# PE10X - $10 Trillion Silver Tsunami - Scott Hauck, Founder, Legacy Capital & Hawk Capital

An episode of [VC10X - Investing, Venture Capital, Asset Management, Family Office, Wealth Management](https://invisiblenetwork.ai/podcast/1632806986), 26 Aug 2025, 33 min.

Audio: https://anchor.fm/s/a453ddd4/podcast/play/107379730/https%3A%2F%2Fd3ctxlq1ktw2nl.cloudfront.net%2Fstaging%2F2025-7-26%2F406322831-44100-2-3da52be13b0b6.mp3

Scott Hauck is an operator-turned-investor and the founder of Legacy Capital and Hawk Capital. Scott is challenging the typical 'strip and flip' model by focusing on what he calls the 'silver tsunami'—a massive wave of legacy businesses from retiring owners. We'll discuss his 'white glove' approach to preserving the soul of these companies while driving growth. But that's not all. We'll also hear the fascinating story of his 'accidental' fund, Hawk Capital, and how it's positioned to capitalize on the UAE's massive one-hundred-billion-dollar push into AI. ⭐ Sponsored by Podcast10x - Podcasting agency for VCs - https://podcast10x.com Legacy Capital - https://legacycap.pro/ Hawk Capital - https://hawkcap.pro/ We talk about - - The "Silver Tsunami" & Legacy Business Investing - A New, Empathetic Private Equity Model - Hawk Capital & The UAE's $100B AI Opportunity - High-Volume Deal Sourcing - Green & Red Flags in Founders - The 120-Day Post-Acquisition Plan - Strategy for High LP Returns & lots more For sponsorship or guest appearance requests, write to prashantchoubey3@gmail.com Subscribe to VC10X on Youtube, Spotify, Apple Podcasts.

## Transcript

[0:00] Hundreds of thousands of baby boomers that own businesses
[0:02] looking to retire, looking to sell their, their businesses off
[0:06] and they want the, the legacy of those businesses to carry on.
[0:10] And so I, I saw that there were so many businesses on the market
[0:13] and the market was so saturated that I wanted to get into the,
[0:17] in the private equity game, raise some funds and go after,
[0:22] you know, the silver tsunami as we're calling it.
[0:25] So both of the funds they pay off quarterly distributions.
[0:28] So with legacy capital, LP's can expect 92% return on average per
[0:34] year. We're not AVC, we're not looking
[0:39] to acquire 25 companies and hope that one of them makes it.
[0:42] We're acquiring 25 very profitable companies that have
[0:45] been around for several years. Hey everyone, this is.
[0:51] Prashanth and I'll be host for the VC10X podcast.
[0:53] And today we have Scott Hawk with us.
[0:56] Scott is an operator turned investor and the founder of
[0:59] Legacy Capital and Hawk Capital. Scott is challenging the typical
[1:02] strip and flip model by focusing on what he calls the Silver
[1:06] Tsunami, a massive wave of legacy businesses from retiring
[1:10] owners. We'll discuss his white glove
[1:12] approach to preserving the soul of these companies while driving
[1:15] growth. But that's not all.
[1:17] We'll also hear the fascinating story of his accidental fund,
[1:20] Hawk Capital, and how it's positioned to capitalize on the
[1:24] UAE's massive $100 billion push into AI.
[1:28] So without wasting any time, let's dive straight in.
[1:30] This episode is sponsored. By my own podcasting agency
[1:33] called Podcast 10X, where I help venture capitalists, asset
[1:37] managers, allocators and family offices and starting their own
[1:40] podcast and building a strong brand.
[1:43] Podcast NX is designed in a way to work well with the busy
[1:46] schedule of investors where we handle every aspect of podcast
[1:50] production so you can focus on investing.
[1:53] If you're looking to build a strong investor brand, starting
[1:56] a podcast should be right up your priority list.
[1:59] It's the only form of marketing where you can showcase your
[2:02] strong network. In other words, access to
[2:05] limited partners and founders and grow that network further.
