Episode Summary
Executive Summary: The episode features two conversations: first, praise for Jordan Harbinger’s long-running interview podcast and a Tony Hawk anecdote about protecting brand integrity; second, a deep dive with Brent Beshore of Permanent Equity on his strategy for buying and operating durable family businesses for the long term. Brent explains his no-debt, no-exit model, ideal target profiles, deal structures, post-acquisition management, and how COVID-era disruption may create both pain and opportunity for cash-rich buyers.
Main Topics: Jordan Harbinger’s podcasting longevity and interview style (Priority: 3/5): The hosts discuss Jordan’s 12+ years in podcasting, his deep interview format, and why his show stands out for avoiding superficial questions and motivational fluff. Tony Hawk brand story and celebrity recognition (Priority: 3/5): Jordan recounts Tony Hawk firing marketers after discovering branded toilet paper, illustrating how seriously Hawk protects his name and image. The hosts also note Hawk’s global fame. Permanent Equity’s long-term ownership philosophy (Priority: 5/5): Brent explains that Permanent Equity buys family-owned businesses and intends to hold them indefinitely, contrasting its model with traditional private equity’s short holding periods and heavy leverage. What makes an attractive acquisition target (Priority: 5/5): The firm looks for durable businesses, strong leadership teams, defensible market positions, and companies in the 'too big to be small, too small to be big' stage, usually with $3M+ in owner earnings. Deal structure, valuation, and capital approach (Priority: 5/5): Brent describes typical purchase multiples, earned-outs, full-balance-sheet deals, and the firm’s preference for all-equity acquisitions rather than debt-financed buyouts. Operating model after acquisition (Priority: 4/5): Permanent Equity uses small specialized teams, portfolio partners, and financial oversight rather than micromanaging, aiming to preserve autonomy while improving systems and growth. COVID-19, recession risk, and buying opportunity (Priority: 5/5): The conversation shifts to the pandemic’s sudden economic shock, Brent’s expectation of severe unemployment and business distress, and the opportunity for stable capital providers to help strong businesses survive.
Key Arguments: Long-term ownership creates more durable wealth than short-term private-equity flips because families built wealth by holding businesses and reinvesting cash flow over decades. Debt makes strong businesses fragile; Permanent Equity avoids leverage to preserve resilience in shocks like the pandemic. The best acquisition targets are already successful, owner-earnings-positive businesses with repeatable processes and some kind of market protection. Brent prefers businesses where the founder is not the sole source of value, reducing 'hit by a bus' risk and making transitions easier. Acquiring businesses with existing operational strength and augmenting rather than replacing leadership is a better model than imposing aggressive 30/90/120-day turnaround plans. Content and education are a major sourcing strategy: Permanent Equity uses inbound interest, podcasts, a book, and a scout network to attract sellers and opportunities. The COVID downturn is likely to cause major disruption, especially for businesses with long restart cycles, and may present rare buying opportunities for patient capital. If someone wants to build wealth, industries like HVAC, pools, lawn care, home services, and construction can be attractive because they are essential, difficult, and less crowded by aspirational founders.
Data Points: Jordan Harbinger podcasting tenure: 12.5+ years - Hosts note Jordan has been podcasting nearly as long as podcasts have existed. Podcast age comparison: 14–15 years - Jordan says podcasts have existed about 14–15 years and he’s been around for 13 of them. Tony Hawk brand story timing: At the height of video games - The toilet paper anecdote occurred when Hawk was making major money from skating games and brand deals. Permanent Equity first fund: $50 million - Brent references the firm’s initial fund size. Permanent Equity second fund: $248 million - Brent says the second fund is roughly 248 million and spans 27 years. Fund investment period: 10 years - He explains the fund has a 10-year investment period, unusual for private equity. Portfolio company revenue: About $180 million - Brent estimates the current collection of companies generates around this level of revenue. Portfolio company count: 9 - He says the firm owns nine companies. Staff size: 16 - Brent says the firm has a team of 16 supporting acquisitions and operations. Scout network size: About 700 people - He describes a scout network that helps source opportunities. Event attendance: 250 people from 11 countries and 5 continents - Brent describes the first Capital Camp gathering. Expected unemployment rate: 20% to 30% - Brent forecasts potential unemployment levels during the pandemic shock. Observed layoffs example: 4,000–5,000 employees - He cites a friend laying off thousands in food service or construction. Observed layoffs example: 585 of 600 employees - Another example Brent gives of extreme layoffs during the downturn. Target owner earnings range: $3 million+ - He says the firm typically looks for businesses generating more than $3M in real owner earnings. Target valuation multiple: 3.5x to 5.5x - He gives a typical EBITDA/earnings multiple range for deals in their segment. Cash-at-close structure: 2x to 3.5x cash at close - He says some of the price is paid upfront and the rest is tied to upside or earn-out. Aerospace example EBITDA: $7 million EBITDA / $3.5M–$4M owner earnings - Brent uses this example to show how reinvestment needs can reduce owner earnings.
Pivotal Quotes: "we want to own businesses like a family would." — Brent Beshore: Explaining Permanent Equity’s long-term, no-exit ownership model. "One way to take a good company, make it a fragile company." — Brent Beshore: Describing why the firm avoids leverage and debt-heavy deals. "If I had to do the same thing, I would do 1-800-GOT-JUNK, but I would do it for lawn care or for irrigation." — Brian Scudamore (referenced by Sean): Used as an example of attractive, recurring-service home-services businesses.
Implications: Listeners interested in buying or building businesses should focus on durable, cash-generative operations, avoid overleveraging, and design companies that can run without the founder. In a downturn, patient capital and strong systems matter more than hype.
About My First Million
Sam Parr and Shaan Puri brainstorm new business ideas based on trends & opportunities they see in the market. Sometimes they bring on famous guests to brainstorm with them.