The King's Hall - Economic Greenification： Why Businesses Are Integral to the New Christendom

00:00:00.000 Hey guys, Brian here with a big announcement from New Christendom Press.

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00:00:39.000 This episode of the King's Hall Podcast is brought to you by Backwards Planning Financial,

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00:00:56.600 Over the past few years since we started New Christendom Press, one of the themes that we've talked about at great length is really the retreat of Christians from building institutions, or at the very least, maintaining those institutions.

00:01:11.580 Weak men have either not built or have failed to gatekeep enemies from coming into these institutions and weakening them to the point of irrelevancy or even shutting them down.

00:01:23.260 Now, one of the things that we've really talked about at length is building institutions for

00:01:29.700 business. And so in this episode, I am joined by two of my very good friends, men that are

00:01:37.080 great business minds. And I'm very excited for me to pick their brains a little bit on

00:01:43.240 building businesses. Because if you recall, a little while ago, we did a four-part series

00:01:48.460 asking the question, what should I do if I had $100,000 in my mattress? Where should I invest

00:01:54.240 it? And we discussed different options. But one theme that came up in every interview was starting

00:02:00.380 businesses or participating in businesses. And so that's what we're going to be discussing at length

00:02:06.700 in this episode. So I am joined today by David Reese, who is a CEO, president, and chairman of

00:02:14.440 multiple businesses, including the Reese Fund, Armored Republic, and Mirror Works, and many

00:02:20.520 others. And he is also the pastor of Puritan Reformed Church in Phoenix. He is married to

00:02:27.560 Katie, has six children, and is the grandfather of, is it now two or one? One. One. All right.

00:02:35.800 Welcome. Thank you, David, for joining me. And then my other guest is Jace Reneveld. He is

00:02:41.960 a serial entrepreneur he has many businesses they're the best businesses they're all profitable

00:02:48.320 they're great he's also a real estate mogul uh and the owner of a crowd favorite alpine gold

00:02:55.140 here in ogden utah so thank you for joining me hey it's a great day and uh gold's at all-time

00:03:00.740 highs what can i say you can say i was right i was right where where's bitcoin i'm not sure

00:03:08.680 82 that's where it is 82 000 yeah pastor burkholder thanks for having me on and by the way jace if all

00:03:14.780 of your businesses are profitable you're doing better than me i know i was like uh dan i don't

00:03:18.740 know if you've seen my books lately but uh there's a lot of capital expenditures especially especially

00:03:23.420 when you're building so it's humble humble beginnings well i will say that all of my

00:03:27.400 businesses all one of them are profitable so it looks like i am the subject matter expert in the

00:03:32.580 room, you're welcome for having me here. So one thing I wanted to talk about is just the building

00:03:41.620 of institutions as a philosophical idea. We've talked a lot on the King's Hall, especially,

00:03:46.920 and Breit Hearth about building the institution of the family, sexual piety, right order in the

00:03:52.920 home, disciplining children. We've talked a lot about churches, kind of where the church has

00:03:57.140 failed and giving a positive vision for churches. What we haven't talked about quite as much is

00:04:02.780 really building businesses. And so that's why we have David here and Jace is because both of them

00:04:09.780 have built businesses. And David is actually doing something very interesting with giving

00:04:16.460 investors the opportunity to participate in the building of businesses and actually getting

00:04:21.940 businesses that are more than just a startup, which there's nothing wrong with startups,

00:04:25.560 but getting businesses that are potentially even positively cash flowing already and purchasing

00:04:30.700 them and giving investors opportunities to actually be participants in the success of

00:04:36.900 those businesses. So I was wondering, David, if you could just talk me through a little bit

00:04:40.500 about what is, you know, what is Reese fund and what do you do in that? And what is it trying

00:04:45.520 to accomplish? Yeah, thanks Dan. So basically Reese fund, what we do is we look for small

00:04:50.920 businesses to acquire. We have management that we're either plugging or that we're working with

00:04:56.540 that's already in there. And then we're also trying to pull together the deal, the capital

00:05:01.420 for it. So the three major activities are finding deals, having good management to be able to run

00:05:06.600 businesses, and pulling together the capital for those deals. And so when you're dealing with a

00:05:11.360 deal, the idea of deal flow is sort of the big thing for thinking about finding opportunities.

00:05:17.160 So what you're doing is you're networking with business owners, you're dealing with business brokers, you're talking to investment banks, and you're trying to interact with people who are dealing with stuff.

00:05:27.640 And as people get to a place where they're kind of reaching retirement age, those become sort of prime targets for us because our goal is typically to buy businesses where there's somebody who has had conservative and Christian values they've been applying in a business, but they kind of don't have a successor.

00:05:46.800 And so they're looking for, how can I give this over to somebody who's going to be a good steward of it?

00:05:53.020 And they're not going to just kind of hand it over and turn it into like, you know, part of the woke apparatus.

00:05:57.400 But instead, that this is going to be something where there's a continuation of those values.

00:06:01.980 And a lot of the time, we've found that there's a lot of guys who are retiring, having built up some business,

00:06:06.900 and they kind of got it to have some level of institution, and it's their baby.

00:06:11.900 They've like poured their blood, sweat, and tears into building something.

00:06:14.780 and they they're kind of like what am i going to do here and so many of these firms are looking for

00:06:21.100 like something to buy to like strip everything out get rid of all the people that the you know

00:06:25.900 the owner cared about come in and um it basically try to do stuff to to jack up profitability in

00:06:32.720 some sort of a three to five year period of time and then sell the business again and the reason

00:06:37.080 they do that is because if you take a business that's making like a million dollars or two

00:06:42.060 million a year and you can get it to 5 million. When you get to that five, not only do you get

00:06:47.540 an increase in terms of the amount of money that people are making from just going like, oh, it's

00:06:52.480 five times as much or whatever. But a lot of times you can, you can, you get like a $5 million point

00:06:56.580 or a $10 million point and you can resell it for an increased number of multiple. And so that so

00:07:02.960 many people are trying to go that way. And so what we have devoted ourselves to doing is to looking

00:07:07.640 for stuff that we can buy and hold. And I have so many people that just say like, you know,

00:07:13.120 that would throw institutional money at us. It's big numbers, easy to access cash. If we would

00:07:19.540 just do the buy and flip as a thing. But our desire is to pour our energy into buying and

00:07:28.320 holding and having long-term cultural impact. So our goal is to have a explicitly Christian 0.95

00:07:34.200 mission for the business, um, to have a kind of the handbook and policies reference scripture

00:07:40.460 and have that, the idea that there's Christian principles being applied in terms of the business.

00:07:45.120 We, we, we lead with the Lord's day, um, as, as a part of what we're going to have there.

00:07:49.860 So we make sure that people aren't having to work on the Lord's day.

00:07:52.260 And, um, and so those ideas, and then also using the book of Proverbs to talk to and develop

00:07:57.460 management.

00:07:57.940 And then we have those things being used in the business, and it helps to gradually leaven the lump. 0.60

00:08:06.060 And it creates opportunities for there to be kind of a building out of a really serious Christian culture. 0.72

00:08:10.160 But that takes time.

00:08:11.120 And I think it really does generate great returns and rewards, but it takes effort and time to really have that fully go into effect.

00:08:18.840 Yeah, that's really interesting because, Jace, I knew you've had some experience in buying and selling equity and businesses and things like that.

00:08:27.200 And so you could see how it'd be really attractive to do what David had just said, where

00:08:30.860 somebody acquires a business and often when they clean up like the profit and loss statements

00:08:36.340 and the balance sheets, what that means is that they're reducing payroll.

00:08:39.440 They're firing a bunch of people, maybe putting in some better processes, perhaps just to

00:08:44.660 inflate your profitability metrics.

00:08:47.620 So then they can put that multiplier on there.

00:08:49.860 And it depends on the industry, right, David, what the multiplier is.

00:08:52.880 it's somewhere between, you know, one and a half X to as high as if it's a tech company,

00:08:58.200 who knows? I mean like over seven and a half X, you know, so you can see why that'd be attractive

00:09:03.040 to one of these big, uh, big equity funds, uh, because you take a business in David's example,

00:09:10.200 that's a million dollars in cashflow and they go to 5 million and then you get a 5 X, you know,

00:09:16.140 multiplier on that. So the business that you paid, you know, whatever your original, let's say it

00:09:21.680 was five million dollars and it made a million dollars a year now you're able to sell for 25

00:09:27.040 million you know so it's a quick turnaround but what sort of but even more than that when you when

00:09:33.420 you when you there are certain stair steps that a lot of the times when you can get you not only

00:09:37.940 get a multiple in terms of like going from you bought this thing at five to going to 25 because

00:09:42.500 you have five times you know growth in in the profitability but you you actually increase the

00:09:47.520 multiplier too. A lot of the times when you increase the number. So if you go from one to

00:09:52.860 5 million, you might go from a three to five times, you know, the purchase three to five times

00:09:58.920 the profitability as a purchase price to like, all of a sudden you're at like maybe eight times.

