This Billionaire Bought Over A Thousand Small Businesses And Never Lost A Dime

we at sh Capital love partnering in Industries where there is much more demand than there is Supply and our formula is if there's much more demand and Supply G become the supplier of [Music] choice Justin ishbia is the founder of Shore Capital a private Equity Firm it's based in Chicago and it invests in Middle America sort of smaller mom and pop businesses 20 million in Revenue new or less in areas like Veterinary or Autism clinics bakeries companies all across America and then it buys those companies and it buys companies like them and rolls them up into larger and larger businesses first talked to Justin because he'd opened a new fund that invested in Industrials which is an area that I cover and that was a big change for him versus investing in healthcare where he'd had his early success and in talking to him I thought his strategy was really interesting about how he had bought these smaller companies which is very very unlike what private Equity typically does and then rolled them up into bigger businesses and just started talking more about that in his broader strategy and found it fascinating I was a senior in high school it was the summer was the summer before I going off to college and my best friend's fathers um was the a partner at the private Equity Firm and I didn't know what private Equity was I my friends had a big house all I really knew and over a summer this uh gentleman explained to me what priv was he said said that we buy companies we help them grow we hopefully bring new resources to them and over a period of time they actually sell those companies I heard that story and I said to him that sounds like an amazing career I said how do you do it he said look it's hard to get into this industry but here's the the pathway and so it was literally from the age 18 years old I knew I wanted to do it from right then once I realized I cannot play baseball that was a bummer for me but once I realized I couldn't play baseball I said okay that's what I wanted to do because I felt like you help bring people together build companies and bring resources together build something pretty special and so that was the origins of it and the early days as sure um you know I think when you go through hard things together you look back on them very fondly in those early days we had 1,200 foot office the rent was $1,200 a month we had a website that was called the 2009 recession special um but look back in those days I long for them you know I missed those days when it was four guys in a relative sweat box where I was 31 my parts were 29 28 and 27 we were kids and um we would tell people where to go build this and we want to buy this and they said where's your money where's your track record who's the Great here in the room and we said we had none of those things but it's the heart the grit you know um young humble and hungry I think those things together and that's what we build early days and over a number of years the track record grew the results grew and um then became more and more clear but those early days those were the fun days those were the days when we were a team and we still are a team of course today but we are a team that we knew we had three chances to succeed and if we didn't get it right there was no future one of sh's biggest winds is Bright View which runs addiction treatment centers and it's based in Ohio another is Southern vet which is a chain of veterinary clinics that's based in Birmingham Alabama in both cases the original business was small Shore bought it and built it in the case of Southern vet for example it now runs 400 locations with 1.2 billion in annual revenue so um I originally met Jay Price through one of my best friends from law school was his best friend in undergrad and so started with a text and I said hey do you know anybody in the veterinary space he goes actually my college buddy is a vetenarian in per Alabama and we flew down there to meet Jay and literally the definition of Southern gentleman and humble he's as humble as they come as smart as they come and um you know we had just closed our first funds this is 2014 we raised $112 million so we were relatively modest in the big picture of the private community and I think what Jay and myself my partner Mike aligned on was a vision where how do we create an environment that was a best in-class place to work professional upside professional training Financial opportunity culture anything other clinicians other veterinarians wanted to partner with not the business guy from New York who has looks like this they wanted the guy who's in the weeds who actually delivered a dog who's actually done a surgery he actually told someone that their loved one won't be going forward with them any longer he did those things and he was fortunate enough we were fortunate to him pick us and he picked us and it was the begin of a journey and um start out with just three locations and today there's over 400 locations and we've done dozens and dozens of Acquisitions and um he's been uh Jay price is I think one of the most respected people in the industry and it's because he is a clinician at heart and training we're big Believers if you can't measure it you can't manage it our belief is that short Capital process the system is a star it's not any one person our job is create an amazing system where we can put relatively um good inputs in but have extraordinary results and we tell our investers and our partners you say I don't promise you the outcome I promise you the process private Equity especially in healthcare has come under substantial criticism for increasing cost and decreasing Services just in ues that his company shouldn't get tarred as it doesn't cut services and that in fact it's expanding and its scale allows it to invest more money in technology and to provide better services at the companies that it buys if you see one private Equity Firm you see one private Equity Firm everyone's a little bit different and I always like to think about my mom and I are super close my parents are married for 50 something years if you can't articulate your story and why you're doing something to my mom it's a really smart talented individual then you can't break it down appropriately to be about the right partners and so people think sometimes of private Equity of you know Wall Street you know big deals cover a Wall Street Journal it's a whole part of the ecosystem where we're partnering with Main Street we're partnering our average Partners have 100 employees when we start these are relatively modest businesses where they have great individuals and I think people think about private Equity is all is one size fit all and I think like