1 0:00:01,564 --> 0:00:25,626 Mark Haney: And now I'm here with my good friend, anthony Romano, and he is the CEO of Cretelgent, which is a company that has been fast growth over the last several years, and so I want to catch up on the company and then maybe talk a little bit about the industry, the state of what's happening in the macro economy and so on, and how it might affect companies like yours or mine, right?

2 0:00:26,880 --> 0:00:29,569 Mark Haney: So, anthony, maybe just a little bit of your background and tell us what's going on with Cretelgent.

3 0:00:30,040 --> 0:00:30,742 Anthony Romano: Yeah, well, this has been.

4 0:00:31,504 --> 0:00:35,127 Anthony Romano: You know, first of all, thanks for having me again And it's been a journey.

5 0:00:35,220 --> 0:00:37,968 Anthony Romano: You know I started this really in January of 2019.

6 0:00:38,840 --> 0:00:46,708 Anthony Romano: So we're four and a half years in and we have, you know, launched a platform as a service for the entire real estate ecosystem.

7 0:00:46,800 --> 0:01:13,333 Anthony Romano: The platform is called Radius and it provides banks and brokers, reits, owner operators, attorneys, law firms you know all the participants in multiple verticals the opportunity to get micro market and property insights to order status, get delivery of all the compulsory diligence that's done during a transaction And then, post transaction, the monitoring, surveillance of those assets you know, sort of across the country.

8 0:01:13,823 --> 0:01:15,480 Mark Haney: So kind of end to end platform.

9 0:01:15,520 --> 0:01:17,701 Mark Haney: It's kind of like a subscription type thing You can.

10 0:01:17,721 --> 0:01:20,249 Mark Haney: someone pays a monthly fee for access to data.

11 0:01:20,720 --> 0:01:25,024 Anthony Romano: There's a subscription and enterprise license aspect but then we have a lot of you know per transaction.

12 0:01:26,230 --> 0:01:38,110 Anthony Romano: You know scenarios that we have some of the largest REITs and largest law firms in the country where somebody might go by 27 storage units or 13 multifamily properties on, in infrequent cases, maybe quarterly.

13 0:01:38,461 --> 0:01:46,870 Mark Haney: Well, i guess I tapped into a favor the other day because I was working on something with Placer County and they're saying you're going to need a phase one.

14 0:01:46,900 --> 0:01:49,321 Mark Haney: I'm like what the heck is that You know?

15 0:01:49,341 --> 0:01:52,310 Mark Haney: so I tapped into you and you guys know, is your different.

16 0:01:52,540 --> 0:01:55,950 Mark Haney: So that was like a one off, because I'm not, you know, i don't really develop much property.

17 0:01:56,220 --> 0:01:58,789 Mark Haney: But can people utilize you sort of that way too?

18 0:01:58,880 --> 0:02:00,246 Mark Haney: Or was that just because I was?

19 0:02:00,314 --> 0:02:05,255 Anthony Romano: you know, we don't proactively spend a lot of good market dollars on on the one off.

20 0:02:05,335 --> 0:02:12,570 Anthony Romano: but somebody's buying a property and they need an environmental assessment or an appraisal or an all to survey.

21 0:02:13,160 --> 0:02:21,264 Anthony Romano: Those are all pretty compulsory services, Different than residential, where you know, you have a home inspection and appraisal and really that's it on the property.

22 0:02:22,320 --> 0:02:28,724 Anthony Romano: There are eight or 10 different things that banks and owner operators and insurance companies require when you're doing a deal.

23 0:02:29,265 --> 0:02:29,806 Anthony Romano: Okay, i did.

24 0:02:29,986 --> 0:02:31,149 Mark Haney: So you guys do appraisals too?

25 0:02:31,329 --> 0:02:34,844 Mark Haney: Yep, Okay, And when you guys do an appraisal, do you?

26 0:02:34,864 --> 0:02:36,652 Mark Haney: I assume you send somebody out there or you do it.

27 0:02:37,340 --> 0:02:39,327 Mark Haney: I mean because you're kind of like a remote, all it's funny.

28 0:02:39,880 --> 0:02:43,535 Anthony Romano: So you think of the platform radius as the UI UX to the client?

29 0:02:43,715 --> 0:02:45,743 Anthony Romano: okay the order management workflow platform.

30 0:02:46,265 --> 0:02:50,189 Anthony Romano: Behind the scenes We've built an entire panel management technology platform.

31 0:02:50,760 --> 0:03:06,619 Anthony Romano: So on that platform would be MAI appraisers, environmental professionals, certified building inspectors, land surveyors So all of those products I mentioned have a site recon component to it and an individual will go out, they'll use our mobile app, do the data collection, take the photos.

32 0:03:06,679 --> 0:03:08,488 Anthony Romano: It comes back digitally into our report writing tool.

33 0:03:08,790 --> 0:03:12,587 Anthony Romano: Then we put it together you know pie and put the report together and back it goes to the platform.

34 0:03:13,160 --> 0:03:15,789 Anthony Romano: So there's a we call it tech enabled services.

35 0:03:16,060 --> 0:03:17,723 Anthony Romano: There's a technology, there's great data.

36 0:03:18,104 --> 0:03:23,527 Anthony Romano: But because it's a pretty regulated industry, these things are required on 90% of the transactions.

37 0:03:24,000 --> 0:03:25,344 Anthony Romano: We provide the end to end service.

38 0:03:25,565 --> 0:03:31,609 Mark Haney: Okay, so there's humans, so you do have partnerships with the people out there doing a lot of this field work.

39 0:03:31,749 --> 0:03:32,210 Mark Haney: I take it.

40 0:03:32,230 --> 0:03:34,807 Anthony Romano: Yeah, the data I mean.

41 0:03:34,827 --> 0:03:38,807 Anthony Romano: if you think about, if you're an environmental professional or you're a building inspector, that's your craft.

42 0:03:39,040 --> 0:03:40,466 Anthony Romano: You might not be great at sales and marketing.

43 0:03:40,560 --> 0:03:43,910 Anthony Romano: So how do you go face off with hundreds and hundreds of clients to get work?

44 0:03:44,180 --> 0:03:45,345 Anthony Romano: Well, we do that for them, right?

45 0:03:45,720 --> 0:03:49,590 Anthony Romano: We face off with the bank, with the commercial brokers, et cetera.

46 0:03:51,482 --> 0:03:53,329 Mark Haney: And so the business is.

47 0:03:53,409 --> 0:04:02,707 Mark Haney: Let's talk about the stage of the business, if you don't mind, because you guys have made an acquisition and so maybe the stage of the business and sort of where you vision taking it.

48 0:04:03,160 --> 0:04:07,751 Anthony Romano: We started growing it organically and coming from sort of the core logic first American world.

49 0:04:08,480 --> 0:04:13,763 Anthony Romano: I learned a lot about the notion of you have no business doing acquisitions if you can't grow organically.

50 0:04:14,880 --> 0:04:19,950 Anthony Romano: So we started with real good organic growth and then there were some kind of tucking acquisitions that we did.

51 0:04:19,991 --> 0:04:34,093 Anthony Romano: We did a couple small And then last year we did a strategic acquisition of a business partner of ours out of Akron, ohio that was called Nexus CRE And yeah, we've done the integration and a lot of cost synergies and revenue synergies.

52 0:04:35,024 --> 0:04:35,606 Anthony Romano: So it's been great.

53 0:04:36,182 --> 0:04:36,785 Anthony Romano: We'll do more.

54 0:04:37,000 --> 0:04:40,671 Anthony Romano: We're pretty opportunistic as the market's been hit pretty hard.

55 0:04:40,880 --> 0:04:51,544 Anthony Romano: There's a lot of really innovative technology companies out there in the space that are doing cool stuff but have a big burn and very little revenue And so, yeah, we'll keep doing that Okay, so interesting.

56 0:04:52,020 --> 0:04:54,749 Mark Haney: So I want to be a little bit educated here, maybe for our audience too.

57 0:04:54,920 --> 0:05:00,112 Mark Haney: So don't do an acquisition unless you can grow organically as well.

58 0:05:00,642 --> 0:05:11,373 Anthony Romano: Yeah, i mean I think the idea would be particularly from the investor, the private equity venture side, if all you're doing is get growth because you know how to tuck in companies that's a different game.

59 0:05:11,600 --> 0:05:27,507 Anthony Romano: So we have a multi-dimensional where we say, hey, we have an organic strategy, we have an acquisition strategy And then the middle, we have this partner distribution, white label strategy where we've got a lot of companies who have pipes into the clients we want to work with and we do arrangements with them in all ways and fashions.

60 0:05:27,901 --> 0:05:29,847 Anthony Romano: So growth strategy is multi-dimensional.

61 0:05:30,680 --> 0:05:32,186 Mark Haney: So it's real estate.

62 0:05:32,320 --> 0:05:45,532 Mark Haney: So I got to ask you you know everybody, you're just predominantly commercial real estate, as you mentioned, and I guess developers that are, i guess, developing some residential you might utilize someone like that, like a would like a big home builder potentially be a client.

63 0:05:45,640 --> 0:05:47,522 Anthony Romano: No, it really is the asset If you think about.

64 0:05:47,602 --> 0:05:50,751 Anthony Romano: You know residential is single, family, multifamily.

65 0:05:50,992 --> 0:05:54,562 Anthony Romano: You know one or two other pieces of property.

66 0:05:54,803 --> 0:05:56,927 Anthony Romano: Everything else is commercial.

67 0:05:56,987 --> 0:06:03,071 Anthony Romano: And I think people my wife sort of said when I started this because I'd come from residential and cat markets the heck do you know about commercial real estate?

68 0:06:03,105 --> 0:06:04,431 Anthony Romano: And it's like it's everywhere.

69 0:06:05,087 --> 0:06:10,789 Anthony Romano: It's the gym you work out at, it's the office you go to, it's the school your kid goes to, it's where you shop, it's the pub you drink at.

70 0:06:10,829 --> 0:06:12,791 Anthony Romano: I mean, go down, everything's commercial real estate.

71 0:06:13,225 --> 0:06:18,032 Anthony Romano: And so we predominantly deal with folks buying and selling and managing commercial properties.

72 0:06:18,405 --> 0:06:20,553 Anthony Romano: We work with developers who need some of those services.

73 0:06:20,665 --> 0:06:23,133 Anthony Romano: But it's a multifamily property.

