The Derivative - Don’t Call it Private Equity, Seeking Value (and Tax Alpha) in Small Business with Adam Tkaczuk

Episode Date: July 21, 2022

It's not every day you get to talk about investing and food in the same conversation, and this week, refinancing, restructuring, and investing in niche businesses is on the menu with Adam Tkaczuk(@Adam_Tkaczuk). Adam is a tax consultant, project CFO, and private equity investor. He raises debt, equity, and government subsidies for projects and helps business owners reduce the tax liability on the sale of their business. In this episode, Adam and Jeff get into "The Greatest Show on Earth" and discuss investing in distressed companies, just what deep value means, food processing and Philly cheesesteaks (we'll take a Whiz with onions, please), private vs. public equity (is the juice worth the squeeze), the true heroes of finance, tax strategies for business owners and so much more! Plus, we're playing two truths and a lie with Adam where he throws in a coffee roasting twist — SEND IT! Chapters: 00:00-01:47 = Intro 01:48-03:45 = Choose your Fighter: Calgary Stampede or Tour De France 03:46-20:49 = Flipping distressed companies, Food processing & Philly Cheesesteaks 20:50-37:48 = Private vs. Public Equity, site selection, subsidy programs & is the juice worth the squeeze? 37:49-45:59 = Family-owned small businesses are the heroes, why not just be a plumber? 46:00-59:37 = Tax strategies for business owners, selling a business & breakdown of an opportunity zone 59:38-01:07:42 = Two Truth's & a lie? A Coffee roast profile --- From the episode: Check out Adam's newest white paper 8 Ways to Minimize Taxes When Selling a Business Follow along with Adam on Twitter @Adam_Tkaczuk and for more information visit ventouxholdings.com Don't forget to subscribe to The Derivative, and follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, or LinkedIn , and Facebook, and sign-up for our blog digest. Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit www.rcmalternatives.com/disclaimer

Welcome to the Derivative by RCM Alternatives, where we dive into what makes alternative investments go, analyze the strategies of unique hedge fund managers, and chat with interesting guests from across the investment world. Happy National Junk Food Day, everyone. I think I'll go with a bag of cheddar and sour cream ruffles. Always like those. Maybe the Cool Ranch Doritos too, but one of those will be good. We've got a bunch of non-junk food coming your way on this channel with Brian Portnoy

on next week and Ben Eifert in Surgify talking through options literature following that. So stay tuned and make sure you're subscribed so you don't miss a beat. Onto this episode. I've been wanting to talk to some private equity peeps about how that asset class is holding up amidst the public equity sell-off. And that's how I found our guest, Adam Chukuk. But this talk isn't that. It's in many ways more interesting as we talk through what deep value means, the interesting world of processed food, whether tax incentives and state tax arbitrage and opportunity zones are a net good or bad for society, and how someone can have so much concentration risk but still think they're being conservative this was a fun chat so send it this episode is brought to you by

RCM's AG services group who help people like the food processors we talked about here manage their wrists with hedges swaps and other OTC trading. Go to rcmagservices.com to learn more. And now back to the show. All right. Welcome everyone. We're here with Adam Kachuk. I had to ask how to pronounce that. Are you a fellow, what nationality is that? My Malik is Bohemian, which is kind of czechoslovakian somewhere around there uh my dad is polish and uh apparently they're telling me that the spelling of his name is ukrainian so i guess if you uh yeah the uk at the end is ukrainian if it were ek it would be polish um but as we're seeing now, that border can shift and people have gone from Poland to Ukraine

and back quite a bit over the years. And we're just talking before we're getting started, you're out of Connecticut, but hanging out in Calgary right now for the Stampede. Correct. Yeah, we've got family up here. And the Stampede is, I think they call it the greatest show on earth, rodeos, pancake breakfasts every morning. It could go, some civic group has free pancakes and sausage and coffee every morning. So yeah, we've taken our family to a few of those. And now I'm like, oh, too much. Canadian sausage up there is probably pretty good.

Wait, is it actual Canadian bacon? Is it the ham? You know, they've had had two a few different versions um i like the links but uh they have had this like i think it was a pre-processed tube thing that they just sliced up and gave you one and some of them are a little more uh just like just get through the line kind of like a food camp or something uh yeah you'll get a parking lot at a mall it'll be full of like 5 000 people getting food and it's it's something to do when you're up here for sure nice well it's on my list to do one day uh make sure you make it over to lake louise area that's beautiful over there absolutely

so i had this big idea to have you come on and talk private equity and talk about valuations there and all this stuff. And as we're talking in our pre-roll, we're like, yeah, that's not exactly what we do. So give us a little background on how you kind of fit into the quote unquote private equity world. And I think everyone will find the other side of it is just as interesting as if you were a big, huge $50 billion firm. Yeah, sure. Von2 Industrial Holdings, we're a group of individual investors, and we find businesses that we would like to buy. We figure out how to finance an acquisition.

We buy them. They're typically distressed, mismanaged when they are. So it's a deep value perspective at this. And then we turn them around, grow them to profitability. It often means hiring and firing management a few times till you find the right person or group that can run the business for you. In fact, sometimes I'll say the less we actually are on site,

the better. Nobody on the shop floor wants to see Connecticut or Massachusetts East Coast owners that are young walk through. It's just not good optically. But yeah, we're more of a holding company than we are a private equity shop directly where we don't, we haven't to date taken outside money to invest in projects or businesses. We have no outside investors, but we do have banks that we work with and we have our own equity that we put into projects. And yeah, that's a quick intro to what we do. Which is awesome.

Yeah. And so, Vontu, I've been watching my 80 hours of Tour de France this month. Is that from Vontu, which is one of the stages in the tour it is should you ever talk to peter turr or uh he's he's a big cyclist as am i i uh we both have share that um that hobby or passion so absolutely that's where it's from do you take do you watch the tour all month uh this year not yet but um admittedly sometimes when you see the same people winning over and over and over again like indurain and yeah and others and and so on it gets a little boring but um this one's been exciting because the uh tade pogachar was supposed to be that again he's going to win

third time in a row now it's gotten a little mixed up spoiler alert for those who haven't seen the last stage but yeah gets a little mixed up and some new talent in the in the mix so it's gotten a little mixed up spoiler alert for those who haven't seen the last stage but yeah gets a little mixed up and some new talent in the in the mix so it's been fun yeah very good so a few things to unpack there so deep value let's talk what that means what do you when you're saying deep value whose price is that based off right that's a loaded question but what what does that mean all right i mean i don't want to turn away prospective uh sellers to us but i'll just say like i think paying four times earnings is expensive so okay you're you're buying a business that could be in bankruptcy in a few

weeks and often it may be going through a bankruptcy proceeding and part of the the court process is to find a buyer. So that's an example of something we'll get involved in. And maybe that's just a quick answer to you right there. Like at that point, what's the value of the business? If you can't get a key vendor that maybe hasn't been paid in six months and you need that vendor to keep the business going, what's the likelihood of you negotiating a contract with that vendor going forward in new payment terms? And that's risky. So the price goes way down as a result. And sometimes it's not the owners of the business that are involved in the sale, but more or less like it's a bank owned property or the investors that are actually making the sale, not always the actual owners of the business themselves.

