How 1 SBA Loan Brought Down 2 Businesses | Edgar Galindo Interview
The one thing to remember
Do not let a new add-on acquisition borrow against your healthy platform until the people, liabilities, and downside are fully understood.
What happened
Edgar Galindo and partner Matias first bought Structure Landscapes in Austin for about $3.15 million, then bought a similar Dallas landscaping/outdoor-living business about six months later. The Dallas deal unraveled after an unpaid commission claim, a seller dispute, expensive legal proceedings, employee departures, and alleged lead diversion to competing businesses. Dallas filed for bankruptcy, and because the Dallas SBA loan was personally guaranteed and also guaranteed by Structure, the debt risk spread to the Austin company. Structure was then wound down too, despite having a good pipeline and improved operations.
Who's telling it: Edgar Galindo, buyer/operator and minority partner This is mainly the buyer/operator Edgar Galindo’s account; the Dallas seller’s, employees’, lenders’, lawyers’, and customers’ sides are largely missing.
Timeline
- Sourcing
Matias had the Austin landscaping business under LOI and recruited Edgar as an on-the-ground operating partner.
- Due diligence
The partners diligenced Structure Landscapes, liked its revenue, margins, market, and customer mix, and changed Edgar’s economics when the lender wanted more commitment from him.
- Closing
They acquired Structure Landscapes for about $3.15 million with SBA financing and seller notes.
- Operations
Structure grew revenue from about $4.8 million to about $6.3 million in the first year, while reinvesting heavily in growth, equipment, people, and marketing.
- Sourcing
About six months after buying Structure, the partners pursued a Dallas landscaping/outdoor-living business they thought could cross-pollinate with Austin.
- Closing
They bought Complete Exterior Solutions and RW Blue, with Edgar owning about 25% through Structure’s investment and Matias moving to Dallas to operate.
- Integration
Soon after closing, the key Dallas salesperson raised an unpaid commission claim of about $100,000, leading to a dispute with the seller.
- Operations
The seller relationship broke down, legal proceedings began, revenue dropped, and employees allegedly started a competing business and diverted leads.
- Exit
The Dallas business filed for bankruptcy after the buyers concluded additional capital would not be enough.
- Exit
Because Structure guaranteed the Dallas SBA loan and had diverted capital to Dallas and legal costs, the partners decided to wind down Structure as well.
stage where a mistake was made
What went wrong 7 issues
One loan infected both businesses
The Dallas SBA loan was guaranteed not only by Edgar and Matias personally but also by Structure, the Austin business. When Dallas failed, the potential debt service and lender claims made the otherwise promising Austin company uneconomic to continue.
Mistake made at Financing → showed up at Exit
“The Dallas loan was personally guaranteed by myself, Matias, and it was guaranteed by uh Structure.”
Warning signs
- The Dallas acquisition was not financially isolated from the Austin company even though it was a separate market and a new operating bet.
- The buyers knew Structure had signed for the Dallas acquisition and that the businesses were cross-collateralized.
How to prevent it
- Before financing the Dallas deal, the buyers and an SBA-experienced lawyer should have modeled the exact impact of Dallas defaulting on Structure Landscapes’ debt service and collateral.
- Before closing, the buyers should have refused to let Structure guarantee the Dallas SBA loan unless Structure could still operate after absorbing the full Dallas debt.
- At the financing stage, the buyers should have documented a downside plan showing what assets the Dallas lender could reach and whether Austin could be ring-fenced.
Key salesperson was not secured
A salesperson responsible for most revenue surfaced an unpaid commission claim soon after closing. The claim damaged trust, threatened retention, and exposed how dependent the acquired business was on one person whose economics had not been settled.
Mistake made at Due diligence → showed up at Integration
“60 or 70% of the revenue came from him”
Warning signs
- One salesperson drove most of Dallas revenue, making his trust and retention critical.
- The seller resisted employee conversations before closing, which limited visibility into compensation and morale.
How to prevent it
- During diligence, the buyers should have identified any employee producing more than 20% of revenue and required a private pre-closing interview with that person.
- Before closing, the buyer, seller, and key salesperson should have signed a written schedule of all commissions owed and who would pay them.
- At closing, the buyers should have used a retention bonus or employment agreement for the key salesperson tied to staying through the first year.
Unpaid commission became a liability
After closing, the Dallas salesperson claimed about $100,000 of prior-year commission was unpaid. Edgar believed the seller knew about it and that it reduced both cash and the true earnings value of the business.
Mistake made at Due diligence → showed up at Integration
“It was an undisclosed liability.”
Warning signs
- The deal had messy work-in-progress accounting, which the narrator says is the hardest part of buying a construction business.
- The buyers did not speak with the employees who would have known about unpaid compensation.
How to prevent it
- During diligence, the buyer’s accountant should have tested commissions by comparing closed jobs, work-in-progress, payroll records, and employment agreements.
- Before closing, the seller should have provided a signed disclosure schedule listing all unpaid employee compensation, commissions, bonuses, and disputes.
- The purchase agreement should have included a specific indemnity for undisclosed employee compensation and an automatic right to offset against the seller note.
Remedies were too small
The buyers believed they had a claim for an undisclosed liability, but the escrow was only about $40,000 against a much larger alleged economic loss. The dispute turned into litigation and arbitration, costing heavily without resolution before shutdown.
Mistake made at Closing → showed up at Operations
“there's only $40,000 in escrow. that's not going to cover the 350 we overpaid plus the hundred”
Warning signs
- The escrow was far below the alleged overpayment and commission exposure.
- The seller note was large, creating leverage for a dispute if the relationship broke down.
How to prevent it
- Before closing, counsel should have sized the escrow or holdback to cover the largest plausible employee-compensation and work-in-progress disputes.
- The buyers should have negotiated seller-note setoff rights that could be exercised immediately for disclosed or undisclosed liabilities.
- Before terminating the seller-manager, the buyers should have had counsel prepare a coordinated notice, evidence package, and dispute-resolution strategy tied to the purchase agreement.
Employees diverted leads
After revenue started dropping, the buyers found messages suggesting employees had started a competing business and diverted leads while still employed. Edgar described this as the dagger for the Dallas business.
Mistake made at Integration → showed up at Operations
“the designer that had resigned, the sales guy and her had started a competing business while still working for us.”
Warning signs
- Revenue and lead performance in Dallas deteriorated while Austin marketing using the same provider performed better.
- Key Dallas employees were unhappy with changes and later resigned or were let go.
How to prevent it
- Immediately after closing, the buyer should have moved all inbound leads, texts, and calls into company-owned systems with monitored access rights.
- At closing and again during onboarding, every employee handling leads should have signed confidentiality, non-solicit, and company-opportunity acknowledgments reviewed by counsel.
- Operations management should have audited lead volume, CRM entries, and lost opportunities weekly for the first six months to detect diversion early.
Second deal came too soon
The partners bought the Dallas business only about six months after acquiring Structure. Edgar later said they perhaps should have waited and understood cyclicality and seasonality better before expanding.
Mistake made at Sourcing → showed up at Operations
“We bought uh the Dallas business 6 months after structure.”
Warning signs
- Structure was only six months into new ownership and still in its own growth and efficiency phase.
- The buyers were attracted to cross-pollination benefits before fully understanding Dallas’s market, people, and seasonality.
How to prevent it
- Before pursuing the Dallas deal, the owners should have required Structure to complete at least one full operating cycle under new ownership.
- The buyers should have prepared a written add-on investment memo proving Dallas could stand alone without cash from Austin for at least 12 months.
- Before closing Dallas, the partners should have reserved the capital already planned for Austin’s growth and efficiency projects, rather than using it as Dallas rescue capacity.
Integration alienated the team
Edgar believes the team may have experienced too much change too quickly: HubSpot and other technology, less regimented routines, remote ownership, and a new outside boss. This does not excuse later misconduct, but it likely reduced trust during a fragile transition.
Mistake made at Integration → showed up at Operations
“maybe too much change too fast.”
Warning signs
- Employees were used to manual folders, daily standups, and the prior owner’s more regimented style.
- Existing employees reacted negatively when an outside operator was installed instead of being considered for leadership.
How to prevent it
- In the first 30 days, management should have documented existing routines and asked employees which ones were essential before changing them.
- For any new CRM or software, the operator should have piloted it with one salesperson first, measured benefit, then rolled it out with training and support.
- Before hiring an outside CEO, the buyers should have explained the selection criteria to existing employees and involved key staff in the interview process where appropriate.
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Thesis
LOI
Due diligence
Financing
Closing
Integration
Operations
Transcript 2364 lines · 16310 words · auto-generated captions
Edgar Galindo, welcome to Acquiring
Minds.
>> Thank you. Thank you for having me.
Super excited to be here.
>> Edgar, we met at UT's ETA event in
Austin in February
>> and I have since been eager to share
your journey with the audience and that
was even before some of the dramatic
events that have happened since. We have
a lot of story, a lot of themes to cover
today. Let's get right into it. some
background on you to start, please,
Edgar.
>> Yeah, for sure. I won't take you all the
way back here, but I I grew up right
outside of New Orleans. I uh went to
undergrad for math. I thought I wanted
to be an engineer, and that kind of path
led me down a construction uh path. Uh I
worked for my first job was for a
familyowned construction business. Uh
ran out of New Orleans. Um they were
much larger. I think they were probably
80 million a year um revenue, but that
was kind of my first my first job, first
introduction to a family-owned business,
right? Much larger operation. Got to
work across the Gulf Coast on different
industrial installation projects and uh
cut my teeth there for 5 years,
everything from field engineer to
planner, scheduler, estimator, and uh
finished out at project manager.
And um yeah, about 5 years in I realized
that the ceiling was kind of uh very
near me. the guy I reported to um he
reported to the owner. So there wasn't
going to be much opportunity or growth.