74 0:06:23,173 --> 0:06:26,951 Anthony Romano: Who's, somebody owns it, somebody else is buying it and we're working with the transaction.

75 0:06:28,570 --> 0:06:34,472 Mark Haney: So which segment of the market excuse me, which of those groups is like the biggest market for you?

76 0:06:34,605 --> 0:06:36,232 Mark Haney: Is it the lenders?

77 0:06:36,445 --> 0:06:37,831 Mark Haney: Is it the brokers?

78 0:06:38,585 --> 0:06:39,187 Anthony Romano: It's a right.

79 0:06:39,227 --> 0:06:42,991 Mark Haney: Now I tell you the certainly the lender and when you say lender, think Like a bank.

80 0:06:43,345 --> 0:06:50,491 Anthony Romano: Think credit union, think community bank, think regional bank, think national bank, think non bank, non depository.

81 0:06:51,755 --> 0:06:54,754 Anthony Romano: Bridge and mezzanine, you know lender and things of those nature.

82 0:06:54,865 --> 0:07:02,872 Anthony Romano: those folks have you know policy around asset class and loan amount and LTV and based on that, here's what has to happen during a transaction.

83 0:07:03,005 --> 0:07:04,652 Anthony Romano: So they order a lot from us.

84 0:07:04,765 --> 0:07:05,971 Anthony Romano: Those are high volume clients.

85 0:07:06,065 --> 0:07:13,111 Anthony Romano: They use our platform on subscriptions, but then the REITs and then one of the biggest clients of ours are real estate attorneys.

86 0:07:13,485 --> 0:07:19,052 Anthony Romano: So they all have a practice that deals with large REITs and deals with corporate owner operator clients.

87 0:07:19,125 --> 0:07:33,853 Anthony Romano: So they would work with somebody who's buying, you know, 47 gas stations or 150 storage units and they're helping with the transit, the legal and financial diligence, and then they need somebody like us to come in and do all of the market and property do it.

88 0:07:34,085 --> 0:07:35,551 Mark Haney: And the problem you're solving.

89 0:07:36,608 --> 0:07:42,790 Mark Haney: Is it predominantly the hassle factor, so it saves a lot of time for the law firm, or is it cheaper?

90 0:07:42,991 --> 0:07:44,014 Mark Haney: How do they get a benefit?

91 0:07:44,125 --> 0:07:44,546 Anthony Romano: Any of those users?

92 0:07:44,566 --> 0:07:46,633 Anthony Romano: yeah, so think about the alternative.

93 0:07:47,405 --> 0:07:53,833 Anthony Romano: What would happen as a bank is, instead of coming to a cartel agent in this platform right and order status delivery of these end-to-end solutions.

94 0:07:54,045 --> 0:08:14,734 Anthony Romano: You would have a Rolodex of single-threaded monoline providers and you'd either pick up the phone or you'd call an appraisal company or an environmental company or a survey company or a and you'd wait for them to respond and get a proposal, and then you'd turn it around and you'd look for your email or you'd use Dropbox to get a report back and really manual, very uninspiring and inefficient.

95 0:08:15,245 --> 0:08:23,606 Anthony Romano: This platform collapses the cycle time, reduces the friction and the transaction improves the experience of all the counter parties in the deal.

96 0:08:24,128 --> 0:08:26,254 Anthony Romano: So it's been yeah, we've been super.

97 0:08:26,745 --> 0:08:39,032 Anthony Romano: That's been the biggest validation, not just the retention aspect of the client that we've enjoyed, but the feedback and utility they get has been bananas And we just did our third net promoter score you know where we talk to our customers and survey them.

98 0:08:39,505 --> 0:08:44,630 Anthony Romano: Industry average in our space is somewhere around 40 or 50, our score was a 74,.

99 0:08:44,791 --> 0:08:47,870 Anthony Romano: I mean, sounds super arrogant, but I think it's less.

100 0:08:47,911 --> 0:08:52,555 Anthony Romano: Just the technology and the platform, but we flank it with world-class customer service.

101 0:08:52,685 --> 0:09:03,991 Anthony Romano: When somebody's buying 38 storage units right, this is a hundred, 200, $300 million transaction you gotta lean in and be part of the transaction with them and help navigate and interpret and almost be part of their deal team.

102 0:09:04,465 --> 0:09:07,229 Anthony Romano: So we say high tech when you want it, high touch when you need it.

103 0:09:07,385 --> 0:09:13,591 Mark Haney: We sort of flank it with customer service And it's kind of like a one-stop shop versus, yeah, having to call five people.

104 0:09:13,725 --> 0:09:18,009 Anthony Romano: Commercial real estate storefront workflow system for end-to-end due diligence.

105 0:09:18,170 --> 0:09:21,731 Mark Haney: Interesting Okay yeah, i can see it being super.

106 0:09:21,811 --> 0:09:24,268 Mark Haney: is it cheaper than calling you know?

107 0:09:24,308 --> 0:09:26,487 Mark Haney: is it more affordable Because it's one service subscription thing?

108 0:09:26,487 --> 0:09:33,154 Anthony Romano: Well, not only the, service is, you know, probably really competitively priced, high quality and fast, but the efficiency that's gained.

109 0:09:33,454 --> 0:09:40,373 Anthony Romano: we have clients who said, hey, we've taken seven, eight, nine days out of our process And if you're a bank, you just did a transaction.

110 0:09:40,685 --> 0:09:47,272 Anthony Romano: If you're a bank and your borrower gets to get into their property faster, less expensive and start running their business, that's a huge win.

111 0:09:47,445 --> 0:09:48,309 Anthony Romano: Yeah, 100%.

112 0:09:48,745 --> 0:09:51,855 Mark Haney: Okay, so everybody's talking about artificial intelligence.

113 0:09:52,506 --> 0:10:05,309 Mark Haney: We're investing into a lot of startups that are dealing with artificial intelligence, and a lot of it is around driving efficiency, and is that gonna be a piece of what you do, or is that a piece of what you do?

114 0:10:06,827 --> 0:10:08,713 Anthony Romano: We're working on it today.

115 0:10:08,965 --> 0:10:10,371 Anthony Romano: There's a local company.

116 0:10:10,505 --> 0:10:13,970 Mark Haney: It's a Moneta portfolio company called AppOrchid, that we spend a lot of time with.

117 0:10:14,445 --> 0:10:18,131 Mark Haney: We've built our ontology, we've built sort of our, And we're a company, we're investing there too.

118 0:10:18,285 --> 0:10:18,787 Mark Haney: Yeah, yeah okay.

119 0:10:18,808 --> 0:10:19,912 Anthony Romano: So we've built our data fabric.

120 0:10:20,005 --> 0:10:24,036 Anthony Romano: I mean we see both a use case in turtle and external.

121 0:10:24,165 --> 0:10:32,236 Anthony Romano: I think internal when you think about using the computing power to reduce the cost and the time it takes.

122 0:10:32,305 --> 0:10:41,634 Anthony Romano: So for a phase one environmental assessment, as an example, it might take a report writer, an expert, eight hours to put that together, compile it, et cetera.

123 0:10:42,585 --> 0:10:45,708 Anthony Romano: Chat GDP just passed the CPA exam last week on the first try.

124 0:10:45,728 --> 0:10:46,009 Anthony Romano: Right.

125 0:10:46,946 --> 0:10:53,214 Anthony Romano: We have models internally that we're working on cutting that time in half and then a human QC's it.

126 0:10:53,725 --> 0:11:10,451 Anthony Romano: So if you can double your output and not literally grow your FTE it's a home run So internally, we see a real opportunity for the client when you think about decision intelligence and all of the disparate data sets and places somebody has to go to make a decision.

127 0:11:11,365 --> 0:11:14,253 Anthony Romano: Just think about location logic you're looking for a site.

128 0:11:15,185 --> 0:11:31,134 Anthony Romano: Well, if you use AI and our front end to come in and look at location biases, stay duration, traffic patterns, income composition, all the demographics, to say, hey, this is the right place to look for a site.

129 0:11:31,967 --> 0:11:34,750 Anthony Romano: So I think there's a ton of use cases in the commercial state world.

130 0:11:34,865 --> 0:11:37,033 Anthony Romano: And yeah, we'd like to be out front.

131 0:11:37,345 --> 0:11:38,230 Mark Haney: Yeah, it makes sense.

132 0:11:38,385 --> 0:11:43,888 Mark Haney: I mean we're using it around here kind of at a small time level with chat, gpt a little bit, and there's a.

133 0:11:43,948 --> 0:11:50,333 Mark Haney: We have a, actually a podcast, you know the stuff, that ways to make our podcast more efficient and stuff like that.

134 0:11:50,465 --> 0:11:51,528 Mark Haney: So yeah we're.

135 0:11:53,052 --> 0:11:59,513 Mark Haney: It feels like it's taking the world by storm, similar to the way you've taken, you know, the commercial real estate processing by storm.

136 0:11:59,605 --> 0:12:02,054 Mark Haney: It's just creating, you know, so much more efficiency.

137 0:12:02,265 --> 0:12:03,089 Anthony Romano: Early innings in it.

138 0:12:03,209 --> 0:12:04,407 Anthony Romano: It's really neat and it's funny.

139 0:12:04,447 --> 0:12:07,553 Anthony Romano: My wife said, hey, does AI replace humans?

140 0:12:07,645 --> 0:12:10,954 Anthony Romano: And I said I think humans that use AI will replace humans.

141 0:12:11,054 --> 0:12:11,876 Anthony Romano: There's no doubt about it.

142 0:12:12,025 --> 0:12:26,551 Mark Haney: I mean, the power of the computing is pretty special, yeah, and maybe we'll have time to make more complex sort of creative decisions and collaborate and things like that, instead of process, process, process all the time.

143 0:12:26,645 --> 0:12:32,210 Mark Haney: We're always running these processes when, my goodness, somebody, you know the machine can do it, no doubt, no doubt.

144 0:12:33,529 --> 0:12:33,769 Mark Haney: Okay.

145 0:12:33,809 --> 0:12:38,493 Mark Haney: So everybody's probably wondering your view on the commercial real estate market.

146 0:12:39,545 --> 0:12:46,204 Mark Haney: You see, you're probably at the front end of seeing where you know where that might be going And I know that that's a broad market.

147 0:12:46,586 --> 0:12:55,147 Mark Haney: We brought up multifamily, there's obviously industrial, you know retail office and so on, give me.

148 0:12:56,030 --> 0:13:01,472 Mark Haney: And then we get the banks tightening up too because of the problems with Silicon Valley Bank and so on and interest rates being up.