Got it. That make the decision about what they sell for. Yeah. Right, right. So in that case, many more ways like distressed, which you also mentioned distressed debt, but it's not necessarily debt, just distressed company overall. Because a distressed debt hedge fund has kind of a different mandate. They don't really want to, I guess it's the same.

Or what are your thoughts on, is it similar to a distressed debt hedge fund that kind of a different mandate. They don't really want to, I guess it's the same. Or what are your thoughts on, is it similar to a distressed debt hedge fund that's buying up that debt cheap or you have a more active role? Often we're refinancing, we're restructuring all the financing in it. So apparently we haven't really worked with debt hedge funds. Typically it's the bank or sometimes it's the, if there's equipment that's been collateralized or work with the equipment, leaseholders and whatnot. And it's not always distress like that.

You know, it's not always that bad. But if we can find a niche business in an industry that not many people know about, there may not be a lot of buyers, in which case we might be able to have an advantage to work out something. Now, this is where I come in is something from the tax angle. My role with the firm is to help find food processing businesses. That's an area I have that background in. But also, if we can reduce the tax liability for a seller, let's say someone's going to get $5 million at the sale, but they owe 2 million in taxes. If we can reduce that tax liability to 500,000 or maybe only a million, our net after tax benefit to selling to us might be higher than someone else. And so that's another angle that I personally bring to the table. We'll dig into that in a sec. So, and that was your background was in the food.

You just mentioned food businesses. So before this, you were doing food stuff. What does that mean? Yeah. So if you look at my Twitter profile or wherever I have some public stuff online, you'll see that I'm a tax consultant, private equity investor, and food processing business owner. So one of my clients was a gentleman who had built up a business. He came into a food processing business that was doing about 600,000 a year in EBITDA. Within five years, he grew that to 7 million EBITDA. So he just blew the place up. I can get into details about that. And they ended up selling it to a business that is now Tyson Foods, and he had a non-compete in place. So he called me up and said, Adam,

I know you're doing, you help raise money for projects, right? I'm like, yeah. He's like, all right, I want to restart a food processing business as soon as my non-compete's over. So when the non-compete's over, let's talk. And so we did. And I helped them finance a food processing business. And I was sort of the startup CFO, if you would. So we started that. Then we acquired a competitor, merged businesses with them. And now we're operating. We're going to do an expansion soon because we're at full capacity.

But it's a food processing business. And chicken, beef, I can get into that if you'd like. But anyway, that background in the food industry. It kind of has a bad connotation, right? Processed food. But what's your take on it, right? Of like, well, that's how it has to happen, right? First of all, there are levels to this.

You can actually use really, really good ingredients. Like, for example, the Philly cheesesteak sandwich that IHOP, you know, IHOP, International House of Pancakes. When they ran our cheesesteak sandwich on their menu, it was the best cheesesteak sandwich you could probably buy in Philadelphia, hands down. And in terms of the quality and quality of the steak and the the cut of meat that's involved in the the quality of the ingredients matters a lot that so that wouldn't play well on the front page of a philly inquirer or whatever right it it wouldn't but you know talking to my partner he's like yeah that was actually we gave them top quality product and they they had a really good run with that and they would sell that across the country and that's something we would

provide. But yeah, if you like Philly cheesesteak sandwiches, just keep eating them. They're, we love them. I, I buy them when I see them and in my part of Connecticut, they're not a common food item, but I will, my, my family is like, yeah, Hey, there's, there's cheesesteak. Let's go get some and so i would love them except i'm off the bread mostly so that it's hard to eat them without the bread without the roll correct correct needed cheesesteak but in like food process what are other examples of food like mechanically separated chicken and things like that sure sure so you have slaughterhouses and yeah heck if you want to talk about the covet impact on the meat industry, I do know a little bit about that as well. But food processing, and I want to break this up into like where in the value chain you are.

Yeah. Food distributors are typically very low margin, high volume. You've got a warehouse and you're just taking product and shipping it out to customers. That's low margin. Your margins can be two, three, four, 5%. And the classic is Costco, not Costco, but Costco, right? Was the, yeah. Yep. And so we will sell to Costco and they have like, we have customers that are captive to them and we'll sell our food products to them. But when you're in food manufacturing, your margins are closer to 10%, can be as high as 15, but you're, depending on the mix, you're in a higher margin business. You can, your ability to own customers is better. So if you have a good sales team, if you have good recipes, if you can connect with the market better, you're able to it's a higher margin business, and you're just adding a lot more value. And, and then there's the cook side of the

business and the raw side, for example, we are right now in the raw side of the business. And what that means is, will, there's there's no expectation that the the food product, even though it's a USDA certified site, we have a license from the USDA, there's no expectation that you can take the package and just start eating it like you can with cooked sausage. And so that actually means that the regulations are a little bit less stringent, because it's expected that you're going to cook this and sanitize it when you're cooking it. And that's what we're focused on right now. But at the end of the day, it's, it's, it's sausage, it's beef, chicken. I don't think we do a whole lot of pork though,

but that seems counter to, it seems to me like there should be more restrictions around raw than around non-raw because it can do more damage. It's raw, but I guess the logic is no, everyone knows it's raw, so they know they got to do something with it. Exactly. You know, you buy eggs, imagine buying unpasteurized. Well, that's wrong. That's, that's the wrong analogy. But yeah, you know, what you're buying is not a prepared food item. Yeah. So the it's, when you have a raw plant with a cooked plant, what we ended up doing, what you have is a wall going down the middle of the plant if they're sided together you'll have your employees will have different uniforms one might be aware blue smocks another will wear yellow the bathrooms the entrances the exits to parking lots are completely separate the