That led me to exploring different
options and uh decided to pursue an MBA
which is why my wife and I ended up
moving to Austin where I got my uh MBA
in 2020 uh at Mcome's uh business school
and went into the Lloyd Consulting. Um
spent two years there. Did a ton of
really cool work. Really enjoyed my time
there. worked a lot but uh worked with
construction clients also uh everything
from procurement to um data strategy and
ultimately decided that in order to to
have the life I wanted which was mostly
more time for to start a family I really
needed to to pivot uh started to look
for a business and actually took a brief
detour to Google uh where I spent I I
want to say like two months uh before
being laid off um
before I I actually acquired a business
and those two months were were very
short. Uh but it gave me a great
opportunity. Uh Google gave me a great
severance package. Uh they vested some
of my equity u ahead of time and I had
just got a signing bonus. So that was
actually the capital that I used to do a
self-funded search. Spent 10 months
looking for a business and um used some
of that as well as a for the for the
down payment.
What? So, two months at Google.
>> Yeah.
>> Uh, got you a signing bonus, some vested
equity, and a generous severance
package. That is the way to play it.
>> Yeah. Yeah. You know, I I It was very
strange. Um, two month. And it was
during the holiday season, too. So, it
was like November through January. It
was like half the time it was it was
holidays. Um, yeah. I like to joke
around that it was a it was a was not a
self-funded search. It was a Google
funded search. Uh
>> yeah, no kidding.
>> And
why did you end up at Google? A guy with
this kind of construction construction
engineering background.
>> Yeah. So, uh I actually had a search
partner uh who who was at Deoid at the
time. Uh he's since gone on and and
bought his own uh business out in in
Nashville, a a glass installer. But we
started searching together and he was
the one that that I I was he had just
had a child and I was talking to him
about struggling with the idea of
starting a family while working uh so
much and he said, "Dude, I think you
would love this. You need to go read
this book uh buy then build at the time
and I I think I read it in one sitting."
Uh but I came back and I was like,
"Yeah, this is what I want to do. This
is it. This is exactly it." And um we
had worked together, him and I, we knew
we we got along very well. were really
good friends during business school and
so we started to search together but we
realized that hey it's really hard to
search properly when you have such a you
know a demanding job. So we [snorts]
both started looking for opportunities
uh to to pivot and something that would
give us more time to to search on the
side still because we both still
obviously needed income and uh I got an
opportunity to join Google um which
definitely did provide me with much more
time to search on the side. what in your
background were you hired to use at
Google?
>> Um, you know, I think one of the the
best benefits of working in in
consulting is that you just do a bunch
of different projects that are
applicable across a very wide set of
industries. So, the data strategy
project that I worked on for a
construction company, I had done another
project for for a Fortune 500 tech
company that that was applicable as
well. they were taking some new things
to market and uh so those specific
experiences in consulting uh were very
applicable to the role that I was uh at
at Google.
>> Gotcha. And what was that role for
those?
>> It was a it was a partner strategy. So
um for a Google Workspace so Google you
know Google Workspace, Gmail, Google
Docs, the whole um kind of that suite.
There's a lot of resellers. So when you
make a website on Wix for example, uh
they'll say, "Hey, do you want a
business email?" So my job was to
represent our partners whenever Google
was making changes to their to their
Workspace offering. Uh it was my job to
say, "Hey, well, how is this going to
impact our our resellers, our partners,
and make sure that, you know, they had a
voice."
>> Gotcha. Gotcha. Great, Edgar. Okay. And
so your your falling in love with or
love at first sight with ETA. Yeah.
>> Was because you saw
flexibility in the lifestyle. So you
were working hard at Deote,
70 hours a week
>> and and buying and owning a small
business. Of course, you're not the
first to say this. Um you you probably
anticipated hard work, maybe the same
number, maybe more hours per week, but
on your terms sort of analysis. Yeah.
No, certainly. Yeah, it was I I more
flexibility uh a bigger sense of
ownership and uh personally I one thing
I really enjoyed about construction was
the tangible nature of it, right? Like
you look outside and you see the
building get taller. You see the
different components going in.
>> Uh I love the the intellectual rigor
that goes into consulting and the the
deep thought that it requires. Uh but
after working you know three months on
something really hard and then all you
have to show for it is a is a PowerPoint
or PDF it just it felt a little
defeating right it wasn't as tangible.
So um that also kind of shaped the type
of businesses that I was searching for.
Uh but that was kind of the the third
component. So a little more time uh more
flexibility a sense of ownership uh
which I had really enjoyed. My dad
growing up my my dad uh owned a roofing
company. He um my mom owned a cleaning
company, so she she would go and and do
commercial cleanings of mostly banks. My
dad does mostly residential roofing.
Then my first job was for that larger um
family-owned business. It was kind of I
I'd seen it before and and I liked it.
Um
>> I knew that eventually entrepreneurship
was in my future. I just didn't know
how. And um so all of those things kind
of said, "Hey, pushed me towards uh
ETA." Well, unlike a lot of people that
might listen to this and have a similar
resume background as you, consulting,
white collar stuff, you you had really
been exposed to
>> small business ownership, small business
culture, the trades, even your dad
owning a a roofing business u much more
so than than many searchers. So, you
probably weren't um it felt familiar to
you in a way.
>> Yeah. No, for sure. I spent a lot of my
summers uh on top of roofs.
>> Yeah. Yeah. Okay, great. Edgar, um, you
meet Matias.
>> Yeah.
>> Is there anything before we get right
into that, is there anything to say
about your search or can we just jump to
that moment?
>> No, I I mean the search was I think very
much what uh it was a like I said
self-funded search. Uh, I did mostly
broker outreach both with my my the my
previous partner um and then on my own
uh kind of during that 10-month
uh window I gave myself. Uh but yeah,
very traditional. Looked at a ton of
different businesses and um yeah, I
don't think there was any.
>> You were you were geographically
constrained. You wanted to stay in
Austin.
>> I do. I do. I I did want to stay in
Austin. I I it was easier for me to say
what I did want to do than than what I
did want to do, right? So, I knew that I
didn't want to go into like
professional. I didn't want to buy an
accounting firm or anything like that. I
I knew that I didn't want to go into
restaurants or healthcare. Uh so, kind
of narrowed it down that way because I
think a lot of people I think when
they're searching, they're like, you
know, what do I want? And sometimes for
me, I find it way easier to say, what do
I not want?
>> Yeah.
>> Yeah.
Well, and and obviously you were drawn
though to I guess construction in that
sort of big universe companies
landscaping which is where you ended up.
Um so happily that is a big universe and
in a universe where there are a lot of
small businesses for sale. We we often
see landscaping of course being the
example. Lots of searchers have bought
landscaping businesses. Um okay great.
So what is this search funer post you
see from Matias?
>> Yeah. So it was actually another
classmate from um from Mcomes who uh I
hadn't been on search fun for a minute.
He reached out and he's like hey you
need to check out this post on search
funer. Matias uh who's my business
partner on both acquisitions which we'll
get into. He um he had a business in
Austin under LOI. It was a landscaping
business. I didn't know at the time, but
the post uh essentially said, "Hey, I am
looking for an operator uh in Austin."
At that point, it was important to
clarify in person. Um
uh someone with a construction
background, ideal consulting background
would be great. Uh someone who speaks
Spanish, uh would be another big plus.
And sort of the more I go through the
list, the more I'm like, man, he might
as well have just put my name on this.
Like, I fit the criteria very well. This
is exactly where I want to be. uh was a
constructionbased business. So I I
reached out to him immediately and I'm
like, "Hey man, we should meet and talk.
This is my background. Uh he happened to
be in town that I think I messaged him
on on Friday afternoon and he just
happened to
>> Let me pause you, Edgar. So he was
looking at buying this business in Texas
in Austin."
>> Y
>> uh and and owning it remotely.
>> Yep.
>> And looking for an operator to be on the
ground operating partner. So
>> Yeah. Exactly.
>> Key word there, partner, meaning that
you'll have some equity. Yep.
>> Um, looking for an operating partner to
run the business there locally in Texas
in in Austin. Okay. And so
the operating partner piece, so that's
different than being the primary owner.
How did you react to that opportunity
given the difference between maybe what
you envisioned for yourself as being the
primary owner, now looking at being an
operating partner, which is going to be,
yes, you're going to have equity, but
you're likely to be the junior partner.
Yeah. No, for sure. Um, I think at that
point I I I I was totally fine with it.
Uh, Matias and I have dad in common that
were very much like incentive aligned.
Um, and I I after, you know, I hadn't
looked at the business, but assuming we
were still in he was still entering due
diligence. So, I figured, hey, if I'm
going to get to look at this business
and I believe in it and I believe in
myself, like I'm certain that I can uh,
you know, grow it and and and make
something of it. So I was totally fine
with the idea of and especially if I
didn't have to put in much much money at
all then like hey then I get to keep my
savings and uh you know deploy that
elsewhere. I had so many friends buying
businesses um that it would be fun to
just invest uh with them. So I was
totally open to it especially after that
first meeting when I saw met Matias and
and realized that we kind of had our our
values were aligned right we both wanted
to to hold. It wasn't going to be a
quick flip. Um and we both had kind kind
of you know our values aligned on like
taking care of the people uh growing in
a in a scalable manner and yeah that it
it made sense to me for sure.
>> And your point here about whatever was
going to be required of you for
ownership whatever equity cash of your
own was going to be required. What did
that look like? What was the offer on
the table?
>> Yeah. So, initially it was um I I want
to say we could I could earn up to like
20% equity. Um
some I think it was like 5% right at
closing and then depending on on certain
growth uh targets could get up to 20
uh over I think it was like over four
years maybe five years and but I wasn't
going to put any any money on the table.
So that that kind of was the the
original structure. Matias was going to
take care of of the entire down payment
and and we were both taking on an SBA.
