The Global Investor

Episode 10: Straight-Forward Due Diligence from an Active Investor with Kyle Gonzales

January 03, 2020 Obris Podcast by Crown Private Season 1 Episode 10
The Global Investor
Episode 10: Straight-Forward Due Diligence from an Active Investor with Kyle Gonzales
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The Global Investor
Episode 10: Straight-Forward Due Diligence from an Active Investor with Kyle Gonzales
Jan 03, 2020 Season 1 Episode 10
Obris Podcast by Crown Private

What are crucial traits, skills and talents for an active early stage and private equity investor? We asked Kyle Gonzales, a very active investor and master of due diligence for the companies in which he invests.

Head on over to our website at https://obrisinvest.com to find more insightful topics and educational materials on investing, along with information about our events and exclusive membership program.

Show Notes Transcript

What are crucial traits, skills and talents for an active early stage and private equity investor? We asked Kyle Gonzales, a very active investor and master of due diligence for the companies in which he invests.

Head on over to our website at https://obrisinvest.com to find more insightful topics and educational materials on investing, along with information about our events and exclusive membership program.

Speaker 1:

Probably one of the things I appreciate most about OBR S and it's been why I was so hard [inaudible] for me to do investments was, um, I need to know the founders and it ended up people are doing the company. Um, because if you don't know the founders, you don't know the company, you don't just period. And if you can't get a read on the founders and you can't do that, don't invest this stuff.

Speaker 2:

[inaudible]

Speaker 3:

welcome to the global investor podcast. The goal of this podcast is to offer investors and entrepreneurs insights and practical advice to dramatically improve the kinds of deals that you invest in and the returns you get. My name is James even sin. I'm one of the partners at crown private and our investment syndicate obras by crown private Oberst is about exceptional people, unique experiences and bespoke investment. Our membership and the obras community are made up of likeminded, yet unique and adventurous individuals as well as family offices. We invest in a spectrum of deals from established companies to startups. We do so with a proven formula of due diligence, structuring and management. Our guest today is Kyle Gonzalez. Kyle is a member of obras. He is also an active investor and he is someone that I consider both a friend as well as one I look to for his expertise in due diligence, particularly in the early stage sector.

Speaker 3:

Uh, Kyle was a senior director at red hat, a multinational enterprise open source software company. He was with red hat for more than 18 years and built and led technical architecture and business development teams working with global financial services and telecom companies such as 18 T Deutsche Telekom, bank of America, and Citibank. Kyle in my world is best known as an active investor. He does thorough due diligence and the companies in which he invests. He sits on boards and is very active in the companies which he invests. Uh, currently he is, uh, active with several early stage companies too that he founded himself, uh, along with partners as well as a couple of our portfolio companies. Uh, please welcome Kyle. Kyle, thanks for joining us. Where do we find you today?

Speaker 1:

Uh, so I'm in Jacksonville, Florida. Okay. Crappy outside the day. But usually winter is not the best time to be here.

Speaker 3:

Florida home, a home office. I imagine, uh, you've been a of obras for several years. In fact, you and I met for the first time when we were both considering a membership, uh, in Auckland, New Zealand almost five years ago. What led you to obras and what keeps you engaged in Obers today?

Speaker 1:

I mean, I think for me there was an interest in, um, you know, I was already doing some investing on my own and, uh, what I've found is that, that it was, uh, honestly kind of a fight. Like it's funny cause there's many investments out there like trying to get any kind of information, uh, getting exposed to different things. So it's just like, you know, I felt like I was a detective trying to hunt down things. So, uh, I didn't, you know, uh, knew the, uh, the founders, Mark and Chris, uh, from a number of different things you're doing online, knew them for a couple of years and they invited me to come out. Um, and it worked out, you know, for me to comment. Of course now listen, all cleanse. So, uh, that was a good, that was a good time. And actually it was worked out too.