00:10:04.700 Is that because there's like a growth multiplier in there because it shows,

00:10:08.320 you know, you, that there are future there's meat left on the bone. So there's more opportunity for

00:10:13.280 it to grow? So that's a great point. If there's a growth multiplier in terms of the revenue,

00:10:18.560 sometimes that can increase it too. But the reason is because there's so much capital that's trying

00:10:24.440 to figure out how to manage these larger groups. So a lot of the private equity guys do not want

00:10:30.400 to deal with the headaches of the development of talent. They want to be able to immediately pay

00:10:36.940 some CEO a million dollars and have him have staff that's making a quarter to a half million

00:10:42.540 dollars a year as sea level people blow them and if it's not producing five to ten million dollars

00:10:47.080 of profit a year you can't afford to throw on the really high quality staff um and that that has

00:10:54.120 already got you know 10 years 20 years you know 25 years of track record of running businesses

00:10:59.160 and building them so their goal is to is to have a very easy process of just buying the business

00:11:05.900 having this team of people that they plug in that are super expensive and that are already that have

00:11:11.540 already been in some sort of like process of buying and flipping for a while, or they're

00:11:16.220 coming out of like a public company or whatever. So they've got this super expensive management

00:11:21.620 load on, which I'm not saying that by itself is bad. You know, I'm all for people making money

00:11:26.340 for being talented and skilled, but the issue is it's not worth it to them to go down into the

00:11:32.020 smaller businesses. And that's one of the reasons that we target these businesses in the one to

00:11:36.740 a $5 million, especially a profitability zone. And then we were willing to go into the five to

00:11:42.280 10, but the problem is the prices start to really go up. And so we can't get the same sorts of deals

00:11:46.760 because of the fact that there's, there's competition for money from people who are

00:11:50.920 willing to, you know, just, just spend a lot more to make it easy and they're accessing

00:11:56.420 institutional capital. And I think it's, it's great to, to get that insight and perspective

00:12:01.180 because in the same way with real estate, you start to see how banks can actually shape

00:12:06.020 the world around us. Um, you know, in this case that David's talking about, um, consolidation

00:12:11.640 is going to be a key part of, of, you know, getting to those EBITDA numbers, you know,

00:12:16.600 so when you see dental groups or insurance brokerages, they start to consolidate so they

00:12:21.120 can hit those numbers, get those multiples and get the big money attracted. But what is the result

00:12:26.680 of that is, you know, less family owned businesses, lower quality services, more streamlined,

00:12:33.400 less flexibility on just personalizing products and things like that. The same is true in real

00:12:39.860 estate. I learned a long time ago, you're not going to get the big money from the banks unless

00:12:44.000 you can have something with global cashflow. And that's why you see Chipotle, Starbucks and

00:12:48.600 yogurt land on every corner because the banks don't want to take the risk. And so I think this

00:12:54.360 is why the work is so important because otherwise what would happen to these businesses that David's

00:12:59.880 referring to, I think they would have to either close their doors or they would get acquired by

00:13:05.300 another company, probably just for assets or, you know, something, you know, far less than what it

00:13:11.080 could be worth to a group like us. And then that business down the road would sell when they reach

00:13:17.580 these numbers. And so I think it's just good for the listener to know how the banking, you know,

00:13:21.900 that's how it's affecting our world. Yeah. Well, boots on the ground. What does that actually look

00:13:26.820 like for a community though, because you're, you're, you know, Jace running some small businesses

00:13:31.280 in the area. And so what does that look like on a day to day versus, you know, essentially having

00:13:36.680 global homo, you know, taking over these businesses, what does that actually do to the 1.00

00:13:40.940 employees and the, and the community and the culture and things like that? Yeah. I mean, 1.00

00:13:46.000 to start, you're a lot less likely to get a living wage out of a, you know, a corporate group like

00:13:50.580 that versus, you know, working directly with an owner or small business. And I think there's just

00:13:55.900 a lot less diversity of, uh, you know, architecture and creativeness. And it's, it's, you know,

00:14:02.700 it's like, like, uh, I think Brian said that, you know, you're, you're everywhere and nowhere

00:14:06.160 all at the same time. Um, and so it's a lot harder work and I think, you know, we're experiencing it

00:14:11.900 right now. It's hard work to, to raise the capital, uh, to buy a real estate project or to buy a,

00:14:17.660 a business. And that's why we're so excited to be working alongside David, because he's kind of

00:14:22.460 open our eyes in a way where for me, I was thinking, Hey, let's start small businesses.

00:14:26.940 Let's empower individuals to then break away from their nine to five, which I think is still good.

00:14:31.220 But what David is alluding to is basically walking into a business, uh, similar to what it says with

00:14:37.280 Israel, you're going to tend, you know, in harvest vineyards that you didn't build or you didn't 0.71

00:14:41.540 plant, uh, the boomers planted some great businesses in our lifetimes. We're not going 1.00

00:14:47.100 to have the ability to achieve that kind of growth, you know, in most cases, but now we have

00:14:53.000 the opportunity to go in and hopefully harvest some of those. And, uh, and that's why I think

00:14:57.540 this is a pretty cool opportunity to be working with David. Yeah. So pastor Reese, I'm going to

00:15:02.360 talk pastor Reese for a second. Um, I we've talked in the past about how we, uh, participate in

00:15:09.600 businesses is actually, if we do it righteously, it's fulfilling the second commandment, you know,

00:15:14.960 to love your neighbor as yourself. I was wondering if you could speak to that as far as like your

00:15:19.140 employees, you know, as far as holding on to businesses and not doing the, you know, flip

00:15:24.620 strip and flip sort of model. In 2023, Indigo Sundries became one of our sponsors. At the time,

00:15:37.580 their business was little more than a side hobby generating a couple hundred dollars a month. But

00:15:41.760 Because of their partnership with us and because all of you chose to support them,

00:15:45.180 they've grown enough to make it their full-time livelihood.

00:15:47.240 This is what happens when Christians support Christians.

00:15:49.720 Our communities are strengthened and faithful businesses thrive.

00:15:52.540 So if you're a Christian business owner who wants to reach thousands of like-minded people

00:15:56.260 and grow your company, we'd love to partner with you.

00:15:58.960 Email us at advertising at newchristendompress.com.

00:16:07.660 Yeah, I think one of the big things is you start to think about people

00:16:10.760 in terms of long-term development of people.

00:16:12.900 And I have to train managers and people

00:16:16.120 that I will start to work with

00:16:17.700 to really think about this,

00:16:19.580 that there's always like,

00:16:20.640 there's like a need for something in the business.

00:16:22.700 And it's always like,

00:16:23.720 well, let's go hire somebody out there.

00:16:25.620 And it's like, can we train them?

00:16:27.280 Can we pay somebody to train on this?

00:16:29.080 Can we just, can we take somebody,

00:16:32.500 you look at employees and you're going,

00:16:34.820 okay, what kind of character do they have?

00:16:37.340 You know, what kind of, you know,

00:16:38.980 mental capacity with level of intelligence. Um, and then how diligent are they? And I break those

00:16:43.840 down, you know, the character you look at, you know, the law of God helps to show the elements

00:16:47.040 of character and their intelligence in terms of like, can they learn quickly? Are they able to

00:16:50.960 communicate well to other people? Are they, are they able to, um, uh, you know, to, to be able

00:16:56.060 to have systems in terms of the ability to like lay out an organization of how they think about

00:17:01.080 a thing. Um, and then when you deal with, um, when you, when you deal with diligence, it's like,

00:17:06.240 well, the energy level, but also the focus level, right?

00:17:09.160 We all have people who like do a project

00:17:10.440 and then like they burn out

00:17:11.800 or they kind of start things but don't finish

00:17:14.140 and that's energy, but they're not focused on completing.

00:17:16.880 And so if you can find people with different talent sets

00:17:19.200 and have them work together

00:17:20.540 to look at positions that work well for them,

00:17:23.440 as opposed to just kind of always looking to hire externally,

00:17:27.540 if you're intentionally trying to develop internally,

00:17:29.900 you think about people

00:17:30.620 and who's a long-term track with them.

00:17:32.880 And those opportunities to develop

00:17:35.020 are also, by the way, discipleship opportunities.

00:17:37.420 So Deuteronomy 6 talks about the set times of discipleship

00:17:40.920 as you rise and when you lie down.

00:17:43.160 But also there's this idea of by the way,

00:17:45.420 as you're walking by the way.

00:17:47.320 And so as you have opportunity for people to lead

00:17:50.880 and you encourage people to lead

00:17:52.440 by talking to the people down below them

00:17:55.200 and helping to raise them up with opportunities

00:17:57.980 to pay them more and to have the training go to them,

00:18:00.400 you're also looking for ways to pour in

00:18:03.000 in terms of the culture and having the biblical principles that you can talk to people about.

00:18:08.160 And I've had a lot of people convert to the Christian religion while working at places

00:18:13.220 that we've got because of the fact that we seek to talk about and apply biblical principles.

00:18:18.220 And the law of God is so much more the practical element of Christianity than the gospel.

00:18:23.680 The gospel is important practically psychologically, and the gospel is what saves.

00:18:28.740 But when you talk about the law of God and you talk about the book of Proverbs, 1.00

00:18:31.320 which is full of stuff to do, what you do is you have all these unbelievers that they're convicted 0.99

00:18:36.280 by the law of God. They see that it's better. They see practical wisdom. And what it does is 0.89

00:18:41.820 it makes it so that they start to ask questions about the gospel. And so there's all these,

00:18:45.140 you know, you just have people that are just having conversations and you don't have the HR

00:18:49.280 freeze, right? Where people are like, as opposed to HR, I want to have a chaplaincy, right? Like

00:18:54.300 there's not this effort to like impose down global homo and feminism and all that kind of stuff.

00:19:00.500 Instead, it's what are biblical principles?

00:19:03.020 And that makes it so there's a totally different environment for people to talk about things.

00:19:06.800 So that's one thing for the pastoral piece.

00:19:08.860 But also for people, the management opportunities that can be existent.

00:19:13.580 For most people, there's this process where you're trying to figure out which track are you going on.

00:19:19.320 Are you going on a technical track where you're developing a technical skill and competency to do something where you can generate extra value by having skill?

00:19:25.680 Are you trying to develop management competency or maybe sales?

00:19:29.980 Like, so a lot of the times the places where you can make the most money are developing some sort of intense competency at a technical thing or to develop a sales ability, which is sort of a mixture of certain methods, but also how to deal with people.

00:19:43.580 And we like to focus on this idea of consultative sales where you're working with people to tell them stuff that's useful for them.

00:19:49.680 And you're like, you tell them, oh, no, you shouldn't do this.

00:19:52.860 We don't have this product.

00:19:54.080 It's not going to be good for you.

00:19:54.700 like saying no to people. And, and they're going to tell people in their network, uh, if there's

00:20:00.640 ever something that comes up about it, that you were honest with them about, this isn't the best

00:20:03.880 thing for you. Um, and so that kind of idea of, of what is, you know, how do you deal with people

00:20:09.820 in the sales thing? And then with management, you know, you're, you're developing people.

00:20:12.640 They have to be able to manage people have to govern themselves. Well, they have to have done

00:20:16.340 enough work that they understand when, you know, what are the likely psychological hangups that

00:20:20.440 people have. And so that, that kind of dealing with people in that perspective of trying to

00:20:25.120 develop, um, develop people, their competencies, have a path for them, building relationship for

00:20:29.960 them with them and try to pass on biblical principles and encouraging that as sort of an

00:20:34.200 interlinking set of chains where there's, there's all throughout the institutions that you're

00:20:38.640 encouraging relationship. Um, a lot of the conversations we have are different there.

00:20:43.120 So like, and also like with my, with CEOs that report to me where I'm just, where I'm the chairman

00:20:47.060 of the board and I'm not running it. Um, what I do, one of my thing I have with a monthly meeting

00:20:51.980 with them, and sometimes there's extra meetings if there's some issue that comes up, but, but

00:20:55.340 there's, there's the monthly meeting where you do a business review. And one of the things that I

00:20:58.900 make sure is, is emphasized there in that discussion is what are the cultural initiatives

00:21:02.720 that are being done to help to improve the lives of people, help to have biblical principles on

00:21:06.340 display and how our relationships being built, uh, and people being kind of brought up. And so

00:21:11.440 So those are those are like major differences that would occur that where our group does that you would not see inside of a lot of private equity or inside of sort of the public companies that people run into a lot.