Well, he was taking on the SBA loan. I I
wasn't even going to have to be u do the
personal guarantee there. Um which kind
of brings in like where we kind of ran
into into some issues, right? So we're
diligencing the deal. The numbers look
good. The business looks great. Looks
healthy. Um we knew we were going to do
it. Matias knew he was going to do an
SBA loan. And once we started talking to
different banks is where he started to
get a little push back in terms of like
and this is like kind of a side tangent
here but my income the year before was
through the roof. It was absurd. It was
because I left Deoid after they
reimbured me for my second semester year
of business school. I got got my Google
signing bonus. I had a pretty healthy
salary at Google and then they vested a
bunch of my equity. So in my W2, it
looked like I I made like over $300,000
that year.
>> So the bank
>> to their cons their initial concern to
Matias was, "Hey, you don't have a
construction background. Like why are
you going to be able to run this
business?" And that's actually the
impetus for Matias going and searching
for an operator
with this with a specific set of of uh
qualifications.
Uh once we submitted kind of myself, we
added me to the deal, the bank
essentially said, "Hey, this is great.
Yeah, Edgar will work, but um he needs
to have more skin in the game. He's the
kind of guy that could easily go and get
a, you know, $400,000 a year job
somewhere else." Like, that's definitely
not the case, but on paper, it just
looked that way because of of my
earnings the year before. And so, they
wanted me to have more skin in the game.
And so, that changed the the structure
for Matias. And at that point, we had
got to know each other even better. Um,
and so I was going to put in some
equity. I think I ended up putting in
like $50,000
and I got 25% of the business right off
the bat. And I could earn another 25,
but this this it was no longer uh sort
of hit these thresholds. It was like,
hey, repay me the difference between
what I put in and what you put in. Um,
there was no really time limit. We I
think we both figured, you know, it
would take a few years, but um
but yeah, that that's sort of
>> And would you were you required to do
that or it was at your option?
>> It was at my option. Yeah.
>> I mean, I was going to do it. It was the
plan. Yeah.
>> So, you you
originally it was going to be earning
20%
over four or five years. Just time in
roll was going to earn you your
>> tenure was going to earn you your 20%.
[snorts] Y
>> then it changed when the lender was like
this Edgar guy earns has earned too much
historically for us to believe that he's
that committed to this project
>> right
>> so so that that meant Matias had to
sweeten the pot for you and the outcome
of that was you were going to get 25%
right off the bat and now but you were
also going to have to put in some money
now $50,000 still $50,000 for 25% that's
a a value at a valuation of the business
of 200 grand. I assume what you guys
paid for that was more than 200 grand.
>> Um we
>> So you were get you were getting in well
below market. You were buying your
equity well below market. Another way of
putting that is you had an incredible
step up.
>> Yeah. Yep. And then the obviously the
the big change personally for me was um
and I think the bank kind of was hinting
at this was we want Edgar to have to
sign a personal guarantee. Mhm.
>> So that 20% threshold was um
kind of at least had to be 20. Yeah.
>> Yeah. Yeah. So it's interesting. So it's
your deal got sweetened.
>> Um but also you now have more risk. A
lot more risk. You're risking $50,000
and the biggest of all the personal
guarantee. Yes. And then the then the
other piece of this was the the the tail
your right your option to buy another
25% of the business. Yep.
>> Um for basically reimbursing for
whatever Matias paid
>> his purchase price. Is that right?
>> Yeah. So uh I can't remember. I think I
don't remember how much he put down. It
was it was I want to say somewhere
around 300,000. So if he put in 300,000
uh and I put in 50, so it was like 350.
So let's say we both should have been
putting in 175.
>> Yeah. to get to. So I would have had to
uh you know pay him the 125
>> 125.
>> Yeah. 125. But it was again it was at
your option. So you would only exercise
that option if you'd be in the money
doing so. Uh and at that point you are
would have already been in the business
for some amount of time, years maybe. Um
you would have been the operator. So you
you really would know you would be of
all people on the planet the one to know
whether or not it was it was a good
>> that was exactly my logic. Yes.
>> Yeah. Very very interesting. Okay. Um
yeah. And so and then finally then
there's a path for you to own fully half
this business. Now 5050 ownership of
course we're always told is is a bad is
a is a recipe for
>> uh dysfunction. [laughter] So you guys
were cool with that? He let you go all
the way to 50, not 49 50.
>> No. Yeah, we were we were we were cool
with that. I think we we obviously spent
a lot of time together um
during that due diligence period. I know
it sounds just short. It was it was like
three or four months because of some
delays, but um I I think we both got
pretty comfortable with the idea of
that. I don't know that like we haven't
had any issues. We're still invested in
a couple other business together. We
chat daily, but um
>> Yep.
>> I I don't know that I would recommend
that to somebody just for for the same
reason you you suggested.
>> Yeah. Yeah. Returning to the story now,
we've gotten really into the weeds here.
So, so let's uh quickly just get through
the the acquisition. You were going to
say that he was in town and he invited
you to he was going to meet the seller.
He invited you along.
>> Yeah. Yeah. So, we had coffee, we
chatted, and he said, "Hey, actually,
the reason I'm in town is cuz I'm
meeting the seller. Like, do you want to
come along?" Uh so, I I tagged along, we
went, we met the sellers over at their
construction yard. Uh it was actually
two partners. Um, and yeah, he
introduced me as someone who was helping
him, advising him on on the deal and the
operations and that someone that might
be interested in joining but wasn't sure
yet. And uh, yeah, that's kind of the
the first meeting. Met the broker, the
sellers, and then uh, we went from
there.
>> And you liked what you saw. Tell us
about the business.
>> I did. I did. I liked what I saw. So,
uh, Structure Landscapes is the name of
the business in Austin. They um they did
about 4.8 million the the year before we
bought it. Um that about 900,000 in SDE.
So it was it was it was a good
performing business. Uh I think we paid
I want to say the multiple was like 3.25
or something like that. We bought it for
3.15
with uh about a $500,000 seller note.
Well, it was two seller notes because it
was two sellers, but um it it did well.
It it performed really well. It uh it
didn't have a ton of uh seasonality
because had a really good split between
now it's project based work and not uh
they didn't do maintenance. So, it was
no recurring revenue. They had what I
guess we would call like reoccurring
revenue where a lot of their work was
for custom home builders who would just
say, "Hey, we have a a home we're
building. Come do the landscape." Uh,
and then homeowners. So, that had a
healthy split between homebuilders and
homeowners. Uh, and pretty I mean, the
average project at that point was like
$80,000. So, you know, pretty high-end
stuff. Um, the the seasonality was
it was actually pretty well adjusted for
because of the customer concentration.
So, home builders here in Austin build a
lot during the summer in preparation for
a lot of people moving in, wanting
homes, wanting to buy homes before
school starts. Uh, and then during the
fall and the spring, homeowners are kind
of building a lot more. But during the
summer, homeowner work goes down a lot
because at least our clients are, you
know, in Tahoe or Tellide or Jackson
Hole or wherever they go spend the
summers, uh, because it's way too hot
here. Uh, but then the the builders pick
up. So, not a lot of seasonality. I kind
of like that. Uh, not a lot of customer
concentration whatsoever.
Uh,
yeah, it was I I think the business was
was really good.
>> And now that you are on the inside, how
do you reflect on the quality of
revenue? the fact that it's reoccurring
or or project based. The fact that that
it's discretionary, at least when you're
selling to to the the residential
customers, big spends, discretionary
spends. Yeah, that's always that's
always a tenuous way to make money.
>> No, for sure. Um, and I will say like
this past few months, like it was
something that was definitely felt with
with what's going on on a on a macro
basis. Uh, with that said, I I like that
I think reoccurring revenue is something
that's overlooked in acquisitions a lot.
People really want that recurring
revenue.
>> Um,
it seems to be I think for various
reasons, right? Really hyped up and and
that's great. Um, but when I think for
in landscaping, like I do I want the guy
that has a $50 lawn every week or do I
want the guy that gets a $100,000
project every month from from the
builder, right? It's it's not under
contract, but it's I mean, the history
shows for the past few years, this is
what's happened.
>> Um, and then in terms of the the the
project based work, I think their
customer demographic has a lot to do
with it. Uh, I mean, being on the on the
high-end uh high-end side of things,
like I really like the fact that our
clients were quality driven and not
price driven.
>> Uh, it was a more of like do it right,
get it done right. Don't, you know,
don't cut the corners. I will pay what
it takes to to get it done right. I'm
not going to, you know, nickel and dime
or But on the other hand, you know,
sometimes they're like, hey, I want a
couple extra plants here. You have to
become of the mindset that's like, I'm
not going to send them a $100 change
order when they've spent $100,000 with
me. I'm just going to say, "Oh, yeah,
don't worry. I'll take care of those
plants." Uh, keep keep them happy.
>> But, uh, yeah, I I I I think it's a I
think it's a good setup. I still think
it's it's a good setup.
>> So, takeaway there. If you're going to
serve consumers, serve the, uh, the the
affluent ones, the wellto-do ones.
>> Yeah, that's that's my take for sure.
>> Um, okay. And and so just again it was
doing 900,000 of
uh 4.8 of revenue. So what is that just
a little bit shy of 20%.
>> Yeah. Like 18.5 19%. Yeah.
>> Yeah. Um it's an SDE number of course.
>> And then you bought it for 3.15 million.
>> Yep.
>> Which was a
>> I think
>> uh whatever 3 and 1 halfx or 3 and 1
halfx is I'm pretty sure is what it was.
>> Yeah. Great. And how many employees? How
old was the business and why was the
seller selling?
>> So, the business have been around for 20
years. Uh, very well established. Um,
four full-time employees, designer, a
couple uh salesperson and a project
manager, and then a revolving cast of
subcontractors.
um many of whom I eventually learned are
like
>> 80% of their
>> income came from from structure. Both
sellers wanted to retire. They were kind
of done with it. I later, you know, once
you get into the business, you start
think seeing what they were doing and
you're kind of like, oh, I I it was a
lot for two people to do. Um and I think
they they just kind of hit their stride.