149 0:13:01,805 --> 0:13:05,108 Mark Haney: Maybe just help me understand your perspective on this landscape.

150 0:13:06,085 --> 0:13:15,956 Anthony Romano: Yeah, i mean you had blockbuster years and values and transactions in like you know sort of 1920, 19 and then going into 2020.

151 0:13:16,365 --> 0:13:29,614 Anthony Romano: The pandemic obviously changed everything And you had the Fed, you know sort of rightfully so, ease and make money available and things of that nature, and so interest rates went down precipitously.

152 0:13:29,675 --> 0:13:35,231 Anthony Romano: Right, the Fed had, you know, 25 basis points on the Fed funds rate Fast forward, get out of the pandemic.

153 0:13:36,285 --> 0:13:42,872 Anthony Romano: Valuations are going up, interest rates are still low, access to capital is great and you know transactions were going bananas.

154 0:13:42,945 --> 0:13:46,126 Anthony Romano: So the Fed has raised rates 10 times this.

155 0:13:46,147 --> 0:13:50,190 Anthony Romano: Pause for a minute, but that took the Fed funds rate from 25 basis points to five.

156 0:13:50,965 --> 0:13:57,787 Anthony Romano: So if you think about cap rates, which is the yield on an investment when your cost of capital exceeds your cap rate, you're inverted.

157 0:13:58,188 --> 0:13:59,032 Anthony Romano: It doesn't make any sense.

158 0:13:59,565 --> 0:14:07,196 Anthony Romano: So right now, the dynamic that is this, and it started really in the third quarter of last year you saw transaction volumes for all asset classes.

159 0:14:07,265 --> 0:14:16,829 Anthony Romano: Everybody talks about asset office because that's the work from home, and now we're back to this hybrid and you've got 60% occupancy across the country and in offices.

160 0:14:16,849 --> 0:14:21,856 Anthony Romano: There's no doubt that asset class has been impacted the most, but all transactions slowed.

161 0:14:21,905 --> 0:14:23,651 Anthony Romano: In fact, year over year.

162 0:14:23,831 --> 0:14:33,387 Anthony Romano: Commercial real estate transactions are down almost 70% across the board And that's a function of the values high of the property and the cost of capital has increased.

163 0:14:33,880 --> 0:14:42,211 Anthony Romano: What we have seen in the last really 60 days is valuations declining And that has to happen in order for deals to get done.

164 0:14:42,780 --> 0:14:47,464 Anthony Romano: There is historic amounts of uninvested capital and liquidity on the sidelines right now.

165 0:14:47,880 --> 0:14:56,724 Anthony Romano: So we have talked to tons of our customers who are just waiting, who buy either single properties or multi-site or big portfolios, and it will come back.

166 0:14:56,764 --> 0:14:58,745 Anthony Romano: I mean historically, when you think of where these rates are.

167 0:14:59,320 --> 0:15:02,867 Anthony Romano: They're not historically high, but relative to where we were 12 and 18 months ago.

168 0:15:03,862 --> 0:15:04,404 Anthony Romano: It's bananas.

169 0:15:04,980 --> 0:15:05,743 Mark Haney: Yeah, what about?

170 0:15:05,803 --> 0:15:07,067 Mark Haney: and people aren't building new either.

171 0:15:07,328 --> 0:15:07,749 Mark Haney: Is that right?

172 0:15:08,180 --> 0:15:11,768 Mark Haney: I mean, you got the transactions, but then you know new development.

173 0:15:11,940 --> 0:15:14,024 Anthony Romano: Yep, i think there's some, i mean in certain asset classes.

174 0:15:14,044 --> 0:15:20,285 Anthony Romano: There's some, certainly in storage, industrial there's still a lot going on in that area student housing and there's still some multifamily.

175 0:15:21,300 --> 0:15:26,148 Anthony Romano: But yeah, you're right, the trading of these assets or portfolios is it has slowed.

176 0:15:26,280 --> 0:15:37,969 Anthony Romano: We're starting to see it pick back up And I think that will continue as people get line of sight to where these rates land and understand where the valuations of the properties are.

177 0:15:38,060 --> 0:15:48,909 Anthony Romano: It's funny because if people are talking about, well, the property value is down 20% And it's like you bought a stock at 10, it went to 100 and it said 80 and now you're a mess.

178 0:15:49,040 --> 0:15:52,207 Anthony Romano: Well, come on, like you, you know there's still equity in these properties.

179 0:15:52,300 --> 0:15:57,789 Anthony Romano: The difference between residential mortgage and commercial mortgage is they're much lower LTVs.

180 0:15:57,870 --> 0:15:59,988 Anthony Romano: Right, these are 60% LTVs.

181 0:16:00,060 --> 0:16:03,986 Anthony Romano: So you buy a $10 million building, you know you're coming in with $4 million.

182 0:16:04,200 --> 0:16:10,923 Anthony Romano: So to get under water, to be in a negative equity situation like we saw in 2008 and nine on the Resi side really hard to do.

183 0:16:11,620 --> 0:16:13,006 Anthony Romano: I do think there'll be some distress.

184 0:16:13,200 --> 0:16:28,369 Anthony Romano: We're starting to see some delinquencies You mentioned it, not just the banks that have those couple of banks that have failed, but every bank is looking at their real estate portfolio and they've tightened the credit box, so that means less fits in there in terms of underwriting standards, so it'll be a little harder.

185 0:16:28,480 --> 0:16:36,466 Anthony Romano: Rates are up, standards are harder, so you're seeing private lenders and other folks and you know they have debt lending and things getting into the mix to help.

186 0:16:36,940 --> 0:16:43,986 Anthony Romano: Because the other dynamic is you have almost a trillion dollars over the next three years of CMBS, which is loans that have been securitized.

187 0:16:44,960 --> 0:16:46,185 Anthony Romano: Those loans are coming to maturity.

188 0:16:46,901 --> 0:16:48,748 Anthony Romano: And most of those loans are interest only.

189 0:16:48,840 --> 0:16:49,965 Anthony Romano: There's zero interest.

190 0:16:50,060 --> 0:16:54,285 Mark Haney: Yeah, for our listeners that might not be as familiar with commercial real estate, you might be thinking of your house.

191 0:16:54,400 --> 0:16:55,385 Mark Haney: You get a 30 year mortgage.

192 0:16:55,460 --> 0:16:56,726 Mark Haney: It's paid off at the end of 30 years.

193 0:16:56,880 --> 0:17:02,808 Mark Haney: A lot of people are locked in at three and 4% interest rates and they're not really selling their houses right now.

194 0:17:02,900 --> 0:17:07,564 Mark Haney: They're kind of just hanging on to it, maybe even turning it into a rental at some point if they want to get something new.

195 0:17:08,160 --> 0:17:08,843 Mark Haney: But you're not gonna.

196 0:17:09,400 --> 0:17:12,086 Mark Haney: There's not a lot of houses getting sold with a 3% interest rate right now.

197 0:17:12,280 --> 0:17:16,601 Anthony Romano: No, i mean, you know the purchase market it's down, but on the resi side it.

198 0:17:16,661 --> 0:17:18,467 Anthony Romano: You know people move and kids.

199 0:17:18,708 --> 0:17:24,042 Anthony Romano: You know you get a new job and kids leave and so you buy new house and that will maintain To your point.

200 0:17:24,322 --> 0:17:28,683 Anthony Romano: You have 90% of residential mortgage holders under 4%.

201 0:17:29,285 --> 0:17:30,489 Anthony Romano: Rates are at 5.5, 6%.

202 0:17:30,700 --> 0:17:34,849 Anthony Romano: You're not refinancing your mortgage, so refis are down 80% on the resi side.

203 0:17:34,960 --> 0:17:45,907 Anthony Romano: So there's no doubt that the macroeconomy and I get the feds gotta, you know fight inflation et cetera, but I think they're starting to see the impact of lending and the tightening of the access to capital.

204 0:17:46,060 --> 0:17:47,065 Anthony Romano: So you know, we'll see.

205 0:17:47,420 --> 0:17:51,145 Mark Haney: But on these commercial loans like you mentioned, i'm going back to that a little bit.

206 0:17:51,320 --> 0:17:56,489 Mark Haney: But what our listeners might not be thinking about is they don't own the commercial property.

207 0:17:57,060 --> 0:17:59,624 Mark Haney: There's these loans against that stuff that are the balloon.

208 0:17:59,664 --> 0:18:14,868 Mark Haney: Payment is coming due, so they're gonna try to refinance it in a time when the interest rates are higher so it's harder to afford the payment, and then also the banks are tightening up as well And your property's probably worth a little bit less.

209 0:18:15,561 --> 0:18:17,922 Mark Haney: So you got kind of like a triple You gotta come in.

210 0:18:17,942 --> 0:18:19,027 Anthony Romano: You gotta come in that scenario.

211 0:18:19,180 --> 0:18:22,726 Anthony Romano: And it's not just the maturity of those, because they're normally not 30 year.

212 0:18:22,766 --> 0:18:26,589 Anthony Romano: The loan products and commercial are 10 and 15 year loan products.

213 0:18:26,780 --> 0:18:31,507 Anthony Romano: So you gotta come in with a lot of capital, okay, or you gotta do a transaction.

214 0:18:32,280 --> 0:18:32,601 Anthony Romano: They'll.

215 0:18:33,023 --> 0:18:34,188 Anthony Romano: We're starting to see delinquency up.

216 0:18:34,320 --> 0:18:37,931 Anthony Romano: I think a lot of those will cure, but we will see defaults.

217 0:18:38,060 --> 0:18:44,299 Anthony Romano: We will see REO transactions And for Critelligent, as bad as that is, that's all our services.

218 0:18:44,400 --> 0:18:45,405 Mark Haney: Transactions are good.

219 0:18:45,480 --> 0:18:46,825 Mark Haney: All our services are required, yeah.

220 0:18:47,620 --> 0:18:54,369 Anthony Romano: I don't think it'll be anything like we saw, you know, when you had esoteric loan products and crazy stuff going on on the Resi side back in the day.

221 0:18:54,460 --> 0:18:57,067 Anthony Romano: But yeah, it'll be.

222 0:18:57,328 --> 0:18:58,732 Anthony Romano: We're navigating at Critelligent.

223 0:18:59,001 --> 0:18:59,905 Anthony Romano: It's impacted us, right.

224 0:18:59,980 --> 0:19:01,246 Anthony Romano: So markets down 70%.