00:21:29.440 OK, Kings, Holly ends, which is what we're now calling you.

00:21:32.740 It is time for you to commit, commit to joining us in Ogden, June 12th to the 14th for our annual New Christian and Press Conference.

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00:24:33.320 That's backwardsplanningfinancial.com or call 615-767-2555 to speak with Joe for financial

00:24:41.840 confidence. I mean, that's fascinating because of the complexity of your organizations and you

00:24:50.100 have multiple organizations. So it's really interesting to hear how the Christian faith

00:24:55.300 and the law of God has permeated every aspect of your company to produce a certain and particular

00:25:01.600 type of culture. I bet, I'm just curious if you'd be willing to share like turnover rates,

00:25:09.080 company morale, or anything like that, just because you just compared and contrasted

00:25:14.720 Like what is a publicly traded company versus your own companies where you're prioritizing, you know, training and and, you know, essentially discipleship within a company to give opportunity for for growth and career trajectories that that are actually challenging them and give them opportunities to, you know, have more responsibility and to make more money versus like probably we've all had experience in W2 land where it's it's not been that.

00:25:44.400 it's more of the quick to fire, um, quick to hire, you know, both. And so I was just curious

00:25:50.260 what overall, like morale within your companies, you think it's pretty good. Turnover rates pretty

00:25:54.460 good. So it depends on the type of job. Um, and it depends on a few things. So one thing is

00:26:01.000 I'm a big believer in slow to hire and quick to fire. And what I mean by quick to fire is

00:26:06.200 more this idea of when you have character failures, um, and, uh, and there's, there's

00:26:12.980 other types of discipline that can be done. And we've worked through things with people,

00:26:15.880 but this idea that, that when, you know, if you, if you, if you allow, you control the environment

00:26:22.600 and so much of the environment that's important to people is working with good people.

00:26:26.320 And if you allow people who are a bad character to stick around and to do stuff, to hurt people

00:26:32.660 or to create problems, you're, you're going to, you know, you're going to either make your best

00:26:36.300 people miserable because they're loyal and they're sticking through it, or you're going to lose them.

00:26:40.040 um and so uh but the firing being for the other reason the other thing is we've also been very

00:26:44.780 careful to try to do severance for people uh when there's not termination for cause um and so if we

00:26:50.780 have some business that's had again the tactical world it's very up and down right very up and

00:26:55.620 down so like in covid uh you know with armored republic you know we went from 2019 to 2020 we

00:27:01.320 tripled in sales all right so how do you would you know you have to hire a lot of temporary

00:27:05.060 manufacturing work and stuff like that to kind of get through stuff so that's like this crazy

00:27:08.760 up and down thing. But you're trying to be open with people about that. And you have higher

00:27:13.480 turnover when you're going to have like fast hiring for that kind of stuff. But for places

00:27:17.580 where there's more skill, like in construction or in a more advanced manufacturing environment

00:27:23.820 or the office groups, the turnover is really, really horrific because of the way that knowledge

00:27:31.000 gets lost. And so what we found is that you have in the first three years of after acquisition,

00:27:37.740 you kind of get this cultural shakeup where people either are like, yeah,

00:27:40.640 I want to do this. We're like, I want to get out of here.

00:27:43.360 And so you have this kind of gradual process of interacting on,

00:27:47.560 on the cultural things and people are the first 18 months.

00:27:49.920 They're kind of like unsure of what you're doing and who you are.

00:27:52.680 And so you're trying to gradually build confidence,

00:27:54.920 but about a year and a half in people really have either solidified their

00:27:59.160 loyalty to you or their hatred of you. And I don't have any enemies.

00:28:05.400 And so that process of building things out, what you find in that first like 18 months,

00:28:12.580 you typically are going to have like a 10% to 30% changeover of people.

00:28:18.620 And so that ordinary, depending on the skill level, if it's a higher skill thing and you've

00:28:24.260 got people that are sort of been there for a long time, you might see their ordinary

00:28:28.300 turnover might be like 5% or something.

00:28:30.300 and so you're looking at a doubling to maybe as many as 4x or 6x times in terms of the changeover

00:28:38.520 in some sort of period of time and then you have a really solidified culture as you're as you're

00:28:44.900 continuing to hire people and it kind of stabilizes there sometimes you don't have many many people

00:28:49.460 change over uh in a deal that we we've recently did for example we've got a lot of people that

00:28:54.260 really solid team and we're not really seeing you know any any problems or changeover that's

00:28:58.480 occurring. And in another business that we did about a year and a half ago, we've seen something

00:29:04.680 in that lower range of change. But this idea that you're being clear about the culture and

00:29:11.120 the expectations, and people can either sign up for it, or they kind of go, I want to go elsewhere

00:29:15.800 as easy. There's places that don't hold me as accountable, or there's places that I don't have

00:29:19.940 to think as much. And there's sort of some people just don't want to be a part of a Christian

00:29:24.620 culture or whatever. So you have these various motives for people leaving as well as the

00:29:29.180 ordinary changeover that would occur there. No, that's absolutely fascinating. And Jace,

00:29:33.000 running small businesses, I know that you've really placed an emphasis on the culture of

00:29:37.200 those businesses. I was wondering if you could just give us a snapshot of what it's like to

00:29:41.920 work with your guys and kind of the culture that you have, the mentality that you really bring to

00:29:46.000 the team there and just tell everybody how much they love you. Well, I can tell you everybody

00:29:52.100 loves not being in the w2 environment uh with without an hr department uh and and that's because

00:29:58.720 we all we all know it we were talking about this yesterday uh there's just there's just like

00:30:03.180 handcuffs on on young men and old uh when you're in that environment and so you know we we hear it

00:30:09.720 all the time from my guys you know we've got i think now six six on our team and and they're all

00:30:16.040 just like grateful that they can they can rub shoulders with other guys who are also pursuing

00:30:21.820 different business uh adventures but also part of a team that is you know we cut to the chase

00:30:28.160 we talk openly we can joke together without getting our feelings hurt um and and and being

00:30:34.500 kind of at the head of that organization so to speak it's it's a group of of different you know

00:30:39.600 uh verticals so you know with with brokering insurance investments accounting you know uh

00:30:46.880 real estate, et cetera, you're able to, to impart a, a, a vision and a culture onto those guys

00:30:53.560 because, because I'm looking more for guys who I think can be very successful kind of

00:30:58.580 independently. That's what, what I've been doing thus far. Obviously what, what David and I are

00:31:03.320 working on with, with everybody is, is a little bit different, but in those cases, you're able

00:31:07.540 to really shape a guy to, to see the longterm and know that it's not just about making money

00:31:13.220 for himself? Of course, I want you to have a living wage. I want you to take care of your

00:31:17.140 family. I'd even love for you to have your house paid off with no debt. Absolutely. But once you

00:31:22.340 get past that, why are we doing it? And that's probably a great question for David too. Why do

00:31:28.560 we want to buy these businesses? Why do we want to make money? And there's a reason there, and 0.56

00:31:34.200 that's to build Christendom and to take dominion, like David's saying. And so when you're able to

00:31:39.860 to get these guys in the same room and they see the the vision lived out in how we deal with

00:31:45.540 customers and why we want to make money nobody has to be ashamed of like yeah we we want to

00:31:50.300 create wealth why not so we can have a a nice car uh which are great too but because we want

00:31:57.220 to go and invest with guys like david and we want to go own a block of real estate and we want to

00:32:02.900 build a school and all these things and so i think that's been the greatest part of having our crew

00:32:07.020 together. And it just would not happen in a remote environment and in the average corporate

00:32:12.380 cubicle environment. Yeah. You bring up some really good points. And David, I want to ask

00:32:16.520 you because, um, you know, Jace, Jace had mentioned like, why, why are you doing this?

00:32:21.820 Because you're, you're a pastor, uh, of a church. Uh, and you know, a lot of the pastoral track

00:32:28.160 ends up being, you get a like barely living wage and, and, uh, you know, the rewards are eternal

00:32:35.100 and it is worthy work. I'm not, I'm not trying to downplay that, but why, why did you start

00:32:41.120 acquiring businesses like this? You know, why, why doing, why do the extra work? Cause believe

00:32:46.720 it or not, I know it's a lot of work being a pastor. So why would you make your life harder

00:32:51.700 by doing the work that you're doing with Reese fund and buying these businesses and acquiring

00:32:56.960 what's the vision there? Yeah. So funny thing. So, so first of all, I think there's sort of this

00:33:02.540 ladder of power that occurs in terms of the order in which people can govern. First, you have to

00:33:08.360 govern yourself and the knowledge of truth sets men free from slavery to sin. Then there's, can

00:33:12.560 you govern a house well? And I think that includes the estate in terms of, are you able to manage the

00:33:17.300 estate effectively? And then there's also, in terms of public office, there's being a pastor

00:33:22.420 or deacon, and then there's also the civil magistracy. And I think that building wealth

00:33:27.240 is about being able to exercise dominion to glorify God in all the culture and all the detail 0.83

00:33:31.760 and handing over something for your wife to rule

00:33:34.020 and preparing inheritance for your children

00:33:35.500 and then trying to do well for the people

00:33:37.260 that are under your authority

00:33:38.400 in terms of that business domain

00:33:40.320 as a part of the household.

00:33:42.740 And you're trying to then have resources

00:33:44.500 that you can pour into public service.

00:33:46.460 And I think that this perception

00:33:48.160 that we have this idea of like

00:33:50.920 you need to get your pay principally

00:33:56.060 from doing the public service,

00:33:58.380 whether it's in the church or in the state.

00:34:00.380 And I think in reality,

00:34:01.760 having a patrimony, having property, having money that you've inherited, having something where

00:34:06.280 you've got some substance where you're not so dependent on paycheck to paycheck for public

00:34:10.600 service allows you to resist when the crowd runs to injustice. And it allows you to have an

00:34:17.840 independence where you can go like, well, if they, you know, throw me out, if they kick me out,

00:34:21.740 whatever, I'm going to do this. And then I, you know, worst case scenario, I'm back to doing my

00:34:27.240 duties in my smaller domain. And my dad really gave me in my 20s, in my early 20s, I was looking

00:34:33.940 at going to basically do studies for the ministry. My dad was like, I want you to focus on

00:34:41.440 business and you can do ministry, but I don't want you to be dependent upon people. I've seen

00:34:48.760 so many pastors. My dad was telling me I've seen so many pastors be ill-treated by congregations.

