We Turned $5M Into $419M Buying Cashflow Businesses ft. Jeremy Giffon

Sam Parr
All right. I've been chasing this guest today for six months, begging him to come on the podcast, because I heard him on a podcast last year, and as much as this breaks my heart to say it, that was my favorite business podcast of the year, and it wasn't even our own. But he was so good that I asked him to come on. His name is Jeremy Giffon. He was the first employee at Tiny which, if ever, listen to podcasts, we've had Andrew Wilkinson on many, many times.

They basically turned $5 million of starting money into about $500 million of equity just by buying businesses that cash flow. So they bought small businesses that cash flowed, kept recycling, recycling, recycling. Over ten years, turned into 500 million. So I wanted to ask him, what was it like in the early days? What were those first deals like?

He was there before they even had a name, before they were even called Tiny. So we asked him about his best deals, his worst deals, the weirdest deals hes ever done. Negotiating tactics. He learned this episode. Amazing.

It's a ten out of ten for me. Enjoy this episode. Good job.

I feel like I can rule the world. I know I could be what I want to. I put my all in it. Like, no days off on a road less travel, never looking back. What's up, Jeremy?

Sam Parr
Welcome to the show. We figure we've had your mentor on enough times now, andrew. He's probably the most popular guest on the show. Enough of Andrew. We got to go to his protege.

We got to go to the young gun who was there from the beginning and have you on. Welcome to the show, man. Thanks for having me, guys. Let's put Tiny into context, because I think maybe somebody listening to this doesn't actually appreciate what we're talking about. Tiny.

The simple story of tiny is they had a services business, an agency, and then they had excess profits. And I think you can correct me if I'm wrong, but I think the numbers are something like, they took five or $6 million of initial equity. They put that into tiny, and we're like, okay, we're gonna go try to buy a business with this. And they've ended up turning five or 6 million of initial startup capital into roughly a 500, $600 million public company where they own, you know, tiny owns maybe a portfolio of 30 businesses or something like that over. Over roughly ten years.

Yeah, eight year period. So kind of amazing. In eight years, turn $5 million to $500 million. Like, okay, I'm doing round math here. Fuzzy.

Fuzzy numbers. But first of all, is that the. Is that the right math. Is that roughly the right story? And then, you know, walk us through the beginning days of that, because you were there at the very beginning, at 1920 years old, employee kind of number one there.

Walk us through that. Yeah. So I knew Andrew because when he was starting Metalab and I was working on another startup, we shared the same studio apartment. Our office was in a studio apartment, and he was in the bedroom area and we were in the kitchen. And we would keep a blow up mattress in case the fire guy came around.

Jeremy Giffon
And we would just say, oh, Andrew lives here, but just have a lot of friends over working on stuff, effectively. Metalab. The short version is Metalab was throwing off a fair amount of free cash flow. I think it was in that range of low millions a year. And the idea was just to go use that free cash flow to buy a business.

And that's the thing with agencies, right? Like, there's not a lot of reinvestment, so you got to do something with the cash. And if you're not going to put in the s and p, that's too boring or whatever, then you got to figure out something to do with it. And so that's kind of what we did. It's funny, like, a lot of people hold codes and stuff are really popular now.

And a lot of people ask, how do I build tiny effectively? And the first step is like, well, you know, bootstrap a business that makes millions of dollars free cash flow, and then, like, get back to me. The rest is, like, pretty easy. And that's the first step. All right, a quick message from our sponsor, which is, of course, HubSpot.

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Shaan Puri
And you said it took eight years. In reality, I think Metalab, the agency that was already eight years older, I. Don'T, I don't know what it was. But, yeah, that's right. Metal lab is probably 1516 years old now.

Jeremy Giffon
So it was a long, a long slog. I mean, Andrew just started really young. It was also, one thing that's really helpful is Andrew and Chris and myself, I mean, we were all big users and fans of dribble. Um, and, uh, and we, Andrew really had that company in mind for a long time, which I think is another really nice thing to have. Like, it's very good to start with a deal, even when, like, even when you're fundraising or whatever, to actually have a concrete thing that you want to go do and use that as the jumping off point for, you know, building whatever it is.

