Acquisitions Anonymous - #1 for business buying, selling and operating - Mills gets sweet on this $3mm Dessert Maker in NYC - Acquisitions Anonymous 264

Episode Date: January 19, 2024

In this episode of the Acquisitions Anonymous podcast, the hosts break down a potential business deal involving a specialty dessert manufacturer in New York City. The hosts mention the company's financial details, customer base, and the possibility of growth. They also discuss food manufacturing challenges and the potential for an SBA loan to fund the acquisition. The hosts are curious about specialty desserts' nature and market potential.Check out the listing here: https://www.bizbuysell.com/Business-Opportunity/specialty-dessert-manufacturer-great-cash-flow-and-limited-competition/2161662/Thanks to this week's sponsor!Acquisition Lab and their team have been longtime supporters of the pod.Created by Walker Diebel author of Buy Then Build: How to Outsmart the Startup Game, is an accelerator with a highly vetted cohort-based educational and support community for people serious about buying a business.Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood, [e-mail].-------------CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.Subscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Hello, everyone. Welcome back to Acquisitions Anonymous. I am one of your host, Bill Dallisandro, and this should be airing in January. So happy new year to everybody. Happy 2024. This is a fun one to start the year off with. It is a specialty custom desserts manufacturing company in New York that makes logo desserts and sells to theme parks and companies and all kinds of unique end markets. So this was a really fun one. We actually thought it would be a good fit for a searcher. So you got the whole crew today. It's me and Michael and Heather and Mills, all of us. I hope you enjoy this episode of Acquisitions Anonymous. This episode of Acquisitions Anonymous is sponsored by Acquisition Lab.

Acquisition Lab and their team, they've been longtime supporters of the pod, and they provide a really great service for people who are looking to acquire a business. So it's created by Walker Dival, who's become a friend, the author of Buy, Then Build, how to outsmart the startup game. So Acquisition Lab is an accelerator with a highly vetted, cohort-based, educational and support community for people who are serious about buying a business. So a lot of our listeners like you, you turn in every week to our deal reviews, you want to get in on buying a business.

You're on this podcast because you're trying to learn how to buy a business. But if you're not quite sure where to start, acquisition lab is a great place to start. So they exist to help people buy a business and to navigate all those complexities of the process, everything you hear us talking about on the show. They provide a proven framework, tools and resources that support you all the way from search to close. They do it. There's a whole bunch of educational material and support. So if you're serious about buying a business,

check out AcquisitionLab.com or you can actually email the program director Chelsea Wood directly. Her email is Chelsea at buy then build.com. So the best part of these recordings for me, guys, is Bill is in the middle of his day. He's had some

cup of coffee. He's super perky. It's 10.30 there. And Heather is just like, oh my God, it's 7.30 in the morning. It's beautiful here in Southern California, what are you guys doing to me? Which I think puts me in the middle of this sandwich here being in the flyover America part. And it's like, anyway, it's a treat. It couldn't be more true today, too, because we're at, you know, almost year end. And so I'm like, as tired as, you know, I'll ever be throughout the year. Yeah. So it was a rough one this morning to get up.

This is one of the untold perks of living on the East Coast, which is that the entire global economy is Eastern Standard Time-centric. Like, when you live on the East Coast, like, it is the ultimate privilege. You just book meetings whenever the heck you want them to be, and the West Coast people deal with it. You guys are jerks. Yeah, we're like, it's 5

a.m. Oh, well, okay, I guess we're going to be on the call at 5 a.m. Okay. Right. I have concluded the optimal time to be on depending upon whether you're dealing mostly with Central or mostly Eastern is either Central or Mountain. Because if you're on Mountain, you're an hour

ahead of all of the California people. But you still get like that feeling where your NFL games started like 11 in the morning. But then like if you want to just, you know, your meetings are starting earlier in the day, like 930, 10 o'clock, you know, in the morning at the latest. And it's like you're not having to do that thing. I think you're stuck with Bill, which is like, okay, like this meeting starts at 5 p.m. Like that doesn't happen when you're in Mountain. Like the day just gets going.