00:34:53.220 and I know that you have strong convictions and you're going to be unpopular in a lot of ways.

00:35:00.900 And so he just was like, you need to be able to not worry about it. And so he really pushed me

00:35:07.260 to do that. And so I'm really grateful to my father for his advice to me to work on business

00:35:13.020 and to make sure that my family was provided for first before moving into that. And so sort of

00:35:20.080 looking to be able to have something to then go into public service. But the other thing is,

00:35:24.620 I think that when you look at, I think it's in Judges 9, where you have the parable of the

00:35:31.580 bramble bush, where there's all these productive men that are able to do things, and they don't

00:35:39.080 want to go into public service. Because they're like, oh, I can enjoy this. I can enjoy the fruits

00:35:44.020 of my labor, and I can do all these other things. And why would I give all that up to go and rule

00:35:48.740 over people who are ungrateful, who will, you know, gut punch you and do all this stuff. And

00:35:54.480 I'd rather just be left alone. And the danger is that when all the productive men don't want to

00:35:58.160 do public service, the people who are not productive and want to govern the productivity

00:36:03.680 of other people and enslave them, they take the offices. And so it's a curse to be ruled by

00:36:10.180 unproductive men. And so that when you turn the bribes or whatever, or the church is a tithe farm

00:36:17.360 or, you know, the tax farm for the state, right?

00:36:20.440 That's danger that that's the thing.

00:36:22.280 And so I love seeing pastors who are productive in doing stuff

00:36:26.700 like what you guys are doing in Ogden in terms of just working to produce

00:36:29.800 and publish and do all this glorious stuff.

00:36:31.660 Like, you know, the old saying, if you want to get something done,

00:36:34.920 if you want to see something get done, give it to a busy man.

00:36:37.220 You know, so when somebody's already productive and got their full schedule,

00:36:40.000 it's like you can give it to him and you know it'll get done.

00:36:42.620 And so that's what I love.

00:36:44.840 So that's why I appreciate you guys so much.

00:36:46.500 is just the hard work that you put in

00:36:48.600 and all the stuff that you're able to accomplish

00:36:50.600 while also ministering to God's people.

00:36:53.040 And so that's my thought about it.

00:36:55.120 That's why I think it's important to do business

00:36:56.740 and to give an example

00:36:58.300 and to be able to show people

00:36:59.860 how you can be generous with your own property.

00:37:01.460 It's easy to be generous with other people's money.

00:37:03.820 It's harder to be generous with your own.

00:37:05.820 And so I think those are all things

00:37:07.220 that can be an example if you're building.

00:37:10.500 Well, I appreciate it.

00:37:11.760 Those are words are high praise.

00:37:13.020 I give all credit to God.

00:37:14.720 And secondly, to Martin.

00:37:16.500 or also known as Martina McBride, if you're a Hanna Cosmos listener. And so Martin is a very

00:37:22.760 busy man, gets a lot done. I think that I would really like to talk. The three of us worked on

00:37:29.320 a deal recently for a glass company in Phoenix, and that was a very exciting process. It's the

00:37:35.320 first time I've ever participated in one of these business acquisitions. The whole thing was really

00:37:40.760 cool to me. Of course, I do like looking at P&L statements and balance sheets and, and seeing

00:37:47.040 value propositions and stuff like that. It was, it was really interesting. I was wondering, David,

00:37:52.220 if you could, if you could just introduce kind of what, you know, like deal flow and how you

00:37:57.620 identified this business and, and kind of what that funding process looked like just at a high

00:38:03.160 level. Yeah. So the company is mirror works and horn doors. And so it does, you know, basically

00:38:10.180 it fabricates windows and doors, um, and then installs them. Right. So it's a mixture of

00:38:15.540 construction and manufacturing. It's not a window manufacturer. It's not a door manufacturer. It's

00:38:20.780 receiving components, but then there's, there's still, you know, you've got to cut up extrusions.

00:38:24.880 You've got to cut up glass. You've got to, you've got to deal with, you know, the getting things

00:38:28.880 ready to install and then the actual installation process, right? So those are the things there

00:38:33.520 that have to be done. And so it's, again, that mixture kind of manufacturing plus

00:38:38.280 installation. So that business, we look for businesses that are sort of in the,

00:38:44.760 we consider blue collar, in other words, manufacturing, trades, or construction.

00:38:50.060 And this one, normally with deals, what we're doing is we're networking, we're talking to

00:38:56.100 people were calling business owners, we're dealing with, you know, brokers or whatever.

00:39:00.440 In this case, we had reached a point where there was enough of a reputation for what we're doing.

00:39:05.100 They actually called us to see if we wanted to buy them.

00:39:08.980 Yeah. And so that was the first time that it happened to us. It was on this deal.

00:39:13.400 And that was pretty neat. And it was because of not only us being in the same city, but also

00:39:18.460 culturally being more of a fit in terms of having conservative values. And so those two things

00:39:24.440 together kind of opened up the opportunity. And so, so that, that was something that was neat

00:39:32.080 and new. And since then, actually over the last, over the last year or so, when we first got

00:39:37.180 contacted from them, we've had, we've had more businesses starting to reach out to us. And so

00:39:41.040 that's one of the neat things about building, you know, reputation and stuff is just kind of the

00:39:44.840 way, as people see you get deals done, they sort of go, oh, here's a person actually, they can do

00:39:48.720 this, right? Because when you go through a selling process, one of the big dangers is that you put

00:39:52.520 in months and months of work and then the person can't buy it. And so the ability to actually pull

00:39:58.600 the deal together is a big part of that. So we had that come in and what we start to look at when

00:40:04.960 we're evaluating the business, there's five elements of any business. You're talking about

00:40:09.040 value proposition, which on a basic level is what does it do that people are interested in,

00:40:15.100 that they're willing to pay money for, right? So for here, it's like, well, there are people who

00:40:19.300 want windows to be in their house and they would like doors to be in their house. And as long as

00:40:24.760 people continue to want windows and doors being built into their houses and people are building

00:40:28.880 them or the same with commercial buildings, then there's opportunity here to provide value.

00:40:34.500 Great. Okay. So then the next thing that's basic, if you don't understand the value proposition of

00:40:39.160 a business, do not invest in it. If it's, if it's super complex and you have no idea what it is

00:40:44.760 they're doing, it provides value to anybody. You just move on, look at the next opportunity.

00:40:49.140 So if you can't, the value proposition has to be understandable.

00:40:52.100 The next thing is you're looking at what the next four pieces are marketing, sales, value

00:40:57.720 delivery, and finance.

00:40:59.220 So marketing is getting attention and turning it into interest.

00:41:03.200 So how do they market?

00:41:04.320 How do they get people's attention and how they develop that into an interest to buy

00:41:07.660 from them?

00:41:08.360 The sales process is taking interested parties and turning them into customers.

00:41:12.640 So how do they do that?

00:41:13.920 And then the value delivery process is, okay, once you've sold, you've made a promise.

00:41:17.900 is either a contract or an exchange of money,

00:41:20.440 how do you then provide the value

00:41:22.060 that you're going to get paid for or have been paid for?

00:41:25.120 And then the last part, finance,

00:41:26.740 you're looking at the balance sheet,

00:41:28.200 which has to do with, you know,

00:41:29.420 liabilities and the assets.

00:41:30.880 You're looking at income statement

00:41:32.080 in terms of profitability.

00:41:33.400 You're looking at cash flow statement,

00:41:34.700 which is, you know, the cash coming in

00:41:36.640 and the cash going out.

00:41:37.920 And you're trying to avoid seizing up.

00:41:41.020 You know, you can have a really great opportunity

00:41:42.260 with high margins,

00:41:43.040 but if you don't have the money to fulfill,

00:41:46.020 then you kind of just have problems.

00:41:47.900 so those are the things you're looking at on any business that you need to

00:41:51.260 understand. So this thing,

00:41:52.460 this deal came through the door from them calling us.

00:41:56.260 And then from there and, you know, basically you have a bunch of, you know, 0.91

00:42:01.380 men who have been hardworking gray heads that had been doing this business 0.72

00:42:05.280 together and they're in the process of retirement and they own it. 0.94

00:42:09.760 And so we're going, okay, so these,

00:42:11.460 these men have worked for a long period of time.

00:42:13.560 They've been in this thing. They're in their sixties and seventies,

00:42:16.060 and they're looking for opportunity to honorably transfer and to take care of the people

00:42:20.760 that they want. And so they actually knew that they had other offers from other firms that were

00:42:26.360 higher to do the kind of strip and flip. And they very specifically chose to not sell their

00:42:34.180 business for as much money as they could in order to avoid that fate for their business.

00:42:40.160 And so they gave us a good deal on that. Now, sometimes some businesses are harder to sell,

00:42:45.640 and they don't have that opportunity, but this business was big enough that they really could

00:42:49.060 get access to a number of people that would be interested in buying. And when a business has

00:42:53.480 like multiple layers of management is large enough, this business is 120 employees, right? So

00:42:59.580 this business very easily is institutionalized already and can run without input. So that's,

00:43:06.760 that's a perfect target for, for larger, larger firms. So that being the case, when we're looking

00:43:14.060 at this, we're starting to learn about the business. We're grateful for the opportunity

00:43:17.540 because of building in there. And we started to look at the marketing process and they're

00:43:21.880 basically not doing any marketing. They're just relying upon like 35 years of reputation

00:43:26.280 of the operation. And so we have, you know, basically the whole team and we continue to

00:43:32.180 have involvement of some of the owners. And there's kind of this gradual process of retirement

00:43:36.480 that occurs. But you have this transition of knowledge and they've got these guys that have

00:43:41.120 been there for 10 years, 15 years, 20 years. And so you've got this whole kind of gradation of team

00:43:46.180 that's already there. And then we also bring in quality new people in terms of trying to

00:43:51.120 help to continue to build out and intentionally build the culture. So they're not doing any

00:43:56.800 marketing. And so we started to go, okay, we have opportunity to support there. We then look at the

00:44:01.740 sales process and they were basically not doing any sales process. They were just providing

00:44:06.040 estimates to existing customers. And so we're like, we can, we can actively increase, you know,

00:44:11.860 reaching out to try to support growth. And when you have men that have been doing something for

00:44:17.240 a long time and they're kind of reaching the last decade or so of their career, a lot of the time

