Well, I think I think that's I think that's absolutely true, especially when you start talking about founders and entrepreneurship. Right? Because entrepreneurship is built it's really designed to punch you in the face. Yeah. And expose your flaws. Right? That's that's really what it's set up to do. And so you have to have a certain mindset. You have to develop a certain mindset Mhmm. To, one, become aware of those flaws.
Welcome to the investor, a podcast where I, Joel Palafinkel, your host, dives deep into the minds of the world's most influential institutional investors. In each episode, we sit down with an investor to hear about their journeys and how global markets are driving capital allocation. So join us on this journey as we explore these insights. Time to do post production. So that's why I am live right now with, my friend Armand Davis. He is a serial entrepreneur, private equity investor.
You know, he's also involved in a lot of other really interesting communities, especially in the the whiskey community who who I'm aspiring to hopefully be involved in a little more. So, you know, Armand and I were chatting offline. We started sharing a lot of valuable knowledge and we're like, this should be this should be just out live streamed because if not, we have to repeat it. So it's it's good to know that you're also not as scripted as me, so we could just kind of do this acapella.
Yeah, I think it's important whenever you're doing that kind of podcast, especially when you want to give off, you know, you want to be authentic, right? So it's important to just be able to have a conversation and let this conversation go where you know, we're supposed to go.
Yeah. So where we where we left off with, we'll we'll go through your intro in a second because I think it's important for everybody to know, you know, what you've been building and kind of your your crazy story from your entrepreneurial journey. I think everybody needs to really hear that because a lot of people have resonated with that.
You know, one thing I'll say is like no matter how much revenue you're generating and no matter how much you're growing, I feel like I've heard a few founders say this, they're always kind of thinking about like just being in survival mode, you know, just thinking it's too good to be true, you know, so and just based on some of the stories that you said, I can resonate with that.
But but anyways, you know, Armand, you know, thanks for number one being my friend, kind of getting to know me the last few months, also being part of the emerging fund manager community. And and yeah, just excited to hopefully get some FaceTime with you soon. And and maybe you can just kind of kick off things with who you are, where you grew up, you know, what did you study and and how you got to where you are now.
Yeah. And it's funny because one of the first things we discovered was that we even had a connection in terms of college and university. Right? I I went to I went to Florida a and m. Yeah. And your brother went to Florida a and m. Yeah. My brother went through the I mean, I think he lucked out because at FAMU, they had like a six six year pharmacy program.
So so as long as you just graduate and I should I feel like I should get him on this show too at some point so he can, you know, he can heckle me in front of the guest. But But, yeah, him and I have gotten really close. Like, we had weird relationships where, like, when I was when I was 15, he was, like, the annoying 10 year old brother. And then when I was 26 and he was 21, we were drinking buddies. And then, I got married and he was kinda like this dumb single kid.
Like, now he's got it, you know, he's on his second one and he's got a family. So we kinda like resonate now a lot. So it's kinda weird. I don't know if you have know, we'll talk about this to a family, but, you know, you you kinda, like, reconnect with different siblings at certain points in your life because you got more to you know, you have more things in common and people kind of understand the same wavelengths. You know, this is absolutely true.
So I have a younger sister, and I definitely do wanna talk about that later because our relationship has been similar. And then, you know, in childhood, we were close in age, only three years apart. Yeah. In childhood, we were not as close. And then we went through that's what we were really close Mhmm. As we gotten to be kind of young adulthood and we were kind of experiencing late college and early life and also in in early marriage. We got married. We got married the same year Yeah.
A couple of months apart, and we got divorced the same year, a couple of months apart. And so Sure. We went through those experiences, and those things have kinda brought brought us closer. Yeah. You certainly do go through those periods, right, where your your relationship kinda ebbs and flows Mhmm. With your siblings. There's also just family drama that everybody has. Right? Some people just Yeah. Have some type of falling out.
Look. I mean, I'm not trying to, like, air out my entire family drama to the entire world. But, look, there's people in my family that they they have some fallout. They don't talk for six months, and then it's Thanksgiving. And then everybody gets together again. You know? So I think that's We had we had divorced. Our parents are divorced, and I was seven. My sister was four. Yeah. And so that that really shapes you. It tends to shape you especially at that age.
I I I have the interest of couple. I have some friends whose parents got divorced when they were in their twenties. That also shapes you. Yeah. But just from a very different perspective. So I'm not saying that any trauma is worse than the other. But it does tremendously impact you. And so we we had that. We went through that together. And we came through that together came up, you know, latchkey kids going back and forth between houses and she ended up being a psychiatrist.
And I ended up being an investor, venture capital, but really what I'm doing is helping founders and working on founders with their mindset and overcoming trauma and overcoming obstacles. So Yeah. We both ended up really working kinda in the space of the mind and and helping to improve mindsets. How do you think divorce impacts kids that are smaller versus, like, you know, in their twenties?
And I guess, you know, if you're comfortable talking about it, like, maybe just talk about how that shaped yeah. Maybe maybe add that on to kinda, like, where you grew up and, you know, your family and everything. Yeah. Well, I think that when you're small Mhmm. It shapes you because you you have to you have to adjust and be mature before your time. Right?
You don't necessarily have to you don't necessarily get to be a full out kid because you have to you have to balance between your households when you're going back and forth between your parents' houses, and the rules are different between one parent and the other. You have to You often have to deal with new people coming in. My mother remarried and I had a stepdad probably, I was seven when my parents got divorced.
