Hugh Podmore

@blueprintsmb22 In Australia heaps of the smaller PE companies just buy those $1-5m profit small businesses with cash. Not having to say "contingent on financing" in the LOI often tips owners over the edge

Yes why I always say target 2.0 DSCR on deals. Searchers always go okay that makes sense until they start looking at deals and doing the math of the required equity check to get there when multiples are not low. x.com/guessworkinves…

@Restructuring__ He runs a firm and he also had plenty of investment gains prior to this. He's an OG venture capitalist and a smart thinker

This will piss some people off, but the truth is that venture capital is a game of access, not investing skills Saying actors/influencers are smart investors is just dumb Actors/influencers are popular and get access to hot deals; that is the truth And by the way, investing 1/3 of your career earnings in a non-profit is degenerate, convince me otherwise

@Larryjamieson_ Which begs the question what would an actually normal market for houses look like?

So much of the bad hoom discourse is just people stressing one causal factor. Hooms in Australia are special because they have EVERY causal factor acting in concert: > APRA lending standards > widespread mortgage fraud > daisy chaining equity from other hooms > non economic bid from Asian expats (no KYC) > structurally increasing replacement cost inflation (labour absorbed by infrastructure projects) > structurally increasing taxes as a percentage of new build cost (more than 50%) > unfettered immigration (except if you’re a skilled labourer) > FHB grants and 2% down government guaranteed mortgages > owner occupied tax exemptions > hooms are sold at AUCTION (hot house bidding environment) > nimby planning authorities (less of a problem now) > govt demand side stimmy to any perceived down turn > govt willing to erode purchasing power of the currency measured in usd by teens percentage per year to defend hoom prices > psycho social imperative to own hoom (no action from your partner without hoom) > I could go on

@Travis_Jamison @Travis_Jamison why do we even use EBITDA? Why not just compare all businesses across EBIT or FCF? I've never really understood...

Charlie Munger famously said: "every time you see the word EBITDA, you should substitute the words 'bullshit earnings'." He's half right. (yah look at me contradicting the eternal god of wisdom) But for real investors mess up when they try and use EBITDA as the end-all-be-all. "3x EBITDA? Great deal" "6x EBITDA? Too expensive" EBITDA was never designed to tell you what a business is worth. It was designed to help you compare businesses on equal footing. It strips out capital structure, taxes, and depreciation so you can line up Company A next to Company B without all the noise. That's the point. And that part works fine. The problem is when people stop there. And boy, do people stop there. I look at LMM acquisition deals constantly, and a common mistake I see is someone looking at an EBITDA number like it's cash in their pocket. It's not. The distance between EBITDA and actual free cash flow is where all the landmines are buried. - How much CapEx does the business need just to keep the lights on?  - What are the working capital swings?  - Are those "one-time" addbacks actually recurring every single year? (Spoiler: yes.) Every dollar sitting between EBITDA and free cash flow is a dollar the owner doesn't get to keep. How useful a number EBITDA is depends entirely on the business model. A marketing agency, industrial services, or consulting firm with basically zero hard assets? EBITDA and cash flow are practically the same number. Munger's critique barely applies. A trucking company with a fleet that's depreciating and needs constant replacement? EBITDA is fantasy. A business showing $2M in EBITDA with $1.5M in required maintenance CapEx is really a $500K earnings business. Munger is dead right here. This is where a lot of the successful tech/online-biz people get tripped up when investing in this space. CapEx has never mattered to them. So the mental model is pretty simple: the heavier the asset base, the less you should trust EBITDA as a standalone number. When someone tells you a business "does $2M in EBITDA," your immediate next question should be: "How much of that converts to cash?" If they can't answer that clearly, or worse, if they look annoyed that you asked, you probably have your answer already.

@drewfallon12 I liked allbirds :( nice founding story from NZ, pro soccer player from across the ditch. Sad to see it fall.

ALLBIRDS SELLS TO AMERICAN EXCHANGE GROUP FOR $39 MILLION, The end of Allbirds - the silicon valley DTC darling that raised over $200m in private capital and peaked at a $4B valuation after its 2021 IPO. American Exchange Group (AXNY) is acquiring all assets and liabilities of Allbirds for $39 million. Allbirds will file a proxy seeking shareholder approval by April 24, wind down the public company, and distribute net proceeds to shareholders in Q3 2026. Shares up ~32% AH Market cap at time of deal: $26 million. Sale price: $39 million. 99% haircut from the 2021 peak valuation. Revenue peaked at $297.8 million in 2022. By 3Q25 run rate was sub $160m, down almost 50%. American Exchange Group is a wholesale-focused multi-brand accessories and footwear roll-up. Doing a deep dive on the collapse this week in my newsletter. RIP

@sourcesandmuses "winning group won the deal with all cash at close" >> it's pretty common in LMM here in Oz for firms to do all cash to remove any "subject to finance" contingency, but then post deal lever up.

