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Lacey Wismer – Getting More Women in Search

Lacey runs her recently started search investment fund called Hunter Search Capital and has been conducting research on female searchers and unique challenges they encounter while seeking and operating a business.

Episode Description

My guest on this episode is Lacey Wismer. Lacey runs her recently started search investment fund called Hunter Search Capital and has been conducting research on female searchers and unique challenges they encounter while seeking and operating a business. We talk extensively about women in search along with how she’s seen the model grow over her career, alternative models in search, constructing a searcher’s board, and how she’s instilling entrepreneurial values with her two daughters.

Speaking of, her 11 year old daughter has a bakery business for residents in the Park City, Utah area. If you live nearby, you can place an order on her website at She makes cupcakes, macarons, cakes and more, an entrepreneur in the making. This conversation was super interesting, thought-provoking, and fun and I hope you benefit from hearing her experience.

Clips From This Episode

What value have you changed your mind about?

What's the best business you've seen?

What college class would you teach?

Board meetings

Business school


Live Oak Bank – Live Oak Bank is a seasoned SBA lender focused on search funds, independent sponsors, private equity firms, and individuals looking to acquire small companies. Live Oak has closed billions of dollars in SBA financing and is actively looking to help more small company investors across the country. If you are in the process of acquiring a company or thinking about starting a search, contact Lisa Forrest or Heather Endresen directly to start a conversation or go to

Hood & Strong, LLP – Hood & Strong is a CPA firm with a long history of working with search funds and private equity firms on diligence, assurance, tax services, and more. Hood & Strong is highly skilled in working with search funds, providing quality of earnings and due diligence services during the search, along with assurance and tax services post-acquisition. They offer a unique way to approach acquisition diligence and manage costs effectively. To learn more about how Hood & Strong can help your search, acquisition, and beyond, please email one of their partners Jerry Zhou at [email protected]

Barrel – Barrel is a digital marketing agency that helps companies create revenue-generating websites, emails, and marketing campaigns. Clients include L’Oreal, ScottsMiracle-Gro, Barry’s, and SmartyPants Vitamins. Barrel has extensive experience working with venture capital and private equity firms to help audit, optimize, and grow their portfolio brands. To learn more about Barrel, visit or email [email protected] and mention Think Like an Owner podcast.

Thanks, Lacey, for joining us. We’ve been looking forward to having you and hearing about your career investing in search funds and investing in female searchers. And I just want to hear a lot about your experience so far. And I would love for you to share a little bit about your background first to get us started.

After college, I started my career in corporate sales. So, I went to work for a small professional sports agency. And I arranged for corporate sponsors for professional golfers. I did that for three years. And it was a great experience. It was really old school. I was picking up the phone and cold-calling companies. And it was hard, and I got a lot of nos. And so, I learned a lot. But I realized that I wanted to do something different, probably more in financial services. And I thought, to do that, I’d better get an MBA.

So, I went to Stanford and graduated in 2004. And then, to complete the career transition, I went into investment banking in the healthcare group at Deutsche Bank in San Francisco and mostly worked on med tech and biotech deals, M&A, and IPOs. And I did that for a couple of years, then found myself back at Stanford, doing consulting work for the Center for Entrepreneurial Studies there.

I wrote cases and helped lecturers with their outside businesses doing modeling and helped a group bring new products to market a cross-functional team between the engineering school and the business school. So, I got to do some really cool stuff. And after maybe a couple years of doing that, my father asked me to come work for him in a family office that he had created. He spent the ’80s and ’90s buying some businesses in the Upper Midwest with a partner. And they’d had one exit from a manufacturing business which set him up to form a family office.

And so, when I came in around 2008, I was helping him with a few portfolio companies he’d held for over 20 years and then started doing some private equity investing for him. And we often disagree about whose idea it was to get into search funds. I, having gone to the GSB in ’04, had classmates who searched. And then, when I was back there writing cases, I wrote some cases around ETA, entrepreneurship through acquisition.

So, I was very familiar with the model that my dad likes to also take credit because he played a round of golf with a long-time search investor who’s a friend of his. So, it doesn’t matter. We both thought it was a great idea. And in 2010, we hung up a shingle and got some introductions into search from his golf buddy and some investors who I knew from the Bay Area and business school. And everybody was really welcoming and introducing searchers to us.