I had a stepdad probably starting about maybe three years later, I think three to four years later. Yeah. And so I think that those things really shape you from that perspective. Also, when you go back in the eighties, right, when this was happening, there were no, you didn't see divorces, divorced parents, single parents on on in your television. Right?
Everybody, if you had the Cosmys, everybody was married, and you have family ties, and you had all these things where everybody was married and in love with each other, and you really didn't get to you didn't see yourself in anything. Right? And so I think that that really impacts you when you're coming when you're coming up as a kid. Now when it happens when you're an adult, it impacts you in a completely different way.
Yeah. Because when it happens when you're an adult and your parents have been married for twenty five years, you grew up thinking that that was the template. Mhmm. Right? You thought Yeah. Okay. This is what I want when I get ready to get married and start a family and settle down. I wanna copy this model. Right? Because I have friends whose parents have gotten divorced when we were kids and all this but my parents are great.
So, I thought, you know, it's like I thought that everything was great and then you could get your parents call you up when you're 25 and say, yeah, we're getting divorced. We actually have, you know, had a had difficulty because nobody just wakes up one day and just says, okay, I'm leaving, getting divorced. Mhmm. Especially when you've been married for twenty five years. What you usually hear, right, is that, oh, we've been married for twenty five years, but we've been unhappy for fifteen.
Right? That's usually what you hear and now the kids are out of that house and we're empty nesters and we, yeah, and we just look at each other every day and like, I don't really know who you are or I don't even really like who you are anymore. Yeah. And so, the impact on you as an adult, it completely destroys what you thought a successful marriage looks like.
So now you're kinda like, well, I don't even know if what I like or what I'm looking for is actually what I need or what I'm supposed to be looking for. And I'm having friends that have been impacted impacted that way as well. So it it's it's tremendously impactful either way. Did you get along with your stepdad? I did a a little bit. He he so he was much older. My mother was probably 36, 37 when she remarried him. Yeah. He was 50. Okay. And he had grown children.
Yeah. And so he was he's probably old. Probably probably really old fashioned, right? Whole school. Yeah. Very much so. Deacon in the church. Yeah. Children should be seen and not heard. Mhmm. Very much so that kind of that kind of a parent or that kind of dad. Yeah. My my dad, my biological dad was Peter Pan. Like, he's everybody's friend. Yeah. And he's perpetually 17 years old which is awesome when you're a kid, right?
Because when you're a kid, you just want to play and have fun and I had a dad who just wanted to play and have fun too. Right? But as an adult, you look back on it and you're like, well, I just necessarily get the structure, right? And the discipline from him. Mhmm. But I did get that from my stepfather. So I was very fortunate. I actually had three father figures growing up. I had my biological dad. I had my stepdad and then I also had my father's father, my grandfather.
Yeah. Who was just a truly quiet and gentle soul. And so I I like to think that I manifest the qualities, the traits of all three of them, although I certainly would also acknowledge I probably possess some of the negative traits of all three of them as well. Would you say that they, you know, you know, I'm from an Indian background. So my parents, you know, I guess I'm first generation, because my parents immigrated here.
So they were really, you know, all about education, you know, hence me being intact and my brother being a pharmacist. They didn't really push me to get crazy advanced degrees. They're just like, look, we just want you to get a, you know, a degree like your uncle and settle down. But like, you know, the fact that your father, one of your father figures was really old fashioned.
Was he kind of a catalyst to push you to, you know, further your education and, further your career, or did that come from, like, internal motivation? No. That's a great question. It my my stepfather, who is the old fashioned, he was actually was a security guard. He was a security security guard for Emerson Electric Company. He's the first black security guard hired by Emerson Electric. And he dealt with racism.
He dealt with all kinds of all kinds of things as a and worked there for I believe thirty years over thirty thirty years before he retired from there. But no as far as that's that's deep in my family. My father's my father's grandfather had a PHD in education. Wow. So I am probably was that making that would make me the third, fourth generation to be college educated. He had a PHD. My father's generation is is my father. I and I have an aunt and an uncle. My aunt is an attorney.
And so, no, it was never for us a question of if you go to college. It was Yeah. When you go to college. And, yes, it was never expressly stated. Mhmm. But I think there certainly was an expectation that we would go and get advanced degrees. My like I said, my sister's a psychiatrist. I actually, I have two master's degrees. Yeah. Which, you know, she would be quick to remind me, do not add up to an MD. But, yeah, education was extremely important. Mhmm. Within my family.
My mother had took eight years of night school to get a master's degree. Yeah. She was raising us, working she worked for IBM for forty years Mhmm. And, you know, would go to school at night to get a master's degree. And so we saw that. We witnessed that. For us, it was always it was always get as much education as you can possibly have. I'm still impressed when I was in college. I mean, was blown away. There was a guy that really handsome, clean-cut guy.
You would never think super well dressed, but he was an orphan, and he was, in foster care his whole life. And he he was working. I don't know if you remember Perkins. I don't know if Perkins is the it's kind of like a Denny's, but he would work like every he would work like all day every day at Perkins, and he put himself completely through college. And I saw him in college and he was studying finance. I think he ended up getting a really good job after college.