That is true. I have several 5 p.m. meetings because of West Coasters. You know, we try to compromise. Yeah. Sorry. All right. I brought a deal. It's a holiday season.

By the way, we're recording these during the holiday season. Everybody's going to see them in January and be like, why do these guys keep talking about Christmas? Well, it's December 22nd. So sorry to all of our loyal listeners. But because of the holiday this season, I brought Heather a deal about Heather's favorite thing. It's no, it's not horses, Heather.

Maybe it's just my favorite thing. It's dessert. It's a dessert. I'll put my hand up. I love dessert. One thing that sucks. about getting older, by the way, is my wife and I, there's certain desserts we can't eat after dinner anymore, like some chocolatey ones.

Sad. Can you eat them at like 10 in the morning for no reason just to experience them? I can't. I don't know about her. She's got problems. That's very sad. So I have a lot to look forward to. That's great. It's, yeah, it's not great. Okay. So, biz by sell. So it's a specially dessert manufacturer with great cash flow and limited competition located in New York City with seller financing available. They have a picture here of a lady with a hairnet operating a dessert, automated dessert machine. Asking price is $3 million, says NA on cash flow,

gross revenue is $1.6 million. EBDA is $600,000, so they're basically at five times EBDA. Established in 2014, FF&E is $350,000 worth of furniture's fixtures and equipment. The business description is a manufacturer of a dessert product, expected exponential growth. 10-year-old New York City company manufacturing a high-in specialty dessert product and selling through wholesale distributors. They are approved vendors to highly coveted and high-profile customers, which include high-end national supermarket chains, multiple famous amusement parks, zoos, cruise lines, wholesale direct suppliers, well-known food halls, and many more.

The company has consistently demonstrated year-over-year growth in both sales and profitability. They turn down many requests from well-known customers to keep their profit margins high while maintaining simpler operations. So I will pause there, and then there's a second paragraph we'll come to it, but it looks like, in summary, a mechanized New York City-based dessert manufacturer that does some sort of specialty dessert selling for about five times EBITDA. Is that how you guys read this too? That's what it looks like to me. It's like New York County, by the way. So it's not technically like Manhattan, but it is right there. It's interesting. It says New York, New York. So this could be in Queens or any of that kind of stuff. I don't I don't know where the New York County ends.

I assume it's the whole city, but what do I do? My immediate question is, why the heck would you manufacture anything in New York City unless all of your customers were right there in New York City as well. So I'd be really curious about how local and fresh this business is. So like, have you guys ever looked at bread routes or any of that type of stuff where you got to like wake up at 4 in the morning and restock the bread and it's got to be made semi-locally because it's got to be fresh and it's got to be on the shelves by the time the supermarket opens or the time whatever opens?

I wonder if this has an element of that. They said national supermarket chains, but maybe it's just serving the local, you know, the local stores of those chains. Because I did see a pizza dough business in New York City one time, which is pretty interesting. But at least you kind of think of New York pizza and it kind of made sense, I guess, being manufactured there. But yeah, anything else that's kind of just generic, not really associated with New York. The only reason to be there would be if you're only serving the local geography because it has to be fresh. That's, I agree with you. When I first saw this, I thought, oh, this is like, you know, I don't know if you guys are familiar with this, but the majority of restaurants actually cook their food, but then they import, like, the desserts, right? Because desserts can be refrigerated. They can, they don't get, you know, they don't, it's not like regular food where after 10 minutes they don't taste as good as when it's fresh out of the oven, like they're that way. Plus, you don't necessarily want to have like a dessert chef, like on staff. So that's what I first thought this was. This is one of those centralized, like, service to high-end restaurants that, like, produces these specials

specialty desserts and get them delivered and here's your taramisu and all that stuff. But then they list the customers or like amusement parks and zoos and cruise lines. So it makes me wonder like, are they like, you know, knock off dilly bars or something dumb like that? So it's just kind of confusing. Well, it's also a little weird that it says they sell through wholesale distributors and then they list their customers as national supermarket chains, multiple famous in amusement parks, zoos, cruise lines, wholesale direct suppliers, food halls. Do you think these are just their end consumers that are served through their wholesaler?