225 0:19:01,680 --> 0:19:04,169 Anthony Romano: We've seen 30 and 35% declines on revenue.

226 0:19:04,189 --> 0:19:15,125 Anthony Romano: Right, we had this crazy 25% quarter over quarter growth for eight, nine quarters in a row And we've definitely seen an impact to our transactions, our orders and our top line.

227 0:19:15,660 --> 0:19:22,228 Anthony Romano: So we went to the middle of the P&L like any good leadership team would do and you start to write size operating expenses.

228 0:19:22,460 --> 0:19:24,886 Mark Haney: Yeah, i have to imagine I want to dive into that in a second.

229 0:19:25,000 --> 0:19:27,408 Mark Haney: So you mentioned that there's a lot of money on the sidelines.

230 0:19:27,840 --> 0:19:42,569 Mark Haney: So, in terms of, like, protecting the economy, people are gonna be able to come in and, you know, refi and put a little more cash into the debt, into the loan and, you know, probably minimize some of this foreclosure type of scenario.

231 0:19:42,589 --> 0:19:44,173 Mark Haney: Yeah, for sure, i think it'll be a meanwhile.

232 0:19:44,360 --> 0:19:45,184 Anthony Romano: I think what I see money in size.

233 0:19:45,264 --> 0:19:52,326 Anthony Romano: What I see is, if you think about any and he just passed away, sam Zell was really the father of the REIT, which is a real estate investment trust.

234 0:19:52,460 --> 0:19:59,709 Anthony Romano: It's a vehicle that allows you know investors to put money in commercial in different asset classes that's publicly traded.

235 0:20:00,220 --> 0:20:09,109 Anthony Romano: You now have, if you think of the Goldman's and the Blackstones and the Brookfields and hundreds and hundreds of endowments and various funds have a mandate to this asset class.

236 0:20:09,641 --> 0:20:11,027 Anthony Romano: That's just like they invest in equities.

237 0:20:11,440 --> 0:20:12,545 Anthony Romano: This is a big asset class.

238 0:20:12,960 --> 0:20:22,029 Anthony Romano: There's lots of money waiting to be deployed to buy commercial real estate And what has to happen again is line of sight to where these rates land and valuations to make sense.

239 0:20:22,140 --> 0:20:23,506 Anthony Romano: So cap rates and yield make sense.

240 0:20:23,940 --> 0:20:29,647 Anthony Romano: So I really think we'll see a surge in transactions as we get into the third and fourth quarter of this year.

241 0:20:30,060 --> 0:20:31,286 Mark Haney: What about alternative lenders?

242 0:20:31,420 --> 0:20:39,925 Mark Haney: So if the banks are tightening up, other people jump in to fill that gap, i assume, because it's a business that you can make money on even if you're a non-bank.

243 0:20:40,460 --> 0:20:43,045 Anthony Romano: Many clients of ours are in that, what we call private lender.

244 0:20:43,540 --> 0:20:47,384 Anthony Romano: They do these mezzanine loans, bridge loans for a period of time.

245 0:20:48,600 --> 0:20:50,107 Anthony Romano: So absolutely yeah, you'll see.

246 0:20:50,200 --> 0:20:53,766 Anthony Romano: I think you'll see more non-banks in the commercial real estate transaction.

247 0:20:53,860 --> 0:20:55,727 Anthony Romano: You saw it big on the resi side.

248 0:20:55,860 --> 0:20:57,105 Anthony Romano: I think you'll see it more in the commercial side.

249 0:20:57,460 --> 0:21:01,468 Mark Haney: When you said go to the middle of the financial statements.

250 0:21:01,660 --> 0:21:09,910 Mark Haney: So, in terms of solving your maybe expense, having too many expenses, what does that look like?

251 0:21:09,980 --> 0:21:11,165 Mark Haney: Is that headcount or is that?

252 0:21:11,246 --> 0:21:12,866 Mark Haney: I mean, how do you approach that?

253 0:21:13,060 --> 0:21:19,351 Anthony Romano: Yeah, yes, I mean for the most part, when you think about from a revenue standpoint.

254 0:21:19,680 --> 0:21:26,984 Anthony Romano: You sell and you can increase your prices For your COGS, you can reduce your data cost, your service cost, et cetera.

255 0:21:27,440 --> 0:21:29,808 Anthony Romano: What's left is gross margin percentage and dollars.

256 0:21:30,480 --> 0:21:32,347 Anthony Romano: That covers your operating expenses, right.

257 0:21:32,780 --> 0:21:35,544 Anthony Romano: So the higher your revenue, the higher your margin, the more you have to cover up.

258 0:21:36,200 --> 0:21:51,088 Anthony Romano: For us and it's interesting when you think about some of the venture and private equity guys that we chat with our margin profile blended with somewhere close to 50% a lot of the SaaS and software and technology guys like well, we like it 60, 65% margin.

259 0:21:51,780 --> 0:21:53,688 Anthony Romano: Well, you're talking about a $10 product.

260 0:21:53,800 --> 0:21:55,988 Anthony Romano: Our average revenue per order is almost $2,000.

261 0:21:56,420 --> 0:21:58,708 Anthony Romano: So that's $1,000 to drop to cover OPEX, right?

262 0:21:59,742 --> 0:22:04,146 Anthony Romano: So whatever is in that gross margin dollar bucket, you have to be able to cover your operating expenses.

263 0:22:05,041 --> 0:22:17,605 Anthony Romano: Yeah, for us and for many companies like us technology businesses and tech-enabled businesses you got 70 to 80% of your OPEX is FTE and associated benefits and payrolls taxes associated with FTE.

264 0:22:18,080 --> 0:22:27,269 Anthony Romano: So, we were fortunate in that when we did the acquisition there were definitely some cost synergies that we knew we could realize You don't need two AP clerks and things of that nature.

265 0:22:28,402 --> 0:22:30,790 Anthony Romano: And then we also moved to this model.

266 0:22:30,900 --> 0:22:31,704 Anthony Romano: I mentioned our panel.

267 0:22:32,420 --> 0:22:39,647 Anthony Romano: We had a lot of W2 resources in-house because I was not comfortable with our turn time, our quality with the panel.

268 0:22:39,780 --> 0:22:41,807 Anthony Romano: This is going back probably eight or nine months.

269 0:22:42,420 --> 0:22:45,704 Anthony Romano: As that improved and we got really comfortable, we made those changes.

270 0:22:45,980 --> 0:22:48,981 Anthony Romano: So we reduced our OPEX by 48%, have you?

271 0:22:49,021 --> 0:22:55,303 Mark Haney: had to do this type of thing in your career before I have, and it can be painful, maybe for me just.

272 0:22:56,406 --> 0:23:07,161 Mark Haney: I live a little more emotionally in terms of the people side And when you have to let friends go, that's a difficult thing Super.

273 0:23:07,301 --> 0:23:15,866 Anthony Romano: I mean, there's no question that it would, particularly when you care about culture and ethos and wellness and collaboration, including trying to create a great place to work.

274 0:23:17,020 --> 0:23:18,567 Anthony Romano: You can't control the external environment.

275 0:23:18,800 --> 0:23:20,948 Anthony Romano: I love being optimistic.

276 0:23:21,120 --> 0:23:22,907 Anthony Romano: I hate being optimistic about things I can't control.

277 0:23:23,781 --> 0:23:26,049 Anthony Romano: And the environment is one where everybody knows.

278 0:23:26,180 --> 0:23:34,048 Anthony Romano: We've been really clear with everybody and sort of said, hey, this is where we are, if these things happen, we'll have to make some change.

279 0:23:34,100 --> 0:23:40,884 Anthony Romano: That could happen in non-FTE expense, it could happen in reduction in pay and you go to 40 work.

280 0:23:40,904 --> 0:23:47,608 Anthony Romano: We've got lots of things, but at the end of the day you got to look at the leadership team and say, look, our job.

281 0:23:47,940 --> 0:23:49,787 Anthony Romano: We got a lot of constituents, the employees first.

282 0:23:50,160 --> 0:23:55,248 Anthony Romano: It's got big investors in this business and we've got important customers and we're going concerned.

283 0:23:55,300 --> 0:24:07,089 Anthony Romano: So we've got to do the right thing And that's never easy And you do it with grace and you do it with compassion and you make sure you provide a safety net and a severance and you help people transition to the best of your ability.

284 0:24:07,561 --> 0:24:09,280 Anthony Romano: But it may be more so in real estate.

285 0:24:09,380 --> 0:24:24,828 Anthony Romano: I mean in a past life on the Resi side, when rates went up, i mean you had massive changes you needed to make, and the longer you wait, the worse it is for the employee and the worse it is for your EBITDA at the end of the day, so you got to get a landing spot.

286 0:24:25,329 --> 0:24:38,630 Mark Haney: Yeah, that's interesting, because in 2008, we had to make my old company, we had to make some really difficult decisions along these lines too, because all of a sudden, our revenue would drop dramatically.

287 0:24:40,267 --> 0:24:52,652 Mark Haney: And I have to imagine people that are I've heard that, within mortgage, you know, and dealing with residential mortgage and stuff that just being in the right spot here, you gotta find a landing spot.

288 0:24:52,725 --> 0:25:03,310 Mark Haney: If you're in one of those type of positions And I wonder how artificial intelligence is gonna affect that as well, because some of these jobs might be eliminated because of that too.

289 0:25:04,153 --> 0:25:04,975 Anthony Romano: For sure no doubt.

290 0:25:05,246 --> 0:25:05,868 Anthony Romano: In real estate.

291 0:25:05,928 --> 0:25:09,011 Anthony Romano: I think it probably is usually a lagging industry to some of the other industries.

292 0:25:09,545 --> 0:25:22,673 Anthony Romano: We're starting to see adoption and people really thinking about how do we take cost out and how do we reduce the timeframe to get stuff done using these innovative technologies, using, you know, sort of natural language, et cetera.

293 0:25:23,306 --> 0:25:24,411 Anthony Romano: It'll come for sure.

294 0:25:24,745 --> 0:25:36,653 Mark Haney: So once you right size it then and you mentioned communication, that was my big thing I probably over communicated, because I just wanted everybody to know the truth from the CEO right.

295 0:25:36,785 --> 0:25:38,051 Mark Haney: And just give it as much as I can.

296 0:25:38,145 --> 0:25:45,773 Mark Haney: But now that you've sort of done all that, now you've got to communicate a growth strategy or a strategy moving forward that looks positive.