I think there was also a huge
uh growth
uh they experienced a ton of growth
during co uh people are home people are
like you know going outside in their
backyard staying home and they're like
oh I should fix this so they had a ton
of growth those those previous years but
it was also very stressful and very
taxing and I think they had a sort of
like we just made a really good amount
of money we can sell the business now
this is even if we had four or five
years left in us like let's just it's
not it's not going
get much better than this.
>> And did that bite you in some way? Did
it did revenue then recede or demand?
>> You know, we we we definitely looked at
that. We didn't look at it as much as as
perhaps we should have. We actually
continued to grow. Uh it took a lot more
effort. Uh but I think
I just we were pretty confident and we
still are. I mean, I'm still very
bullish on the central Texas area. It's
just growing so fast. We have so many
people moving here that we figured even
if
>> there is some sort of a hump because of
>> co like we're still good. There's still
a lot of people moving in and there's a
lot of construction going on.
>> Yeah. [snorts] No. Um we hear it over
and over from people in geographies that
are growing North Carolina, Texas
>> that particularly if they're in home
services uh that
>> that's an incredible tailwind. um that
can correct for a lot of uh you know
[snorts]
>> weaknesses in your own operations
sometimes. Okay, Edgar, thank you for
all of that. Now, let's
>> as I said, there's a lot of story here.
There's the kind of the story of two
businesses or two acquisitions in one.
Let's hear now about the second
acquisition. This was in Dallas. Please.
>> Yeah.
>> Begin. So, um about 6 months into um
running Structured Landscapes, um we
came across an opportunity for a
business in in Dallas. Uh very similar,
um sort of setup or demographic or or so
we thought initially. Turns out high-end
and Austin is a little different than
high-end in than in North Dallas. Uh but
yeah, residential a little bit more
outdoor living. So, while structure down
here really focused on landscaping,
think plants, grass, turf, artificial
turf, um they did that, but they also
did a lot more of like covered patios,
outdoor kitchens, more of the outdoor
living, which is something that the
owners down here had stayed away from.
Uh I think they they had like one bad
outdoor kitchen and they were like, "We
don't do that." Um
>> and but we had customers down here
always saying like, "Hey, we we have
outdoor kitchen like we want this. we
want to cover pergola, we want etc.,
etc. So, we saw that as an opportunity.
The the Dallas business didn't do nearly
as much landscaping. Uh, and we thought,
hey, we can kind of cross-pollinate
these two. There's some opportunity
there. Another thing we'd really been
exploring in Austin was maintenance. So,
we we don't do we don't do maintenance
down here, but they had a maintenance
arm up there, and we figured, okay,
we're going to learn some things there.
Uh we already knew what you hear about,
you know, maint landscape maintenance,
super low margin, uh kind of race to the
bottom, very price conscious customers.
Uh but it keeps the lights on, like if
projects slow down, you you at least
have this sort of more more steady
reoccurring revenue. So we thought there
was really good opportunity to to
cross-pollinate these two. Uh the Dallas
business was a little bit bigger. They
had done uh 6 million the the year
before the acquisition. their IBIDA was
slightly larger than uh structure. They
had uh 950,000
in SDE.
Uh so it's like a 16% margin.
Uh they had a much more robust team in
terms of operations as well. They had
they had a like a bookkeeper inhouse.
They had um couple designers and and
full-time salespeople like base and
commission salespeople. Uh down here we
were just commission only salespeople.
They had an actual office with uh not
that the office was like super
necessary. They had a they had a really
nice showroom. Uh, and so what really
appealed to us was them bringing clients
in, showing them like, you know, the
showroom actually had an outdoor kitchen
built in, being able to sit them down,
uh, with big screen, showing them their
3D model, and, uh, they just had a what
seemed to me like a very, uh, much more
robust
uh, operation, like sales operation
specifically.
>> Sounds like it.
>> Yeah. So, we we we liked what we saw.
the the owner there was uh much younger
than the owners here. I think he might
have been mid mid-4s. Um whereas the
sellers here were were early 60s and uh
he had done a great job growing the
business. Uh again there there were some
tailwinds with CO and all of that but he
was kind of local to that area had done
a great job building a community around
his business sponsored different events
and uh had really done a great job
making that business sort of like the
local hero
the
and he like his reason for selling was
like I'm I'm exhausted like this is as
far as I can take it like I've done
everything I can to to grow this and and
kind of this is where I'm I'm stuck.
Uh so he was really interested in
bringing in some some new people who had
done things differently who had some
more ideas uh and and rolling over some
equity and and potentially sticking
around a bit longer. This was right
around the time the SBA had sort of
changed that rule where they could, you
know, you could roll over equity. Um
>> Yes.
>> And so that was really appealing. We
ended up not going that route um to kind
of get the financing done a little bit
faster. But we did have an agreement
with them where hey like you know things
work out we maintain these kind of uh
metrics then then you can you know be
awarded some equity or even buy buy some
equity back. um he was going to stick
around as the general sort of a general
manager, less responsibility
um and and more input from Matias and I.
Matias actually was moving to Dallas to
sort of run that while I was just going
to stick around in in Austin.
>> And yeah,
>> and so that was kind of the the
rationale for for buying that that
particular business. We we saw a lot of
opportunity. We thought it would be a
great fit. Uh, and just like the one
here in Austin, they had great
processes,
but they were all very manual. So, it
was like Manila folders everywhere. Um,
sure, like I mean, and and the the joke
here in Austin was that the seller here
had been in business for 20 years, and
I'm pretty sure he had killed more trees
than he planted just from like
everything he printed.
>> He would get an email printed, he would
reply, and then print out his reply, and
everything went in my little folder.
>> Uh, wow. and very well organized. Like
he got custom stickers for the Manila
folders were like, "Have I ordered the
plants? Have I got the permit?" And he
would just check it off as he went. So,
it's a great process, but it was just
super manual. Um, and I think I hear a
lot about that in in ETA where it's
like, "Hey, we're going to come in,
we're going to bring in tech, and we're
going to like make things super
efficient." And it's not that things are
are inefficient, like there's a lot of
these guys have processes. They just
don't have it like digitized. uh which I
think is different than bringing in tech
to make things efficient and bringing in
tech just to digitize what already
exists and one will reward you more than
the other
>> if there are processes in place that are
pretty good but analog you don't think
introducing digital is that much of a
needle mover
>> it'll it'll help you for sure yeah but
it won't it's not like you're in terms
of creating enterprise value like you're
not really
you know doing much different like
you'll take a few hours worth of
workload load off of people and and sure
you minimize phone calls of like, hey,
where is this file? Like just check the
drive, but it's not you're not
fundamentally
restructuring the business in a way
that's like really much more efficient.
Yeah.
>> Interesting.
>> Um, but yeah, so uh we bought the Dallas
business, Matias moves
>> and Edgar, what is your participation in
that deal? Are you an owner in that
business? Yeah. So, uh, still 25% same
structure. Like Matias wants my input.
He he, um, I'm going over like initially
I was over there every week, uh, to kind
of get things going. Again, just
bringing my my sort of construction
background, structure, landscapes,
uh, also put in money into the deal. So
inherently I was going to keep 25% of of
whatever that money that went in. Uh
there was some additional capital that
went in but we just kind of kept it at
at 25%. With the same structure like hey
you know he Matias put in more money if
if at some point you're interested in in
owning more of this business then you
know same idea just just paid pay the
delta the difference here.
>> Interesting. Okay. [snorts] Um, all
right. So, you you had a a a line to
owning half of that business, but out of
the gate, you owned 25%
via Structures ownership of it.
Structure put in the money. Interesting.
Okay.
>> Um, and is that to say that structure
was generating a lot of cash?
>> Yeah, structures was doing well. Uh, we
were we I think that first year we when
we bought it, it was 4.8. That first
year we finished at 6.3. I think it was
a little around Whoa.
>> Yeah, it was around 24 20% growth top
line. Right now, you look at like the
bottom line and you're like, "Whoa,
where did all that money go?" You're
like, "Okay, yeah, well, we spent a lot
more on marketing. We bought new
equipment. We we hired new crew." Uh
>> yeah.
>> So, bottom like bottom line, we're like,
"Oh my god, this this is scary." But we
we knew that going in like this was our
plan. Uh sort of, hey, we're going to
we're going to grow this thing
aggressively, focus on growth year one.
on two year on second year we're going
to focus on you know efficiencies sort
of optimizing cost procurement I mean we
bought stuff from the same vendors for
the past 10 years and I never questioned
it that first year we're like buy from
them it wasn't until year two that I'm
like hey why aren't we looking at
different options here and and sure
enough there was like 10% savings in
plants or other things just by shopping
around a little bit more Uh so that that
was kind of where we focused on on year
two but yeah we had had great growth we
We felt very confident in what we were
doing.
>> What was the name of the Dallas
business?
>> The name of the Dallas business was it
was actually two. He had split it up
into their um
sort of install side and their um
maintenance side. It was uh complete
exterior solutions and um RW blue was
the maintenance side. We bought them
combined and combined them as one right
off the bat. But yeah. So now you have
two businesses. You've got Austin,
you've got Dallas. You're partnered with
Matias. He's moved his family to go be
the operator in Dallas. You're operating
Austin. Y these two businesses are
similarish in size. Dallas is a bit
bigger. They've got very complimentary
um offerings. And so if the
cross-pollination thesis was that the
weaknesses or things that Austin isn't
doing, it can learn from Dallas and vice
versa. Um, all sounds great on paper.
>> Yeah,
>> it really seems like a good strategy.
Okay, so what happens?