are they also selling direct? There may be some clues here in this second paragraph. Let me read that. They have the ability to produce proprietary patterns to accommodate their customer's logos on the product would differentiate them from their very few list of competitors. They do not have a marketing or sales team and only run one shift per day,

which can be increased to three shifts per day at maximum capacity. They develop a patented, automated production machinery, which have put to its full capabilities, quadruple production. They are trademarked, vegan certified, SQF certified, Gurdly certified with proprietary recipes. They're not really Gurdily certified.

That was just a joke. My kids don't laugh at my dad joke, so I stick you guys with them. Projected revenue increase of 50% each year going forward at current operations with a marketing and sales team and increased production, revenue growth will be all caps, exponential. Price includes intellectual property, patent, and trademark, and their unique brand. So the thing to answer, the reason I wanted to read that, Bill, you asked what they make, and there's this interesting kind of produced proprietary patterns to accommodate their customers' logos on the product,

which differentiates them from very few list of competitors. And that reminds me of going to the zoo or Disney, and there's Mickey Mouse, you know, there's a dessert in the shape of Mickey Mouse's head, right, for example. Okay, so, I mean, that second paragraph, I got to say, I kind of like it, right? So it says that they've got a lot of excess capacity on the, fixed equipment they've already made, says they've got patents and some sort of,

of intellectual property, which I mean, I'd have to diligence that. But if they've got some sort of thing that lets them do Mickey Mouse's face in an automated way for lower costs, that could be interesting. It says they can quadruple production with the full capabilities of their automated production machinery. Sounds good. It's interesting to me that this is, it looks like it's just one product. They say manufacturing a high-end specialty dessert product. It makes me think like a of dipping dots, which not, it's not to the same scale, but it's not like, hey, we just make frozen cakes and ship them or frozen pies. I wonder if it's like one really signature, interesting kind of thing. It could be. I mean, they say very little competition. They say

they've got intellectual property. You know, maybe it's something unique. This is starting to sound cool to me. What about you guys? Food manufacturing is always tough. You know, that's the only part about this. I go, oh, it's, you know, there's a lot of regulation because of health and safety. It is perishable and you have to really manage your inventory and your delivery routes. So it's never an easy business. But for a food business, food manufacturing business, this does sound pretty interesting. The logo part, wow. I mean, it kind of reminds me of those, for a little while, a lot of drink places around here had the ability to put a design into the foam of your drink.

You could actually upload a picture and it would like of your child and it would make, you know, put their picture on that. It sounds something like something cool like that and I think that would be very, very interesting. But I do wonder how far outside of the local territory you could expand with that.

That's a big part of this, right? Is how much can you grow it? Because they say they've got excess capacity here. So if you grow it, obviously a lot of that's going to drop to the bottom line. But then I look at it and I go, it's in New York, New York. Is there something local to this?

Do they have to have local customers, which is absolutely going to cap your growth? So that's a dynamic I want to understand. If I can sell nationally and I've got patent-protected manufacturing technique and excess capacity and they don't currently have a sales team, that sounds interesting, unless there's an obvious reason they don't have a sales team, which is that they either can't serve any more demand or there is not any more demand or whatever it might be. Yeah. Did I see that it was vegan?

as well. It didn't say that. It says vegan. Well, it's vegan certified. Yeah. Yeah, which could be some of the niche. So it's not like a flawn. Well, that's got eggs. I'm just trying to think, what is so special to eat? Yeah. They use vegan eggs for that. They're

new. That's true. They have vegan eggs for everything. Yeah, that's true. Who knows what it is, but it's it, but I think that that makes it kind of another dimension. Okay, that's a market, a very nichey market, but is growing. And so that would be interesting. It's all about, I guess, shelf life shipping and growth here. You know, excess capacity isn't really worth much in your production line if you can't find a market for it.