297 0:25:46,967 --> 0:25:48,993 Mark Haney: What does that look like now in terms of like?

298 0:25:50,647 --> 0:25:52,073 Mark Haney: what are you communicating to the team?

299 0:25:52,145 --> 0:25:59,013 Mark Haney: What are you communicating to investors, customers, about the go forward plan and why it's gonna be better than it is today?

300 0:25:59,525 --> 0:26:11,731 Anthony Romano: Yeah, well, i think the foundation was again the utility these clients get Watching in all of these verticals, clients really satisfied and having a big ROI with what we're doing.

301 0:26:11,785 --> 0:26:18,668 Anthony Romano: So we know beyond product market fit, we know this solution set and what we're doing impacts our clients In this market.

302 0:26:18,749 --> 0:26:21,479 Anthony Romano: If you think of bank, the bank was doing 10 transactions down to the June three.

303 0:26:21,499 --> 0:26:22,365 Mark Haney: Still got the customer though.

304 0:26:22,425 --> 0:26:23,570 Anthony Romano: Yeah, we've still got the client.

305 0:26:23,825 --> 0:26:25,291 Anthony Romano: They're transactions down, but they're hurting too.

306 0:26:25,825 --> 0:26:27,472 Anthony Romano: So our message has just been to our team.

307 0:26:27,765 --> 0:26:28,690 Anthony Romano: Now's the time to lean in.

308 0:26:29,085 --> 0:26:51,632 Anthony Romano: I mean really lean in with our clients and help them get their transactions done, get the information, make the decisions fast So that, as things recover, where you had three vendors that you used when you did 10 transactions, well, as things come back it might not go back to 10, but it might be five or six and you might just have one We might actually come out ahead from an orders and revenue perspective.

309 0:26:51,713 --> 0:26:54,171 Mark Haney: Yeah, that's interesting Cause I would think on something like this.

310 0:26:54,825 --> 0:27:14,044 Mark Haney: I was gonna call it land grab, but there might be a way to grab market share right, Because you're providing something that's gonna allow a bank that's maybe needs to reduce some headcount, or some other organization that's thinking about reducing headcount, And it's like look, come in with our solution and it's gonna create a lot of efficiencies for your business.

311 0:27:14,205 --> 0:27:17,649 Anthony Romano: No, no, where they had four or five people in their group, and now they've got two.

312 0:27:18,285 --> 0:27:23,772 Anthony Romano: They can go back up to the same volumes using our technology without adding staff, And so that's a great thing for us.

313 0:27:23,885 --> 0:27:30,771 Anthony Romano: What's been the silver lining, I think, in the real estate debacle that's going on, is we can get airtime with a lot of people.

314 0:27:31,165 --> 0:27:37,033 Anthony Romano: They're willing to look at new technology, new innovation, I think, in particularly commercial real estate.

315 0:27:37,105 --> 0:27:38,732 Anthony Romano: I think the adoption of technology.

316 0:27:39,105 --> 0:27:42,547 Anthony Romano: It will be evolution and not revolution, And so.

317 0:27:42,848 --> 0:27:45,550 Anthony Romano: But they're more open now to all right, how do I take cost out?

318 0:27:45,645 --> 0:27:47,252 Anthony Romano: How do I do things faster?

319 0:27:47,325 --> 0:27:51,527 Anthony Romano: How do I have less FTE And how do I make sure I don't mess the experience up with my borrower?

320 0:27:51,548 --> 0:27:52,130 Anthony Romano: and prove that.

321 0:27:52,866 --> 0:27:54,312 Anthony Romano: And we play really well there.

322 0:27:54,905 --> 0:28:04,569 Mark Haney: So, in terms of market share, do you have a sense as to the size of the market and then where you guys stack up in terms of market share, like how much is there to grab?

323 0:28:05,726 --> 0:28:09,396 Mark Haney: A lot, i mean, i tell you it's probably a 15 to 20 billion.

324 0:28:09,685 --> 0:28:21,714 Anthony Romano: When you look across before, during and after a transaction and all the data and analytics, all the services, all the solutions, all the platforms, it's a big market just in the commercial world.

325 0:28:21,845 --> 0:28:24,192 Anthony Romano: And so, yeah, we've got 800 clients.

326 0:28:25,425 --> 0:28:29,292 Anthony Romano: We wanna get to 2,500, 3,000 customers and they're in these key verticals.

327 0:28:29,465 --> 0:28:42,975 Anthony Romano: And the beauty is, once you crack the code with a specialty insurance provider and you see the value they get where it took them four hours to do what you showed them how to do in 15 minutes, well, there's 38 specialty insurance firms in the country.

328 0:28:43,365 --> 0:28:45,810 Anthony Romano: Now you can just propagate right through and go bring them a solution.

329 0:28:45,925 --> 0:28:48,550 Anthony Romano: And we've got now six of the top 10 and we'll keep going there.

330 0:28:48,845 --> 0:28:56,371 Anthony Romano: And you can kind of do that in each one of the verticals when you understand each node in the client's process, what they're trying to get done, what their alternatives are, how much they spend.

331 0:28:57,325 --> 0:28:58,751 Anthony Romano: And so, yeah, we've been really fortunate there.

332 0:28:59,005 --> 0:29:12,508 Mark Haney: Yeah, i would think just adding new customer, new clients, would be a big focus right now, because your product's really sticky and so just you need to collect more clients Both, i would tell you.

333 0:29:12,529 --> 0:29:18,131 Anthony Romano: It's funny because we've been acquiring about 75 new customers a quarter for the last two and a half years.

334 0:29:18,385 --> 0:29:19,369 Anthony Romano: Right, that's a big number.

335 0:29:20,365 --> 0:29:28,207 Anthony Romano: Where I think we have a real opportunity now is we've been focused on new customer acquisition, but the entry point of each of those clients may be.

336 0:29:28,769 --> 0:29:30,134 Anthony Romano: I came to you for environmental prescreens.

337 0:29:30,265 --> 0:29:35,250 Anthony Romano: I came to you for appraisals hey, i wanna manage my assets here And they don't really understand the depth and breadth of what we do.

338 0:29:35,445 --> 0:29:36,308 Mark Haney: So the opportunity.

339 0:29:36,368 --> 0:29:39,010 Anthony Romano: I think we could double our revenue and not bring in a new client.

340 0:29:39,265 --> 0:29:44,811 Mark Haney: Just wallet share expansion, Yeah, and when you're adding new product offerings within your platform.

341 0:29:44,985 --> 0:29:51,433 Mark Haney: But I guess some of it's just training, just a basic understanding of oh you guys, offer that now too, You offer that now too.

342 0:29:51,866 --> 0:29:55,912 Anthony Romano: Yeah, and the user and the old adage of the user doesn't buy, the buyer doesn't use.

343 0:29:56,025 --> 0:30:01,892 Anthony Romano: So the somebody who's using us to place orders et cetera, that's not the individual that you talk to about adopting all the other things you do.

344 0:30:02,005 --> 0:30:05,811 Anthony Romano: It's usually the head of lending or chief credit officer, depending on the institution we're talking to.

345 0:30:05,905 --> 0:30:10,792 Anthony Romano: So you gotta navigate the organization And we've got tons of opportunity.

346 0:30:10,845 --> 0:30:16,233 Anthony Romano: We've got big law firm client that spent $800,000 with us and everybody said, oh, it's great, these guys spend a lot of money.

347 0:30:16,485 --> 0:30:17,751 Anthony Romano: So well, that was their Chicago office.

348 0:30:17,885 --> 0:30:19,270 Anthony Romano: The other eight offices never heard of us guys.

349 0:30:19,471 --> 0:30:26,913 Anthony Romano: Just so you know We can go horizontal in these customers in different functional areas of their business and in different locations, and expand what we're doing.

350 0:30:27,425 --> 0:30:35,832 Mark Haney: Okay, we're talking a little bit about money of this on the sidelines in real estate, but venture capital is sort of a world that both of us have some familiarity with.

351 0:30:36,385 --> 0:30:38,273 Mark Haney: You've raised money for your business.

352 0:30:38,425 --> 0:30:39,851 Mark Haney: You guys are a venture back company.

353 0:30:40,365 --> 0:30:41,168 Mark Haney: You mentioned Monetta.

354 0:30:41,208 --> 0:30:42,252 Mark Haney: I believe they're an investor.

355 0:30:42,766 --> 0:30:54,853 Mark Haney: I'm a small, very small time investor into the company And that world has changed at some level because of what's going on on the macro economy And interest rates going up has affected that too.

356 0:30:55,965 --> 0:31:06,589 Anthony Romano: Yeah, because I mean you get yield a lot of places right Now, venture has a charter and their LPs expect, you know, something to happen over a three to five year, you know sort of period.

357 0:31:07,206 --> 0:31:25,951 Anthony Romano: And you're right, 18 months ago, the discussion with either venture capital firms or private equity growth equity guys, it was very different in what they were willing to do to deploy the capital and make the investment and the metrics that they cared about you know in terms of where you were in that journey.

358 0:31:26,065 --> 0:31:28,955 Anthony Romano: So it was everybody goes, oh, grow it all costs.

359 0:31:29,045 --> 0:31:30,330 Anthony Romano: I don't think anybody really ever said that.

360 0:31:31,026 --> 0:31:32,250 Anthony Romano: And no venture firm.

361 0:31:32,912 --> 0:31:42,628 Anthony Romano: when you hear people say, oh, they're placing 10 bets and they just want one unicorn, i haven't found a venture firm in places a bet They do their diligence okay, there's no doubt.

362 0:31:42,668 --> 0:31:46,351 Anthony Romano: You do 10 investments, as good as the diligence is, and you believe in the management team and the market.

363 0:31:47,025 --> 0:31:47,969 Anthony Romano: Four or five of them don't make it.

364 0:31:48,485 --> 0:32:00,256 Anthony Romano: And then you hope that one or two do pretty darn good and you get more than your money back, and then two or three of them you know do really well and you get seven to 10 times your money And that's how the IRR for a fund returns 20 and 30% to their investors.

365 0:32:01,307 --> 0:32:07,974 Anthony Romano: So it certainly was acquire clients, grow revenue you know add users create a competitive mode.

366 0:32:08,928 --> 0:32:10,113 Anthony Romano: And we were doing that.

367 0:32:10,325 --> 0:32:21,828 Anthony Romano: We weren't doing it with an outlandish burn, but that was often acceptable for a lot of these venture firms to say continue to invest in the business Like it's working, it's working, and then when things turn, you're.

