My fifth guest of the show is Nick Haschka, an MIT graduate living in San Francisco focused on buying small private companies through his firm Cub Investments, along with two other partners. Together, they recently purchased a business called The Wright Gardner which provides interior plant leasing and maintenance services to companies in the bay area. One thing that is interesting about Cub's approach is their use of add-on acquisitions to expand the plant leasing business and part of our discussion is on how they view the risk with add-ons versus platform acquisitions, which was very interesting. The more I read and learn about the micro PE and permanent capital space, the larger and more diverse it feels. Every investor invests differently and each story is different. Nick is no exception, and in our discussion we cover how his background has influenced his investing, his unique work experience, misconceptions he sees in small company investing, and his disagreements with the concepts of competitive advantage and Porter's Five Forces. I hope you enjoy our conversation as much as I did.   Show Notes Links • Cub Investments • The Wright Gardner • Credit Parent   Notes 1:30 Brief overview of Nick's background 4:00 Strategy of focusing on local businesses, found The Wright Gardner 5:04 No external investment, utilizing SBA loan program 5:30 What experiences prepared you best? 6:44 How do you view add-on acquisitions at Cub and diversification? 9:31 Weighing buying a new platform business versus an add-on 11:32 Risk of investing in an add-on and integrating it into your existing companies 14:42 What is involved in the Cub Investment "car wash?" 16:46 Examples of new processes added to companies 18:18 Are there benefits to not having experience in the business you're going to acquire? 19:31 Misconceptions with buying small companies 23:34 What gets looped into the earnings number that you need to remove and how do you view that process? 25:22 Role of the 80/20 rule in due diligence and working with the seller 27:53 Role of the previous owner after acquisition 30:29 Is the size of purchase an indicator of the replacement value of relationships with customers? 32:28 Growth of Cub Investments 34:26 Change of valuations recently 36:39 Competition for deals 37:34 What class in college would you teach? 39:10 Most fortunate event that was completely random? 40:47 Best business you've seen?   I’m also the founder of The Operator’s Handbook, a print publication where small company operators share their insights and ideas for building more effective and profitable companies. Articles focus on process improvement, sales, hiring and training, managing culture, and all responsibilities within operating a small company. If you run a small business and are looking for new ways to grow and improve, subscribe today and join your peers in the endless pursuit of better at theoperatorshandbook.com.