September 23, 2025 • 22 mins
The IPO market has hit a wall – but is this the end of the road or just a detour? In this eye-opening episode of Startup Different, we dive deep into the dramatic shift reshaping how entrepreneurs think about exits, growth, and building lasting value.
With IPO volumes plummeting and regulatory hurdles mounting, a new generation of entrepreneurs is writing a different playbook. Private equity isn't just for Wall Street anymore – it's becoming the exit strategy of choice for founders who want to maintain control while still cashing out. Meanwhile, search funds are quietly revolutionizing business acquisition, turning everyday entrepreneurs into industry consolidators.
But here's where it gets interesting: while traditional exit routes are evolving, AI is simultaneously opening unprecedented opportunities to disrupt established industries. We explore the emergence of "search and destroy" funds – a bold new approach where entrepreneurs systematically target and transform entire market segments using technology.
What You'll Discover:
- Why the flood of private capital is making IPOs less attractive (and what this means for your startup)
- How search funds are democratizing business acquisition for entrepreneurs without massive war chests
- The hidden costs and long-term implications of going public that every founder should understand
- Real strategies for using AI to identify and exploit inefficiencies in traditional industries
- Why understanding true business value – not just growth metrics – is more crucial than ever
Whether you're a founder planning your exit strategy or an entrepreneur looking for your next opportunity, this episode reveals the new rules of the game in a post-IPO world.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Things kind of fascinating. So what does this mean for
founders? I think this gets back to like
the IPO dream is it's I wouldn'tbuild towards it these days
because it seems like a really not good path, right?
Like it seems the path path, yeah.
And and potentially not worth it.
Like you might get down that road thinking you want to do the
IPO and have ring the bell, right, Whereas you might be able
(00:21):
to go to private equity retain similar amount of control.
Let's get it rolling. Big ideas, money, hustle, smart
dream so. Wild.
Turn that grinding through a joyride.
I thought this is kind of interesting.
(00:42):
I saw a pattern in the news thatI thought might be relevant.
Basically what's happening is nobody's IPO anymore.
And I thought this was kind of weird and I wanted to dig into
this subject because I think fora lot of founders, there's like
a couple of dreams when you start a business.
The dream is either OK, I'm going to create an empire, we're
a gazillion dollars, and I'll berich and famous on my yacht.
(01:04):
Right. So no exit, just.
Kind of just going roll it. There's a second case where you
build something I don't want to say with the intention to sell,
but at least to annoy competitors that are bigger,
maybe in a more established market, hoping that they
acquire. You so like a revenge business.
I know you love revenge, but this is more like.
(01:25):
Love. Revenge.
You'll find that very interesting.
You know, what common theme among many entrepreneurs, I
remember talking to Sam part about this and he gets all
fucking fired up about it is he's always like, oht man,
somebody said this to me and I was like, I'll show them.
Years later. I sold them like, yeah.
And then I looked back on the experience and it was actually a
very nice e-mail. They were like, hey, you know,
(01:47):
good luck. You know, I wish you all the
best. But I, you know, at the time, I
was just filled with such murderous rage that I saw it as,
you know, something really threatening and it motivated me
for like a decade. Like, that's ridiculous.
But I know exactly what you're saying.
So this is this is silly story about where my cottages on Lake
Ontario. Yeah and there's a park and
(02:08):
there's a chip truck there and the the road is called Hwy. 33.
So the chip truck is called Freeway 33.
And I found out that apparently the employees there got pissed
off with the owner and so they went one perk up no way the lake
and opened up another chip truckin revenge three plus you.
Know you wanna work with this chip truck five year non compete
(02:30):
to making your own chip truck pal Anyway, that's funny
actually in downtown. This is going back to our our
Tammany roots in Kingston there's two bubbas poutine.
If anybody in Queens knows this downtown Kingston there's two
bubbas poutine. Yeah the original bubbas and
Bubbas poutine the same logo it looks.
I cannot I cannot believe they must have sued each other a
million times Yeah, but like same logo basically one just
(02:51):
says the original right. And it's like two brothers that
fought or like a dad and a son Yeah.
And they just, you know, revenge, man.
One got pissed off the. Other I can't believe that the
post bar food situation. He's getting a phone call.
Put it live, I. Wanna hear it?
I put my phone and do not. Disturb it must have.
Been went through. Cool.
That's weird. Who was it, Dad?
(03:11):
Chris Dad, we're we're filming right now.
Chris, the solution is in the comp plan.
Yeah, go say I love that episode.
OK, Sorry. You were gonna say something
before Dad called. You you remember as a gun.
No, we were talking about chip trucks and poutine and things
like that, But I was surprised that the, you know, post bar
food competitive landscape is sostrong in little Kingston ON
(03:35):
that like, you know, they didn'tcome up with like a different
name for the other like ones the.
Original One of four or five poutine places in Kingston.
Like people, those you know, yougo out drinking.
Awful business. You gotta like stay up late
you're every weekend and you gotta serve poutine to like
drunk people as they pour out of.
The bar I remember being in, like, I don't even know if it's
(03:56):
still ever like Mr. Donaire and the guy, you know, just can see
the troublemakers coming in and right away he's like, get the
hell out of here. Like you won't even certainly
like just get out is like get out of here and like the guy,
you know, he just I I would hatemy life.
Yeah, that's yeah. You mean?
Like a bouncer at. A you know.
Like a donair place anyway. Alright, back to what we're
talking about the poutine of IPOs.
(04:19):
No, so sorry. So we had the scenario where
you're building the business long term, building the empire,
being sold by a competitor or being bought by a competitor.
And then third case is the IPO. Yeah.