[2:09] And contrary to what most people here, it's still very early to
[2:12] start a podcast. There are at least 10X more
[2:15] newsletters and thousand X more blogs than there are podcasts in
[2:19] this world. You can learn more about our
[2:21] podcasting services at Podcast ten-x.com.
[2:25] I'll make sure to add the link in the description below.
[2:28] Enjoy this episode. Hey, Scott, so good to have you
[2:31] on the VC10X podcast. How are you doing?
[2:33] Good. How are you?
[2:34] Thanks for having me. Yeah, it's a pleasure and I'm
[2:37] doing very well too. Thank you for asking.
[2:39] So just start things off. Can we first have your urgent
[2:43] story and what experiences shaped your part into private
[2:47] equity? Absolutely.
[2:48] Yeah. I've, I've spent the last 20
[2:49] plus years as an operational partner.
[2:52] I've worked on over 150 different businesses throughout
[2:55] that time as as you know, as a operational partner, as a as
[3:01] clients. I've worked with lower mid
[3:04] market to enterprise level clients like Panasonic, Verizon,
[3:10] Qualtrics. I've worked with Coca-Cola,
[3:14] Fitbit, all in the pursuit of helping these businesses with
[3:20] their operational and financial goals.
[3:23] I have been a part of six different exits.
[3:25] The most notable exit was the sell of Galileo to Sofia a few
[3:30] years ago for $1.2 billion. And essentially, you know, I saw
[3:34] what was happening in the marketplace in the US with all
[3:37] of the legacy businesses that were heading the market.
[3:41] So hundreds of thousands of baby boomers that owned businesses
[3:44] looking to retire, looking to sell their, their businesses off
[3:48] and they want the, the legacy of those businesses to carry on.
[3:52] And so I, I saw that there were so many businesses on the market
[3:56] and that the market was so saturated that I wanted to get
[3:58] into the, in the private equity game, raise some funds and go
[4:02] after, you know, the silver tsunami as we're calling it,
[4:06] with all of these legacy businesses that are going on the
[4:08] market at extremely undervalued rates and, and there's extremely
[4:13] profitable. And so I launched Legacy Capital
[4:17] about two years ago to capitalize on that opportunity
[4:21] in the US market and, and, and really to do what I've been
[4:26] doing the last 20 plus years for my own businesses, for myself.
[4:31] And later I launched Hot Capital in the fall of last year.
[4:36] It was kind of an accidental fund that we launched.
[4:39] It's based out of the UAE and we launched, we launched that fund
[4:42] to really take advantage of the, the AI opportunities in the UAE.
[4:50] Right now, the UAE government has set aside $100 billion to
[4:54] invest in AI and emerging technologies over there and
[4:58] we're looking to capture a large portion of that with our $500
[5:02] million fund. So 20 years, 20 plus years as a
[5:07] operational partner, worked on a lot of different businesses, you
[5:10] know, different sizes of businesses, different industries
[5:13] and launched the funds over the last couple years to really
[5:18] capitalize on market opportunities.
[5:21] Right. That's quite interesting.
[5:22] And how do you plan to make it different or maybe challenge the
[5:26] traditional private equity model with legacy capital?
[5:30] It's a great question. I mean, we're not the typical
[5:34] financial strip and flip private equity model.
[5:38] The businesses, especially on the legacy capital side, these,
[5:41] these businesses are owned by people that that want to retire
[5:44] and these businesses are their babies and they protect them.
[5:49] They're very proud of what they've built and we take a very
[5:52] empathetic approach to coming in and and doing due diligence on
[5:57] these businesses. We work as operational partners.
[6:00] That's what I've been doing for the last 20 plus years.
[6:03] So we come in, we provide, you know, everybody in the business,
[6:06] including the management team that's looking to leave with
[6:09] equity in the business. We're incentivizing everybody to
[6:12] help build these companies up. And we understand that these
[6:16] companies are their babies. And so we take, like I said, a
[6:19] white glove approach to handling them and to building them up and
[6:25] looking at at really supporting them from an operational
[6:28] standpoint, not just with, you know, cramming financial,
[6:32] unrealistic financial goals down their throats.
[6:35] Absolutely. So at Legacy Capital, is there a
[6:38] specific niche that you're targeting of businesses that you
[6:42] want to acquire and build? Yes.
