The 7 Year Collapse of an SBA Acquisition | Scott Duncan Interview
The one thing to remember
If the seller, a few craftsmen, or one customer relationship are the real business, you are not buying systems—you are buying people who can walk out the door.
What happened
Scott Duncan bought F&M Tool and Die in 2018 through a self-funded search, using an SBA 7A loan for most of the approx. $3.6 million price. He thought he was buying a profitable, repeat-service manufacturing business, but soon found heavy dependence on the seller, scarce technical employees, and one highly profitable customer relationship. The company recovered for a while, then COVID, volatile demand, steel inflation, a shift into large project work, and a badly timed facility move pushed it into distress. By early 2025, bookings had collapsed, the lease was terminated, employees were laid off, the bank took possession, and Scott moved toward personal and business Chapter 7 bankruptcy.
Who's telling it: Scott Duncan, the buyer and operator This is Scott Duncan's buyer/operator account; the seller, employees, customers, lender, vendors, and investors do not give their side.
Timeline
- Thesis
Scott chose a self-funded search focused on New England rather than a traditional funded search.
- Sourcing
He found F&M Tool and Die through an industry-specific broker, initially passed, then returned to the opportunity.
- Due diligence
He got comfortable with the service-and-repair thesis but missed how much the business depended on the seller, key employees, and profit concentration.
- Financing
The deal closed at approx. $3.6 million with about 10% seller note, about 10% investor equity, and the rest SBA 7A debt.
- Closing
Scott closed in mid-2018 with no personal equity in the deal and very little cash left personally.
- Integration
Employees and customers were not enthusiastic, and a key employee soon left with a highly profitable customer relationship.
- Operations
The company improved in 2019, then faced COVID shutdowns, layoffs, steel price inflation, turnover, and a shift from repair work toward large project-based mold builds.
- Operations
In 2023, Scott moved into a larger facility suited for the new tooling-plus-molding strategy just as bookings softened sharply.
- Exit
After failed relief efforts, vendor pressure, an Article 9 process, lease termination, and collapsed bookings, Scott shut down the business and the bank took possession.
stage where a mistake was made
What went wrong 7 issues
Seller was the system
Scott believed he was buying a manufacturing company with repeatable systems, but later concluded it was closer to a professional services firm built around the seller’s technical knowledge and relationships. That made the owner transition much harder than the financial model assumed.
Mistake made at Due diligence → showed up at Integration
“there were not systems and processes. It was Mike and team”
Warning signs
- The seller’s phone could not stay quiet during lunch, showing he was still central to daily customer and technical decisions.
- The buyer’s first walkthrough felt chaotic, with old machines, disarray, and weak visible systems.
- Employees and customers were uncomfortable with the transition because they knew how much depended on the seller.
How to prevent it
- During due diligence, the buyer should have shadowed the seller for multiple full workdays and logged every technical decision, customer call, and employee escalation the seller handled.
- Before closing, the buyer should have required a written transition agreement with the seller covering technical problem-solving, customer handoff, and a minimum consulting period.
- The buyer and investors should have treated the company as a relationship-heavy professional services business unless proven otherwise by documented systems and a capable management bench.
Hidden profit concentration
A key employee left soon after closing and the work from a major customer followed him. The customer looked acceptable by revenue concentration, but the work was far more important to profit than Scott understood.
Mistake made at Due diligence → showed up at Integration
“so he walked and essentially took that business with him”
Warning signs
- The customer was only 10-15% of revenue, but the buyer later found it was about half of EBITDA.
- The buyer knew the key employee was going to leave, but not that he was setting up next to that customer.
- The customer commitment before closing was a handshake, not a binding purchase order.
How to prevent it
- During due diligence, the buyer should have mapped revenue and gross profit by customer, employee, and manufacturing process, not just by customer revenue percentage.
- Before closing, the buyer should have confirmed where the departing employee was going and whether he had equipment, customer proximity, or plans to compete.
- The buyer should have required retention agreements or transition bonuses for employees tied to the most profitable customer work.
Project work became risky
After COVID, the mix shifted toward large project-based mold builds instead of the smaller service and repair work Scott liked. Fixed quotes and rising steel costs caused some large jobs to become unprofitable and damaged customer relationships when the company asked for more money.
Mistake made at Operations → showed up at Operations
“these massive jobs underwater from the price of steel”
Warning signs
- The business shifted away from smaller repair jobs toward large new mold builds.
- Steel prices rose sharply while earlier customer quotes were still fixed.
- Large jobs had long sales and delivery cycles, sometimes stretching from quote to completion over many months.
How to prevent it
- Before accepting long-cycle fixed-price work, management should have added material escalation clauses and quote expiration dates to customer contracts.
- Each month, the operator should have reviewed open project margins using current steel prices and renegotiated or stopped work before losses compounded.
- During diligence, the buyer should have separated repair revenue from new-build project revenue and valued the project work at a lower, risk-adjusted multiple.
No financial cushion
The deal closed with high leverage and very little buyer liquidity. This did not cause every operating problem, but it left little margin for error when EBITDA fell, COVID hit, bookings declined, and payroll pressure mounted.
Mistake made at Financing → showed up at Operations
“None. Uh in fact, the day we closed, I had like $2,000 to my name.”
Warning signs
- The acquisition used SBA debt for most of the price.
- Scott put no personal equity into the deal and had almost no cash left at closing.
- The business later had to make about $32,000 monthly debt payments while cash flow became volatile.
How to prevent it
- At financing, the buyer and investors should have required a dedicated working-capital and debt-service reserve funded at closing.
- The buyer should have modeled a first-year loss of the top profit pool and confirmed the business could still service SBA debt.
- The investor group should have delayed closing or reduced leverage if the buyer had no personal liquidity and the company had no room for an early shock.
Moved as demand softened
Scott moved the shop into a bigger, nicer facility that seemed strategically right for the tooling-plus-molding model. Soon after, demand softened and the company was in a new building with too little work.
Mistake made at Operations → showed up at Operations
“we ended up in this new building without much work to do”
Warning signs
- Bookings were strong at the end of 2022, but the surge was tied to post-COVID supply chain disruption.
- Customers had over-ordered inventory and became hesitant to place new capex purchase orders.
- The move occurred just as bookings started to soften in 2023.
How to prevent it
- Before moving facilities, management should have required signed backlog and deposits sufficient to cover the move disruption and fixed costs.
- The buyer should have treated the 2021-2022 order surge as potentially temporary and stress-tested demand after customer inventory normalized.
- A board or investor review should have approved the move only after comparing the no-move downside case against the new-facility downside case.
Tough skilled-labor culture
The workforce did not automatically accept a young, non-industry buyer, even one with manufacturing experience. Scarce technical talent, turnover, and a culture built around the prior owner made integration and later downsizing much harder.
Mistake made at Due diligence → showed up at Integration
“there were some guys there who just did not like that I didn't come from the industry”
Warning signs
- Scott’s first day reaction was that no one was happy to see him.
- Mold makers were scarce, highly skilled, and hard to manage.
- Some employees had worked under the seller for decades despite complaining about his style.
How to prevent it
- During due diligence, the buyer should have spent time on the shop floor with key tradespeople and tested whether they would accept him as the new operator.
- Before close, the buyer should have built a retention and communication plan with the seller for skeptical employees, especially scarce mold makers.
- In the first 30 days, the buyer should have identified informal leaders and involved them in operating changes before rolling out new management systems.
Lender lacked workout depth
When the business became distressed, the lender did not move quickly or appear experienced with SBA workouts. This did not create the operating decline, but it made the restructuring process slower and more painful.
Mistake made at Financing → showed up at Exit
“They didn't even have an internal workout team.”
Warning signs
- The lender was a relatively small regional bank.
- Scott felt he had to lead the bank through the interest-only process.
- Relief took about two months despite early communication.
How to prevent it
- When choosing the lender, the buyer should have asked who handles SBA distress, deferments, and workouts before signing the loan documents.
- At the first sign of sustained cash-flow trouble, the buyer should have engaged restructuring counsel and prepared a written lender proposal with specific SBA options.
- The buyer and investors should have maintained a lender-contact escalation list beyond the relationship manager.
Prevention checklist 0 done
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Thesis
Sourcing
LOI
Due diligence
Financing
Closing
Operations
Transcript 2374 lines · 16750 words · auto-generated captions
Scott Duncan, welcome to Acquiring
Minds. Thanks for having me.
>> Scott, yours is a story of a self-funded
search that goes to zero. It is a
harrowing tale and we thank you for
being willing to share it so that others
might benefit from it. Where does all of
this begin, please, Scott?
So for me, this starts in between my two
years at HBS. Um I had kind of on a whim
decided to take the Rick and Royce ETA
route through your final year there. And
um I went through the two courses. They
were amazing. I feel like they taught
100% of the 10% you can learn in a
classroom. Um and then I took it from
there.
>> And what drew you? What was so inspiring
about what they were teaching and what
this path offered?
>> Well, I knew I knew there was going to
be some sort of entrepreneurial route
for me out of HBS. Um, you know, I was a
medical device engineer beforehand. I
had always worked at startups and I
liked that, but my internship in between
the two years was for really small
biofarma startup. And I was just sitting
there and I realized that all these
companies that I worked for that were
venturebacked had never really
materialized into anything. So all of
the stuff that I had worked on as a
professional never actually benefited
anyone, never had been sold, none of
that stuff. So I kind of saw an
opportunity in search to um sell shovels
instead of dig for gold. And as soon as
I I read the book, right, everybody
reads the HBR Yeah. HBR guide to buying
a small business and it like changed my
life, right? So I was hooked after that.
>> Mhm. Okay. Great. And so say a little
bit more about your background because
there was at least perceived business
buyer fit here. So let us understand you
a little better.
