Founder's Story - Connecting Capital and Innovation: Nate Wasson of HalBar Partners | S2: E22

Episode Date: April 2, 2024

Nate Wasson is featured on today’s Founder’s Story. Nate Wasson is Co-Founder and Chief Investment Officer of HalBar Partners, where he leads strategic fund initiatives. Nate and his team recognize that capital can be a catalyst, but it’s not the only requirement for growth. HalBar is redefining entrepreneurship through acquisition.  According to Nate, HalBar’s entrepreneurship through acquisition strategy solves two pain points: one for the entrepreneur searching for a company and the second for the investor who wants to invest in the search fund as an asset class instead of investing in companies one by one. The ETA strategy in partnership with Novastone Capital Advisors, which has the largest ETA program in the world; HalBar operates in that sweet spot of growth equity and invests in profitable companies with demonstrated upside, increased revenues and margins, and the multiple expansion between early-stage middle-market and later-stage middle-market. Today's episode is brought to you by BiOptimizers, whom I LOVE their MAGNESIUM BREAKTHROUGH product that has helped me sleep better, stay focused and feel all around healthier. Check out their products at http://bioptimizers.com/danrobbins use promo code FOUNDERS for 10% off any order.Our Sponsors:* Check out PrizePicks and use my code FOUNDERS for a great deal: www.prizepicks.com* Check out Rosetta Stone and use my code TODAY for a great deal: www.rosettastone.comAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy

Welcome to Founders Story, the podcast where trailblazing entrepreneurs share their extraordinary journeys, uncover the passion, grit, and vision that drive the world of business and innovation. Hey everyone, welcome back to another episode of Founders Story. I know we've talked about this before. This is huge, the silver tsunami. and i needed to bring back another expert because we're going to dive into how you can become an entrepreneur without being the founder and the huge opportunity that's happening right now so we have nate wasson he's the co-founder of hall bar partners which is a private equity firm focusing on entrepreneurship through acquisition or ETA. He's also the co-founder of Alveria, which is an invite-only co-investment platform.

But Nate, welcome to the show. Yeah, thank you for having me. Really appreciate being on the show. Love it. So for those that don't know, what is the Silver Tsun silver tsunami can you explain it yeah when you think about what's going on in in our world today and the sort of the macro economic tailwind that is there we have this huge amount of uh baby boomers who are retiring so uh it's been coined the silver tsunami i've talked about it several times now there are over are over 12 million baby boomers who are in the process of retiring or about to retire. And so and when you think about what that means in the context of business, well, that means that a number of these baby boomers have a business,

almost 20 percent of baby boomers have some sort of business and that something needs to happen with those businesses. And there's a few options. Some of them aren't great and frankly, aren't great for our economy, aren't great for the employees. And some of them are really exciting. And we'll have a chance to talk about it today on the show. The interesting part about what I've seen from the U.S. and other countries and many other countries, family legacy business is a big thing. It's passed from generation to generation. But in the U.S., I find most generations don't want to take over their parents' business. So then what happens?

I'm guessing it just closes. Is that correct? You got it right. So for, you know, almost half of the companies that are, um, that are in operation today could potentially close if we don't find a solution to, uh, these, these lower middle market businesses and find a new operator for those lower middle market businesses. So before people think, okay, I want to do this, this makes total sense. I want to be a business owner. I want to be an entrepreneur. I'm going to go find a great business that I can

inject my knowledge, my skill sets into. What do you tell people before they even get to that point? Is there something they should know? Is there something they should do before they consider buying this company? Yeah. So I think you absolutely have to first think about when personal growth is really hard and you have to take those those steps to growing personally, whether and knowing yourself and being self-aware is one of the most important. Know what you're good at. Know where your gaps are. Know what kind of team you need around you to be successful. And this is whether you're a founder or an entrepreneur buying a business that's already operating. If you have a sense for who you are, you've taken steps to grow personally, and then you're ready to put yourself in a good position to buy an already operating business. You got to know that is an entrepreneurial path

and it's never easy, right? You have to draw, that path gets drawn in pencil, erased 15 different times and drawn again. It is a really difficult path. It's a rewarding path because of the, you're stewarding the legacy of a business, you're the caretaker of and kind of chief growth operator for a business that's been in business potentially for 100 years. And you're going to write that next chapter. There's a lot of weight on someone's shoulders for doing that.

And then you're asked to innovate and grow on top of it and be completely relevant in today's kind of new economy. So, I mean, that's amazing. It's a lot to think about, which is probably a good thing for someone to really consider everything before they dive in. It's like almost getting into another marriage when you buy a business and when you start. So how is All Bar helping people not only buy the business, but also how is that impacting the people that have a business that maybe didn't even know that they could sell it? Well, just like any other really great business in the world, we started with a problem that needed to be solved at Hall of Fame.