And So what was interesting, I looked up some data on this
because I was like, I haven't heard about, you know, for a
while. Remember like I think like
Alibaba was last week IPO, I cankind of remember.
OK, apparently there was others like Snowflake was a big one in
the United States, like last year, 2021 got a huge valuation
(04:40):
anyway, So there's basically been this IPO draws on the first
half of 2025, only 12 VC backed IPOs happened.
So it's one of the lowest countsin decades.
So this in the United States, yeah, historically there were
the gold standard. So in 2010, eighty 3% of Unicorn
exits were IPO and by 2024 that fell to 11%.
Whoa. Like whoa, like this is a huge
(05:01):
like change. And so it's kind of like a
couple of different reasons, like why is this happening?
And I guess I'll go to you, but like, why do you think it's
happening? I know, I know why, but I'm
interested in your. Hot ringing the bell at the New
York State I. Want to ring the bell?
I think that's really. Cool, as appealing as it used.
Maybe they need a bigger bell. Yeah, that kind of spell,
though, there's no like, like, you know, if you exit and you
sell your company, I think it's just like you like look at your
(05:23):
bank account. You're like, oh, I got a lot of
money now, but like, yeah, I can't say anything about it.
Whereas if you IPO, you can go ring the bell.
And it's a big YEAH moment. I think, but then why are people
not doing it? I don't know they are.
Not why do you think this is what I'm saying?
Like what what what would So I have so my hunch was and it was
accurate if I do say something as well.
Yeah. Was that it's slowed for a bunch
(05:45):
of different reasons. Mostly that first is like the
crazy regulatory troops. To actually go through with it,
right, you have to do a big roadshow.
Probably have to be what, like 100 million in revenue?
Ohio, at least. OK, so like dude.
You're if you're doing an acquisition in the United States
and it's less than 75,000,000, it doesn't even have to be close
(06:05):
the disclosed to the SEC, right,right.
So like, so consider that like you've got, I think you got to
be doing like half, half a billion I think for like
practically. Speaking right, right.
So maybe that's a big part of ittoo.
Is it? It is and you have to really
build your business. We get to IPO stage, whereas you
can exit much more some. Of these AI startups out that
we're seeing so this was the thecounterpoint.
(06:26):
So like, some of these huge AI companies are getting 10s of
billions, hundreds of billions of dollars from private
investment. Yeah, right.
So there's kind of this thing where you don't really need to
go. And then, sorry, the other part
of that regulatory piece for theIPO is like, you do a lot of
reports. Yeah.
You know, your job as a CEO really changes.
(06:48):
You probably need a new CEO to be honest.
You just hire people in your accounting department to do
those reports like it's not. Like, I don't think this is
trivial. I think it's like you can, yeah,
yes, obviously. You're at least $100 million a
year company. You can probably afford to hire
the accountants to do the like. I don't think the paperwork is
really the reason, but even the.Ongoing.
But then there's like the commitments, like the
projections you're gonna make tothe market.
(07:08):
Yeah, that's gonna affect your share price.
I think there's like an instability.
Yeah, I'm more of a perceived instability and the availability
of that capital versus going to private equity, who's just going
to give you not like with a lot of work as well, but they're
going to give you a crapload of money.
Yeah. And you're not tied to what I
think the invisible hand of the market.
(07:30):
That's what I want to say. Adam Smith isn't out there
driving your company. You know, all of a sudden it
feels a lot more like, OK, well,we can argue with the board.
You can't really argue with the market, you know, so Donald
Trump does something crazy and then all of a sudden your stock
goes down and you're just like, oh, we just have less money to
play with now. Something completely arbitrary.
But if you go to private equity,you actually have the means to
(07:52):
take that capital. And it doesn't matter in the
same way what Donald Trump does,not as a media buys you time.
I. Still think you're subject to
market forces regardless if you're.
I'm not saying you're not subject to market forces, but I
am saying that the time that when you feel the impact of
market forces could potentially be delayed, right, if you're
getting private. You're, you're, if you're
(08:14):
private equity, you don't have like a valuation that's sitting
out there publicly where every time Donald Trump does something
weird that your stock price plunges and you got your, your
shareholders then up in your face.
Because with a private equity, they're, they're not valuing
that business like every second.They're they're just holding it.
Like I think there is that trendof private for longer, which is
(08:34):
fairly consistent. So like I agree with you, I
think I think there's a lot of companies doing that and I think
there's a lot of private equity money out there.
So it's it's easier to go that route.
Like there you don't have to be as big, the money's there.
Like IPO is just not really seenas the way to do it or, or it's
not as appealing as it was. Before I think there's also the,
(08:56):
I think if we were to look back to, so 2010 was the comparison I
made, which is all unfortunatelyfor me a long time ago now.
And the, the one of the big comparisons there is if you
wanted to get the kind of capital that people are now
moving around privately, like $6.6 billion for open AI, for
example, like that they raised privately, right?
(09:16):
Like astonishing. But I actually think that's
going to be a pretty small number to some of the reasons
we're going to see for, you know, other companies here like
Anthropic and such over the nextlittle bit.
Like I, I just think that that availability of capital now is
significantly higher than in 2010, right?
You were like even like relatively like with inflation
and everything, I think it's just there's a shit load more
(09:37):
money available privately than there used to be.
And so I think that it becomes amuch more compelling argument to
someone, if you're like, well, how much do you need?
We need billions of dollars. Cool.
Like we can, we can rein that inwithout having you having to go
through the filings and the regulatory markets and all these
other rules you got to play by going forward.
You can continue to sort of operate within reason along the
(10:00):
same lines that you've been doing previously.
You know, and also, I think again, company direction and
incentives aren't modified. You are on mission for whatever
Sam Altman wants to do as opposed to what the market
thinks you ought to be doing. You know what I mean?
