How do you fund growth with non-dilutive capital?

Episode 110 - George Alifragis Transcript Jason Kirby (00:01.594) Hey, everyone. Welcome back to $100 million Exits. Today, I'm excited to have George Alafragas with us on the show. George, you've been a multi-time operator building multiple companies and exiting, and now have transitioned into an investment role at Metropolitan, a $1.8 billion private investment firm, primarily focused on private credit. We're going to talk a lot about One building and now transitioning to the investor role. But before we get into kind of where you're at today, I want to talk about how you got there and talk about your operating experience at your past companies having been a part of two high level exits. Kind of walk us through a little bit about that experience as an operator, what it was like being boots on the ground. George Alifragis (00:49.334) Yeah, absolutely. First off, thanks so much for having me, Jason. I know we've been working together on getting this scheduled. So I'm excited that today is the day. From my perspective, I am still very much the operator in the investment firm. So prior to joining Met, I was the CEO of global tech company called SRIUS. We were essentially a niche Infosys meets Cognizant and Accenture, where we would support large enterprise clients with their digital transformation roadmaps. Then we had a vertical focus around telco first and foremost, and then we had a few other verticals with support as well. So I was the boots on the ground CEO, very much focused though on growth. So CEO meets CRO, you wear a few hats when you're a mid-sized business. And then with that, we were able to drive quite a bit of substantial EBITDA positive growth in a short amount of time, made quite a bit of noise in the P world. And then we exited to Orion, which is a P-backed larger system integrator meets global tech company. We can obviously dive into a little bit on additional details on that front as well. And then before that, I'm actually originally from Canada, where I led one of Canada's largest independent telcos, which is called Ultima. And interesting story there as well that we can unpack, but essentially we sold and exited to Telus, which is a public company in Canada, one of the largest telcos. And that's when I moved to Miami. So I'm currently based in Miami. Our firm is headquarters in New York City. So I have the pleasure of going back and forth quite a few times that month, but I love it. It could be a lot worse. And I'm actually currently in NYC as we speak. Jason Kirby (02:32.474) Yeah, and you got into kind of the telco space going in for Ultima from Bell. You were there kind of rising the ranks in kind of big corporate for many, many years. How does a kind of career big corporate person like yourself transition out of a large conglomerate like Bell and into a leadership role at George Alifragis (02:41.677) Long time. Jason Kirby (02:58.616) Either I was, Altima wasn't really, was it a startup really, like, what, would you define Altima back then? George Alifragis (03:04.28) So Ultima was at that point more in its growth stage and we were, would say, top eight independent telco in Canada. So definitely not early stage, much more later stage and in full on growth and expansion. Jason Kirby (03:21.754) So how did you get to go transition from going big corporate to what would effectively be not small, but a smaller company? George Alifragis (03:30.07) Yeah, great question. I get that one a few times. I would say what comes to mind is the following. So one, sometimes folks over index on big corporate versus small companies. I think it really depends on what is the actual zoner genius and trade craft that the operator brings and how do they either survive or thrive in different environments. So what I mean by that specifically is from my point of view, I've always been very entrepreneurial, even at Bell, which is a 40,000 plus employee company, was one of the many entrepreneurs, right? So oftentimes when you're in a large corporation and you're entrepreneurial, that's kind of the term that they use. But my trade craft over the years was always very much focused on growth and scaling. And within large enterprises, You also have a series of business units, right? So it's never just one conglomerate across, you know, across the entire org. It's really a combination of business units, divisions, you name it. And within that, ended up starting off actually in the small medium business world. Both my parents also are entrepreneurs. They built their businesses from the ground up. I essentially grew up in their businesses. So have some unofficial experience at a very young age, let's just put it that way. And again, all throughout my all throughout just, you know, different life experiences, different age brackets. And then within Bell when I first started, definitely started within the small medium business space. Bell, although it's a telco, it is still very much a high tech company relative to the solution that sells to the market. Because At a Bell level, you're not just selling internet, you're selling a solution as a whole. So that can encompass a number of different product lines. So I shared that just because again, it really comes back to kind of where the corporation is at, how it's structured, what specifically does that individual bring to the table, and also what has been their track record and what they focus on. And then kind of fast forwarding Bell to your earlier point was George Alifragis (05:49.822) a 13 year career, definitely didn't plan to be there for that long. But it was amazing because it taught me the rigor, the institutional discipline that's required to actually scale. It also, I would say, zeroed in this focus on EBITDA positive growth. So was vastly responsible for, again, EBITDA targets and EBITDA growth, which is not something that small medium businesses think of, I would say, naturally. And then there is a need to to institutionalize the business as you're scaling across different stages. So I think the notion there is adapting the governance, adapting the level of how much you institutionalize to the business itself to not over encompass it and then kind of it slow down. You want to maintaining that speed factor. But that's really kind of how it all came together. And then really the domain expertise that you build over time. So thankfully about covered all markets by the end of my tenure. So it was very familiar with the different markets that