage video tech business. And we were about five or six people at a time and then we grew over seven year periods. James Rose (14:19.13) I was given the opportunity to move into sales leadership and expand within that business as the business grew, which is I think is what I wanted. In the sales role I was in originally, the opportunities actually the people are in the most money with individual contributors and I felt a little bit capped by that. wanted to kind of develop my career and be exposed to more than just sales. How can you actually really scale a company? Yeah, so that was, as you say, like over 10, 15 years of my career in those sales and sales leadership roles, which was good. But yeah, where we are now, obviously I've kind of pivoted to &A and trying to build value in different ways, but it was an enjoyable part of my career. Jason Kirby (15:14.86) So yeah, let's kind of transition to that narrative. Like how, I guess why, you know, did you kind of say like, okay, I've had enough of the corporate journey. I got the bug to go back and do something on my own and then why roll-ups? James Rose (15:20.198) Yeah. James Rose (15:30.135) Yeah, so there's a couple of steps for me. the equity play within the startup didn't materialize. So I could see that actually this was, I've been there seven years. This was when I left, I thought this really be another five years before any kind of capital event, just the path that business was on. So that was a bit of a wake up call that you know, can dedicate your time and effort to a company and not get a payoff at the end of it, should we say, which meant that I had to revisit my plans that if I wanted to do bigger things that I had to find a new model. I also could see this dichotomy between kind of bootstrap businesses and well-funded businesses. So when I left that... a video tech business, did some fractional work was my first step was like, how do I just get exposure to more businesses? So I was doing two days a week, fractional, I was being put into high growth companies that had some aggressive targets to me. Usually they had some go to market problems that I'd come in and solve. And I was just exposed to a whole diverse range of businesses, some had raised some who hadn't. And I thought, geez, this is still a really long path. know, most of these companies are three years in, they've probably got another seven or eight or maybe more. before the founders are gonna have some sort of exit event. How do we kind of shorten that timeframe? And that led me to looking at the &A market and particularly in the agency space, I could see a lot of change happening. You know, the big groups, the big holding groups that had been acquiring revenue for decades were under pressure. There was talent leaving those holding groups and going to independence. Shareholder value was dropping. Yet there was thousands of agencies that were really well run, profitable businesses that have been trading for 20 years. And so when I looked at that landscape, thought, how can we roll up our independent agencies that make it a really good outcome for the founders? So how do we de-risk some of the pitfalls of the execution risk that comes with rising big amounts of capital? Because I'd seen that that James Rose (17:45.528) has its risks, whether it be the technology, whether it be the people, it's never a dead cert. And so the model that we landed on was, how do we take a minority position? So we don't have to deploy lots of capital. We don't have to come in and run these businesses. But through a holding group structure, we can actually increase shareholder value much quicker. our model is to be like the final two to three years for the founder where they've already done the hard work, they've proved resilience, they've proved market cycles, they're cash flowing, but they're still unfortunately valued as an independent subscale business. And so by us achieving scale, we then attract capital that will take our group to the next stage. And that's what private equity are looking for. That kind of 50... 50 million percent enterprise value. There's a lot of capital waiting to be deployed because it's less risky than coming into an early stage venture from my personal obviously experiences. So it was multiple steps to that realization. And then it took a long time to, it took about 12 months of deals falling over before we actually got into our first agency, which was February last year. But it's a journey like with any founders journey, you learn along the way, you don't have it figured out from day one. And we've to make a lot of changes to the vision, to the terms, and kind of keep adapting. Jason Kirby (19:21.996) So let's talk about this market. know, lot of people are thinking, you know, technology companies and that's where everything's at. And there's been a pretty sharp shift towards real business. We'll call it, you know, cashflow revenue profit, mainly because in my opinion, the, the venture market grossly overfunded a lot of businesses. And, you know, I think one of your businesses in the past, the, you know, Wuxi, I think it was called. uh, raised 10 million, but it was effectively a service company. It's like, what was a service company, a managed service company doing raising venture capital or private equity at that level. Um, and a lot of these companies got grossly overfunded and, I respect the angle that you're taking with