Speaker 1:

I'd disclosed the big deal at work, so I was like, all right, well now I've got some cash so we're going to, you know, take my wife to Auckland. Um, was kidney engaged is really the people, I mean, there's people that I met like yourself there the first meeting. Um, that's a large number of people that I still keep in touch with. I mean, even people that aren't even part a, it's still a part of my parents, but I still kept in touch with them cause they just, you know, showed up or whatever. But like, you know, and that's the thing that really keeps me engaged is that my, my Rolodex of people who I trust that I can reach out to has, um, has grown tremendously. The amount of fab learn from obras both from the deals and from the other members has been tremendous. And, uh, you know, there's a even getting now, I mean, I think in almost five years now, I think there's a sense of ownership and the group that, um, it's not just passive. I'm not just sitting back and moving things back. Like I can get involved in the group and help the group evolve into what I needed to be as, uh, my needs is an investor change.

Speaker 3:

Yup. Yup. No, that makes a lot of sense. What you just described as your own story, um, that is parallel by, by many of us who came, came in with her own background experience and have gleaned significantly from, uh, being a part of the, of the, the group and deep relationships. I'm, I'm glad that it's been the case for you. Uh, our primary interest today and the reason I wanted you to come in to do that podcast is, uh, I've always been impressed with how you function as an active investor, both in established private equity companies as well as early stage. Uh, you pour yourself into the companies that you're considering and then the companies that you invest. But before we go there, uh, let's speak a little bit about what got you to where you are today. Earlier this year, retired from red hat where you were a senior director. What led you to retiring to, sorry, what led you to retire and what did, what did, what have you retired to?

Speaker 1:

I mean, you really, I Obrist the blame for that for the most part. Uh, my wife, I think he got it. I mean, I, you know, one of the challenges I think saw with the corporate world is that, you know, uh, kind of being part of a Royal court, like if you're in the corporate world, you work at their behind. Um, and unless you're at the very top, you really don't have very much control. Um, and I think over the past couple of years that even as I moved up, like they can, they can pay you plenty thing, take care of you. You can do things, but they're gonna, they're gonna get their measure out, right. Any, any company that employees you, they're employing you because they're being charitable and partying because they want to extract something from you. And they're going to make a profit from it, right?

Speaker 1:

So whatever they're giving you, if they're giving you a raise or promotion, that's not just because they're feeling generous, they're going to ask a lot. And it just really got to the point that there was, you know, really obviously that, um, you know, no matter how much you can get there, you can never truly control, uh, I'm going to death and mature the, the very tippy top of the company. So really looking for a place where I can do things and have on my own control, my own schedule. I think my wife got tired. I, you know, instead of, you know, thinking of things by the seasons. Um, most of my calendar was dictated by our sales quarters, um, and, uh, that kind of tired of that. So I think that that was something I wanted to. Um, interestingly enough for me, um, really, I, I retiring from the corporate world and moved right into the startup world, right? I went pretty quickly from investing in startups to, uh, being in several startups myself. And a lot of that education came from just the experience that I've had so far with arbors.

Speaker 3:

Yeah. Well, as I recall, even though you were working full time, you were putting in another club probably close to full time, uh, in your, uh, yeah, that was split world as well. So feel great so that you can now do two full time jobs. Just invest.

Speaker 1:

Yeah. I only do two full time jobs. Yeah.

Speaker 3:

How's it going so far? Tell, tell me, tell us about what companies you're working with now. Anything. Is there anything engaging, particularly engaging that's drawing upon the best of what is Kyle?

Speaker 1:

Yeah, so, um, I'm in a, uh, pretty my, my, where I spend most of my day and if you see me on LinkedIn where I'm spend way too much time these days is, uh, I help along with some other people that, that we know they're in around the group, uh, to found a company called next prime that we're in a, uh, we're a clearing and settlement platform for a large institutional buy-side players in the crypto space. That's just the barest minimum I can do. To kinda describe what we do. Right. Um, but, um, that's been pretty busy and I'm, you know, doing leading sales and business development for that, which is why, which is why I live on LinkedIn. My, my, uh, my new home, I did it a lot before, but not like I do now. Um, also another startup that I actually started several years ago and it's been still near and dear to my heart.

Speaker 1:

And actually you'll learn a lesson where I actually gave up a majority stake to get the right people involved in it. It's called the ABA Gaudreau one. Uh, they presented a couple of, uh, some overs, events. The CEO is a Batali who I think the people, anybody who's been in the group knows has been very dedicated and, uh, you know, I, and so the founders were actually stepped out of our majority States to get, uh, and bring the Italian, bigger and Altos and bring a CTO, someone I'd worked in before who's really jelling and bringing the company there. They're actually going to be at their MVP. Um, really now they're going to start, um, pushing sales and early Q1. And so, um, that's a really interesting company. They're, they're a, um, you know, there's a lot of companies aggregating data online. They're doing search, not re, uh, research, not search right.