>> Yeah. So, I think this is kind of where
it all goes south here. Um, a couple of
months, maybe less than a couple months,
a month and some change into the Dallas
acquisition. um the one of the sales
guys there uh the sales guy in terms of
like driving revenue uh maybe 60 or 70%
of the revenue came from him um
approached Matias and was like hey so
you know now that the transaction is
closed and everything are you going to
pay me the commission that I'm from last
year or is uh the seller going to be
paying me the commission from from last
year and that was kind of a surprise to
both of us were like especially cuz
during the negotiation there was like in
construction there's this whole and this
is like the messiest part of buying a
construction business the the work in
progress component of the transaction.
>> Yeah.
uh the seller negotiated to keep 5% of
the work in progress that that should
have come to us for commission and we
said okay for the commission sure like
you sold that that was the commission
structure 5%.
uh you know whoever sold it is kind of
the assumption. Um but I guess the
understanding for him was for him. So we
felt that so we already paid that
commission for the work in progress. Um
and he felt that he hadn't. So that was
kind of the the first kind of red flag
for us was okay this this sales guy is
not happy. He's owed actually quite a
bit of money. It was somewhere around
$100,000.
>> Uh
>> wow. which
it's $100,000 right off the bottom line
and it's $100,000 times the 3.5 multiple
that we paid. Right? So we're exactly
we're already
>> now we're in the hole significantly. So
we approach the seller about the
situation and want to understand hey
what's going on here? There was a little
bit of he said she said in terms of the
commission wasn't earned. We looked at
the books ourselves and we were pretty
convinced that this was a very valid
claim for commission. Uh we presented
that to the seller. He didn't want to
pay it and um that was it for us. Like
we had a pretty hard line of we can't
work with people we don't trust. Um we
let him go.
>> And do you did you feel that the seller
had intentionally
intentionally hidden this?
>> Yeah, I I think so. I personally think
so for sure. Uh this is
>> Yeah, cuz he he wouldn't have he would
have well well understood that this his
leading sales guy had yet had yet to had
yet to have been paid his commission and
would want that commission.
>> And uh yeah, of course. And um there was
you know and and I this is where I I
kind of go back and and kind of kick
myself a bit here is uh the sellers who
don't want to let you talk to their
employees uh because they oh I don't
want them to find out that I'm selling
like what if they leave and this
transaction falls through. Um we we went
with that and we said yeah fair I
understand we don't need to talk to them
like um I I I don't believe in that
anymore. I think you should definitely
100% talk to talk to as many employees
as you can and it should be a red flag
if someone's really adamant about you
not talking to the employees. I'm not
sure that these are related here, but in
hindsight like talking to him ahead of
time would have easily surfaced this.
Um, so yeah, we end up uh parting ways
with the with the seller. the this claim
is that not contractually protected
against by you guys because then anybody
from the previous owners the sellers
history can surface and say you owe me
money.
>> Yeah. So I think I think this is kind of
where I guess it gets into the next part
of the story here where this turned out
to become a very long expensive lengthy
legal battle. Um probably after letting
go of the the seller before we even get
into like you know our own hiring a
lawyer and looking into this we were
served with uh papers for like wrongful
termination.
Um, and the seller was like demanding
like the the extent of a seller note,
which was $600,000.
Um,
$680,000.
Uh, he wants
>> So he So he had a seller note of $680
and when you terminated him, terminated
your relationship with him.
>> You also said, "We're not paying you any
of the seller note."
>> No, we we hadn't said that. It was our
intent to then go to our lawyer and say,
"Hey, there's only $40,000 in escrow.
that's not going to cover the 350 we
overpaid plus the hundred or whatever
amount we have to pay to the sales guy
to keep him happy because if he leaves
then it's like game over here. Um so
that's kind of what we were looking at,
right? Going to the to the lawyer, hey
the asset purchase agreement was
violated, but instead we were assert
first and now we're defending a wrongful
termination thing. We're filing counter
claims that
>> uh he violated the asset purchase
agreement. Um he's asking for his full
seller note like upfront one year salary
plus a year's long b it was like a
million dollars essentially. Uh he's
demanding a court hearing in in um
Denton County, Texas. Our contract
specifically said we would go through
arbitration first. Uh so we end up
filing to go through arbitration. Uh we
end up deciding hey let's try mediation
first. mediate. We go through mediation
that doesn't work. We come to no
agreement. Uh and as we're moving
towards the as the battle continues, at
some point that's this is kind there's
other stuff that happens in the
background which we can dive into, but
that um that we never saw the end of
that. We ended up closing the business
before all that litigation ended. Um, I
think we ended up spending like $160,000
in in lawyers. Um, and never really kind
of got resolution there. Um, because
Yeah.
>> Well, let me just follow questions here,
Edgar, real quick on just on the
point I made earlier about this
commission and who who owes the
salesman.
>> There must be some standard language in
an asset purchase agreement. And so
maybe that's what you're saying was
violated.
>> Yeah. Yeah. Exactly.
>> I should know this and I don't what is
what what is the language that's like
you know anything that the seller or the
the entity under the seller's ownership
owes stays with the seller. We're not
going to inherit that liability.
>> It was an undisclosed liability.
>> Okay.
>> Undisclosed liability that he was aware
of. You know, I think the language and
and sellers will fight like sometimes
something might come up where and this
actually I believe it now. I didn't
believe it at the time, but vendors like
I've got invoices from vendors are like,
"Hey, I meant to send you this like 6
weeks ago and I never sent it." That is
one thing, right? I didn't know that I
owed this money. Like, fair.
>> Um, but an undisclosed liability for
which you do know uh it is, you know, a
a broader violation of the of the asset
purchase agreement.
>> Wow. And so it would, you know, this is
one of these where it's like, is it
worth it the to to to go legal uh to
lawyer up? And the answer is almost
always no. But in your case, we, you
know, as you pointed out, this $100,000
is it's a onetime
amount of money that you have to cough
up, come up with,
>> and it it it it structurally revalues
the business because it's $100,000 less
of
>> profit of earnings on an ongoing basis,
assuming
>> whatever the the sales commission that
was earned in that year is is kind of
earned in future years for the SE the
key sales guys. So that's where you're
getting the $350,000
overpayment of the business. $100,000 in
earnings less times the multiple you
paid three and a half is 350,000. So the
sum here is significant and that's why
you decided it was worth going legal.
>> Exactly. Exactly.
>> Yeah. Um and yet still
and and and also you had just had what
seems to me to be a pretty open and shut
case like you had the law on your side
it would seem. But but no, it doesn't
sound like you won.
>> Yeah. I mean, there was no there was no
closure. So, I I wouldn't say we didn't
win or we didn't or we lost in any way.
We we went through arbitration, which is
just, hey, can you guys talk it out? We
were not able to talk it out. Um I think
you're not like presenting hard evidence
there. Uh, and then once we are done
with arbitration, then we're we we filed
a, you know, a I guess a we filed a
lawsuit with um the state of Texas to go
after after this money. Uh, and then you
go into a lengthy process of discovery
where it's like, show us the
documentation, show us this. And that
the arbitration itself took several
several months. The discovery was just
about to start and at that point we
decided to to close the business. Um
there's a lot of other evidence that we
have that was just kind of um I'm pretty
confident he also violated his
non-compete. He registered a business, a
competing business actually like during
the time we were in arbitration, which
is crazy to me. Um
>> Wow.
>> So, and I think that the lesson here was
and I've heard this so many of times,
but it's just hard to see why you're in
it, but like you can't do a good deal
with with someone who's bad intentions,
right? It's
>> Yeah. Uh the business itself I I believe
in. I think they they were great. Um the
numbers worked out well. They had a good
market. Um
fast growing area also just like central
Texas like the Fort Worth area is crazy.
Um
>> so yeah, we're we're kind of in the
process of that. Um
>> and and Edgar, so your conclusion is
that this guy your seller was basically
a bad apple.
>> I think so. That's that's for sure uh
kind of my
>> my take here.
>> You just a second ago talked about the
uh non-compete that you think he
violated the non-compete that and also I
think a non-solicit uh which is more
enforceable than a non-compete but I
think he was flagrantly violating both.
Um te tell us a little bit about what
you found there on that front. Yeah. So,
um the the reason we learned about the
the him starting a new business um
[snorts] was that a few months I mean as
we were going through this whole process
uh a few months later we we experienced
like a we started feeling like we
weren't performing like we used to be.
Uh this is in in Dallas. Uh we had we
used the same marketing uh people for
for both Austin and Dallas and we were
getting significantly better results in
Austin uh which was a little odd to us
and uh the revenue just started dropping
and so we had to make some tough
decisions and and let some people go. Uh
in Austin we we outsource bookkeeping.
Um
and over there we had a we had an
in-house bookkeeper. I don't remember
what they were call it $80,000 a year.
Um we had an in-house designer. We had
an in-house designer here. Uh but the we
also used uh we we outsource some of our
design work like the 3D renderings and
whatnot uh to different third parties.
They weren't doing that there. So we
started looking at how can we cost cut
to adjust for this drop in revenue. Let
me take a step back here. The designer
that we had up there when we bought the
business was an hourly employee.
Um making like I don't know $60 an hour
which is market for landscape designer.
Uh by the time she was working 20 hours
a week by the time we we had kind of got
there the hours were up to 40. So with
overtime at that rate, it it ended up, I
don't know, being something like 130 40
plus thousand a year, which was much
above market. And we knew this because
we had a in-house designer in Austin, uh
was probably a little more qualified,
but uh making significantly less. And so
we gave her the opportunity to say,
"Hey, we're going to drop you to a base
salary, but we're also going to give you
commission. And if you sell what you
sold last year, you should be exactly
where you're at now. But at least this
way we get some peace of mind that hey,
things are are, you know, selling. Um,
she ended up deciding not to stay with
us and and resigned. Uh, a couple of
weeks later after that, we um we let go
of the bookkeeper
and I I remember driving up there and
talking to the sales guy like, "Hey, why
is why is like our sales are dropping?
What's going on? what's on the pipeline.
Let's talk through this. Uh and then he
had a healthy pipeline and he was just
like, "Hey, I'm going to close this one.