your, uh, you know, kind of new roll up and, you know, platform company of, you know, buying real businesses because that's been a general theme that's coming up more and more. We're actually working with a couple of tech companies to go buy. real company, you know, kind of buy real companies because, know, they have tech that these customers won't buy because it effectively depletes their, you know, it eliminates their job. So, you know, just some insight for our audience on kind of deals that we're structuring now and kind of curious to get your thoughts on it. We have tech companies that are in market that try to sell like a per se basis off software for like couple hundred bucks a month kind of thing. And they struggle to sell it. James Rose (20:20.063) Nice. James Rose (20:30.295) Yeah. Jason Kirby (20:48.2) And when we did a deep dive audit, we identified that they had a product that effectively eliminates the buyer. So the buyer buys it and then their job is reduced to about 10 % of its original workload because the software does 90 % of the work. yeah, obviously riding on the wall, like I buy the software and then what good am I? it's like, you better be the first one to use it the best. And what we identified was like, well, James Rose (21:02.845) Interesting. Yeah, yeah, yeah. Yeah, yeah. Jason Kirby (21:14.7) Acquiring capital market was not interested in their business anymore for a variety of reasons. That's what we identified is like they have a hurdle they have to hit. They want to get to about a $50 million plus valuation. And they're nowhere near that right now in terms of real life comps. And so what we identified is like if they go out and buy five, $10 million revenue agencies that are doing maybe 15 % EBITDA, 10 % EBITDA, they could eliminate a lot of the overhead with their software. James Rose (21:25.082) Mm-hmm. James Rose (21:31.578) Mm-hmm. Jason Kirby (21:45.307) Consolidate have efficiencies and get closer to like a 30 to 50 % EBITDA effectively with that revenue after like a year of transition. And those are the types of companies that were going out and buying on their behalf. they're take becoming a tech enabled service provider. So their multiples won't be, you know, 20, 30 X revenue or anything stupid like that, but they could get 10 X EBITDA in these situations. So I'm curious to kind of hear your thoughts as you're in market. James Rose (21:50.33) Yeah Jason Kirby (22:14.508) and looking to buy companies. How do you guys evaluate? Do you guys have tech, and is that a piece of it? Or is it you're just coming in and debocking and tackling and consolidating service businesses? How do you think about it? James Rose (22:28.216) Really good, interesting topic. So originally our vision was to have a tech enabled platform, still to do the minority, not the full acquisitions that you just described, but to have some kind of tech enabled layer around the group. Right now that is still to be decided, if I'm honest. There is pros and cons to both. We've looked at partnerships in the tech space. We've looked at AI development. instill agents at a group level that drive efficiencies. And if I'm honest with you, where we are right now is we feel that we want to leave some value on the table. And coming back to that kind of execution risk, like we've not done this before. You know, we, we, this is our first group we're building. We've got fairly modest expectations of size and shape. And so we feel quite happy to let the acquirer do some of that tech enablement. as the next stage rather than us take ownership of that. But there is 100 % a huge opportunity there and across so many markets because as you say, they've got the tech already, they already own that they've got, you know, they've funded it however they have. So they've got the platform. I think what's different for us is we don't have the platform. So it's like, we either have to acquire it partner with or bring that in some other way. And that just is a slightly different timeframe and different level of capital than we're looking at right now. And it's amazing. I've spoken to a number of founders actually that have had a similar realization on the funding side. like tech, for example, a tech social agency I spoke to recently who have struggled to raise to continue on the tech path, but are now developing a managed service. not only because of funding, you know, that sort of subscale and still early stage, but also on the on the brand side. So we're seeing that brands now are kind of coming a full 360 and saying, well, it's great that you've got some tech, but we want the people servicing us. We want that full wraparound managed service. And I think that's where some some models have gone a bit too tech enabled and missed the people part potentially. Jason Kirby (24:49.131) Now I want to keep talking about this because this is more and more of what I'm seeing. Like even ourselves at Thunder, we consider ourselves a tech enabled investment bank. At the end of the day, you know, everyone wants a transaction and get a deal done. But the only thing that gets a deal done is people. You can have all the tech kind of in the background, streamlining, making things more efficient, know, faster models, know, models that produce, financial models that produce faster, you know, like competitive research, like everything's getting faster and more efficient. But that's just like table stakes. That's