Speaker 1:

Where they can kind of make 'em makes sense. A lot of data feeds coming in, right? We're always reading new sites every day, but we're always looking for data that matters to us and they can kind of dig into a lot of that matter. And I've actually used it in my first start up right where I have them. I have them do search for, um, relevant institutional articles, um, in the crypto world and I get them delivered to me every single day. So I've topics go through and, and get data and that just crushed with, um, random news that's coming across the wire. We can add the, we can put, put in the, uh, the writeup on this. We can put a reference to avocado. Yeah, absolutely. You can sign up for free now and can see what it's about. I mean it's really progress greatly over the past year.

Speaker 1:

Uh, and I think we'll see further improvement in going. What is your role with avocado? Uh, honestly right now I'm kinda like, they're a Yoda. Um, I come in and, and give them advice and not test out systems, but, uh, the CEO and the CTO, uh, they're the full time on it. Um, but I come in and, you know, help them when they have a question about corporate structure or I think we'll approach or really I honestly a lot of the same time advisory things I'm doing for a lot of startups. I'm involved in a, I just happened to be much more daily involved, uh, probably in them than in others and over nights. Next prime. What is your primary role there? Uh, the head of sales and business development. Okay. Okay. Okay. What do you, I referenced before that they are benefiting from the best of Kyle.

Speaker 1:

What do you think the best of Kyle is? What we're going to, we're going to dig into your due diligence process here in a minute, but I want to ask you just kind of candidly, since I didn't give you this as a prep question, what do you do best? Any investment will? Um, the interesting thing for me is, um, I have the thing I've built up my career around, right? Two things is a rent both endurance, uh, has always been one. If you're in the corporate world and you can't get beaten with a bat on a regular basis, then you're never going to survive. Um, but the second one is finding what the problem is, right? Go try to break something. Whether you're doing it, you know, mentally going through your head where you're going to find the flaw or um, actually going through and testing it, right?

Speaker 1:

Whether it's a, you know, a new product that's coming out and you have to go, okay, well how is this going to, how our being our, how our customers have beat us up? The mistake product comes out, right? Or we do a new sales campaign and we're like, Oh wait, something's missing here from what we really need to say and we're going to get burnt with it. So how do we try to patch it and um, you know, change the campaign or whatever, um, and then try to flip it around. And once I find whatever's broken, then we try to fulfill it and make it and, you know, make it right. And I think when we're getting into, you know, that's a, it's a useful thing when you're in, when you're in a startup, right? Because everything is moving very, very fast and you need to look at something and go, where's the problem?

Speaker 1:

Right? And is this something we need to address now? If it's not, let's at least write it down for something we do need to address having to fix it. But it's also important in a startup, right? Whenever you're evaluating an investment is finding work. Something's gonna break. Because, let me assure you, it's going to, I mean, even even down to the most basic thing, like when you know, for next prime, for instance, when we, we bought an entire set of servers, we'd set up our entire environment and we had one distal labor and um, you know, when preproduction had one only one server, that was the only server that was unique, right. And it had every, everything else was redundant about it. We had redundant power supplies, drives, network connections, like everything you can do to make it redundant. And, uh, the main board failed.

Speaker 1:

So the only server that we had that was the unique server and the only part of the server that couldn't fail because it was unique fail. So that taught were like, Nope. Yeah, we should have known that that was going to be the one place that would break. Fortunately we got to, you know, it happened well before in production and get it replaced and we immediately made sure we had plenty of redundancies for that. So it's just looking, you know, looking for that. So that's a, that's a really, um, you know, I guess sometimes I'd dig into, people are like, you're very negative. I'm like, no, I'm not negative. If you want bleeding, you want me to find what's wrong before like the market or time or here happenstance finding this wrong. So, and that's a big thing that I ended up applying to a lot of my companies and then working to figure out how to remediate that. [inaudible]. Excellent. Well let's speak a bit a bit about due diligence. That's where I think the first, the first place where I saw you really shine is your deep dive due to due diligence. And just a little context

Speaker 3:

for those listening or watching, a lot of our folks are not familiar with over us in our, in our processes. But um, when a deal first comes to us, there is a team of people who do the deep dive and each of us have our own unique perspective and I've really come to appreciate how yours compliments my own. Tell us about your due diligence process, Kyle.