also ended up being the same markets for the smaller players, essentially. it's long-winded answer, but essentially it's a combination of all that. And you do have to make sure, that who you're bringing on is the right fit relative to attitude, mindset, relative to how they structure their teams and themselves. Are they just coach? Are they coach player? obviously a few nuances there, but I would say it's a combination of all of the above. Jason Kirby (07:24.057) Kind of a question out there, I'm just curious. Was there an existential crisis for you to get out of a corporate or was it like an opportunity came and you took it? Was it like a self-reflection of like, need to get out of this. I need to find something different. This is soul sucking or you you just found a new job and you're like, right, let's do that. George Alifragis (07:37.784) Yeah. George Alifragis (07:45.134) No, I love the question. I don't think I've actually had that one asked that way before. I was actually going through... Jason Kirby (07:51.085) you George Alifragis (07:57.164) I would say kind of my own, not crisis, but reflection. I was at the 13 year mark and actually the studies showed this, so I was very much in line with stats that are out there. Once you've been with a business or the same organization for 10 plus, especially 12 plus years, you start asking yourself, so what am I gonna do? Am I gonna stay here forever? Because at that point, you're at an inflection point within your career where obviously, pension benefits, stock options, you name it, start looking very different. And if you continue staying there up until the 15 year mark, it is actually a lot harder, quote unquote, to leave, just because you lose a lot of the upside. So I was a set. And then that's where you reflected deeply, because I still to this to this day, so very much love Bell. I love the people at Bell. I mean, you get to work with incredible human beings, especially as you're working with, you know, hundreds and hundreds of colleagues. So it's a diverse group and it was an incredible group. that part is not the issue is more so a reflection on like, do I want to only experience this for ever? And I think that's where I realized that the answer was no. And I think that's where also I reflected on myself and saying, you know, there's a few things that I've endured and that I've gotten used to within the corporate world that didn't necessarily align with how I prefer to operate. They weren't necessarily deal breakers, but as a concrete example, just very candidly, in very large corporations, when you are constantly looking to drive EBITDA positive and continuous dividend paybacks to your shareholders, you're actually also just constantly restructuring, which means anywhere from three to four layoff cycles a year, which again, people don't often realize or understand. So from one end, you could say I kind of survived 40 plus layoff cycles and also built teams across that. But from the other end, just a human impact there is still quite intense. So that was something that I would say I kind of reached my tolerance level at. And then it was the opportunity that presented itself. So Frank, who's my former CEO, reached out. We had a series of conversations. And then I remember at dinner in and around Christmas. George Alifragis (10:21.26) He made me an offer that I essentially couldn't refuse. And that was the right offer for me. was going back to a smaller mid-size company, which again, I know quite a bit of because both my parents have built their companies and continue doing so. And the impact you can bring there, which I'm you've heard before, is different. So that's the leap of faith I took and don't regret it by any means. Jason Kirby (10:43.64) And for that transition, how clear was it to you that there was an exit on the horizon post taking that offer? Was that presented or was that like after you got in, it was like, that was like the mission to go and sell the business. George Alifragis (11:00.61) Yeah, so what's interesting with that one actually is we were not at all considering to exit. So that was not part of the plan. Really, the plan was actually to continue growing and scaling and going from being, within the top eight to being within the top three because we really had that opportunity set and the potential to do so. What ended up happening, though, because, as much as you can plan for things. Life has an interesting way of reminding you that you're not always in control. The CRTC, which is the regulatory body in Canada, released what many of us would say is the worst case scenario that the industry ever projected. So the CRTC dictates the foundational costs of essentially what the tier one incumbents are charged to independent telcos like Altima. So independent telcos are not to be confused with resellers. We have our own core network, but a lot of it is interconnected with other networks that are built across tier one incumbents. So the CRTC is a regulatory body that essentially dictates those costs and they released a ruling that was, probably the worst ruling we could have ever anticipated. It essentially broke our unit economics, made the independent ISP model unviable. So we had to actually move from scaling mode to exit mode very quickly. And that's really what we did. Jason Kirby (12:30.723) And how did that lead you going to Suraeus? George Alifragis (12:35.63) That's right. So what was interesting just before I go there with Altima though, in retrospect is even though we were never planning to sell immediately by any means, I was actually part of Frank's succession plan. We were focused from day one that I joined anyways on the business fundamentals. We were focused on making sure that we were essentially driving capital efficient growth, looking at it across what we could control and invest in today versus tomorrow, and also actually driving evident positive growth, which again comes from kind of that larger corporate background. And that's what fundamentally made us a very attractive asset within that regulatory kind of turning point. And that's actually what allowed us to be Telus's platform plan. So we were Telus's ideal target when it came to as a platform for the series of ISPs that they acquired. So that I think was a huge lesson to me and your ways of the team and potentially to this broader audience that focusing on the business fundamentals, the key metrics that matter to your business, to your growth is what's going to continue setting you apart and