>> Yeah, that definitely perceived business
buyer fit here. So I was a mechanical
engineer by education and I wasn't the
math kind of mechanical engineer. I was
the hands-on type of mechanical
engineer. And even in undergrad, I had
some experience running CNC machines and
doing prototype machining which was very
relevant to the business I ended up
buying. Um, so basically just doing
design engineering and manufacturing
engineering at these hardware startups
and I thought that was really going to
lend itself pretty well to this
business. Great. Okay. So you sounds
like you uh decide that you're
definitely going to go down this path
after taking those Rick and Royce
courses. So you graduate and immediately
kick off your search.
>> Yeah, I did. I started um I think now
people people end up searching while
they're in business school, which I
think is crazy, but I think probably
around March, April, I really started to
commit to it. I deliberately didn't do
any sort of recruiting um at HBS just so
I wouldn't have the option and be
tempted to do it. I originally started
off with the intent of being a
traditional a funded searcher and and
then changed my mind in I think May,
June, something like that.
>> Why did you change your mind?
>> Well, I I got a soft commitment on one
unit of what I was trying to raise and
you know, I don't want to say it came
too easily, but I'm like, "Wow, this is
it just really made me consider the
economics of it." Um, and I was also
thinking it just made me reflect on what
it was that I was doing this for. I
didn't want to be, you know, a hired
gun. I didn't want to just be um be a
CEO for seven years. I thought this was
going to be something that I was going
to do for 20 years, 25 years. And I I'm
from central Massachusetts. My family
was here. I knew my wife's family was
probably going to end up here. And that
was really not compatible with a
traditional search. So, it just took a
little bit of reflection on my part to
realize that this is more of a I think a
lifestyle play for me than a career
play. Mhm. Great. Yeah. So, the
geographic focus that your search was
going to take meant that sort of
precluded doing a traditional search
where your investors will expect you to
be willing to move anywhere. Um, there
is some nuance to that, but that's at
least the stated expectation. But also
this point I've I've actually never
heard if I if I understood you correctly
that because so you raised only a single
unit for the traditional fund search
fund but it came your sense was that it
came very easily. Is that right? And
therefore that meant if these investors
were so willing to throw money at this
that actually it's because the economics
were too good for them. Is that what you
were saying?
>> Uh I realize that's a pretty cynical
take. Uh but in a way
>> that's fine. But no, but give us your
cynicism, please.
>> Well, it wasn't like I didn't exactly
crush the pitch. Okay. I didn't go in. I
[laughter] was still like very much all
the like owning the business just took
all of the HBS polish off of me, but at
the same time took all of the bad parts
I think about being like an engineer
mindset out too. So I I I look back on
this and be like, "Wow, I would have
done so much better at this now." But it
was just like here are the economics.
And I did go in with the idea of I
really only want to look within New
England. And the guy was like, "Yeah,
all right. I'm interested." And he
didn't stroke a check obviously, but it
just I'm like, "Wow, this is I thought
this was going to be the hard part." And
then after that, I'm like, "Wait a
second. I can do this on my own if I
continue to, you know, live like a grad
student." And and then like
>> living with my my now wife in an
apartment in Watertown. like, man, I
just realistically don't want to move to
Omaha or like California or something. I
want to stay right here. I'm a New
Englander.
>> Mhm.
>> But this point about it being easy to
raise
and that being a reflection of how good
the economics are for the investors. Was
that was I overreading into what you
said or is in fact is that in fact what
you were sensing?
>> It was part of what I was sensing. Yes.
So, I'm not I'm not disagreeing with
you. It was not the entirety of my
decision, but also I'm like, "Wow, he
didn't even need to think about this.
This is crazy." Like, what are the
economics for him versus what they are
for me?
>> And I mean, Jim Sharp is always one to
point out that let's say you're a
searcher 10 years down the road, like
your investors at that point have you're
the person adding all of the value. And
I understand that now in a much bigger
way than I did even then. So, it was
really just a point that made me look
back and consider what I was doing it
for in addition to being like, "Wow,
what am I actually giving up if I can
collect money that easily from people?"
>> Yeah.
Well, and let's also call out the
obvious that if you are at HBS from the
investor's perspective,
there's a lot of kind of pre-screening
that's been done. So it's not so easy if
for you listener if you didn't come
don't have the same Harvard pedigree. It
might not be so easy. Uh but that played
that clearly played a role here.
>> Yeah, for sure. And I realized that I'm
I'm wearing my Patagonia right now. But
uh [laughter] I I don't think I was like
the traditional entrant or graduate from
HBS and it was still really weird for me
to even now think about well maybe that
played a part in all this.
>> Yeah. Yeah. Good. Well, appreciate um
your honest feelings on all this, Scott.
Okay, so you decide to do a self-funded
search focused on New England. Maybe
once you decided to go self- purchase
selffunded, you tighten that
geographical constraint even more.
>> Yeah. And there's another reason why I
didn't like the funded path just for me.
And and I don't think this is wrong. Um,
I just didn't believe in the idea of
going in with an industry thesis because
I knew that the stats were that, you
know, people write their PPM for a raise
and they're like, I'm going to focus on
this industry and industry B and
industry C. And I don't know if that's
changed, but a lot of folks don't
actually end up acquiring within the
industries that their PPM said were
targets. So, I thought, well, I
definitely don't want to over constrain
my search. And if I'm optimizing to be
close to my parents and my wife's
parents, then yeah, okay, I probably
can't just look within central
Massachusetts, but I can look within,
you know, Vermont and Maine and New
Hampshire and and all of that. So, it
did the geographic focus was the driver
behind I think the the majority of my
search.
>> Great. And anything else to say then
about the parameters of your search?
>> I don't know. Uh the strategy I think
probably everybody does this it does it
this way. I just canvas the broker
network first because I figured you know
if somebody has gone to a broker as
somebody interested in selling their
business they're interested in selling
their business. And um there's probably
just lowerhanging fruit and you don't
need to convince somebody or or find a
seller and convince them that you're a
credible buyer. Uh so that was really
just the beginning of it was looking
within New England and calling brokers.
And then once I had saturated New
England brokers, I started reaching out
more and more until I got diminishing
returns and then switched over to
probably the laziest proprietary search
in the history of ETI. [snorts]
>> Okay. Uh and and by the way, what size
were you looking for? The kind of
traditional upper six figures of SDE?
>> Yeah. Yeah, I think that would be that
would be representative. Yeah, I looked
even then though it was looking at like
that half million dollars worth of SDE.
I did see some competition from private
equity for bolt-ons. I can't imagine
what that's like these days.
>> So, this is eight years ago, right? I
can't imagine it's gotten better.
>> Mhm.
>> And if you were to find a business doing
850 of SDE, were you going to be able to
buy the thing yourself or were you
actually going to need to have some
investor capital help you out? Investor
capital all the way. I had I probably
had an irresponsibly low amount of money
to start a self-funded search with, let
alone like try and fund it entirely
myself. [snorts]
>> Why? Why irresponsible? And how much was
that?
>> I think it was like 60 grand. And I
mean, I don't know if people start with
now, but that was enough to get me
through
a year, maybe 18 months if I got really
creative with my burn rate. Um, but I
think about it now, and maybe it's just
that my perspective has changed being a
father and a husband now, but I had no
plan. I had no plan for what I was going
to do when I entirely ran out of money.
Like, my wife was a grad student. I'm
like, I guess I'll just find a job,
right? Like, no, I got rent to pay. But,
I guess the benefit of being younger and
optimistic.
[laughter]
>> Why did you call your proprietary search
lazy? What did you mean? the world's
laziest actually.
>> I don't know. I think that when
everybody is zigging, you should be
zagging. So, it was very I don't know.
Again, I've been out of the I think the
proprietary search world for a while
anyway, and I don't know what the
techniques are now, but I just didn't
see bulk email and hiring 40 interns as
a viable strategy when I was looking
for, you know, just one thing in a very
small region. So, what I would do, I
went the I tried to go the the
highquality, low volume route, and I
would just be sending out semicustomized
letters every day with a signature and
like on nice paper and big envelopes
with an official looking logo on it in
hopes that that would make it to an
owner's desk, but it wasn't very it
there was not very high volume and it
didn't yield very much in the way of
results. And when I really got into
that, I was under LOI on F&M tool
anyway. And you know, I only have so
much time in the day. I think that's
something I would do differently now,
though, is I' I'd spend much more time
on proprietary than just waiting for
brokers to get back to me.
>> Oh, really? Why? Just not enough deal
flow from the brokers.
>> Not enough deal flow. No. Um,
but also, it's nice to have something
going on autopilot, you know, even if
there's even if it's just getting you a
lot of junk leads. I think it's there's
more something to be said about the
optionality of having a lead generation
machine working for you versus, you
know, hoping that a broker calls you
back. And I don't know what brokers
think of searchers now anyway, but even
eight years ago, I was like, "Oh, are
you one of these search fund guys?" I
would always say, "What's a search fund?
I don't know what that is." [laughter]
>> As you like covered your Patagonia logo
on Zoom.
>> Yeah. They could hear it through the
phone like this guy sounds like a
business school guy.
>> Yeah. All right. F&M was the name of the
business.
>> F&M Tool and Die.
>> F&M Tool and Die. Uh, how did you find
this business?
>> Through a broker. It was actually one of
the very first deals I found. It was
through an industry specific broker. Um,
I sent over an IOI. There was some
interest. I walked in. This is crazy,
but I didn't like it. And I thought,
well, I'm only, you know, a month or two
months into my search. It doesn't make
sense to take this any further. I'm
going to back out. And and so I did, and
I continued to go down the path of
searching. And it came back a few months
later.
>> Before we unpack that statement, what
does it mean tool and die? That's a type
of business that I've heard um but
didn't really know what it is.
