0:00
I started a PE firm alone to buy a business, but it wasn't your typical PE firm.
Search this video
0:03
My office, my quote-unquote office, was just a library at school.
0:08
There was no fund, uh like no money. I had a lot of help.
0:10
I had over 50 unpaid interns come from Craigslist, and I had them sift through over 400,000 private companies for a year and a half before I found eggcartons. com.
0:27
So, a while back, maybe a month ago, I came on here, and I was like, um "Dude, there's this business.
0:33
Have you heard of this business called eggcartons. com?"
0:37
And you were like, "No, what what is that?"
0:38
Well, it's exactly what it sounds like. You go to eggcartons.
0:40
com, and it's a place where you can buy the packaging, the carton, for eggs.
0:43
Um and like but also packaging for a bunch of different varieties of eggs, like huge shipments, small ones, eco-friendly, not eco-friendly, but also just like in general, like other packaging materials as well.
0:57
So, I was like, "Yeah, fascinating business, right?"
0:58
Like you go there, it's a old-school looking website, you know, it's like dial 1-800-eggs.
1:01
com, you know, whatever, like to to call us to place an order.
1:05
And I was like, "This is fascinating." So, I dug in.
1:07
I was like, "Who's behind this?"
1:08
And I basically found that it used to be owned by this guy. He ran it for 24 years.
1:11
I was like, "Okay, this sounds about right."
1:14
And his LinkedIn picture was him like with a you know, like a phone with a cord in it, and he's like got it up to his neck, and he's like sitting at a messy desk.
1:22
And I was like, "Oh, yeah, this looks like the guy who started eggcartons. com 25 years ago."
1:27
But now, I was I noticed, "Oh, it says like he ended his ownership 1 year ago."
1:30
So, who who's behind this?
1:30
And I saw that there was this woman named Sarah Moore, who's like not what you would expect to be like It's like, "Oh, this person should be like the CEO of Lululemon or something like that.
1:39
Why is she getting into egg cartons of all businesses?"
1:43
like beautiful, Harvard graduate.
1:43
Yeah, like you looked like a celebrity a little bit.
1:48
um And so, I tried to reach out to her.
1:50
I couldn't get a hold of her.
1:51
And so, but I couldn't resist.
1:53
So, I came on the pod, and I told the story.
1:54
I was like, "Yeah, so basically, it looks like she purchased this business.
1:59
She did like one tiny interview about it and but I had done one thing that I didn't tell you about I don't think that day, which is I've been experimenting with a format that I wish people use more on me.
2:09
Like when people reach out to me they're like, oh I'd love to talk to you sometime.
2:13
Like if you have a question just send me the question.
2:15
In fact, if you have a bunch of questions like just send me a Google Doc.
2:18
I'm going to look at it and if I want to answer I'll answer if I don't I don't.
2:20
And so that's what I did to her.
2:22
I go I sent her an email.
2:24
I said, egg cartons like with five exclamation points.
2:26
I go, that's hilarious like what a hilarious niche.
2:29
I go we got this podcast.
2:29
I'd love to feature you on it.
2:31
Um I have five questions for you on this Google Doc.
2:34
If you answer them with bullet points I'll tell your story on the podcast.
2:37
We get 20 million downloads a year.
2:38
It'll be great for your business.
2:40
I go this is me on Twitter by the way, whatever. I sent it. No reply for 20 days.
2:46
Um then she go she emails me out of the blue.
2:49
She goes, I couldn't have paid someone to make me sound as cool as you and Sam did on the podcast last week. Thank you so much.
2:54
I filled out your Google Doc.
2:56
I think those will answer your questions.
2:57
I would have responded earlier if I didn't think this was spam.
3:00
Um blah blah blah send me send me your address I'll send you some world class egg cartons.
3:03
All right, so I want to read you what she what what I had written to her and what she replied.
3:08
But did you want any are you going to are you going to accept those cartons?
3:14
Very nice really very nice of you.
3:16
Very nice of you Sarah but thank you but no thank you.