also essentially allow you to be prepared for anything that the market may throw your way. And then fast forward to answer your question specifically. After that exit, I fulfilled one of my childhood dreams, so to speak, which was to buy property in Florida. My parents own properties in Florida when I was younger, and I have some of my best memories growing up in the heat and in the humidity, because the summer, ironically, was a little bit slower for my parents. So that's when we would hang out in Florida. It wouldn't be in the winters, unfortunately. So moved to Miami. And at that point, didn't necessarily have an immediate plan. I was kind of determining, am I going to stay in Miami six months out of the year? Because Canadians can do so and go back and forth. And then that's where actually a director of value creation that I used to work with introduced me to the CEO, Sryas. He essentially said, listen, if you're on the market, so to speak, Sryas is sorry. So how he framed it was like, you are probably the George Alifragis (14:54.316) best type of operator that Soraya's could bring on at this stage of their growth trajectory. So ended up meeting with the CEO in Boca, which is just a short drive away from Miami. We did that a few times and then he also made me an offer I couldn't refuse. So that kind of came through my network and organically. And then that's how that happened. Jason Kirby (15:17.986) And what was kind of the experience at Soraya's before you ended up selling to Orion? George Alifragis (15:25.254) it was very intense, cause similar to Altima, were in full on growth mode. I would say Shry's was a little bit later stage in its growth curve. So we had a lot to, focus on a lot to unpack. we also had a number of different entities and brands that had kind of, you know, formed over the years. So we were looking at that as a whole. so it was really intense. was intense days, intense weeks because we were very much in hyper growth mode. The company itself was actually entirely bootstrap. So it hadn't taken on any outside capital. Not that that slows things down, but it does, actually, you know, force you to continue focusing on capital efficient growth, which candidly is, is all I really know and know how to implement, to be quite frank. So it was. Very intense, very growth oriented. Essentially, we refocus our go-to-market strategy. We deepened our vertical focus. And then we focus also on building the right brand equity, which again, ironically, selling was not part of the plan, but ended up being a great turnout because we had to focus on the core of the business, the go-to-market strategy as a whole, and then the brand equity that we were rebuilding. and essentially scaling. Jason Kirby (16:53.849) And I guess walk me through the transition of post exit to Orion and making your way into an investment seat. Like an investment firm. does, how does one make that leap? George Alifragis (17:06.742) Yeah. So another great question, as much as I'm often known for someone who always plans to make plans, that was also not part of So relative to the exit, that was actually one of the most efficient and quick processes I've ever, one experience and two now that I'm on the investor side have ever seen. I think the key takeaway there is that we were so surprise was essentially the ideal tuck in for Orion, which was P backed. And because we fit just extremely well within their org strategy, and we would essentially bring that telecom customer base and vertical expertise, it ended up being a very smooth and effective process. And also, you know, they were backed by a group that is very knowledgeable in driving very, very effective tuck ins, sorry. And so that was actually quite smooth. And then following that exit took a bit of time to recharge. Because again, those were really, that was a really intense period, probably lasted two and a half to three weeks, I was originally planning to take maybe two to three months. And then just again, went into discovery mode and thinking of, okay, what do I now do next? Right? I know it was important for me was actually figuring out how I get to stay in the US because again, I was still very much Canadian citizen. Miami feels like home. It is very much home. So it was kind of considering, okay, do I go down the EB2 path, which is essentially, you know, the investor visa, invest in my own business, start my own business? You know, how do I approach that essentially? So start on that path and that probably was the main focus within that exit is just realigning what comes next with the right immigration path, so to speak, ironically, because that was really important to me relative to Minorith Star. And then explored a few opportunities that I can get into. But really, the one that was a little bit of the oddball George Alifragis (19:27.958) was met. one of the recruiters that Matt hired ended up reaching out. What's interesting with that story, her name is Zaharo. She's an incredible recruiter, by the way. What's interesting with that story is I originally declined Zaharo's invite because she was reaching out on behalf of Matt. I had candidly never really worked with a private credit firm before. And for me, if I can bring value to a role, let alone so to a conversation or let alone a role. I just want to be mindful of their time in my time. Thankfully, she was a great recruiter. She kind of reframed it positively and then here I am today, but definitely not part of plan. It was a really interesting opportunity where I was coming in as essentially Mets as a succession to Mets president, which was my predecessor, John. but really focus more so on the current role that I'm in, which is heading our operating network and now ecosystem that I can, again, unpack together in a bit. So that ended up being just an incredible alignment relative to the people around the table. So I get to work with someone who was seven times CEO who had, who was also an operator, but had been in the investment world for 10 years. Someone who I learned to respect. tremendously and essentially accelerate my learning through that transition and then come into the investment world where instead of being an operator who essentially is driving impact for a single company, I could then extend that impact across a number of companies, right? So across our portfolio. So that's what I would say was the most compelling part of that scenario. But first and foremost, it was very much about the people and people that I get to work with. And