But, you you look at that and then you kind of compare that to like, my parents, you know, they were both working and, you know, we had kind of a, you know, a family unit and that person kind of still had that spirit in him to kind of still, you know, do something really great, you know, and he he kind of didn't rely on anybody. He had to rely on himself essentially. And and I thought that was really inspirational. But like, he put himself through college.
I remember, like, one summer he went to Europe and he learned Arabic and Oh, wow. He taught himself. So he really I mean, I think sometimes you have the the freedom to really explore yourself and and you don't have the responsibility holding you back or, you know, your parents yelling at you to do stuff. So he kinda just was like, look, I'm gonna go to The Middle East and learn Arabic and get those cultural experiences. And he did it all on his own.
He worked like extra hours at Perkins, probably had some other jobs. Like, you know, doing that completely shows you some people can be completely self made, you know, without that family unit too. That's just going back to what you were saying earlier, like helping helping people think about mindset. Sometimes if you have the right internal mindset, you know, that's what it takes sometimes to get through those difficult times.
And sometimes people that don't have that mindset, that's when you start getting into kind of the mental health considerations. And some people, if they don't have that internal, you know, maybe positive community or something, you know, that's what probably leads a lot of people to kind of getting over the edge. Well, I think I think that's I think that's absolutely true, especially when you start talking about founders and entrepreneurship. Right? Because entrepreneurship is built.
It's really designed to punch you in the face Yeah. And expose your flaws. Right? That's that's really what it's set up to do. And so you have to have a certain mindset. You have to develop a certain mindset Mhmm. To, one, become aware of those flaws. Yeah. Acknowledge those flaws, not turn away from them, not run away from them. You have to acknowledge those flaws, but then also understanding how to overcome them. Right?
Mhmm. Whether it be assembling a team, whether it be doing working on mindfulness and self improvement to eliminate some of them. And the the truth is, right, it's a combination of a combination of both. But if you're going to be an entrepreneur, you you you the first thing entrepreneurship one zero one is to be able to overcome adversity. Right? Yeah. And so a lot and and we all face it in different ways.
So the gentleman who was an orphan, he faced it in one way, you know, myself being a product of divorce, right? I faced it in a different way, right? But how we handle those things, how we overcome those things, how we turn of that trauma into a strength by using it to propel ourselves is is is what is what's really kind of makes you stand out, you know, helps to separate you.
Yeah. So going back to your story, so so you were navigating high school, thinking about college, and then where'd you go to college? And then tell me what you studied and what you did your masters in. Yeah. With the Florida A and M, and that probably the divorce is probably the single largest factor in terms of shaping me as a young man. And then my college choice was absolutely about the second most influential decision that I made.
Really this is you hear people often refer to their college or the university and the gender of in the field by the female gender. And I think that that's because, you know, I when I speak about family, family, it really you know, she really nurtured me. She really raised me.
She protected me even when I was in that formative stage to be in classrooms with students who looked like me, who were just as just as ambitious as I was, just as intelligent as I as I was to have professors who could look at me and say, I I I've been exactly where you are and, you know, you can you have what it takes to make it. That was something that someone like me at that stage in my life really needed.
And so I think they had I think they had a pretty good accounting program and also like, an agricultural program too. Right? Because that's what the school stands for, agricultural university. Yeah. Agribusiness was a big but, yeah, the business school, frankly, I believe, was one of the best business schools in the country. I mean, we we we went to work with all of the top Wall Street firms. We went to work with the top pharmaceutical companies, the top CPG companies.
They all came and came to recruit. And so Mhmm. We were brilliant in terms of the students, but also the faculty and the dean, doctor Sybil Mobley, is a legend. I believe she was the first black female CPA in the country. Mhmm. And so we we no matter what your focus was, your major was, you had to take I believe we had take three years. I we graduate. I believe we were only six credit hours away from a minor in accounting. And no matter what your focus was Mhmm.
You had to take about three years of accounting classes. Mhmm. And so me and me deciding to major in finance and this was an interesting journey. I did decided originally. I didn't wanna be if I was gonna be in advertising. Because I thought I wanted to be Eddie Murphy from Boomerang. Sure. And that was that was my goal. I was gonna be Marcus Graham. So you wanna be an actor? Yeah, I was gonna be, well, okay. So, I did it first. I wanted to be an actor.
Yeah. And then, my my mother's family, very religious family said, oh no, you can't go out there to to LA like they all kinds of crazy stuff out there. You don't wanna go out there and lose your soul. And so you don't wanna be an actor. And so but I did I was so inspired by that role in terms of business. Yeah. That's what I thought that I wanted to do that. I took my first marketing class, and it was all numbers and science. And I was like, wait. This is constraining my artistry.
I I didn't this is not what I thought it was. Yeah. I've gotta find something else to do. So when I used to visit my brother in at FAMU because he, know, over the holidays, I would just go up there and stay with him for a weekend. Yeah, that's when that's when T Pain was blowing up. So we saw T Pain. So he, you know, he's from there. So that was that was a fun time to be in college and, you know, even just be like a young professional at that time.
Was I was I was working, you know, but it was fun to just kind of go back to the college town. Yeah. Hang out with my brother and hang out with all these all these other people too. Yeah, so that they have a thing. They had a music culture that was pretty, pretty vibrant, you know, around that time. So I can imagine that, you know, definitely resonated with, with other with other mediums, right? Whether it's acting or or getting into the entertainment space.