368 0:32:21,968 --> 0:32:26,730 Anthony Romano: It's so irresponsible in my mind So you can't be positive, you know, in cash flow early stage.

369 0:32:26,845 --> 0:32:31,369 Anthony Romano: It just you know it doesn't make any sense to do that, Or it's gonna take you 20 years to grow your business right.

370 0:32:32,065 --> 0:32:37,167 Anthony Romano: But, fast forward to now and you know we're in the midst of some additional, you know, capital raise.

371 0:32:37,207 --> 0:32:52,394 Anthony Romano: We've got folks coming to us which is kind of cool, but the things they care about are cash flow and EBITDA And you don't need to necessarily be there, but you better have a line of sight and a really clear plan to get there, because the irresponsible burns.

372 0:32:52,585 --> 0:32:56,394 Anthony Romano: I mean, the number one adage is don't run out of capital.

373 0:32:56,836 --> 0:32:57,036 Mark Haney: Right.

374 0:32:57,685 --> 0:33:00,229 Anthony Romano: If you're in year one, year two, you have to don't run out of capital.

375 0:33:00,646 --> 0:33:02,011 Anthony Romano: It's survival is all that matters.

376 0:33:02,051 --> 0:33:03,809 Anthony Romano: Everything else is just words, Like it doesn't matter.

377 0:33:04,305 --> 0:33:08,010 Anthony Romano: If you run out of capital and you've raised 10 or 20, you're sort of done.

378 0:33:08,225 --> 0:33:12,193 Anthony Romano: Or you get to the end of that and you realize you're over a barrel.

379 0:33:12,373 --> 0:33:15,053 Anthony Romano: Right, You got four payrolls left, you got a hundred employees.

380 0:33:15,505 --> 0:33:18,771 Anthony Romano: Yeah, the business looks good, but you don't have the capital to continue.

381 0:33:19,345 --> 0:33:30,277 Anthony Romano: And then you get into down rounds and really ugly bad stuff You got to get out in front of it with maybe it's headcount at some point or you know some option.

382 0:33:30,425 --> 0:33:35,994 Mark Haney: So in terms of that, there still seems to be a lot of money on the sidelines.

383 0:33:36,085 --> 0:33:37,151 Mark Haney: They want to invest.

384 0:33:37,453 --> 0:33:38,559 Mark Haney: They're looking at different metrics right now.

385 0:33:38,579 --> 0:33:45,035 Anthony Romano: Selective selective And I think when people ask you about when you raise, what's the process and how do you sort of think about it?

386 0:33:45,125 --> 0:33:48,731 Anthony Romano: The first thing that I made this mistakes right, every one of these funds.

387 0:33:48,845 --> 0:33:51,992 Anthony Romano: There certainly are some general funds, but most of them have a thesis right.

388 0:33:52,527 --> 0:33:58,373 Anthony Romano: They've sort of signal to their LPs I'm gonna invest in biotech, I'm going to invest in real estate and prop tech.

389 0:33:58,505 --> 0:34:01,274 Anthony Romano: I'm going to invest in companies that are cashflow positive.

390 0:34:01,605 --> 0:34:05,073 Anthony Romano: We only write checks because we have a billion dollar fund of 25 million or more.

391 0:34:05,445 --> 0:34:14,532 Anthony Romano: So if you're raising capital, you got to know that All these funds on their sites, for the most part, you can ask what's your criteria, what's your investment approach, what's your thesis?

392 0:34:14,965 --> 0:34:20,591 Anthony Romano: So, to waste time on a lot of folks that, hey, i'm raising $5 million, great, our smallest check's 20 million bucks.

393 0:34:20,786 --> 0:34:21,589 Anthony Romano: You waste a lot of time.

394 0:34:21,845 --> 0:34:39,955 Anthony Romano: So understanding the makeup of who those folks are is important and we now have a group that we work with and that have continued to keep up to date on how the boats float and, over a long period of time, have watched, and I think that's the big difference between early seed and certainly series A.

395 0:34:40,665 --> 0:34:50,452 Anthony Romano: Series A A for me, was aspiration We could talk about again a great leadership team, incredible domain expertise, great experience, trickle of revenue, good concept.

396 0:34:50,746 --> 0:34:51,750 Anthony Romano: Here's what we're going to go do.

397 0:34:52,546 --> 0:35:02,131 Anthony Romano: And people invest in that regard, right, because they will believe that When you get to series B I use B as bullshit like, hey, man, there's no faking it, it's called historical financials.

398 0:35:02,605 --> 0:35:04,553 Anthony Romano: Here's my last 12 or 24 months, right?

399 0:35:05,387 --> 0:35:08,912 Anthony Romano: So you can't come in and say, well, you said you were going to get 1,000 customers.

400 0:35:08,965 --> 0:35:09,567 Anthony Romano: You got 500,.

401 0:35:09,668 --> 0:35:11,566 Anthony Romano: You said you were going to do 17 million guys.

402 0:35:11,586 --> 0:35:12,068 Anthony Romano: They ate million.

403 0:35:12,088 --> 0:35:12,370 Anthony Romano: You said you.

404 0:35:13,488 --> 0:35:14,251 Anthony Romano: So that didn't lie.

405 0:35:14,505 --> 0:35:31,630 Anthony Romano: So now you're at the metrics in my mind where you've got to be really clear on revenue and margin and OPEX, ebitda and cash flow and, yes, ip and yes, users and yes, nps those matter, but the financials are where these guys are at And then what can this become?

406 0:35:31,885 --> 0:35:32,631 Anthony Romano: I mean there isn't.

407 0:35:33,075 --> 0:35:35,316 Anthony Romano: These aren't affinity investors, right, all the.

408 0:35:35,517 --> 0:35:37,223 Anthony Romano: They have LPs that want to return.

409 0:35:37,355 --> 0:35:42,763 Anthony Romano: So they have to believe that over the time horizon of their investment they're going to get a real return.

410 0:35:43,537 --> 0:35:46,025 Anthony Romano: And knowing that, you know, is super important.

411 0:35:46,095 --> 0:35:57,226 Anthony Romano: I mean matters in the conversations, in the pitch decks, great, but the real work starts when they start with diligence and look at cap tables and proformas, historical financials, revenue cohorts.

412 0:35:57,275 --> 0:36:02,900 Anthony Romano: I mean there's just a lot you got to be prepared to have an adult discussion about and come out the other end.

413 0:36:03,355 --> 0:36:11,102 Mark Haney: It's interesting that you're bringing this stuff up, because these are sort of big boy type of or big girl I should say you know big.

414 0:36:12,337 --> 0:36:14,444 Mark Haney: They're deeper discussions, it's real business.

415 0:36:14,835 --> 0:36:20,245 Mark Haney: A lot of the startups that are, you know, in the very early stages they're kind of product people.

416 0:36:20,575 --> 0:36:27,786 Mark Haney: Right, they've built this cool product, they're organizing the business and they haven't necessarily sat at the helm of a company.

417 0:36:27,935 --> 0:36:32,119 Mark Haney: That's you know your size or the size of the last companies that you have built.

418 0:36:33,056 --> 0:36:34,943 Mark Haney: And how important is that experience?

419 0:36:35,035 --> 0:36:38,078 Mark Haney: I mean, can you get the on the job experience in most cases?

420 0:36:38,339 --> 0:36:50,096 Mark Haney: or I mean because you're in the fire if you're a startup, but I mean Crutelsian's lucky to have brought you in from the outside and you know a professional CEO, yeah, i mean.

421 0:36:50,136 --> 0:36:50,558 Anthony Romano: I do think.

422 0:36:50,920 --> 0:36:51,522 Anthony Romano: Thank you for that.

423 0:36:51,635 --> 0:36:59,240 Anthony Romano: But I do think that the product folks and the engineers and the technologists that have you know the chops there if they surround themselves.

424 0:36:59,335 --> 0:37:07,522 Anthony Romano: I mean I was really fortunate with you, with Lukash We go down the list of people in this region who helped and leaned in and helped navigate that process a little bit.

425 0:37:07,575 --> 0:37:09,081 Anthony Romano: Yeah, i had some experience but it was very helpful.

426 0:37:09,355 --> 0:37:11,644 Anthony Romano: I think that exists for a lot of your portco's right now.

427 0:37:11,715 --> 0:37:15,843 Anthony Romano: You'll be with them by their side as they go out and have those conversations.

428 0:37:15,955 --> 0:37:21,243 Anthony Romano: But to be prepared, you know you're going to get caught flat-footed.

429 0:37:21,475 --> 0:37:24,424 Anthony Romano: There's no question with private equity guys doing diligence.

430 0:37:25,095 --> 0:37:35,721 Anthony Romano: But you can only get caught flat-footed on the same question once, right, when they talk about subscription models, when they talk about revenue cohorts, when they talk about margin profile, you can get flat-footed once.

431 0:37:35,835 --> 0:37:42,082 Anthony Romano: But then you got to be prepared because the next firm's going to ask you that And that's what matters to them and how they look at how much they're going to invest.

432 0:37:42,715 --> 0:37:43,117 Mark Haney: Yeah, okay.

433 0:37:43,137 --> 0:37:46,402 Mark Haney: So let's talk about the relationship with a company like Monetta.

434 0:37:47,456 --> 0:38:03,461 Mark Haney: And if they're your lead investor, what kind of well, what's the expectation of someone like from you, of how they might help you navigate getting that next round, or helping you prep to scale the business?

435 0:38:03,955 --> 0:38:12,700 Anthony Romano: Yeah, i mean they have a lot of portco's and many of those, as you know, have been wildly successful, not only in terms of where they are in their journey and their growth, but big, big exics.

436 0:38:13,997 --> 0:38:15,543 Anthony Romano: And Monetta's team is fabulous.

437 0:38:15,715 --> 0:38:16,860 Anthony Romano: They've been massively helpful.

438 0:38:16,955 --> 0:38:26,543 Anthony Romano: They help with investor briefs and executive summaries and pitch decks and all of the diligence, building a data room and how to be well-organized, and they've been very, very helpful.

439 0:38:26,975 --> 0:38:32,542 Anthony Romano: I'm super fortunate our CFO, chris Arell, is you know, mba from USC Price Waterhouse.

440 0:38:32,562 --> 0:38:38,735 Anthony Romano: He's the young guy, but beyond that, he's got the chops to build models and build data reports.