Lost another deal in brutal fashion this week - home services business with a solid operator, $1.5m of EBITDA - spent a full day with the seller learning the business, validating the roll-up opportunity, and his rollover equity - winning group won the deal with all cash at close - spoke to the seller for two hours yesterday talking through everything and he said he felt it wasn’t worth trying to negotiate given how much we talked about him leading the rollup, which is understandable - Of the three losing bids, said I was the only one that wanted to get on the phone with him, said one group even sent him an email with some curse words. I’m the first call if the deal comes back around - wrapping up the call and he asks if I’d be interested in backing him for his next thing after he rolls off the transition period Lost the deal, but gained a potential strong operating partner. Be graceful in defeat, you never know where it can go. Silver linings in the ebbs and flows of this deal game

You mean AI is going to decimate your most prolific LinkedIn posters?

@SMBfugazzi I'm looking at search fund deals and was using this lens... The future buyer after 5-6 years of owning a business ALSO needs to think there's both runway to pay off their debt plus the terminal value. So I do think even in SMB land if there is AI disruption potential it cuts vals

Interesting and at a minimum thought provoking enough to pish your pants a little

@ClintFiore Oh you sweet summer child...

@HughPodmore What other is there?

Guess the Industry: $40M Revenue, $30M EBITDA

@ClintFiore That's not the "OF business" I would have guessed!

Those that guessed Oil Field (OF) were correct! Lots of OF guesses- surprised how many of you got it! It’s an oil field services biz we are talking to.

@loobah_l Ah yeah in aus black does arrivals kerbside pickup and only the non-black plebs have to schlep it out to the parking zones.

@HughPodmore the meet and greet feature (for airports) is a step up - now most US airport make you cross the highway and go into the long term parking lot and up the elevator to get into your Uber, which is an issue if you're a woman traveling alone, or a mother with a small child

ok, but will it remove asian electric hybrid cars from the pool?

@yrechtman The exception to this is "non value added parenting". Eg we use a Gemini gem to automate our weekly meal planning, create the shopping list etc, and ideally place actual grocery order. Freeing up time for exhausted parents is a pain point worth $$

Growing suspicion that there are vanishingly few use cases for consumer agents. People don’t do work in their personal lives. The only people who do are sf dorks using spreadsheets to plan trips to tahoe

@TheEmergentCity @AvidCommentator $144 is cheap. We pay $190/day in Sydney CBD. Last year we had three kids all at the same daycare. Thankfully one now in school.

Before subsidies, my kid’s daycare charges $144 p/d - multiply that by 180 (no. days in a private school year) is $25k. It costs $25k p/a to send your child to Stuartholme - an elite private school (pic 2) The scale of the grift in Aus beggars belief Graph by @AvidCommentator

@Larryjamieson_ CTA or Ryans for down market, clocktower bar for upmarket

Favourite drinking venue in Sydney cbd?

@Sam_Rosati @guessworkinvest Keen to hear this one! I suspect it looks a lot more similar in Australia and markets that don't have SBA loans.

Where people get confused in ETA: Self-funded search ≠ independent sponsorship. They look similar from the outside. But the risk, economics, and day-to-day role are completely different. New episode of The Intentional Owner drops tomorrow with @guessworkinvest. We break down the real differences.

@Larryjamieson_ Also why do you need 5 people to manage a metro tunnel twitter account?

Most Melbourne crew I’ve seen

@ChrisJBakke Lucky they're not about to host a world cup! Maybe a good time to get mexico city tickets cheaply on the second hand market

Hotel prices in Hawaii and Florida just doubled for the next few years

@loobah_l @wil_da_beast630 We have three under 6 and three car seats across the back (got a Mazda cx9 as it's just wide enough). At what point do they just build baby seats natively into the cars? I think Volvo has this

@wil_da_beast630 CA law is 7 or 8. FL law is 5. If you have a kid every 3 years, and 3 kids (i.e. the 2.1 replacement rate) you will have a car seat in the car for over a decade

Do people actually follow this law? In Appalachia, they just...don't. How long are kids supposed to be in these seats?

@AvidCommentator At some point you'll need a Gaius Gracchus to come along and do land redistribution.

As time passes I feel more and more detached from the West, like an observer watching a strange experiment I don't fully understand. To a degree I've always felt like this, a foot in two worlds, the inevitable reality of my heritage and some of my formative years spent overseas. On one hand we are following a path I've experienced before, one of censorship and the loss of rights and civil liberties. On the other its something new and thoroughly idiotic, the quantifiable deterioration of a society while being told everything is fine. We possess one of the most rare and precious nations in the history of human civilization. But instead of our leaders doing everything they can to protect that its being thrown away little by little, all in the name of keeping the plates spinning and avoiding potential political and economic downside. The truth is there are no real answers to this issue, not one's that are politically palatable to today's leaders. I know folks in the halls of power and how the sausage is made, and this ain't getting fixed any time soon. It makes me deeply sad to see where this country that I love is heading...