Like there's something to be said there.
So a lot, I think a lot of timesthose are aligned, don't get me
wrong, but there's got to be such situations where, you know,
(10:20):
like, well, why did Michael Dellbuy back Dell, right?
Because he didn't like the direction it was going.
And so he bought, he made a public company private again.
Yeah, right. Like there's something to be
said there. Yeah.
So actually I had some data on companies that reversed from IPO
like the take private. Where is my data on that?
(10:41):
But that is, is a trend where people are are you know,
business owners are saying, hey,we don't really want to be in
the market, we'd rather be private and we'd rather be doing
stuff without these, you know, regulatory hurdles that kind of
stuff. One of the other pieces that I I
found that I've is kind of interesting.
This is kind of like, you know, when you think about an
entrepreneur starting a businesslike your exit track, you know,
(11:03):
like where do you wanna be? What's your horizon look like?
Yeah, so I, I looked it up. So if you're VC track, so you're
probably 7 to 10 years on average to get to an IPO,
assuming you had a solid business and you're growing it,
you're doing. All the of braces power laws
power. Law.
You get to be one of those. You're probably.
Looking at you're. Yeah, exactly.
(11:23):
The, the private equity track ismore like a 5T7 years to
acquisition, so happens a littlebit faster.
But this search fund track is actually the quick one because
they're just looking for profitability, right?
And they're after that sort of stuff.
And that's why that well that that market is.
Exposure is like, so it's interesting because another data
point that I have which I thought was kind of
contradictory to search Fund, which we'll talk about in a
(11:44):
second, was that in July 2025, there were 58 corporate backed
exits worth 37 billion. And it's basically suggesting
that that was the highest numberin 18 months.
But still compared to like 2020-2021, that's like way
lower. So corporate acquisitions have
also slowed over the past two years.
Yeah, I think this is kind of like fascinating is because of
high interest rates, recession fears, worries about overpaying,
like kind of like standard stuff.
(12:05):
But generally speaking, there's less of this.
But then you have this like kindof other thing happening in the
market for entrepreneurs or wantto be entrepreneurs who are
getting behind search funds and going and rolling up a series of
boomer businesses in the same industry.
Tired of business authors and influencers who have never had a
(12:26):
successful business. Me too.
I sold my company for $40 million and I want the same
success for you. Check out Startup different on
Amazon, Audible and Kindle, right.
So I did a post on LinkedIn about this, by the way, and this
guy I was like, you know, peopleare doing this and this is crazy
and it's like such a lucrative way to go and find profitable
(12:48):
businesses or whatever. You know, watch out what's under
the hood, you know and and some one of the first comments this
guy goes to welcome to 2022. Cool.
I like that I banned him immediately but.
Report Report. Unfollow Block.
He hurt my feelings. No, it's actually it's actually
hilarious. I marked it as funny.
But so like search fund isn't exactly new, but it is an
(13:11):
interesting in this scenario, like I don't think you like
what's your end game on a searchfund?
Is it a bigger, another acquisition from another big
company or another group doing search funds and further market
consolidation? I I think the real opportunity
there is, is for the entrepreneur that you go out,
you find a business is profitable, you you acquire it
and you're probably buying it from a boomer and you're not,
(13:32):
hopefully you're not spending a fortune, but you can get a
small. Well, it's a multiple of EBITDA.
Right. So, but then you you quote there
and you do thing you're not supposed to do, which is like
try and make him a monopoly. You go out, you buy the
competitors, you try and build it up into a bigger bundle of
businesses. You optimize, you implement
systems, you do all you. Say you don't want to make a
monopoly. No, I do.
Yeah. Yeah, you're not supposed to.
No, no, that anybody who thinks if you're listening today in
(13:53):
business and you're like businesses aren't supposed to
make money, you are wrong. Exactly what they're supposed
to. They're not supposed to do that,
but that's what you're trying todo.
Ideally, you live in a world where you have no competitors
that command the command the maximum price.
Yeah. Exactly.
You're probably. Peter Thiel is like competing is
for losers. You don't wanna.
Compete, You wanna win and own. Yeah, Anyways, exactly.
So I think that's really interesting.
(14:14):
I actually have talked to a bunch of different
organizations. I was talking to one guy that we
know through an investment that we've done and he actually, you
know, had pharmacies, bought a bunch of pharmacies, ran the
pharmacies, optimize them like that.
And then there was somebody elsedoing a search fund buying
pharmacies. So he sold his bundle of
pharmacies. Really didn't know that.
(14:35):
But what's really interesting ishe kept all the real estate
cause he owned the buildings. OHS.
So then he became a realist like.
That guy was OK to just buy the the the business but not the
land. That's right.
They didn't even want the land, which is totally like what we
found too with our business because our office space that we
owned was not part of our acquisition.
(14:55):
They didn't want the office space, want the business.
They don't want to have to deal with, they find it messy to deal
with real estate, whereas we're kind of like, OK, we'll keep it.
Yeah. You know, so we'll be landlords,
you know. Yeah.
So I thought that was really interesting because there are
there, there's the business piece of it, but then there's
kind of like the assets. And sometimes it's a bit of an
asset play. I think I remember hearing a
(15:16):
story about was like the Pebble Beach Golf Club, OK.
And it was like losing money. It's in near San Francisco, as I
recall. And it was like losing money,
like, terrible golf course. Like it was really expensive
golf course, but like, not doingwell financially, still has a
really good name, all that sort of stuff.
Really managed whatever. OK, The guy buys it and he
(15:37):
immediately sells off. There was like a quarry that was
part of it. Yeah.