So, or you don't have the excess capacity to deliver the product further away. So it seems like they're doing logoed stuff, right? So they're putting Mickey Mouse's face on it. If you can ship it, I think you're in a really good position here to do a lot more sales and marketing, right? you can do outreach to every company, everybody with a logo basically and go, do you want customized desserts for your staff for Christmas, for a big event, for all of your best clients, you know, any of these things, which is probably not how they think about it right now, they probably think about it as like a food service business to sell you a bunch of Mickey Mouse

heads that you sell at Disneyland, you know, or whatever it might be. But if they can do customized stuff at scale and ship it naturally and it has shelf life, there's a lot of growth here, especially when you've got to set a logo, that includes national high-end supermarket chains, famous multiple amusement parks, zoos, cruise lines, et cetera, you can say, we make all their fancy desserts. Did you have it at whatever restaurant, we can make it for your clients? I mean, that's pretty compelling. You just need to sell a crap out of that. Right. Even the wedding business, you know, they like to have customized things at the weddings. That could be really interesting market there. But like you said, it has to be,

you know, we have to know more about whether this product can ship, what capacity, you know, what size batch they have to make, you know, can they do small batch logos or does it have to be, you know, pretty huge? That, I think that's the absolute critical thing, right? Do I have to run 5,000 here or 10,000 or can I run 100? Right. Yeah. Have you guys ever looked at a business called TIF's Treats? Are you familiar with that? I've heard of it. Is this a cookie business? Yeah, it's a, it's a, it's a cookie delivery dollar. basically. And what they did was they've basically taken the market of like B2B gifting and replaced it with cookies, right? And so basically they have all these little like,

I would say really cheap kind of baking and distribution centers to where you can call these guys at cookiedelivery.com, I think is what it is, or cookies.com one or two. And like they're all over Texas now. They start in Austin, and they will, like, you call an order, you give them 100 bucks, and they go deliver like four dozen cookies to an office, right? And it's like, it's this idea of like the cookies get baked really quickly, and then they show up as a, you know, a treat at your, for a holiday gift or whatever, for B2B type stuff. So it replaces like the old, you know, the old like pepperage farm basket that everybody used to give. It's like that kind of thing. This is nothing but cakes, but something you actually want to eat.

Well, the cookies kind of suck. I mean, that's the first thing I'll tell you. They taste kind of chemically, so I don't like them. Whenever they show up, I'm like, oh, these freaking cookies, because there's something about the way they use the ingredients. They don't taste like my mom's, so they're bad. But anyway, the point, yeah, about nothing but cakes or all this kind of stuff, or like flowers, right?

It's like, when you give so many flowers, it's not about the flowers, is that you spent time to do something special for them and you thought of them and you took the effort. You know, that's the immediate thing that comes to mind for this. for me, especially if they're in New York City, is like, why aren't people ordering specialty custom desserts with the logo of their thing or whatever from these guys and having it go straight, you know, to customers? Where the job to be done is to show somebody some value,

not to buy a dessert, if that makes sense. All right, taking a quick pause here, I have something to tell you. This is Michael. I hate bookkeeping. I hate bookkeeping. I hate doing HR. I hate doing all that kind of stuff. But for bookkeeping, I have found a solution.

It is my friend Charlie's business. called cloudbookkeeping.com. So that's cloudbookkeeping.com. They are your perfect partner. If you want to get bookkeeping out of your hair and focus on making your company, your customers happier and more successful. So please give them a call, call Charlie, cloudbookkeeping. com. Tell them we sent you. They're a great way. If you're a business buyer, if you're a business owner, you're tired of hassling with getting your bookkeeping done. He's got a whole fleet of people that are well trained and work for him. He's located here in St. Antonio,

so I can tell you because of that, he's awesome. And they're a great partner for you to potentially call to help with all your bookkeeping needs so you can do the important stuff in your business rather than worry about getting your books right. So give Charlie a call, cloudbookkeeping.com, and now back to the episode. What is the best Christmas present

y'all have ever gotten from like a vendor or a customer? Like, what's the best work Christmas present you all have ever got? Chili's gift card. Obviously. Okay. That was coming a mile away. You're welcome. I can go first while you guys think.

