Building Redemptive Businesses Through Purpose-Driven Acquisition: Growth Capital Podcast

Hey everybody, welcome back to another episode of the Growth Capital Podcast. I’m your host, Justin Dixon, and today we’ve got Andy Galpin. He is the founder of Tree & Leaf Partners.

They are a search fund. Effectively, he is going out and he’s raised a little bit of capital to go out and find a business that he can buy and then effectively take over and act and jump into the CEO role. So it’s a bit of a different philosophy or structure than a traditional private equity firm who’s going after multiple deals and they’ve got a big fund.

So we dig into kind of the comparisons between a search fund and a private equity firm and some of the kind of value that maybe a seller would get from selling to a search fund versus a private equity firm. And then we talk a lot about kind of his focus on culture and focus on evaluating culture as part of their due diligence process. So super interesting conversation with Andy.

Let’s get Andy on the pod.

Andy, man, nice to see you again. And thanks for being a guest on the podcast.

It’s great to be with you, Justin. Thanks for having me on.

Yeah, no, well, let’s jump in. You and I met almost a year ago at an event at a conference here in Texas. And so maybe give everybody else that’s listening a little bit of an overview of who you are, where you are, and what you’re up to.

Yeah, so my name is Andy Galpin. I am a redemptive acquisition entrepreneur. What does that mean?

Redemptive, we focus on more than just the profitability of a business. We’re looking at kind of what impact can we have on the world through the lens of business. And that’s customers, stakeholders, suppliers, the community that that business exhibits in.

How do we think about that more holistically? Acquisition, I’m looking to buy a business rather than build something from scratch. And then entrepreneur, I’m looking to step into leading and running that organization for the sea of the future.

So I’m based in Dallas, Texas, but originally from just outside London in the UK, where I spent almost six years helping IBM’s clients design more meaningful experiences for their customers and employees.

Got it. Well, let’s unpack redemptive a little bit more. I don’t know if you’ve ever heard that terminology before.

So how did you land on that? And I guess maybe explain it a little bit more as far as your role in finding a business, because you’re more of a search fund, if I can use that term, where you’re raising money to go find a business that you will acquire and run versus what normal PE is doing, and they’re buying multiple deals, and they’re hiring people to run those deals. So maybe talk through the difference between search fund and redemptive, and then we’ll dig into more.

Yeah, so search funds, you highlighted quite well. The difference between us and other types of buyers of businesses is, firstly, that I am the entrepreneur. So the one talking to you as part of that process is the one that’s going to step into your shoes as the CEO of that business going forward.

So when I’m talking to buyers or sellers of businesses, I am looking to build rapport and demonstrate trust and give them confidence that I’m the right person to lead their business in the future versus other types of buyers who are often different on the process end versus who actually goes in to run the company kind of moving forward, whether that’s the kind of partners in the private equity firm that manage the deal process versus the management team, they’re actually going to bring in post acquisition.

And it’s a little bit different on that front. And the second side is, I’m only looking for one business. So a lot of private equity firms or independent sponsors are looking to buy multiple businesses, maybe over time, I am looking for that one business.

So I can take off that investor hat, put on my CEO operating hat, and give my 100% attention to growing and scaling that organization to make it even more successful than it’s already been.

And how do you start a search fund? Like how what are the criteria qualifications? Can anybody just kind of go, you know, maybe they’ve got a rich uncle and they go out and they say, hey, I’ll give you a couple million bucks to go buy a business.

Like how do you get started in that space? And then how do you kind of attract investors to because they’re investing in you for all intent purposes, right?

Yeah, 100% say that there are multiple ways of doing it. I’m doing something known as a traditional search model, or an investor back search, a lot of other people choose more of a self funded route. So they aren’t actually raising capital up front, they’re covering those costs themselves to find the business.

And then they’ll either acquire the business using an SBA loan, or maybe bring in some equity partners then at that stage, and to enable them to kind of close the transaction. So from a self funded route, that’s almost open to anyone. And anyone can go look for a business and negotiate with a seller of an existing business, and then try and close it, there’ll obviously be criteria that investors look at, both from a business perspective, and the searches perspective, when the acquisitions ready to close.