He immediately sold off the quarry for what he paid for the
golf course. All he must have got sued right
so like from the old owners or something yeah I just I I like I
think that's great, but I feel like an America you.
Gonna feel like this is the kindof move that like a prophecy
does and everybody hails him as a hero.
(15:57):
Oh, totally. Oh, you ran.
Ran towards the fire. Yeah, totally equity play like,
oh, I found the value in this. I did.
Get rid of the sport. You must have gone off though,
while he was doing the due diligence figured out about this
query and then went and was like, hey, let's advertise that
we're gonna have this Corey findsome buyers and then day one
boom. I guess that's.
Business, right? Like that's business.
Like, isn't that the the point is that people are going out
(16:19):
there looking for businesses? They own a quarry.
I don't know. They own a quarry.
Like an aquatic driving. Range called Pebble Beach, so
maybe that's where the pebbles came from, I don't know.
They import levels. You want your golf course to be
very authentic. Yeah, but regardless, so like,
you know, asset play and and you've got a free golf course.
So I just thought that was really interesting.
(16:40):
And I think that's what a lot ofpeople are doing with these
search funds or that, that goingin acquiring a business from a
boomer is you're looking for like, hey, what's the piece
that's actually valuable here and what do I actually want?
And and going after that and trying to bundle multiple of
them together to to make it into.
It actually it was another pointin my notes that was a lot of
what's happening now is something called a continuation
(17:02):
fund through Venture. Capital.
What is that I've never heard of?
That it's a, I think it's just afancy way of saying rather than
expecting our payout at five years, we expected at 10 as a
venture capitalist group or something like that.
So like longer term venture capital thinking and I think
it's probably because in certainmarkets they just think that.
(17:23):
The value of these. Things is going to increase
later. Like it's just so I think in a
way like why I don't. So for example, why don't, why
didn't they want the real estatein our transaction?
I think it's because if you wereto look at the two assets, let's
just make them two assets, the business and the real estate,
right? You'd be like the business is
the fast growing thing over the short term worth the short term
amount of value probably right. And the the real estate is the
(17:45):
longer term. Value about the timing too is
2022, yeah, downtown Toronto real estate was not super
valuable at that point rent. Complicated still now, to be
honest. Yeah, exactly.
Although, although. Yeah, come back.
Hey, government going back to work, TD Bank going back to
work. Yeah, Anyway, but yeah, so I
think, but my point there was that like the the nature of some
(18:08):
of the private equity is changing, which I think is kind
of fascinating. So what does this mean for
founders? I think this gets back to like
the IPO dream is I wouldn't build towards it these days
because it seems like a really not good path.
Like it seems the path path and potentially not worth it.
Like you might get down that road thinking you want to do the
IPO and have ring the bell, right?
(18:30):
Whereas you might be able to go to private equity, retain
similar amount of control, do another series or late, late
investment that's really significant based on the
valuation you're coming. You're still Unicorn everything,
but you don't have to deal with all the public filing stuff and
all that issue. Like fundamentally the stock
market is about, you know, incentivizing people to make
(18:51):
teeny, teeny little investments in your company.
So you can use that capital and,you know, run with it.
But if you've already got like enough money, it's almost like a
question, like, what is enough for your company's growth?
Yeah. And can you find it through less
difficult means? Yeah.
And so I think that that might be a super valid path for a lot
of entrepreneurs. And the other thing is if you're
going to go down the road of sort of like working with a
(19:15):
venture capitalist or investmentpartners, understand that
they're probably not thinking IPO anymore either, right?
That they're probably thinking this kind of path as well.
Or if they're not, or if you really want that IPO, you better
communicate to them early because I think they will.
Probably try to talk. You out of it, which is kind of
an interesting thing, yeah, so. There's definitely like two
(19:35):
sides to it. Like there's the companies that
I feel like are implementing AI or using AI effectively in their
business. And there's a lot of businesses
just aren't. And I feel like it's weird
because I feel like I would loveto go to let's take something
really easy. Let's take a lawn mowing
company. OK, what if you're the?
One name Tyler. Tyler.
Yeah, I never hired him, but yeah, I know weirdness.
(19:58):
But you know, so Tyler's got a little business, He's got like
10 clients. He's probably 1 IP.
So I, I don't think I would everbuy a business like that because
you can just go do that yourself, right?
And I think you can actually just, you don't have to buy
them. You can just wait them out.
You can come into the market, you can say we're going to
implement robotic. Remember you.
Talked about my thing in stealthand you were like an AI first
company. Like I think you have the
advantage of going into these markets without buying any of
(20:21):
the things they do, buying theirbusiness and being I first and
crushing. Them yeah yeah so there's like
the search fund but there's alsolike I don't know the I'm just
gonna copy that business model do it way better use AI more
effectively and. Destroy, destroy.
Destroy. Find.
It hell yeah oht woon did we just coin we?
Just join it, Graham. Like alert the presses.
(20:41):
The domain name. No, but but for real though,
like I, I think that well, this is the post on LinkedIn where
the guy kind of like reminded methat this is happening in 2022.
OK, so, but hang on, hang on before that.
He like a lot of that post is like be careful of what you buy
for. Like make sure you look at the
cuts these things obviously you're gonna do and due
diligence. But if you don't know what
you're looking at and you're just starting out entrepreneur,
(21:03):
like you might not know what you're looking for.
And there's all skeletons in those.
Alright, so you need to put together a LinkedIn post that
you're really good at those. That's your search and destroy
business model? Hell yeah.
Rather than a a search fund, you're a search and destroy
fund. That's pretty cool.
So the idea is you go into like legacy industries with a bunch
of terrible players that do thatreally inefficiently, and you
(21:25):
set up a new business, you're backed by side like lunch and
your AI 1st, and you go in and fucking crush them.