[6:45] And so we're looking with legacy capital, we're primarily looking
[6:48] in the technology and transportation spaces.
[6:51] I know that's that's somewhat broad, but technology wise
[6:53] specifically we're looking at SAS companies, we're looking at
[6:57] e-commerce based companies, we're looking at fintech and
[6:59] healthcare companies. On the transportation side,
[7:02] we're looking at freight companies.
[7:04] So standardized freight companies, three PLS and
[7:08] transportation technology companies.
[7:10] Got it. Quite interesting.
[7:11] And why did you choose these teams specifically to target?
[7:18] Really it's, it's where I have experience.
[7:20] So I've spent the last 20 plus years working in technology,
[7:24] transportation, healthcare, finance.
[7:27] And so I, I decided to focus on industries that have less
[7:31] governance and compliance overhead.
[7:34] And with funds, you know, our second funds with Legacy and
[7:38] with Hawk Capital, we're probably going to be more
[7:40] industry agnostic. But for now, we're focused on
[7:43] industries that I have a lot of experience in, the team has a
[7:46] lot of experience in, and has less compliance and governance
[7:50] needs. Got it.
[7:52] Very interesting. And beyond the deal, what's the
[7:56] operational approach that you're taking at Legacy Capital?
[7:59] How do you plan to build those businesses after you acquire
[8:02] them before you try to exit? That's a great question.
[8:06] With every one of the businesses that we're currently looking at
[8:08] acquiring, the management teams want to stay on from anywhere
[8:11] from six months to a year and a half, even 2 years.
[8:14] So that helps us transition the the business businesses over
[8:19] from the existing management that wants to sell them over to
[8:23] a new management team that we can bring on and trade.
[8:25] And on top of that, we we look to start upgrading these
[8:32] businesses, processes and technology platforms day one.
[8:37] We transition them over to what we call our continuity platform,
[8:40] which is really a large tech platform where we, we
[8:43] essentially have an agency model where we're allowed, where we're
[8:46] able to come in and plug in these different businesses.
[8:49] Their technology platforms are the ones that we upgrade for
[8:52] them into this platform. And we can start tracking
[8:56] everything they do from a return on ad spend perspective to a
[8:59] return on investment perspective and see where these businesses
[9:03] are, you know, where they're spending money and making the
[9:06] most return off of their off of their activities.
[9:09] So within about 120 days, we come in and we're optimizing
[9:14] these businesses from a platform and process perspective.
[9:17] Quite interesting. And as the name suggests,
[9:19] legacy, right. So how are you putting emphasis
[9:23] on the legacy of the business and working with the original
[9:29] founders of the business, maybe your promoters to you know,
[9:32] preserve that and make that continue forward?
[9:34] Absolutely, yeah. We understand that these
[9:36] businesses on the legacy side are, are their babies.
[9:39] And so they're not only helping with transition, we're providing
[9:42] them with equity in the new business to help incentivize
[9:45] them to help us transition everything over.
[9:49] But we, we understand that these businesses are important to
[9:52] them. They're important to the
[9:53] American economy, and we want the legacy of these businesses
[9:56] to live on. Absolutely.
[9:58] And do you carry forward some principles that the founders say
[10:03] that, OK, these are the principles that I build this
[10:05] company with, they build this business with, and I want these
[10:09] principles to live on. Is there some sort of, you know,
[10:12] soft philosophical thing that also goes on there besides the
[10:16] operational approach? Sometimes there is and obviously
[10:20] we take that into a town. It's got to be a good fit for
[10:22] the funds as well. You know, the businesses we look
[10:25] at, they need to be adding value to the market and they need to
[10:28] add valuable, you know, services and products for the next
[10:31] several years. There's, there needs to be a lot
[10:33] of upside on top of the fact that they need to be very
[10:36] profitable. We only look at the top five to
[10:38] 10% of businesses that are on the market right now.
[10:43] But yeah, we we take a look at you, take everything into
[10:46] account and make sure that we're working with the existing
[10:50] managers a very holistic fashion.
[10:53] Got it, Interesting. And what motivated you to create
[10:56] Hot Capital and how does it reflect your vision for
[10:59] investing in globally? Yeah.