Well, I've had a few funds on my show. There's one guy you should meet him. His name is Bruce. He was at he's at MEC Ventures, and he used to be an A and R, you know, representative. So he would pick artists and he was just he was telling me like the way that he picks artists, it's very similar to being a VC. You know, you gotta pick talent and find the right the right team that you want to back. And that's essentially what A and R did. Yeah. So yeah.
And I think that, you know, that time in Tallahassee, when I'm talking about that time of about mid nineties, early to mid late nineties, early two thousands. The other thing that Fermu, even though it was an HBCU, actually had a a good amount of diversity, particularly among in cultures. Mhmm. Tremendous Caribbean student population. Some of my closest friends, one of my one of my best friends in the world was from from Jamaica. Mhmm. Met him there.
Would never have known him if I had not gone there. And it's been a life changing friend. And I think that getting exposure to all those goals. I I'm born and raised in Saint Louis. So from the Midwest. We get and I love I love the Midwest upbringing. I love the Midwestern values. I love I love all of that. Right? But you know, I didn't meet and and spend time with people from from The Caribbean.
I didn't meet Yeah. And spend time with a a lot of people from other countries until I went down to Famut. And so I think that having that experience was tremendous in terms of shaping me and guiding me in terms of direction that I have in my life and also the the family. You know, you have your family that you didn't choose in your family that you choose. And I think that the family that I chose, I'm very lucky to have. Sure. So you graduated from college, and then I think you worked Yeah.
I think you worked at an investment bank for some time. No. Yes. So I pivoted. Yeah. After deciding I didn't wanna do marketing, I decided, well, what what can I do? I I I was always very interested in psychology but didn't wanna go to medical school. Yeah. Didn't wanna go and write a dissertation to get a PHD. So I was like, well, what can I do in terms of in terms of psychology? Yeah. That that will one allow me to make some good money, right?
And two, will allow me to really kind of stretch my mind in that way and so I came up on sales and I'd already worked sales jobs. I worked sales in high school in a sense but I became really fascinated by sales and so then it became, well, what can I sell, right?
Because you can sell any, there's a bunch of stuff that you can sell and and I was actually at a physics class because another thing they required us to do even though we were going to be business majors is they required us to take a full year of physics. I was in physics class and the professor started talking about momentum and force and vectors and gravity. And I thought to myself. Momentum investing. Yes. I said, listen, all of this applies to the stock market.
Yeah. The stock market is beholden to these laws. These laws of physics. And I was hooked. I was hooked then. And so when he graduated, MBA in finance, worked at Goldman for a brief time. Also worked at SunTrust Bank for a few years. I worked and started up with equity trading desk there and then moved in working in in equity portfolio management in the trust department. Mhmm. But always wanted to be an entrepreneur. Right? Yeah. So Well, let's talk about, you know, for for the audience.
There's some people that maybe want to learn a little more about the buy side and the sell side.
So maybe you can talk a little more about, you know, what, you know, the role is of a portfolio manager and also maybe talk about how the maybe the margins have evolved as well, like maybe the incentives, you don't mind, maybe just taking a quick snapshot to kind of unpack that role, that career if somebody is trying to get into that space, but also just kind of how that's evolved or maybe become more attractive or less attractive. That might be nice to maybe double click on.
Yeah. I mean, I think that it depends on the mindset of the person that's looking for it. I'm, you know, as you I'm extremely entrepreneurial. Yeah. Right? And so particularly, different shops have different cultures. Mhmm. And by shop, I mean, different institutions and banks. I wanna explain that. And so, you know, at at at SunTrust, we were managing the equity portfolios for the trust clients of the bank.
So, SunTrust, if you're familiar with it, it's now been merged in the BB and T. It's truest. Mhmm. But it was a it was old old Georgia money. Right? So, we're managing the portfolios for, you know, the Coca Cola heirs for. Wow. You know, those are like old, old. Yeah. For everybody. And so, long gone, Lee shop, right? So, very conservative, right? Not a lot of high high frequency trading, not a lot of in and out.
It's when you buy something, you're gonna hold it for twenty years because really you're doing it to produce income for years. Most of the time, the people that are investing are are not the people that actually create or made the fortune. Right? And so, that's very different from, you know, what I do today as a VC or even if in a more aggressive shop, let's say, a Goldman or Morgan Stanley, maybe a more aggressive shop.
And so Yeah. I think that in terms of the margins, you know, when you set that up, when you're doing it, it's almost like you you get a set fee based on your assets under management. So, really, the income is tied to how basically how many clients you can bring in. Mhmm. And how many assets under management you can how how much assets under management you can build up. Yeah. Not as much tied to performance in relation to the markets. Right?
Mhmm. The thing that drew me to alternative investments, private equity, venture capital, hedge funds was the fact that it was a true meritocracy in terms of if you can now if you outperform, then you outperform. Right? And you get paid accordingly. You get compensated accordingly. And so I I I love the, you know, the fact that as a VC, right, I can create value, and I'm rewarded for creating that value not just by accumulating assets under management Mhmm.
But also by creating value above market returns. So that's that was what kinda drew me more to venture capital, but I didn't get there. That wasn't a straight line for me. Right? And we can get into that and talk about how, you know, as I was getting after a few years at SunTrust, I was, you know, getting the entrepreneurial bug. And really in one of the few moments that I doubted myself in business, I wanted to I wanted to start a hedge fund, and I wanted to short the market.