00:44:22.800 what happens is they go, we're just going to do things well, and we're not going to try to grow

00:44:27.540 anymore. And they also stop pushing their people as hard because they're looking for opportunity to,

00:44:34.520 kind of just make it so, okay, I've done a lot of the work. How can I leave this? And how can I

00:44:41.080 enjoy some of the fruit of my labor? And so there's sort of this, a lot of the younger men 0.53

00:44:46.500 are chomping at the bit to then go push and grow. And so we found that when you have honorable men

00:44:52.780 that have led a business and run it well and done good things, a lot of times they've got quality

00:44:57.180 people that are there underneath them that when they move into retirement, these guys are ready

00:45:01.760 to charge. And so that's kind of the neat thing is there's a bunch of quality people there that

00:45:08.540 are ready to charge. So then from there, you have the value delivery piece is how do you do

00:45:16.100 efficiency? And a lot of times, especially businesses that have been owned by people who

00:45:20.060 are going into retirement, efficiency has not been the focus. It's sort of just been like,

00:45:24.340 well, are we doing well enough at it? And so there's a lot of tools using books that focus

00:45:29.320 like the theory of constraints or certain lean principles or whatever where you can improve

00:45:33.520 things for the efficiency and you don't want to have this like endless tinkering um into everything

00:45:38.940 but you want to figure out are there some are there some obvious and clear ways of improving

00:45:42.940 efficiency is there money we can put into tools that will make things faster what can we do to

00:45:47.920 make life easier um and and so those things in terms of efficiencies um and thinking about teams

00:45:54.220 Is there a way to start specializing people to kind of do certain types of tasks more?

00:45:59.720 So that kind of stuff helps to really increase efficiency in the operations set.

00:46:04.080 From a finance perspective, a lot of the times there's difficulty for growing.

00:46:07.720 So like in construction, one of the big constraints on growth is capital because you have to put money into building stuff.

00:46:15.060 And then you have to, from there, wait to get paid.

00:46:19.100 And so you're trying to figure out how can you grow.

00:46:22.100 And when you take on new customers, there's payment risk.

00:46:23.940 there's debt risk. And so you have to be able to support the cash flow, not only for growth,

00:46:29.940 where you invest stuff and you're waiting months to get paid, but you're also having like the risk

00:46:34.760 of new customers not being able to pay you back. And so you're trying to manage those things and

00:46:39.900 have access to capital to be able to support them. And so we were able to come in and support the

00:46:44.120 capital for the growth. We're able to help to improve efficiencies. We're able to encourage

00:46:48.340 sales operations to start becoming growth focused. And we're able to help with sort

00:46:53.920 the marketing processes with search engine optimization, paying money on paid advertising,

00:46:58.440 using email, using text message marketing, that kind of stuff, and engaging and using social

00:47:02.480 media in an appropriate way to be able to roll it out. And so with the value proposition you're

00:47:06.880 looking at, is there a need for something here? Like, is there a new R&D, like a new product line?

00:47:12.200 Or do you just say, hey, we're going to actually just focus on selling more of what we're already

00:47:17.060 doing because there's untapped potential there. And those are the major decisions that have to be

00:47:21.200 made. So then, Jace, maybe you can speak to this a little bit. David identifies this business. He

00:47:28.480 goes through a whole complicated process of looking at all of those five steps, secures some

00:47:33.900 bank financing or some other private financing, seller financing, things like that. And then

00:47:40.600 you have an interesting opportunity as an investor where you give people access to

00:47:47.860 being able to participate in this purchase and to the business in varying degrees depending on what

00:47:52.940 the terms are. But really, it's a very exciting process because it's not like sales. There is

00:47:59.880 some sales in there. You have to convince people that the business is legitimate. But you're really

00:48:04.720 giving them access to opportunity, to really all the opportunity that David has created through

00:48:10.440 that whole process that he just talked about, where you've identified a great business with

00:48:15.780 good employees. You've identified the value proposition and the growth potentials and things

00:48:21.060 like that. And then you, you are generous enough to give investors opportunity to participate in

00:48:27.020 that with you. So I'm just curious, Jace, from your perspective, participating in this deal with

00:48:32.040 mirror works, I guess, what was that process like? Um, had you experienced anything like that before?

00:48:38.240 Um, what did you see as you like recruited other people? Like, Hey, check out this deal. I'm able

00:48:43.720 to participate. You can do it with me. Like, what was that kind of like? No, I think that's a great

00:48:48.520 question. And, and, you know, just to give context to the listeners, uh, we went down to open up a

00:48:53.900 new branch of our business in Phoenix and, and Dan said to me, Hey, I just have been connecting

00:48:59.040 with this guy, David Reese. You should, you should link up with them. Um, and so I said,

00:49:05.000 all right, well, great. Let's go, let's go to his church on Sunday morning and meet, meet, uh,

00:49:09.220 david and and and that was really solid obviously and so i'm like okay there's some pretty big trust

00:49:14.300 here and clearly there's uh there's very you know foundational levels of uh yeah of trust and then

00:49:20.960 and then david says kind of on day one hey i know i haven't bought you dinner yet but uh let's meet

00:49:25.580 up and talk about this deal uh that you know that that might be of interest and i was like okay so

00:49:31.220 so i think david was the next day after church that i drove uh you know the hour across town

00:49:37.480 because Phoenix is such a huge market, or metro rather. And we sat down at AR500's facilities

00:49:45.120 and I got to see, you know, investors, we want to see what the guy's made of and kind of how he's

00:49:51.620 running an operation. So I think that was, you know, important for me to see the facility and

00:49:56.700 what he was already doing before even receiving the pitch, you know, learning about the complexities

00:50:02.020 and the organizations and clearly it was a tight run ship. And so then we get to sit down and I

00:50:08.100 hear a lot of basically what David just said. And I think if you're like me, his candor, his style

00:50:14.700 and thoroughness inspires a lot of confidence. And you're like, wow, this is kind of the first

00:50:22.660 time I'm considering something like this, but I really want him. Because you don't get those

00:50:28.220 phone calls. And we've been talking about this recently is how do you get on the list? How do

00:50:32.780 you get the email or the phone call with a great opportunity? Because if you're not in those

00:50:39.080 circles, then you're just stuck with making your own way or trusting Wall Street to manage your

00:50:44.920 money for you. And so it was really exciting to hear, but then realize, hey, I don't actually

00:50:50.660 have the money to do it independently. I would have loved to, but what ended up happening was

00:50:56.220 even cooler i think because i you know i didn't want to let david down you know there's immediately

00:51:01.320 like hey i we got to make this happen um and so you know i call you and and we start to you know

00:51:08.040 i call my dad and and you start to put the numbers together and realize that hey i think we can

00:51:13.100 actually put put a seven figure number together to to get what david needs because we trust him

00:51:19.180 you know we know the business is solid i know phoenix is a growing market um my dad has experience

00:51:25.220 in construction. And, and basically I'm like, Hey, if, if, if the lawyers are good with the

00:51:30.480 paperwork and my dad likes the, uh, the deal and we all like David and more importantly, trust him,

00:51:37.620 then I'm not willing to pick up the phone and call people to try to raise money for, for the

00:51:43.600 deal. And, and so that was a really good process because it's, it's a banding of the brothers in a

00:51:50.100 way uh to to actually go after a common goal and and it was surprising how how streamlined it was

00:51:57.120 when when you know when you have already built the trust you know that had a lot to you to do

00:52:03.000 with you as well in being able to call guys here locally and and and raise the funds and and yeah

00:52:10.280 give them as much detail and information as they wanted but kind of like you and eric were talking

00:52:14.380 about on the hard man podcast some guys didn't know really anything about the deal and i don't

00:52:20.560 want to overly simplify that but but they probably didn't open up any of the spreadsheets and that's

00:52:26.620 okay right we are here putting our own money on the line and and vouching for other brothers

00:52:32.480 and that's kind of i think where we're excited about how we can continue to build this this is

00:52:38.260 why we just got the taste with mirror works and we want to see how we can leverage our you know

00:52:43.600 biblical principles and our community to, you know, to, to the point where you don't need to

00:52:48.860 call, um, you know, uh, I don't want to drop any Edward Jones, uh, to, to invest your money because

00:52:55.000 you know, there's guys in your community that are going to actively deploy this for all the reasons

00:53:00.320 that we just discussed. So hopefully that answers the question. No, no, that does. What's really

00:53:05.200 exciting to me is now there's a Christian business that exists in the Phoenix area that will provide

00:53:10.500 a great service to its customers, both residential and commercial in producing glass, you know,

00:53:16.620 mirrors, uh, doors and things like that.

00:53:19.400 And it, it exists because of the work David did.

00:53:22.540 And then we were able to support that.

00:53:24.260 That's really exciting to me.

00:53:25.880 And I think one of the aspects that is often underestimated, this is, this is what makes

00:53:30.220 like stock market investing so difficult is that you can do your stock picking thing.

00:53:34.860 And you're like, Oh, I own, I own shares in Tesla.

00:53:37.580 like Elon Musk and I, you know, we're like buddies now.

00:53:40.980 You're like, no, you're a faceless, nameless, you know, you bought a few shares.

00:53:45.180 Congratulations.

00:53:45.600 Like you have no influence whatsoever.

00:53:47.360 You have no say.

00:53:48.500 You don't actually know what's going on.

00:53:50.240 You don't know the character of the people.

00:53:51.920 You're placing a lot of trust in a company that has, I don't know what their profit to

00:53:56.820 earnings ratio is, but it's probably off the charts.

00:53:59.640 You know, it's, it's insane.