Speaker 1:

Sure. So, you know, the thing with over us is that the, the, the deals that are coming in are from a variety of industries, right? So the first thing in a due diligence process is you need to learn, all right, dune, you can, you have to take what the founders are saying about their company, right? And, and get that in [inaudible]. But you can't fully rely on the company itself to tell you what you need to know about the market if you do. Um, it's very much like the news, I think. What was that like? Uh, Mark Twain said, if you're, if you don't read the news, then you're uninformed. And if you do read the news, then you're misinformed. Um, if you're not from it, you have to. So if you're not familiar with the market, right, you're going to not know about the market, right?

Speaker 1:

But if you only read what the company tells you about the market they're going into, you're going to be misinformed. And it's not that it's not their fault. They're not trying to mislead you. It's just that, you know, they have a view of the market. And you really need to go more broad and understand the market and understand the money's being made here. So for me, a big, a big part of any investment is understand that market. I don't need to know everything, but if I can't wrap my head around it, then I don't invest in it because then I, I can't judge the risk. Right. And a lot of cases, there's been investments that I've done that, that was the first thing that got mixed was I looked at the market and I'm like, I'm going to get anywhere near that market. Right. I don't, I don't really want, I want that in my portfolio.

Speaker 1:

I know it's, you know, it's gonna be an ugly market. It sounds good. It's too frothy, you know? Um, but it's still, it's gonna pass. It's gonna pass through, you know, the market that has seemed legitimate. Um, the next thing in the due diligence process, I've found is, is about the founders, right? The, probably one of the things I appreciate most about OBR us and it's been why I was so hard [inaudible] for me to do investments was, um, I need to know the founders. I ended up people are doing the company. Um, because if you don't know the founders, you don't know the company, you don't just period. And if you can't get a read on the founders and you can't do that, don't invest this stuff, right. Investing in a slide deck, don't do it. And in fact, if you invest on a slide deck and it binds, that's not their fault.

Speaker 1:

Cheerful, um, you to know the founders, you have to know their motivations, you have to know their capabilities to do things. Um, I'd say I agree side of this is one of my, one of my largest startup investments right now is, uh, with a company called API MADEC, which was when I was introduced to actually my very first meeting with Oprah. So when I was in, when I was in, um, New Zealand and [inaudible] with one of the founders just a couple of weeks ago. There you go. So the, the founder, you know, ideal, the ideal is the kind of CEO that I wish every single startup had. And the reason is that he, the, I see a lot of startups that want that. Like, I have a great idea. I want you to give me a lot of money and I'm a hire a bunch of people to do all this work for me.

Speaker 1:

If you see a startup like that, run and deals not like that, and deals involved in every aspect of his business. And not only that, but the deal realizes that it's his idea, right? He's the person that people want to see and talk to you. So what does he do? He puts himself doing brutal schedule, right? Um, traveling between, you know, as home in New Zealand and the development offices in Pakistan, and then traveling literally around the world probably multiple times every single year. Going to conferences and getting his thoughts and ideas on his market out there. Right? It's interviewed, meets people. Um, that is what you have to do. And he's doing that sort of thing on a global scale. And so, you know, when you look, I look at a company like that on that I'm like, uh, you know, I sat down with the founders one before I put in there and really got to know them and that's why I've, you know, had done again, invested in them three times because I know like he's going to make it happen, right? He's the kind of founder that that does that, right? So founders are the big thing. And then the final part is like, okay, if you look at the the market and you're like, I want to be in this market, I understand this market, I think I should be there. And you've talked to the founder, um, and what they're doing and you really feel good about the founder or founders, right? That they can, they can carry it.

Speaker 1:

Then you look at the deal, right? And the deal is two fold, right? It's really, this is where you start looking at the company, right? Which is the numbers make sense and does what they want to do. Make sense. Right? So, for instance, I had a, I had an investment where I went through at the market was great. It was a home healthcare company and they were doing, um, essentially like a [inaudible] robot friends for, for elderly people, right? Which, you know, almost say like if you'd said this 10 years ago, I'd be like, that's stupid huge thing now, right? This remote assistance, people don't want to go to a nursing home. They want to age in place. They want to be in their space, right? So I looked at that market, the market was great, I talked with the founder, founder was really smart, went through the deal and the financial side of the deal was pretty good.