only call it sorry they called a Chinese wall like in the financial industry no no that's a wall PC anymore yeah Yeah, it is it is not the case. The only way to get from one side of the plant to the other, including HVAC and everything is to get in the tunnel oven, which is basically a conveyor belt that will cook you if you were to ride through it. And it's a big tunnel about 50 feet long, you get in one side and you are cooked as you go through. That's the only way to get from one side of the building to the others to the cook oven uh the tunnel oven they call it and then the food has been cooked and sanitized at one end and um i can get you know you gotta go in and sterilize the plants and anyway that's my food background uh i'm looking for manufacturers of food products and folks who take raw ingredients like vegetables

and protein, make some sort of a package, packaged item and sells it. And I'm not looking for white label manufacturers or somebody else's manufacturing. I want them to own the manufacturing resources and own the customers. I'm not looking for distributors, though. It's OK if you have a distribution facility involved in the project. We're looking for that value add in the food chain. It seems to me that it must be a smaller and smaller subset of available companies, right? Isn't it? Is it like the rest of the world of the bigger get bigger?

Right. It's a winner take all type scenario. It's not, it's a very fragmented industry. Go through the grocery store and take a look at all the food items that are there. And then I mean, you also see that wheel that pops up from time to time of like, actually this whole aisle is actually just Nestle and Tyson, right? Or like a lot of brands are owned by a conglomerate, but sorry, I interrupted.

No, no. And that's what they do a lot of folks have uh bng foods i think is what it's called nestle others are just going and buying all these all these companies um and the reason they do it is because it works uh and and one of my um uh colleague i know in the industry what they'll do is they'll take like a example. I think it's Italian sausage, right? Or some, some Italian protein. Individually, you might get a family business that does 10, 20, 30 million in revenue, and that might sell for six, seven EBITDA or so. But if you buy them and you buy all the other Italian sausage companies and you merge them together you can then sell this

for 12 13 times ebitda and that is that is a private equity play that's been done many times with folks that we know in the industry um and we get calls all the time ourselves hey would you like to sell we want to you know oftentimes they're looking just to buy my uh my partner honestly someone who knows how to sell someone who knows how to build a plant um and so um yeah there's ways to make money in this industry yeah well i was telling my wife keeps wanting these uh mediterranean chicken skewers from costco not not the other costco costco right i'm like I was in, threw them in the cart and I just, they're like $18. And I looked down at the, I think it's $15 a pound and it's chicken, right? So it's cooked, it's spiced chicken, but it's chicken and it's $15 a pound.

So I'm like, all right, someone's making a ton of money on this thing, right? They just process it, put it on a stick, cook it, put some spices on it. I mean, it's tasty, but I don't know if it's what, cause what's normally chicken per pound is like $3 or something, $4. Who knows? Yeah. Yeah. Actually that's not far off. Um, probably a little less than that now. COVID. 5, 6 X just to cook it and put it on a stick. Yeah. One of the things that happened for us, and I'll jump into it since COVID, it's still kind of in the rear view mirror. When the commodity prices were going up, we would buy, I don't know, several thousands of pounds, truckloads of beef or chicken, and we would start processing. And it might take a week or so to go through the inventory and get it out

to a customer. What would happen is, let's say our price point's a dollar a pound, which it wasn't, but let's just say it is. By the time we're selling it to a customer, the price for that raw material has gone up to two, $3 a pound. And so we take the income, revenue from the sale of the beef or chicken, and then you have to go back and buy more

and it's expensive. And so the commodity prices were moving so quickly and contracts were not up to speed. Most contracts weren't, hey, we're going to charge you X dollars a pound plus some index based on the meat market, which is not the way it had been. What ended up happening is we were just like breaking even for a little while just because prices were going up so quickly and we figured that out since but what they're telling me now are that like chicken for example, apparently the flocks of chickens that are out there is going to take a while to come up back to speed. A lot of farmers and folks who were growing cattle and pork were slaughtering animals because

you couldn't feed them. You couldn't get the corn. You couldn't get the grains. And then if you had the pigs, you couldn't take them to market and sell them because the slaughterhouses were shut down. And so all of these flocks and herds have been greatly reduced. And it's going to take a while for those to come back up to pre COVID levels, just biology really. Which is part of those huge umbrella supply chain issues. Right. But that's part of that whole. Yeah.

So we expect meat prices to be elevated for a while going forward notwithstanding what the economy does um you need a good uh hedger in the meat space i know i know yeah yeah we were talking about that earlier oh yeah we'll have that conversation um but yeah if you're in the meat industry and perhaps jeff here someone you want to talk to about hedging. So going back a little, you said, so you've got this food company, you started Vontu or joined the group of guys at Vontu. So just curious from a personal level of like portfolio construction,

how do you think about that of like, oh, this is my job or this is my investment? Basically, you're kind of putting 100% of your investment into this distressed debt type thing versus do you ever sit there and read Jason Buck tweets and say like, I should have some more diversification into trend or volatility or some of this other stuff. You're like, all right, I'm all's it what's the term hog wild hog wild yeah i'm going full hog high on the hog on on food companies i think jason's uh cockroach portfolio is awesome so if if you're doing portfolio construction so even stepping back, I work with alpha architect

for a while. If you're familiar with them, Wes Gray and the group, I'm a big believer in trend following and long volatility. It just makes a lot of sense. You might sit there for four or five years of underperforming and having this, this bleed, if you will. But when you need it, it's there. And if you do the math, you really, you're not trying to hit home runs. You're trying not to strike out. That's what you're trying to keep the inning going. Even it's okay if you strike out a couple of times, but you just want to keep getting people on base. That's how it works in baseball. That's how it works in investing.

You don't want volatility to work against you where you lose 50% and now you have to make 100% to get back to where you were. And I'm sure your other guests, you've touched on that many times. So that being my background, I look at this about 50% of, I guess, for my global portfolio is in private businesses. Maybe 25% is 20%. Just about all of my tax-sheltered accounts are in a trend-following strategy. So I can go in and out and it makes trades. There's no tax liability. I mentioned I have a automated trading

system that probably trades about five percent of my portfolio um and then i'm about 25 in cash wait wait hold on that doesn't work out right uh all right so i've got 50 percent in the business of the investable portion i've got that spread out between trend following, value, buy and hold, index funds. You know, it's nothing all that. And do you view that 50% as equity, as your equity bucket or as stock exposure, but just in the private space?