like the James Rose (24:54.474) Mm. James Rose (25:18.262) Yeah. Jason Kirby (25:18.838) bare minimum that's required. And if you don't have that, your profit margins will be less and people will overtake you. And so I think it's an absolute must for businesses to evolve into being more tech enabled. But the other day, it's like, can't, I see AI companies popping up on the left and right where like the AI &A banker and like, all it really is doing is just cold emailing a bunch of people. It's like, all right, it's a numbers game. It's like, not really. James Rose (25:39.295) Yeah. Jason Kirby (25:47.935) Cause like when you want to, at least in my world, like if you want to do a transaction, like people just need to justify the time invested to get behind the idea of an acquisition. And they really only trust that if they conceptualize the idea themselves and went hunting for it. Or the person they trust brought them the idea. And so it's so much still comes out of relationships. Another example is, tech company here in the UK, next sales enablement, million sales enablement tools out there. James Rose (25:57.151) Yep. Right. Jason Kirby (26:18.332) And they chose a different route rather than raising tens of millions of dollars. There's a little bit of money, get some tech off the ground, but then they do the managed service. So they have like a managed service. That's like 15 grand upfront plus, you know, some, you know, kind of maintenance. and then they have a SaaS fee, which is like, you know, 50 bucks a seat. And so like the SaaS is there, but they're cash flowing and not going to have to go out and raise money and kind of compete with these other, you know, the gongs and those bought, you know, these mega companies out there that have raised tens of millions or hundreds of millions. James Rose (26:35.126) Nice. Jason Kirby (26:48.035) And they're just going have a great business, you know, and there's edge there. Like people need help. Like, you know, for setting these things up, I like to expect your office manager to set up your sales and enablement. It's not really going to happen. So there's definitely a need for these managed services, know, in the space. it's just, it's a slightly different business model than what we've seen before that should hypothetically be higher margin, lower head count. so one thing I want to kind of talk about is what you're seeing in terms of James Rose (27:01.381) Exactly. Yeah. Jason Kirby (27:18.123) pricing these agencies. Everyone always wants to know, what am I worth? What's my valuation? And for insights on the people here, it's like some of the major conglomerates as you were alluding to, it's like, let's just put some out there like WPP and S4 capital, their heyday, 15 billion and 8 billion respectively in terms of valuation. now are 20 % of that or even 10 % of that value. James Rose (27:18.586) Yep. James Rose (27:46.84) Yeah. Jason Kirby (27:47.403) completely fallen off a cliff in terms of market comps and publicly traded comps. So I'm curious from your perspective, what are you seeing in terms of the valuation of these types of companies now given that the market multiples have fallen off a James Rose (28:01.614) fascinating. I was actually looking at this a few months ago when I saw WPP share price, because as you say, these are these have taken a real beating over the past few years. And if you take an average of the public holding companies, they're trading at around eight times EBITDA, roughly on average, publicists has done done well, mainly because I think the market views their tech enablement as a success. But you compare that to private markets, you it's not unusual for a private agency that is a service based business doing maybe a million and a half of EBIT to get a 10x, you know, as a tactical acquisition for a group, like that happens quite regularly. So you're seeing like higher multiples in private markets or the public markets. And that's fascinating for me because, know, that's, that's all every other market you look at is the opposite. You know, you've got liquidity in the private market. So you pay a premium for it. You've got the trust, you've got the, you've got the governance. But I think that's a nearly signal that, that private equity and big funding is looking at the independent agency space. And they're seeing that it's bottoming out. And I think they're looking at value right now and coming into the market this year and next year. and looking to consolidate themselves and take these independents forward. I don't know the inner workings of any of the groups, to be honest, but anecdotally, the number of layoffs that are forecast this year are in the tens of thousands, which is really sad for a lot of very talented people that have been in these businesses for a number of years. But that's just the way the market is right now. Jason Kirby (29:49.243) Do you think that has anything to do with just like kind of the like even anthropic CEO kind of had a manifesto that went out yesterday or the day before of, you know, like, watch out white collar jobs, you know, in terms of like there's gonna be mass layoffs, which is like marketing companies and one of the first applications of AI agents is, you know, marketing. James Rose (30:09.551) Yeah. It's undeniable risk. I'd say we look at salary load, we look at cash flow, and some agencies are bloated, right? There's no denying it. We