And also the bank will be very concerned about your background and the fit for the business before they’re willing to lend you money in order to acquire that business. So the self funded route is kind of open to everyone. The traditional route is a little bit harder, because it involves raising capital at the front end of the process, that then covers your costs during a roughly two, two and a half year search process.

So Tree & Leaf Partners, we have 16 partners, which are a mix of institutional funds, family offices, and high net worth individuals and CEOs who’ve gone through this process and this journey in the last 20, 30 years, and now want to advise and encourage and inspire the next generation of CEOs.

So I went through an MBA program at the Kellogg School of Management, that’s where I got introduced to the model of search funds and this idea of raising capital from investors, and then bringing them a deal to help fund the transition of leadership in one company. And so I met a number of my investors through that process, and then got a number of introductions to others as I was going through the two to three month fundraising process about maybe two years ago now.

And so they if I can understand it correctly, they they kind of give you not give you they invest money in you a certain amount so that you can have kind of runway to fund your your life to and also fund your ability to go and put yourself in front of the right people attending conferences, you know, you know, marketing materials, things like that. And so they invest in you for that two to three year search period. And then the goal obviously is to find a business to acquire.

At that point, do you then go back to those investors and say, hey, I have a business and here’s the one I want to buy. Obviously, you’ve gone through a massive vetting process and everything. And then do they invest more into that deal?

Or how does that all all that work?

Yeah, so at the beginning of the process, you often raise between half a million and maybe 600,000. And depending on your expenses, where you’re going to be living and the projected costs that you’ll have for your search. And that money is mainly kind of covering my living costs, paying for the conference that we both met at that enables me to kind of travel to those events and and attend them in person.

And then also covering some of your deal expenses that are likely to come up during diligence. So things like your quality of earnings with the accountants, the purchase agreement being written up by the lawyers and technology diligence, if it’s a technology business, as we are focused on. And then once you’ve found the business, worked it through that diligence process and you’ve got all the information that you can get at this stage of a process, you then have a second fundraising round that starts with those 16 investors.

And you’ll be sharing this information throughout the diligence process, but you’ll reach a point where they need to make a decision and they all have committed capital or their own capital that they’re investing in deals.

And then based on the diligence that you’ve done, they’ll make a decision to invest in the business and help you move that forward. Or they might just make an introduction to someone else who’s more specialized or focused on the niche that you’ve ended up in that will enable you to kind of close that fundraising over time.

Fascinating. And so you talked a little bit about, you know, or I guess initially about kind of criteria. So what are your target criteria, you know, if somebody’s listening to this and they’ve got a business that they want to sell that’s in your, you know, smack in the middle of your bullseye, you know, spot, what would that kind of look like for you?

Yeah, I mean, there’s a number of things we look at. I started Tree & Leaf Partners with a philosophy that focused around culture being the core value driver of an organization. And it’s very hard to measure culture.

It’s one of those more qualitative things that we look at, whereas we tend to focus in finance on more of the quantitative measurements that we can actually measure and model with. But I believe that those quantitative measurements are only going to be up and to the right in the long term if we’ve got a foundation of a really strong culture.

So we’ll often look for organizations that are very intentional about how they build their organization, the values or behaviors that they exhibit and like their employees to represent, and how intentional they are about building those relationships between employees and with their employees.

Because if a customer company is looking after their employees, the employees will look after the customers and the customers will keep coming back and everyone will stay happy. So culture is something we kind of try and dig into early on and look for organizations that care deeply about that. Then we’re in a certain size range.

So on the software side that we focus on, around four to eight million in annual reoccurring revenue tends to be where we focus on. On the technology services, which is the other core area that we look at, we look at EBITDA, so around two to eight million of EBITDA as kind of our focus area. And then for me, it’s really important the company understands why it exists and the purpose that it has in the world.