Like how do you, it's just kind of, right? If you sat down with a financial advisor, be like, Oh wait, you got way too much in these private businesses. What are you doing? But also, right. We could pull up a thousand stories of like the people who make true wealth have that concentration, right? They go bigger on the bets they believe in. Yeah. I mean, I invested. So first I got equity when I started the business with the folks there. And then I invested in the business soon after that, once we were up and running. And it's also cash flowing. You know, I get distributions from it, which is, that's personally how I invest. I'm not into buying dreams and I don't like to take market risk.

Like I know people are going to be buying chicken and beef, like the Philly cheesesteak sandwich. People are going to be buying that forever in Philly and so on. So there's always going to be a market. This particular industry, I'll just throw this out for the food industry. When, when the economy goes poor and there's a recession,

very often people are still going to keep buying comfort foods. And so a lot of times these are recession proof industries. I like that. I like knowing that, Hey, I'm going to buy in this business and I can understand it. I don't need, I don't need a presentation. I get it. People buy these things. We sell it for more than we make it.

It makes sense to me that I'm comfortable with that. I'm not comfortable with Tesla, for example, though. I think Tesla has made a big difference. Other car companies are making electric vehicles. And so there's, there's definitely a societal impact that that company has had, but I don't really trust the revenue or their, their income that I see from there. And I don't know if it's going to be around in 40 years. Right. Which is fascinating because a lot of people would be like what you're going into some private business whose customers could disappear overnight and all these private business risks versus this publicly traded thing that is on everyone's tongue and you see them all over the place.

So it's just an interesting to me mindset shift of like, in your mind, you're not taking much risk at all. And if you sat down with 10 financial advisors, I'm sure eight of them would say you're taking a ton of risk on these private company bets. Sure. And let's just look at like PE ratios, for example, if you cobble together an investment of 10 businesses, an average private business is going to sell for six, seven, eight times EBITDA, you know, so, and earnings might be a little higher than that, say, you know, but right now the S&P 500s, I'm guessing 15, 20, I haven't looked at it since the market really crashed here, but I think it's down to like, you're buying, yeah, you're buying revenue at a very lower, lower price than you could otherwise. You do get management risk and I'm not going to, I don't want to downplay that. That, that's, that is critical critical and a lot of these private businesses are managed

for the benefit of the owners and that just takes like a good legal view of this of like all right where is this business going to go how as a as a passive investor and i'm not passive in the business because i'm on the financial side but i'm not i'm not an operator of the business day to day selling meat and whatnot. So part of the thing that I work through... The little hoodie and the glove. Sure.

You want to make sure that the owners of these... If you're an investor in a business like this, in private equity and you want to buy these businesses but not operate them and own them, be in control. If you're a non-control minority owner, you want to buy these businesses but not operate them and own them. Be in control. If you're a non-control minority owner, you want to make sure that the owners can't take, they can't bonus out all their cash flow and leave you with nothing.

Things like that you want to look at closely. But then it also opens up, and you wrote a little white paper and said in your notes to me, tax alpha. So how do you view, it seems in this private structure, there's a whole lot more opportunity to do some, hit the right buttons to get these different kinds of alpha in terms of tax and opportunity zones and all these different things that maybe aren't

necessarily available in the publicly traded space. Absolutely. Absolutely. Yeah. Or do you view it as like, those are available, but it's already all priced into the stock where maybe if I find a private company that hasn't pulled some of those levers yet, it's not priced into their true value. Yeah. The latter. Public companies now, like GE definitely takes advantage of these. You know, every publicly traded company is out there and they're negotiating when they build a new plant. They're going to be negotiating with the state and local tax authorities to reduce their property tax abatements and liability. And they do all that. And that's part of my background.

I did that for years, helping Fortune 500s reduce their tax liability when they expand. Does it impact the bottom line? Yes and no, because what really matters more is access to employees and customers when you're siting a location. So it's called the site selection industry. You'll hire someone like myself or in my former life, we would go and look for a hundred acres in a metropolitan area with a certain number of employees and the labor force availability, and we'll negotiate all the incentive packages, we could offset the cost of a new plant by up to 30% or more. And I'm working with one private business right now, it's a family owned business. and they are building a $60 million galvanizing plant.

So far, we've secured $30 million in subsidized subordinate debt and tax credit equity. So instead of it being a $60 million project, it's more likely it's a $45 million build after all the grants. And then you're asking banks not for 45 million or whatever, you're saying, look, we've got 15 million of debt in the project, but that's subordinate to you. You hear about capital stacks. This is actually more of like a collateral stack. You can piece together a capital and collateral stack in such a way that the investors get increased returns. And it also works when you're selling an asset. There's ways of like opportunity zones, 1031s and structured sales that you could use to reduce, defer or sometimes eliminate tax liability when you're selling a business.

Let's dig in. Yeah, I'd jump to the what's your view on, is it a win-win? Like, so this steel plant that's getting built, who's giving away the subsidies there? The local, the county or the state or the federal program? State and federal. So in this case, I'll get into specifics. This involves New York State's Brownfield tax credit. What it is, it's a former Exxon site, I believe. And Exxon vacated the site, but there's some oil leakage on the site. So what they've done, the owners and sellers of the property have remediated the site through what they call the Brownfield tax program in new york state that's managed by the department of environmental conservation i'm talking try not hit you with too

many terms yeah you clean up the site you remove the contaminated soil you'll bring down fresh clean top sill and then you get a certificate of completion and in new york state there's various versions of this law in this particular site that we have, the subsidy is a 22% cash refund for all tangible property placed in service on the site. So if you've got a $40 million, $50 million of tangible property and machinery and equipment, real estate, all of that, that the state will view it as though you had overpaid your taxes by 10 million and we'll cut you a check for $10 million. And that subsidizes the project. And the idea is, but for these incentives, this site would remain a contaminated site with no economic value. And a lot of these government subsidies are based on that.

They typically are available in distressed sites, economically distressed, environmentally distressed, or so on and so forth. And the beneficiaries are those that make investments, create jobs, create housing, medical services, colleges, universities, nonprofits. So there's a whole gambit of ways that you try to take advantage of these and how you qualify and whatnot. But in this case, yeah, go on. I was just going to ask, do you think the New York state taxpayer is getting their money's worth there? Like, and overall, it seems right when you look at it from the investment lens, I always feel like it's almost taking advantage of the of the governments, right, of these subsidy programs.