walk away from some opportunities where the founders propped up the agency with directors loans just to not let people go. Like it happens all the time, but we have to be a little bit more. commercial about these decisions. And there is a metrics that Yeah, so there's downward pressure on on on headcount, but we, we haven't seen any like, we've got four agencies now, we haven't seen any redundancies or layoffs, and actually, we're hiring across most of them. So we're finding ways for for those employees to be more productive. And we're staying true to the fact that brands want that personal relationship and skill. But yeah, it's changing all the time and it's very hard to forecast what this next two years will look like. I think there's definitely a five year risk in this market where the state of the independent agency world could be very, very different. But right now we're sort of on the cusp of it and we're trying to manage it fiscally with some governance. Jason Kirby (31:28.526) I find it interesting to kind of see how agencies kind of navigate these headwinds, especially because I think, you when we were talking offline in terms of your target, well, actually for the audience's purpose, like, who do you want to buy? who's on your, you know, kind of like, what would you say are the attributes of the companies that you're looking to acquire? James Rose (31:39.122) Mm-hmm. James Rose (31:48.209) Yeah, so there's some hard rules. So in terms of revenue and profit, so ideally a minimum of half a million EBIT is a kind of baseline. 10 years of trading history or more, the longer the better. We're looking at UK, US and Middle East and looking to diversify revenue across those markets. So right now we've only got one agency that has an office in the US. So we're actively looking for more agencies. in the US so that when we exit as a group, we've got that geographic diversity. So there's this kind of finance and tenure. We look at founder led agencies that have started to make some paths with management team and succession. A lot of the agencies we speak to have already spoken to a number of different acquirers in the past. So they're quite up to speed with valuations and what they would be expecting in the open market. But beyond that, they have to be servicing global brands. They have to be kind of cashflow positive and put some discipline in those areas. And then we talk about the top 1%. And it's hard to quantify, but for me, it's actually the people in these businesses. I'll know very quickly when I speak to a founder whether I'm aligned with them or whether they're, you and as we just described, these are people-based businesses and relationships. are really important. You know, we're building this as a minority. So it's not like we're coming in to change the rules overnight. We're coming in to be aligned with those founders over a bigger exit in the future. there's some soft things behind that in terms of like how they're managing the team, just understanding their journey, like what they've been through, why they built the business, what their expectations are. And that just comes out of conversation. So it's, it's, yeah, it's hard to to have firm lines, but there's certain things that, you know, it makes sense for us in terms of the direction we're heading. Jason Kirby (33:51.849) And when you think about founders that might be interested in selling them to you or to anyone else that are running these service businesses, there's two types in my opinion. There are the ones that have adopted technology and are rapidly scaling and have real sales funnels. And then there's others that had a real business and they are now kind of resting on their laurels and they haven't really invested into the latest and greatest technology. And they're now kind of in this either on decline and then, have declined, or they're kind of flatlining and not sure what to do. So for those, those in the latter position that are maybe kind of like, what do do? Like what's, what's your advice to those, those founders that haven't really taken the action yet. James Rose (34:30.618) Mm-hmm. James Rose (34:35.929) Yep. James Rose (34:41.203) Yeah, I think first we'll take an internal review and survey your customers and your people because if you're an established service-based business, what I've seen is that there's a very high chance that you are still targeting verticals and customer bases that were five years old now. You you're not looked at any new markets, you've not reviewed your ICP, you've not developed a real commercial engine, and that gets you to a certain level. But times are changing, and whether you bring in a fractional person or a consultant, you need to start really looking at the data. And I think founders avoid that sometimes. They can get quite complacent. It's hard to look at your business and say, well, actually, we need to pivot. But go to market. And billing the commercial owners is a common problem we see. They're just still targeting industries that they shouldn't be. I would say get a CFO. A lot of agencies, know, sub 5 million, I'm shocked how many don't have any CFO whatsoever, whether that be fractional or other, you know, they have an accounting firm that's looking in the rear view mirror. And that's a problem. You know, you have to have proper forward looking guidance of where the business is going because Any acquirer is going to be looking at