>> Yeah, it can mean a lot of different
things. Um so specifically what we did
was uh building and servicing injection
molds more when I bought it it was much
more servicing than building which is
one of the reasons why I liked it but uh
tool and die is think of it as very
high-end machining for very specific
tools that go into manufacturing. So
that could be sheet metal stamping
tools. It could be um punch tools. It
could be what I did injection molding.
Um it's just when I think of tool and
die, it's machining, but it's got a
specialty and usually the machining is
very difficult materials, higherend
processes and and much lower volumes
than when you think of traditional CNC
machine shop.
>> Okay. So, it's servicing
the large complex machines that a
manufacturer is using. Um, in a way, yes
and no. So, you're making stuff.
[snorts] You're you're making stuff out
of metal and it could be for tools for a
variety of manufacturing processes.
>> Um, but it's it's kind of hard to
explain. I always struggle to do this,
especially when I tried to break it down
between, wait, so you build the thing
and you service the thing and then you
also do the thing, the injection molding
that you're selling into your customers.
So, it was just it was a constant pain.
[laughter]
>> I'd buy I'd buy a simpler business next
time around just to save myself the
headache of explaining what [laughter]
it is that I do.
>> Uh, okay. Well, maybe we'll get more
clarity as we as we hear about this
particular business. So I also heard you
say injection molding. Uh I know that
has something to do with plastic. Say
what define injection molding for us and
specifically what your business did.
>> Okay. So injection molding is a
manufacturing process. Uh you
take liquid plastic and it's basically
in what in effect is a a huge hot glue
gun. And then you shoot that molten
plastic into a mold. The mold is made
out of metal. Um, it sounds very simple,
but it's actually very complex because
it's like a it's a machine and each one
of them is highly custom and highly
engineered. And so you shoot the liquid
plastic into the mold, the mold cools
down, and then you get a hardened
plastic part off of the mold. And the
great thing about injection molding is
that it's very high volume. So you think
about, I don't know, every plastic car
part, a lot of it is injection molded.
Um, I'm looking at all the stuff on my
desk right now. It's injection molded.
So, each one of these parts requires a
tool or a mold. All molds are tools. Not
all tools or molds. It's kind of maybe
helpful for explaining tool and die. Um,
and it's like this big investment when
you're developing a new product is when
you tool it up. You have to get this big
expensive block of metal so that you can
make things for pennies per piece.
>> Mhm. you were basically looking around
and saying almost everything that I see
uh came from an injection mold but there
is plastic manufacturing that that is
manufactured in other ways.
>> Yeah. Yeah. You can you can things can
be blow molded things can be machined
but when I think of high volume plastic
manufacturing it's injection molding. So
I was a service provider into the
injection mold injection molding
industry. Okay. and my customers, they
might have pre-existing injection molds
that they needed uh to be serviced. So,
we did that. That was the majority of
the business when I bought it. Or on the
flip side, they might have a new
product. They might have be taking in a
new product from somebody else and they
might need a new mold designed and built
for that. So, we did that as well.
>> Okay. So, injection mold servicing.
>> Yeah. Fair. Fair to say.
>> Fair to say.
>> Okay. and what what did you
like about the business? And then let's
of course hear what you didn't like
about the business because you rejected
it the first time around.
>> And this whole story is going to be
about the weaknesses of the business.
So, so go with the good stuff first.
>> We'll start with the good stuff. Um, I
liked it because it just resonated with
me. I always had a a weird fascination
with machining to the point where even
when I was in college as a mechanical
engineer, I thought about dropping out
to become a machinist. Like in my co-ops
where where I was working during
college, I was running bridge ports. I
was doing prototype machining and I
loved it. Um so it it did check a box
for something that I was at least
marginally passionate about. that the
size was right, the price was right, the
location was right, and at at that point
anyway, I think the revenue dynamics
were right because the average ticket
for us was, I think, like 2500 bucks.
So, it was just these really little
emergency repair jobs on an injection
mold that was keeping somebody's
production line from um from running.
So, they'd show up and we'd fix it and
it would go out the door within a week
or two, maybe a month. and and we'd get
paid. So, it was like a great great fit
for what you'd think of as a traditional
like ETA business where low not really
recurring revenue at all, but very
highly repeating revenue.
>> Mhm. Uh and as we've already said and
you've reiterated just in what we heard
that the business buyer fit here felt
really good. There was a an X factor
this business had for you. You just
liked it.
>> Yeah. Yeah. Great. size of the business
or numbers you can share.
>> Yeah, I think if you average it out, it
was probably somewhere between call it
3.6 and 4 million in revenue and then um
roughly 25% EBIDA on that. When I bought
it, I think it was I think 2017 ended up
being like a phenomenal year. So, it was
1.2 million on 4.2 in sales. So, um, I
thought I was getting a sweetheart deal
cuz it ended up being like 2.9x EBIDA.
Um,
and you know, that was another reason
where I'm like, well, let's just keep
going with this thing. Um, because I'm
not going to find something for much
cheaper and there's a lot of IBITA
there. I thought there was a a big
safety factor and I also thought that um
this was the result of
some of the decisions that the seller
made to professionalize it when he
decided to sell. But I thought we were
just getting some leverage on those
decisions.
>> Mhm. So you saw
what seemed like momentum coming out of
the business and in fact momentum that
you attributed to
uh professionalization, you know, value
having been added to the business by the
seller uh in anticipation of selling it.
Um but what were what had been the
things that you didn't like about it and
and maybe still saw? [snorts]
>> The first thing that I saw when I went
inside the building was just chaos. So
it was an old building, old machines,
old guys, you know, and nothing was
maintained. Everything was dirty and
everything was in disarray. And so I I
my background was medical device
manufacturing. So I had worked with
vendors like F&M, but it was not like if
I were to start an organization from
scratch, I would want my systems and
processes to be in place. And I'd also
want the facility to represent the skill
set of the the folks inside the
building. And I just wasn't getting
that. I I walked in, I'm like, "Wow,
this is going to be a knot to untangle
to professionalize this place." So,
there was that. And then, maybe this is
just the hindsight talking, but I just
didn't get a good vibe. Like, I didn't
get a good vibe from um walking around
and and seeing employees and all of
that. And I just I I don't know. I can't
put myself back into that frame of mind
right now, but I just didn't I I don't
know. I'm much more of a vibes guy now
now that I went through [laughter] this
instead of a spreadsheets guy.
>> And what about the industry, Scott? Uh I
the a lot of the injection molding
industry has had been long since
offshured, right? So where where did how
did that play? where did this business
sit in that broader, you know, dynamic?
>> Yeah. So, that's a really good point and
and I had actually seen the tail end of
that as a design engineer because I had
purchased tooling from US manufacturers
before. I had a little window into the
industry. Um, but yeah, it was it the
manufacturing of injection molds had
become commoditized and sent to China in
the early 2000s. So, that was one of the
questions I tried to diligence is why is
this company still here? So the benefit
was on the service and repair side.
That's not something that can be done in
China. You still need a very skilled
mold maker is like the the top tier
technical person on the floor. You need
a mold maker to do that and to diagnose
what's wrong. Um and typically there was
an emergency dynamic too. So it would
come in there would be a a pretty high
willingness to pay if you could turn
something around quickly. And there was
a need to do that in the states. There
was also a need to do stuff in the
states on the new mold, the new project
builds that we were doing. Um, for a
couple of reasons. One was just
intellectual property concerns. The
other was the size of the molds we were
building. They're generally pretty big,
so you can't I mean, it's very expensive
to put that on a boat and ship it over
from uh either Portugal, which is
another mold making hub, or China. So I
think I think between those two things I
was I just got more comfort around the
fact that there was an enduring business
here. Uh but I mean that turned out to
not be true later on down the road. Um
bit of foreshadowing there but uh for a
while that thesis maintained. It's like
that's that was true for a while.
>> Okay. Well things uh go not well very
quickly into the acquisition. So this
this story picks up um quickly. But
before we get to the the drama here,
Scott, what were the terms of the
acquisition, please?
>> Oh, rough numbers. I think the purchase
price was 3.6 million and roughly 10% of
that was a seller note. Roughly 10% of
that was investor equity and the
remainder came from an SBA 7A loan. So
this happened right when the minimum
equity injection for a 7A loan it went
from 20% to 10%. So I took advantage of
it. I don't think that had any sort of
material effect on my outcome. I don't
know if it would have changed my
decision-m throughout, but uh my logic
was I ought to swing for the fences
here. I don't have any assets to lose
and if this opportunity is put in front
of me, I might as well take it. Mhm. And
the So you said 3.6 million
and the preceding year was that 2017 you
said.
>> Yeah. 2017
>> year before it was at 1.2. So based on
>> that year it would have been a 3x but
based on pri but that was its peaking
year. So prior years would have been
lower. But let's call it in between if
you blend the previous three years
somewhere between three and 4x is what
you paid.
>> Yeah. Yeah. Probably 3.5. if it was less
than four. I know that.
>> Mhm. And you said you had $60,000 to
your name. Uh that was for everything
from living expenses to search costs to
your own equity into the business. So,
how much equity did you put into the
business?
>> None. Uh in fact, the day we closed, I
had like $2,000 to my name. I had to
immediately as soon as I had a checking
account and we collected some
receivables in that first week, I had to
stroke a reimbursement check from the
business to myself for some of the deal
fees that I incurred just to remain
above water. So, I finished with zero
and I put none of my own money in. Um,
and then so the it was all of the equity
came from investors.
>> And I'm surprised that they let you get
away with that. Not. And by the way,
this has nothing to do with how the
story plays out, but in generally in
general investors, myself included, like
to see skin in the game. Were those
conversations that came up with your
investors?
>> I don't know. I think uh maybe it was
different times. Maybe self-funded
searches hadn't been as professionalized
as they are now, but I [snorts] had
already burned down a lot of the
savings. And I think that was the logic
there was that I already had a lot of
skin in the game in the form of pre
sweat equity. But I don't know.