But surely there's some argument on the other side of like, no, this is a good thing. And that would just be sitting there contaminated and rotting. I'll tell you an example of when it did not work. It used to be in New York City under the old program rules that someone would take a lot that had a gas station in it. This is Manhattan. You clean up the gas station. It maybe cost you a few million dollars. Now you get 22% of a skyscraper refunded to you. Yeah. A billion dollars. Yeah. So it was an uncapped program. Then they started placing caps and restrictions on it. You're not allowed to double dip. New York state has a 5% investment tax credit. So if you're a brand new business in New York, you get a 5% uncapped refund on all investment you make in the state if you're a manufacturer. And they said, you can't take that tax credit plus this

tax credit for the brownfields. I'll admit sometimes it's debatable. I mean, this is how I support my family, and a lot of times I will come into a project and I'll get paid to generate these tax credits and to call it tax credit equity and bring equity to a project that's free. But a lot of times I look at it and go, man, this is so complex. And sometimes the transaction costs can be very high. Both folks like myself get paid, lawyers, accountants and whatnot. Sometimes it's not worth it, frankly. Even for whoever's building the plant, you're saying? Oh, for the plant, it's always worth it.

You've got to do a cost benefit. So from a political standpoint, I think the simpler you can make these programs, the more as of right you can make them, meaning you don't need to apply or get approved. There's no governing body taking a discretionary review of your project and approving you or not. It's almost like a line item that you file on your tax return. I think those are very efficient and very useful. So definitely tax policy matters and it drives

investment where you want it to go. That's good if it's done right. For the business you've got to determine if the juice is worth the squeeze and i'll give you an example a few years ago new jersey was giving an incredible amount of money away to companies that would locate in new jersey uh i've had clients that would receive 35 million dollars in grant money to relocate from Philadelphia to New Jersey and Camden, New Jersey, for example. Which is like right across the room. Yeah, yeah, exactly. And states do this all the time. And I think it's good in some ways. It's like when you go buy a house or a car, you're going to negotiate, you could kick the tires and you're a consumer, you're a customer of these states and these taxing jurisdictions, and you have the right to negotiate the fees you pay when you commit to a particular location.

I think that's all fine. But like in New Jersey, here's $30 million. Okay. So that's a tax credit that you would sell for $25 million. All right. We'll just use that number. So it's $25 million. Then you pay tax on that at the sell for 25 million. All right, we'll just use that number. So it's $25 million. Then you pay tax on that at the federal and state level. That brings you down to like,

I don't know, call it $15 million net. Then New Jersey's charging you $400,000 more a year in property taxes. So over a 10 year period, you take 4 million off that. And you add up all these other disruptions and you get a benefit. You absolutely get a benefit, but it's not the 30 million. It's not a windfall. Yeah. I sometimes have an issue with that. Like Chicago, we've been losing lately, right? Like Boeing left, Citadel's leaving, all these groups are leaving, quoting crime, but I suspect it's taxes more than crime. But it's like, where does it end? If everyone just keeps playing this game and just, the companies just keep circling the country over a hundred years time span, they just keep

circling and getting the best deal and never paying what there should be paying at any one location. So yeah, it's a tough nut to crack. I'll say very often though, you only get these funds if you perform. So you'll enter into a contract with the municipality or the state and say like, I'm going to hire 500 employees. I'm going to invest $40 million or whatever those numbers are. And unless you do that, they're not going to give you any money. And then on a year to year basis, they're digging into your department of labor reports, your 941s, all your tax returns to make sure those employees are on site. You certify, and there's a whole process of verifying that you are still in compliance and they're still getting a benefit. And the states make more money than they lose. I'll make that absolutely clear.

Okay. Good. then they lose. I'll make that absolutely clear. The tax revenue far outweighs the benefits that they're giving you, which tells you how much revenue they make on taxes. Payroll tax, corporate income tax, property tax, the jobs, and it goes from there. Mind jump back to, we're talking about the public versus private, like Google, Amazon, the Irish twist, all that stuff, right? Where they're putting their revenues through a subsidiary and their effective tax rates, like whatever it is, 5%, 6% or whatnot. Do you think those huge players have way bigger advantage of what they can do versus a small private 5 to 10 million EBITDA revenue company?

Luke Gromen That's an interesting question, because yes, on one hand, these companies can offshore their profit centers and not, they call situs, where's your revenue and profits situs? They can recognize all that income offshore and not pay taxes unless they patriate that money. So that's an advantage. What a small to medium or family-owned business can benefit from, and I think you're my heroes, and I want to touch on that in a moment because I have my heart pulls for for the family-owned business yeah you're in a position where I think most of the tax code in the united states has been drafted to your favor you can take advantage of so many tax benefits depreciation solo 401ks retirement plans just just so much that you benefit from from owning a business

like like this food processing business or something you're you are advantaged in the tax code five to one over what a w-2 employee can do you're able to shelter so much of your income, build wealth without it being taxed. And you will make, I was in Manhattan. Here's a great example. Midtown Manhattan consultant working with the Fortune 500s of the world. I had partners in this, I wasn't a partner in the firm, but I had partners in this firm were making say a million dollars a year yeah our customers my customers were folks in southern new jersey that were like a cement manufacturer all right i don't even know if he had a high school degree or not or past high school um but just an honest guy he and his wife started a cement manufacturing company in southern New Jersey because he was a construction worker. All right. He's a construction worker, looks at the world

and goes, oh, they're taking prefab cement and putting it into the foundation of this, this house next door. And they're done in a day. And I'm taking, it's taking me four days to pour this foundation. He makes some calls and then ends up becoming a, um, a major precast net manufacturer. Um, and I've probably given away too much information now already because people could probably figure out who it is, but I'll say I've had business owners that started a business in the eighties with their family. Um, they make signs for the New Jersey roadway. They make sauces that goes to Campbell's.

They make meat. Like I'm involved with. They dig clams out of the ocean. These folks are financially better off than most of the finance people I've met in New York City when I lived there. Three to one. Three to one from a revenue standpoint or just all the advantages of your time? After tax income, like how much they put away each year. And beyond that, the equity of their business. They have a $20 million business that they've built. And they might make $2 million a year.