[11:02] So Hot Capital, like I said, it's kind of like our accidental
[11:04] fund we were meeting with, who is now an investor in Legacy
[11:08] Capital and my business partner in Hot Capital.
[11:13] But my Chief Investment Officer, Heidi Deemer and I were in Dubai
[11:18] last year in the fall. And we were talking with this
[11:22] guy. His name is Sheikh Sheikh
[11:24] Khalifa, and he's part of the Alba Wadi family.
[11:28] And he told us about an opportunity within the UAE
[11:30] government where they've set aside $100 billion to invest in
[11:34] AI projects and businesses over the next couple of years.
[11:37] And he told us that we should create a fund to capitalize on
[11:42] that opportunity. I have a lot of experience in in
[11:45] AI tech and, and emerging technologies.
[11:47] And so it was a great fit. And so it's something that we
[11:50] jumped on very quickly. We quickly got residency in the
[11:53] UAE and we established our business model over there and
[11:58] started raising capital up before the end of last year.
[12:02] Got it. And Hog Capital seems like
[12:05] hybrid fund of funds model, a mix of different investment
[12:09] strategies rolled into one fund. So can you, can you give us an
[12:12] insight into that? Absolutely, yeah.
[12:15] We set it up as a fund to fund model because we not only want
[12:18] to be able to invest in AI based practices and emerging
[12:21] technology, but other funds that are doing similar things.
[12:24] We can actually fund up to $50 million of legacy Capitals
[12:29] business with with money from Hawk Capital.
[12:33] And so those those two funds can work in tandem with each other.
[12:36] But there's there's a lot of opportunity out there with not
[12:38] only businesses but funds. And so we decided to build that
[12:41] hybrid model to take advantage both.
[12:44] Right. And the growth stage AI space
[12:48] seems to be very crowded, crowded with different sort of
[12:52] established investors already playing in that area, right?
[12:55] So what's your unique edge when competing with top deals against
[12:59] larger, more established funds? That's a great question.
[13:03] I mean we're looking at you know AI businesses that larger funds
[13:07] really aren't taking a look at. Most of them are, you know,
[13:10] lower mid markets to mid market deals and a lot of these
[13:14] businesses that we're looking to invest and they've been around
[13:17] for at least three years. They're they're already
[13:19] profitable and they've been growing rapidly over the last
[13:22] few years. We're not looking to make full
[13:24] acquisitions of these businesses.
[13:26] We're looking to come in as you know, financial controllers, but
[13:30] operational partners. For instance, one deal we're
[13:33] looking at, we're looking at investing $25 million into the
[13:36] business for 51% of the equity. They already have a great
[13:41] operational team and process in place.
[13:43] We're really just coming in to provide the capital that they
[13:46] need in order to help them go public over the next year or
[13:49] two. And a lot of businesses that
[13:52] we're working with or looking at investing in have given us
[13:55] exclusive rights to invest in their business on top of other
[14:00] capital that they're they're currently raising.
[14:02] So not a lot of competitors in the space.
[14:05] Plus we, we know what we're looking for from a lower bend
[14:08] market to mid market perspective and we, we look for the deals
[14:13] that are, you know, have the most upside and most the highest
[14:16] potential for a lucrative exit over the next couple of years.
[14:21] Absolutely. And in the global AI ecosystem,
[14:25] you know, there are different countries at different stages in
[14:29] their developments and innovation and investments
[14:31] they're making into the technology.
[14:33] What particular areas, maybe outside of the main markets,
[14:38] let's say the US, that you are keenly looking at and tracking?
[14:43] Yeah. So for legacy capital, it's it's
[14:44] within the USI mean we're also looking at e-commerce and SAS
[14:49] based companies located in in primarily English speaking
[14:53] countries, Australia, certain parts of of Europe, England.
[15:00] We've even looked at a company in Singapore that is very
[15:03] profitable with hot capital. I mean, most of the businesses
[15:07] we're looking at, they don't have to be in the UAE or
[15:10] headquartered in the UAE. They just have to have some sort
[15:12] of tie in and and somehow benefit the A, the UA, e.g, DP
[15:20] and government in some form or fashion.