It's just taking me a little bit
longer." Blah blah blah. Um and then he
ended up putting in his two weeks
notice. By that point, we had just
Matias had just had a child, so he moved
to be with his uh kid and we hired an
operator there. And a couple weeks in,
he had to he needed some bookkeeping
stuff. So, he went on to the old
bookkeeper's computer and he logged in
and he learned that uh he could still
see text messages on on like the I guess
she had her messages linked to her
computer. And um
they were pretty bad in terms of it
turns out that the designer that had
resigned, the sales guy and her had
started a competing business while still
working for us. The reason the leads had
dropped is they weren't really making it
to our system because they were like
screenshotting them and sending them to
the person that had already left. Uh
they were reaching out to clients and
saying, "Hey, we know you have a meeting
with this, you know, give us an
opportunity." Uh, and I think that was
kind of the the dagger for us. We were
like, "Oh my god, we've lost
everything." Like the employees, like
what's, you know, going on here? And in
going through those communications,
that's where we learned that they had
set up a meeting with the old seller and
he showed up in a vehicle um that
belonged to a competitor. And then we
looked at who like owned that competitor
and and he was one of the owners. So
that's how we realized, wait, when was
this company even registered? Oh my god,
like there's he's been he's been doing
this for a while. Um, and that was the
that was kind of the the the downfall of
the Dallas business at that we we
weren't really able to recover from from
that. But yeah,
>> so four people, the seller, the
designer, one of the salespeople, and
the bookkeeper were all in cahoots to
stand up.
>> And not initially, for sure. the the
seller was when we let go of the seller,
he went and did his own thing. Everybody
else that that stayed was really with
us.
>> Um until I I don't know, something
flipped and uh and they decided to start
their own thing cuz in the
communications they were like, "Should
we tell the seller that we're doing
this? Should we not?" Like um so they
weren't in cahoots initially, but at
some point they were like, "Hey, we
should talk to this guy." and and they
had this meeting and uh yeah,
>> it must have just
caused you to doubt human nature. Like I
mean to just to see that level of sort
of betrayal and um intrigue and and kind
of behind your back. I know they don't
know you. They don't necessarily have
loyalty to you. It's not like you've
been their boss for years and years, but
it's it's still
>> No, it's it's really disheartening and
uh you know, like frankly at some point
you're like, wait, is it me? Like am I
the common? Am I doing something wrong
where I'm like turning all these people
away?
>> Yeah.
>> But um
>> yeah, and then you just kind of, you
know, kind of talk yourself out of that,
especially when you have another
business that is doing well, where the
things you're doing are working and and
you're doing the same things over there.
I think uh the change was maybe a little
drastic for everyone there, but um yeah,
no, it was it was it was a big bummer.
Like, yeah, for sure. It made me
question myself why I was doing this. I
know Matias definitely struggled. Uh I
mean, a lot of the coms in the messages
were just putting us down, like, you
know, we're going to we're going to
screw these guys. We're going to we're
going to make this work. Was there
something in the nature of their
criticism about you guys
>> that listeners could learn from? Were
they like these private equity guys? Was
it something where it was like because
you weren't native to the landscaping
business, they saw you as interlopers
and and and didn't know what you were
doing or something like that?
>> Yeah, I think I think it was a little
bit of that. I think uh some of the the
messages um
reflected like we um we put in HubSpot
as a solution there.
Um so just better track leads pipeline
uh to for us to better have an idea of
what's working, what's not and um we put
in other tech and I think that that's
what I mean with maybe too much change
too fast. Like why are they making us do
this? You know, we haven't done
[clears throat] this before. uh the
manila folders work just fine. Um but
for us it was about visibility and and
and
>> data tracking like sure the data exists
but if it exists in a manila folder I'm
not going to be able to properly find
trends and and diagnose what might be
what what's working and and what's not.
And that's something we had done in
Austin you know that was working pretty
well. I could tell you what key words
were leading to to sales and which ones
weren't.
>> And and what about the remote nature of
your ownership? Matias was there but
then he wasn't after a while.
>> Yeah.
>> You were coming and going from Austin.
Did that did that did that feature
figure into their criticism of you guys
or that wasn't really an issue?
>> Yeah. No, I I think I think that's
definitely part of it. Um, we
I I definitely I definitely think so. I
think the the old seller uh he was he's
a vet. Uh very regimented. It was it was
great. I actually really admired that of
them. Uh where like 700 a.m. meetings,
standup meetings every day, like who's
going where, what's happening today. We
didn't see like I mean in in Austin,
everyone here is remote and we get stuff
done just as efficient. And we were
like, "Okay, let's earn some trust by
like,"Hey guys, you don't have to come
in at this time every day." Or like,
"Hey, maybe we can adjust how we do this
so that it's, you know, a little less
taxing." Um, and I think maybe that was
misconstrued to some extent. The the
other big thing that that kind of played
out was that when Matias was moving
back, his intent his intention was to
move his family, his new uh kid to
Dallas.
>> Yeah.
>> Um but while like those first couple of
months, he was going to need they were
going to need all the family support
they could get, which I totally
understand with a one and a
half-year-old myself. Um,
>> yeah.
>> So, we hired uh an operator or a CEO
there and there was definitely some bad
emotions about like, wait, why didn't he
ask why didn't they interview any of us
to see if we could run the business?
>> Um, and and maybe I think what we could
have done a little bit better was to
have um
>> have them be more to go. I don't think
any of them were qualified to really run
the business, but for them to have a
little more buyin, maybe participate a
bit more in the interview process or the
selection instead of being like, "Hey,
surprise. This is your new boss."
>> Um, I think that's something we could
have definitely done done better. Um,
made them feel more involved instead of
just like, "Hey, this is happening."
Like, you know, deal with it.
>> Yeah. Yeah.
Well, those points, those
self-criticisms, uh, Edgar, all
resonate. They all, it sounds like they,
um, may be true, good insights, but
certainly don't seem to rise to the
level of like gross mismanagement or
something, you know.
>> Yeah. No, I' I've I don't think I've
gone through this in my head a million
times and and I don't think so. Yeah.
>> Okay. We still got a ways to go here,
Edgar. That was so that was the collapse
frankly of Dallas. Before we leave that
piece, so what does it look like to shut
down the business? Like what are the
financial implications of that servicing
the debt going forward? Losses, no more
profit coming out of the business. I
mean, what was that analysis?
>> Yeah. So, uh, yeah, it's it's pretty
rough. So, we ended up filing for
bankruptcy. So the bank is is not going
to get paid. Um you know at least the
SBA will cover whatever 80% or
something. Um Matias
making the decision was we were always
modeling out what our runway is and what
our burn rate is and how much we're
spending versus how much is coming in.
The sudden drop in sales kind of was
hard to plan for.
And so the decision came like pretty
abruptly like, "Hey, this is not going
to work." Uh, Matias actually put in
additional capital. Um, not to mention
the fact that the attorney's fees for
the prior case was way more than than we
ever uh anticipated needing to spend or
wanting to spend. Um,
and so it it it's one day, hey, this
isn't working. we're going to we're
going to shut in fact actually we Matias
was willing to put in an additional I
don't remember maybe $200,000
>> um to see us through for a period of
time and we had a conversation with the
then CEO and we were like hey is this
enough like what do you think and he was
very honest he was like I don't think
that's enough and so we said okay then
there's no use you know throwing good
money after bad uh we shut down there's
things I wish we would have been able to
plan for better. Um, we left a couple of
projects unfinished, which I think is
ultimately really unfair to the client,
the homeowners who who
>> had nothing to do with it. Um,
>> yeah,
>> some got a good deal in the sense that
we were 70% complete, but we had only
collected a 50% deposit. Others got paid
a deposit and and didn't get anything.
Um, then, you know, obviously they
become creditors and that goes through
the trustee.
>> Um, the the bankruptcy process is is
painful. So there is some sort of like
sense of relief to where once the
trustee takes over, you hand them all
the documents, you answer all their
questions and
they just kind of take over and they're,
you know, going to sell whatever needs
to be sold to to take care of whoever
can be taken care of. So you don't
you're not actually constantly involved
after a few weeks. You're just kind of
stepping aside. Um, regarding the SBA
debt though, we always had this, we knew
that Structure had,
you know, signed the for the Dallas
acquisition and Structure was the
businesses were crossc collateralized.
Our lawyers had a hard time explaining.
They're like, "What h we're like, what
happens?" And they were like, "Hey,
well, structure can take on the debt of
the Dallas business and just continue to
pay it." That's something we we
evaluated at some point. We felt like it
was it was possible or yeah you you know
you just the banks are going to fight it
out. It's going to be weird uh having
the Dallas because there was different
lenders. The Dallas bank saying hey
structure we want all of these assets so
that we can be made whole and then the
Austin bank saying hey those are
actually our collateral for our loan uh
and and they're actually paying. So like
I I I I don't know how it was going to
play out. Uh, and our honestly our
lawyers seem to not have that super
clearcut. Also,
>> Edgar, the idea was that Austin was
going to take over the debt service on
the SBA loan.
>> Yeah, we we we evaluated that evaluated
that for like I don't know a short term.
Um, but it it became very clear that
like while Austin had grown was growing
like there was just no way the it it was
double the the debt.
>> Exactly. No,
>> it was double the debt. It it this it
even if
uh Austin could could do that,
>> the the financial
the it just didn't make sense for Matias
and I to continue to to work towards
like what would eventually be just like
staying afloat, right? Or just treading
water.
>> Yeah.
>> Um but Yeah. And and and so when you
when Dallas files for bankruptcy,
what are the implications on you guys on
personal guarantees?
>> Yeah.
>> Etc.
>> Texas is great uh protections for
bankruptcy. Uh like I'll speak
personally. Um I live in my primary
residence. Yeah. So, my homestead
protections, like the bank cannot come
after my house, which was like the most
important thing to me. I think that's
like the biggest risk people take. Now,
if I had a rental property, yeah, that'd
be fair game, but but I don't.