I think it's always so much better to have that than to be abstractly, oh, I'm going to start a fund or I'm going to start a holding company or whatever. And so it was like, dribbble's really cool. We would be the right owners for that. Andrew New, the co founders there, and maybe we could buy that, and that would be a starting off point. And it's all very real and concrete versus the, we're going to build a holding company of technology businesses or something like that.

Sam Parr
Now you're three guys who've never bought a business before. Take me back to, you're sitting in the kitchen or whatever, of your apartment, office slash hangout lounge. Are you guys like, hey, can we buy buying businesses for dummies? How did you even figure out how to do it? And also, if this was a good idea, because it's a big risk, I think probably four or $5 million of equity went into that deal.

That's kind of like, that's a big deal. That's not like a couple hundred grand at that stage. What were those conversations like at the beginning, as best as you can remember? Yeah, I mean, it was like anything. There's generally one way that you can categorize sellers.

Jeremy Giffon
It's people who care about what happens to the business after they sell it and people who don't. And certainly for people who care, it's a lot about, it's this huge trust exercise of, are you going to screw up my baby? In their case, they've been working on it for a really long time. Their names are very attached to it. There's a big community.

Community. Businesses are really difficult. The community can really turn on you fast. And so, yeah, there's that whole piece. And then mechanically, yeah, it was literally like, I don't think we even had a book.

We just looked it up online. Like, I would literally go on legal depot and, like, get a Loi off there and edit it. And, you know, for the first few deals, like, you know, I was 1920, and Andrew would be like, can you go get a loi for this? And I didn't know what that was. We just go download one and write it up.

And it's interesting because one thing that we didn't like, this is an example of just the benefit of not having a lot of experience. Typically, when you do an loi, it's pretty far along in the process, and we would just fire them out because we read them. And in an loi, the only thing that's binding usually is the exclusivity and nothing else, not the price or anything else. And so we thought, okay, like, this is a totally non binding thing, so let's just, like, chuck it out there. It's nice to have something on a piece of paper.

It's kind of like a term sheet, although even term sheets, like, socially or more binding, and we didn't realize that. Oh, and private equity and Loi is like a pretty sturdy commitment or whatever, and that was for better and for worse. On one hand, it let us move really fast. On the other hand, we learned quite quickly that, okay, you're not supposed to go back on, like, what you changed in an loi and that kind of stuff. And so there's all those little things where just not being familiar with the process really kind of let us move fast.

It let us be friendlier. And that was the whole point. Like, we had both had these kind of bad experiences with, with buyers, and we thought, you know, there's got to be, like, a better service to be done there. Basically, I had a handyman come over yesterday and he comes to my front door and he's like, show me what you need done, whatever. And I said, great, that's what I need done.

Shaan Puri
And he goes here, before we start, I need you to do something. And he pulls out a notebook and he wrote, he writes, my rate is dollar 50 per 1 hour. And he hands it to me, he goes, sign this for me. And I just, I go, okay, cool, I'm aware. That's awesome.

He's like, that was. Spits in his hand, shakes it. This is now official. And I was like, I appreciate, I appreciate your style. That was like the tiny loi.

Sam Parr
Yeah. At least understandable. So at the time was dribble like an obviously good business because it turned out to be an amazing investment. Probably like a, I don't know, what is it, like a 50 x on your money there, right? Like it's, yeah, more than that.

More than a 50 x. Amazing. What did you guys like try to underwrite the deal where you're like in Excel? Like dragging some like, you know, 10% growth by dragging it over 20 columns? Like, how did you guys, what did the deal look like and what did you expect?

Jeremy Giffon
Again, it was pretty obvious that it was a great business. And I think Andrew's told this story before, but there was some immediate day one levers around like a big part of the business was advertising and we could find better advertising providers and things like that. So there was levers you could pull on day one that were going to improve the business. But yeah, it just felt like this big opportunity. It was a top 1000 website.