So I want them to know the problem that they’re solving for their customers and have a really good understanding of how they’re doing that. And often we look in sectors like education and healthcare, because they are naturally very purpose-driven. If you speak to a healthcare company and they can help explain how their solution delivers better outcomes to patients, even if they’re 10 steps away from a patient, then they’re probably doing a really good thing in that ecosystem.

If they can’t explain that, then it perhaps suggests that they operate in a black box area where no one’s quite sure of the value they’re delivering, including themselves. And that probably wouldn’t be a good fit for us as an organization.

Interesting. And how do you typically find these business owners? Because I would imagine you’re kind of reaching out to either brokers, people that are on the sell side, or you’re going direct.

So how does that process work for you?

Yeah. Yes. And both of those.

So I like to joke that 80% of my time is on proprietary outreach. So finding, identifying business owners that might be a fit for the type of transition we offer, because it’s not the best fit for everyone. And then perhaps 20% of my time is working with those intermediaries, like the investment banks and the brokers who are already doing a great job of representing companies that are ready to go through that sales process.

We prefer to catch them early so we can talk about our vision and paint a picture of that. I find that owners can often get dollar signs in their eyes when they go working through an intermediary, and it becomes all about that final paycheck at the end of the day. And the best fit for us as an organization is often an owner who cares more about what happens to the organization when they’re gone than the dollar signs that they get or how many zeros are on the check at the end of the process.

So we’re looking for owners that think of themselves more as long-term stewards for the business, and they need to hand this business over to someone else who’s going to look after and steward it well versus someone who’s looking to maximize the value they’ve created up to this point and then is less concerned around the future of the business moving forward.

Yeah. I was going to ask you a little bit about the kind of differentiator or maybe value prop to a seller who, let’s say they started the business and so they’ve birthed this business. They’ve got friends and family that work at the business, but maybe they’re at a point in their life that they’re maybe not the right person to take it to that next level, right?

Maybe they’re really good at zero to one, but they’re not really good at the one to 10. And maybe that’s where they need to realize, hey, somebody else needs to step in and continue what they’ve built. How do you present your offering in maybe a way that competes with a private equity firm, the more traditional private equity firm?

And a second follow-up is kind of more around, are you typically offering less money than a PE firm or is that not a differentiator?

Yeah. So I think it starts for us with building a relationship and building trust because we’re different to other buyers in the fact that I’m the one who’s going to be operating this business and the owner is going to be working with me on an ongoing basis, both through diligence and into that transition period if they’ve decided not to stay or for an ongoing basis if they’ve decided to stay with the organization.

The nice thing about our model is we’re quite flexible to work around those different needs. If people aren’t ready to step away from the business and want to be part of growing it in its next stage, we’re very open to that. So it comes first from that relationship that we have with an owner and whether they think we’re a good fit for what they’ve built and the culture that they have within the organization.

On the pricing point, I always say that a strategic buyer can pay the most for your business and the reason they can pay the most is because Tina in accounting isn’t needed anymore. John in marketing isn’t needed anymore. Your 10 programmers can probably cut down to about five as they merge and integrate your company into their broader organization.

They’ve got some of these common admin functions that they already have and there’s already a cost that they’re paying. So the reason they can pay you more money is because they’ve stripped away those costs from the business and they have no intention of keeping those in the organization. So if your goal is to maximize your check at the end of the day, then someone who’s thinking like that as a strategic is always going to give you the most zeros on the end of your check.

But if you care about what happens to Tina or what happens to John and whether they have a job in three years time, then you’ve got to decide whether you’re willing to sacrifice that for a higher paycheck. And then I’d say there’s a scale in terms of kind of the typical buyers and what they tend to do with the business.

But I find a great question that you should ask as the owner of a business when you’re in a process like this is how have you come to your valuation or what’s your value creation methodology and ask the buyer to think you through how to talk you through how they’re creating the value that they’re going to see because whoever buys this business has to be able to create value in some way.

And they’re going to do this in one of two ways. They’re either going to cut costs by getting rid of people like Tina or they’re going to invest in growing the business and growing that top line revenue that enables the business to be more efficient and more successful in what it’s doing in the market. So there tends to be different buyers that focus on different things and some do a mixture of both.