[15:23] Absolutely. Quite, quite interesting.
[15:25] And how will the AI fund the hot capital and the buyout fund that
[15:31] is legacy capital, how will they work in tandem, if at all?
[15:36] What are the synergies between both these funds if they are
[15:40] going to operate at the same time simultaneously?
[15:42] Yeah. I mean the fund of fund model
[15:43] helps with that. As mentioned before, you know,
[15:46] we can we can fund up to $50 million of legacy with funds
[15:52] from hot capital, but really they overlap from a technology
[15:56] standpoint. So, you know, if we find an AI
[15:59] legacy business in the US for legacy capital, we'll we'll
[16:02] definitely jump on it, but there's not a lot of those out
[16:04] there. A lot of the businesses are
[16:06] more, you know, legacy businesses that have been around
[16:09] for 10 plus years and you're not going to find AI businesses that
[16:12] have been around for 10 plus years in the low and mid market
[16:15] in the US. And so from a tech standpoint,
[16:19] yes, there's overlap and from fund to fund standpoint, there's
[16:22] some synergies, but for the most part they're they're two
[16:25] separate funds. Got it.
[16:27] Interesting for founders that are listening, what's the
[16:31] biggest green green flag you look for in the team and what's
[16:35] the common red flag that makes you pass a deal?
[16:39] That's a great question. I mean, we really just we look
[16:41] at the ability to transition businesses over.
[16:47] So as we come in and we look at a deal, we're working with
[16:49] managers. We're not going to work with
[16:52] management teams that are, you know, aren't flexible and, and
[16:57] working with us and, and understand that we, we need to
[17:00] come together as a partnership, especially if we're, you know,
[17:03] looking to provide them with equity in the new business and,
[17:07] and have them help us with transition.
[17:09] So it's got to be a willingness to help the transition and to
[17:13] work well with us. There's got to be a good fit
[17:16] personality wise and attitude wise and willingness to work
[17:21] with us. Red flag would be the exact
[17:24] opposite. You know, people that you know,
[17:26] are, are really just trying to get the best, the, the most
[17:31] money out of their business. They don't really care about
[17:34] the, you know, the legacy of their businesses.
[17:36] They don't care about transition.
[17:37] They just want the money and they want to get out that that
[17:41] causes big, big red flags to us because you know, why are are
[17:45] they hiding something? Because you know that they don't
[17:48] want us to see is that is that the reason why they want to get
[17:50] out of this business as soon as possible?
[17:52] Why aren't they willing to transition for at least six
[17:55] months with us? Why do they not want equity in
[17:58] the new business Like there's it raises some red flags.
[18:00] And so that's probably the biggest red flag in it up
[18:02] itself. Yeah, that makes sense.
[18:06] And when, when you're fundraising from LP's for these
[18:09] funds, what's your page about delivering returns and managing
[18:14] risk in in the current economic climate?
[18:17] So. Both of the funds they pay out
[18:19] quarterly distribution. So with legacy capital LP's can
[18:23] expect 92% return on average per year and they can they can
[18:29] expect a 5.5 X multiple on their invested capital.
[18:34] So if they're investing, you know the the minimum and legacy
[18:37] which is 250,000, they can expect a return of about $1.4
[18:41] million over the the life of the fund, which is 7 years.
[18:46] And it's similar for, for hot capital, it's a seven-year fund
[18:50] and they're receiving quarterly distributions.
[18:53] And we manage risk really by looking at the top five to 10%
[18:58] of the businesses out there that are for sale that like I
[19:00] mentioned with legacy, the US market, Sperry is a very
[19:04] saturated market right now with legacy businesses.
[19:07] And we essentially have our pick of the litter.
[19:10] So we only look at the top five to 10% of these businesses.
[19:13] They have to be extremely profitable.
[19:15] There has to be a huge value out and a huge upside.
[19:18] And we, and we get these, you know, these businesses acquired
[19:21] for, you know, very undervalued rates.
[19:24] And so that's how we, that's how we manage risk.