This is 02/2005, 02/2005, 02/2006, and I really, really was convicted. I got really into technical analysis. Mhmm. And I saw that this was a massive head and shoulder top that was forming. And I was just ringing all the bells at SunTrust, right? And their response pretty much was, look, we're a long only shop. Yeah. Just tell people, just buy buy stock and hold it for twenty years. Yeah. It'll be worth more, right? Which Yeah. They're just like, hey, keep your head down.
You know, don't don't rock the boat here. What we got what we got is going good. Yeah. So, hey, just keep keep quiet, Armand and. Right. Just keep keep working on those long only strategies. Those long only strategies. Like, if you buy this in twenty years, it'll be worth more than it is today. Right? Yeah. And so, I that wasn't really me. That didn't fit my personality.
I wanted to start a hedge fund and short the market and like I said, one of the only moments I really doubted myself was I I just thought, you know, no, I was 27 years old. So nobody's gonna give me a 27 year old black man that doesn't have an Ivy League education. I was gonna give me $20,000,000 to short the market coming up coming up with one of the largest bull runs coming out of 09/11 right biggest bull runs in history, and you know I'd never even asked anybody for the money.
I never tried to raise the chair. And that was a tremendous lesson for me in terms of when the universe puts thing puts thing in your mind, then you've been charged with something. The universe And you believe it. I mean, that's the thing. Right? If if you have something that's stuck in your mind, then you believe it to be true versus kind of the other way around where, like, you believe something to happen and then that it becomes true. Right? That's right. That's right. You gotta trust in it.
You gotta trust in it. You know? And so I decided I was gonna instead of try to raise $20,000,000 to short the market and I actually did sit down in the moment of pure like self flagellation like twenty twelve, twenty thirteen and Mhmm. Calculate like if I had shorted spiders and triple Qs in in mid two thousand seven, what would I've made?
And if, yeah, if I'd raised 20,000,000, if I'd shorted $20,000,000 worth of spiders and triple Qs in mid two thousand seven by twenty twelve, twenty nineteen, I probably would have made, made close to $120,000,000 Wow. And so, I've left that, I left that on the table and that's okay because the lessons that I learned in the meantime. Have proven to be even more valuable, right?
Yeah. And so, I, you know, I'm always where I'm supposed to be And so instead of going and starting a hedge fund and shorting the market, I bought a small construction business. And that was in the late two thousand six. Mhmm. And So you bought the business and then you kinda took control. You know, so that's something that I have had a lot more interest in more on the private equity side. So there's there's a lot of people that are retiring.
I actually saw a daycare center that's, I think, low 6 figures and they're making 7 figures in revenue. And the, you know, so if you were to acquire that and control it, it's already kind of operational. Right? You just got to be an operator or find somebody to kind of lead the lead the initiative. But, you know, that's that's a very that that strategy is coming to be much more prominent where there's some angel investors that are looking to buy, you know, cash flowing businesses, Yeah.
Digitize it, digitize it, and then kind of like, generate generate a higher revenue and then hopefully sell it. 100%. I think we are moving into an era. We we are we are returning back really to the age of the operator. Yeah. I I I think that we kinda got away from that because there was just you could kinda just throw anything up a wall and it would grow. It would it would grow in value especially over the past decade And the premium that an operator created was kinda lost in a lot of that.
But I think that now we're returning back to the age of the operators. So if you know how to run a business, right, which, you know, I that's that was the lesson that I learned when I I bought this construction business in late two thousand six, 02/2007. So walk me through. So how did you so let's let's talk through what was going on in your mind. You wanted to be this hedge fund manager. Yeah. And, you know, you made yourself believe that it's not possible.
So then so then what was going on in your mind as plan B or C? Well, what was going on in my mind was, okay, well, I will buy a different business and I will grow that business to a point of success where it generates enough income for me. Yeah. That I can effectively create my own hedge fund with my own capital. Okay. You know, from that sense. That that was that was the Yeah. So you wanna you you thought, know, hey. Why don't I just boots? Well, you didn't bootstrap a business.
So what made you decide to buy an existing business versus try to found your own business? Well, I think that for me, one, it happened to be a construction business. I I had no knowledge, no prior knowledge or experience. Yeah, experience. Yeah, exactly. I would think you don't, you know, that's a big learning curve too to kind of understand the the industry as a whole, right? I mean, oh, yes. Be able to operate a business that's already running. So, yeah. So, yeah.
It it of the businesses that I looked at. Mhmm. I was so anxious to get out of where I was. That was a business. I met the owner and he said, hey, if you buy the business from me, I'll stay on. I'll teach you everything that I know for the next couple of years and then. That's great. I'll go off into into the sunset and you can take it to new heights. The thing that I liked about it, it was a small It wasn't it it was it was only, you know, it was doing around a million dollars in revenue.
Yeah. And so I thought that there's obviously a lot of opportunity for growth and the the guy who was running was just tired. Yeah. Now, what actually happened? Did you did you also you know, sometime, I just wanna share this with the audience too. Sometimes what people can do is seller financing. I don't know if you ever consider that. But that's actually a really you did. So that's great, because you didn't have to put much capital upfront the seller.