Speaker 1:

Then I finally asked them, I'm like, well what kind of company do you want to build? Right? Cause this is robots. We're talking about it, you've got patents. And uh, we got to the end of it and they were like, well okay, I've a really important question for you, right? Cause I'm invested in this deal. Are you going to take my money and build up more technology in this space or are you going to take my money and you're going to build a bunch of robots and try to be a robot company? And he's like, I want to be a robot company. And I'm like, well I'm not giving you my money. It's like why? Why are you going to get any me my money? I'm like, well cause I, I am 100% confident you are going to develop great technology in this phase and you're gonna be able to patent it and get it used.

Speaker 1:

However, you know absolutely nothing about building robots. You have know nothing about manufacturing. You know nothing about production. You know nothing about distribution, you know, know anything about that, right? So if you tell me you're going to try to do this and build up, you know, production, I'm like, well you don't have any expertise in that, right? If you told me you were going to build a great patent portfolio in this space, work with the key players and get your patents in place, then I'd go invest in it. Now, fortunately that person reach back out to me and after about six months of banging their head on, uh, trying to build robots and go, yeah, I don't think I'm going to building robots. I think I just want to build technology. I'm like, all right, well let's talk and let's go get the deal. Um, but those, those three things have to be there and you have to go through them with every single investment you do and you have to get it.

Speaker 1:

And I'm done. And I will tell you, um, when I look at my investments, I've already got a couple of investments that are blown up. Cause look, if you're in this space and you're, and you're not prepared to lose money, it's like, you know, don't, don't go on the, you know, I don't hate to use the casino thing, but it's like if you walk in the casino and then you get mad that you left the blackjack, why'd you, why'd you walk in? Why you do this? Like some of your deals are going to blow up, but when I look at them it's because I didn't pay enough attention to this space. Honestly. The probably the biggest ones, I didn't pay attention to the founders. The founders is probably the biggest one. I do two, two investments I've taken write offs on. Um, my most recent and it's because I let someone talk to me around the founder issue and I'll, I'll never do it again. Okay.

Speaker 3:

All right. Bullet points. Founders

Speaker 1:

wonders, market and deal. What are they doing? What, what are you actually investing in and what are you getting out of it? You have to know and make sure you feel good with all three of those before you send your money because there's a lot of people that need your money and there's a lot of people going to do some great things with it and there's a lot of people that are going to waste it. Do your due diligence. You're right. I think that's really, that's really wise.

Speaker 3:

A lot of people who are investing aren't where you are. They're not as established. They haven't been through a few hundred deals as you have. How would you advise them to build the expertise to say, look at founder market deals?

Speaker 1:

Look at Nielsen's th th th the way that you, this is by looking at deals and comparing deals, right? It's like anything else like you, it's, this is a skill that you build up. It's not a, there's no talent. Like somebody didn't get born in at three years old. They're, you know, picking perfect, received the old's like a product, right? You have to look at deals, you have to look at track records, you have to look at things that work and really look at things that work like, don't, you know, like, I'm sure like two years ago, everybody thought we work was actually brilliant. Um, and it actually is brilliant. The CEO's gonna make out like a band on. That'd be every single, every single other person that we work. Um, you know, it's going to like, it's really gonna eat it. Right? Um, but you know, you just, you have to look at the deals, look at the things that they're doing, look at what people are raising for, ask the questions.

Speaker 1:

Even if you're not sure about investing it, just look at the deals, right? Um, because you have to build up that kind of understanding. I have to ask a lot of questions. Don't be afraid of asking the question. Don't be afraid of quizzing the founders. Like if somebody is asking you for $10,000 and they won't give you 30 minutes of their time, then you don't give them your money, right? That's a lot of money. $10,000 for 30 to 60 minutes. That's a pretty good ROI on top, right? Go make sure you get that time. Get your questions answered and understand. Uh, you, Kyle are a very active investor. Once you have decided to invest and let's take API MADEC for example, you're on the board of API MADEC [inaudible] you are on calls with a deal in his team probably at least weekly or more than one weekly basis.