And it wasn’t just an easy start. And back then, it felt like most searchers, who were raising funds, found out about us very easily. I didn’t have to do much. And now, our dance card was full. And so, I’ve been doing it about 10 years. And like everybody else, I’ve seen a lot more searches whereas, in that first year, maybe I saw 10. This year, I’ve seen over 60. And it’s been really fun. My dad and I also added an entrepreneur-in-residence program.

So, we had in-house searchers where we were the solo sponsor. And that resulted in one acquisition. So, we just started tackling search funds and ETA investing a couple different ways. And sorry, I did forget to mention that, when I started at the family office and we were investing in search, I was also our searcher. So, for probably two years, search for a business to buy for the family was a big part of my job.

And the reason that matters is then, when I hired EIRs to do that instead of me, or I invested in searchers, I definitely have a lot of empathy for looking for businesses to buy. So now, the only difference is, I am currently in the middle of raising a new fund. And I’m still working with my family. They’re investing in this fund. But this allows me to broaden my investor base and do a few things that I couldn’t do within the family office.

And one of the things I’m really excited to get to do is to focus on female search fund entrepreneurs. And I’m sure we’ll talk more about this. But my goal is to get my portfolio to be 25% female CEOs.

Excellent. And so, your time spent looking for a business to buy for the family, was that because you wanted, as a family, to buy a new business? Or was this more of you wanted experience as a searcher before investing in more searchers? And you wanted to have that empathy? Or is there a blend of the two?

No. It was really just we wanted to buy a business. Once we got started investing in search funds, that was great. But my dad’s bread and butter has been owning businesses himself or with a partner. And he’s created a lot of value in long-term holds. So, the idea is for us to buy a business with no intention to ever sell it. So, I was tasked with that. I didn’t succeed as a part-time endeavor for me. I didn’t give it the effort it necessitates. So that’s when we started bringing in entrepreneurs in residence.

So, you never ended up finding a business to buy and that closing on one?

Correct. Not myself. I didn’t close on one. I wrote some LOIs, and I got close. But then, I threw in the towel and said, “We need to pay somebody to do this full time.”

How much empathy did that give you for searchers after having gone through that experience?

Quite a bit. And it goes back a little bit to my cold-calling sales experience out of undergrad. I definitely have some points of view on approach to sellers and standing out. It’s a crowded world. Right now, there’s a lot of people trying to buy lower middle market businesses. And so, it just helps me think through how you convince a seller to want to sell their business to you.

Certainly. As an investor over the last 10 years or so of investing in searchers, how has the model, for you, evolved, from your perspective? Obviously, it’s grown significantly. You were saying, you’d see probably 10 a year. And now, it’s 60. Obviously, that’s going to bring a lot of change with it. What have you been seeing?

There’s just more on both sides of the equation. So, more searchers and more investors. I still see great deals, and the returns have stayed the same. So, it’s still a really attractive space. I mean, I’m raising a fund to keep investing in the space. I definitely believe in this asset class. There’s just more work in picking the right opportunities. And that’s the right searchers to form a relationship with, the right investments to make. So, it’s just, for me, probably more time intensive to weed through everything that comes across my desk every day.

So, since there is now a larger number of searchers that you’re seeing every year, have you had to raise your hurdle or bar for investing since… you probably can’t invest in 60 per year. So, you have to say no to more than you have before. What do you cut out now?

I find it to be one of the hardest parts of the search fund investment process because I’m meeting all really neat people. And there’s a lot of subjectivity in the decision-making. So, I think about everything, from where you’re locating your search to if you have an industry that I haven’t heard of before or I haven’t seen a lot of searchers looking in. Now, I’m looking at gender composition with my new fund, looking at background.

And then, I’m just getting that feel as I talk to people. And one thing I’ve done is I’m insisting or asking for more phone calls and more Zooms with every searcher I talk to. It takes me probably three calls to get comfortable. And with COVID, we’re not meeting in person. So, we have to make up for that a little bit. But little things come out in conversation that I pick up on. And I’ve developed my own decision matrix and screening tool for searchers. But a lot of it really still is gut feel.

Do you think that’s partly because there’s still such a small sample size? And then, search isn’t a huge asset class. So, there’s maybe not the sample size you need to have a more quantitative approach? Do you think that’s part of it? Or is there just such a personal element? You’re backing a person, not necessarily a deal yet.