>> Sure. And how much did you retain of the
business?
>> 80% of the common.
>> Wow.
>> Great. Thank you for sharing that,
Scott.
You know, it's just hearing that though,
it's it's heartbreaking because this had
this gone well, the economics were
really strong in your favor and in the
description that you've given us of the
business. Sounds like a very searchy
friendly business. It was a searchy
business for sure. And I remember trying
to explain the model to people who
weren't familiar with it. And yeah, the
economics would have been great. And
they'd be like, "Oh, well, what's your
plan?" To grow the business. Like that
would be a nice side effect of stuff I
do, but I actually don't have to. I
don't need to change anything and this
is going to work out really well for
everybody. And that was kind of the
plan.
>> But what happened? So you get into the
business. Take us through.
>> Okay. My biggest surprise was that no
one was happy to see me. like no one and
again I I don't know what my expectation
was but I remember my first day and
everyone's reaction was like wait this
is the guy like this is the guy who's
buying F&M and uh it was just really
weird I it was awkward I don't know it's
probably a very common search thing but
uh I was not received with open arms by
employees or customers perhaps that's
just my perception but I just I don't
know I don't know what I was sold as
when the seller let everybody know that
um he had sold the business.
>> So from that
>> it is interesting at the risk of making
you feel self-conscious, you come across
as a guy I feel like first of all you
had real manufacturing chops, you know,
you got a big beard, you know, I feel
like you kind of you you kind of look
the part. I'm surprised that there
you're young, there's that. You're a
Harvard guy, there's that. Those
probably didn't work in your favor. And
maybe that's the answer.
>> [snorts]
>> But personalitywise, I feel like you you
don't seem like somebody who, you know,
has lived behind a spreadsheet their
whole life. And you don't talk like that
either.
>> Thank you. I take that as a compliment.
>> Yes, you should. [laughter]
>> Yeah. I have the big beard and the red
flannel. Uh,
>> right.
>> But I, you know,
I think the youth had something to do
with it cuz I was 31 at the time. And
then it was just an obvious mismatch
between my personality and the seller's
personality. Uh he had a much bigger,
more forceful, more prone to anger
personality than I do. Like, and this
was something that in the first few
weeks I was going around and I was
trying to meet everybody
>> and there were a lot of complaints.
There were a lot of complaints about
him. Um,
and I'm like, great, I am right on the
money here. I'm going to be a more
egalitarian, caring, like millennial
style leader and everyone's going to
respond well to that. And it was not
true. And that's something that I tell
searchers now is that first of all, if
you think you're going to come in and
step into somebody's role and just do
the technical aspects of their job, like
that's a big big assumption. And the the
personality match matters just as much
because at the end of the day, despite
all of these guys saying that they
didn't like working there, most of them
had worked there for decades. And
>> they were working there and every day
they showed up, they were continuing to
like double down on the fact that
somehow this management style was
working out for them.
>> H
that's fascinating.
Okay. All right. So, you get a vibe on
day one that nobody's happy to see you.
Then what?
>> Usual search stuff. Like I had a couple
of employees quit. Um the big issue was
that a key employee quit who was doing
one key manufacturing process for one
key customer who at the time was only 10
to 15% of revenue but ended up that I
mean it was just amazing how this flowed
through the P&L. they were probably
about half of IBIT and I didn't know
beforehand how to diligence that you
know in retrospect I wish I had further
but um so he walked and essentially took
that business with him and this was a
few weeks prior when I met with the
customer uh that was a handshake deal
across the table and the owner one of
the owners said Scott we're going to
give you a million dollars worth of work
next year and they gave me 200 grand so
like all half of ibita gone
um in the first six months.
>> Wow. Well, Scott, hold on a sec here.
First of all, how many employees
>> at that point? I think it was 22 or 24.
>> 22 or 24 is what you bought it with.
>> Yeah.
>> Okay. So, this customer, so you actually
were able to meet with customers before
closing?
>> I wish. Yeah. And I told the seller, I
do not want to do that at all, but he
didn't listen to me. I would rather lay
low for a few months and then introduce
myself and have a a little bit of a
track record underneath me and and have
it in the back of their minds like,
well, if Scott bought it 3 months ago
and things have continued to run
smoothly, then things are going to
continue to run smoothly. But it was
like two weeks before close when I knew
just from talking to other searchers
that tons of stuff can go wrong.
>> I was meeting the number one and number
two biggest customer and it was just I
don't think it was good. I don't think
it was good. But anyway, this number two
customer said, "Not only are we going to
give you um the same amount of business
that we gave the seller, we are going to
give you more. Let's shake hands and
have a beer." And I thought, "Great.
There's one more diligence risk that is
is not an issue." And less than a month
in, I mean, that account was basically
gone.
>> Now, but it wasn't because the they just
kind of reneged on that. It was because
their guy at F&M left and they followed
him.
>> Yeah. Yeah. They followed him right into
the garage bay adjacent to theirs in
their facility cuz he had already had a
few hundred,000 worth of machines um
already set up. So that was
premeditated. Now to be fair,
>> the um I was aware of that going in. I
was aware that this guy was gonna leave
and go on his own. I was unaware that it
was next door to the second biggest
customer and I mean if I had known
differently I think that probably would
have made uh my decision to go forward
uh change maybe.
And I also obviously like I mentioned
before I didn't understand how that work
flowed through the P&L and just how
significant it was because it was it had
been drilled into me 10% of sales 10% or
15% of sales for customer concentration
is the acceptable limit and they were
right there. I was told that this
account was super unprofitable and then
when I went back and I looked at the
data in the ERP system like wow this is
the most profitable stuff we have in the
shop.
>> Wow. Wow. [sighs]
Okay. Um. All right. So, you lose the
key guy in in 10 15% of revenue, which
represents half of IBIDA in the first
six months.
>> Yes. Well, in the first month.
>> Oh, that was the first month.
>> First month. Yeah. And then there's the
the office manager story. The office
manager who was at the the business when
I acquired it had been there for I don't
know 40 years, something like that. she
was going to retire.
And so before I even closed, I helped
out the seller in hiring a new office
manager who within the first two weeks
of her employment had stolen his credit
card and went on a shopping spree at
Walmart and TGI Fridays and racked up
like $5,000 worth of charges that he
came to me with. I was like, "Did you
spend $100 on my credit card like going
out to dinner?" I'm like, what are you
talking about? So, it was pretty easy to
put two and two together and figure out
that she was the culprit for that. But
that was within the first two months.
So, I I'd lost the revenue. And then I
had also called I fired her obviously
and called the police and called the
bank and called all of my investors.
Like anybody whose phone number I had
and thought should know about this, I
was in touch with be like, "Well,
here's the second big issue that
happened." Um, ended up like that was
great. It was a great thing that
happened because I I found Cindy. Cindy
was great. Um, this never would have I
never would have found Cindy had that
not happened. But like, man, that was I
I just didn't sleep. I just didn't sleep
for like the first three months.
>> You because of the office manager thing
or because of the lost IDA? One seems
significantly bigger than the other.
Okay. All right.
>> Both. I mean, I was so stressed out. I
think it was hard to discern what was
more important. the nature of the
employees or the this this uh trade if
you will. Uh there's a reputation among
these tradesmen and trades women, right?
What is that reputation?
>> Primadanas,
difficult to manage, rough around the
edges,
insanely technically skilled. Um that
about sums it up.
And so why say more specifically why
that is hard to manage
>> because they don't want to be managed.
>> Well, yeah, there's there's that. And
they know they're good like and they
know that there's very limited supply of
mold makers around, let alone mold
makers in the Northeast. Um, and there's
this saying that mold makers have wheels
on their toolbox so that they can wheel
their toolbox to the next shop and get a
25 cent per hour raise. So, I was aware
of that dynamic going in,
but it just takes a special kind of
person to do the job. Like, you have to
be really, really, really conscientious.
And the attention to detail it requires
is is pretty high because you're talking
about tolerances that are what 10,000 of
an inch. So, 0.00001
in. And to think at that level and to
have that level of perfectionism, it
just attracts people who I think are
difficult to manage. And I found that
out pretty early on.
>> And maybe that is part of also the the
culture clash that we started with here
that they're just that
it's just a it's a um what do you call
it in the uh in comedy where tough
crowd. It's just a tough crowd by
nature.
>> It was a tough crowd for sure. And I
felt a a huge amount of imposttor
syndrome despite having a reasonable
amount of machining experience like for
a Harvard MBA for sure but even for a
mechanical engineer. I understood what
it was they were doing and they knew
that I would still never understand the
complexity and and the technical skill
that they had. And I think that kind of
rubbed them and I'm speaking it didn't
rub everybody the wrong way, right? But
there were some guys there who just did
not like that I didn't come from the
industry and that I I would never know
as much as the former owner did.
>> And despite the fact that I I will well
I I'm making an assumption I shouldn't.
But did you do the I'll never be as
smart as you guys. You know the reason I
bought this business is because of your
talent and service that you deliver to
our customers. So I'm here to enable
you. What I do bring is the ability to
run this business and grow this business
and and be your enabler and and kind of
etc. where where my value is is at the
business level. Did you try that tech?
>> Yeah, I don't think it really made a
difference for them. Um, I I did that
too with the customers because this was
kind of big big assumption number two
after can I do the seller's job and can
I be the seller was that they needed
somebody to solve technical problems for
them and that's what the former owner
was. He was an extension of their team
and he was the chief technical solutions
architect. So I had that conversation
with employees and with customers. um
employees definitely didn't care because
I think it was the E-Myth mentality
where if you can do technical work, you
understand the work of like or or the
business of doing technical work. And
when they extrapolated out their
expertise on the shop floor, they
thought, well, I could run this business
and therefore you need to have this
technical expertise in order to be an
effective operator. Uh which certainly
would have helped earlier on, but I
think as I built systems, it ended up
not being necessarily true. Mhm. Well,
but say more though about this this
dynamic where the seller had all this
tech technical expertise. You didn't.