Who was that article? Was that a Wall Street Journal op-ed or someone? It was like, there's people making money all these weird ways in the middle of the country. Who knew? That was on Twitter. And it's like, I had no idea that my plumber who has 15 employees makes more money than I do. And I'm a lawyer at a law firm or something. Yeah, that's the way it works.

You're a W-2 employee at a law firm. Partner, maybe not. It's hard. You just, it's very difficult to accumulate wealth as an employee, in my opinion. And I think business owners, small business owners are my heroes. And this is why. When I was a consultant working with Fortune 500s, my customer, my client would be a middle market manager, a middle manager. He's just concerned. He or she is just concerned more often than not in their career, building up the resume within a few years,

they often are moving from role to role business to business. And they're leaving these commitments in their, their wake. Like, are we just committed to Ohio that we're going to create 50 jobs. We're going to get $5,000 a job. This is a Fortune 500 dealing with $5,000 a year in jobs. It's going to cost $50,000 of compliance costs to deal with that 50 people and fill out the reports for the state of Ohio. But you get a few million dollars that you can recognize on your annual review and then they get promoted. They're not thinking long-term. I think the only people in our economy that are thinking long-term are family-owned businesses. They're thinking,

if I move to New Jersey or to Ohio or build a new plant or hire these, buy some equipment, how is this going to impact me in 10 years like what's the value of this business and this decision to my family and to my employees and they care a lot about their employees like they're every business owner that I've I've talked to that I've had as a client has said Adam, I am proud of Jake or Pamela over there. They came to me when they were in high school and now they're making $200,000 a year. And I'm thrilled with them. Which brings up, I just think they care so much about the people they work with. They care more about their employees, their communities, and the longevity

of their business than a lot of publicly traded companies do. Do you think that's dying out? Everyone now wants to be, I'm going to be an engineer at Google or at Amazon or have these high paying software design jobs, or I'm probably a little too far in that world or reading the wrong Twitter feeds. People still need the other jobs, but there are stats I've seen of like the formation of independent businesses is way down. Where I said, have you heard of entrepreneurship through acquisition? Is that a term you've seen on your Twitter feed at all?

Yeah. All right. So my Twitter feed is filled with people trying to buy these businesses who are trying to quit their nine to five and start a plumbing company or something um yeah uh it's funny you said my good buddy from college his he's uh four kids in manhattan wall street right huge i don't even want to know what his annual burn is private schools in manhattan but he's he's like i just want to we're having beers

he's like i just want to tell my kid like forget all, he's like, I just want to, we were having beers. He's like, I just want to tell my kid, like, forget all this. He's like, I just moved this money around and it's just mumbo jumbo, like go do something real, like be a plumber, right? Own a plumbing business. He wasn't even thinking of it from like the, the revenue and the money inside of it. He was just like, do something real with your life, help people out. Is he just, all right. All right. So I don't know this gentleman, but what was this? Maybe three beers into a melancholy, like I wish the world were a certain way. I think so. Yeah. It was a little bit of like, what am I doing? What have I done with my life? I'm just right. Like, and he lends money to private equity actually. So I think he was just like, what are we doing? And he probably sees those real businesses on the other side. And like, that would, that looks like a good path. Um, but it probably was

also a little bit of like, how much further can this go? Like, and that's back to the overall P right when they're paying 20, 25, 30 multiples for private businesses, which seems to me like the only hope of making that work is that you're going to get another PE firm to buy it at a higher price from you. So anyway, we've, we've lost the script there a little bit, but we should have beer here. No, but yeah, exactly. It is Friday. We should start doing that Friday, Friday beers. So come back to some of the tax stuff for that business owner. I don't know if you can give away too much of the secret sauce in the playbook, but what are some of the strategies they can use there to lower that sale income? To lower your tax. Well, talk to your CPA and accountant. So first

of all, I'm not a CPA, an accountant, or a lawyer. I work with a lot of them, but so none of this is tax advice. And frankly, in three years, some of the tax advice that is right today will be wrong because the laws change. My background's actually in physics and business. So I've learned all this as I've progressed in my career. But if you're a business owner, try to figure out you're taking advantage of those PPP loans, for example, things that come up in your industry. Take advantage of those at the government level. The real incentives, real tax starts to kick in in two areas. One, if you're expanding your business, you're hiring people, you're building new physical plants or relocating or moving or expanding and growing. So that's, that's one bucket. The other is when you're selling your business and you're going to hit

a massive tax liability at that point. There are strategies that we could chat about, or I could just allude to that, that will help you reduce that. Because those are the two times when you're in a position of power, I'll say, or you have influence. You have influence in negotiating and deciding what taxes you're willing to put up with and take advantage of all these incentives that these governments make available to you. So how do you have any influence on the side when you're selling the business? It seems like you just get this, all this money. How do you have influence with the tax authority? A lot. So the further out you plan, the better you have.

It's almost like, imagine you're probably familiar with like estate tax planning. It's similar in that I think I'm going to sell my business or I may pass away. How do I start structuring my estate so that it transfers to the rightful owners, whoever I want, reducing tax. That's going to take some tax planning and some forethought. Same thing when you're selling a business. You could, for example, move the business into a trust, often located in Nevada, and let it season for a few years and then sell it. Now the now the trust is actually owns the business for you, not you. And because it's in Nevada, you pay no state tax on that. Or you could move your business or a portion of your business to a lower tax state, like Florida, Texas, whatnot. And when you sell the

business, a portion of your business is taxed in the low tax state and a portion of the business is taxed in the higher tax state. These all take a lot of time and planning. And the truth is people don't plan. It's very, very rare. You're going to find someone who actually goes through this process. Or you have some of your things, right? They're distressed. They didn't think they're going to sell. And now five years later, they're in trouble and they need to sell. Yeah. I really like the Opportunity Zone program for a lot of this. I actually don't mind paying taxes. I advise just about everybody, look, you're going to sell a business. Maybe we're going to get 30 million in capital gains. There'd be a larger one, but 3 million, whatever. Capital gains taxes are at generational lows right now. Just pay the tax.