That’s exactly right. We’re investing in entrepreneurs. And the business comes next. But we have to believe in them first. So, I don’t use any, really, quantitative approach to the decision-making. The analytical stuff is maybe in your background. Do I see either sales operations or transactional experience? If not, it’s a little bit more of a stretch for me. There are a few easier criteria to get through. Where did you go to school?

But then, a lot of it still is just in the details of what you’re telling me and how you’re describing it. One thing that’s hard to remember, or that’s important to remember, is we’re investing in CEOs. And so, the search is a necessary step to the way more important value creating part of the process. But you do still need to have some search skills. And there’s a lot of grit and determination in that, which is just you picking that out as you’re talking to people. So, I do think a lot of it is still just pretty subjective.

How many of the 60 searchers are female today that you tend to see?

Yeah. I went back and looked. And basically, what I just looked at was that, of 2021 graduates, the second years, who I’m forming relationships with now, about a third of them that I’ve found so far are female. And I could just feel that the tides were turning. And it’s slow, but there are more women searching, I think, even in the last 12 months than I’ve seen before. And I’m not sure if that’s just a natural change or if it has to do with COVID.

So then, I’m not sure if it’s necessarily sustainable. But we know, from the most recent Stanford search fund study, that 7%, it said, of new funds are formed by women. And it should be, obviously, much higher as business school classes are almost 50-50. So, I think we have some work to do to get that number to where it should be. But I also think it’s starting to happen naturally.

What do you think is preventing more women from becoming searchers?

My guess is there’s a lot of preconceived ideas about what a search fund entrepreneur looks like. So, when they first hear about it, which is typically when they go to business school, I think it’s starting to be a more known concept before business school. But typically, it’s been when you go to business school. And then, you read the case studies when you go to the classes. And you start looking at who, in your class, is searching and who’s searched before you.

You might not think that you fit the criteria. And it might be because you were in marketing or product management before school. And so, you don’t see how you could possibly go search for and then run a business. Maybe you don’t have any transactional experience. But what I want people to know is the parameters are more flexible than you might think. And investors are more willing to work with people who maybe don’t fit the criteria that we’ve historically seen to make it work for them.

So, I recently committed to a female searcher who did not have transactional experience. And so, she’s taking an LBO modeling class in between getting investor commitments and calling capital. And so, there are a lot of ways that investors can help searchers get up to speed in the different areas, if they don’t have that. But I just think, the more female searchers we have… and so, we provide more examples to business school students… they’ll start to identify themselves more as good-perspective searchers.

You mentioned that you opened up your parameters a little bit more on the backgrounds and experiences of searchers, of who you’ll back. And I’m curious if that has anything to do with any characteristics of searchers that are predictive of their performance. And maybe previously, investors thought that if you had an MBA and you had a good background, your performance was probably going to be pretty good.

I’m curious if you’ve seen that some of those predictive values aren’t as predictive as we thought. And is that why you’re opening up your parameters a little bit more? Or is there something else there?

I think I’m opening up my parameters or, I would just say, flexing on them a bit to encourage more people to consider ETA. So, an example for me would be a geographically constrained search. Maybe somebody going to business school doesn’t know that that’s an option. So, they don’t search. But they would actually be a great CEO. And so, they head down some other path. And now, we’ve lost an entrepreneur who would make a great leader and create value and I would love to support, as an investor.

So, I’m saying that I want the parameters to be loosened a bit to encourage more people to consider the path. In terms of outcomes, I don’t think I… I mean, I’ve backed a range of backgrounds, MBAs, no MBAs. And I don’t have any conclusive evidence that one MBA and background is the most successful. I’ve seen a big range. So, I really am focused on each candidate.

Got you. And then, once a female searcher begins her search, what are some obstacles or challenges that are unique to female searchers that they’re likely to encounter?

The one I’ve heard most is just some sellers have an idea in their head of who they want to buy their business. And it is not a woman. And so, on the flip side, I know of several searchers who have bought… or buying businesses from female business owners who would not sell to a man, or they would prefer to sell to a woman. So, I think it could go either way. But that’s really the only story I’ve heard, is just some resistance from some sellers and who they meet.

Thirty-nine percent of privately held US businesses are owned by women. So, I think we are missing a sizable part of the market by not having more female search on entrepreneurs.