This I think plays into
the observation that you made to me in
our pre-call that this actually wasn't a
manufacturing business.
Yes. Yeah. Um so that two things. The
way this was positioned to me by the
broker and by the seller was that the
seller really wasn't involved. He played
golf for six hours per day and then
would fly off to Myrtle Beach on
Thursday every every weekend. Right? So,
which is which was true. He did that.
But then when a customer called and they
had a very specific injection mold
problem, he would pick up his cell phone
on the golf course and say, "All right,
we'll just bring it to the shop. We'll
do this, this, and this." I think the
not cynical take on this and I warned
searchers about this is that his dad
started the business and he had been
doing it for so long that he actually
had no idea how much he knew and how
critical his knowledge was to the
operation. Um so back to the point about
this not being a manufacturing business.
I actually think this was a professional
services business because just like a
law firm or an accounting firm, the
talent leaves the building every day uh
when it's closing time. Like the
machines continue to run sometimes, but
the it was the people who made the
machines run. Um and the second thing
about that was that it was a
relationship business. It was not a
transactional we're going to buy this
service or product from F&M tool. They
were buying from Mike who enabled it all
and Mike was obviously the seller and
that's why everyone was uncomfortable
because everyone knew that except for
me. The employees knew that and the
customers knew that and I thought this
was something where they were buying
from a collection of systems and
processes that were F&M tool but there
were not systems and processes. It was
Mike and team
>> and I totally missed that. Mhm. And how
could you have diligenced that better?
Or how might you tell listeners to
diligence that
>> get lunch with the seller and see how
often their phone rings?
>> Would that would have uncovered it in
this case?
>> I think so. Yeah. I mean, I remember the
first couple of lunches and it was we
couldn't get through 10 minutes of
conversation without something coming
up.
>> Well, I've heard that uh tip multiple
times before. So, um it's actually
reassuring to know that it would have in
fact worked in this case that that that
would have um told you what you needed
to to know. The number one cause
anecdotally that we see for self-funded
searches going sideways, going south is
seller
misrepresentation all the way to seller
fraud. Was do you think that there was
some of that here? I'm thinking about
the right way to put it. I think fraud
is probably too strong of a
characterization. Was I set up for
failure? I I don't have any proof of
that. I just don't know. Uh it just it
makes me wish I bought a bigger business
with a real management team. Um and it
made me realize that I like I said more
of a vibes guy now. I wish I trusted my
gut when I was walking around and I
interacted with the seller because I
think had I done that I I wouldn't have
gone through with the deal.
>> Okay. So, carry us through the story.
We're only really 6 months in, although
we're we're starting to see the the
shape of how this is going.
>> Sure. So, that that was 2018. I bought
the business in the middle of 2018 and
that takes us to the end of 2018 and I'm
thinking like like the the feeling of
what have I done stayed with me for 6
months. But 2019 actually turned up I
mean a little bit. Um we I started
implementing EOS in Q1 of 2019.
So that built some rapport with the the
managers within the business. We got a
lot of work in 2019. Um it it replaced
the work that we had lost in 2018
actually. So uh 2019 ended up in mid-
teens IDA territory. So we were
servicing debt and I was getting more
comfortable pulling levers within the
business and talking to customers and
things like that. So it was still really
difficult but it was just so much
different than 2018 was because we were
doing well.
Great. Okay. So 20 2019 you emerge
toward the end of the year thinking that
like okay this has been painful but
maybe I've earned my stripes now and
that was my J curve and now we're
moving.
>> Yeah. And so it was that was probably
through the majority of 2019, but the
workload uh got pretty soft at the end
of the year and the business really
depended on customer deposits. So we
hadn't booked any work. Cash flow was
pretty bad and that took us really right
into CO.
>> And what happens in CO?
>> What happens in CO? Um, I was watching
the news trying to figure out like what
is it that I tell employees because the
rumor mill was going crazy. This was
like before before anything had really
shut down and there was no guidance.
Like I didn't know what to do. My
investors didn't know what to do and the
workload was evaporating when there was
all of this uncertainty and
eventually it was just the the decision
was made for me really. um we just we
didn't have anything to do. There was no
work. And so middle of March, I think I
I fired seven people. [snorts] So I
don't know, probably about a third of
our capacity was gone. And later on,
maybe a week or two weeks later, it was
shut down time. We got a letter from um
local government saying, "You need to
shut down. You're a non-essential
business." And I told everybody else to
go home. And I had nothing to do. So, I
would just keep driving from my house to
the shop. It' be the only car on the
road. I had no idea how I was going to
pay the bank note or the bank payment
that was coming up in in April. And it
was just really really incredibly
uncertain. And and also,
you know, everybody else was going
through the same thing. So, saw the the
flip side of that was amazing support
from my investors and the search
community and the small business
community as a whole.
How did you decide how many people to
let go as opposed to just sending
everybody home and you know furlowing
everybody and you know what's that
decision look like?
I think at the end of the day it was
Kentucky windage, right? Because I had
to figure out I had a a rough idea of
what I thought our bookings were going
to be for that year. So, I thought,
we're probably going to be a $3 million
a year business in terms of revenue. And
at the point where I was making that
decision, I had already just, you know,
I I'd let seven people go because I
thought that was the right thing to do.
By the time April or May rolls around,
it would have been appropriate for me to
make another capacity decision. But I
had reasonable certainty about we're
coming in. I knew that the PPP loan was
coming in. And I knew that my senior
debt was on um deferment just because
every every SBA loan got that throughout
COVID. Um so I just figured I'll we'll
be EBIT do break even for 2020. And lo
and behold, that ended up happening. So
it was the right decision to to let
seven people go. But in retrospect, I
think that was sheer luck versus any
sort of management prowess.
>> Okay. All right. So CO is um a time of
deep uncertainty. revenue the revenue
spigot essentially shuts off. You let
have to let some people go. There's some
relief. Um but
not to say that it's it probably helped
that the entire world was experiencing
uncertainty in this in this moment. Um
maybe it didn't. Uh but at least you
weren't totally alone in this. Uh 2021
brings what?
more bookings and just incredibly
incredibly volatile business conditions
as well. Like we had started to pick up,
we were booking a lot more work. Um
COVID had fatigued a lot of employees,
not just for me. So I saw some turnover
like in 2021 both my both of my key
employees left. One of them I fired, one
of them left to go to the same customer
where the other employee that I lost in
the beginning um went to. So
>> that other employee must have been
talking to them. They must have
maintained that relationship. That
sounds like a classic
>> Bob's gone over, you know, Bob was
trying to pull me over to whatever over
to his new place.
>> And we were still working with that
customer. We were still doing Oh,
>> a little bit of work for them. So, you
know, they were they were still involved
with the business and [clears throat]
they needed somebody to come in who had
the expertise that my foreman did. So,
he left. I brought in a general manager
who had experience with
>> uh obviously the tooling side for us,
but also the injection molding side of
things. So, in 2021, we started doing
the injection molding, making the
plastic parts as well. And we did that
out of a a renovated cow barn in
Connecticut. So very scrappy and a year
later that was uh like a half a million
dollar a year business. So I mean 2021
was a really formative year but the
crazy thing was it's we saw the price of
steel within the span of 12 months
increase 240%.
>> So the sales cycle on one of these
things especially um a new mold build
that's big which is what we did was it
could be 18 months. So you quote it, we
would quote stuff in in 2020 in the
beginning of the year and then finish it
in the middle of 2022. So we ended up on
these massive jobs underwater from the
price of steel and we had no
>> because your costs had gone up, but
you'd already given you'd already given
a quote to the customer at the old old
prices of steel and so you were
underwater on all these all these
quotes, but had to but they were
commitments had to had to serve. Yeah,
they were commitments. And if you, you
know, put yourself in the seat of
somebody who's an engineer at one of our
customers,
it's hard for them to go back to their
management and say, "Oh, we need a 40%
price increase on this."
>> Right?
>> And they just weren't We did manage to
get some extra dollars on those jobs,
but not nearly enough. Uh, and it just
it damaged a lot of those relationships,
not irreparably, but it took a huge it
was a big ask for us to go back and get
money on a lot of those projects. And
and in many cases, it was you can take
this and have something to do or we're
just going to pull the plug and and find
somebody else to do it for us.
>> It was really strange times.
And Scott, say more about the fact that
this Connecticut barn that you started
not just servicing injection molds, but
actually making plastic parts yourself.
So being injection molders, if I'm using
the vocabulary correctly. Yeah. Yep,
that works. Uh, and this is what I
thought the future of the business was
too. I had seen this work out with other
companies in the area where they started
doing the molding and together it was
like a razor and blade type thing. um
where the the molding of the part was an
annuity because there were switching
costs. If you helped a customer design a
part and then you built the tooling for
them and then you started doing the
injection molding for them too, it was
very difficult for them to find another
vendor who could do all of that that
entire chain and we saw some really
early success with it. So I thought this
is my way out of the J curve. this is my
way out of dependence on tooling because
another thing that was going on in that
market was that coming out of COVID
everybody had a ton of capex dollars
slloshing around in their budget. So the
job mix for us shifted away from the
service and repair that I loved and over
to building new molds which turned us
into this crazy projectbased business
the exact opposite of what you want in a
search business. So, in a way, injection
molding uh buttress the business because
now we're making money pennies at a
time. We're just doing it a million
times over. Instead of booking projects
that are half a million dollars in
revenue and could be all of that year's
projected ibita.
>> Mhm.
So, sorry, you you like the new business
model even though it's less even though
on paper it's less search friendly.
>> It's I heard you use the word an
annuity.