Move on. Enjoy life. Don't deal with all this. But if you're someone who hates taxes or just doesn't want to give the state of California $10 million or whatever it is, then you can start planning. How can I structure this in such a way that I'm keeping more of this money than the government? And I've got a white paper that you could perhaps link to. It's on Bondo's website. Yeah, we'll throw it in the show notes. Yeah. The smaller your business is, the more options you have. could do structured sales you could you could sell a part of the business every year for a few years and that would put more of the this you recognize more capital gain or income or capital gain from the sale under lower tax

brackets uh that's one way one way i really really like that I think is creative is you sell the business to a buyer. And sometimes there might be an earn out where like, look, you're going to stay on and be an employee, help me do a transition. And then we're going to pay you an earn out or some money over the next couple of years as you perform against that contract. You could say, look, all right, I'm going to sell the business to you, but I'm going to become an LLC consultant to you right now going forward. Now I'm not generating W-2 income from you from the sale. I'm generating business income and my wife, oh, she's going to be part of my business as well. So we're going to be a consulting firm because we, and we will, we're going to charge you 500,000 a year to consult. And we're going to take that 500,000

and we're going to put it into a, um, uh, a defined benefit plan, a pension plan. And you can pretty much put most of that tax free into effectively an IRA. Uh, and that, that's a great way to avoid taxes and grow a nest egg tax-free. What about the Peter Thiel backdoor Roth IRA? Aren't they trying to close that? Or did they close that? What was the... I don't know. I was actually reading an article about it.

I almost retweeted like, you know, this is... Anyone can do that. If you have access to a company that's like going to grow 100x, first, you don't need your IRA. You're going to do fine. But yeah, you can have a self-directed IRA. So these 401ks, as a business owner, you can have a solo 401k. It's your own 401k.

And you can have it in a self-directed account. You can invest in real estate and businesses and commodities. As long as it's not a business or a real estate that you're participating in, in a material way, or you can't put it in a house you own, but, or live in as your primary residence. And there's certain tax rules around it, but yeah, you can do whatever you want with that money, you know, freedom, you can do what you want. I really like those. When you get into a defined benefit plan, where they define the benefits, you have an actuary, it's a pension plan, you could you could take hundreds of 1000s of dollars a year, and put it into this 401k. And you can you can

manage that as you will as well. And so there's there's lots of freedom you have when you own these retirement plans for your business. And where were we going with this? Go ahead. Just overall tax strategy, but do you ever, I'm very leftist on all this, but do you ever feel like it's a disadvantage, right? If you know all this stuff, you can earn all these benefits and then the rest of the world is like no i'm just toiling along it's a w-2 employee and i don't get any of this stuff so it's like i don't know how to is that a societal problem or it just is what it is how do we fix it i think this i think it is yeah you're basically telling a business owner the first hundred two hundred thousand dollars you, if you're self-employed, you can put

that away into a tax-free account. But if you're an employee of a business, you're limited to like $18,000 a year. Sorry. Yeah. Which is why. Yeah. I dislike it. Now, there's a lot of rules that if you're a business owner and you have 50 employees, you generally have to offer all the employees the same benefits that you have. So it's a little harder to do that. But if you're self-employed... Safe harbor rules on it. Yeah, exactly.

So I'm left with you on one way in terms of I really wish the tax code allowed people to build wealth better if you're an employee. And that just isn't the way it is. And I wish it were the case. Is crypto solved that? What's that?

Is there an easy way? Is crypto solved that? Crypto solves everything. Everything's been solved by crypto. But you can see now when some of those, like what else are these people supposed to do? They can't get ahead because they don't have these tools.

So like, all right, I'm going to YOLolo it on these crypto trades um that's actually an interesting motivation yeah you're the crypto outside of starting a business i mean i think there are people like look just start a plumbing business you can charge a few hundred dollars an hour, build equity. Anyway. Ben Eifert just had that bullshit op-ed in the financial, where was it? I don't remember what it, but it was basically like, yeah, of course these 20% yields on some DeFi thing are bogus. And of course this is, but you can see the appeal of it. I'm like, oh, I don't want to go start a plumbing business. I just put this cash over here. It's like owning a business. I get this dividend, I get it paid out. Of course it's all BS, but anyway, back to the, we lost the

script once again, which is always makes for a good, you know, it's fine going on those tangents. I'll just throw this out for getting back to selling a business. The Opportunity Zone program is really good, provided you can reduce the fees and transaction costs, like anything in finance. Back to Ben's point, if you're a retail private equity shop, you're charging a lot of money for these, like know, like two, 3% a year to manage money. That's about what the benefit is three, 4%, depending on how good the underlying investment does. And we don't have to get into details about the opportunity zone, but if you do sell a business and it is capital gains, you, and you do know of an investment that you like, like this

galvanizing plant I'm working on, it's in an opportunity zone. You could throw money in there. In fact, the money we have raised is from an opportunity zone investor. There are no fees. Give us a quick opportunity zone breakdown. It's run down poor areas, essentially. Okay. I'll try to do this in two minutes. If I go too far, I'll be back. All right. So opportunity zones, you sell an asset and you generate a capital gain. You can then roll the capital gain into an investment in the distressed census tract called an opportunity zone. In each state, the governors determined where their opportunity zones were. And sometimes they're not always really distressed. They were locations and census tracks that could reasonably be expected to attract

capital and they wanted to give a boost. And so regardless, each governor determined there are plenty of opportunity zone maps you can go into and see if there's a location that works for you. Then you could either put a business there or invest in real estate. And those are really just some qualified opportunity zone investment or opportunity zone business that you could invest in. There's rules around it. And should you do that, you don't have to pay taxes on the capital gains that you rolled into the fund and into that investment. You could defer paying taxes on that until I think it's April, 2027. So right now it's about five years. So you get the ride, the government's money tax-free for five years,

and then you pay that capital gain in 2027. From there, you never pay tax on that investment again. This is all federal level, by the way. Each state either conforms or not in varying degrees. So should you say buy a multifamily apartment building or invest with a real estate developer that's building that does something like that? Maybe they invest 10 million in today. And in 10 years, you sell it for 20 million, you would generate a $10 million gain, but you don't pay tax on that $10 million gain if you've held it for 10 years. The other benefit is if you structure the Opportunity Zone fund correctly as an investor, you can take dividends and reimburse all the cashflow coming off of these investments and roll that into another Opportunity zone investment and kind of keep all that money tax sheltered. Going back to our earlier comments, it's very difficult.

It's right on two minutes. Good word. Okay. It's difficult to take advantage of this program if you're not a high net worth person. If you've just selling stock and you've got $20,000 in capital gains, where are you going to put that? I think there are some real estate groups online that'll take small checks, but more often than not, it's high net worth investors selling businesses. That's primarily the folks I've been working with in this world. They sell a business and they just want to go put it in the real estate diversify. Sometimes they want to roll it into an investment, like an ongoing business, an operating business as well.