I’m thinking about how a female searcher is going to appear to any business owner, a male or a female, and how, by definition, that’s going to be probably pretty different because most business investors are going to be men. So, just hearing a different voice is going to be unique to, I would imagine, most business owners. Have you found any differences in likelihood of close by being female, either a woman buying a female-owned business or buying a male-owned business?

The only thing I’ve heard recently was on a webinar I was lucky enough to join, hosted by Harvard Business School, where a stat was shared that fewer women failed to acquire a company when they searched than men. They have a lot of self-funded searchers out of Harvard. So, their data is different than what you might see in the Stanford Search Fund Study. And so, I want to dig into that. And another investor and I, about a year ago, formed a group called the Women’s Search Network.

And it was after years of talking about how there are no women at the search fund conferences and very few female searchers and what can we do about it. So, we formed this group. And the point of the group is to offer networking and make the search fund ecosystem a little smaller for female search fund entrepreneurs. So, they can ask each other questions as searchers or ask a female CEO a question.

And it might have nothing to do with being a woman. Or it might have to do with the nuances of negotiating with a seller as a woman. I mean, we cover all of it. And we offer webinars and, like I said, networking opportunities. We’re currently doing a research project on every woman we can find who’s bought a business through the search fund model, including self-funded and all the other accelerators, incubators, because we want to know the answers to some of these questions.

And we want to be able to share their stories and experiences with the search fund community, mostly current business school students who will benefit from seeing that there are women who have successfully done a search fund and bought a business and had an exit. So, I think, when we have that data, we’ll be able to answer a lot more of these questions.

What are one or two key questions you’re trying to get answered throughout this research process? And what are you finding so far?

The analytical stuff will look like the Stanford study. So, it’s, how long did you search? We’ll look at the acquisition metrics of the businesses they buy. What does the multiple look like? What is the size… and then, on the more qualitative part, we’re doing interviews. And I think that’ll be just as revealing. And a key question for me is, what hesitations did you have about pursuing search? What made you decide to do search? Which model worked best for you and why?

So, whether it’s self-funded, an incubator, traditional-funded, a geographically constrained… because I want to know where the numbers fall there and what might be more attractive to a female entrepreneur and why.

What are some of those key learnings you’re picking up so far?

I think there is a healthy amount of more self-funded female searchers than traditionally funded. And the only reason I’ve been told so far is, I want more control over the search process. So, I want to reserve the right to go find a business that’s too small for a traditional search fund, something less than $1 million in cash flow. Or I might not be able to move because my significant other’s job is the front runner in our house. And so, I don’t want to take investor money if I can’t give them what they want.

So, through your fund, are you investing traditionally in female searchers then? And how are you able to give them some of that flexibility that they might hesitate on?

I mean, I think the majority of my investments will be in traditional search funds because that’s what we see the most of. But again, in talking to the 2021 class at a number of different schools, I am seeing many more people pursue alternative models. So, again, that includes geographically constrained. I’ve talked to a handful of people who want to form a long-term holding company, which is a little different, in a couple of ways.

You’re accumulating three to five, six businesses, maybe in one industry, maybe not. And you know that you’re going to hold those businesses for 10-plus years. So, that’s a more popular model I’m seeing the industry roll up, is something else I’m seeing more of. But I still think the majority of what I’ll do will be traditional. And so, in my fund, I’ve currently made five investments. Two of them have a geographical constraint that’s specific to a region, not just one metropolitan area, but a region. And one is in a specific industry doing a roll-up.

So, I do have flexibility built into my fund structure, including term. I kept it indefinite so that I can participate in these long-term holds because, like I said, I joined my family office and help manage some of the businesses we’ve owned for 30-plus years. And there’s a lot of value creation in holding companies longer.

Is that another element they’re trying to add some more searchers, is that long-term hold and more permanent capital mentality?

I’m definitely a fan of it. I’m not sure it will work for every investor. And I understand that. And as I transition here from being a family office investor to a fund manager, I have to think more about that. So, as a family office investor, I believe wholeheartedly in longer term holds. It’s how my family has created a lot of value. But as a fund manager, I’m cognizant of the fact that my investors were going to want most of their money back. So, I think it’s about striking a balance.

And I’ve told them, “Look, the majority of your capital should be returned within 10 years. But if we do get into something that’s a longer hold and it’s compounding and creating cash flow and I can pay you back in dividends, that is a better deal for all of us than exiting just to exit.” And so, I’ve just been really upfront with my investors that I do have the intention of making a few of those investments.