Speaker 1:

What does it mean for you to be an active investor? Well, I think for an active investor, I mean, look, if you, um, if you go tomorrow and buy shares of Apple stock, right? You don't, you can't do is you're not going to call up Tim cook the next day and go, Hey Tim, I have some ideas. I think I can go contribute to your bottom line. Like it's not gonna correct. They got to take your call. Right? But you know, you're looking at this space where, especially where Oberst is in the market, it's earlier stage, right? And any early stage company does not have all the resources they need, period. [inaudible] all the re that month, the things they needed. I would say, in fact for me where I get very involved is that a majority of startups, uh, are founded by people that don't know what to sell things.

Speaker 1:

And it's not their fault. Like it's not that they're deficient, they just haven't done it. Sales just like learning how to invest on due diligence, learning how to sell is a skill, right? And if you find a lot of early stage startups, especially if they're, they're based on technology, those startups are going to focus on people that are writing the code. You're going to figure focus on people that are developing the product and getting into the space, but they're not focused people that know how to sell a multi year deal into a corporate procurement apartment and ha and talk about how to structure the deal or to do things like that. So that's all from, from my perspective, that's a lot of how I get into companies and a lot of how I provide feedback is on a sales and business development. Right. Because it's something I do.

Speaker 1:

It's something I know I don't have to go sell the deal for them. But I mean specifically like with the API MADEC I've definitely walked them through, um, how to structure deals if they've hit not at a loggerhead and they get moved forward. Giving you some advice on how to, how to try to get around that. I've done that for several other companies as well. I have a couple of companies that are there are not in the arbors portfolio. Not those anything wrong. They're just came from a different place. Should've been able to advise them as well. Right. And um, so I think that from your perspective, right? If you're making a, uh, if you make an investment in early stage, you need to be active. Why? Because your money, right? If you can do something to help that company that you've put money into, right, you shouldn't do it because otherwise, why are you not trying to make yourself more money? [inaudible]

Speaker 1:

right. And it doesn't take much. I mean, it's a phone call. Maybe it's a man. I think you're parched. Great. I'm gonna invest in your company. And then I know someone who really needs to use what you're doing. You make an introduction, he agrees, a market, you introduce them to a new place, whatever it is. But you know, you want to get involved. I mean, there's not a lot of places when you're looking at the stock market, right. Other than, you know, playing around with stuff he can get in public stock March, can't do it. But in private equity, especially early stage, this is a place where you can be active and you can leverage the things that you know, your experience and go through and make yourself more money. [inaudible]

Speaker 3:

no, very, very well said. I love that within obras that there is enough diversity amongst what we're talented at that uh, you may be actively involved with a few companies. I may be actively involved with a few companies and so on and so on amongst, amongst the members. Um, and it's fun,

Speaker 1:

isn't it fun? It is. And honestly, I've actually invested, I've invited people, I mean, when I think about inviting people to have Sarah do to Oprah, I'm sorry, I almost went old school name. I went think about inviting people to Oprah. It's like I've recently invited one of my good friends in because he's been looking at doing more investing but wanting to be more hands on. Right. And he's, he was a hands on real estate investor. That's how he's been doing it. So he's not, but he's not just investing in projects. He's out, like looking for properties and, and renting them out and knowing how to maximize and read the market. So he's already kinda been active in its own portfolio and really liked the idea that he's going to make early stage investments, that he wants to be active there.

Speaker 3:

Yeah. Yeah. Well, let's pivot a little bit. I would like to see your mid career right now and yet you've retired, uh, how have your investment priorities, behaviors and goals

Speaker 1:

changed since retire? You've retired or since you decided to retire? Yeah. You know what's interesting, um, I, I thought about this and, and the reality is it hasn't. And the reason it hasn't is because of the reason that I, that I rolled out my investment plots. But to begin with, right? Thinking anybody who's in the U S is the typical thing. Like you'll work for many years, worked for decades. You save up your money and give it to a financial advisor. And then the idea is, you know, the whole idea is save up enough money so that doesn't run out before you die. Right? Um, they're like, well, that just always sounded really dumb to me. Right? I'm like, I don't like, I don't want to play a game. I'm like, what if like medical science, there's something awesome and this cow, you can live to be 150 and buy a condo on Mars, but your full wing fee runs out when you're AB.