It's a win win for the seller, because the seller is able to make some interest or recurring payments. Yeah, how does that work? I guess if you did seller financing, he would you know, the acquisition price he would give to you as a loan, and then there's interest that he would earn off of that. But it's taken off of the cash flow anyways. Well, and you know they say that your your first deal is always your worst deal. So, I'm glad I I'm glad I got this one under my belt with my own money.
Yeah. And so, we did kind of a hybrid. So, we. Okay. We gave you. So, we put some money down and then got some seller financing. And then got seller financing. Well, you know, we put too much money down, right? Yeah. And he got real comfortable with the lumps of looking at his bank account every day and seeing 6 figures in his bank account. And after two months of. 6 figures from of. 6 figures from the recurring revenue you mean? Or? No. 6 figures down payment.
Oh. Well that's just you know that's just one down payment though. Right. Right. And so you know after after two months literally this is December 2006 we did it and he quit in February 2000. Oh, wow. So, he didn't stay on to. He did not stay on to teach the business. Not only did he quit but he turned around and he sued he sued me. Oh, And said, you still owe me the rest of the money for the emergence of the business. Yeah. And so, I literally bought a business in an industry.
I had no prior knowledge or experience in under the premise that the owner was going to teach me the business and in two months, two months later, he quit. Yeah. And then sued me and said that I still owed him the rest of the money and so. Well, I mean, oh, you mean for the the seller financing? Yeah, for the seller financing and so that was my baptism baptism by fire into M and A. Get a get a good get a good lawyer to map out those terms and levers, I guess, too.
I think that's like I've I've been in that situation too. So. Yeah. Yeah. So, I had to sink or swim, right? I had to learn this industry and learn this business. Yeah. And so, I actually reached out to and started reaching out to building inspectors. And building inspectors are very interested.
You got any experience in real estate which they're kind of like, you have to have em but nobody really likes em because they're the guy that comes in and tells you everything, you know, what you're doing wrong. Yeah. And so, those guys were really just. Well, they can make or break a deal as well, right? If it. 100%. Yeah. Yeah. Yeah. Yeah. I mean, you go and get you get your inspection done in your building and they come back with a litany of things that need to be done. Kill a deal, right?
Yeah. And so, I was, I would take those guys to lunch and I would just talk to them about what they're seeing out there in the market with buildings and with different things and they just would talk to me about what they see and how things leave and why and why contractors are doing things the wrong way and all those other things and what happened from that was they began to send me business because they would go and they would see all these issues
with the building and they would say, you know what? You need to call our mom because I've had lunch with him and I've explained to him already exactly how this is supposed to be fixed. And I know that he's gonna do it exactly like I wanted to be fixed. Sure. And so So I've got, you know, an analogy with that. Right?
So, I mean, just building relation, you know, in the venture space or even in the PE space, you know, people, you know, you'll be surprised just being kind and generous to other people like how that can get you access to deal flow, get you access to LPs. But like, you know, I mean, surprisingly, I mean, the LP, you know, the the attorneys, the fund admins, all the people that are kind of supporting the infrastructure, all of those people deal with all your potential, your customers.
So just kind of doing working with some other service providers, I think that also opens up a lot of outsized opportunities that people don't really normally think about because like, oh, yeah, I don't want to talk to this lawyer because they're going to probably, you know, try to try to sell me their services. But if you just kind of build a friendship with them, lot of times that opens up, you know, potential referrals and customers. Absolutely. Absolutely.
And so yeah, they saved me the building inspectors saved me in the business in 2007 was fantastic. I thought I was the smartest guy in the world. It's like, man, I I I bought this business and even though this guy quit on me, I'm, you know, meeting and and with these inspectors and got an booming business and must really be the smartest guy in the world. Like I bought this business, this is going to take off, it's going to be amazing. We're going make money forever.
And what were you what would services were you doing? So was it like landscaping or because like what kind of construction work was it? It start when I bought the business, it was a stucco repair business. Very niche. Mhmm. So stucco is the it sounds like the roof? Yeah. It's the exterior cladding. So it goes on. So you have the most popular exterior cladding on a home exterior. So like the Sears. Remember remember Sears vinyl siding? I don't remember those. Right, right.
But it's like that stuff, right? The siding of the. Oh. Of the house. It's not like that. No. Yeah. It it goes on the side of the house but it's not like vinyl siding. So, you have siding, you have brick, and then you have stucco or in stone. Sucko and stone. Mhmm. So stucco is a masonry product in general. Got it. A cementitious product. Mhmm. You put it on with a trowel just like you use your trowel with, like, with, your brick. Mhmm. It's very popular in Florida, very popular in California.
Yeah. Often in the South, in the North, North, the East, Northeast especially. It's not as popular because the cold weather. Mhmm. That's it impacts it a little bit more. And so you typically find it in areas where you have very warm weather. It goes all the way back to ancient times when the Native Americans had right, Adobe. Mhmm. And that was really kind of a a stucco type of type of product. That was the kind of origins of it derives from that. So that was.
And then did you I think you told me you expanded to other verticals as well. Yeah. Right? So when I bought the business, that's what it was. Mhmm. Through the course of owning the business, I expanded to a full service general contracting. Yeah. Consulting, construction management firm. I had full have general contractors license. Yeah. We'll say brokers license and full all all of that. So expanding the service offerings. But that was even a process and a journey Mhmm.