It had millions of active users. It was very important we, when it launched, like, I think I bought my dribble invite on eBay or something like that. It was really hot for a while and it was just this kind of like cool thing that didn't really exist. You know, there's not a lot of independent social networks that have millions of users. And you know, we, we negotiated a pretty fair deal, I think, like, you know, the other buffet line is price is my due diligence and that helps a lot.

But no, we never thought, we never thought any of the deals could be, you know, 50 plus xs. We're always just like, can we make 20 or 30% cash per year from this business? And that would be great. And anything after that is just kind of upside, I think. And yeah, regarding models, Andrew used to make me do discounted cash flows because it was kind of like the thing that you felt investors ought to do.

And then at some point I was like, here is your spreadsheet. But I'm just making up all the assumptions in the spreadsheet. And I think it was like, so many of these things are just like comfort blankets or whatever. You just like, it makes you, it's this big scary thing that you're doing, and it makes you feel better that you have it so you can look at it and be like, yeah, like, we've modeled this out, you know, but it's like, it's bullshit. You're just, you're just making it up.

Sam Parr
You also had a great quote. You were like, you said something to me. You go, the more quantitative analysis, so the more numbers number numerical analysis you're doing about a business, the more you're commoditized in your analysis. What does that, what does that mean? Unpack that one.

Jeremy Giffon
Yeah. My favorite anecdote here is in the Facebook IPO, Barclays put out this research report where they say what they think the business is going to be worth. The way they do that is through a discounted cash flow. A part of that calculation is, what is the terminal growth? What is this thing going to grow out forever?

They put it at 3%, which is what most companies are. That got them to a $200 billion valuation. Now, the next ten years, it grew 30% a year. And as a $2 trillion company, and it's just an example of you do all this modeling and this research report, and you're just so off. You're in an order of magnitude off.

And so what was the point of doing any of that? It would have been better to think really hard about actually how much can Facebook grow? Just this first principle stuff of what percentage of the planet could use this a lot more basic. And, yeah, that's a lot of the quantitative stuff. Also, a lot of the quantum stuff is totally commodified.

Right? People know how to do this. You can learn how to do this in school. And therefore, maybe it's like a useful table stakes thing, but you're not going to get any edge that way because everyone can do it. And where the edge is in quantitative stuff is in the two Sigmas and Jane streets and the MIT phds, and you're not going to be doing that either.

And so you're not going to do a better model on a company than the next guy and somehow get some edge there. So then when you're looking at a deal, when you're trying to, for like a small bootstrap business, a business doing anywhere from a million to 30 million in revenue, what are you looking at to spot the opportunity? If it's not the. If it. I mean, are you, how much do the financials and the cash flow statements actually even factor into that?

Shaan Puri
Or are you just thinking, I can make this bigger? I mean, what, what part of the numbers actually matter to you? Yeah, it's pretty basic, right? It's like, okay, let's, you know, let's make up numbers. It's doing $5 million a year of revenue, a million dollars of earnings, and you think, okay, on day one, I could raise the prices by 30%.

Jeremy Giffon
I could reduce headcount, I could launch this new product, whatever.

Would you pay a million dollars for that? Yeah, of course. Would you pay $3 million? Yeah, probably. And then you can just kind of go.

And I think where modeling gets important is when you're at the very edge of that, you're like, would you pay $10 million for that? And then it's like, well, a lot of things would have to go right, maybe, or whatever, but there's some number there where it's like, yeah, I paid $3 million for business making a million dollars. And so then the trick becomes, okay, can you get the business for $3 million? And that's where it's like, tiny was in a lot of bids with other folks, and I don't think we were ever the highest actual price, but we often won deals because we could offer other things. So that comes back to, why you on the deal?

It's because the very common thing that would happen is we'd get pretty far with the seller, and then they'd say, hey, we like you guys, but we've got this offer for 25% more. So we're going to go take it, and very often be like, great, go explore that. And then turns out that offer was not as real as you thought, or it was six months of whatever. There's more debt, or they didn't have the financing. And then you actually figure out that, oh, there is other things in the deal that are important, like the ability to get it done, the ability to be honest, to be trustworthy, to do things fast, like all those other soft things and things.