>> Um,
>> all of our money by that point, my wife
and I had put into retirement accounts.
Um, minus, you know, a few thousand
dollars here and, uh, whatever, some
stocks or funds. um they they they don't
come after retirement accounts
and then uh you get to keep um one
vehicle for every licensed driver in the
household. We only have one vehicle, so
you know it's it's not worth much
anyways, but uh so we got to keep that.
And then the last thing was uh I want to
say and people should fact check me
here. This is kind of the gist of it,
but it's like $100,000 of personal
possessions. So, I like I remember like
at one point walking through my house
and being like $100,000 and I'm like
looking and I'm like what do I have
that's worth I don't have like expensive
watches or anything like that. Um I
remember like looking at the TVs and I'm
like the like that's nowhere like TVs
are like $300 nowadays. I think the the
our fridge was the like our most
expensive asset that [laughter] we had.
>> Um so that gave me some peace of mind.
Now what I would get is uh seven years
of bad credit. Um,
>> yeah.
>> And and you know, that's not nothing,
but my wife wasn't involved in the
acquisition, so if we ever need to buy a
new car or something, she's going to
have to buy it.
>> Okay, Edgar. Well, that's And so
bankruptcy,
Dallas closes, and the plan though is to
continue on its structure.
>> Yeah, we keep chugging along down here
in Austin. Um,
had a a pretty decent year last year.
Uh, so we grew that to 6.3 the year
before. This past year we were pretty
stagnant. I think we were like 6.1 or or
something along those lines. Um, but our
bottom line drastically increased. So
kind of the those efficiencies uh that
we had been talking about, we
uh yeah, just honestly like that first
year gave me insight into how much money
we were spending on things like
equipment maintenance. And it turns out
we had like very old skid steers that we
were fixing all the time and buying new
ones uh was actually going to be less.
Like the payments for those uh we got
new trucks. We moved to a new
construction yard that had much more
space. Um we had outgrown the smaller
one where we actually had to stagger
when people came in because we just
couldn't fit enough vehicles in there.
So some people came in at 6:30, some
came in at 7:30. uh to where we were
able to just have everyone come in, get
out the door. Uh we also tried to
concentrate our operations a little bit
more in Austin. Uh we still do a ton of
work out in the Hill Country, Horseshoe
Bay, a bunch of different areas further
out west. Uh but we're really trying to
consolidate, you know, so that we
weren't driving as much. Uh which was
ultimately a cause for rework. Uh we had
one project manager who was driving
everywhere, just missing things. Not his
fault at all. We ended up hiring another
project manager. This was actually the
the the the quickest ROI I can imagine
here. We had a $480,000
landscape going on that we projected to
make about
25 to 30% gross profit on. Um, we hired
a new project manager at like $60,000 a
year
and our more experienced project manager
just devoted himself. We devoted him to
that project. We're like, you you just
run this one and a couple other small
things nearby, but you're focused on
this project. Um,
and he was able to hit 40% gross profit.
Um, which was just a big wakeup call to
like he covered most of the other
project manager salary just in that one
job.
>> Yeah.
>> And and it was just a big wakeup call
for like how and this is stuff you it's
much more obvious in hindsight, but the
idea of like spending money can actually
save you money. It's it's not like super
intuitive. Uh, but that's exactly what
happened here.
>> Yeah. What else can you tell us, Edgar,
about just the just being a small
business part owner operator? Um, and
and I I know that it was challenging
because I heard you on stage. We were I
interviewed I moderated a panel that you
were on talking about this.
>> Yeah.
>> So, share share with us about the kind
of the day-to-day and how it contrasted
with your, you know, cushy job at
Google, albeit it was a short-lived job,
but still.
>> Yeah. Yeah. No, for sure. So, uh I think
one of the like I'll I'll talk about the
the the
flexibility component and my feelings
versus my spouses.
>> Um the whole rationale for doing this
was again my wife and I wanted to start
a family. We wanted to have children and
I she super smart [clears throat] was
like hey I know the kind of dad that you
want to be and you're not going to be
able to be that kind of dad working this
much. Um, we need something different
that gives you more flexibility.
I feel as though even though I I at
structure still working 70 hours a week,
I um
it doesn't feel like 70 hours to me. It
it it's much more rewarding. I get to,
hey, I'm going to go over here today.
I'm going to go check this out today.
Today, I'm locking myself down on my
computer and going to crank out
paperwork. I doesn't feel like 70 hours
to me. It's interesting. I'm learning
new things. If you were to ask her, she
would say there's not much of a
difference between how much he was
working before and how much he's working
now.
>> So, yeah, it feels better for me, but if
I think back to the rational why I did
this, I don't think I necessarily met
met that uh flexibility criteria, even
though it feels better to me.
>> Um, the other component kind of talked
on the same [snorts] thread of uh
flexibility is you get to like make your
own hours. Mhm.
>> You you get to like make your own hour.
Like I get to go pick up my little girl
from daycare every day at 4:30, but uh
you know it's like make your own hours,
but you have two hours a day to make. Uh
so there's still a ton of work
>> there. Um the operator on the operator
side of like making things efficient. Uh
I knew this from consulting but it's
even harder I think in in more
bluecollar fields is you can drive
efficiencies like any anybody can come
in and say hey we're going to start
using this this tech solution that is
really going to save us time and is
going to be great but the change
management that comes along with it like
getting the people who are so entrenched
in the way they've been doing things for
for a decade or more that is really the
challenge that is really the hard part.
Uh, so the the thought of like, hey, I'm
going to go in and and make things more
efficient. There's tools and there's
processes, but there's also people, and
the people are really the the hard part
in my opinion,
>> the uh realities of of being an an
owner, um, so was it, aside from this
whole debacle in in Dallas,
was it what you wanted? I mean other
other than maybe you didn't get as much
time with your family as you had hoped.
Was it basically what you wanted? It's
it's sounding pretty positive with
challenges but positive.
>> No. Yeah, for sure. It's uh it was more
challenging than I expected. I I don't
regret it. I don't I don't wish I could
go back. I think I I've learned a ton.
Um I think my my next pursuits will be
better because of of kind of my
experience. Uh and I guess to close the
loop on structure.
>> Exactly. So we haven't we haven't
dropped the the second shoe needs to
drop now.
>> Yeah. Yeah. Exactly. So uh we are
closing structure down uh because of
that kind of same liability that we
talked about. Um I think structure is
very promising. We have a great
pipeline, great set of employees. I our
initial plan for structure was to
invest. we were always going to invest
the first two to three years uh for the
growth, for the efficiencies, for what
have you. Um,
and without that investment, it's just
not as appealing of an opportunity.
And
that investment, when Matias and I talk
about it, it it went to lawyers in
Dallas. It went to uh making some things
right, like we ended up putting more
money when we closed. we put in more
money to make sure that all of the
employees were paid. Um, we didn't want
anybody to have to go to bankruptcy
court hearings to, you know, for their
last check. So, yeah. So, uh, it doesn't
make financial sense for us anymore. I
think especially with the the potent
even if we wanted to put more money in,
I think the looming idea of like what
are the banks going to say about this?
Is the Dallas bank going to say no, that
money actually should come to us? um
there's too much risk in in continuing
to run to run it the way we are. So, uh
a few weeks ago, we we decided that that
we're going to shut down structure as
well. We're doing things a little
differently here since we have more
planning. We're finishing out all of our
projects
um so that, you know, everyone who's
paid for something kind of is is made
whole. Um but yeah, we're we're winding
down and and should be wrapping it up in
the next few weeks, which
>> and Edgar, wait. So, let me understand
it. So, Dallas has has brought brought
down Austin because the debt service of
Dallas flows to Austin.
>> The debt service.
>> Yeah. as well as the
the additional capital that we had
invested into Dallas both in terms of of
like, hey, how can we save this business
that is is kind of sinking
um
is capital that that we had initially,
you know, planned to use for for Austin.
Uh
>> right.
>> No, but I'm I'm trying to understand why
Austin doesn't survive or why it doesn't
make sense.
>> Oh, yeah. Yeah. The cuz the debt ser cuz
you basically have to keep service it
because Austin
>> the structure entity was an investor.
>> Yeah.
>> In Dallas, it now needs to service this
big SBA loan.
>> The Dallas loan was personally
guaranteed by myself, Matias, and it was
guaranteed by uh Structure.
>> Okay. Okay. So, the banks are going to
come back come after all three Yeah.
>> entities, two people in and structure.
>> Yeah. And so, um, okay. So, it's
basically just going to come after
structure for all the money or to
continue servicing the debt. And with
that debt service, it just you can't
there's no free cash anymore coming out
of structure and it doesn't make sense
to carry on.
>> Exactly. I um
>> Yeah. I I don't remember what our debt
coverage ratio was for Structure. Um,
but it it gets shot when you double the
the debt,
>> of course. Yeah.
>> Yeah. And so is there is there some
lesson here in
like
linking
the two businesses that structure was
somehow guaranteeing Dallas or
>> I yeah I don't think we should have we
should have done I think like the the
whole idea at one point was like kind of
doing this little mini roll up right um
more um
>> I I don't know what the proper way to do
that is like are you automatically
linking them? I think there's some value
in in keeping things separate until you
kind of are fully in a in a steady state
uh flow or operations. Uh there's also
the the like the kind of elephant in the
room here. We bought uh the Dallas
business 6 months after structure. It
was a good opportunity.
Perhaps we should have waited a little
bit longer and then made sure we
understood things much much better.
cyclicality, seasonality.
>> Um, I think there was maybe some haste,
maybe just the one of the things I
learned here is like once you have one
business, like the opportunities to buy
others are much easier. It's that first
one that kind of is is really hard,
>> a common pattern on acquiring minds, the
searchers. It's so hard to get any
>> tow hold in a market, get have sellers
get back to you, be treated seriously as
a buyer. Exactly. But once you're on the
other side of a transaction and you are
an owner, you're in the club and and all
of a sudden opportunities come to you.