that's what brought me to Met. Jason Kirby (21:23.897) I'm seeing a general theme of opportunities being presented to you at timely moments in your career. obviously that comes with being worthy of such opportunities. It's not like they're just handed to you without being relevant. But then you, I really want to kind of transition into your role here at Metropolitan because you have this really bespoke kind of George Alifragis (21:42.271) No, definitely not. Jason Kirby (21:52.952) the career path of going big corporate and then SME to now kind of being at the $1.8 billion fund, which is not a common path for most. And I want to kind of now talk about what metropolitan is all about, because that's where our conversations have originally stemmed from, you and I. I find your firm to be very interesting in terms of its approach to working on deals and making, I would say, George Alifragis (22:13.963) huh. Jason Kirby (22:22.137) better way to put it is like making deals happen as opposed to, you know, like must check these exact boxes. You don't fit, you're out. Um, which in this market, I think is very opportunistic. Um, because everyone's still trying to do their playbook and so many companies that the way things are moving, the acceleration of the market shifts, the changes, capital allocations moving so quickly. I firms should be in a position like yours to, um, George Alifragis (22:31.875) Well said. Jason Kirby (22:50.297) be nimble and understand how to underwrite deals in a more effective strategy. So I'd love for you to give the audience a little bit of context on Metropolitan, how you guys work, what you guys look at. And then I want to start unpacking, you know, you know, kind what you're seeing in the market and whatnot. George Alifragis (23:06.126) Absolutely. So at a high level, Metropolitan is a private investment firm. We provide non-controlling growth capital to small and mid-sized businesses. We specifically focus in what the investment world calls a non-sponsored space. So all that means is that we work directly with management teams instead of working with just other investors or P groups or P back companies. And really what's interesting with MAD and part of why I joined MAD is the core of our thesis is actually centered around helping owner, operators and founders grow in scale while one, maintaining majority control and two, preserving majority of their hard earned equity. So that obviously resonated with me tremendously. Our capital, like I shared, is meant to be growth capital. So it's meant to be catalytic. It's not meant to keep the lights on. The way that I typically frame it as, you know, with operators since I'm still very much the operator in the investment firm is, Think of it as growth capital that you attach to your growth strategy. And that growth strategy can be a combination of organic and inorganic growth. So it can be both. But it is meant to fund a growth event or growth milestones. It's not meant to fund a broader business plan that takes five plus years to materialize. And it can be quite meaningful. So our capital is anywhere from 10 to 50 million. And we can scale up to 100 million if and as required. From our perspective, we're relatively sector agnostic, which is by design. It allows us to provide a lot of diversification to our limited partners and our investors, which is great. And then from my point of view, just personally, it allows me to go deep into so many fascinating sectors, which again, I really enjoy. And that's also why we have our operating network is because we have to go deep across a variety of industries and sectors. We, you know, the firm just pretend to know all these sectors and understand the intricacies of it. So hence why we work hand in hand with our operating experts and our broader ecosystem also plays a role there. So yeah, so that's a little bit about MED and kind of the tie into our operating networking ecosystem as well. Jason Kirby (25:13.197) So I want to talk a little bit more about that operator ecosystem. lot of funds, especially in the VC world, private equity world, they have kind of like their venture partners, like operating partners. Everyone gets a different label. I guess what separates Metropolitan's expert network, we'll call it, or operator network from the other firms out there that claim to do the same thing? George Alifragis (25:39.15) Yeah, great question. So I would say it's fundamentally very different. our operating network, so think of it as kind of two ecosystems that come together. So our operating expert network is one that consists of a little over 600 active and former C-suite leaders. Essentially people who have been there done that across a variety of industries. And we work with them, which is different than VCs and PE groups. across the investment lifecycle. So that is, I would say, one of the key differences. So what that means practically is that our operating experts, yes, they bring us opportunities. So that is similar to say like a venture partner or a scout within VCs, which PEs don't necessarily have. So they bring us new investment opportunities. also, however, diligence investment opportunities with our operating experts. So I mean, huge part of the VC model as well. However, do PE-style diligence. do essentially what that means is we go a lot deeper than the depth that VCs go in relative to diligence. It's extremely important for us because on our end, by the way, part of our thesis too is if let's say we invest in 10 companies, the goal is not for just one or two to really knock it out of the park. It's all of them have to win, which again is a little bit different from the VC model. Whereas PE is similar. they're looking for every one of their investments to drive a certain return. So that's why they do, you know, quote unquote, PE style diligence. So we go very deep, very wide with our operating experts. And then we also bring in other ecosystem partners for the diligence part. Then once we fund the opportunity, that's where we can also deploy our operating experts across our portfolio companies, but always in a partner mode. So we're non-controlled, right? So think of it as our operating experts act as an extension to the management team. and they can come in either in a fractional, interim, or full-time capacity, if that makes sense, of course, for both parties. They can also, however, act as an extension of our asset management team, which is also different from the other models. So there's value creation that happens