So it's more like, are you able to get a price? That's really a no brainer, or at least that's how I look at it, versus I really think I'm smarter than everyone else, and I can pay slightly more. I mean, that works for people. People do do that, but it's just like a totally different game. I'm always fascinated by the people behind these businesses.

Sam Parr
What can I learn? You know, tiny is a great business, but it was created by people. It was created by Andrew, by Chris, by you. And I'm like, how do they think about things? What do they know about what they're doing?

What worked for them? What are their ultimately, what are their superpowers? And I asked you, what's Chris's superpower? Because forget Andrew. Everybody knows Andrew.

He's popular. He's out there. He talks, he's got a big following. Almost nobody knows Chris. I had dinner with Chris and I was like, I fucking love this guy.

This guy's, he's dynamic, he's really engaging. He asks great questions. And so I've only known him for a couple hours in my life. You've known him for a lot longer than that. What is Chris's superpower that, that he brought to tiny?

Jeremy Giffon
I mean, Chris's superpower is just being able to, Andrew is so high pace and so high energy that Chris is just able to modulate that and kind of be the sober second thought, you know, we're not going to do this or that's way too much or, or whatever. Um, you know, a very interesting piece of the tiny partnership, at least at the beginning, that I thought was really quite unique and interesting is that, you know, Chris and Andrew had tiny as this vehicle that they would share together, but then they could also do things on their own, investments, businesses, and that actually, like, I don't even know if it was intentional, but that provides this great release valve of, okay, like, all the time. You know, Andrew would come up with some cockamamie motion about some restaurant or whatever, and he would just say, okay, I'm gonna go do that on my own. And Chris could have the same thing. Like, Chris was great at investing in public equities, and he could go do that on his own.

And I know that doesn't directly answer about Chris's superpower, but it is this interesting structure. I think one thing that can really go wrong in partnerships is if it's like you're dedicating your whole life to this thing and everything you do is going to be through it, it can really turn into this prison if you don't share the same taste as your co founder. And so having this release valve and being aware of that is really nice. People normally pick partners who are like them, right, but Andrew and Chris are not like that. You know, I guess.

Sam Parr
Is that a. What did you learn from that? Yeah, I mean, I would also say, like, andrew is really good at sales and kind of creating this new vision. And then Chris is really good at being kind of the negotiator and actually, like, getting a good deal and structuring it well and everything. You know, there's all kinds of things about, about negotiation.

Jeremy Giffon
Like, one thing that would be, like, structurally. Another interesting thing is, you know, I would. I would be kind of the front guy on a lot of deals and would come back to them and they would kind of be quarterbacking it. And what was nice is, like, I would throw out an offer that I thought was really aggressive, and it was kind of the most that I could, like, emotionally stomach. Aggressively high.

Shaan Puri
Aggressively high. Low. Really low. Really low. And so this is, I want to be clear, this was back, like, in the early days when we had no money and we were really trying to, like, be scrappy.

Jeremy Giffon
Tiny is not really like this anymore, but. And then I would say, okay, like, I've really got this down. Uh, you know, and then they would just look at me and. Cause they'd never talk to the, the seller and just say, I think you can do, like, 25% less. And, like, sometimes I feel like I want to throw up.

Shaan Puri
You know, talk through that. When you have to present a shit offer to someone, I imagine some, a lot of times, maybe not a lot, 1015 percent of times, they're like, okay. Yeah, well, more than that. And actually, what's even rarer is at least I. I always have this fear that they're just gonna lose it, you know, like, and that almost never happens.

Jeremy Giffon
It happens sometimes, but it almost never happens. And another nice dynamic there is. You can always say, well, hey, like, I'm on your side. Like, I, you know, it's the old car salesman gamut of, like, my manager's killing me. It's the same exact setup.

Right. And that's, that's super helpful. And, you know, Chris shared all kinds of tricks with me. Like, one great one is it's always best to just kind of, when you float an offer to just not say anything else, people will immediately start negotiating against themselves. And so one trick that you can use if you're on, I guess it probably doesn't work on Zoom, but if you're on, just a call is you can, like, say your offer and then hit mute.