Speaker 1:

Like, I'm not gonna go back when I'm 80 and become a Walmart breeder. Actually I can't leave because they eliminated Walmart graders. So sorry, now no longer have that. So I thought very early, I said, my, my objective is twofold, right? I have, um, my investment philosophy was I wanted to make sure that I had a strong cash position, um, to, you know, just to make sure that stuff happens. And I made sure that I survive it. And as part of the reason that I've been able to do my retirement, uh, I have a core of my, uh, investments that are focused on longterm, uh, um, income place, right. To build up a, you know, a core to make sure that my rent gets paid and they're, the kind of investments that I look at that are ones that they shouldn't be able to pay me for a really long time.

Speaker 1:

Right. I can put them in place and that they have, you know, once they're at the maximum payout that they should be able to operate for a decade plus to really get things out there. If I don't have something that matches that, that I take the income that I'm looking for, that I'll put it in something short term, the thing from producing until something longer term come along. Um, and then beyond that, that's where I start looking at startups where I can make a play and the startups typically a little bit longer to like, um, focus in on, you know, what I was looking for. But I think this is important to have, you know, startups there, uh, because there it's a, a way of generating additional capital for you to invest. That was for a long time and when I retired, that didn't change, right?

Speaker 1:

I mean, when I was employed, um, and I had my objectives, I'm like, okay, here's my check down. What's my cash look like? Right? Well I haven't have a cash position. Okay, good. Next then my next investment priority was always improving my income. Right? And if I've made income investment in producing investments that year and I felt good about them, then I took the additional, uh, the initial capital and put them into something that could generate, uh, you know, account longterm capital gain from you eventually. [inaudible] and that's the philosophy. So I think that that, so I think, you know, the interesting thing, the tournaments question around is that I think the idea of people saying, well, I want my, if you have to change your investment philosophy because you were tired, then your pre-retirement investment philosophy was broken. [inaudible] and you should be thinking about a more permanent portfolio that should not have to change just because circumstances in your life change, right? You should be thinking about those circumstances in your life changing. Cause you know what? Retirement doesn't, isn't always voluntary, right? Retirement can be, I got let go. No company blew up. Right? The board was doing bad things. Um, I worked for the next Enron and therefore, you know, poof. Right. You should be thinking about those things and um, as you, as you move forward.

Speaker 3:

Well, I do recall that you were, it was the intent to retire was part of your philosophy and your plan for pretty much as long as I've known you and you acted on it when you felt like it was the right the right time. I appreciate that you've said that, that your philosophy and your approach really didn't change. Those were all, those were all built in. Others who are listening are, uh, in their careers, still working for the man or the woman or the of the company. What advice would you give them those who are, uh, aspire to, uh, to retire at the ripe old age of, uh, their, their, their, their mid career time?

Speaker 1:

I think the biggest thing is that I find that, I guess one of the things that's very hard about being in the corporate space is that there's a system, right? If you, if you pay attention, there's like a system that you're, that you're geared into. I actually have a good friend that I worked with at red hat is, was interesting for me because he, um, he helped me, he married into a rich family and then we've talked about it a lot because he came from a family that was not, and we talked a lot about their perspectives on things, right? That um, you know, people in, in the normal thing, that's all you're supposed to work and you put money in your full one K and you invest here and you do this type of investing and not that, and then you get out there and you, the plan is almost made for you, right?

Speaker 1:

You're supposed to work until this age. Why? Because that's when you can take money out of your 401k and then you're supposed to do it this, but you really should retire by this age. Right? And so there's a lot of stuff that's on autopilot and I think the rent's important part is to really understand what are you doing right? Don't make it based off of what the plane is like. What do you want to do, right? When is it that you want to do it? What is the thing you want to accomplish? Make sure you have a plan. Make sure you have an agenda to get this thing Dory, and then work backwards from there. Right? Now, this doesn't mean I didn't contribute money to my 401k. I definitely have money. I put my name up four one K I, it doesn't mean that. I was like, well, you know, I have plenty of people that are like, well, I put money in my 401k and I have a very good mortgage and that's my plan.