And you as a seller of a business need to get comfortable with the types of decision that that buyer is going to make because those decisions are baked into how they think about prices.

Yeah, I’d imagine some people get into or start businesses for very different reasons, right? Some people build it as, you know, maybe as a lifestyle business that grew into, you know, an actual business or others are getting into the business to, you know, with an exit in mind. So they want they may be the ones that are more maximizing the value and the check at the end of the day versus, you know, somebody that built a business and they’re just, you know, ready to turn it over to somebody like yourself to continue on.

What’s your typical, you know, time horizon from a post acquisition standpoint because a lot of private equity or venture capital, they want to see a return and return money to their investors, you know, in that kind of four to five ish year timeframe. What’s your kind of timeframe look like?

Yeah, so our timeframe is indefinite. So I like to consider us more of a long term or permanent equity type strategy where we don’t have a fixed fund lifecycle. So there’s no pressure for me to return capital to my investors in the way that a lot of private equity firms often operate.

This means we can think a lot longer term in how we’re both evaluating businesses and how we’re being intentional about creating value. Good example of this is if a company needs a new ERP system, but the payoff is going to be over the next six years, then a private equity firm is not going to be able to justify the return on investment if they’re going to be selling it in the next four to five years.

Whereas because we’re looking in the longer term and we’re going maybe in 10 years, maybe in 20 years, and we will sell this business, we can make those decisions that are better for the business now.

And they’re going to help us in the long term growth of the organization. Now my my hope is I find an organization where I am the best person to lead it for the rest of my career. But I also understand that I have limitations and we may reach a point of growth within the business where I become the bottleneck in the way that sometimes the existing owner has become a bit of a bottleneck or is just not focused on on kind of what they want to do.

And so at that point, we’d either consider an exit and be very considerate about who we would hand that business on to, because we’ve obviously spent a lot of time investing in the culture of the organization over those years that we’ve held it. And we want to find a buyer that’s similar to me, but has a different skill set that needs it to take the business to the next level, but is going to steward that investment that we’ve made in both the people and the culture and the suppliers and the ecosystem that we’ve created around that organization.

Yeah, I’m curious if you’re seeing a lot of businesses come across your desk that you know, maybe there would have been a successor kind of in mind, you know, maybe it was a business that was started a while ago. And so they, you know, maybe they didn’t have kids or the kids didn’t want to take over the business. And so now they’re at a point where they’re the owner is older and they’re ready to retire.

But, you know, they’ve locked up a lot of their time and money and value in the business. And so, you know, while they’d love to work, work in the business forever, they know that they can’t. And so they’re going to turn it over to somebody like you who can, you know, while you’re not part of the family, so to speak, you would be able to kind of keep that legacy going, going forward.

Are you seeing people like that come across?

Yeah. So I had a conversation with a healthcare SaaS company a couple of months ago, and they were going through a very similar process and they had multiple offers on the table. And they would tell me kind of an offer for me is more appealing because they could see I would look after the company and look after the people who dedicated 15 years of their life to building this organization.

Because oftentimes the owner owns all the equity, but they have a lot of respect for the work and the energy and the time that a lot of their key employees have placed into kind of building this organization with them, because none of us do this on our own.

And therefore they care about what happens to those employees going forward. And in that example, the owner had, I think, three kids, and all of them were off doing other interesting things and had no plans to come back into the business and no excitement around running a business.

So finding someone like me was actually quite exciting to him and his wife to find someone who would be passionate about fulfilling the vision that they had for the business and continue building out that picture of what they felt the business could become if they just had more time.

Yeah. We talked about this a little bit kind of off air, so to speak, but in the last year, what have you been seeing from a deal flow perspective? Because it sounds like you’re still in that search process.

So maybe share a little about kind of just overall kind of deal flow activity over the last year. And then any close calls that you got to almost getting over the finish line and they just didn’t transact for one reason or another.

Yeah. I like to say uncertainty is the biggest driver of indecision. So I started my search off the back of the COVID pandemic.