Yeah. And you’ve talked before about interesting alternative models that you’re starting to see. Is the permanent capital one of the most interesting to you? Or is there another one that you’re spending some focus on?

I find them all pretty interesting. And I see a nice variety in spaces that are appealing. So, a couple of industry roll-ups and really different industries. And then, like I said, the geographically constrained is interesting because I think it helps you position yourself differently with sellers, if you have a strong network, where you grew up, or where your spouse lives, or whatever it might be. And you can leverage that as the local business buyer, I think. And we’ve done this successfully within the family office.

In Minneapolis, specifically, we had one of our EIRs search. He didn’t want to move out of his house. So, we agreed to 100-mile radius around it. And he acquired a business in 12 months. And it was that hometown story that really resonated with the seller, who had been approached, by the way, by dozens of other likely buyers and said no to all of them. So, it’s a needle in a haystack. I can’t, as an investor, promise that that’ll work every time. But I think there’s something to it that is interesting to me, at least.

Yeah. What are some advantages in having that hometown focus? Obviously, that resonates probably more with the business owners in the area you have. You can develop quicker relationships with brokers because you can spend more face time with them. What are some interesting advantages you’ve seen come from that hometown focus?

I do think it’s the ease of relationship building, whether it’s with intermediaries or sellers. You can offer an in-person lunch really quickly and seamlessly. It’s a little bit more like the cold-calling mentality that I was trained with. Getting in front of somebody always creates a stronger bond than a phone call or even more than an email. So, this buyer of ours, this entrepreneur in residence, was really savvy about crafting custom emails to sellers.

And then, he used something unique in his past. In this case, it was that he was a veteran. And so, he would put that into emails, especially where he could see that the seller had that in common with him. And again, in this case, that excited the seller that another veteran could preserve the legacy and the culture that he built. So, I often give searchers the advice, “Tell your story. It’s going to resonate with someone.

And if you can do any customization to your emails, even on a mass scale, if you’re searching nationally, if you can take a few extra minutes to pull something out that connects you and differentiates you from every other buyer, I think it’s worthwhile.”

I’m curious how you’ve developed your focus in veteran searchers. That’s another area of focus for your investing so far.

I can’t say it’s been an area of focus. But I’ve definitely enjoyed working with searchers who have military experience. And I think the reason is that they get some skills and personality traits out of that. Or maybe they had the personality traits that drew them into the armed services. But what I really look for in a searcher, what’s hard to find, is somebody who’s confident but also humble.

And I think every veteran I’ve met who’s searching really has that combination of qualities and skills, and it is hard to find. But that, to me, sets you up to be a very successful CEO.

What do you think it is about the military that creates those two characteristics in somebody?

I think, to go into it, you have to believe in yourself because you’re going to be challenged. And so, there’s the confidence. You go in, and you do the difficult, physical challenges that you have to do. And once you’ve done that successfully, I can imagine that you feel like you can do most anything. And then, the humility comes from the chain of command and the respect that’s built into that structure.

Is there anything that veterans tend to struggle with in doing a search and running a company?

Well, I think it depends on… sometimes I see searchers who’ve gone straight from the military to business school. And sometimes they’ve had some operating experience as well. So, what they haven’t had, if they come straight from the military, as any operating experience, they have the opportunity, with a summer internship, to make up for some of that. But I haven’t seen it really hold them back from doing well, if they haven’t had any operating experience.

And you might know that as investors and do more to surround them with support and mentorship as they take the CEO seat. Maybe it’s a CEO coach or more frequent contact with the board.

Yeah. And speaking of boards, as a searcher, from their perspective, how should a searcher think about building a board and the different folks that they need to have in their circle?

For the searchers, it’s the same as picking their cap table. I mean, I feel a lot of them really have their pick these days. And so, I always tell them, “There’s a lot here that’s just personal fit. You got to like this person, the board.” The searcher needs to like their investors because it is a long-term relationship. Even in the shortest hold, you’re looking at six years of searching and operating a business. So, hopefully, you have some connection.

And then, I’d like to see a little bit of a variety and backgrounds and perspectives. So, it’s really cool. I think that we have some ex-operators, search fund operators, who’ve had an exit and are now investing. I love their perspective because they sat in that chair and have a lot of experience that they can share with the searcher. And then, it’s nice to have a mix of individual investors and some institutional capital because they’re slightly different perspectives there.