externally and internally. And then the last part for our operating experts is they also work with us on what we call fishing holes. So as much as we're sector agnostic, we have a fishing hole practice. George Alifragis (28:02.678) So if you were to visualize the investment waters, think of fishing holes as pockets across those investment waters where we want to be proactive instead of being reactive. So we essentially develop the thesis with our operating experts. We map out where and how could our capital be constructive and transformational within a variety of niches. And then we go fishing with them. So we go fishing and understand, how do we build the equal system? ecosystem, sorry, how do build the ecosystem together? And then we know which are the companies that we think, you we'd a good fit for. So that's really how we work with our operating experts across the spectrum, which I have rarely ever seen in either the VC or P world. And then our ecosystem consists of other partners. So that can be &A advisory firms, investment bankers, it can be law firms, accounting firms. other investors, family offices, you name it. And we also bring those relationships in that ecosystem to the table relative to the value that we bring to our portfolio companies. But we also work with them across the investment lifecycle. So I won't kind of repeat every single scenario, but similar can apply, right? Across origination or deal flow, diligence, portfolio company support. And then as we go deep in certain sectors, but also always focus on both external and internal value creation. which again, when you combine all of that is actually quite different from the other models that exist. Jason Kirby (29:34.361) Yeah. And I'm just saying also the scale of participation you guys have is astronomical in comparison to most rooms that I've run across where it's like five, 10 close relationships, you know, that they have maybe a few more depending on the size of the fund, but, know, I think you said 600 plus. Um, so. George Alifragis (29:55.982) Correct. And that's just on the operating expert side. We have a lot more on the ecosystem. Jason Kirby (30:03.299) Big numbers. guess that's, and that's your focus is maintaining that, that network and that community to know when to activate, who to activate. For my own personal benefit, how do you navigate that scale of a group when you come across a deal you're doing and or port code that's already in the system that has an EID and or desire, like how do you activate the network? George Alifragis (30:12.952) Thank George Alifragis (30:31.148) Yeah, great question. That's also one of the reasons why I was brought in. So we had to implement a lot of structure processes and systems to allow us to actually activate it then scale it. So this is not just some random contact list or Rolodex. We really had to go deeper in segmenting our network, understanding their skill sets, understanding their true domain expertise, not only the focus, but the stage that they were involved in. and going a lot deeper, but we also had to essentially go deeper in understanding where they were at in their career journey. So what I mean by that is you combine the intelligence you have on your relationships with also the past that those relationships want to embark on when working with you. We call those swim lanes. We love analogies of the Met. And that's where our operating experts are. It's also not a rented network because if you... firms out there that have what LPs call a rent network. It's a network where our operating experts opt in. So they opt in, they opt into the swim lane that they're looking for. They also get vetted. So we do have some deep vetting that takes place because we want to make sure that who we are bringing on, you can trust them. know, they are what they say they are. And we validated their domain expertise. So it's really a combination of the right structure, the right processes and systems, which then is essentially supporting our platform roadmap that allows us to activate the right people at the right time. And we're continuing to invest in the platform and further developing that as well. Because really, we want to be in a position where we can not only activate the right relationships for us, but where we can create true flywheel effects across the ecosystem and the network. So what I mean by that is, I'll give you a concrete example. because of what we built, we see a lot of proprietary deal flow and we see very high quality deal flow. That being said, as much as to your earlier point, Met is always working towards getting to a yes versus getting past no, it still has to fit our investment mandate. And we do end up saying no to a lot of great opportunities. So they may be great deals, but they're not the right Met deals. And from our perspective, we are all about the operators and helping George Alifragis (32:55.694) our founder, helping founders scale in general and more broadly. So that's where we want to be in a position to say, okay, if say, you know, Josh, you are scaling X and you know, we unfortunately can't help you here. We want to be in a position to recommend and refer him to either other investors who are a better fit relative to thesis or to other operating experts or partners who may be able to help them along the way. So that can be a combination of the right partners who have the right relationships across a variety of capital partners. It can also be a gap that we've uncovered, which is, hey, Josh is our fictional founder. Josh, you're doing great, but we're seeing a gap in marketing operating expertise. We'd highly encourage you to think about that a little bit more. Happy to introduce you to, let's say, two of our operating executives who have the right skillset and background for you. facilitate the introduction, then we get out of the way. And then, you know, also here, you know, another introduction that can help you with the capital raising, but with other capital partners and or introducing directly to another capital provider that again, may be a better fit. And that generates a huge viable effect, right? So the operating experts that then, you know, get this opportunity that we create, obviously keep us top of mind. And then that fuels our origination engine. And then as we send proprietary deals to other partners and investors, we essentially earn the right for reciprocity. So they do the same. And then that's how we create a true flywheel. Jason Kirby (34:30.713) So let's talk about