Yeah, I love this idea. Isn't this actually just being a
good? This sounds way cooler.
Sounds way cooler. Yeah, yeah.
I'm a fellow at the Search and Destroy.
It's like why commentator like that's that's old news.
(21:46):
I'm part of the search and destroy.
Group. I'm glad.
Everybody gets a free grenade. Anyway, so I'm glad we finally
had like a unique thought on this and we'll probably go and
like Google it be like it already.
Exists, and no way is that depressing.
Alright folks, here's your firstsurgeon destroy fund.
See you next week. Started up?
(22:08):
Let's get it rolling. Big ideas, Money, hustle, Smart
dream. So why turn that grind into a
joy ride?
Things kind of fascinating. So what does this mean for
founders? I think this gets back to like
the IPO dream is it's I wouldn'tbuild towards it these days
because it seems like a really not good path, right?
Like it seems the path path, yeah.
And and potentially not worth it.
Like you might get down that road thinking you want to do the
IPO and have ring the bell, right, Whereas you might be able
(00:21):
to go to private equity retain similar amount of control.
Let's get it rolling. Big ideas, money, hustle, smart
dream so. Wild.
Turn that grinding through a joyride.
I thought this is kind of interesting.
(00:42):
I saw a pattern in the news thatI thought might be relevant.
Basically what's happening is nobody's IPO anymore.
And I thought this was kind of weird and I wanted to dig into
this subject because I think fora lot of founders, there's like
a couple of dreams when you start a business.
The dream is either OK, I'm going to create an empire, we're
a gazillion dollars, and I'll berich and famous on my yacht.
(01:04):
Right. So no exit, just.
Kind of just going roll it. There's a second case where you
build something I don't want to say with the intention to sell,
but at least to annoy competitors that are bigger,
maybe in a more established market, hoping that they
acquire. You so like a revenge business.
I know you love revenge, but this is more like.
(01:25):
Love. Revenge.
You'll find that very interesting.
You know, what common theme among many entrepreneurs, I
remember talking to Sam part about this and he gets all
fucking fired up about it is he's always like, oht man,
somebody said this to me and I was like, I'll show them.
Years later. I sold them like, yeah.
And then I looked back on the experience and it was actually a
very nice e-mail. They were like, hey, you know,
(01:47):
good luck. You know, I wish you all the
best. But I, you know, at the time, I
was just filled with such murderous rage that I saw it as,
you know, something really threatening and it motivated me
for like a decade. Like, that's ridiculous.
But I know exactly what you're saying.
So this is this is silly story about where my cottages on Lake
Ontario. Yeah and there's a park and
(02:08):
there's a chip truck there and the the road is called Hwy. 33.
So the chip truck is called Freeway 33.
And I found out that apparently the employees there got pissed
off with the owner and so they went one perk up no way the lake
and opened up another chip truckin revenge three plus you.
Know you wanna work with this chip truck five year non compete
(02:30):
to making your own chip truck pal Anyway, that's funny
actually in downtown. This is going back to our our
Tammany roots in Kingston there's two bubbas poutine.
If anybody in Queens knows this downtown Kingston there's two
bubbas poutine. Yeah the original bubbas and
Bubbas poutine the same logo it looks.
I cannot I cannot believe they must have sued each other a
million times Yeah, but like same logo basically one just
(02:51):
says the original right. And it's like two brothers that
fought or like a dad and a son Yeah.
And they just, you know, revenge, man.
One got pissed off the. Other I can't believe that the
post bar food situation. He's getting a phone call.
Put it live, I. Wanna hear it?
I put my phone and do not. Disturb it must have.
Been went through. Cool.
That's weird. Who was it, Dad?
(03:11):
Chris Dad, we're we're filming right now.
Chris, the solution is in the comp plan.
Yeah, go say I love that episode.
OK, Sorry. You were gonna say something
before Dad called. You you remember as a gun.
No, we were talking about chip trucks and poutine and things
like that, But I was surprised that the, you know, post bar
food competitive landscape is sostrong in little Kingston ON
(03:35):
that like, you know, they didn'tcome up with like a different
name for the other like ones the.
Original One of four or five poutine places in Kingston.
Like people, those you know, yougo out drinking.
Awful business. You gotta like stay up late
you're every weekend and you gotta serve poutine to like
drunk people as they pour out of.
The bar I remember being in, like, I don't even know if it's
(03:56):
still ever like Mr. Donaire and the guy, you know, just can see
the troublemakers coming in and right away he's like, get the
hell out of here. Like you won't even certainly
like just get out is like get out of here and like the guy,
you know, he just I I would hatemy life.
Yeah, that's yeah. You mean?
Like a bouncer at. A you know.
Like a donair place anyway. Alright, back to what we're
talking about the poutine of IPOs.
(04:19):
No, so sorry. So we had the scenario where
you're building the business long term, building the empire,
being sold by a competitor or being bought by a competitor.
And then third case is the IPO. Yeah.
And So what was interesting, I looked up some data on this
because I was like, I haven't heard about, you know, for a
while. Remember like I think like
Alibaba was last week IPO, I cankind of remember.
OK, apparently there was others like Snowflake was a big one in
the United States, like last year, 2021 got a huge valuation
(04:40):
anyway, So there's basically been this IPO draws on the first
half of 2025, only 12 VC backed IPOs happened.
So it's one of the lowest countsin decades.
So this in the United States, yeah, historically there were
the gold standard. So in 2010, eighty 3% of Unicorn
exits were IPO and by 2024 that fell to 11%.
Whoa. Like whoa, like this is a huge
(05:01):
like change. And so it's kind of like a
couple of different reasons, like why is this happening?