441 0:38:38,795 --> 0:38:43,339 Anthony Romano: That's what these investors want to see And if, again, it's in that aspirational stage, it's what we might do.

442 0:38:43,836 --> 0:38:50,584 Anthony Romano: If it's what you did, you've got to be able to put that in the right context, for here's what happened, here's why it happened and here's where we're going with it.

443 0:38:50,915 --> 0:38:56,101 Anthony Romano: And so, having a really good investor and a really good leadership team you know who's particularly in the Fayette side.

444 0:38:56,235 --> 0:39:07,026 Mark Haney: Yeah, yeah, you know it's interesting because when we decided to start the growth factory, i made three calls One to Dale Carlson, who you know sleep train guy, so you know, philanthropic man and just a great business man.

445 0:39:07,255 --> 0:39:10,058 Mark Haney: He was the first call and he's like how do I help Mark?

446 0:39:10,696 --> 0:39:14,524 Mark Haney: Second call I made was Barry Broome, who does all the economic development stuff around town at GSEC.

447 0:39:14,875 --> 0:39:18,943 Mark Haney: And the third call I made was to to LoCache from Monetta Ventures.

448 0:39:19,255 --> 0:39:28,739 Mark Haney: The three people that I felt I respected most in this world and could help give me some feedback on our dream.

449 0:39:28,799 --> 0:39:31,938 Mark Haney: And all of them said the same thing What are you working on, how can I help?

450 0:39:32,796 --> 0:39:43,805 Mark Haney: And so, like Keshe and Monetta has come on as a you know, a formal advisor to the Growth Factory Ventures Fund And it's like having, like, my teammates are great.

451 0:39:43,995 --> 0:39:53,980 Mark Haney: You know, i've had some experience angel investments, doing angel investments, but having LoCache and the Monetta team sort of there as our sounding board with guidance has been invaluable.

452 0:39:54,135 --> 0:39:54,536 Anthony Romano: He's been.

453 0:39:54,657 --> 0:39:58,500 Anthony Romano: I mean, they were entrepreneurs that learned how to be VC, so they sat in our chairs.

454 0:39:58,601 --> 0:40:00,200 Anthony Romano: they get it, which is, which is beautiful.

455 0:40:00,715 --> 0:40:04,141 Anthony Romano: They'll be winners in a big way out of this And I'm so grateful for that relationship.

456 0:40:04,935 --> 0:40:14,493 Anthony Romano: They're, i don't want to say generalist, but when I think about now what we're looking, the funds that we're talking to now, all of the LPs of these funds are commercial real estate holders.

457 0:40:15,016 --> 0:40:15,517 Mark Haney: Interesting.

458 0:40:15,537 --> 0:40:17,864 Anthony Romano: They're, in other words, it's more than just capital.

459 0:40:17,924 --> 0:40:18,716 Anthony Romano: Now It's.

460 0:40:18,776 --> 0:40:24,901 Anthony Romano: They can bring strategic value in customer relationships, business partner relationships, right, so does that make sense?

461 0:40:24,995 --> 0:40:27,845 Mark Haney: The LPs of the funds that are investing in you.

462 0:40:27,955 --> 0:40:36,624 Mark Haney: So, just so our listeners know that when somebody has a fund, they have, let's say, 100 investors, and these people are the minority share.

463 0:40:37,355 --> 0:40:42,303 Mark Haney: They all own part of this investment, and so it could be a big group of people.

464 0:40:42,775 --> 0:40:52,941 Mark Haney: So a friend comes in right, the general partner, they make that investment, but then each of the people that are investors, they can add value, no doubt, and you can tap into those people.

465 0:40:53,035 --> 0:40:57,020 Mark Haney: The individual LP limited partner who makes an investment can add value.

466 0:40:57,743 --> 0:40:58,244 Anthony Romano: Also the firm.

467 0:40:58,315 --> 0:41:00,984 Anthony Romano: So many of the private equity guys we're talking to today.

468 0:41:01,415 --> 0:41:13,925 Anthony Romano: Their investors are CBERE, cushman and Wakefield, heinz, hilton, walmart, folks that have a giant commercial real estate footprint, the biggest multifamily owners, the biggest warehouse and storage owners.

469 0:41:14,235 --> 0:41:21,904 Anthony Romano: So those folks all make investments and they can introduce you because part of the private equity guys want to see hey, is there real value in your product?

470 0:41:21,975 --> 0:41:25,144 Anthony Romano: Let's go talk to some of our LPs and see would they use it?

471 0:41:25,997 --> 0:41:27,484 Anthony Romano: And so far it's been really good.

472 0:41:27,504 --> 0:41:27,806 Mark Haney: That's great.

473 0:41:27,826 --> 0:41:29,618 Mark Haney: We're going to grow the business and it's through your advantage.

474 0:41:29,980 --> 0:41:30,903 Mark Haney: That's part of the advantage.

475 0:41:31,176 --> 0:41:32,943 Anthony Romano: So you say hey, can you bring more than capital?

476 0:41:33,035 --> 0:41:36,265 Anthony Romano: Can you help me with pricing and packaging and subscription model?

477 0:41:36,355 --> 0:41:38,984 Anthony Romano: Can you help me with business development and relationships?

478 0:41:39,075 --> 0:41:47,662 Anthony Romano: You guys really understand acquisitions and talking acquisitions And those are the kind of firms that we're talking to now That becomes really valuable.

479 0:41:47,715 --> 0:41:54,730 Anthony Romano: There's many kind of vertically integrated commercial real estate companies that have started venture arms.

480 0:41:54,775 --> 0:41:59,727 Anthony Romano: So think Prologis, divco, west, bh3, brookfields.

481 0:41:59,795 --> 0:42:02,419 Anthony Romano: They all are big commercial real estate players, that's what you'd think about.

482 0:42:02,795 --> 0:42:10,120 Anthony Romano: But they all have hundreds of millions of dollars in growth equity capital that they take bets on in companies that can impact their real estate business.

483 0:42:10,542 --> 0:42:11,184 Mark Haney: Which makes sense.

484 0:42:11,475 --> 0:42:12,778 Mark Haney: Did you ever meet the guys from Hank?

485 0:42:13,419 --> 0:42:14,943 Anthony Romano: Yes, In town They have a.

486 0:42:15,103 --> 0:42:21,240 Mark Haney: They sold the JLL Yeah yeah, they sold the JLL And that's part of their venture arm, but yeah, so that guy's been on the show.

487 0:42:21,335 --> 0:42:22,821 Mark Haney: I was an investor in that company as well.

488 0:42:23,336 --> 0:42:29,782 Mark Haney: So, yeah, it's interesting to think about the different synergies that they can pick up by buying that type of company.

489 0:42:30,597 --> 0:42:42,406 Mark Haney: It could be someone like you or someone like Hank Very cool And that's kind of part of the backyard advantage thesis is that we can get our limited partners from the growth factory.

490 0:42:43,820 --> 0:42:53,666 Mark Haney: We can get the partnerships that we have with cities and counties and the kings and colleges and universities to be early adopters to some of these startups.

491 0:42:54,055 --> 0:43:01,304 Mark Haney: When they start to get their first customers, hey, let's strap the product a little bit, let's be an early customer and get them a little bit of capital.

492 0:43:02,056 --> 0:43:03,842 Mark Haney: At the heart of what we're doing is bringing love.

493 0:43:04,595 --> 0:43:23,862 Mark Haney: So, if we can in ours are all Sacramento, so it's sort of interesting because we're in this little fish bowl where we all kind of know each other because it's a small town And so we're thinking that that actually can be an advantage And we've seen some of that begin to happen for our portfolio companies and for other friends that are coming through our networks as well.

494 0:43:23,955 --> 0:43:24,478 Mark Haney: So, tons.

495 0:43:25,255 --> 0:43:33,103 Anthony Romano: This region's come a long way in the last several years And what you guys are doing is a big part of that in terms of entrepreneur and business and things of that nature.

496 0:43:33,255 --> 0:43:41,802 Anthony Romano: But the introductions that we've had I mean so banking relationship back within RISO Not only have they been great advisors, but they've been five-star bank.

497 0:43:42,215 --> 0:43:44,620 Anthony Romano: Yeah, five-star bank And they're a great customer of ours.

498 0:43:44,975 --> 0:43:46,923 Anthony Romano: And look, they're not going to use us because we're their buddy.

499 0:43:47,195 --> 0:43:50,501 Anthony Romano: They're going to use us because they get great value in utility And then they're going to tell other people about it.

500 0:43:50,815 --> 0:43:54,982 Anthony Romano: So we've been the beneficiary of the region and these relationships have been cool.

501 0:43:55,155 --> 0:43:55,718 Mark Haney: That's really cool.

502 0:43:58,079 --> 0:43:59,665 Mark Haney: OK, so I want to talk about you as the CEO.

503 0:43:59,755 --> 0:44:04,265 Mark Haney: You got recognized by Ernst and Young as being one of the top CEOs.

504 0:44:07,078 --> 0:44:07,460 Mark Haney: What happened?

505 0:44:07,480 --> 0:44:08,122 Mark Haney: What was that all about?

506 0:44:08,336 --> 0:44:11,979 Anthony Romano: So Ernst and Young, i mean I think most people think of them as tax and audit.

507 0:44:12,635 --> 0:44:17,222 Anthony Romano: They're a world-class, one of the most iconic professional services firms in the world, headquartered in the UK.

508 0:44:18,595 --> 0:44:25,395 Anthony Romano: They spend, they have this whole entrepreneur of the year program And they spend a lot of time, much like you, but in a different form of fashion.

509 0:44:25,456 --> 0:44:30,055 Anthony Romano: They've got a lot of people dedicated to how do we impact communities, entrepreneurs, small businesses.

510 0:44:30,176 --> 0:44:37,175 Anthony Romano: They actually do a lot in venture and things And around the country they do these entrepreneur of the year type of awards.

511 0:44:37,276 --> 0:44:39,015 Anthony Romano: So yeah, you know somebody nominate you.

512 0:44:39,115 --> 0:44:44,942 Anthony Romano: You write five or six long essays, you answer a bunch of questions, you set out financials.

513 0:44:45,275 --> 0:44:46,782 Anthony Romano: They had folks come up to Sacramento.

514 0:44:47,417 --> 0:44:48,842 Anthony Romano: You spend 90 minutes in an interview.

515 0:44:49,978 --> 0:44:54,175 Anthony Romano: Then they start with whatever 1,000 people And they narrow down to 70, 80, 90.