3:19
No dude, everything in the house could turn into like a toy storage container.
3:22
You you there I have toys forever all shapes and sizes.
3:23
All right, so All right, what did she say?
3:25
So I basically said here's my question.
3:26
I go, you go you bought egg cartons. com.
3:28
Did you buy it alone as part of a PE firm? She goes, alone-ish.
3:30
I started a PE firm alone to buy a business but it wasn't your typical PE firm.
3:35
My office my quote unquote office was just a library at school.
3:39
There was no fund like no money. I had a lot of help.
3:42
I had over 50 unpaid interns come from Craigslist and I had them sift through over 400,000 private companies for a year and a half before I found eggcartons. com. What? Yeah, I know.
3:54
Then I go I So this So that's my first question.
3:57
Second question I go, how the heck did you buy it?
4:00
Oh, no, why the heck did you buy it?
4:02
What about the business made you want to buy it?
4:03
Was it the name, the customer retention?
4:04
What what drove you to it?
4:06
She goes, my goal was to buy a business with all debt so I could have 100% ownership.
4:10
I had no collateral though except for my 2012 RAV4.
4:12
So I was trying to find something that was already stable enough that I could pitch a bank that the business itself was the collateral instead of my RAV4.
4:23
Um that So I needed historical cash flows.
4:25
This business fit because it had been profitable since it started in 2001.
4:30
Had a high barrier to entry given the domain name and 100 plus other similar domain names that they own like eggcartins like misspelled, eggcarton. com, uh blah blah blah.
4:41
Then she says the founder has strategically purchased all these domains over the years to protect their like their demote.
4:46
It was simple enough It was also a simple enough business that somebody with zero operational experience, me, uh and average intelligence, me, could operate if they tried hard enough.
4:56
I was like, wow, this is incredible.
4:58
Then I said I said, I live in Silicon Valley.
5:01
People here are obsessed with crypto, AI, blah blah blah.
5:02
They would underestimate eggcartons. com.
5:04
Can you give us a sense of the scale of the business?
5:07
That's a really good way to frame that question.
5:08
That's a That's a beautiful way to frame that question.
5:12
Cuz you nagged her a little bit like you said something a little rude.
5:14
You're like, yeah, you know, it's probably not that big but maybe it is, you know, like impress me. Right.
5:19
I would think this is small but you know, I'd love to be surprised.
5:22
You know, would you say that this is more than this and less than this?
5:25
And so she Anyway, she came back with I'm in the middle of something that prevents me from sharing the numbers publicly.
5:32
All I can say is that our revenue is less than 50 million.
5:35
And I was like, oh, okay.
5:35
But that you not less than 20.
5:38
If it was less than 20, I feel like you would have said less than 20.
5:41
I feel like that that would be the case.
5:43
Um I said, how did you negotiate the deal?
5:45
She's like, ah, there's a bunch of context here.
5:46
She goes, "In summary, I harassed the owner until he replied. Then we hit it off.
5:50
We came up with a valuation together.
5:52
Then I contacted over 100 banks, most of which told me to f off.
5:55
One of them threw me a bone and agreed to an uncollateralized loan.
5:58
The final deal was 75% bank debt and 25% the seller's note."
6:03
So she bought this with no money down.
6:05
Like, the bank financed it and the seller financed it.
6:08
She said, "Before buying the business, I had I overpaid an accountant to check my work and do an audit of the business because frankly I had no idea what I was doing.
6:15
His fees got rolled into the deal itself.
6:17
So, uh she used an accountant to cover her ass, but also paid him out of the deal itself. This woman is amazing.
6:24
fun tidbits or anecdotes I I could share?
6:26
She Here's what she says.
6:26
This is where it gets great.
6:27
She goes, "Uh while searching for the business, I participated in several research studies just to make money uh like to while I was doing my search.
6:37
I went from I went legally blind from a deodorant study for a bit.
6:39
So I had to take a break from working from working until I could read again.
6:44
Um she goes, "My response rate was awful.