00:54:01.880 whereas what we did and and to your example of guys not really you know diving into the numbers

00:54:08.320 of the business is that really when you boil everything down we're working in an economy of

00:54:13.560 trust i trust that this person will do what they say i mean even if you go to mcdonald's you trust

00:54:19.940 that they're going to give you what you order and you have certain expectations often they don't

00:54:25.760 meet it but um that's really how we operate as an economy of trust so when we get men like david

00:54:31.480 Reese, who's identifying these businesses and everything like that. I'm not going to be as

00:54:35.400 sophisticated as David Reese and his attorney and his CFO and his, you know, his tax guys and all of

00:54:42.540 that. They, I trust that David will do his due diligence. And I'm ultimately like, we're

00:54:47.880 ultimately investing in David Reese because we can see his body of work. We can see his character

00:54:53.540 and you know, I write a check, do the wire transfer. I trust this guy. I'm investing in

00:54:59.480 david reese so thank you for being a trustworthy man please don't lose all my money well at the

00:55:07.060 same time we're we're on the same team but we're sitting on other sides of the table

00:55:10.640 yeah right and if i'm going to make a phone call and ask somebody you know to invest i it's almost

00:55:16.120 better that that david and i are kind of on separate sides of this because i need to be

00:55:20.660 and you need to be very judicious in your questions and getting them answered and doing

00:55:25.240 the due diligence independently so that we can check each other and then know that hey yeah i'm

00:55:31.060 i'm not just you know on david's team totally like of course we're on the same team but as far as as

00:55:37.020 far as breaking this down i want to make sure that that i'm you know asking guys to do something that

00:55:44.140 i would do because i had kind of an almost an adversarial relationship with the numbers to play

00:55:49.920 devil's advocate, which we've been doing, uh, you know, so that we can consider, you know,

00:55:55.200 future opportunities and then get better and better to where we build a reputation through

00:56:00.200 trust in David that people can call us and, and maybe Lord willing, even reinvest their funds in

00:56:05.720 the future after we've shown that, that this is the right model. No, that's a, that's a really

00:56:10.520 good point, Jace. I think that nobody would argue that I'm a big, you know, there's a bigger kill

00:56:14.940 joy than me. So, uh, I've really loved that process and, and, uh, David, you've, uh, done

00:56:20.700 very well in answering a lot of my questions on the next deal, which is really something that I'm

00:56:26.820 very excited about. And, uh, David, I have questions. I have questions. There's a, there's

00:56:33.140 a deal right now that we're, we're funding for. That's very exciting. Uh, particularly because

00:56:39.940 of the industry that it's in is very exciting for me. Uh, personally, I was wondering, David,

00:56:46.120 if you could just introduce like, what, what are, what are you doing right now?

00:56:50.880 Yeah, absolutely. So right now, um, when we, when we look for businesses, when we're actively

00:56:55.640 like pursuing businesses, they don't necessarily come to us, but even, even when they come to us,

00:56:59.680 we're looking for things. We're looking for other businesses where we think that this is a good deal

00:57:05.200 or we can run this well, or we want to set it up as a platform. And there's this difference between

00:57:09.020 a platform business and a business that you think you can have in some way connect onto

00:57:15.320 an existing business and to have them work well together. And so we recently, you know,

00:57:21.660 had an opportunity come up where, you know, Armored Republic is obviously in the tactical

00:57:25.660 space. It has a huge email list. It has, you know, a huge text messaging list. We've got,

00:57:31.620 you know, all sorts of, we've been around for over a decade and all sorts of stuff where we're

00:57:36.080 It's just we've got a lot of contacts.

00:57:38.340 And so we had an opportunity arise to acquire an ammunition manufacturer.

00:57:45.340 And so you think about the people who buy body armor tend to also be purchasers of ammunition.

00:57:55.020 I know, controversial statement, but I said it.

00:57:57.800 so that being the case without as a business thesis it would be easy uh to be able to take

00:58:03.720 the same sorts of customers that buy body armor and to be able to sell ammunition so i know hard

00:58:11.520 to follow but there's there's a line of reasoning that connects those things now the other thing is

00:58:17.260 uh that you go okay so these have these are separate businesses and so when you're trying

00:58:21.080 to build out uh investment what you're trying to do is you're trying to figure out how do you pull

00:58:25.600 in that money, give an attractive return and deal with governance and stuff like that. So this will

00:58:30.500 not be kind of joined into Armored Republic. It'll be a separate business with its own board. And so

00:58:35.520 one of the ways that you have things, one of the things that's neat about these kind of smaller

00:58:39.500 investment groups is, you know, you guys helped to pull together money for that deal that we closed

00:58:44.860 and you have a board member that you were able to elect, right? And so you have a member of the

00:58:49.720 board as well as having, you know, the ability to know the people involved in the deal and all that

00:58:54.220 kind of stuff. And so the neat thing about interacting in that you've got a small group

00:58:57.620 of guys that elected a board member, you know, and, and, and that's kind of, that's not happening,

00:59:02.900 uh, you know, with a small group of guys that are working together, uh, unless you're, you know,

00:59:07.360 billionaires, um, on some sort of public company. So that's one of the neat things there. So you're

00:59:13.060 trying to build out the governance and to make it so that not only is there trust, but then there's

00:59:16.440 also this sort of like, how do things work in the ongoing way? And so we're again, doing that same

00:59:20.460 thing. We're building out a group of investors that will then also get to elect for themselves

00:59:24.420 a board member. And so we move forward. And this deal, basically, the current sales are focused on

00:59:34.300 selling to firearms manufacturers. It's not doing business to business sales. I'm sorry,

00:59:40.280 it's not doing business to consumer sales as the way it's doing business. And so the neat thing is

00:59:45.580 it's got this sort of stable process of currently selling very high quality ammunition to very

00:59:52.580 discerning buyers, manufacturers of firearms. And then we are now going to add on using all of our

01:00:00.180 tools for marketing and sales that we have at Armored Republic, and we're going to sell a

01:00:05.620 direct-to-consumer line. And so you look at the value proposition and you go, okay, if there's

01:00:09.400 currently sort of a focus on proof rounds and to be able to fire these rounds out of firearms

01:00:16.640 and to have those firearms then be able to show their quality and to be able to withstand the

01:00:21.500 explosive power of the gunpowder. What you're then doing is, okay, there's already a high

01:00:26.920 quality product here. What can we add on? And so the focus of what we're planning to do in terms

01:00:32.820 of add-on is not to go and compete for the cheapest possible ammunition, right? We don't

01:00:36.480 want to go compete with like wolf for like steel cased ammunition and see can we can we can we win

01:00:41.300 in that market the ammunition market is a multi-billion dollar market in terms of the the

01:00:46.300 amount of ammunition that's purchased by american consumers so our goal is to go how do we put out

01:00:51.600 very high quality rounds that are have a very high probability of shooting when you pull the trigger

01:00:56.540 and and doing that with defense rounds marksmanship rounds but also subsonic rounds which

01:01:05.060 have been an increasing thing that people care about because you use suppressors for that and

01:01:10.100 so this idea of of being able to use subsonic rounds to be able to hunt with them or to be

01:01:14.820 able to use them in environments where where they wouldn't normally you wouldn't really expect them

01:01:18.920 where you don't have to wear ear protection but to be able to instead be able to fire and have a

01:01:24.680 lower decibel and this this idea of how do you make that so this round is still good we've got

01:01:30.000 we've got designs that we're using to be able to have high grain bullets to be able to have those

01:01:35.980 be shot and still maintain the same amount of energy that gets transferred newtons or joules

01:01:40.540 that you're that you're dealing with in terms of the transfer of energy and on the other side

01:01:44.540 with marksmanship rounds you know the reality is if you've got to resist tyranny the most important

01:01:49.280 thing is not going to be you know how quickly can you clear a room it's going to be how effectively

01:01:53.200 can you shoot a distance and so that being the type of thing where people are thinking about

01:01:57.020 can they hunt well? Can they, can they practice marksmanship? Well, can they have a store of

01:02:01.700 really high quality, long distance bullets? And then the defense round, something you're

01:02:04.880 expecting to actually go off some sort of hollow point. That's, that's designed to pedal and have

01:02:09.600 a very effective sort of build out there. So these are the types of value proposition changes that we

01:02:15.140 intend to bring to a business like this, where we've already got all the structure for how things

01:02:18.020 work and you can do additive value to see significant growth. Man, Ben, I knew we were

01:02:25.760 handsome, but I didn't know we were that handsome until I saw our recent Haunted Cosmos thumbnails.

01:02:31.320 Yeah, your skin looks so velvety smooth. I mean, it's unbelievable. Chris at New Dominion Design

01:02:38.180 Company did an absolutely fantastic job, not only on those thumbnails, but on our recent book cover

01:02:42.620 as well. Yeah, exactly. And if you need some design work from Chris, you should go to

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01:04:53.580 I mean, I'm very excited about this.

01:04:55.360 Actually, there's a group of guys I know.

01:04:57.020 They were out shooting just yesterday at a range and all of them were hitting at a thousand yards.

01:05:02.780 And so being able to have ammunition that can consistently do that, that's one of the biggest challenges as a guy who likes hunting and shooting long range.

01:05:11.500 I find it to be absolutely fascinating is the difference between a hand load, you know,

01:05:15.640 guys in their garage that are like measuring out the powder and, and they're, um, looking

01:05:19.960 at the seating depth of the, of the bullet and crimping or not crimping.

01:05:23.840 And, and all of that, it's, it's actually very difficult to do hand loading well.

01:05:27.980 And then you go to factory rounds.

01:05:29.220 And one of the issues, uh, with factory rounds is that they have these massive machines that

01:05:35.220 they're just cranking out as much ammunition as possible.

01:05:37.740 you shoot out you shoot this this these factory load uh this factory load ammo and you could have

01:05:44.120 variances of hundreds of feet per second uh with some of these uh larger longer range calibers

01:05:50.920 which means what does that mean well at distances it means like feet or at least a foot of of you

01:05:58.660 know variance within your groupings at the at that long range so that's an easy one to understand

01:06:03.600 is you have a company that right now has very tight tolerances for their business to business

01:06:09.940 that's what proofing is is they're providing uh new firearm manufacturers with the specialty ammo

01:06:15.440 that's is it overcharged is that the test yeah so it's more it has more pounds per square foot

01:06:22.020 in terms of the uh the explosive power that's generated so that you can test it and show that

01:06:26.840 this thing can withstand above what it's stated to be able to stand yeah and so it's very very

01:06:32.160 accurate. The loading is very, very accurate for this ammo because this has to hold up in court,

01:06:36.780 right? For these firearm manufacturers. And so you take that quality and precision,

01:06:43.880 and then you apply it into these different categories. Defense ammo, you want it to go

01:06:48.100 bang every time you pull the trigger. You don't want the case where you're carrying your pistol,

01:06:52.380 you've carried it for years, and finally there's a situation where somebody is trying to harm you

01:06:56.060 and you pull the trigger and it doesn't go bang. You're shooting long range. You want it to hit

01:07:01.260 exactly where you expect it to hit. And I do always hit where I'm aiming. It's not always

01:07:06.340 where I'm shooting for, right? That's the, there's the marksmanship joke. Um, but, uh, so with this,

01:07:12.600 with this business, I guess, um, you've, you've identified it, you've, uh, done all your due

01:07:19.120 diligence and right now it's open to investors. And I alluded to this in the hard men podcast

01:07:24.620 interview with Eric, uh, if you haven't listened to that, uh, that there is an opportunity right

01:07:29.960 now. And if you're interested, well, you're hearing the opportunity now from David is that

01:07:34.800 there's actually an opportunity to invest in this ammunition company. And there's a lot more

01:07:40.280 details that we can obviously provide. But what, I guess, what are the qualifications for somebody

01:07:45.660 to invest? Because unfortunately, you know, if you've got, you know, a couple thousand bucks in

01:07:50.460 your savings account, you're just burning your hole in a pocket in your pocket. You can't just

01:07:54.680 necessarily, you know, participate? What are the qualifications, Jace?