516 0:44:54,295 --> 0:44:55,421 Anthony Romano: You go down to Palo Alto.

517 0:44:55,576 --> 0:44:58,580 Anthony Romano: You're doing these interviews with private equity and they're kind of advisor guys.

518 0:44:58,981 --> 0:45:04,820 Anthony Romano: And then they narrowed it down And it was really super humbling because the people that I was with I think this is Silicon Valley.

519 0:45:05,595 --> 0:45:08,425 Anthony Romano: I mean some of these guys are curing cancer, putting shit on the moon.

520 0:45:08,495 --> 0:45:15,660 Anthony Romano: I mean it was unbelievable in terms of the businesses, really blockbuster businesses So very humbled and honored And they got it down to 29.

521 0:45:16,435 --> 0:45:21,139 Anthony Romano: And I think they picked four or five to go to the national Critellegeant and I wasn't one of them, but it was still.

522 0:45:21,300 --> 0:45:29,986 Anthony Romano: It was some really cool event that happened earlier in June out in San Francisco And yeah we just appreciated the opportunity.

523 0:45:30,035 --> 0:45:32,555 Anthony Romano: I mean, for me it was less about the Anthony Ramono brand.

524 0:45:32,595 --> 0:45:43,603 Anthony Romano: But how does Critellegeant and we've had investors come, we've had business partners, data providers You just elevate the business and what we're doing And more people are like let me talk to those guys.

525 0:45:43,623 --> 0:45:44,566 Mark Haney: So we got a lot of guys.

526 0:45:44,606 --> 0:45:45,710 Mark Haney: Yeah, you'd be the CEO.

527 0:45:45,975 --> 0:45:54,662 Mark Haney: It's your job to be at some level in the face of the brand and move the molecules in all these different ways, and so that's a good group of people to be around.

528 0:45:54,723 --> 0:45:55,044 Anthony Romano: It was great.

529 0:45:55,235 --> 0:45:56,500 Anthony Romano: Yeah, the whole process was really fun.

530 0:45:56,915 --> 0:45:58,141 Mark Haney: OK, so what did I not ask you?

531 0:45:58,175 --> 0:45:59,425 Mark Haney: What else do you want to talk about today?

532 0:45:59,575 --> 0:46:01,002 Mark Haney: What's important to you right now?

533 0:46:01,383 --> 0:46:02,927 Anthony Romano: I think essentially, i love this region.

534 0:46:03,035 --> 0:46:35,363 Anthony Romano: We've been, so again, big beneficiaries of it, not only with business partners and investors, but employee base here has been amazing And in these kinds of times you've got a lot of companies that are doing massive cuts and changes And our feeling has been look, you could buy people's back with earnings and bonuses and stock options, but you can't buy their heart, and you've got to create a culture and a foundation that really is honestly matters, where people say I want to be part of this And part of that is what we're doing.

535 0:46:35,475 --> 0:46:45,463 Anthony Romano: Like I want to have my fingerprints on something that is really impactful that's going to blow it out, and I think that we've got a lot of people in the org right now that are pretty excited about where we're going.

536 0:46:46,535 --> 0:46:51,964 Anthony Romano: And when you're a venture-backed business, it doesn't always mean you sell the company.

537 0:46:52,035 --> 0:46:55,542 Anthony Romano: There's recapitalization, there's IPOs, but there's an end to this.

538 0:46:55,695 --> 0:47:01,586 Anthony Romano: And so our leadership team has said, hey, we want to run really hard over the next 24, 36 months And then we'll see.

539 0:47:01,835 --> 0:47:04,104 Anthony Romano: I mean, we'll have acquired a lot of clients.

540 0:47:04,195 --> 0:47:05,200 Anthony Romano: It'll be a competitive boat.

541 0:47:05,295 --> 0:47:06,139 Anthony Romano: The platform's there.

542 0:47:06,515 --> 0:47:10,442 Anthony Romano: We've had two or three firms come to us and say, hey, we're really intrigued with what you're doing.

543 0:47:10,475 --> 0:47:11,801 Anthony Romano: We're just in an adjacent market.

544 0:47:11,855 --> 0:47:12,860 Anthony Romano: What do you want to talk about?

545 0:47:13,717 --> 0:47:17,164 Anthony Romano: And it's early yet, and so we'll have more of those conversations in the next couple of years.

546 0:47:17,335 --> 0:47:19,847 Anthony Romano: But yeah, it's been really exciting to see it grow and succeed.

547 0:47:20,269 --> 0:47:20,571 Mark Haney: All right.

548 0:47:20,611 --> 0:47:28,445 Mark Haney: So last question I got to add one of the things that you and I have in common is we're family guys, right?

549 0:47:29,238 --> 0:47:39,143 Mark Haney: So we're talking about your daughters And they've gone off and got their degrees at great schools And they're getting good jobs, And you and your wife have been married along.

550 0:47:39,215 --> 0:47:40,119 Mark Haney: How long have you guys been married?

551 0:47:40,815 --> 0:47:44,150 Anthony Romano: We took her to sophomore homecoming dance in high school and been together ever since.

552 0:47:44,230 --> 0:47:52,955 Mark Haney: Yeah, i knew it was like forever And not that you're that old, but it's like it takes a while But it's interesting.

553 0:47:53,979 --> 0:47:57,635 Mark Haney: So any words of wisdom for that?

554 0:47:57,715 --> 0:48:15,200 Mark Haney: Because you see there's a decline in families at some level And so I always feel like when I meet someone like you, i want to help bring out that story a little bit about look, you did some things right.

555 0:48:15,481 --> 0:48:15,742 Mark Haney: What?

556 0:48:15,975 --> 0:48:19,713 Mark Haney: Any advice to men out there or anybody?

557 0:48:19,893 --> 0:48:21,721 Mark Haney: Well, i did not, because your kids love each other too.

558 0:48:21,895 --> 0:48:22,558 Anthony Romano: I thank you for that.

559 0:48:23,236 --> 0:48:28,820 Anthony Romano: I did a couple of things right, my wife did a lot right And you're absolutely right, we're super blessed.

560 0:48:28,875 --> 0:48:36,461 Anthony Romano: Olivia and John and the daughters are their best friends And I've never seen them fight And they share everything And it's such a unique scenario But it made it really easy.

561 0:48:37,975 --> 0:48:39,521 Anthony Romano: My wife I was unencumbered.

562 0:48:39,541 --> 0:48:40,404 Anthony Romano: I mean, she did a lot.

563 0:48:40,535 --> 0:48:51,449 Anthony Romano: I traveled a boatload when I was pre-cretoligent and tried to never miss school and recitals and games And I was a coach.

564 0:48:51,555 --> 0:48:59,981 Anthony Romano: But what happens then is you don't ride your bike as much, you don't fly fist as much, you don't work out as much And that's OK Because that's where you are in the season, if you will.

565 0:49:01,816 --> 0:49:10,763 Anthony Romano: But I would give a lot of advice around balance to guys or gals that are in these kind of roles, because it will take as much as you can give.

566 0:49:11,275 --> 0:49:16,742 Anthony Romano: There are 80, 90 hours a week And when people say, oh, i worked 80 hours, let me tell you what really 80 hours looks like.

567 0:49:16,935 --> 0:49:20,919 Anthony Romano: It's like 12 hours a day, seven days a week And you're on.

568 0:49:21,461 --> 0:49:23,881 Anthony Romano: Right, you're on, And so that's real.

569 0:49:24,455 --> 0:49:29,942 Anthony Romano: If you're not eating right, If you're not sleeping right, If you're not exercising, you're in trouble.

570 0:49:30,103 --> 0:49:36,104 Anthony Romano: In my mind, I think those things when you look at mental, emotional, physical health.

571 0:49:36,545 --> 0:49:40,662 Anthony Romano: You got to own that Because it's not easy, And you got to have emotional endurance.

572 0:49:40,682 --> 0:49:43,699 Anthony Romano: That's going out of style In the fundraising world.

573 0:49:43,920 --> 0:49:45,379 Anthony Romano: You better fall in love with the word no.

574 0:49:46,575 --> 0:49:49,724 Anthony Romano: In the last two months I've talked to 90 firms 90.

575 0:49:50,315 --> 0:49:52,478 Anthony Romano: We've got seven or eight of them that are really going deep with us.

576 0:49:53,615 --> 0:49:59,598 Anthony Romano: So, it's a process And you've got to play the long game and be in it marathon versus sprint.

577 0:50:00,236 --> 0:50:06,899 Anthony Romano: But that lifestyle balance and still taking care of yourself is super important so that you can go, so that you can go hard.

578 0:50:07,315 --> 0:50:09,620 Mark Haney: Well, it's interesting Making a good decision.

579 0:50:09,815 --> 0:50:14,443 Mark Haney: That's the thing about the decision you made to marry your high school sweetheart.

580 0:50:14,763 --> 0:50:17,118 Mark Haney: That can go good or bad, but that decision.

581 0:50:17,338 --> 0:50:19,906 Mark Haney: It's amazing how important that decision is.

582 0:50:19,995 --> 0:50:22,865 Mark Haney: Because you get that one wrong, the rest of it crumbles.

583 0:50:22,955 --> 0:50:33,106 Mark Haney: I mean, some people aren't going to back the 12-hour day person, they're not going to tie in with the same values that you have to bring the family so close and unified.

584 0:50:33,155 --> 0:50:42,146 Mark Haney: They're not maybe going to have that same health aspirations for themselves and for your family And so great decision, thank you, yeah, super.

585 0:50:42,235 --> 0:50:47,181 Anthony Romano: And I'm surrounded by a leadership team, chris and Toby Lutz, who you know, and that are the same.

586 0:50:47,275 --> 0:50:51,939 Anthony Romano: They've got from the same people The clock all Sac State grads, by the way the whole entire executive team, all.

587 0:50:52,501 --> 0:50:53,163 Mark Haney: Sac State grads.

588 0:50:54,736 --> 0:51:00,444 Anthony Romano: And also have those same values of balance and family, and it makes it easy to navigate the business together.

589 0:51:00,544 --> 0:51:01,006 Anthony Romano: I love it.

590 0:51:01,115 --> 0:51:09,700 Mark Haney: Well, congratulations on your success And I look forward to seeing what the next few years look like and the growth of Crotellogen And anything I can do.

591 0:51:09,741 --> 0:51:10,483 Mark Haney: You know I'm here for you.

592 0:51:14,759 --> 0:51:14,861 Mark Haney: Right.