6:46
I started doing borderline insane things to get a reply.
6:48
At one point I took a photo of myself wearing a sweatshirt that said, 'I want to buy your business' with a massive grin and I faxed it out to thousands of businesses a day.
6:56
Um to this day, I run into owners who recognize me from those faxes.
6:58
One of those owners is actually my neighbor.
7:03
Then she says, "The library we worked out of required a school ID to enter.
7:05
Most of my interns didn't go to the school, so we had to get fake IDs for all the interns to get into the library.
7:11
Every time we hired someone, there was a lag because we would need to get more IDs.
7:15
During co- uh before COVID, I used to fly to China to examine the egg cartons.
7:19
On my first trip to India, I got held by Indian customs and interrogation for hours cuz they didn't believe that I was coming to India alone.
7:24
They did not believe that I was coming to investigate egg cartons.
7:30
Uh related to India, I almost got killed there.
7:31
I rejected a shipment from an Indian vendor.
7:33
The his whole family lived there.
7:35
He was furious, started chasing after me.
7:36
The hotel put me into incognito mode for my safety.
7:38
My driver luckily was at the door that I ran out of, otherwise I'd probably still be there buried underground.
7:46
Um she goes, "When I bought the business, I considered it a egg company, but now I think of it as specialty packaging.
7:51
40% of our business comes from things un- entirely unrelated to eggs.
7:54
You'd be very surprised by our customer base.
7:56
You know, think big brands like Boeing, SpaceX, Disney, Madison Square Garden, Crayola, etc.
8:02
Anything that requires protection and separation is fair game."
8:05
Um there is there's one one more she said, but dude What's the other one?
8:10
Is Sarah Moore not my hero?
8:10
Is she my hero or is she not my hero? This woman's wonderful.
8:14
Why is she Why didn't she talk about this publicly more often?
8:17
This is like it I feel like there was tons and tons of stories there.
8:23
Dude, you know people There's some people who are so in the game that they're like they're like, "Oh yeah, what am I going to stop and chat about the game?"
8:30
Like, "I'm in the game, right?"
8:32
Like that's the feeling I get from her.
8:33
I've met some people that are like this that they're sort of like it's a combination of they kind of don't realize how story-worthy story is until like quite a bit later.
8:42
And the second thing they're sort of like, you know, either they just prefer privacy or they're like "Yeah, I don't really know why I need to do that, so why would I do that?
8:49
It's going to be kind of braggy and kind of weird and what's the benefit?
8:52
And maybe I just rather be be personal."
8:56
Um so I think that like I know a handful of people that I'm like, "Dude, I wish I could tell their story on the podcast because they're epic, but they just don't see value in this and they're also not consumers of it."
9:06
That's the other thing I've noticed.
9:07
Most of those people don't listen to a bunch of podcasts or take inspiration from it.
9:11
So it's kind of a foreign idea to them.
9:12
They're like they're like, "People will care?"
9:14
It's like, "Yeah, of course people will care about this. This is awesome."
9:19
Um so anyways, I was totally inspired by this story and she is uh kind of amazing. She is one of us.
9:23
She No small boy stuff for Sarah Moore.
9:27
So I think she's only When you If you Google her, you you basically can't find anything.
9:31
I mean, there's next to nothing on her.
9:32
There's like one or two pictures. There's very little.
9:34
I found one article where it says that she's 28 and she uh uh it says she answered a question, "What inspired you to start buying companies?" She says, "Freedom." What is your mantra?
9:44
"Don't take counsel from your fears."
9:46
Like that's pretty much all she Like she answered nothing. This woman's amazing.
9:49
Why can't we find anything about her?
9:51
There There's a lot There's a lot going on with her.
9:53
We need to convince her to come on.
9:56
There's a 30% chance she's a fat guy named Craig.
9:58
So, like, you know, we could be getting catfished here.
10:00
I wouldn't put it past her.
10:03
Uh but I'm going to go with the with what I see.
10:06
I think I think she's amazing.