01:07:59.760 Yeah. So for this offering, we have to have an accredited investor. And that means you have a

01:08:05.100 net worth of a million dollars without including your own personal residence. And then if you're

01:08:10.960 single, you know, $200,000 per year as an alternative, or if you're married, $400,000.

01:08:16.680 So David can correct me if I'm wrong, but it's kind of an either or thing. And so, you know,

01:08:22.380 there's different ways to, to reach this. Um, you know, it's a, it's a self certification.

01:08:27.620 And so I think sometimes people forget that they, you know, they do have assets, uh, that they own.

01:08:32.240 And so, you know, you're right. If you just have a couple thousand in your account, probably

01:08:36.260 unfortunately not going to be able to do this one, but if you're, if you're close or, or, you know,

01:08:40.560 you think you might be in the, in the ballpark, definitely, you know, still reach out. Yeah.

01:08:45.240 There's ways to do it. Who should, who should they reach out to, you know, just to check for that?

01:08:49.980 Yeah. So they can come to, they can go to reesefund.com and they can fill out sort of the investor form there. And you may end up talking to basically Jace, you know, or to you, Dan, to be able to then have some kind of conversations about some of the process there. And so people who come from this would like to just, you know, we can go through the forms on the site. It'll be easy for you to deal with.

01:09:14.920 And they might end up talking to somebody on my staff in terms of some of the check-in there.

01:09:19.000 We've got one of my associates for the firm, but also our general counsel sometimes can help to deal with some of the things that come up with that.

01:09:26.800 But then for being able to talk more about a lot of the details of this particular deal, since you guys are involved in it and helping to kind of organize some of those conversations,

01:09:35.200 we might end up talking to you guys at some point there after they get through some of that initial checking.

01:09:40.500 So that's kind of the process that they would go through.

01:09:42.300 And then the other thing is just as you think about people coming in here, again, who is well positioned for this?

01:09:51.360 Our goal is not to encourage people to come and throw all of their money into some opportunity here.

01:09:57.040 We intentionally, these are high risk, high reward types of scenarios.

01:10:00.100 Our goal is to have high rates of return, but our goal is also to take risk.

01:10:03.680 And we're doing that by buying a business.

01:10:05.920 And then there's some portion of that that's debt, some portion of that that is invested capital, and there's a plan for growth.

01:10:11.640 And so the goal is to aggressively strive to get good returns.

01:10:17.300 But the other thing is the underlying value is this.

01:10:20.500 When you buy stock on the stock market, the average stock right now in the stock market is selling for 20 times price to earnings,

01:10:27.580 which means it has to operate for 20 years at the profitability it had last year in order for it to pay for itself.

01:10:33.940 um we you look at the the the um the s&p 500 and you have the big businesses that are that are

01:10:42.640 there they're selling for about 25 times price earnings so they have to operate for 25 years

01:10:47.920 at their last year's profitability before they pay for themselves you look at the nasdaq and it

01:10:53.860 was at like 35 or closer to 40 and now it's down to like closer to 30 or whatever but this this

01:10:59.400 you're looking at 30 times. And so you're literally buying things, you know, 20 times,

01:11:05.540 25 times, 30 times their, their, their earnings, right? So if the business was making a million

01:11:11.680 dollars in profit, you know, on, on the stock market in general, it'd be selling for 20 million

01:11:15.940 bucks. It'd be selling for 25 on the S and P it'd be selling for $30 million on the Aztec. So you

01:11:20.640 have this idea of like, these are the really crazy prices that are being paid. We're buying

01:11:25.240 businesses. And we're buying businesses somewhere between like three and six times, depending on

01:11:33.600 its growth and stuff like that. So you're looking at, you know, if a business is making a million

01:11:38.480 dollars a year, we might be buying it for three or four or five or six million dollars. So right

01:11:43.440 there, you're already looking at if the company doesn't grow, you're already looking at a rate

01:11:49.040 of return where you're talking about a third or maybe 18% of the initial value being returned

01:11:56.120 in profitability if it just flatlines. And so that right there is the dramatic change.

01:12:03.160 The difference is with stock, when you're buying it on the stock market, you can buy and sell same

01:12:08.100 day, right? The problem is this stuff, the illiquidity, the way it gets tied up. And so

01:12:12.780 that's part of the risk. People go, oh, no, I have this demand. So it's like, do you have some money

01:12:16.480 you can put aside and think about it as a long-term investment, a few years. So that's the,

01:12:21.920 it's a few years being tied up. But the idea is in exchange for that, you're getting an opportunity

01:12:27.200 for a much higher rate of return. There's also the risk though, of businesses even going out

01:12:32.080 of business, right? So we try to be really straightforward about all that. And when I talk

01:12:35.760 to people, the other thing I want to say is that people need to have a risk tolerance. Like if you

01:12:38.740 don't, if you don't have the gut to deal with it, if you don't, if you don't, you can't handle the

01:12:42.600 stress of like a high risk investment, just, just do something else. You know, that's, that's the

01:12:49.860 reality. Put it in gold. Yeah, that's good. So, so then we have on the other side, you reach out

01:12:56.440 to Jason if you want other stuff, that's going to be like a good place to park things. And then

01:13:00.320 later you change your mind, you know, you can do something to the oldest, right? But the other

01:13:03.100 thing is, there's also this, this other thing there is you have this, you know, the rate of

01:13:10.160 return you have uh you have the the risk uh you have this idea of the tie-up but the other thing

01:13:14.760 is if you're just starting out like and you're willing to take risk okay but the reality is i

01:13:20.660 try to advise men get some assets that you have control over like buy a piece of real estate to

01:13:27.160 do something like that where you're able to get something and it's 100 under your control

01:13:31.340 and and and when you when you have some property that's under your control and you're able to

01:13:37.060 either rent it out or to make sure that you can live in it when you have stuff that's under your

01:13:40.880 control it gives you some security so i would advise people to build up some stuff typically

01:13:45.740 like with my own sons i teach them to try to get four pieces of real estate where there's

01:13:49.760 rent being produced on it and then start going into other stuff related to like businesses or

01:13:54.060 whatever so my goal is not to get everybody to put everything they can there my joke sometimes

01:13:57.220 is you know give me all your money uh that's the that's the that's the how i start the pitch is

01:14:00.740 how i end the pitch and you know please give me all your money but the but the reality is that

01:14:05.220 there are things to do in certain orders and I want people to understand how to

01:14:09.060 evaluate those types of things. So that's the, uh, that's,

01:14:12.460 that's who this is meant for is a person who has some money that they can tie

01:14:15.380 up and, and to take a risk with for a potential high return.

01:14:18.560 Yeah. That's, that's great advice for other people.

01:14:20.460 I prefer to ape all in on everything I do. It's 100% actually leverage it.

01:14:27.140 No, that wasn't financial advice. I'm not a financial advisor.

01:14:30.280 Do not take that advice. Um, anyway, Jason,

01:14:33.160 did you have anything that you wanted to mention? Now I'm completely lost my train of thought.

01:14:37.140 No, I was just going to say, uh, that, that is great advice. However, you know, we've all

01:14:41.860 counseled enough young men to know that, uh, four pieces of property in today's environment

01:14:47.000 would be extremely difficult. And so one thing I do want to throw out there is that,

01:14:50.780 you know, if you have put your trust in, uh, in Tesla or Microsoft or Apple, Hey,

01:14:56.480 it probably done well for you, but, but alluding to those, uh, P and E ratios, uh, maybe there's

01:15:02.500 an opportunity with your IRA to roll over some of it into a much better ratio of price to earnings.

01:15:11.480 And so a lot of guys don't think about that. We do it all the time with gold. We roll over

01:15:16.460 portions of IRAs into metal, but you can also do that with your IRA. So yes, still got to meet the

01:15:24.380 requirements. I would absolutely recommend what David is saying, but if you're not there in the

01:15:29.640 property side, but you are sitting on, you know, some capital within your IRA. I think this could

01:15:34.540 be another great opportunity to diversify those holdings. Um, if, if you have, you know, spare,

01:15:40.880 spare, uh, funds in there, or if you're a boomer getting ready to retire, maybe looking at,

01:15:45.740 you know, diversifying, getting, getting out of the potential stock market risks. Um, I, I would,

01:15:51.420 you know, personally put my money on, on this versus, versus the stock market, but that's just

01:15:56.000 me. Well, yeah, it's something real, right? It's something real. You know, the people that are

01:16:01.960 involved in it, which is a really exciting, you know, really exciting thing. You'll be able to

01:16:06.500 see the product, you know, you can buy it online. You know, it is a, it's a real thing that,

01:16:12.120 that you're participating in. I'm just curious, David. So for, for an investor that's like,

01:16:17.180 oh yeah, I'm, I'm interested in an opportunity. You talked about higher risk, higher reward,

01:16:23.000 Just based on your initial fairly conservative projections for this business, what could an investor, based on those projections, expect to see as a potential return if everything goes your way?

01:16:42.200 Yeah.

01:16:42.520 So first of all, the way we've designed it is to be preferred shares, which means that it has a special dividend.

01:16:48.380 and jace you helped to design that and so that the number that was settled in on for the preferred

01:16:53.140 dividend can you remind me eight percent per annum so so it's just paying on a monthly basis

01:16:59.960 uh basically uh that comes out like 0.67 percent basically a month on the monthly payment

01:17:05.000 um and so it's it's paying out that so it gives some sort of cash along the way but then uh in

01:17:11.760 addition to paying out some cash along the way uh it also is tied to basically the way the money

01:17:17.560 comes out because we're not flipping it to sell it to you know somebody else what we're doing is

01:17:23.020 we're trying to hold and to continue to have that work so we're buying the shares back so

01:17:27.540 so what happens when you think about the way normally private equity works is you've got

01:17:31.880 sort of this like money comes in uh from investors and your interests are aligned because you're

01:17:37.660 buying a business and you're trying to buy as cheaply as possible and then at the end you're

01:17:41.340 selling it and everybody's you know trying to sell it for as much as possible easy interests

01:17:45.120 are aligned. So for us, what, how does this work? Well, we go in and we're trying to buy the

01:17:49.740 business as, you know, as affordably as we can. And then you're trying to then build the business

01:17:55.820 out. But how do we deal with the exit of investors? Well, we're buying their shares back as a stock

01:18:01.520 repurchase. So how do we determine a price on that? The way we determine a price is by having

01:18:06.600 basically an algorithm built in or having a formula that's there. And the formula is tying

01:18:12.800 the value of the share to the growth in the profitability of the business. And so the more

01:18:19.420 profitable the business becomes, the more expensive the repurchase becomes. Now, that desire to see

01:18:26.440 the business grow and to then use the business to buy back its own shares is how all that lines up.