We have a distributor in the UK who distributes our stuff in the UK. And every year, he sends us this giant box of like unique British candy, like that you can't get in the United States. Like I don't recognize any of the brands or if you recognize the brands, it's not skews they have here. And he just sends us this pile of. it to our office. And it's all unique, weird, good stuff. And we look forward to it every year. I love that one. So when I used to do M&A work, we would give all of our clients. We were an M&A

firm and we managed money for a handful of families. And we would send those Harry and David gift boxes with like pears, you know, and like dried meat and stuff like that. And we worked with like about 65 families. So we send out the gift boxes. And then like the next day we see this like what we think is a fraudulent charge for like way, way, way more than we planned for Harry and David's. And the people at Harry and Davids accidentally sent 47 boxes to every client instead of one box to every client. And so it was like over a hundred thousand dollar. Yeah, yeah, it was like over a hundred thousand dollar order.

And it was already too late like because of it was holidays, how quickly they shipped. And so every single client had 47. boxes show up on their doorstep. And they were just, you know, at that point, they're just, like, giving them away. Like, the mailman needs to take some, you know. And, and everybody was just like, you know, you really got to step up next year because one, Harry and David's box is really going to be disappointing next year. That's awesome. I think somebody lost their job at Harry and Davis for Keying that in. Holy cow. Holy cow. I must be in a bad mood this morning. Because all I can think of are the bad gifts I've gotten that I just didn't really wasn't too excited about. Like,

I don't, being a woman in a man's kind of industry, you tend to get like a scotch or whatever, you know, because they bought it for everybody. Or dress socks. I didn't want scotch. Yeah, I give it away. I'll give it to my male family members or whatever because it's not stuff that I really want. And this year I got, I mean, it was a really nice bottle, but a bottle of, you know, fancy Jose Cuervo tequila. I mean, the dark kind that I don't know.

and, you know, I wouldn't drink that. I gave that to my daughter. So I think in one year, somebody gave me like a Rush Limbaugh book and it was not the right gift for me. What a poor choice. Yeah, what work? It's amazing.

For a political book gift. Like that is a bad choice. I never forgot that one. That was pretty bad. Wow. You would like some customized desserts with your firm's logo on it. I would be much better than that. much happier with this.

Okay, well, who should do this deal? Or how would somebody figure out if they should do this deal? Because I think, I mean, the first initial reaction is, like, there's a lot of people in the food manufacturing and niche food manufacturing business, and there's natural buyers for something like this, and they've seemingly all passed on it, because this listing looks like it's been around for a while. But, like, A, how would we figure out who should look at this and be, like, well, who should look at this?

So what do you guys think? It's too small for most independent sponsors. So it's in this weird no man's land where an owner-operator can't, you know, can't do this deal. And it's too big of a hurdle to get over. I just am dying to know what it is. I think this is searcher red meat right here. $600,000 of even da. I mean, you probably can't pay 5x for it as a searcher, but, you know, maybe with an earn out or something.

I mean, this is this prime SBA right over home plate, right, Heather? I would say so. I mean, size-wise, it definitely is, I think any, if they're trying to get SBA debt, any lenders going to want somebody with some kind of industry experience they can feel safe with because it is manufacturing, any kind of manufacturing. And then you add food and you need someone with a resume. And a lot of searchers don't have this kind of resume. So it would be kind of a unique.

We have a group of searches. we call mid-career searchers. You know, they are maybe in their 40s. They've got some significant work experience and they're leaving corporate world, you know, to search maybe somebody in there that has the right kind of experience for this could do it with an SBA loan.

So, Heather, is it really that important? Like, if I rolled up and wanted to buy this business, am I not going to get an SBA loan for it? You're going to find that the field of lenders gets pretty small if you don't have the right kind of resume or you can't somehow convince them you've got transferable experience. So one of the things we coach people on is not, we don't want to see your resume, your generic resume that you might use for getting a job.