Speaker 1:

And I'm like, but what is your plan? Well, so put money in my 401k and back my mortgage. Really? That's the whole plan. Like, yeah, you might need to add some other things to that, you know? So that is a, that is a big thing is really have a, have a, have an agenda, have a plan. What do you want to do? Make the pieces of your life, work around it. Um, and then understand when you want to go. It's actually funny, it's not that different from an investment, right? If you get investment advice, it's all you. It's like, why did you get into it? Why do you get out? Right? Um, people should look at jobs or careers the same way. Right? You know, for me, when I started my career, for instance, I started a company that was not much more than, than a startup.

Speaker 1:

They would just barely IPO. They were getting into the tech bots, right? It was very scrappy companies starting up and then worked there until my company got bought by one of the oldest blue chip tech companies on the planet. Right? And they definitely were not that kind of company anymore. And I'm like, yeah, I think this is where, you know, this is where probably gives a good off ramp for, for my career. Right? And so understand those kinds of things. Um, don't, just, don't just operate in autopilot. Don't just say, well, I guess I'm going to do this home 65. That's something, just have a plan for what you really want to do. And when you want to do it. And you know, I think a big thing to that, you know, and did you send was that, you know, this is kind of a midpoint, right?

Speaker 1:

And I, the interesting part about this is that for probably six years, I've been talking about around age 45, which I just turned get today. Um, thank you. Uh, talking about like, this is a, this is a mid point. This is a place where, you know, a good time where if I want to have another whole cycle, right and go carry something in my career that this was a good place to go do that. And so we have been planning, you know, looking at this kind of time period for quite some time and many, many, many things. I mean, we were talking about before birth, talking about this before for my company ever got bought out or anything like that. Right? Uh, but those conditions change, but it didn't change your stand. The objective and the reasons why I would do it, right? This is other factors to go pull in, right?

Speaker 3:

You know, we've just barely touched the surface of what I think is what makes up Kyle as a human being. As an active investor. Uh, I'm gonna do a real quick plug for our events because, uh, our events, Kyle are a great place for people to get to know folks like yourself, to get to know you and others like you. Um, who are very active investors and have learned along the way to the credit of are those who are listening or watching. I think that most are probably not just plugged into the system on a conveyor belt, but they're actually active looking to how do I grow my wealth? How do I grow my life? And I know that for you and your wife, the lifestyle was part of that, that you're, you're grand plan is you have a lifestyle that you want, a lifestyle that you live that you want, that you wanted to make sure that you're able to maintain that. So you're thinking about the present and the future. Well, I'm going to, we're going to wrap up in just one second. I'm going to ask, are there any last words that you'd like to share with, uh, with our listeners and viewers?

Speaker 1:

Wow. Um, for today and last words for today. Don't, don't do anything. I wouldn't do a lot of, it still gives you a whole lot of options. Um, but no, I mean I really think about is when, when everything I've done, I mean when I really look up, look at the times when I've been successful. The reason that, the reason, the times I've been successful, I've had a plan, I understood why I wanted to do it. I really put a lot of thought into it and then we just put it on next. Like once the plan is decided, yeah, we had touch points and check ins. So we did it and we're not gonna look at times where I felt like I wasn't successful, whether it was with a job or something I was working on or that plant. I didn't, I didn't work the plan. I didn't go back to my basics. I didn't work through there. And I think it's important to have that and understand what your tolerance is for risk, what your, what you, what you want to achieve in the end. Mmm. And, and to set your goal and set your own goal, but then cause at the end, no matter what happens in life, if you achieve your own goals and adventure, other things happen, that's all you then isn't RQ successful isn't that you got what you wanted, then you win.

Speaker 3:

Well that was a great interview. Thanks very much to Kyle and solace. Kyle is a good example of an Oberst member. Uh, our members and guests are really an amazing group of self-made and accomplished individuals and investors. We come from 15 countries in a wide variety of professions. We share the common pursuits of surrounding ourselves with great people in great places and gaining significant returns in investing. Uh, I recommend that you consider obras head over to our website. Obras invest.com. That's OB, R I S I N V E S t.com to learn about our investor group. Uh, we are welcoming new members at this time. And also the best way to get to know obras folks like Kyle is to come to one of our events. We are currently preparing for an event in Dubai in the United Arab Emirates, starting on March 30th. We'll have details on the website very soon. Uh, thank you very much for joining us this week. And, uh, all the best to, uh, to you.

Speaker 2:

[inaudible].