deal making. How do you go about making deals happen at Met? George Alifragis (34:39.042) Yeah. So from our point of view, we are very focused on getting to a yes versus getting past no. So what I mean by that is we are immediately trying to put ourselves in the operator seat and beyond just understanding the market opportunity or what this company is worth, we're immediately going into like can this business actually scale and what is the go-forward thesis? So really bringing to the table and to the approach and or to the deal-making process that operator mindset and investor mindset. And that's in my mind and in my opinion where the magic happens. So really starting there and taking that approach. And then we do end up going a lot deeper upfront than other firms. The reason that we do that is a few fold, but one, We are not in the business of just issuing term sheets for the sake of issuing term sheets. So from Matt's perspective, if we issue an IOI or bullets, which is equivalent of term sheet to a certain degree, that means we actually want to move forward. Obviously, it's always contingent on formal diligence. But why that's valuable is that it provides a lot of certainty of close to the counterparty and to the founders. What sometimes people don't realize, which I'm sure you've heard have been seen, is even if a capital partner is leaning in and they're saying they're coming in, it's only real until one, the paperwork is signed and two, the capital is actually deployed. A lot can happen in that period. So from our perspective, we have 18-year track record where we have always delivered our commitments. So we provide that certainty of close. And then we go deeper because we look to understand, what are the business opportunities? What are the potential limiting reagents? for the company to scale? Are there certain things that they haven't thought of that they should be thinking about? What's the actual alpha that we create and coming together? So there's a lot of, I would say value exchange that happens throughout the process is not just traditional, know, grilling or kind of going deeper on financials and that's it. And that our founders appreciate tremendously. A lot of them actually, when we speak to them after we funded, they actually end up saying on how George Alifragis (37:04.3) The entire diligence process was a highlight because they learned so much from it. It was so different than what they've experienced before. And that's what stood out to them because they felt and understood that we were trying to be real partners. And we were really trying to understand what they were looking to achieve and trying to help them get there. So that I would say is what helps us stand out and how we approach deal making as a whole. But it's definitely a team sport. It's definitely one where we bring in both the operators and our know, investment team to the table. And that's where we do what we can to help management team essentially achieve their vision and get to that North Star. Jason Kirby (37:45.017) And when it comes to like, you know, the topic I wanted to go into now is just generally alternative capital. So for the audience sake, like everyone knows venture, you sell 10, 20 % of your company consecutively, multiple times you get diluted from owning a hundred percent to like 10 % at a billion dollar exit. Then there's, you know, private equity, you build something. It has good fundamentals. good retention, checks a lot of future for cashflow boxes. People want to buy the majority of your company, if not all of the company. Then there's credit, then there's like just unique creative deal structures, like credit traditional banks, people think like, oh, it's like a loan on my house. It's like, not really, but you're not getting your 6 % interest rate. George Alifragis (38:30.551) Okay. Jason Kirby (38:34.68) But there's private credit, which they expect to be paid. There's cashflow coming back on a regular basis, back to the fund, as opposed to waiting for the capital event in the future. And then there's everything in between in terms of just creative deal structures. I would like you to walk us through kind of how Met structures it steals in terms of its credit, its payback, like, how wide it ranges. I think that would be interesting because so many other private credit firms are like, it's a line of credit with a 14, you know, or like prime plus five. And, know, this is what you're going to get. This is, know, this is the payment schedule and it has to be this exact thing every single time. So walk us through how Met kind of the range of what you guys are capable of. George Alifragis (39:22.862) So I think before I get there, what's really important and what I always tell founders, because I often take the intro call with them whenever I can, of course, is we are there to create optionality for them. I've been in their shoes. And what's most important to me and to the firm is that we help them understand the different paths that they can take in order for them to then make the best decision for them and for their teams. I think to your point, oftentimes, people default to what they know or what they think they know. But it's really important for you to understand the different options that you have. Otherwise, how are you making the right call and the right judgment call? I think building on that, when you think of capital, really fundamentally, there's truly two types of capital. So there's equity and then there's debt. And then there's hybrid somewhere in between. But those are really essentially the two types of capital that exist. And then to your earlier point, You know, the VC world is typically still equity capital or traditional equity. They have venture debt arms that we can speak to. And then private equity can be either full on equity or hybrid combination of the two. Met really stands out because we are essentially very different from all of the above. Everything we do is bespoke. Everything we do is tailored to the business and tailored to what the business needs. And that's what I would say sets us apart tremendously. Going back to one of your earlier examples, as well as, you sometimes people confuse this with a bank. We are definitely not a bank. I've been on the board of a very large financial institution. Banks have different products, right? And then they bring them together as solutions. And those products definitely serve a very important purpose. But there's a reason why, you know, there's been this huge shift