My guest today is Justin Ishbia. Justin is the Founding Partner of Shore Capital. Shore is a private equity firm that invests in microcap businesses within industry niches. With $7 billion in capital deployed but an average transaction size of just $12 million, Justin has worked to build a system to drive success for hundreds of businesses through replicable operating procedures and championing young professionals.
The firm has created a moat around volume with nearly 600 acquisitions over the last three years, some of the highest numbers in the world. We discuss identifying growth prospects, constructing a meaningful board, and the business mentality behind "main street," not wall street, as Justin puts it. Please enjoy my conversation with Justin Ishbia.
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For the full show notes, transcript, and links to mentioned content, check out the episode page here.
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Show Notes:
(00:03:10) - (first question) - “The system is the star” and how it applies to Shore Capital
(00:07:10) - Shore Capital’s origin story
(00:12:48) - What the perfect type of deal looks like for Justin
(00:16:34) - The historical rates of return for their deals
(00:18:12) - Shore Capital’s defensibility and strategic advantages
(00:22:13) - Their board system and incentive structure
(00:28:20) - Why they focus on the industrial subsector
(00:31:21) - Overview of thesis evaluation and generation
(00:37:24) - What they’re looking for during the diligence stage
(00:40:45) - The bad reputation of levered rollups
(00:43:57) - What he’s learned about negotiations
(00:46:39) - The weak points of Shore Capital’s system
(00:48:59) - The Innovation Stack; Thinking about stacking unfair advantages
(00:52:11) - Selling a business and what buyers are looking for
(00:55:08) - Heavy focus on operations and their portfolio performance group
(00:58:00) - Why nobody above an associate level has ever left Shore Capital
(00:60:46) - Lessons learned becoming the owner of a major sports franchise
(01:03:56) - What’s surprising about how the league functions
(01:05:05) - Key people and firms he’s learned the most from
(01:07:17) - Where Shore Capital’s system could improve the most
(01:11:06) - The kindest thing anyone has ever done for Justin
Justin Ishbia - Lessons from Acquiring 586 Companies - [Invest Like the Best, EP.357] | Invest Like the Best with Patrick O'Shaughnessy podcast - Listen or read transcript on Metacast
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