Kurt Leedy and Kyle Coots - The Three Methods to Grow Capital - Ep.134

My guests on this episode are Kurt Leedy and Kyle Coots, co-founders and managing directors at Miramar Equity Partners. Kurt and Kyle have an interesting vantage point in the search world being backed by a family office with an agnostic time horizon, allowing them to invest in the widest set of opportunities in search and parallel spaces.

Our episode focuses on a concept they developed they call the three ways to make money, those being classic LBO, M&A-driven strategies, and organic growth. We dive into the characteristics of each along with a few examples from their portfolio.

We also touch on how the intersection of two or more methods can create exponential outcomes. Finally, we discuss a few theses they find interesting in healthcare and software and how they develop a thesis on an industry.

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Special thanks to our sponsor: Oakbourne Advisors

Links:

Miramar Equity Partners

Kurt Leedy on LinkedIn

Kyle Coots on LinkedIn

Will Thorndike with Patrick O'Shaughnessy

Business Breakdowns - The NFL

Time Codes:

(3:36) - How did your backgrounds help form this concept of “The three methods to make money”?

(9:18) - Do you have a model of investing that resonates most with what you’re looking to accomplish?

(12:24) - Have Search CEO’s been primarily focused on one of these three buckets in your experience?

(15:51) - What are some characteristics & examples you’ve seen of the Classic LBO investing model?

(18:36)- What questions or risks are you optimizing for when considering LBO?

(22:13) - What are some factors that have correlated with a high retention rate in companies you’ve observed?

(24:23) - Can you walk us through how you divide M&A Driven Strategies into its two subcategories: Roll-Up and Transformative?

(33:46) - Is there some value in having M&A experience for a CEO & their company?

(35:42) - Why do you think there is such increased popularity in the M&A strategy within Search?

(39:00) - Which companies and characteristics fall under the Organic Growth Model?

(46:00) - What are some examples of companies who have combined these methods and found success?

(51:10) - What are your thoughts on Software businesses and any opportunities in that space?

(54:40) - What are some ways you develop and validate different theses?

(1:01:19) - What strongly held belief have you changed your mind on?

(1:03:32) - What’s the best business you’ve ever seen?