01:18:31.300 And so we become incentivized as the business is growing to buy back the shares as quickly as

01:18:35.540 possible so that we're not having to pay for it at the higher price point later. So there's this

01:18:41.260 like race to grow, to make money, to be able to buy back the shares and to try to do that faster.

01:18:47.400 So the idea is to get your money back more quickly. There's pressure on us. And then the

01:18:51.380 idea that as that's growing, you're participating in the growth. And so if we're hoping to be able

01:18:58.460 to do the repurchases in somewhere between two and a half and four years is sort of the time

01:19:03.600 frame there. And during that time, we're hopeful that we can have a pretty dramatic growth.

01:19:08.780 We're talking about trying to take the current profitability and make it so that it grows by

01:19:14.800 four, five, six, seven times during that and have it be directly related. So that's the same sort

01:19:20.200 of possible return there. You're talking four times the money, five times, six times, seven

01:19:24.820 times the money, depending on the level of growth. And so that's the kind of high reward is in a few

01:19:30.240 years time, seeing those kinds of multiplications of the initial capital. And so that's where

01:19:37.000 this is different from a lot of what you see in terms of the publicly available opportunities for

01:19:41.820 investment is that kind of dramatic growth. Yeah, that's incredible. When I first started

01:19:45.840 looking at these opportunities with David and running the numbers, I'm looking at my stock

01:19:52.480 portfolio and my cryptocurrencies and things like that. I'm like, wait a minute, I can do

01:19:57.980 what sort of investment and anticipate what sort of returns? This is insane.

01:20:02.620 And the thing that's really, I think, kind of a travesty is that the SEC is trying to protect

01:20:07.940 the average person from this sort of investment. Isn't that insane? I think it's crazy. I understand

01:20:13.680 that there are risks, but apparently only, you know, the wealthier people can take on risk that

01:20:20.360 has really good return, you know, but this does, one of the opportunities and the concerns that

01:20:26.520 you brought up is like with the stock market, you know, I can go buy Tesla shares and then

01:20:31.280 sell it tomorrow and i only have to pay short-term capital gains tax if if it's profitable otherwise

01:20:37.620 you write it off which i'm really good at now um but with with something like this yeah your

01:20:42.960 your funds are locked in right and so you have a the company has an optional purchase of your shares

01:20:50.500 at at what time time frame at two years basically so yeah so there's there's initial point and jace

01:20:59.220 I'm sorry. I know you worked through the details on our period of time here. So can you repeat,

01:21:03.860 what are the numbers that we chose on this deal? Yeah. So, you know, calls and puts, right? So

01:21:09.140 the company call opportunity opens up at year two, which in this case will really be two and a half

01:21:15.380 because if we purchase the business mid-year, you know, we want to make all our calculations

01:21:19.780 and valuations based on a full calendar year of gapped, you know, accounting analysis. So,

01:21:25.900 But at year two is when the company has its first option to buy back and call those shares in accordance with the EBITDA multiplier equation that we've calculated, and it would be based on those end-of-year numbers, in this case, 2027.

01:21:43.940 And then at year six, we have what's called a put, which is where the investor can say, hey, I'm out, buy my shares, do the math, calculate the EBITDA, give me my preferred share strike price, and then I'll be about my business.

01:22:01.060 but all through that time you're you're getting that dividend and um and the way i like to explain

01:22:07.640 it is is kind of like on a short-term loan uh you know say it's a five-year with a balloon payment

01:22:13.420 and and in this case you know you know the the borrower is is the company and they're saying

01:22:19.120 hey we don't have a we have no prepayment penalties at starting at year two so we could

01:22:23.740 buy back those shares at year two but by year five we absolutely must buy them back so it's

01:22:28.640 been kind of an easier way to for me to think about it personally being a real estate guy

01:22:32.500 and then a couple other things is you know i was talking to a guy who does you know real estate

01:22:37.100 syndicates and and one of the benefits is is that you know he was getting dividends quarterly

01:22:42.180 and in this case we're getting them monthly and so as a real estate guy it's almost like

01:22:47.780 owning property that pays you rent uh without without the the broken toilet or or the the

01:22:54.180 new roof requirement which is which is pretty cool we got our first dividend payment for the

01:22:58.420 last, uh, the last deal, um, on April 1st, which was, uh, very, very awesome because, you know,

01:23:04.940 I'm used to having to send a general contractor out to make sure everything's good. And then I

01:23:08.520 get my rent checks or what have you. So that was cool. It's, it's monthly versus a lot of these

01:23:13.060 are quarterly. And then, um, the, you know, there's, there's capital calls a lot of times

01:23:18.740 in these syndicates that, that, you know, if you want to stay in and keep your position,

01:23:22.780 you got to add more money and uh and that's not how we're how we're setting this up um and and a

01:23:28.400 lot of times those are longer deals and so those are just some considerations that that are pretty

01:23:32.820 cool with with an offering like this yeah yeah was there anything else you wanted to add david if not

01:23:37.660 i'll i'll i'll wrap this up i think just to to summarize i think that the opportunity here is

01:23:45.340 for money that you can put away um for a while and just leave it and that there's opportunity

01:23:50.440 for substantial growth. This is a type of deal that we do, that we're looking for acquisitions

01:23:58.180 all the time. And we're talking about an opportunity like this occurring a few times a

01:24:03.320 year. But this one is unique in that it's a very high growth one. We normally are not focused on

01:24:08.720 really high growth as much as we're just looking for durable cash flow and maybe sets of assets

01:24:15.240 that can help to support the value of the business.

01:24:17.540 In this case, this one is a very high growth one.

01:24:20.780 So when we were talking about, you know, in MirrorWorks

01:24:22.940 and having you guys work with me and investing in that,

01:24:25.400 that was an asset-heavy business

01:24:28.100 that had really high capital requirements for continued growth.

01:24:31.960 And so our growth plans on it were not very aggressive,

01:24:34.360 but it was still a really great return

01:24:36.020 because of the fact that it's just the underlying value of the business

01:24:40.220 having a business that you're not buying for the 20x or 30x on the stock market of the price to

01:24:47.260 earnings ratio, but instead that you're looking at a business where you're buying it in that

01:24:51.260 smaller zone, single digits price to earnings ratio. And so this one is neat because there's

01:24:58.560 that underlying business that we already have in it that is going to be a pretty stable business

01:25:05.640 in terms of ups and downs, but we're not talking multiples, but adding on that consumer component

01:25:09.880 being able to have the prospect of a really fast multiplication of the profitability of the

01:25:15.760 business. And so that's not the norm for the stuff that we're seeing. And so this is unique in that

01:25:20.560 way. And so I'm excited about this one. And I hope that that's something that your listeners

01:25:25.880 are interested in and that we can give them opportunity on. Yeah. And so if you are interested,

01:25:30.240 we'll have the link in the show notes for the Reese Fund webpage. Do you have the website off

01:25:36.240 top of your head uh just reesefund.com uh is reesefund.com will be a place where they can go

01:25:42.540 in they go to the invest uh the invest page fill out the the forms there and then they can just

01:25:47.720 communicate in the message that they're interested in this ammo deal um they heard about it here um

01:25:52.020 and and so just mentioning your king's hall thank you thank you so much david and i i hope you're

01:25:56.780 all encouraged and interested in this topic i know one of the accusations that we have uh commonly

01:26:03.000 received in the past was that we are basement dwellers in our mother's basement. And my mother

01:26:08.640 made very good grilled cheese sandwiches, but I have not lived at home in a very, very long time.

01:26:13.120 And we are actually building real things and doing real things. And we all live by the motto,

01:26:18.440 Festin Alente, make haste slowly. And so we'll see you next time on the King's Hall.

01:26:22.800 stay safe mask up get the vax don't take unnecessary risks be careful we've been coddled

01:26:35.680 smothered in warnings trained to fear and avoid risk we've been taught to play it safe and be on

01:26:42.060 our guard and not just against a scraped knee or a failed endeavor no we've been taught to censor

01:26:47.880 our speech, our words, even our thoughts. Don't think those dangerous thoughts. Don't notice.

01:26:53.980 Don't speak out. If you do, we're coming for you. Who's coming for you? It almost doesn't

01:27:00.020 even matter. Whether it's the HR lady at your company of either sex, weaponized church courts, 1.00

01:27:06.060 the social media censors, or even those you once considered allies. Watch out. Take care. Play it

01:27:12.520 safe. But was it always this way? Have we always lived under this kind of stifling,

01:27:18.160 wet-blanketing panopticon? Is this the spirit of our Christian forefathers? Of the men who 1.00

01:27:23.900 founded our nation in blood and in faith, willing to face down all the might of Britannia and her 1.00

01:27:29.540 redcoats? There was a time when Americans didn't shrink from risk, when they would rather die than 1.00

01:27:35.300 bend. Our Christian forefathers knew what it was to draw the sword and throw away the scabbard. 0.86

01:27:45.820 They knew what it was to set sail for the unknown. They defied tyrants. They built,

01:27:51.280 explored, and dared great things. Who settled this land? Who built one of the greatest nations ever

01:27:57.860 to be? Who settled the West and covered the continent from sea to sea with the Christian 1.00

01:28:02.260 people. Who searched out glories, crisscrossed the plains with railroads, and fought off usurpers

01:28:08.280 and invaders on all sides. Risk wasn't a bug, it was a feature. Without it, our fathers knew there

01:28:14.720 was no greatness. And now, we're supposed to trade boldness for bureaucracy? We're supposed to tremble

01:28:21.100 at the unknown instead of mastering it? We're supposed to bow and scrape, not even before

01:28:26.320 bullets but before hr ladies we don't think so it's time to remember who we are this year join

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The King's Hall - April 25, 2025

Economic Greenification： Why Businesses Are Integral to the New Christendom

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