that. And if they want to get to a certain level of EBIT to achieve a certain multiple, it's impossible just looking historically. so the CFO side of things is a common gap. And look at acquisitions. If you've got a solid business and you don't want to build a bigger sales team, you don't want to develop technology, look at some &A activity. Maybe there's a competitor of yours that would be happy to merge with you. And you could... You could kind of do a paper share transfer and double overnight. I think &A is one of those topics where you can go very deep with it and you can pay a lot of money to consultants. But the best thing to do is just get out and speak to people, you know, don't get, don't get stuck in the education mode, go and have conversations with similar founders and say, Hey, what, you know, what's your plans? Where are you looking to get to the next two years? Could we, could we do something together? James Rose (37:01.286) I think that's a massive opportunity for founders, whether it's joining a group or just doing it themselves, really. Jason Kirby (37:09.098) No, I would agree. I too many people kind of get lost in their world of their own little silo and don't really have conversations. And then they're kind of misguided or very unaligned expectations of reality. I can't tell you how many times companies think they're worth way more than they actually think they are and haven't really done the deep dive audit on themselves and or had someone else come in and audit them from a valuation perspective that puts a lot of these founders in check. That's something we do often with lot of companies is just kind of like show them like, I know you think or thought you were worth X, but based on current comps and you your, you know, your revenue has still growing, but not as fast or, whatever these, you know, variables that come into play, just see like, my competitor raised a hundred million dollars. So I must be worth, no, those are, you know, two different things, apples and oranges in a lot of cases. So I find it wise to kind of give them those educate that level of education. James Rose (37:55.201) Yeah, yeah. Jason Kirby (38:03.74) James, what would be the best steps for someone that is building a service business, managed service business, agency, whatever sector, to start this process of an exit and start lining up those pieces? James Rose (38:22.0) So firstly, getting personal clarity. So the founder led businesses is usually only a couple of people on the cap table, maybe some EMI options, but being really clear on what the number is, forget the benchmarks, forget the big raises, like what is a number that's going to be meaningful to you? And then subtract all the sweat and tears you put into it because the market's not going to value that. So getting really clear because it may only be a couple of million, which is a lot of money, but it's a lot more achievable than someone's looking for a 50 million or whatever the number is. So I think get really clear on the number. Speak to the market and understand what multiples you are worth today and just accept the fact that that's it. Have some conversations with acquirers. and understand the reality. Because if you don't address that, you can't then plan ahead of how you're going to fill the gap, right? And the gaps needs to be filled one way or another. Is it scaling independently? Is it during the group? And honestly, that process can take some founders a few years, you know, because they're the business. It's always like, we've got a five year plan, we're going to sell in five years. And that's really a timeframe they put out there because it's far enough in the future to feel close, but it's not close enough to drive any action. So I would have that reality check. And then my personal recommendation would be to look at &A. Either &A or having a conversation with people like yourselves, you can give them a real honest set of options around the fundraising. And if they do fundraise, make sure that they get the right people to execute and de-risk it. A lot of times I've seen businesses do the raise and then underpay people, get sub-level management in. And then they spend two, three years in this cell. Well, we didn't hit our targets. Well, you probably should have got better people in in the first place who've, you know, who could execute. yeah, it's, it's. Jason Kirby (40:20.692) saying my cousin Jimmy's not good enough. No, I totally agree. And I think that's very valuable. And James, for those that, you know, are inspired by your story and or want to connect with you, what would be the best way for them to learn more about you and connect with you? James Rose (40:36.57) So yeah, just James Rose, Inflective Group on LinkedIn or inflectivegroup.com. Happy to connect and yeah, starting to post a bit more on there. So that's probably the best place. Jason Kirby (40:49.658) And for those listening, if anyone wants an introduction to James, just ping me directly or leave a comment in the comments down below and I'll be happy to help facilitate that introduction for you. James, I really appreciate you coming on here, sharing your story of kind of founder to operator, back to founder and buying companies in the seven day journey that you're on. I look forward to following your journey and thanks for coming on the show. James Rose (41:13.461) Thank you, pleasure. Appreciate it. Thanks, Jason. Cool.