We want to see a buyer profile that highlights any and everything in your background that prepared you for this business because that's what the lenders are trying to scrutinize. So yeah, there's a there's a good chance without, you know, a good story to tell about why you're a good fit for this, that you would not get the loan, even though the numbers might work. I didn't realize it was that stringent. I mean, I thought I could make a pitch, you know, like, I'm a really great marketer. We got this thesis around selling logoed cookies all over the internet.

We really think we can grow this thing, blah, blah, blah. And I thought that would kind of, I kind of thought this was a check the box item, that if you were kind of, if you were good at the spin, it didn't really trip you up. But you're telling me it's a little bit more intense than that. It depends, is what I'm telling you. So manufacturing gets a little more scrutinized than, you know, some other B-to-B service. So the lenders kind of have certain hot buttons where they're like, wait, I'll let, you know,

I'll let someone come in without experience as long as they kind of sell me on themselves in many industries. But when it comes to something manufacturing of anything, that changes. And then you add the food component to it, and I think it changes even more. So it's kind of, and it depends, answers. There's plenty of businesses where lenders are okay with you out, you're having direct industry experience. But manufacturing, a little tougher.

So, Bill, you're not as persuasive as you think. I guess not. Well, Heather's on to me. That's the problem. I need to go find a different lender. You've got to start over. So I do want to give this broker credit because I tried one of my tricks, which is you take the image that they have in the listing and you Google image search it to see if it shows up

someplace else. And it turns out this is a stock photo. So this is not the real thing. So we can't guess what the, because I've been trying to guess what the dessert was from this photo the whole time. This is pretty close to pre-leine manufacturing is the closest thing I can see. But yeah, kudos to the broker for, they know, they're under my little tricks. Maybe they are the listeners of the podcast. Pretty soon, Michael, we keep doing this long enough.

All the brokers are going to figure us out. And they're going to change all their pictures. They're going to take all their hats off. They're going to stop touching their face. They're not going to touch their face. They're going to block me on social media. It's probably the first off. Look, here's the thing I like about this.

And I'm turning over, by the way, whose cat is part of the podcast today? I'm going to go get her. Sorry. She's doing a great thing. Let's get her in here. Maybe she wants to buy the business. She's like,

did somebody say special to be desserts? Does she like? Yeah. Look, I think when you see something like this that just doesn't make sense, that's a sign that there's opportunity to go dig into. Right? And it's the stuff that. you're like, why does a sane person have this listing

and why did they do these little things? Like sometimes it's worth your time. And Bill talks about, you know, I love how you talked about there's some ways that this could be a very interesting business. If you have a specialty corner of stuff or you have the opportunity to grow it by going further from B2B to B to C or directly,

like all that's really exciting to me. So like I think that's my takeaway from this is like if you're a creative deal maker and you like interesting problems, like when you see stuff like this, like go check it out. Like, this is where you find alpha, in my opinion. I'm dying to know what this is.

Well, I know what you should do after this bill. I'm signing the NDA. I already got the link in our chat. But, like, it threads the needle in such an interesting way because it's specialty desserts. Like, part of my suspicion is that you could get in and realize that, like, it's, you know, it's New York based. Like, I don't know, is like six flags or Disney World or like, is there one place that has, like, massive customer concentration or like carnival cruise lines is 40% of their business or something.

I just, it's really piqued my interest. I'm curious. I think there's a, there's a bunch of things that could kill it, right? Mills, like you, like you get, and kind of that small business M&A, right? You can try to find something that has a whiff of this will be really great unless I can disqualify it. Right. So yeah, you can come in, but this is the type of one that there could be the gold nugget in the middle. If it's special, it's not just some generic special dessert. Like, it's got big corporate customers. It might be able to scale.

They've got some IP. You know, you might come in here and find that this is really interesting and not just your run-of-the-mill, specialty dessert manufacturing. Or you may come in here and find that the broker totally oversold it and they're 75% to one Disney theme park and it's, you know, something that anybody can do and there's, and the IP is pointless. But you just don't know until you look at it. I'm interested, how would you guys diligence this IP?