And then you can, like, be, like, you can start saying, oh, you know, whatever, but they'll just hear the silence. And that's a big thing as well, because oftentimes you just need to let it float and sit out there. But it's like, too uncomfortable for you to actually do that. Dude, I've got this friend who works in the CIA, and I was talking to him, and he has to negotiate with people. You know, basically his job is to convince people to become spies.

Shaan Puri
So if he goes to the Middle east, he has to convince a guy who's loyal to some country in the Middle east to commit treason. And when he, like, goes to these negotiations, his tactic, because he said the same thing, he goes, I say what I want and what I want to happen, and then I shut up. And his other coworker was there, and he was like, who's not part of that? He's like, dude, they do this to me all the time, just at work. I'll notice they say something, and I just want to fill the silence, and I want to keep talking, and it, because it makes me uncomfortable, and I end up just talking, talking, talking, and they sit back not saying a thing, and they always get their way.

Jeremy Giffon
Yeah, totally. I mean, one, one very cynical way of looking at negotiation, um, is that it's just who can bear to be uncomfortable longer? Um, and, and, like, that's certainly true. You can do that in a retail setting. You know, Sean does that all the time.

Shaan Puri
Sean, I think we would. He negotiates the king of the awkward silence. Yeah, he's very comfortable. Have a condo on awkward island. Yeah, he's the mayor of that area where he's just very comfortable being uncomfortable in a conversation.

Sam Parr
Jeremy, you told me something else that Chris taught you that is less about kind of the. Kind of the gamesmanship. I think when we think about negotiation, we often think about the gamesmanship. What do I say? And I think you already said one interesting thing, which is a lot of times is what you don't say.

It's to stop talking and let them talk. But another piece you had mentioned to me was, like, it's not you versus them. Can you explain that? Like, how Chris taught you. It's not you versus them.

Jeremy Giffon
The way that I like to frame it, the more kind of mature, the way that you can really do, I think, for your entire life and not kind of get, you know, be known as this, like, bastard who's just relentless and negotiate against. It's kind of, I love this idea of in a traditional negotiation, you're sitting across the table from one another. And the way that I really like to reframe it is, um, you're both sitting on the same side, and what's on the other side of the table is the problem. And the problem can be you want 50 million for the business. I want to pay 20.

But it's still this, like, okay, this is a problem. Let's work together to figure this out. And it's this very subtle thing, but it makes a huge difference. And that's, I think that's how you start to unearth, okay, maybe, like, it's actually not. It's cash and something else that's more important for you.

Why do you want 50? What is it that's 50 that's so important? And why can I feel like I only can pay 20 or whatever? And that works really well. I use that every day.

You can use it in, like, relationship problems and everything of kind of, like, making the problem other and then putting it out there and being like, let's work together on solving this thing. And there's just something so much better about that than the kind of, like, I'm going to hit mute and stare at you and, like, break you. Like, well, see, Jeremy, the problem that we're trying to solve is I want the money in your bank account to be in my bank account. Yeah, exactly. I want that.

Shaan Puri
I want that chase account to say 50. Yeah. Now it is true. True, though. Uh, you know, one of the things my dad taught me, one of the best things my dad ever taught me is, like, when you go into a negotiation, it's not the same thing.

Sam Parr
It's not us versus them. It's he goes, make a table of your needs and your, like, basically your needs and then your gives. So, like, what do you have to offer? And then what do you. What do you need back?

And then what do they have to offer? What do you need back? And they're never, like, perfectly symmetrical. It's not like, and so, for example, some of the things they need are very easy for me to give. Cost me nothing, or I'm totally comfortable giving that.

And it's actually their fear or their big sticking point was something that's not so hard for me to give on. Or maybe I could go out of my way to give more, even than they're expecting in that area. And in this other area, I need something, and then they're happy to give it. And so that's usually the better way to do it. Robert, my favorite question is, what would need to be true?