In terms of getting there and getting the business to that point where we expanded those service offerings. Right? Because, again, I was just trying to figure out the basics. So you know what, you know, just kinda like, you learn all this stuff later on in life. But I mean, what what I've seen just kinda later in my career is, you know, there's so many companies that have done what you've done. Every single big large conglomerate has an innovation arm.
The best example that I would say that's similar to you if you ever thought about turning this into a billion dollar contractor, there's a $5,000,000,000 contractor called Suffolk Technologies in Boston. And, you know, what they've done is, you know, they have a corporate venture arm, which is the Suffolk, you know, Suffolk Ventures or something like that. But they, you know, the woman that leads those investments, she's been on my show, but it's really interesting.
So many of these businesses, they have to have some type of innovation arm for construction. It makes sense to invest in the the prop tech, The technology that's going to number one, make your business easier to operate, but also just getting access to those innovations from an investment standpoint, that's also going to probably improve your balance sheet and your income statement, you know, hopefully down the line from some liquidity event.
So yeah, Well, and that's part of the reason why I'm actually industry agnostic as an investor, but I do really like infrastructure for that reason. Construction, you know, people still frankly, they build houses just pretty much the same way they build houses one hundred years ago.
You know, it the the industry has probably been one of the most resistant to innovation which just means that it's ripe for disruption and so, when I think about things from a perspective of where would my dollars, where could I create the most value as a VC, then I don't wanna ignore spaces like infrastructure. I don't wanna ignore spaces like consumer product. Right? I don't wanna ignore those spaces.
It's solely focused on tech because what I think that there's this tremendous talent in those in those other industries, those other spaces. And I think there's also tremendous value that can be. Yeah, absolutely. And are you still did you hand that construction business off to somebody else? Or did you think about selling it? Guess is that, you know, because now you're doing more more. Yeah, you're obviously, you know, directly investing. Yeah. Mhmm. I pivoted.
I I I made a a decision to commit. Yeah. To the investment side of things. And so I guess I can go back a little bit and talk about how I ended up out of a robot that arrived at that decision. Yeah. Like I said, 02/2007, things went extremely well. We all know what happened in 02/2008. And the the the recession hit and and it hit housing extreme housing and construction extremely hard. So I realized I had jumped out of the banking frying pan and into the construction fire. Right?
And so it was a real challenge man. By by twenty ten, twenty eleven, I was on the verge of bankruptcy. Yeah. Phone had stopped ringing. The building inspectors weren't getting any calls to prefer me any business. Mhmm. And I was in real trouble, man. I was on the verge of of being insulted and and and business failing. I lost my home. Got foreclosed on and and lost my home.
Yeah. I lost my marriage at that time during that time and I just really was at a point where I was going to take my last few dollars out of the bank and hand it to a bankruptcy attorney, file for bankruptcy, go crawl off into a hole somewhere and die and I I I drove to the bankruptcy attorney's office and parked my truck and when I got ready to get out of the truck and go in, I just couldn't move. I just literally was paralyzed.
I sat there in the parking lot for an hour with my hands at ten and two on the wheel just staring out the windshield and just could not. I could move, take my hands off the wheel to open the door to my truck to get out and go in. And so after an hour, I just said, hey. This must not be where I'm supposed to be. And so I drove back home. Yeah. Yeah. Because if it felt right, you would have just kinda been like, look. It's I'm just gonna call it quits.
So, you know, but you got in, it just didn't feel right, right? It didn't it didn't feel right. It didn't feel right. And that's that is another instance where you could say that I applied the lesson that I learned. Mhmm. By not going to raise the capital for the head fund. And then I trusted my gut. Right? I trusted my gut. My my my there was something in me that was saying hey man you're not supposed to be here. You're not supposed to be here.
So I went home and about to figure it out and instead of laying a bunch of people off, what instead, what I did was I empowered my employees. I I made each of them owners. I said, hey, you guys are all small businesses underneath my business. So, you create revenue generating opportunities. I'll share that revenue with you. If you create cost savings, then, I'll share that. So, I'll share those savings with you.
You know, if it's supposed to get a project done in five days, if you get it done in three, I'll pay you for four days, right? I still get savings, right? Yeah. If we do it, did it that way and happy to say, we came out of the recession stronger than we went into it. Yeah. So, you turned around. Yeah. Yes. So, I mean, so why did you so then why, you know, so for me, if it was me, I'm like, man, this is crushing it like, this is a great business. It's operational. It's generating revenue.
I got through the tough time. I turned it around. Yeah, so why not still continue to you know, why didn't you continue operating it? Yeah, kind of like do the investing also, Trust me more bandwidth with the kids and everything too. Well, no, I mean, it goes back to again, mindfulness and trusting your gut, right? Trusting your gut, believing in yourself. Investments is my first love. Yeah, I love.
Sure. I I just love to, I love, I I love the the process of taking something that's in one state and bringing it to a better state, right?
Yeah. And so, and I also have what a lot of VCs have, which is just a little bit of, like ADD, a little bit where I'm I'm kind of like, I I don't want to just be doing one thing, you know, and that's kind of like, as a VC, I get to invest in multiple businesses and work with multiple founders and so, I get off of one call with a founder that's an EdTech and I get another call, and that founders and infrastructure, I get another call and that
founders and healthcare, and I get to apply all of my skills to all of it, right? Mhmm. And so I really enjoy that and it was something that I, this is something that I've been compelled do. Right? It's not a job. It's a vocation. Right? And it's when you you also wanna have focus too because if you got too many things, you start getting spread too thin. I mean, although you don't sleep, although you don't sleep just like me No. I'm glad that you're also focused as well.