One is there are a lot of really wonderful firms that are in venture capital and really focused on starting. biochemical reactions in your body. Here are signs of magnesium deficiency, irritability, anxiety, insomnia, muscle cramps, high blood pressure, and even constipation. I know I suffer from a few of these, but many supplements don't work well because they use low quality magnesium. That's why Magnesium Breakthrough by BioOptimizers is recommended. Offering seven forms of absorbable magnesium, BioOptimizers stands by their products with a 365-day money-back guarantee. That's insane. So make sure you visit biooptimizers.com, B-I-O-O-P-T-I-M-I-Z-E-R-S.com backslash Dan Robbins. That's biooptimizers.com backslash D-A-N-R-O-B-B-I-N-S for a special offer.

And make sure you use the code founders, F-O-U-N-D-E-R-S, founders, and you get your 10% off. So check out biooptimizers.com to learn more and back to the show startups there were a number of really great firms that buy larger operating businesses but there weren't a ton of firms that were helping people buy these middle market businesses that are already cash flowing wonderful businesses but need a new operator because of a retiring or no succession plan uh business owner operator that's where we stepped in we said hey how can we get institutional capital into the hands of these great folks looking to buy a business and we formed hallbar around that premise are there certain industries that you are looking at or

certain types of businesses that you focus on? Or is it more about the person that you're bringing in it? Like, how does this whole process work when it comes to matching the two people together? Yeah, that's a great question. It is all about the person. It is people first, people second, people third. The person who is going out to operate this business, they have to have domain expertise in that business. They have to have deep managerial competencies in several areas and be self-aware enough to go and find the bench strength they need to operate a business successfully. So that takes a lot of time, energy, and enthusiasm for a group to do that. So we partnered with somebody

called Nova Stone Capital Advisors. Today, they run the largest entrepreneurship through acquisition program in the world. And they select and help folks who want to do a entrepreneurship through acquisition strategy and go out and find a wonderful middle market business to buy, they help people through that process. And we're a partner of theirs along the way to help people acquire those businesses and then add a lot of value once they've acquired those businesses and are trying to grow them. It's really amazing how if you could have a business that is already cash flowing, net profitability, I don't think people a lot of times understand that you're not going to get paid for possibly a few years when you start a business. And many times the owner, the CEO is making less than a lot of the employees in a

startup type environment, right? Sometimes they don't even make anything for a year or two so i think that this really can alleviate some of the stress around you know cash flow and and getting money up front and getting uh you know a salary right away yeah i think the thing about the if you're a mid-career professional and this is what we really focus on in partnership with ncr these middle career professionals. You have a family, a couple kids, maybe you have the dog running around, you have a house, you've got a great career, you're comfortable, but you've got this entrepreneurial itch. You really want to get out there. You know you can make a difference in your community by growing and operating a local business that really speaks to your domain expertise, the one that

you've built up potentially in a large corporation or through other business endeavors over time. But you're a bit trapped. You can't actually go out and do that. Well, enter the entrepreneurship through acquisition strategy. And this is very much in much of the academic research referred to as search funds. When you get into the NCA program, they'll provide you a salary to go and find a company to buy for up to two years. So now you have that part of it solved. When you find the company to buy, the NCA and Holvar and others help come together to provide you the capital to buy that company and then finally you can actually earn a salary day one because you're operating an already cash flowing business this is when when we say our uh our baby boomer friends have really figured it

out they knew these businesses where we're great for building a life, building a career and developing and taking care of the folks in their community through offering jobs and employment. Now we can actually pass it on to another operator with great expertise who has a nice long runway to continue that legacy locally. And they have the structure and support around them to be successful. And that's what the combination of Novastone Capital Advisors and their ETA program and firms like Hallmark, who partner with NCA, really provide. It sounds like you're giving a dream scenario. I mean, those are all the things that I wish I knew going into business. I could have cut out a lot of stress and pressure, not only on me my family

it's a lot when you're doing it and i also went from corporate to business so i can understand the pain points uh if people want to get in touch with you if they fit into the things that the dimensions that you were talking about here and they think this is something good for them how can they do so well first if you're an an entrepreneur looking to learn more about search funds and ETA, the first thing to do is go and reach out to Novastone Capital Advisors, NCA, and you can actually apply directly into their program. Typically, we're looking for folks with about 10 years or so of experience and who have had meaningful domain expertise in a lower middle market type business or industry if you're an investor looking to invest in in the growth engine

uh for entrepreneurs uh reach out to me directly at www.hallbar.io we'll be able to to help you get your capital deployed into this space, invest in it as an asset class versus just trying to invest one at a time. So we've actually solved that problem from two angles. One, from the entrepreneur's perspective of, how do I get into a program that supports me in acquiring a business to run? And then from the investor standpoint,

how do I invest in these entrepreneurs broadly? We've helped on both angles. Nate, I can tell that you're going to help millions of people not only get into business, you know, maybe become entrepreneurs or expand their businesses. You're also going to help those people that have spent years and years, maybe decades. You said 100 years building something that doesn't just fade away, that gets into the hands of somebody else who can take their passions and their love for the business and take it to the next level. So Nate, thank you again for being with us today here on Founders Story.

Yeah, Dan, happy to be here. Thanks for having me. Thank you for tuning in to Founders Story. Keep exploring, keep dreaming, and join us next time for more inspiring entrepreneurial journeys.