01:08:03 · Giuseppe Balzano, Mikk
I don't know. Guys, build. It doesn't matter. Know? You you... Money is there. There's a lot of capital. Go there, look for money, make risks, fail, but do something. Quoting for the Europeans, you know, some months ago, you know, he went in European parliament saying, it doesn't matter what you do, but do something. You know? I think this is the the kind of period in which we are for the next decade. It's gonna be the same. So, yeah, I hope this is the message I'm passing. [01:08:36] S0: Awesome that you brought it out because I... I've been taking notes here and I've been putting on quotes that now you're living you're living life, man. You... You've come a long way. It was just you and your presentation and your very different approach of building a holding company at such a young age with, as you said, not the strongest track record. And you still were able to do that. So during this two year period, you mentioned before, I already forget, but did you ever feel that, okay, it's... I don't know. It's it's too hard. Can't do it. No. Never. Have to change the approach.
01:09:12 · Giuseppe Balzano
[01:09:12] S1: Never. Sorry. Sorry. Maybe, you know, people will listen and say, no. Yes. Never. I never doubted of myself. There is a famous famous for me, of course, moment of my life, and I don't think this guy will listen to to the interview, but maybe you will. And you will you will you will see myself still remembering after six years what you told me in in the underground in Milano. You told me why you're doing this, and my answer is because I believe in myself. I know I'm gonna make it. And there was no odds that that project would have been successful. It it has been. It was successful. We made money out of that deal. Okay? And the only reason was because I believed in my means, in my resources. You know? So going back, no. I I never doubted of myself. I doubted about shareholders, founders, employees. Every time, every day, I'm diffident a lot. I'm an engineer. I'm very logical and methodical. So if you do something which I'm not expecting you to do, for me, it's a mess because, you know, I I lose the the the the laws, you know, the constraints of the equation. So there is something not adding up. You know? But if you're, you know, if you're doing what we are supposed you to do, I I believe in myself, so I can... I I know I can do it. And, also, keep in mind, I had nothing to lose. Zero. Like, no family, no obligations, no debts, no houses, nothing. So if you if you deal with someone that doesn't doesn't know what happens if he fails, it's different.
01:10:49 · Mikk
[01:10:49] S0: I'll promote this message. This is awesome, man. Thanks. Thanks for sharing your story. So again, we are two acquisitions in. I think we didn't mention, you said on the pre call, you raised 25,000,000? Yes. From 15 investors, again, two acquisitions done, one more this year, fourth before the next summer. What's the plan for the next maybe three, four years? And I I would add here, do you need to raise additional capital, and from which moment you see this platform become like a self sufficient?
01:11:20 · Giuseppe Balzano
[01:11:20] S1: So, yeah, just just a note... Just an add up because it's important. I want I want people to know that in the future, you know, maybe history, you was was clear. We approved the capital increase for 25,000,000. We still have some tickets in which my shareholders have the options to increase the the the capital. But the way we had to structure in Italy is tricky. So, technically, it's an art commitment. If they don't transfer the money, there is a 90% penalty, so I can I can buy back their shares at a 90% discount? So technically, it's enough commitment, but until they transfer money, it's not commitment. This is how I think. So if if you if you think you can be a good addition to the cap table, happy to have a call. My shareholders will cover the 25,000,000 of the of the capital needed, but it's important to address the point. That said, which is which is also important, on the on the acquisitions, we will do three, four acquisitions per year. Going faster, it means that we need more capital, and I want to be efficient in the in the capital we raise. I don't want to be diluted. You know? The way we structure the deal is I'm not incentivized to raise more capital. I'm incentivized to keep the capital as it is and to work with the capital I have. It doesn't mean that I have to. It means that if I decide to go up with the capital, I will be diluted. This is the the the truth. So the only way to do that is to be patient. You you have to kick the the the snowball effect sooner or later. It could be three years, four years, five years, six years. So I'm not I'm not gonna raise more capital than that. This is my my point of view. 25, some debts, maybe. I had a beautiful call with a super successful holding company. Maybe you did an interview as well. And and he told me the only thing I was wrong with, and I made a mistake, was to raise a lot of capital. I should have done it differently. So, you know, something that is still here here in my mind, and I decided to be efficient in the way I raise this capital. It's easy not to
01:13:53 · Mikk
[01:13:53] S0: Efficient in a way that You should use more depth, or how would you be able to do the deal? So in in what way more efficient?
01:13:59 · Giuseppe Balzano
[01:13:59] S1: Yeah. I know. It's... It means that you're you're... You just go slow. It's like, listen, with 25,000,000 plus, 25,000,000 in that, you have 50,000,000 in the I dollar. Okay? Mhmm. If you buy companies at four x, because this is the average. Okay? Four, five. Let's let's let's let's do five, because it's easy from a mathematical point of view. You're buying 10,000,000 worth of cash flow. It's not it's not cash flow. It could be EBIT, but in Italy, you know, you can have a cash conversion by postponing some tax. So let's assume that out of 10,000,000 in EBIT in EBIT, you you have 8,500,000 in free cash flow. Okay? That can be leveraged to buy more companies. So the question is not when I kick. It's not if I kick the the the snowball, it's more when. And if I decide to buy 10 companies to Morgan, the amount of capital I need would be a lot because I need more capital, more equity. You know? So if I decide to go slower, two, three, maybe two acquisitions first year, three second year, four third year, you know, I will have then the cash flow coming from the from the subsidiaries. You know? So at the third year, I would have eight plus eight plus eight twenty four multiplied by duo... By $250,000,000 more. You know? So I don't need to raise more equity. Maybe I can refinance. I don't like to refinance up to a point in which you have five x debts, you know, on on the on the EBITDA because it's not healthy. So the only solution is to play with time. I think time is the only variable that is not related to anything. You know? So the only thing is to just wait. And maybe in two years, I will stop the acquisitions engine, and I will resume after twelve months. Because by then, you know, we'll have more cash. Could be. Or maybe I go back to my shareholders and they say, hey, guys. This is the best company ever in Italy. I wanna buy it, so I need more capital. You know? In that case, I'm gonna do a capital in Greece. So I want to be flexible and entrepreneurial in the way we build the company. Okay. Do