Jeremy Giffon
So it's like, okay, you want to sell your business for $100 million. What would need to be true for me to pay $100 million for it? And you can just lay it out, like, what would make this a no brainer? And you can do that in any situation, and sometimes it's impossible, but oftentimes it's far more possible than you think, when everyone actually lays that out. Because usually there's some sticking point that you don't realize, or it's something that is outside of the scope of things you've already talked about.

And I'm always amazed by how much that works. That works as I've been fundraising. It works there. What would need to be true for you to be like, oh, it's easy for you to give you money, or, you know, for a trip. Like, what would need to be true for everyone to be excited about going on this trip?

Like, it's just such a good question. And it really sets that up as, like, let's collaborate on this. That was my pickup line. What's a guy like me got to do to be with a girl like you? And then she's like, do you have a friend?

Sam Parr
What's his name? You have this other thing on here where you talk about how, what do you say, a cold email is the most asymmetrical trade, and that you've actually cold emailed a bunch of people. There's one guy in particular who you listed that I want to ask you about, but it sounds like the cold email has done well for you. Explain more. Yeah, I think it's funny, I've been saying this a lot more publicly into groups and stuff, and it's still, if everyone cold emailed, the Arb would go away.

Jeremy Giffon
But I think it's just too scary or whatever, that people don't do it. It's still a huge opportunity. I will say the addendum to that advice is, you gotta have the goods when you show up for the meeting or the call or whatever. I think, like, I think. I don't know, maybe it's just like, anecdotally.

Cause I talk about this a lot. I get a lot of cold outreach. And you also, like, the second part is, you gotta be really good when you show. You show up. But if you're good when you show up, it's just this incredible, incredible kind of hidden secret, which is, there's always a scarcity of talent.

Like, no matter who you are and how much money you're worth or whatever, there's a scarcity of really awesome people. And so everyone has an infinite appetite to meet people who are interesting, talented, have a unique view on things, whatever. And if you can present that, you will really kind of go a long way. And the downside, I can't even remember I'm sure I've sent hundreds that have never been responded to. I've never got a bad response.

It's usually just no response. And I don't even remember the non responses, but the ones that I've got responses from have been amazing, you know? And so I think. I definitely think more people should do it, especially if you're young or you're a student. That alone can be enough of a hook that, like, most people will meet with a student if they seem switched on and interested.

And, yeah, I'm still amazed that people don't do it, but I've started to see people do it and then they show up and, like, they don't have anything to say or they don't have questions for Barrett or whatever. And that can be really bad. We already know your first deal, but that was the first one. But I want to know. First deal, worst deal.

Shaan Puri
Best deal, weirdest deal. It's like the fuck murder Mary of what we did. First deal, dribble, which might also be best deal. What's the worst deal that comes to mind? What's a big mistake?

Jeremy Giffon
You made the worst deal. And name names and list their email address and social media handles. Yeah. The worst deal is actually the one that I can say the least about, which should indicate how bad of a deal it was. Give us the abstract.

The worst one was just that the person was dishonest. And I should have known and I didn't. And I ignored it for. For greed reasons. Cause I was just thought this was such a good deal, I could look past these things.

Sam Parr
When you say I should have known, I ignored it. What are some things people could look out for? What could I learn from that? Yeah, it was not this deal, but there was a friend of mine who buys similar types of companies, did a deal where they flew in the founders to meet them in person. And the first night the founders wanted to know where they could get drugs.

Jeremy Giffon
And that in and of itself is not a strong signal, but in that context, in that situation, it's like, what more do you need to know? And it turned out that they were doing a bunch of stuff that they didn't disclose or whatever. It's always stuff like that. Someone who's really flashy is almost always a bad sign. All these little things.

And even like, in the case of this deal, I introduced the person to a bunch of different friends and experts and they were all like, this guy is really something. I don't really know why you're dealing with this person. And it is funny how you just get the blinders on when something is so good. And I think we've all made that mistake. And so, yeah, that one, it just turned out that there was a bunch of things that we didn't know about and it went very badly and we lost our money.

It was a really small check. Fortunately, that was, like, the one upside, but that one was pretty rough. What's the most unique or weird deal? The best one, I mean, it's kind of too early to tell. One that I really, really love is this company called Meal Lime.