So there was a lot of uncertainty around, is this coming back? Have we reached a state of normalcy? That’s a fun word.

Let’s use that. Have things stabilized? What’s spiking?

So people weren’t really thinking about it’s time to sell my business. They were more thinking about how can I steady the ship and stop it sinking and keep solving the problems that I’ve got for my customers and my clients and keep everyone afloat. I think now the election has passed and interest rates have started to come down.

We’re seeing a bit of a stabilizing in the level of uncertainty. So my prediction for the future, and probably a prediction is a good word, is we’ll see a lot more businesses start to come to market after Christmas. Now that uncertainty is out of the way and the election’s out of the way as long as the interest rates keep coming down and people can be confident in that.

In the past year, we saw an uptake after Christmas. So once some of that uncertainty had gone away and people were coming to market with their businesses, summer tends to be quiet and then it ramps up again, kind of late August all the way up to Thanksgiving. And then once we get close to Thanksgiving, no one wants to be running a process because it takes three, four months to sell your business once you’ve prepared everything and you’re ready.

And a lot of people aren’t ready for that process. So the idea of starting that in the middle of two big holidays with Thanksgiving and Christmas coming up is often unappealing to people. But a few months after the summer were very busy for us in terms of what we were looking at.

Yeah, you kind of jumped the gun. I usually ask people near the end if we jumped on a podcast a year from now, what would it look like for your firm and everything? I guess maybe expand upon that a little bit in the sense of obviously you’re anticipating maybe more deal flow coming out.

I feel like that’s very consistent for what I’m hearing from other private equity buyers essentially looking at deals. So is that kind of your thought process that Q1 is going to be maybe not look like 2021 where everything was just flying off the shelves? But at least a lot better than what it has been in the last year.

Yeah, that’s definitely my opinion. And if I was to jump forward a year’s time, say the traditional search model, we raise enough capital for around two to two and a half years. So in a year’s time, I’ll have reached the end of my kind of capital spending.

So either I’ll have found something or be very close to something, or I’ll have transitioned into running the company. And I can worry less about the deal flow coming in and more about how I’m creating value for an organization on the other side.

Yeah, well, hopefully in a year, you’ll have landed a deal and I can have you back on and we can talk about that process a bit more. One thing I wanted to talk a little about, you talked about culture being a value driver, I think is how you put it.

When you’re looking at deals, I guess a couple things, how do you assess or evaluate a deal? And is it on you to do all of that? Or do you bring some of your partners in to help on some of the due diligence process, you know, from a nuts and bolts and numbers perspective?

And then maybe drill into a little bit of how you look at a company from a talent and culture perspective. Because to your point, you’re not there to immediately cut heads, right? You’re not there to kind of just shave the employee expenses.

But, you know, obviously you’ve got to evaluate that talent to make sure that Tina is the right person, short and long-term for the company. And maybe she is, or maybe she isn’t. But, and I hate to, you know, put Tina under the gun here.

But, you know, how do you think about kind of those kind of topics around diligence and talent and culture?

Yeah, so diligence sits with me as a primary responsibility, but I will pull in the right partners who fit that specific organization as part of that process. So I’ve got a software deal. I’ve got investors that have been investing in software for 10, 15 years.

So I’ll bring them in as part of the process to help me with diligence and get them to bring some industry insight. Equally, if it’s more of a services business, I’ve got other investors that that’s their expertise and they can come in and support there. And then I need to take the investors on a journey with me.

So when we’re thinking through valuations, how do we think about what this company’s worth? What’s our value creation strategy for it moving forward? I’m looking to make it more of a collaborative process as we go through that.

I’m the one driving it, but I’m pulling in the right people to make sure we’re valuating it in a sensible way. I’ve got a high net worth individual that sits on my board that’s focused on value creation and talent development. So I’ll bring him in often kind of closer to the end of diligence and think through what does our value creation plan look like in detail?

And how are we thinking about the skills and talents that we need in the organization to go from here all the way up to here? And that’s really important that each investor kind of plays a role as part of that process. And ultimately they feel confident in the deal in the way that I feel because they’re the ones who are gonna be funding the acquisition once we get to that stage.