towards private credit, because for banks, you have to respect certain parameters, and it's a lot of templated solutions, right? So are you looking for a line of credit? Are you looking for a revolver? What are you looking for that the bank offers? It's very rare that they can create something that is truly bespoke, especially in the space that we focus on, which is the lower middle market, which again, just means smaller businesses below 100 million in annual revenue. Once you've exceeded that revenue threshold, George Alifragis (41:46.126) then yes, you'll have a lot of different players who are willing to be creative, but that's where we really stand out. So we are essentially highly tailored, highly bespoke to what the business needs, what the business is looking to achieve. What that means practically is that we can underwrite where the business is at today, and we can also underwrite the go-forward growth plan. That's why us understanding growth strategy is so important. That is rare. Not a lot of traditional lenders can do that. And what's interesting with our capital is that in the way that it comes together, it actually behaves and acts as growth equity, but it is legally structured as debt, which is what gives you the best of both worlds. So from a founder's perspective, it's usually received as a hybrid capital solution. And that's more than fine in terms of how to interpret it, because it is true to a certain degree. And that's really how we stand up. I would say the other areas that make us different is there's no templates, right? So it's highly bespoke. It can be very tailored to growth milestones, to the business, to the different parts of the growth strategy that have to take place and how they come together. So it is very flexible, which again, is very uncommon in the private capital world, but then it's also very scalable. So remember I said anywhere from 10 to 50 to 100 million in growth capital. So when you think about that and you compare it to the venture world, what that practically means is that we can actually help a company that, example sake, is at a series A stage and or series A kind of business model and revenue mark, but we can help them accelerate and skip to a series D. So going from series A to series Z and how we structure the capital solution and how it's scalable. What that means for them is they actually don't have to keep raising capital as you're growing, which is a full-time job on its own. And two, that's also what makes it significantly less dilutive because to your point, the more you raise venture capital, equity capital, George Alifragis (44:04.174) the more and more you dilute yourself. So actually in today's world, it's relatively uncommon to see founders who still own their company even after a Series A. So that's usually the right time that we come in is the equivalent of a Series A readiness stage. But again, we don't navigate in venture world. So I don't want folks or the audience to overly use those examples because those are, you know, People typically know a series A, B, D, and E, and et cetera. But think of the business has achieved a series A readiness in terms of growth, in terms of opportunities set ahead. And then we can come in and help them skip to a series D ultimately. Because after series B, and I'm sure you can attest to this, it's very rare that the founder still owns the business, period. So essentially, that actually now makes that company or opportunity sponsored. And that's when we can no longer help them because it would go against our thesis and we're very much focused on the non-sponsored space. Jason Kirby (45:07.586) So for the sake of obviously not sharing, identifying details, but like an example of like a typical deal structure that you guys are proud of when it comes to this blend of non-deluded, like this written like debt, but feels like equity type arrangement. Like walk us through maybe like the deal structure of one of those deals that your team has done. George Alifragis (45:35.374) Yeah. So we've done quite a few of them. I would say the ones that we're really proud of and that typically our management teams see a lot of value in are the ones we're safe. For example, we both have alignment and a deep understanding as to what it's going to take to achieve the growth milestones in the next one to three years. So we zero in on that. And that's where we're able to say, okay, based on where the business is sitting, where it's going, the business would be able to leverage or maximize 30 million of growth capital. Now that 30 million is hyper tailored to different use proceeds. So what I mean by that is you can then take that 30 million and the first tranche or the first deployment can be 5 million. So there can be 2 million of refi, there can be 2 million of growth. and then a million of working capital, so to speak. So when you bring that all together, that's actually exactly what the business needs at that milestone. And then as they continue on their growth trajectory, say, fast forward four or six months later, that's where we would deploy another five or 10 million. And that is then put to work in the right areas. So in structuring it that way, we actually handle a lot of the cash management, so to speak, and we don't ever have our capital burn the balance sheets as well. So we are the ones that are essentially providing that financing as the business grows and scales. And it's very practical and is also very much applied to where the business is looking to drive the greatest ROI for themselves, of course. And then we get to benefit from that directly, indirectly. And then that's how we structure it. And then part of that can be, if I take it a step further, we will then figure out, depending on where the business is at, depending as to how much is part of the plan, we're taking true equity risk. We'll then figure out, OK, the blend. So how much of it is the debt ratio versus the equity component? And that equity component is also flexible as well. So that can be a combination of warrants, can be a combination of equity kickers. George Alifragis (47:56.408) can also be rev share. So very adaptable to again, what the business needs and also to what the founder is more comfortable with. Sometimes there's different founders who care about different things, right? There are certain founders who are fine with saying, hey, you guys are, I wouldn't be able to get to the next stage without you guys. And you you've more than earned 10 % of the business because if