And I guess I'll go to you, but like, why do you think it's
happening? I know, I know why, but I'm
interested in your. Hot ringing the bell at the New
York State I. Want to ring the bell?
I think that's really. Cool, as appealing as it used.
Maybe they need a bigger bell. Yeah, that kind of spell,
though, there's no like, like, you know, if you exit and you
sell your company, I think it's just like you like look at your
(05:23):
bank account. You're like, oh, I got a lot of
money now, but like, yeah, I can't say anything about it.
Whereas if you IPO, you can go ring the bell.
And it's a big YEAH moment. I think, but then why are people
not doing it? I don't know they are.
Not why do you think this is what I'm saying?
Like what what what would So I have so my hunch was and it was
accurate if I do say something as well.
Yeah. Was that it's slowed for a bunch
(05:45):
of different reasons. Mostly that first is like the
crazy regulatory troops. To actually go through with it,
right, you have to do a big roadshow.
Probably have to be what, like 100 million in revenue?
Ohio, at least. OK, so like dude.
You're if you're doing an acquisition in the United States
and it's less than 75,000,000, it doesn't even have to be close
(06:05):
the disclosed to the SEC, right,right.
So like, so consider that like you've got, I think you got to
be doing like half, half a billion I think for like
practically. Speaking right, right.
So maybe that's a big part of ittoo.
Is it? It is and you have to really
build your business. We get to IPO stage, whereas you
can exit much more some. Of these AI startups out that
we're seeing so this was the thecounterpoint.
(06:26):
So like, some of these huge AI companies are getting 10s of
billions, hundreds of billions of dollars from private
investment. Yeah, right.
So there's kind of this thing where you don't really need to
go. And then, sorry, the other part
of that regulatory piece for theIPO is like, you do a lot of
reports. Yeah.
You know, your job as a CEO really changes.
(06:48):
You probably need a new CEO to be honest.
You just hire people in your accounting department to do
those reports like it's not. Like, I don't think this is
trivial. I think it's like you can, yeah,
yes, obviously. You're at least $100 million a
year company. You can probably afford to hire
the accountants to do the like. I don't think the paperwork is
really the reason, but even the.Ongoing.
But then there's like the commitments, like the
projections you're gonna make tothe market.
(07:08):
Yeah, that's gonna affect your share price.
I think there's like an instability.
Yeah, I'm more of a perceived instability and the availability
of that capital versus going to private equity, who's just going
to give you not like with a lot of work as well, but they're
going to give you a crapload of money.
Yeah. And you're not tied to what I
think the invisible hand of the market.
(07:30):
That's what I want to say. Adam Smith isn't out there
driving your company. You know, all of a sudden it
feels a lot more like, OK, well,we can argue with the board.
You can't really argue with the market, you know, so Donald
Trump does something crazy and then all of a sudden your stock
goes down and you're just like, oh, we just have less money to
play with now. Something completely arbitrary.
But if you go to private equity,you actually have the means to
(07:52):
take that capital. And it doesn't matter in the
same way what Donald Trump does,not as a media buys you time.
I. Still think you're subject to
market forces regardless if you're.
I'm not saying you're not subject to market forces, but I
am saying that the time that when you feel the impact of
market forces could potentially be delayed, right, if you're
getting private. You're, you're, if you're
(08:14):
private equity, you don't have like a valuation that's sitting
out there publicly where every time Donald Trump does something
weird that your stock price plunges and you got your, your
shareholders then up in your face.
Because with a private equity, they're, they're not valuing
that business like every second.They're they're just holding it.
Like I think there is that trendof private for longer, which is
(08:34):
fairly consistent. So like I agree with you, I
think I think there's a lot of companies doing that and I think
there's a lot of private equity money out there.
So it's it's easier to go that route.
Like there you don't have to be as big, the money's there.
Like IPO is just not really seenas the way to do it or, or it's
not as appealing as it was. Before I think there's also the,
(08:56):
I think if we were to look back to, so 2010 was the comparison I
made, which is all unfortunatelyfor me a long time ago now.
And the, the one of the big comparisons there is if you
wanted to get the kind of capital that people are now
moving around privately, like $6.6 billion for open AI, for
example, like that they raised privately, right?
(09:16):
Like astonishing. But I actually think that's
going to be a pretty small number to some of the reasons
we're going to see for, you know, other companies here like
Anthropic and such over the nextlittle bit.
Like I, I just think that that availability of capital now is
significantly higher than in 2010, right?
You were like even like relatively like with inflation
and everything, I think it's just there's a shit load more
(09:37):
money available privately than there used to be.
And so I think that it becomes amuch more compelling argument to
someone, if you're like, well, how much do you need?
We need billions of dollars. Cool.
Like we can, we can rein that inwithout having you having to go
through the filings and the regulatory markets and all these
other rules you got to play by going forward.
You can continue to sort of operate within reason along the
(10:00):
same lines that you've been doing previously.
You know, and also, I think again, company direction and
incentives aren't modified. You are on mission for whatever
Sam Altman wants to do as opposed to what the market
thinks you ought to be doing. You know what I mean?
Like there's something to be said there.
So a lot, I think a lot of timesthose are aligned, don't get me
wrong, but there's got to be such situations where, you know,
(10:20):
like, well, why did Michael Dellbuy back Dell, right?
Because he didn't like the direction it was going.
And so he bought, he made a public company private again.
Yeah, right. Like there's something to be
said there. Yeah.
So actually I had some data on companies that reversed from IPO
like the take private. Where is my data on that?
(10:41):
But that is, is a trend where people are are you know,
business owners are saying, hey,we don't really want to be in
the market, we'd rather be private and we'd rather be doing
stuff without these, you know, regulatory hurdles that kind of
stuff. One of the other pieces that I I
found that I've is kind of interesting.