>> Yeah. Well, the I liked the I like the
injection molding side of things. I did
not like the projectbased side of
building new tooling um only. So, just
to clarify, I liked the combo of the two
because
>> the annuity on the molding side could be
so good that you could basically give
the tooling away
>> and still be pretty profitable. Um, but
I needed to do something to get away
from doing only the new mold builds and
in a decreasing amount of repair. So,
>> in my mind that was the molding.
>> Mhm. Great. And and so just for the the
razor and blade u metaphor there that we
of course give away the give away the
razor sell the blades um business model
where if you so you would do the molding
for them or at cost or below cost which
is significant value you know some some
hefty lump sum but then if you also then
keep the business and do the injection
moldings too all the plastic that this
mold is now producing for years and
years. Those are your razor blades.
That's where you're making um a little
bit of revenue for but on a very regular
basis for a long time.
>> Yeah. And
>> there's lock in there's kind of customer
lock in there.
>> Exactly. So we could build the tooling
for free or or build it at cost for
somebody and if it was even um if it was
a complex plastic part, we could do it
and and make money on it. We could do it
and send it entirely to China. We could
get certain components built in China
and do a hybrid tooling build. So, there
are a bunch of different ways that we
could do this, but it would lead to that
almost contractual molding work. And
like to put it into perspective, it was
like pulling teeth to get approval on a
new mold build. So, we would get it
would take us months, months, sometimes
years to get somebody to sign off on
spending a hundred grand for a new mold.
But then after that, you're getting
$80,000 purchase orders for molded
parts. Like, it's no big deal cuz it's
coming out in a different budget. Like,
there it's the same company, the same
buyers, but this is not the tooling
budget or the R&D budget or the capex
budget. This is operating budget. Like,
we need this to make product. So, it was
just an entirely different decision. And
that was my logic. I wanted to tap into
that and and really mimic the same type
of dynamic we had earlier on in the
business where we had um more service
and repair stuff and smaller tickets and
and less thought about should we spend
this money or not.
>> Mhm. In the pre-call you
you described this moment in the
business, this pi it's not a pivot. It
was more of an expansion uh of of of
service to your customers. uh as the
moment where you felt like the business
is mine now like this is where you felt
like you know this is your
chapter of ownership really begins
because it was such a strategic move and
the business model changed quite a bit
and I think that that that's a reference
maybe is it Jim Sharp somebody some ETA
thinker talks about there being this
moment in a searcher's operational
journey where they it feels like they go
from their, you know, fill in shoes,
filling the previous owner's shoes to
the business is really mine now. Um, say
more about that.
>> Yeah. So, this was that Jim talks about
how the business you have now is not
going to be the business that you have
in 10 years. And when I tell this story,
it sounds like this was a decision I
made sitting at my desk one day thinking
like, you know what we're going to do?
We're going to be an injection molder
now. And it was it wasn't that way. This
was something that unfolded over really
years and something that was a necessity
because the business the industry that
we had bought was just fundamentally
changing. So this was something that we
deliberately moved towards but it wasn't
a a snap decision. Um, and it also it
satisfied a number of I think the
personal issues that I had with the
business because it just didn't feel
like me. And um, it it was starting to
get really difficult to find employees
who could do that core mold making work
that we were doing. Um, it started to
feel more technical. It started to feel
more engineering um, instead of like a
blacksmith shop. And I was starting to
sell to customers who I could really
relate to. Like my conversations now
were with engineers who were designing a
product and wanted to purchase stuff to
build that product. It wasn't um me
talking to injection molding or sorry
injection mold experts for that matter
about something that was going wrong
with their tooling. And an interesting
thing that happened during COVID was
that a lot of those super technical
older guys, they were all guys that we
had been working with as our customers,
they retired. So postcoid, like 2021,
2022, our points of contact at these
customers were gone or the company had
been bought and moved someplace else or
the company just shut down because the
owner was 65 and said, "You know what? I
don't want to deal with this COVID
stuff." And they just closed the door.
So it was like that felt like overnight
was that our customer base was it was
the same but we weren't dealing with
these technical knowledgeable people
with an understanding of what it took to
do the work and therefore willingness to
pay for it.
>> Okay, Scott. So that's into 2022. So
take us through 2023 which is really I
guess when the when it dips again and
for good this time.
>> For good. Yeah. So, the end of 2022, I
was I was looking at what our bookings
were, and we were booking four or
$500,000 a month worth of work. It
actually became a problem. It was a good
problem. Um, but there's a such thing as
with a shop like this, having too much
work. Um, my lease was coming due and an
opportunity came up 7 minutes away for a
bigger, much nicer facility that was set
up to be an injection molding facility.
And the building was actually owned by
an entrepreneur who did exactly what I
was trying to do that he he bought a
tooling company and then transformed it
into a a combo tooling molding company
and sold it to private equity and did
really well. So he kind of in a way
ended up mentoring me and really made it
so that we would get into that building.
Um so and again this was like this felt
like it's finally happening. It's
finally turning into my business. And
the other thing was like yeah I think it
was the same price. It we were paying so
much in rent that it wasn't like this
irresponsible move that um well we we
bit went into this building that we
couldn't afford. It was just like so
negligible and it made sense. So that
was I think that was the first half of
2023. We moved the entire shop into this
new building. Um
and I that was really the beginning of
the end for us.
>> Why was that the beginning of the end?
>> Because bookings started to soften again
in 2023.
21 and 22 were this huge runup coming
out of COVID driven by the fact that
nobody could get their stuff. Um, and
then once people started to be able to
get their stuff again, they ordered a
ton of stuff. So my customers customers
literally ordered years worth of
inventory as soon as they could. Um, I
remember personally we had orders that
were, you know, a $300,000 mold build
that were being held up from shipping by
a $3,000 part. So this was going on all
over the supply chain. So what we saw
this hu this runup in 21 and 22 is
really just a temporary thing. And then
people started to get a little bit
hesitant in 23 and as I said the the
business had shifted over to this point
where we were doing a lot more project
work than service and repair work. So we
ended up in this new building without
much work to do and it was like a month
in that I had to do another layoff.
So to be clear, you
20 part of why 202 went so well was
because of the postcoid surge that we
were all
participating in really
>> and then and then it it pulled back. It
started pulling back hard at the top of
2023 right as you have made this move
right as you know as your as your
business model is only a few months old.
>> Correct. Yeah. And by the way, it's not
like 22 was going well. We were dealing
with with still we were not profitable
because of how bad some of these jobs
were going that we had drastically under
quoted. So I was I was still like
pulling up on the joystick
>> um in hopes that things are going to
turn around and and by the way it's
really it was a tough situation to
manage with these massive projects
because you're trying to communicate
with your customer about when is this
thing going to land, when are we going
to do this project? meaning like when
are we going to get the 50% upfront
deposit for this and they're saying oh
yeah it's going to happen you know next
month and then that month comes around
and they don't know and it's somewhere
else the the purchase order for this is
somewhere else off in their organization
and it lands on the desk of somebody
who's responsible for approving it and
they just wait because they're waiting
to see what happens. Um, so we had no
idea what was coming when. And
>> especially in 2023, it just changed to
this point where it didn't it didn't
make sense to reduce capacity to the
point where it would make sense to break
even or at least just service debt.
Because had we done that, we never would
have been able to do these jobs in the
first place, you know, because we were
we were just so understaffed at this
point in time. um and so unsure about
what was going to happen that it just it
created that weird incentive that it
made sense to hold on to some of our
capacity in that way.
>> Okay. So, let me make sure I understand.
So, you're in it's 2023. You're in the
new the new uh building
and you have more sales. You have too
much in sales, right? the $500,000 in
orders a month, but you're holding back
some of your capacity because of the
uncertainty.
>> Um, sorry I didn't explain that well.
So, we ended 2022 at that rate. Um,
things probably and I'm just I'm
guessing at what the number was, we
probably dipped down to three and a half
million. We probably look like a three
and a half million dollar a year revenue
company um by the end of 23. So, that's
significant. Um, and it wasn't we
weren't we weren't modulating our
capacity. Our customers were holding
back on purchase orders because they
didn't know if they were going to be
buying this stuff because they still had
tons of inventory.
>> And then let's run a hypothetical. Let's
say that uh in with this uncertainty
going on I as the manager was sitting in
the seat faced with the decision of do I
reduce headcount again or do I hold on
to these guys because my customers are
telling me that it's only a matter of
time before this order lands.
>> And if I reduced headcount we wouldn't
have been able to do those orders. So
we're in a bad place. If I hold on to
the headcount,
>> like obviously we're in a bad place
because you I'm just carrying I'm
carrying more uh labor than the P&L
warranted, but it we had to if we wanted
to respond to any of these orders that
came in, we had to. So every day became
a bet on what was going to happen next
month.
>> Yep. Yeah. Yeah. Okay. And so t take us
through 2023 then.
>> Uh things somewhat stabilized. I did
another another layoff unfortunately
like I said right after we moved. Um it
materially affected our ability to do
some of the jobs that we had going on.
So we ended up late on a bunch of stuff
but we were surviving. Uh and but at
that time it was like a slow decline in
work. I can't remember what the numbers
were but we probably ended the year
looking like a $3 million a year revenue
business. So, we went from booking like
a $6 million a year business to shipping
like a $3 million a year business just I
think as a result of
>> of people over buying in 21 and 22
coming out of COVID and then being
really hesitant to place any sort of
capex purchase order going into the
future because they didn't know if they
were going to need it.
>> And how is your your headsp space this
whole time, Scotty? You've now been in
the business for five years. Um, is your
skin thick at this point? Like what
what's the emotional journey like? I I'm
sure it had changed from month to month,
but try to snapshot it for us.