[19:27] We're not AVC, We're not looking to acquire 25 companies and hope
[19:32] that one of them makes it. We're acquiring 25 very
[19:35] profitable companies that have been around for several years,
[19:38] 5/10/15 plus years, has a great model already has a great
[19:44] customer base, has a lot of demand in the market.
[19:47] And, and we may have one of those businesses out of the 25
[19:50] failed, but we are looking at very profitable businesses,
[19:56] which for LP's is a great thing because they're receiving
[20:00] quarterly distributions from day one.
[20:02] Right, absolutely. And you know you're promising a
[20:06] short duration strategy that the businesses are going to exit in
[20:10] three to five year time frame and you're going to see exits.
[20:14] LP's are going to see exits in the portfolio, right.
[20:16] Well, why is that structure attractive to sellers and what
[20:21] does it unlock for LP's? Well, it's attractive because I
[20:25] mean not only are they getting our LP's, getting quarterly
[20:28] distributions from the profits of these portfolio companies,
[20:32] but as we're as we're looking at whole periods of 36 to 60
[20:36] months, you know, we're turning over these businesses pretty
[20:38] quickly. And so from day one post
[20:41] acquisition, we're looking for you know, ways to build this
[20:45] company, these companies up very rapidly over a short amount of
[20:48] time. And we're already thinking about
[20:50] an exit strategy. So who can we sell this business
[20:53] to? Is it going to be a roll up?
[20:55] Is it going to be a consolidation with another
[20:56] company? What is the overall plan for
[20:59] exit and when do we think we can exit this business?
[21:02] Because you know, the faster we can turn over businesses that
[21:06] you know within that 36 to 60 month hold period, the faster we
[21:09] can provide greater returns to our LP's on top of the the
[21:13] quarterly distributions that are already getting from the profits
[21:16] of these companies. Yeah, totally makes sense.
[21:19] And after you have made a deal, you have acquired a business,
[21:24] what happens after that? What's the step by step process
[21:27] by which you run the operations of the business and transform it
[21:30] to run like a well oiled engine? So the first thing we do even
[21:34] before acquisition is we work on hiring the new management team
[21:38] that'll work with the existing managers, the sellers of the
[21:40] business during transition. So that's that's very important
[21:44] to find the right people, the right fits and the right
[21:48] transitional plan for for each of the companies that we look to
[21:51] acquire. And that's primarily on the
[21:53] legacy capital site within the 1st 120 days of being a post
[21:58] acquisition. We're looking at normalizing
[22:01] their data, we're looking at up updating their technology and
[22:04] their processes. We're bringing them onto our
[22:08] continuity platform, which is essentially, you know, an agency
[22:11] model middleware component. We use Mulesoft and then we, we
[22:16] have our own agency model CRM systems and other tech
[22:20] platforms. And so we add them onto our
[22:22] platform and we, it really opens up the ability for them to see,
[22:28] you know, return on investment and return on ad spend in real
[22:30] time with the different aspects of their business that are
[22:33] they're making the, the highest returns.
[22:35] And where we can put, you know, the, the majority of our
[22:39] investments at post acquisition help build these companies up.
[22:42] So we're thinking about, you know, an exit from day one and
[22:47] we're planning, you know, backwards from that.
[22:49] But really, you know, on top of that, we're looking at
[22:53] onboarding them to it, the different platforms that we have
[22:56] and building out their their tech platforms and their
[22:58] operations. Absolutely.
[23:00] And what what's your mechanism for deal sourcing and how do you
[23:03] consistently find high quality deals that others don't win
[23:08] before you? Yeah.
[23:09] For legacy deal sourcing is definitely not a problem.
[23:12] We have three different ways of sourcing deals.
[23:16] Most of the deals we source are through business brokers
[23:18] throughout the US We have 25 business brokers throughout the
[23:22] US that we have agreements with and they provide us with.
[23:30] They, they, we essentially have first right of refusal on any of
[23:34] the businesses they send us. We have 24 to 48 hours to pass
[23:37] on a business before it hits the open market.
[23:39] And then we also have an internal team that is sourcing
[23:43] off market deals for us. Now we have an external team
[23:46] doing the same thing. And so they're finding
[23:47] businesses that fit our model that aren't even thinking about
[23:51] selling their companies at this point in time.