This is kind of like, you know, when you think about an
entrepreneur starting a businesslike your exit track, you know,
(11:03):
like where do you wanna be? What's your horizon look like?
Yeah, so I, I looked it up. So if you're VC track, so you're
probably 7 to 10 years on average to get to an IPO,
assuming you had a solid business and you're growing it,
you're doing. All the of braces power laws
power. Law.
You get to be one of those. You're probably.
Looking at you're. Yeah, exactly.
(11:23):
The, the private equity track ismore like a 5T7 years to
acquisition, so happens a littlebit faster.
But this search fund track is actually the quick one because
they're just looking for profitability, right?
And they're after that sort of stuff.
And that's why that well that that market is.
Exposure is like, so it's interesting because another data
point that I have which I thought was kind of
contradictory to search Fund, which we'll talk about in a
(11:44):
second, was that in July 2025, there were 58 corporate backed
exits worth 37 billion. And it's basically suggesting
that that was the highest numberin 18 months.
But still compared to like 2020-2021, that's like way
lower. So corporate acquisitions have
also slowed over the past two years.
Yeah, I think this is kind of like fascinating is because of
high interest rates, recession fears, worries about overpaying,
like kind of like standard stuff.
(12:05):
But generally speaking, there's less of this.
But then you have this like kindof other thing happening in the
market for entrepreneurs or wantto be entrepreneurs who are
getting behind search funds and going and rolling up a series of
boomer businesses in the same industry.
Tired of business authors and influencers who have never had a
(12:26):
successful business. Me too.
I sold my company for $40 million and I want the same
success for you. Check out Startup different on
Amazon, Audible and Kindle, right.
So I did a post on LinkedIn about this, by the way, and this
guy I was like, you know, peopleare doing this and this is crazy
and it's like such a lucrative way to go and find profitable
(12:48):
businesses or whatever. You know, watch out what's under
the hood, you know and and some one of the first comments this
guy goes to welcome to 2022. Cool.
I like that I banned him immediately but.
Report Report. Unfollow Block.
He hurt my feelings. No, it's actually it's actually
hilarious. I marked it as funny.
But so like search fund isn't exactly new, but it is an
(13:11):
interesting in this scenario, like I don't think you like
what's your end game on a searchfund?
Is it a bigger, another acquisition from another big
company or another group doing search funds and further market
consolidation? I I think the real opportunity
there is, is for the entrepreneur that you go out,
you find a business is profitable, you you acquire it
and you're probably buying it from a boomer and you're not,
(13:32):
hopefully you're not spending a fortune, but you can get a
small. Well, it's a multiple of EBITDA.
Right. So, but then you you quote there
and you do thing you're not supposed to do, which is like
try and make him a monopoly. You go out, you buy the
competitors, you try and build it up into a bigger bundle of
businesses. You optimize, you implement
systems, you do all you. Say you don't want to make a
monopoly. No, I do.
Yeah. Yeah, you're not supposed to.
No, no, that anybody who thinks if you're listening today in
(13:53):
business and you're like businesses aren't supposed to
make money, you are wrong. Exactly what they're supposed
to. They're not supposed to do that,
but that's what you're trying todo.
Ideally, you live in a world where you have no competitors
that command the command the maximum price.
Yeah. Exactly.
You're probably. Peter Thiel is like competing is
for losers. You don't wanna.
Compete, You wanna win and own. Yeah, Anyways, exactly.
So I think that's really interesting.
(14:14):
I actually have talked to a bunch of different
organizations. I was talking to one guy that we
know through an investment that we've done and he actually, you
know, had pharmacies, bought a bunch of pharmacies, ran the
pharmacies, optimize them like that.
And then there was somebody elsedoing a search fund buying
pharmacies. So he sold his bundle of
pharmacies. Really didn't know that.
(14:35):
But what's really interesting ishe kept all the real estate
cause he owned the buildings. OHS.
So then he became a realist like.
That guy was OK to just buy the the the business but not the
land. That's right.
They didn't even want the land, which is totally like what we
found too with our business because our office space that we
owned was not part of our acquisition.
(14:55):
They didn't want the office space, want the business.
They don't want to have to deal with, they find it messy to deal
with real estate, whereas we're kind of like, OK, we'll keep it.
Yeah. You know, so we'll be landlords,
you know. Yeah.
So I thought that was really interesting because there are
there, there's the business piece of it, but then there's
kind of like the assets. And sometimes it's a bit of an
asset play. I think I remember hearing a
(15:16):
story about was like the Pebble Beach Golf Club, OK.
And it was like losing money. It's in near San Francisco, as I
recall. And it was like losing money,
like, terrible golf course. Like it was really expensive
golf course, but like, not doingwell financially, still has a
really good name, all that sort of stuff.
Really managed whatever. OK, The guy buys it and he
(15:37):
immediately sells off. There was like a quarry that was
part of it. Yeah.
He immediately sold off the quarry for what he paid for the
golf course. All he must have got sued right
so like from the old owners or something yeah I just I I like I
think that's great, but I feel like an America you.
Gonna feel like this is the kindof move that like a prophecy
does and everybody hails him as a hero.
(15:57):
Oh, totally. Oh, you ran.
Ran towards the fire. Yeah, totally equity play like,
oh, I found the value in this. I did.
Get rid of the sport. You must have gone off though,
while he was doing the due diligence figured out about this
query and then went and was like, hey, let's advertise that
we're gonna have this Corey findsome buyers and then day one
boom. I guess that's.
Business, right? Like that's business.
Like, isn't that the the point is that people are going out
(16:19):
there looking for businesses? They own a quarry.
I don't know. They own a quarry.