>> Yeah. And I think knowing that is is
huge for people, right? Uh I think we
were still in the like mindset of like,
oh my god, like do these opportunities
come come about? Uh
>> so you felt you needed to jump when
Dallas came as an opportunity because
you didn't realize that
>> now as owners you might be seeing a lot
of opportunities.
>> Yeah. Exactly. or you you just have more
opportunities in the sense of like you
can take a little more you can buy a
smaller outfit, right? You can buy a
$300,000 SDE business and fold it in. Uh
whereas before a 300 thou like you don't
have any wiggle room if you're buying
that that small of a entity
>> as as the first acquisition, right?
>> Yeah, exactly. [clears throat]
Yeah.
>> Um what what other any other learnings
from this Edgar? Talk to employees,
especially key employees, I think is uh
kind of one of the big ones. Just keep
in mind the whole driving efficiency
thing, like are you actually
restructuring the way the business does
things or you just digitizing? Uh
because then the ROI is going to is
going to be different on those
investments. Um
>> well, I want to I want to dive into
that. Uh and I and I have another
question for you and then we got to
start wrapping up because we're over. So
on this tech piece,
Edgar, you actually had said to me in
the precall that you you do think that
this opportunity for efficiency is is is
vast, that so many of these businesses
um maybe don't have processes, although
it sounds like yours did, um and are
just begging for technology and that
that's and and then you proceeded to
talk about some custom code that you
built with a the help of AI and and the
efficiencies there like talk us through
how you think about that and what you
built.
>> Yeah. Um so what I what I built was a
very niche piece of uh software. It's a
web app done almost exclusively with the
help of AI. And I think where the value
in this is, it's it's not in that it's
digitizing
existing processes, but it's it's
actually creating new workflows for how
things should work or how how things
should done. So essentially grabbing
that manila that handoff from the manila
folder from the sales guy to the
estimator to the construction guy uh is
kind of not fully reinvented but but
optimized in a way that it's not just
now digitally but it's it's more
structured that the documents are found
in the right place. The the right people
have access to the right data at the
right time. Uh, and it's it's insane to
me that I was able to do this just with
with AI. Um,
I think there are a lot of bluecollar uh
individuals who can build custom app
just for their business. Now, I think
where people will run into issues is
building things that are scalable if
they want to sort of sell it or or or
commercialize it. But in terms of
solutions for yourself, there's no
better time right now. Um I think I
think it's we're in a unique sort of
inflection point with how
uh democratized AI and and the solutions
that it can come up with are the issue
with and I see this and I've talked to
other operators who have this issue here
is that they will use QuickBooks is
almost like mandatory. Um then you have
some CRM whether that's Monday or uh
Trello or uh HubSpot. Then you have your
kind of project management which is like
Jobber or Service Titan uh or LMN,
whatever it might be. And what I find
myself very frustrated about was that
I'm paying $1,800 a month for HubSpot.
And I only use their CRM and they have
other great marketing platforms and they
can record your calls and go through
your email and do all of these cool
things. I don't need that. I'm like
small enough to where all I need is just
who's calling me, when did they call me,
like where am I in the sales process?
And in talking to my rep, like how do I,
you know, do this? And it's like, no,
you you have to pay. You already have
the most basic package, right?
>> Uh so that's a little frustrating. I
feel like I'm paying for features that I
don't need or don't use. But when you
have some something like jobber or other
applications that are private equity
backed it's like hey reach the broadest
audience as possible as much as
possible. So you end up with a product
that is not built for landscapers. It's
built for landscapers, HVAC plumbers,
roofers, fence builders, deck builders,
you name it, right? Uh and so you end up
with something that's like kind of it's
got features that are built for guy for
something that you don't use, but you
still have to pay that basic price. And
you built this app over some number of
weeks. I mean, you didn't bang it out
one Saturday afternoon.
>> No, no, no, no, no. It it it was a
number of months and and I had some
help, right? Um, it was months, but it
was not months of full-time like I was
still running the business. It was it
was
>> um Yeah, it took a while.
>> Yeah.
And and so this point about it saved you
money, saved you $50,000 a year, that's
a salary. Um, but it also it sounds like
it also caused you to kind of refactor
some processes because the you're going
back to your theme that it's not it
shouldn't be just about digitization of
existing processes. It should be kind of
a re-evaluation of the best way the
first principles approach to the
processes of the business.
>> Yeah, I I can give you a very quick
example. Uh the designer works on the
design does it hands it off to the
estimator the picture manila folder
right? hands off the middle of the
folder to the estimator. The estimator
um prices it, gives it back to the
salesperson. Salesperson hands the
middle folder to the client. Client
revises it some changes. Now we can do
some things in parallel, right? So as
the designer is creating the design, the
estimator can start seeing what's
happening at the same time and can start
either providing feedback like hey that
wall that you're designing is going to
require a footer
um or start estimating it at the same
time. So by the time that the
salesperson or the designer is done and
says hey I'm done with this design the
estimate is almost you know 80% done and
sure there's some you know back and
forth and then fixing things but things
that were um sort of in series can now
be in parallel.
>> It's that kind of
>> sure
>> because in physical form like there's
only one Manila folder but in digital
there's copies of it so you can kind of
um have things going on at the same
time. Yeah. You know, Edgar, I'm
getting the impression that you're
rosier now on just the the day-to-day
life of being uh the owner and and
primary operator of the business than
the last two times I talked to you at at
Austin, you were on stage and the panel
was kind of like a kind of a war stories
panel and it was talking about the
hardships, the realities of this path.
Then when we connected I guess a couple
weeks ago um you similarly were kind of
pining for your white collar cushy
consulting days which were hard work but
you know didn't come with all of the
emotional psychological burden of this.
Um, but today I hear I hear your your
your tune is a little brighter. Maybe
when maybe those previous times you were
really going through it with the
decision with this decision of to shut
down structure and I of course didn't
know then what I know now. Um, anyway,
if you would react to to that, what you
know, what what do you tell people out
there about the reality the day-to-day
of this path?
>> Yeah. Uh, no, I think I think that
probably had a lot to do with it last
time we spoke. Uh, it's definitely been
an emotional roller coaster as you can
imagine. Um, I I ultimately what I what
I don't want to do is discourage people
from from looking at this as a as a path
for them. Uh, but I also like I also
think they really need to be aware of
like it's hard. Uh, it it's really hard.
It consumes a lot of time. It's not just
hard on you, it's hard on your family.
Um, but it's also very rewarding. I
think it's something I mentioned in the
panel uh was that I I did this to be
able to provide for my family. And one
of the things I found most rewarding is,
you know, taking a step back and being
able to say and being able to see that
you're not just providing for you and
your family, but but all of your
employees and their families. Uh and
that is that is super rewarding. And I
think that's probably something that was
really front of mind last time we spoke
like what's going to happen to to to
the employees to to everyone that that
you really grow to care about.
>> Uh and so what's happening with
structure is that um a saleswoman who's
an all-star she's been in landscaping
for forever. She actually worked for the
previous owner for 14 years uh doing
design work and and sales. Uh you know
once I broke the news to her she she was
like hey this is this is all I know.
This is what I've been doing. Uh I will
kind of start my own thing.
Well, that is a pattern on acquiring
minds that many people um entrepreneurs
get into this path for uh a number of
reasons, but like the gratification of
being able to impact their employees
lives is not among them
>> frankly. and then they get in to the
seat and they find that that actually
jumps to near the top of the list if not
the top of the list of one of the most
gratifying parts uh of the journey is is
the impact you can have on your
employees. Thank you for for answering
the question of what what happens to the
folks at structure now now that with
your decision. Um great that that uh
they're going to land on their feet or
some of them are going to land on their
feet.
>> Yeah.
>> Last question for you, Edgar. What's
next
>> in terms of what's next? I'm actually
going to go and help my dad uh run the
family business, right? He's he's had
his own business that he's been asking
me for help with uh for a long time. And
no, this is actually uh different. He's
out in the uh El Paso now. It's um
>> it's an insulation services. So, they
install insulation for oil field uh
equipment.
>> Okay.
and uh you know kind of full circle.
That was kind of the first job that I
I'd kind of worked for. Uh it's small
business. Uh going to work with my dad.
That's going to be great. Get to spend
some time with him. I'm staying in
Austin, which kind of ties into the how
can you run things remotely. I'll
probably have to spend a lot more time
flying back and forth. Uh but I I don't
shy away from sort of small businesses,
I guess, is is the point here. Um, and
then obviously I I think the the
application that that I built for uh for
landscaping, it's it could help out a
lot of people. So I think I might try to
commercialize that as a sort of side
project um while kind of running my
dad's business.
>> And your your the personal bankruptcy
piece of this um you've processed it.
>> Yeah.
>> Moving onward. Um, I'm it's going to
happen as a matter of like timing. I'm
I'm not sure yet. That's something I I
need to kind of nail down with with my
lawyer, but um yeah, I think I've I've
come to terms with it. It's I again am
lucky that I have other opportunities
like a dad who has his own business who
wants help.
>> Well, Edgar, thank you for sharing. What
uh a journey uh painful but you do sure
seem to um have a philosophical approach
about it and it sure helps when going
through something bad that there you
know it's it's helpful that the future
appears bright or that you have
prospects waiting for you so that you
know you can feel like you land on your
feet.
>> Thanks very much for for sharing this.
We talked offline about um given the
news of of shutting down structure
whether or not it made sense for an
interview anymore and I said it makes
even more sense uh for an interview now
and and you said and you agreed. Um so
thank you for joining us in Acquiring
Minds.
>> Thank you for having me.
>> Hope you enjoyed that interview. Don't
forget to subscribe to the Acquiring
Minds newsletter. We send an email for
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