I were to go elsewhere, they'd be looking for 30 plus percent. So that's one example, right? There's other founders who will tell us, you know what, I really want to preserve as much of my equity as possible. You how can we be creative here to make this work? And that's where, again, depending on what the business needs and how all the different pieces come together, we can then look at a ref share model. We've looked at a royalty model. We are very creative in how we look at the different pieces. And that is usually, again, what sets us apart. And that's how we structure it. And then that's also what creates our edge versus others because others will oftentimes have to fall within their templates, within their swim lanes. And I guess the last nugget I'll share there to make it actionable is we are often an alternative to equity capital or very dilutive capital. So we are non-controlling and significantly less than options of that. At the same time, we are not the traditional private creditor, private lender. because different private credit firms have usually niche solution sets. So what I mean by that is I'm sure you've heard of like revenue-based financing, equipment-based financing, right? So we don't limit our structure based on those areas. We can actually look at all of the different assets of the business. The hard assets, the financial assets, the recurring versus reoccurring versus spot revenue. And that flexibility allows us to really structure things in the best way for the business. So a little bit of a long-winded answer, but... It essentially covers the spectrum and that's where it allows us to really provide usually a facility that is much larger than what management teams can get elsewhere, but one that is also the very focus on the different catalysts and the different milestones that the business is looking to achieve. George Alifragis (50:16.206) I can't hear you anymore, Jason. Jason Kirby (50:20.568) Here I am just talking to myself. Cut that out. Yeah. So I appreciate you giving the example there and how flexible you guys can be and why I wanted you on the show is just to expose founders that really worked their networks to find out what their options really are. The traditional VC playbook doesn't have to be the only playbook to pursue. The bank turns you down or you can't get an SBA. That's not the end of it. George Alifragis (50:44.462) Well said. Jason Kirby (50:49.45) or sometimes those are just not the right products. there are certain terms that are associated with them. And I think one thing I want to kind of share here is like, so many founders get hung up on like a, an interest rate. Yeah. It's like, it's, I want to lower interest rate. It's like, but what terms like personal guarantees or like she goes wrong. Like you're on the hook for $20 million. How's that feel? you know, and I think that there has to be an education for founders. George Alifragis (51:13.998) Jason Kirby (51:19.254) that there are options out there and they all come at different costs. And to look at the entirety of the package and the people on the other side of that package to get a deal done as opposed to like, well, my home mortgage is at 6%. Why can't I get something like that? Some people have never done debt, have no idea actually what market rates are and the fact that... there's substantial capital risk and they're not as safe of an investment as they always think they are. so blending this equity debt solution, I think, gives people alternatives like, hey, you got to go get equity. Some people can't really get the equity they want at the price they want or the debt. Everyone wants prime plus 2%, but they're not that product. They can't get access to that product. George Alifragis (51:50.626) Absolutely. George Alifragis (52:13.122) now. Jason Kirby (52:14.904) So I always like to make the joke ahead. Go ahead. George Alifragis (52:17.164) No, I think. I was going to say, think to Bill on that because you hit the nail on that. think what's really important is aligning the right capital at the right inflection point with where the business is at. I think the other key takeaway there is when you look at the different scenarios, debt is actually always cheaper than equity. If your business is actually growing and scaling, there is no scenario where debt is not cheaper than equity. So you need to understand to your point, like what is the true cost of capital that you're taking on and to not confuse, you know, a debt instrument, like a mortgage to what a tailored private credit solution actually is to completely different beasts, different risk profiles and different, you know, curves and trajectories. And, and really again, to your point, I think it's often understanding like what combination of capital do I actually need and And who am I raising the capital from? So understanding who the partner is is mission critical because a capital partnership is very similar to a marriage. You are signing very real legal paperwork and you want to make sure that you're in it with the right partner and the right partner who is aligned with where you're headed is supportive of your North Star and that is going to help you get there and that is not actually going to potentially limit you in getting there or kind of throwing wrenches or or putting the wrong covenants to your other point. So I think that's really key. So there's why it's a further, further bell on that point. Jason Kirby (53:52.948) I'm glad you did. For anyone that was listening and wants to learn more about you or Matt, what's the best way for them to do so? George Alifragis (54:04.049) LinkedIn is probably the best medium, relatively active on LinkedIn, so please feel free to reach out. I usually am able to go through all of the LinkedIn inbox messages. Otherwise, we obviously have each other's coordinates, so we would encourage them to reach out to you and we would love to work with them through your support and through your introduction. so very, very simple and straightforward to reach out to us. LinkedIn probably first, and then if not, let's work through that relationship together. Jason Kirby (54:32.514) Perfect. But George, it's been a pleasure having you on and talking about alternative capital, but also your trajectory of going from corporate to SME to investing and switching those contexts in today's world. find it's a fascinating story. So thanks for coming on and sharing the story. George Alifragis (54:51.918) Thanks so for having me, Jason. Really appreciate it.