When it comes to kind of culture and evaluating people and strategy directly, this is really hard to do during diligence because often as many of your listeners will resonate with, we only have so much information. And often that information is all being channeled through one person, the seller of the business. We don’t have access to customers at the beginning of the process.

We certainly don’t have access to employees sometimes until the day after the transition happens. It just depends on how the owner is approaching that sale and how open he or she is choosing to be with their employees as part of that process. And there’s not a right or wrong way for them to approach that.

Both have their risks that come with it. And so I like to start with the owner and just observing how they talk about the organization, how they’ve made various different decisions when it comes to people and hiring and firing and whether they’ve been intentional about building a culture in a certain direction, whether there are values or behaviors that they hold up as things that we do as a company and ways that we act as an organization.

And then how do they speak about each of their employees? So if there’s a set of key employees, maybe five or six, maybe they’re part of the management team.

Maybe they’re just a techie who built half of the product. So they’re just really key to an organization. I’ll often spend at least 30, 40 minutes as part of diligence, just walking through that employee’s journey with the organization, understanding what’s important to them, what their priorities are, how they fit within the organization, how they connect with the other employees and what the owner thinks is important to them.

And depending on how much information and how well the owner can answer that, those questions give us a really good taste from the outside of what it’s like to work there and what it’s like to be part of that organization. If the organization is big enough, we can also look at external sources. If it’s a B2C organization, you can go on Yelp or Google Maps and look at reviews and see how customers are talking about this business.

If it’s not, if it’s big enough, it might be on Glassdoor. So looking at how previous employees are talking about it or perhaps kind of people who’ve interviewed there, what’s their experience being.

And then I love talking to either previous customers, if you can work them out, old employees, people who’ve left the organization, often you can find that on LinkedIn and just do a bit of digging around kind of the history and what they thought of the organization now they’re on the other side.

Or community members, if they’re a very involved organization in their local community, that can give us a lot of hints around how intentional are they at building an organization that is outward focused and connecting and building an ecosystem around them versus being very insular and just focused on maximizing what they’re doing internally.

Yeah. Do you use any kind of like standard assessment tools to kind of plug people into so that you can kind of use data to kind of help drive a talent or culture decision?

There are tools we would use post acquisition. We often don’t have the access to the people to make the best use of those types of assessments in order to make the decisions we need to do. But something I do internally here, we use CliftonStrengths, something I do with everyone who joins my team on the search side, just to help them understand kind of how should I be thinking about approaching these tasks?

Because I have a different set of innate talents and strengths than Andy does. And Andy did this process first. So he’s gonna lean on what he’s good at in order to drive the value and get enjoyment out of that.

And I need each of them to understand what am I good at? And how does that change how I think about what I’m approaching? And how does that change what roles I wanna do in the future and how I see myself within the organization as I grow?

And so we use things like that and another kind of psychometric tests that just help people understand themselves better so they can help find their fit in the organization. And that’s something that’s really important to us when we get on the other side, that we’re looking for the right person in the right seat within the organization. And that doesn’t necessarily mean that Tina is meant to be in accounting.

She might be actually a really good salesperson and she just came into the organization has got stuck in accounting and helping her understand herself better will also help her understand where does she want to invest the skills that she’s been given?

And is that a good fit for our organization? Or should we do everything we can to help Tina get a better role somewhere else because she’ll be more successful somewhere else and will be more successful once she’s out of the organization.

We’ve really given Tina a lot to think about through this last half an hour. She’s an accountant, now she’s in sales and now she’s fired. She’s at a rollercoaster.

She can do anything, I believe in her.

That’s right, that’s right. I want to shift a little bit to AI.

It’s all the rage right now, everybody’s talking about it. And I guess, are you seeing AI integrated into the companies that you’re looking at? And if so, is that a positive, a negative?

Because I feel like everybody’s got a .AI title or link or something like that. So I’ll ask that and then I’ve got a follow-up on AI in general. But yeah, what are you seeing in the companies that you’re looking at?