[23:53] And then we we hook them and get them into our our acquisition
[23:57] pipeline and we source about 50 to 60 business deals per
[24:04] business day with Legacy capital.
[24:06] And last month alone, we looked at over 1000 deals and issued LO
[24:11] wise. We have about 18 companies in
[24:14] our pipeline right now that are late stage due diligence and
[24:18] four that we're looking to close on within a matter of weeks.
[24:21] Got it. Can you give me an insight into
[24:24] what is the internal decision making process look like while
[24:29] you're evaluating these deals and thinking if we should do
[24:33] this deal or pull out? Sure.
[24:35] We have a few, you know, filter mechanisms in place and so my
[24:39] team will evaluates the deals as they come in for business
[24:43] brokers and and off market deals.
[24:46] And if it looks like something that fits our model that we want
[24:48] to continue doing due diligence on, the team will issue an LOI.
[24:52] And then from there we'll get into, you know more serious due
[24:55] diligence. We have a team with Acuity that
[24:59] handles all of our our front office and due diligence from
[25:02] there. They they'll walk through,
[25:06] they'll go through the 160 point, a due diligence checklist
[25:09] that we have in place for all of the businesses.
[25:12] And it's really pretty standard stuff.
[25:15] You know, looking at whether or not they have any lawsuits in
[25:19] place or unresolved leans on their business or anything like
[25:22] that. Looking at the management teams,
[25:25] looking at the formation of companies, the structures,
[25:28] everything holistically on top of the financial history and
[25:33] performance of the company. But yeah, we have a few filters
[25:37] in place that starts with the lead coming in and we look at
[25:42] that lead and, and, and then eventually will turn into you
[25:47] know what LOI and accepted LOI and then we turn it over to our
[25:51] due diligence team to manage it from there.
[25:54] If as it gets closer than I step in with my team and we we focus
[25:59] on purchase and transaction details of the deal.
[26:02] Got it. Interesting.
[26:04] And you've been an operator before and you've seen multiple
[26:07] exit states, right? How does that experience shape
[26:10] the way you evaluate risk and build conviction on needs?
[26:14] I mean, it was working on over 150 businesses and clients, you
[26:18] know, most recently as an agency partner at a small digital
[26:21] marketing agency and working on clients like Qualtrics.
[26:25] I, I've seen first hand what it takes, you know, from a
[26:30] financial perspective and from an operational perspective to
[26:33] build a company up. And I know what the, the
[26:36] blueprint of those companies looks like, as you know, before
[26:39] we even begin the due diligence process with them.
[26:42] And so it's really just looking at those companies and those
[26:46] organizations from, you know, through the lens of my
[26:50] experience and teaching my team how to do the same thing.
[26:54] That's quite interesting. And coming to my last main
[26:57] question before we go to the rapid fire round, and this is
[27:00] what would be a boldest prediction when it comes to the
[27:04] future of technology, AI, transportation, maybe in the
[27:08] next 5 to 10 years. Well, I mean our growth
[27:11] projections and the growth projections that we're seeing,
[27:13] you know, throughout the world are, are big.
[27:18] And so I mean those, what would be great is over the next few
[27:21] years, we, we see those growth projections come true.
[27:24] We exceed those growth projections, you know, and the
[27:28] businesses that we've acquired that we have investment stakes
[27:31] in have become even more valuable because of of what's
[27:36] happening throughout the world and in these particular sectors.
[27:40] Yeah, quite interesting. And now moving to the rapid fire
[27:44] on and I'll ask you 66 quick questions about the investments
[27:49] you are doing and you can answer for both the different funds
[27:52] that you're running, right. So the first one is what are the
[27:56] sectors and regions you invest in?
[27:58] So legacy capital, it's transportation and technology,
[28:02] you know, and as I mentioned before, SAS, e-commerce,
[28:05] Heltech, fintech, transportation technology, freight and three
[28:09] PLS. And with hot capital, it's AI
[28:12] and emerging tech. We also look at defense
[28:15] platforms, cybersecurity and and data centers.
[28:21] Got it. And with HOG, you're also
[28:23] investing into funds. Yes.