And the other thing I tell searchers is, “You can’t go wrong in the search around community as far as investors go.” I’ve been doing this 10 years. And every single person I’ve met in the space is fantastic and really committed and hands-on and thoughtful and engaged and everything a searcher could want. So, I then always go back to personal feel and connection as the most important thing. There are times when specific industry experience is critical. And I’ve seen it actually save the day. So, of course, you have to take that in consideration too.

Yeah. Of course. You want to have people in your circle who you like and get along with. But is there also a balance where you also want board members who you like personally but will also challenge you or tell you truthfully if things are going well or not or if they’d like to see certain things done or changed?

I think that’s so important, just honest communication between the board and the CEO. And the hardest thing is when things aren’t going well, to have those tough conversations. And I think it’s really important for the CEO to remember that we know you have not been a CEO before. And we know that you can’t possibly know how to handle everything that comes your way. There’s a lot of unknowns. And we want to help. That is what we’re here for.

So, the only trouble I’ve seen is when the CEO doesn’t bring problems to the board soon enough.

Why do you think they hesitate in bringing problems to the board? Are they just nervous? Or are they trying to fix it before the board finds out? Or how do you convince searchers to be more open in sharing bad news?

I think in the boards I’ve seen that operate well, there’s maybe one person on the board who talks to the CEO every week. So, hopefully, that intimacy is there where the CEO feels more comfortable maybe previewing something with just one person as opposed to on a formal call. I think I’ve seen CEO coaches be really helpful and acting as a liaison between the CEO and the board or helping the CEO understand how to best present something to the board.

And I think, for CEOs, the hesitation… and I would have this too if I was a CEO, is I would rather try to fix this first, then go wave the red flag before I need to. It’s like a balance. They have to strike between bothering board members who are all presumably quite busy but knowing when to ask for help. I’m guessing that’s a pretty difficult decision for CEOs.

Yeah. It’s certainly something they have to work through and figure out for themselves. What class would you teach in college if it could be about any subject you wanted?

I shared how, early in my career, I did some cold calling. And it’s easy to look back mid-career and think about the things that helped you. But one thing I did as a kid, around age 16, was a two-week wilderness excursion trip. And it was really hard, and I had to struggle. And there was never enough food. And I was cold. And we had to do this 24-hour solo where we fasted. And part of it was also river-rafting. We were freezing. And we had to do rock-climbing. That was terrifying.

And it really set me up to look at things with a better perspective on what’s really hard. And so, the class I would teach in college would be outdoor wilderness challenges. And it’s the mantra of you should do something that scares you every day or anything you think like that. I’m always telling my kids that, “If you go do something really hard in the woods, then when you come back to your computer, you have a perspective of, Oh, I survived that, or, Oh, I’m stronger than I thought I was. I’m more capable than I thought. And you can apply that to every area of your life.”

What trips would you go on?

I love summiting a mountain, rock-climbing, river-rafting, long hikes, several-day camping trips. If you were in a school, in a city, you could still do some of this. In New York, you could use Central Park. And it’s just the notion of struggling through something a little bit. That, I think, is the important factor here. It’s funny. My friend just told me this story that, at their dinner table one night… she’s got two daughters.

And one of her daughters asked her, “What does Lacey do for a living?” And her other daughter, who’s 13, said very confidently, “Oh, Lacey’s an adventure capitalist.” And so, she just had it a little off. But I had actually thought to myself, Oh, that’s a cool concept. And what if that was the name of a class you could take where you’re just capitalizing on adventure? And what it can instill is you to take into other areas of your life. I love that idea.

That’s an awesome name. You should use that one day.

I actually googled it, wondering if somebody had thought of this concept or done anything with it. And all I could find is that it’s a video game.

Oh, what’s the video game?

It’s called Adventure Capitalism.

What did you do?

I’m not a huge video gamer. So, I didn’t look any more into it. But I actually was surprised that no one had thought of this because, a lot of people, at least in the Bay Area and where I live now, in Park City, are outdoor enthusiasts. And they are doing something pretty awesome every day. And they’re adventuring every weekend, whether it’s on their bike or their skis or on foot. So, it actually surprised me that it wasn’t a known concept.

Interesting. I like it. What’s a belief you used to hold strongly that you’ve changed your mind on over the years?