Yeah, I would definitely say AI is being used but it isn’t necessarily being used in the best way or as an integral part of a product or service. So more commonly, we see kind of an integration with kind of the OpenAI API. And so they’re pulling in some AI capabilities but they don’t actually have anything in-house that is using that data or driving some insights.

And often that doesn’t drive much value to the end consumers, but it’s great from a marketing perspective because we can stick the word AI on our front page of our website and claim that we’re doing something with that. There are some companies kind of exploring this but oftentimes we’re looking at quite small organizations. So they don’t have the horsepower to hire a $350,000 AI programmer that can help them build an LLM internally and to really add value.

But they’re thinking about how can we partner with other organizations to derive some value? And how can we start using some of these products internally to make our operations more efficient? I met with an owner a couple of weeks ago and they said, yeah, we know we’re going through a sales process, but we decided we have to do something about AI as we’re going through that.

And they’re working on their strategy from a product perspective, but they’re also just giving their employees access to some different AI tools and saying, hey, come up with some different ideas. How can you use this to make your job easier and make your life better? And then once they come up with the ideas, we can formalize and sort out all the security around that.

But helping them use and leverage tools to make the internal operations better, I think is a really easy, quick win that a lot of small businesses can do. So we’re reducing some of those repetitive tasks that I think AI is positioned really well to remove from our plate because AI doesn’t get tired and it doesn’t get bored. And then I can delegate that to ChatGPT or Google Gemini or whatever product I wanna use.

And I can focus my time and energy on what I really like about my role and what I really enjoy doing. And if that’s in sales, maybe it’s talking to customers. So I don’t have to worry about summarizing my meeting notes.

I can leverage AI to summarize that and put that in the CRM that takes 15 minutes out of my day that means I can do what I enjoy rather than doing what I don’t enjoy.

Makes sense. Are you leveraging AI at all in your process as you’re looking at companies, screening companies, anything like that?

Yeah, we’ve got an interesting tool we’ve just onboarded that is replacing some of the more traditional databases like Grata and ZoomInfo. And they’ve taken approach of doing a mini training exercise for an LLM on the types of companies you’re looking for. So you’ll train it on say a gardening services business, you’ll feed it examples of these are good gardening services businesses with reoccurring revenue that really match our criteria.

And then they will go out and do a live scrape of both Google and other directories to try and find other similar companies based on that training set. So it’s a bit more live of a live search for want of a better word than your traditional databases that have a fixed set of companies that you are then using a criteria to drill down into. So we’re playing around with that a little bit to find potential targets that might be a fit for us as an organization.

And then we use kind of ChatGPT a little bit in kind of how we personalize emails and customize our outreach to people, but also take off some of the admin work and some of the research work from my interns.

So I encourage them to use it when we’re writing memos, but validate it. It’s really important to use our brain on top of it because it can still have problems and then use it to help customize or get us 80% of the way there with some activities that I can then kind of step in and go, I’ll spend 20% of my time refining this and making it right and rather than spending 100% of my time building something from scratch.

Yeah, I had a friend of mine who’s pretty deep in AI and it kind of was a light bulb moment a little bit for me around like when you’re writing emails, everybody’s writing the email or having ChatGPT write an email, a drip campaign, but they’re copying, pasting what ChatGPT writes and just using that.

And he was like, ChatGPT will get you or whatever AI tool you’re using, will get you 60 to 70% of the way there. You need to validate and also put your own language, your own flavor onto it, or you’re just gonna be put into the AI slop that’s out there that everybody’s getting hit up with on LinkedIn and emails and all that fun stuff.

So that was helpful for me to kind of think about, okay, well, I can still use ChatGPT to write the message, but then I need to spend five minutes editing it versus a half an hour writing it kind of thing. So it makes sense.

And it doesn’t matter what content I create, 100% of it I revise. There’s always something in it that doesn’t sound quite like me or doesn’t quite make sense. So that kind of spot check quality control is really important.

Yeah, it makes sense. Well, this has been a very interesting conversation. I haven’t had anybody on that’s a true search fund person yet.