Like an aquatic driving. Range called Pebble Beach, so
maybe that's where the pebbles came from, I don't know.
They import levels. You want your golf course to be
very authentic. Yeah, but regardless, so like,
you know, asset play and and you've got a free golf course.
So I just thought that was really interesting.
(16:40):
And I think that's what a lot ofpeople are doing with these
search funds or that, that goingin acquiring a business from a
boomer is you're looking for like, hey, what's the piece
that's actually valuable here and what do I actually want?
And and going after that and trying to bundle multiple of
them together to to make it into.
It actually it was another pointin my notes that was a lot of
what's happening now is something called a continuation
(17:02):
fund through Venture. Capital.
What is that I've never heard of?
That it's a, I think it's just afancy way of saying rather than
expecting our payout at five years, we expected at 10 as a
venture capitalist group or something like that.
So like longer term venture capital thinking and I think
it's probably because in certainmarkets they just think that.
(17:23):
The value of these. Things is going to increase
later. Like it's just so I think in a
way like why I don't. So for example, why don't, why
didn't they want the real estatein our transaction?
I think it's because if you wereto look at the two assets, let's
just make them two assets, the business and the real estate,
right? You'd be like the business is
the fast growing thing over the short term worth the short term
amount of value probably right. And the the real estate is the
(17:45):
longer term. Value about the timing too is
2022, yeah, downtown Toronto real estate was not super
valuable at that point rent. Complicated still now, to be
honest. Yeah, exactly.
Although, although. Yeah, come back.
Hey, government going back to work, TD Bank going back to
work. Yeah, Anyway, but yeah, so I
think, but my point there was that like the the nature of some
(18:08):
of the private equity is changing, which I think is kind
of fascinating. So what does this mean for
founders? I think this gets back to like
the IPO dream is I wouldn't build towards it these days
because it seems like a really not good path.
Like it seems the path path and potentially not worth it.
Like you might get down that road thinking you want to do the
IPO and have ring the bell, right?
(18:30):
Whereas you might be able to go to private equity, retain
similar amount of control, do another series or late, late
investment that's really significant based on the
valuation you're coming. You're still Unicorn everything,
but you don't have to deal with all the public filing stuff and
all that issue. Like fundamentally the stock
market is about, you know, incentivizing people to make
(18:51):
teeny, teeny little investments in your company.
So you can use that capital and,you know, run with it.
But if you've already got like enough money, it's almost like a
question, like, what is enough for your company's growth?
Yeah. And can you find it through less
difficult means? Yeah.
And so I think that that might be a super valid path for a lot
of entrepreneurs. And the other thing is if you're
going to go down the road of sort of like working with a
(19:15):
venture capitalist or investmentpartners, understand that
they're probably not thinking IPO anymore either, right?
That they're probably thinking this kind of path as well.
Or if they're not, or if you really want that IPO, you better
communicate to them early because I think they will.
Probably try to talk. You out of it, which is kind of
an interesting thing, yeah, so. There's definitely like two
(19:35):
sides to it. Like there's the companies that
I feel like are implementing AI or using AI effectively in their
business. And there's a lot of businesses
just aren't. And I feel like it's weird
because I feel like I would loveto go to let's take something
really easy. Let's take a lawn mowing
company. OK, what if you're the?
One name Tyler. Tyler.
Yeah, I never hired him, but yeah, I know weirdness.
(19:58):
But you know, so Tyler's got a little business, He's got like
10 clients. He's probably 1 IP.
So I, I don't think I would everbuy a business like that because
you can just go do that yourself, right?
And I think you can actually just, you don't have to buy
them. You can just wait them out.
You can come into the market, you can say we're going to
implement robotic. Remember you.
Talked about my thing in stealthand you were like an AI first
company. Like I think you have the
advantage of going into these markets without buying any of
(20:21):
the things they do, buying theirbusiness and being I first and
crushing. Them yeah yeah so there's like
the search fund but there's alsolike I don't know the I'm just
gonna copy that business model do it way better use AI more
effectively and. Destroy, destroy.
Destroy. Find.
It hell yeah oht woon did we just coin we?
Just join it, Graham. Like alert the presses.
(20:41):
The domain name. No, but but for real though,
like I, I think that well, this is the post on LinkedIn where
the guy kind of like reminded methat this is happening in 2022.
OK, so, but hang on, hang on before that.
He like a lot of that post is like be careful of what you buy
for. Like make sure you look at the
cuts these things obviously you're gonna do and due
diligence. But if you don't know what
you're looking at and you're just starting out entrepreneur,
(21:03):
like you might not know what you're looking for.
And there's all skeletons in those.
Alright, so you need to put together a LinkedIn post that
you're really good at those. That's your search and destroy
business model? Hell yeah.
Rather than a a search fund, you're a search and destroy
fund. That's pretty cool.
So the idea is you go into like legacy industries with a bunch
of terrible players that do thatreally inefficiently, and you
(21:25):
set up a new business, you're backed by side like lunch and
your AI 1st, and you go in and fucking crush them.
Yeah, I love this idea. Isn't this actually just being a
good? This sounds way cooler.
Sounds way cooler. Yeah, yeah.
I'm a fellow at the Search and Destroy.
It's like why commentator like that's that's old news.
(21:46):
I'm part of the search and destroy.
Group. I'm glad.
Everybody gets a free grenade. Anyway, so I'm glad we finally
had like a unique thought on this and we'll probably go and
like Google it be like it already.
Exists, and no way is that depressing.
Alright folks, here's your firstsurgeon destroy fund.
See you next week. Started up?
(22:08):
Let's get it rolling. Big ideas, Money, hustle, Smart
dream. So why turn that grind into a
joy ride?
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