That's the overview. But I mean, the risk is that real estate, wherever you went to, is not a good investment, right? So there is risk there. Yeah, yeah. Yeah, a lot of these are the way to figure it out, in my opinion, is if an investment's only being offered to Opportunity Zone investors and only Opportunity Zone investors are investing in it, then that's a warning sign. Yeah. If this investment is actually good and can stand on its own two feet, you're going to get people investing in the project without the opportunities on incentives. And that's probably a good litmus test.

We've been doing some different bits to end the pods. I can let you choose your adventure. Give me your hottest take. We can play two truths and a lie. Two truths and a lie. I don't have any hot takes. All right, done. So the game, either personally or professionally or whatever, tell me three things and I'm going to suss out which is the fib.

I should have prepped you for this, sorry. Yeah, yeah, all right, all right. What can I say? Thatpped you for this. Sorry. Yeah. Yeah. All right. All right. What can I say? That's a, an interesting lie. Um, I'll throw this out. This is actually, I'm not. All right. Here's one. Here's one. Uh, coffee roasting. I, uh, you can go to, uh, here's a couple of things. Yeah. You can go to home Depot and pretty much cobble together a coffee roaster at home Depot that will outperform.

And you'll be able to make coffee that tastes better than anything you can buy retail. Okay. That would be one. Can't get the beans at Home Depot, though, can you? No, you can't. You can't. Gosh, I should have gone for the hot take here um i can't think of a lie i'm sorry yeah uh i cannot lie i cannot that's fine we'll dig into the coffee roasting um

so you're talking with someone who doesn't drink coffee oddly enough i go just pure diet coke from mcdonald's instead all right much worse for my long-term health but um i like the idea of caffeine but not the taste of cough so having thrown that disclaimer out there tell you can go build a quality roaster just do it yourself yeah you can you'll probably need some voltage regulator but basically you take a heat gun you blast air up through a screen and you agitate the beans and turn the beans into a, you know, you cook them over time. They call it a roast profile. And you can greatly impact the taste of coffee depending on how you roast it.

It's not like a sauce you cook on a stove. You know, you just heat something up and it boils and you get the ingredients matter. Here, how you cook, how you roast the coffee makes a big difference. And what, what got me on the coffee, Jeff, then up to you here is when I stopped putting cream and sugar in my coffee, I had to find coffee that tasted good. Cause suddenly you realize a lot of coffee tastes bad. It's very bitter. It doesn't, it doesn't.

That's my problem. Too bitter. Yeah. Wait, so is it the quality of the bean isn't as important as how you roast it or? Probably a little bit of both. So the bean matters year to year. It's almost like wine, you know, wine grapes, you know, a certain vineyard will produce wine that tastes different every year. And then how the vineyardyard the winery makes the wine

and ferments the grape so i i make wine and beer too as a hobby i um although my pod last week is with a guy from nappa and we were talking through how all the and this is actually jason's theory but all these people coming out of uc davis are so good now that they've really the variability or the volatility in the year-to-year quality is almost nothing now, right? It's like they've gotten so good, they can just churn out the same taste. The vintages aren't as important anymore. Interesting. You're probably going to get a lot of people who disagree on that because they like the variants and that's how people have been educated. He didn't like it. He's like, you're right, we want that variability.

That's what made it fun. Interesting. So the beans are similar, you're saying? Beans are similar. Each year, depending on how much rain, sun, humidity that a certain hillside gets, the beans are going to taste different. How the bean is processed, natural or washed,

makes a difference. I like natural processing where you leave the husk on the bean and you get a little more of a chocolatey cocoa flavor in the bean than if it's washed. A lot of these uppity coffee play roasters, I don't like. The coffee tastes too acidic to me actually.

So I like a darker coffee, but still sweet without the bitterness. But anyway, you can affect all of that through the roast profile of the beans, and it changes year to year. How long it's been since the bean has been roasted matters. Over the next two weeks, the taste of a cup of coffee from that bean is going to taste very different. There's unlimited ways you could mix and match these things. Where do you source your beans? So you're doing this at home?

Yeah. Yeah. I do it at home. Um, uh, sweet marinas is a good site. You can go to get green beans, you know, three, five, six, $7 a pound. And, uh, you know, if you're so inclined, you could put it on your stovetop and like shake them like you would popcorn and you're going to get a horrible cup of coffee, but you'll get the experience out of it. And then how much do you make? So do you buy any of your own roasted stuff or you do it all

for your own consumption? You know, when I'm at home, uh, my, my MacGyver coffee roaster broke or the heat gun broke. So I got to replace that. But, um, yeah, I, you know, I make a couple pounds a week and that's what I drink. And so, you know, how long does it take know i make a couple pounds a week and that's what i drink and so you know how long does it take you to make a couple pounds i'm getting i'm getting to the is the juice worth the squeeze it's juice worth the squeeze it takes about an hour uh to set it all up and is the roast worth the drip in this case and then yeah and we'll finish it up with our so will there be a coffee piece of the portfolios at some point down the line does that fit into the food business i'll be honest the only way to make it work is to charge like 30 40 a pound and so there's um a group called

april coffee they're in like the netherlands or something and they've they've been able to do it you know if you can convince someone to pay four times more than what you can get for it, maybe three times more than what you can buy at Starbucks, then yeah, you can make a go of it. Otherwise, it's a low profit margin business and you don't see anyone, very few sustainable businesses that just rose coffee without there being a retail component where you can charge $3 a cup. Right.

That was one of the best posters ever sent. It was like a coffee cup with 10 cents. And then it was a Starbucks cup with $2. This was years ago, whatever it was like innovation just said, there's a, is a brilliant idea staring you in the face, right?

It was the same size cup and everything. It was just 10 cents, $3. Where's brilliant ideas there. And you in the face. Thanks Adam. It was just 10 cents, $3. Where's brilliant ideas there. And you in the face. Um, thanks Adam. It's been fun.

Um, have a great, great time out in Calgary and we'll, uh, see you next time. We're in the Connecticut area. I've come visit us in Chicago. Will do.

All right. Thanks so much. Bye. Bye. Cheers. You've been listening to The Derivative. Links from this episode will be in the episode description of this channel. Follow us on Twitter at RCM Alts and visit our website to read our blog or subscribe to our newsletter at rcmalts.com.

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