So this is super helpful as a comparison to a traditional private equity, a private equity firm that’s out there that most people know about. I had not heard about search funds until probably two or three years ago. So it’s super fascinating.

And I definitely wish you luck as you kind of get into 2025 and hopefully a deal will cross your plate that fits your criteria and is a good match as far as that goes. So as we round this out, I wanna kind of shift to the final three pack of questions that I ask every guest. So question one here, what is the most influential business book that you’ve read lately?

Yeah, I think I’ve got it here on my desk actually. It’s one called the Redemptive Business. It’s by an organization called Praxis Labs.

And it’s basically, we talked about that word redemptive at the beginning and I borrow their language, but I really love it as a philosophy and a framework for thinking through kind of how do we use business as more than just a profit generation machine? How do we use it to create fulfilling careers for people in an organization? How do we use it to solve real problems in the world?

How do we use it to impact our communities and make the world we live in a better place? And Praxis have done a really good job. They’re an accelerator and also have a venture arm.

They work with both for-profit and non-for-profit organizations. And they’ve been very intentional about thinking through how do we have a philosophy for redemption and improving the world through the work of business and the roles that we do. So they’ve got a great website called Redemptive Business that I encourage people to look up.

You can order the book, but all the data is available free online. But I love using these. I share these with owners that I speak to and kind of use that to help them understand the ethos that I’m bringing to the table and the care and attention I want to look at in all different aspects of their business as part of that process.

No, that’s awesome. I’ll have to definitely check that out. That’s interesting.

Awesome. Second question here. What is your favorite thing to do outside of work?

Ooh, that’s a good question. I would say cooking and baking.

Okay.

We do this a little bit more in the UK kind of during the week, but in the US we have a bit of a trend of eating out a little bit more. But I do enjoy kind of making a good Sunday roast as we do in England or baking a nice cake or some really indulgent brownies, like chocolate fudge brownies or something interesting like that. So I enjoy trying new things and experimenting a little in the kitchen.

It keeps me grounded.

No, that’s awesome. Yeah, no, it sounds great. And then last question here.

What’s your favorite vacation spot?

Good question. I think I would say I’ve really enjoyed over the last few years, embracing a practice of kind of silent retreats. So taking myself out of the busyness of the world where we get constant stimulation from everything around us and just disconnecting from technology and spending some time reflecting and being with God and making sure my priorities are in the right place.

And I am doing the things that I wanna be spending time doing with the people I wanna be spending time doing. And I find my day-to-day life is too busy for that. And I really struggle to fit that in and make sure I’m reprioritizing things, but spending kind of two, three days, taking myself away and having that as my sole purpose and sole focus is really refreshing to me to kind of invigorate me for the next year of work.

Yeah, no, my wife and I just went to Big Bend National Park down in Southern Texas and did some hiking. And that is off-grid for a good portion of that, which was a lot of fun to just hike for 10 miles and get out in nature and not worry about, do I have emails? Do, what is social media saying?

Like all that stuff. So I completely agree that having a bit of time away from technology and not having it kind of run our lives is can definitely be helpful. And to your point, reinvigorate you to kind of get back to work and all that stuff.

So awesome. Andy, man, it’s been great to connect and actually reconnect. I guess if people wanna learn more about you, if somebody’s got a business that they wanna sell you, what’s the best way to get people or get in touch with you?

Yeah, so either our website, treeleafpartners.com or you can find and follow me on LinkedIn. I’m Andy D. Galpin.

And there is another Andy Galpin that’s just moved to Dallas that is focused on health and wellness and is a doctor in kind of some awesome medical things. So if you find him in his podcast, it’s not me, but he’s a great guy. So I encourage you to check him out.

But Andy D. Galpin and I talk a lot about culture building and storytelling on LinkedIn. So if that’s of interest to you in your organization, then feel free to follow me on LinkedIn as well.

Awesome. No, Andy, man, it’s been great to reconnect. I appreciate your time and yeah, we’ll talk soon.

Great. Thanks so much, Justin.