It's a meal planning app that tiny bought in 2018. Meal planning made easy. So four and a half million people, it says on the website, use this app and what do you do? You say what ingredients you have, and it gives you like a bunch of recipes to cook and lines them out for breakfast, lunch and dinner. But it was just this really awesome app.

And it was made by this really amazing technical guy who had just built this really great product. Like, I remember the moment that sold me is like they, you know how the iPhone turns off when you put it close to your head? Um, he realized that you could use that sensor. If your hands are dirty while you're cooking, you could wave your hands over that sensor to like, go to the next part of the recipe or stuff. All just these little things and they have these huge butterfly effects.

Turns out when you do that, Apple thinks that's really cool, and then they feature you in the App Store and there's all these small details. And we bought that business and it grew a lot. We got all of our money back in the first couple of years, and then this was the only business tiny as sold to date that two major grocery retailers came along and I guess in a boardroom somewhere, they had just decided, we need an app. And so they both became interested. And it was kind of funny because the company that I was at before tiny, we had sold the company to workday, and it was a pretty difficult experience.

And so I kind of viewed it as my chance to get another go at selling a company to a public business. And really kind of, it was going to be my turn to get a good deal. And then we sold it. We sold it for a huge revenue, multiple made a lot of money, excess of 25 times of our money. And it's still today.

It's like, if you look it up, it's still used. It's this great thing. I think the original team is still there. They were very happy with the outcome. I just loved that because it was this kind of perfect little situation and this great little, almost like craft app, just someone who cared a lot about making a great product.

And I love those. And the weirdest deal, it was basically. This company, a big Fortune 500 tech company, bought a business, and the business had two business units, and the big Fortune 500 only wanted one of those units, and they basically had to divest of it very quickly. And so we were able to buy it for, it was doing $10 million of recurring revenue, and it was shrinking. The business was shrinking because it was built on top of another platform that was becoming less popular over time.

And we were basically able to buy it for so little that we borrowed all the money and then paid back the loan in like three or four months. And so we basically got it for free. We were able to, we bought this out of the tiny fund and we could write this great update to our investors saying, hey, we didn't call any capital, but you now own this new business. We're going to do a distribution soon. And it was like small dollars, but it's cool to pay nothing for a business.

And then the interesting part is we also got a domain that's probably worth a million or $2 million, depending on how fast we wanted to sell it. And so it was kind of this, like fun little deal of like, can you actually do a business for, can you buy a company for no money down? And, you know, it won't be a business, it will not be a 20 x, and it's not going to grow for ten years, but we'll make many multiples of our money on it. And it's fun. Like, in the actual fun statement that, like KPMG does, they have to list the cost.

And so the accountants list it as like a $36 cost basis, which is, I guess, like the actual money that went into the deal. And those are cool. Like, you can be really, really creative. You don't have to put a lot of money down. How did they find you or you them?

We, in that case, we knew a board member, and it was the situation where, again, we made a bid there and they didn't like the bid, and they went and tried and shopped it around. And turns out, like, there's a very limited set of buyers for that kind of thing, and especially ones who can do a deal really, really fast. And so it was kind of this. We understood why we had the right to win this, this deal. We understood that money was not the most important thing here.

And so we were able to get it for this great price. That's it for part one. We actually kept talking to Jeremy, and it was so good that we're going to turn it into a two parter. The second part is actually all about what he would do today. So the first part was kind of like how they built tiny.

Sam Parr
The deals, the lessons learned. That was the past. And now I asked him basically, if I was going to do tiny today, what would I do? What deals would you be looking at? What businesses do you think are great buys?

What opportunities do you see? And he tells us the single best investment opportunity he sees today in this next part. Enjoy. That's coming out tomorrow.

I feel like I can rule the world. I know I could be what I want to? I put my all in it. Like days off on a road less travel, never looking back.

We Turned $5M Into $419M Buying Cashflow Businesses ft. Jeremy Giffon

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1: Introduction

2: Building Tiny

3: Key Strategies and Deals

4: Negotiation Tactics

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