a restaurant there's fine dining there's fast food there's Quick Service restaurants you know there's carry out private equ I really encourage anyone not just with us any private equ firm get to know the people and if I was ever considering a private Equity Firm as a potential seller do references talk to their former partners we're pretty confident in our former in our results with our partners but you know my dad always taught me one thing and I think it applies of private Equity you get one reputation use it wisely and when you do hundreds of transactions like a firm has done if your reputation isn't viewed as being honest transparent doing the right thing you won't last very long and so if I had one thing to say about people wrong with private Equity they assume before they know take the time to get to know um reputations matter do your homework and I think you'll find out the right outcomes and you'll find the right fit for you what may be right for you might right for me and vice versa I believe that Money Follows success give me success give me good people success money will take care of itself for us everything starts with picking the right sector we want to look at an industry that has kind of 15 years of sunny skies Tailwinds demand Trends a simple example is the consumerism of healthcare today if you or I want to order pizza pull my phone out it's here in 5 minutes if you want to go see a doctor get your eyes checked out you have to call somebody wa in the hole for 8 minutes no one wants that the consumerism of healthcare is I think an area people want it more at their fingertips and so looking for themes with strong talance so get if you get that part right you're swimming in water that people want to be in and then from there our job our primary job is finding the best-in-class individual to partner with Justin and his brother Matt are very close and they're also very competitive with each other what Justin didn't want to work at wwm with Matt the two along with their dad bought a majority stake in the Suns last February with basketball Matt owns the larger stake so he calls the shots in soccer where they own a minority stake in Nashville SC it's Justin's decision and Justin hopes that that will be the case in baseball Matt and I the first time worked together formerly has been with the Suns and that's a relatively newer thing from us we are very very different he has some amazing qualities that I don't have I've learned a bunch Matt is a lot more um I would say quick to act and decisive in a very positive way I mean more calculated in some respects but in between I would say this when we disagree upon something the midpoint usually the right outcome and so I think I can hear my in I can be in a room in a business conversation and context and a topic comes up and I can hear it back of my mind saying I think Matt would think about this way and so it's I'm not saying I always do what he does but I think he has a different perspective he is one of the best I've ever seen on culture right he played basketball for coach Tom mizo he won a National Championship in college playing college basketball he's leading a business he runs it like a team not a family there different things I think a family you can't fire your brother you can't fire your mom you know in in a team though the best team is want accountability across the board and I think he's created a culture of accountability um and so I think he's created a culture of accountability and I think him and I together have different angles and perspectives I think together though I think we're a pretty strong um [Music] Team my real focus is on is how do we get better in every single day things we do um a buddy of mine here we're in a small group we talk about things all the time and the word that I thought is is win and one measurement of winning is financial money but winning is impact on people I love the win here that people want to work here over and over again people don't want to leave the organization people want to partner with us te is about winning um money follow success if you focus on the money part I don't think it goes very far so we grew up um like we didn't never wanted for food never wanted for a shelter um but it's not like it is today and I believe that focusing on the task at hand and people don't see the hard work that happened 20 years ago on a random March day when it's snowing out and it's you know 6 in the morning you're getting up you're and going to work and or you don't see the days know 15 years ago when your peers are going on a 10day vacation over spring break and you're kind of saying you know what I'm going to keep grinding do what I going to do that stuff isn't seen as visible um but I think as you look back at it you say you know you put the right work in and to me also like my most important job is raise my kids right and so people say you know you have X dollars you know know why do you keep working and my answer is three reasons one my kids have to see me grind I believe that kids do as you do not as you say so they're going to see Dad even though I I'm always have enough money to put food on the table they're going to see Dad get up every day put on a jacket on hustle be stressed about something CU I believe for them to be able to be the great part of our society that see Dad work number two I love what I do I wake up in the morning I'm the richest man in the world not because of dollars because I don't work a day in my life I love what I do and number three and one most important the guys here and the gals here they took a chance on me when we weren't wasn't clear if we'd were successful we didn't have a lot of money remember we got our very first you know $10 million sale they took a chance and I get great joy of when we do something well here and Good Financial outcomes occur seeing them buy their first house or buy their first something whatever it may be or be able do things they never thought they were able to do in their own lifetime those three things the team the love for the game and also the kids the kids got to see you grind those things get me out of bed every day and that's what I focus on

Channel: Forbes

Views: 233,663

Keywords: Forbes, Forbes Media, Forbes Magazine, Forbes Digital, Business, Finance, Entrepreneurship, Technology, Investing, Personal Finance, Justin Ishbia, Phoenix Suns, Phoenix Mercury, NBA team, private equity, what is private equity, fundraising, how to fundraise, Shore Capital, Chicago, Chicago billionaires, American billionaires, small business, running a small business, fundraising for small businesses, trust the process, United Wholesale Mortgage, Southern Vet

Id: QeOVMp8ytr4

Length: 11min 7sec (667 seconds)

Published: Tue Apr 09 2024