>> Uh, it wasn't as thick as it ended up
being in 2025. Um,
and and in a weird way, I was more
emotionally involved. Like when I did
that that other layoff when um right
after we had moved, like these were
people that I had hired. They were
people that I cared about. like, well, I
cared I legitimately cared about
everybody, but these are people that,
you know, I brought them in and I sold
them on the vision, and now I'm telling
them that the vision wasn't working out.
So, uh, I was not in a good place. Um,
I had I had gone on depression
medication
the the week before or sorry, I think it
was the week after I had um done the
COVID layoff. So, I had been struggling
for a while. Um,
>> and it just kept kept getting worse.
That was that's the thing my wife talks
about. She's like, "Every time we review
this, it's worse than it was before."
And I cannot believe that it can keep
getting worse than it was before. Like,
so that was her perspective. Um, we had
our second kid around this time, so
there was much more stress around the
household. And I just I became quite
honestly I became a shell of a human
being. Like I would go in I would go in
when it was dark and I would just deal
with problems all day and then I'd pick
the kids up and my wife would come home
when it was dark and we were strangers
living in the same house like we were in
marriage counseling. Um I was at that
point on my second therapist and my
second depression medication because it
just wasn't working. Um it was a really
really really low point for me. And how
long did I I guess you said depression
meds starting after the COVID layoff. So
spring of 2020 this started was bad
already your headsp space I mean and
then that lasted I guess for years.
>> Oh yeah. Yep.
Wow. Okay. All right. So, um, bring us
to the final decision, unless there's
any plot point I'm missing between where
we are and there.
>> No, I think the only plot point that
you're we might not have gone over is
that things just didn't get better. It
was still the same narrative from
customers. We had um we were always
tracking a number of big projects that
would be transformative for us and none
of them were landing because someone in
our customers organization was unsure
about the future and they weren't
communicating that to our direct point
of contact cuz we were dealing with
relatively big uh big customers, right?
So if we were talking to somebody on the
floor who was responsible for tooling or
an engineer, they're like, "Oh, it's
often finance in like Chicago. We have
no idea what's going to happen." Um, so
beginning of 24 rolls around, I start
negotiating with my bank. I start
telling them, I need to go on a payment
deferment because we're this just isn't
going to work for us. We've got a year
of this going on. I'm not optimistic
about this year. It was an election
year. Um, I'm not getting the warm and
fuzzy from any customers. We got to do
something or else there's going to be an
issue.
>> And how did those conversations go?
>> Poorly. Um,
it was
>> you you'd been servicing your debt
perfectly until then.
>> Yeah. Right. So, every every every
month I think it was like 32 grand or
something coming out of my bank account.
And it got to the point in January where
I was actually on a little
>> mini vacation. It was kind of a working
vacation where I had some stuff going on
coincidentally where my in-laws were.
So, we went down and stayed with them
while I worked. And I'm like, how am I
going to make payroll in a couple weeks?
And like the only thing that we could do
at that point was go to the senior
lender and say we need some relief. So
that conversation took uh 2 months. We
didn't end up getting any relief until
until March. And that's an experience
that I talk about with other searchers
with because like your lender probably
knows less about the SBA process than
you do. And I I was surprised that I had
to lead them through the process of
getting me on interest only. So March we
want interest only. April um I think it
was April I started entertaining more
serious options be it a chapter 11. Um
chapter 7 was not on the on the list for
me because I thought those would be
unfair to my employees and unfair to our
customers because I thought we'd make it
through at some point. So that's the
middle of of 24. And at that point, I
had stopped paying the bank. It's
amazing. Like the the only way to get
people to negotiate with you is to stop
paying them because you can have all of
these other conversations. Uh and but
they really only take notice when the
check doesn't show up. At that point, I
was being
>> which by the way, sorry to interrupt,
Scott, but I have to say that's
disappointing to hear because lenders
always say your best course of action is
to get in front of this with us. If you
think it looks like you might slip, tell
us before the fact, not after the fact,
so that we can work with you, so that
you've given us heads up. So you were
following the best practice and yet it
seems to have not mattered and really
they didn't care to talk to you until as
you just said you miss a payment.
>> Yeah. Sample size of one on this. I
don't know if this is a universal
experience for sure but
>> yeah it was uh
>> there was not much movement on their end
and I don't think I think it was because
they didn't have any experience with it.
It was a relatively small regional bank.
Uh it was pretty clear when we closed on
the loan years beforehand that they
didn't have a ton of experience with
anything like [snorts] that. They didn't
even have an internal workout team.
>> So when I was having this negotiation, I
was talking to my relationship manager
and I don't know where it was going in
the bank after that, but it wasn't
somebody who had deep expertise in SBA
loans or turnarounds or restructurings.
For sure.
>> Yep. Yep. Yep. Okay. So you miss a
payment and then what?
>> Nothing.
>> [laughter]
>> nothing. The bank wasn't my problem at
that point in time. Um, it was vendors
and my experience was that the more
sophisticated my vendor was, the less
they cared about my payables. It was the
small shops like me that got like
ridiculously aggressive. I had uh
creditors calling my wife's cell phone
number. They were emailing my
father-in-law. They were emailing her
allegedly. Uh my employees told me that
they were one vendor was sending
pictures of my house that they hired a
private investigator to take. Like it
was it was crazy. Um
>> Oh my god. Was that Did that make you
feel unsafe?
>> Uh I think this says more about my state
of mind at the time than the actual uh I
think threat. But I I was looking over
my shoulder. if there was a car parked
on my street and I didn't know who it
was. I'm like it was I was paranoid. I
was I wasn't sleeping. I was on a
sleeping medication. Um I was barely
talking to my wife. Uh it was just wild,
wild, wild, wild. And never in a million
years did I think I was going to get to
this point. But in a way, it was a
requirement to go through the article 9
sale because you don't get any of the
legal protections of bankruptcy. so your
creditors can do whatever they want. And
they were taking full advantage of that.
I had um I had the county sheriff show
up to the shop to serve me with lawsuits
more times than I remember. I had a
vendor file a police report from a
different state saying that I had stolen
from him. Um, which you know obviously
is but uh just anything
anybody could do they were trying. Like
I had
>> this is this is just such a case god of
like the walls closing in. You can just
feel feel the
claustrophobia of this big time. And so
that's just the restructuring side of
things.
talk about why we were in restructuring.
In the middle of 24 or maybe maybe up
until about September, we had gone from
just a few years before starting to look
and feel like a 5 to6 million a year
revenue business to feeling and looking
like a $600,000 to $1.2 million a year
business.
>> It was horrible. And to talk about the
incentives again, I mean, there was no
point in trying to cut down to a size
that made sense for that revenue. It it
just wasn't worth it. It It only made
sense to hold on for as long as possible
and shoot for the moon and hope that one
or two of these massive orders come in.
Um, and then as things got even worse,
like, do I want to be running a $1.2
million a year business? Do I want to be
running a $2 million a year business?
Like I had fired so many people that the
only people that I had left were the
extremely skilled older guys there and
they were all headed for retirement in
three to five years. So there no matter
what at the at the end of 24 there
really wasn't a business there. And I
just had to hold on for as long as I
could for my employees first, um, my
customers second, and then, uh, you
know, to the degree I could salvage
anything for my vendors or I knew my
investors were wiped out at that point,
um, that's what I was holding on to, but
I was hoping for a miracle.
Did you get it? I [snorts] got a minor
miracle. I got a minor miracle in
October. I got my biggest customer
placed a pretty substantial order, but I
remember being
I remember being uh meeting with my EO
entrepreneurs organization forum in
October saying like if we don't get
anything else, I'm going to be exactly
where I was a month ago in 3 months and
that's what happened.
>> You worked through that job and and then
back to back to where you'd been. So,
yep.
>> It didn't save you. It just it just
bought you a little bit of time that you
Okay, it's pretty clear you're not going
to make it. Even if even if you can get
by by your fingernails, is it even worth
it at this point? You don't do any of
the bank bankruptcy protection options
which are chapter 11, chapter 7. You
consider the article 9. You did not go
through with the article 9.
>> No, we did go through with the article
9. Um, it took it took a really long
time. And in retrospect, I'm I'm glad it
did because
had we negotiated with the bank and done
a deal before I ended up closing the
business, then I would have inherited
this like just
a completely unviable business. So,
because of their inexperience, what
should have taken 3 to six months ended
up dragging on for eight. Um,
in early February, I had had a pretty
decentsiz order get cut in half, and I
was negotiating with my landlord to pay
them weekly instead of monthly. They
ended up using that as an excuse to
terminate the lease. So, in the middle
of February, I had I had quoted
$600,000 worth worth of work in the
quarter when we typically would have
quoted three million at that point in
time.
We had booked $10,700
worth of work in the month of February.
My lease had been terminated. I was
talking with the people who are going to
buy the assets of the business from the
bank about finding a new place to move
the business to having just gone through
that and understanding how difficult and
expensive that is just in terms of
opportunity cost and loss time, let
alone moving everything over. And
you know, no prospects of work coming in
in the future really and no answers
coming in from our customers.
>> And so you decide.
>> The decision was uh kind of made for me.
If we had gone on or at least tried to
go on um we would have required a
capital infusion from the the folks who
were going to buy the assets and it
wasn't clear whether or not they were
going to do that. And
so I made the decision on a Friday. I
called my office manager on a Monday to
get everybody's final checks ready. I
fired everybody on a Wednesday. I helped
everybody load up their toolboxes on the
Friday. And then the following Tuesday,
the bank took possession.
>> When when was that?
>> That was first week of March.
And what are the personal implications
for you financially at this point?
>> At this point, I mean, I had been
missing mortgage payments, right? And I
had I had a great credit score. I never
carried credit card debt in my life. Um,
which is crazy because I had over $5
million worth of SBA debt at this point.
Um, and I just feel like a total dirt
bag, right? And I have no nothing lined
up after this. and I have two kids and a
wife and a house and and like I just I
just don't know what I'm going to do.