Right? Like they probably got some patent. It sounds like on a machine that I don't know, fills canoles or makes bonbons or I don't know what it does. How in the world do you diligence whether this patent is actually valuable or whether it's kind of one of those vanity patents that people get? You start with a lawyer, I guess, and you probably need an engineer, you know, if it is, you know, a manufacturing, you know, specialty.

And a lot of small business and intellectual property is vanity. You know, it wasn't necessary. And it actually gums up a lot of SBA deals because the SBA requires you to transfer the intellectual property with the sale, even if you don't need to, like trademarks. And it gets to be a real pain if somebody's got a bunch of vanity trademarks and you've got to transfer all of them, whether you need them or not. So with SBA, you're kind of stuck buying that. But yeah, is it a useful patent? I think you need an attorney maybe as an engineer to tell you. Yeah.

What I have seen, Bill, also there are, in the patent world, it's a pretty diverse world. And like, you can go find patent attorneys and trademark attorneys, for example, who were formerly engineers or trained in food science or worked in that industry. And so I would go start there. You know, once I got past kind of my market diligence and was ready to start spending more money on it, I would go see if I could find somebody like that who specializes in patent and trademark in this particular niche. And a lot of times I think it could save, Heather, what you're talking about,

it could save having to hire two people. You just hire one person who does this all the time and that's their specialty. So that's what I would do. But I definitely wouldn't do it until I take a deep look at my kind of market diligence and have a good investing thesis. Yeah, I'd also want to understand like, you know, when somebody says they have a patent, right? The patent is only valuable if it lets you, if it gives you an unfair advantage in competition, right?

So I would want to observe, is it patently obvious? no pun intended, that this company has an unfair advantage, right? Like, are they materially cheaper than their competitors? Are they able to do materially smaller runs or materially bigger runs? You know, is, there's their pricing different. Like, can they do something that no one else can do? Like, literally, they have a capability. So less than just looking, like reading the legal document, I would look at their business and say, what competitive advantages does this business have? And are those the things enabled by the patent? If they If they're trumpeting this patent and it's not conferring any observable competitive advantage,

you've got to wonder how valuable is this patent. And going back to what Michael said, I mean, usually the market will tell you, you know, if the person's like, I have this amazing intellectual property around proprietary chocolate chip cookies, then, you know, it kind of falls flat on his face. Or like, we have a unique way to make cupcakes, but they're just cupcakes. Like, okay, stop, you know, don't pass go. But if it's actually something that is unique, creates unique distribution, unique actual product, you know, unique fulfillment, something, right, that is truly defensible, then the intellectual property will probably prove itself out. But then they also have to have a history of defending their intellectual property if you want it to be worth it, darned.

Cool. This is a good one. Well, Mills, let us know what you figure out. Be the best holiday gift ever when you, your holiday gifts are going to go through the roof. You'll know because you're going to get some in the mail, Michael. Great. Great. Not 47, I hope. Oh, hilarious.

So I go to my gym this morning, by the way. I joined a new CrossFit gym, so I got on a gym. And we do the whole workout. You know, this wasn't that strict. This was okay. And then, like, the class runs over. And as we're walking out the door, the instructor goes, like, hey, wait, I forgot something.

And he brings out, like, this giant tray of, like, cookies and cupcakes and dessert and all this stuff. I'm looking at him. I'm like, bro, I just worked out for like an hour at 5.45 in the morning and you want me to eat a cupcake? Like, how's this work? It was like fresh, like for you to eat right now, not like, yeah, yeah, like, here's a cupcake or some fudge. I was like, why is this my problem? At a gym? Yeah, yeah, that's wrong. Why is this my problem? That's weird, especially at 545 in the morning. Like, that's, that's an aggressive start of your day, just a big chunk of fudge at 6 a.m. I thought we were friends. I thought we were friends.

All right, let's cut it out there. And yeah, happy holidays, everybody. Well, when they read it, it would be happy, happy, happy 2024. Happy New Year. Happy New Year. Happy New Year.