So Well, I want to see that you don't sleep about getting their money back, not that you don't sleep because you're trying to get their money back half the time and the other half of time you're trying to run your other business. Sure. Yeah, that's fair. I mean, your focus is a big thing.
I think, you know, one thing I hear from a lot of entrepreneurs is that they want to, you know, they have all these other great visions and all these cool products and expansion plans, but they're not, you know, 100% double down on the core business, which could really be, you know, optimized to to, you know, hopefully two x three x, you know, maybe the recurring revenue. Yeah, I mean, and you can do that when it's your money. Mhmm. But you can't do that when it's mine. Yeah. No, absolutely.
So, yeah. So, I I, you know, to me, the venture, I, like I said, it was not never a goal or a target for me. Like I said, to do a hedge fund. Yeah. I was going do long short, right? I was going do that but as I really began to get drawn back to investments, it became more of what it it was more natural to me. It was like, well, I can marry my investment experience with my experience owning and operating business. Sure. Right?
And. Yeah and I think you can empathize with the founders a lot more too because you went through that journey. So, you can really, you really know how it is especially especially when you're, you know, you're the founders kind of go through their challenges. Absolutely. And I invest exclusively in ethically diverse or female founders. And so the our the journey that they go through is is is frankly is unique, right?
Because there's so many other factors that work against underrepresented founders. Mhmm. Right? And and so for me to be able to walk in a room and say, yes, I I as a black man also had a business and really struggled and was on the verge of bankruptcy and managed to turn it around and these are the things that I did. This is the mindset that I developed. I think that it's all I'm really trying to do is share that knowledge and that experience with Yeah.
Today's founders to help them help them reach their goals. Yeah. Sure. Absolutely. Well, this is amazing, Armand. I I mean, this hour flew by. I like I could chat with you for Yeah. Another hour. I feel like we actually cut I feel like we cut some of those the story short because I heard the long the more detailed version of it. But, you know, the I really enjoyed kinda, you know, being able to share your story.
I think it's really important a lot of times for people to understand, you know, the the ins and outs of being a founder and, you know, just overcoming challenge. I think the the main theme that I take away with is just handling adversity and and you know, looking at founders and seeing how they handle it versus just kind of having them come to you with problems. Yeah. Well, yeah, I mean, you have to develop a mindset of abundance, right?
Because if you think about it, when we when when we're young and we didn't we weren't raised around money, we were raised with money. A lot of us aren't. That you you you when they gave you a card on your tenth birthday at $10 and then what did they tell you? Right? Yeah. Put that away. Right? Go hide that somewhere. They want you to put it away somewhere where you can't even remember where you put it. Right? But this is the antithesis of what the most successful people do. Right?
And so you have to realize that you need to actually become a vessel for knowledge and a vessel for money where it flows through you and you use it like a tool. Money is a tool just like a hammer. Mhmm. Right? And so when you can develop that mindset, then, you can understand how the money comes into the business, but you should immediately be putting the money to work. I want my money to get up and go to work every day just like I do. Right?
Yeah. And so that's how you get to the point where you don't have to work for your money because your money's going to work for you. Right? Yeah. And so that's part of what I teach founders and how I help them to try to develop that mindset to be able to grow and scale. Mhmm. You know? Yeah. The only thing the only thing I'll I'll say as well is, look, if you do wanna be the next Eddie Murphy, you wanna go to LA, even if your dad doesn't want you to, you should.
You know, I mean, me, so I live in New York with my family. You know, we have a small family now, and live in Manhattan. My dad still thinks I'm crazy. He's like, are you doing? It's like all your family, all your uncles and aunts, they live in Jersey. They got beautiful homes. They got a big backyard. But, you know, that was kind of my journey.
And I was, you know, if I listened to my dad, I you know, like, god bless my I you know, he's the smartest person in my life, but sometimes you gotta just kinda trust your gut. You know? You gotta trust your gut, man. Yeah. So You gotta trust your gut, man. So yeah. And trusting your gut, man. What what what whiskey are you drinking lately? I mean, I'm not the expert like David is. I mean, I I've got like a a will it at home. Yeah. And I got a rye. I got a rye and I've got a couple.
I've got a few bourbons I think at home too. Yeah, if you gave me some gifts. But yeah, that's that's part two of this man. We got to get your wife on the show for the audience. You know, our mom's wife is a whiskey expert, so we're gonna try to do some type of experiential stuff. Yeah. Hopefully hopefully somewhere, maybe Kentucky, maybe New York. So we'll we'll do something. She's a marketing genius. She's a mark I said she's a marketing savant.
She's not formally trained and educated in marketing, But she has an innate understanding of what draws people in. Yeah. And you know she does things that you can often be like, well, why'd you do it that way? She's like, I I again, I trust my gut and this is what this is how it looked to me in a way that I thought that it would draw people in, and she Mhmm. Has built a brand from scratch, from from nothing into really one of the most dominant brands in the spirits industry. Exciting.
Well, excited to double click on that, you know, hopefully soon with some more friends. And again, I'm on thank you for being generous with your time and, and doing some community building today. Appreciate it, man. My pleasure. My pleasure. Alright, take care. See you guys later. Yep.