I'd always been told that it's pretty
easy to find a job when you uh fail at
searching. Um so I figured that that was
going to be an option for me. But uh it
was March at this point in time. Um
and I just gotten back in touch with the
lawyers that I had spoken to a year
before saying, "Well, it happened. It's
time to go chapter 7." Um, and it was no
matter what it was going to be personal.
Um, and then business as well.
>> And so what does that mean? They take
the house.
>> Uh, fortunately in Massachusetts there's
the Homestead Protection Act. So I
think, and this is another thing that
we're, you know, just crazy timing. Um,
that changed in October, I think, of of
24, the amount that was covered under
homestead protection. So, uh, I was
reasonably certain that our house was
going to be okay, but I wasn't 100%
sure.
>> Mhm. So, what does it look like then?
They come after whatever liquid assets
you have. They take those and then and
then do you have a more payment hanging
over your head for years and years?
>> Yeah. They take a look at what you've
got for liquid assets and then there are
some that are exempt. My house was
exempt because of the Homestead
Protection Act. Um, and you can retain
like a car that's worth 8,500 bucks or
something like that. And it's it's
really it's really degrading in a way. I
mean, if you're defaulting on a whole
bunch of debt, I think to a degree, you
might end up um
maybe deserving to go through a process
like this, but they took like with my
lawyer, I went through an inventory of
everything I own, like down to the watch
that I bought with gift cards and how
many TVs do you have? Like, what's the
value of your furniture? And you know,
it's just it doesn't make you feel good,
that's for sure, because you don't know
if you're going to get to keep any of
this stuff. Like you can you can
logically know that the SBA is not going
to come after like the used sofa that I
bought on Craigslist, but you're still
having to list it all out. You just feel
like garbage.
>> And after you've made this decision and
you're really going through the worst
case scenario at this point, how are
things at home? [snorts]
>> Uh, great. [laughter]
Like I had once I had come to the
conclusion that the business was going
to shut down in a way like the weight
had lifted off my shoulders in that last
week. Uh I told everybody like I told
everybody on that Wednesday that we were
shutting down and they all saw it coming
right like they knew they saw the level
of work that we had on the shop floor
and in fact we didn't book any more work
throughout the remainder of the month.
We ended February having booked less
than $11,000 worth of work, having only
a few years before been booking four or
$500,000 in a month.
>> So, it was quiet. It was super super
quiet on the shop floor. And they were
just waiting. So, I brought everybody
into the lobby. I had to pull out an
office chair and sit down cuz I thought
I was going to pass out. Um, but I told
everybody and I left the room getting a
a handshake or a hug from everybody in
the business and I mean that was it. So
that was the end of the week.
Coincidentally, I had a long weekend
planned with my wife. I got super sick
and she said it's from a change in
cortisol in my body. I don't know, she's
in the medical field so she understands
more about that than me. And then it was
just relief after that. It was relief
punctuated by,
you know, proceedings like issues with
my customers like when are we going to
get this stuff and legal issues and
threats and things like that. But very
broadly it was relief followed by grief.
>> And at what exactly? There's a sense of
loss here. Uh that's different than say
personal failure or is it is that one
and the same? Well, it was important for
me to go down swinging and I felt like I
had I felt like I had done the best I
could for the employees and customers
and my investors and all of that because
it was there was no more there was
nothing left. There was nothing left in
me. So, the the feeling of failure
rarely entered my head. Uh but it was
grief. It was grief for um you know I I
cared about my employees like I missed
seeing everybody. I missed going in and
having something to do. I was sitting in
this office and I'm like well I guess I
look for a job now and I hadn't updated
my my resume was from 2015 2016. I was
updating my the business school
application resume that I had
>> and just winging it. So, it was just and
it I don't want to get too like
philosophical about it, but it was grief
for what could have been. And then for
me, it wasn't like, oh man, I wish I
made a bunch of money. It was like, h
wow, this is this is a feeling of loss,
a loss of purpose, a loss of identity.
You did leave it all in the field,
though. There is there is a sense that
you don't um there's not regret is not
something you feel.
Regret is not something I feel. Uh not
something that I feel
in any sort of systemic way that I mean
I will I'll wake up in the middle of the
night and I I will wish things had gone
differently, but I don't like wallow in
this all day long. Um there are
decisions that I wish I had made
differently for sure. Um,
but no, I'm not I'm not sitting around
like feeling sorry for myself. Uh, I I
own it fully. And I think because I own
it so fully, then it's helped me not
really feel super, I don't know,
regretful about it. I ran the business
for almost seven years. Um, I built some
really good relationships. It didn't end
up working out. I met through going
through this process an awful lot of
searchers who went through bankruptcy or
some other sort of business failure. And
not to be like nonchalant about it, but
there's a lot that can happen that's
outside of your control. And talking to
[clears throat] those folks made me
realize that. So, you know, it is what
it is. It's the most like basic thing I
think somebody can say at the end of
this, but I've come to embrace that it
is what it is.
And you're actually I don't know if
you're actively searching now, but you
remain enthusiastic about
entrepreneurship through acquisition for
yourself, believe it or not. Yeah. Um I
was actually under LOI on another
manufacturing business earlier uh with
the same folks who were looking at
buying the assets of F&M. Um didn't end
up working out. Uh but I don't have any
Yeah, I still love the model. I actually
still love manufacturing with some
caveats and I I would be shocked if I do
not end up um searching again. Just
maybe I think I'm taking a break for the
time being.
>> And so reconcile that for us, Scott,
having kind of had the worst possible
outcome and yet still be uh being
enthusiastic about the model. We talk
about search as this incredible
opportunity, but an opportunity with
serious teeth and generally those who
are feel the, you know, teeth penetrate
their skin, uh, are going to come away
feeling like it wasn't worth it. It's
not worth it. You're one of the wounded
and yet you're going to go down the path
again. Yeah. And I have a a whole
assortment of thoughts on this. So, the
first is that this is why bankruptcy
exists. And I didn't ever stop to think
about it before I went through it. But
what is bankruptcy? It is a legal
process by which you can get out of out
of all of this debt and you can start
again. It takes a while. It's really
hard. I mean, that might be that might
be the rate limiting factor for me
searching again. Um, but that's what
it's here for. It's to it's to remove
the negative incentives of
entrepreneurship so that people who are
entrepreneurs can try again.
>> So that was one thing. I didn't stop to
think about that before it was real. Uh
the second thing is I think the
attention that I got from the search
community after was just unbelievable.
Like I thought that this was going to be
some sort of mark of shame for me within
the ETA community and it's been the
opposite. They're like, "Wow, you're
like they they just remark at my
resilience and the like this is a pretty
unique skill set like within within
search let alone um you know running a
business as a whole is like managing a
business through distress is not easy
and the only way to learn how to do it
is to do it. So uh I I don't know I just
became a much better operator in that
regard. So for that reason, search
remains um it remains attractive. And
then the final reason is that I tried
looking for a job and I think I'm
unemployable. Like I I tried I probably
did like 120 jobs and um
>> I don't know what the story was, but I
didn't get much traction. I know it's a
hard time to be looking for a job
anyway, but I think I think they looked
at me as a little bit too much of a
gunslinger for anything super
professional and corporate and in my pay
grade. I'm sure of course there are
people who went through what you went
through and go on to get corporate jobs
W2s but the thing that we often that we
so often hear about entrepreneurs once
the kind of taste of entrepreneurship um
you become unemployable you know sort of
um constitutionally unemployable
um is probably more acute in your case
because the level of responsibility that
was on your shoulders uh as you carried
a business through crisis
um is kind of like that much more
autonomy than an entrepreneur who has it
easy. It's just like you know you you've
you know you've
been captain of a ship that's seen
battle sort of it's like the level of
autonomy that you know is even deeper
than your average entrepreneur. I don't
know maybe I'm pushing it but I could
see that that I could see that if I'm
considering hiring you this is a guy
that that has just seen too much He
[laughter] he he can't be he can't be a
cog at this point in my organization.
>> No, I think that's true. Uh I so I think
that uh you know what might have been
going on is that any sort of AI
screening tool sees president on a
resume. I was like next. But also there
there were some that were like uh if
they were startups or something like
that, I would I would interview and one
of them
>> they made me do a presentation and I'd
get on the phone with a recruiter and
like well tell me about a time you faced
a challenge like have I got a story for
you?
>> So I remember like I was in this
interview and I had to do uh a
presentation for the whole interview
panel and I talked about shutting down
F&M and they all looked at me like they
were shocked. A relatively junior role
too. So, I'm like, [snorts] I don't I
guess I didn't illustrate the point
there that I could do that job or maybe
uh maybe a bit too experienced. I don't
know.
>> Well, Scott, uh you apparently have
already heard it from a lot of people in
the search ecosystem. So, I won't
belabor it, but we are so appreciative
that you're willing to do this, come up
here, put yourself on stage, uh and go
through this harrowing journey, um so
that people, um so that all these
listeners and searchers behind you on
the path, uh can learn something from
it. Um, these are the stories that uh
are happen in the shadows. I always uh
try to get people on here to tell them
and I've had some success with that, but
there are so many more um stories like
this that we never hear and we are
always so appreciative when somebody's
willing to. So, thank you very much for
doing it, Scott Duncan. And uh
congratulations on your survival.
>> Thank you. Um and it's really my
pleasure. The ETA community has been
amazing for me. I feel like it's my duty
to pay it forward at the very least and
maybe expose that it's not this quick
path to riches that everybody uh thinks
it might be and just warn people that if
this is not something that you can
foresee yourself going through then
maybe it's some not a really really
viable career path for you because
somebody has to be on this side of the
bell curve and I think ends up happening
more than people realize.
>> That's well put Scott Duncan. Thank you,
sir.
>> Thank you. Hope you enjoyed that
interview. Don't forget to subscribe to
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