This is also a good question because I have three kids, but two of them are daughters. And I told you, I’m starting this new fund. And so, that was a big risk for me. I left a pretty comfortable situation with my family office to do something entrepreneurial myself. And that is challenging and intimidating. And so, I think it’s the path of most resistance can be more challenging but more rewarding.

So, I guess what I’m trying to say is, don’t take the easy path just because it’s easy. It’s like the college class, I think. Out of challenge can come the most reward. And I’ve been thinking a lot about this as my daughters watch me embark on this new phase in my career and how important it is to me that they know that there isn’t just one path. And you can take a sharp left turn out of something that feels too easy and do something harder because, probably, you’ll feel even better once you’ve done it successfully.

How are you teaching your daughters to be more adventurous, entrepreneurial, and willing to take on challenges that, historically, have been harder for women to take on?

Well, one thing is encouraging them a lot in math and science and talking about jobs that, historically, haven’t been as gender equal. So, I always tell my oldest daughter that she should go to NASA because she’s really smart and really passionate naturally about those subject areas. And so, I keep just encouraging her to think about things she could do with them that might be more male-dominated.

And then, with my younger daughter, during COVID, she decided to take her passion for baking and make it into a business. And so, I didn’t just let her bake. We made her build a website. And she developed her own logo. And she’s not that excited to go through the P&L with me. And I told her she owes me quite a bit of startup capital back, but we’ll get there. She’s only 11. But what’s challenging about this for her is she might get an order… she’s still doing it.

She might get an order on Friday night. And when you’re 11, you don’t have necessarily the perspective to think about what an order on a Friday night really looks like. So, she has been challenged. And there have been tears and disagreements between mother and daughter as I remind her, “Well, you started a business. And you need to honor the orders that are coming in, or you’re not running a business.” So, she’s actually getting in her own 11-year-old way a pretty good dose of what it looks like to be an entrepreneur, which is really cool.

What’s her business called? And where can people order from her?

It’s called Bananas Baked Goods. And she does have a website, which I promise, I did not help with at all. And she has an Instagram handle that, I think, is bananasbakedgoods. There might be PC in there because we live in Park City. And you can order on the website. And what I do, my job, is I do local deliveries.

Does she ship out of state?

Not yet.

Oh, man. I was hoping we could get a few audience orders.

Yeah. Well, that will be the next level maybe when she’s 13.

I like it. What’s the best business you’ve ever seen?

Hindsight is 2020. So, I think my answer is the business we bought with our EIR in Minnesota. It was a very unlikely target for us because it’s asset heavy. And there’s a pretty large maintenance capex budget each year. But what was attractive about it was that it worked in its geography. So, this is a road safety and traffic management company. And it’s in Minnesota, like I said. A couple key points about the state are that there’s a lot of state funding for road construction and maintenance in Minnesota.

It depends more on the state funding there than federal. And they underspent for decades on roads. So now, there’s a huge backlog of work and a healthy budget for it. And the winter accelerates road deterioration there. Business wouldn’t work everywhere. And it was close to $3 million in EBITDA when we bought it. And we got it for under four times. So, we are value investors. This is the way that I was taught to invest in.

In the search fund world, we typically see 6X entry multiples or somewhere around there, depending on the industry. But in my dad’s world… and he’s the one who’s trained me as an investor… we’re shopping for three to five times businesses. Now, these are needle-in-haystack businesses, especially right now, as the market has remained so frothy. But this guy found it. He negotiated it.

I already alluded to the relationship he built with the seller on the hometown search and veteran aspects. So that was definitely a part of it. We got a really attractive debt package from the company’s incumbent bank. So, the entry valuation was a big part of what made it attractive. The searchers fit with the business, hugely attractive. And the industry, we have the government as the ultimate payor here.

And so, no, there’s actually not recurring revenue, which is the gold standard in search funds, for good reason. But it doesn’t always have to be. There’s always going to be exceptions. So, what I liked about this one is that it really was an unlikely target but the perfect fit for valuation and suitability for the entrepreneur and geography and niche industry.

That’s fascinating. I love hearing about that. Thank you so much, Lacey, for sharing your time with us. This has been fantastic. And I’ve learned so much. And I hope others in the audience have as well. And hopefully, we could get some more orders for your daughter’s business too.

Yes, yes. She’ll love that she got a mention. Thank you so much. It was fun to be on.

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