[28:25] Exactly. That is OK.
[28:28] So what's the typical stage of investment?
[28:31] So with legacy capital the business needs to be very
[28:35] profitable that you know they need to be selling for a
[28:37] multiple under 5X EBITDA to to revenue.
[28:42] They need to have low debt under 2, you know, as a debt to
[28:47] revenue ratio, they need to have a very valuable product and
[28:54] service and it's got to be something that has a lot of
[28:57] upside. And the business owners need to
[28:59] be willing to help us transition the business over the next six
[29:03] months to to a year with hot capital.
[29:07] We look at AI and emerging tech companies that have been around
[29:11] for at least three years, are profitable and are growing
[29:15] rapidly, and really just need the, you know, the financial
[29:18] support to, you know, for a lucrative exit over the next few
[29:21] years. Got it.
[29:23] Do you lead rounds? So buy out, of course you lead
[29:26] that round, but you can ask for Hall Capital.
[29:29] Yes. So we, we will invest enough
[29:34] capital to acquire upwards of 75% of the business and take
[29:37] financial control. You know, we'll take anywhere
[29:40] from 25 to 75%, but the goal is to have financial quick control
[29:45] of the businesses that we invest in and then leverage, you know,
[29:50] the existing teams as operational partners.
[29:53] Got it. And for and for Hawk Capital.
[29:56] Yeah, that is, that is for Hawk Capital.
[29:59] Yeah. Oh, OK.
[30:01] So for Hawk Capital is when you have like you have to acquire
[30:04] businesses, is it well? In that too, it's we're
[30:08] investing in businesses. So we're coming in as financial
[30:11] managers, but then we're working with them as operational
[30:14] partners and we're not taking full control.
[30:17] We'll go up to 75%. Most of the deals we're looking
[30:20] at are are between 21, sorry 25 and and 55%.
[30:26] But then they they already have strong operational teams in
[30:29] place and we just, we come in with financial support to help
[30:33] lift those businesses up. Got it.
[30:37] What's the typical check size you put in?
[30:39] So check size, I mean minimum with legacy is 250,000.
[30:44] We've been seeing you know average checks I have about
[30:46] 750,000 primarily from independent accredited investors
[30:50] and family offices with high capital.
[30:53] It's much, much larger. We're looking at investments and
[30:57] typically that that range anywhere from 1 to $3,000,000
[31:00] minimum. But then average check size
[31:03] there is is really about 5 million.
[31:06] Got it. Where can founders get in touch?
[31:11] Founders, they can get in touch with me, They can reach out to
[31:15] me at, at Scott at Legacy Cap dot Pro or Scott at Hotcap dot
[31:19] Pro. They can reach out through the
[31:21] websites for Legacy Capital, it's Legacy Cap dot Pro.
[31:26] We're still finishing up some revisions on the Hot Capital
[31:29] website and we should have that released again here in the next
[31:33] couple of weeks. Awesome, last one, where can
[31:37] listeners follow you? Follow me on on Instagram, you
[31:42] know, we have histogram pages for both Legacy Capital and Hot
[31:46] Capital. Sign up for our, our weekly
[31:50] newsletter. We'll send out articles that
[31:53] have a lot of value, that provide a lot of valuable
[31:56] information on what we're doing within the PE space and within
[31:59] the financial space. And so follow me there as well.
[32:03] Yeah, now that's interesting. This is the first time someone
[32:06] has said Instagram and not LinkedIn so I'm happy.
[32:10] Yeah, LinkedIn, you could. Follow us LinkedIn too.
[32:12] We, we do post things on LinkedIn, but I mean, it's, it's
[32:15] mostly Instagram and then, you know, we, we have a weekly
[32:18] newsletter that we send out and, and so that's, that's the most
[32:22] popular places for people to follow us.
[32:24] Yeah, awesome. I'll make sure to put those
[32:27] links in the show notes below so our listeners can get there
[32:30] easily. Thanks so much for doing this
[32:32] with us Scott and I wish you all the best and happy and resting.
[32:35] Thank you so much and thank you for the time.
[32:37] It's been an honor. Likewise, Thank you.

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