Yes, it’s been a while since you’ve heard from me.
I haven’t written a blog post since September – that’s almost four months of not connecting.
So what happened?
I started a business.
My 2020 Year in Review
In early September, a friend of mine invited me to speak with a private equity investor about investing in her fund.
She outlined their investment pipeline, their process for deal review, expected returns, and overall investment philosophy.
At the conclusion of the call, I wondered why I was going to invest in someone else’s fund when I believed I could do a better job of building my own fund.
And so that’s what I did.
In early September 2020, I laid the groundwork for what would become my next venture, and that’s what I started a few days later.
When I sold my last business in 2017, I decided that I never wanted to own or run a business, ever again. I had decided that from that point forward, I was going to be an investor, but, I didn’t want to take the lead on running a business.
But then, Covid happened.
In 2019, I was away from my home for at least 5 months of the year, and frankly, running a business was the furthest thing from my mind.
Fast forward to this past fall, and with no in-person meetings, restaurants, flights, or travel, I was finding myself at a desk for way too much time.
Then, and at the same time, I divested the balance of my shares in the telecom company I sold in 2017, stepped down from the board, and had both extra cash, and time as a result.
The confluence of those factors, mostly as a result of Covid, led me to begin what would be my next challenge.
If You’re Handed Lemons, Make Lemonade: My Private Equity Fund
Running a business wasn’t in my short, or frankly, long-term game plan.
I didn’t want to manage staff and didn’t want the responsibility of overseeing another business. BUT, I was lacking a challenge.
So I’ve given myself one year to build a new business, and more importantly, put the management team into place so that by the time we can travel once again, I would be ready to hand the reins to the team to manage the entirety of the business leaving me to focus on strategy and direction.
And so, CloudStrike Ventures was born, and with it, my first employee and first acquisition.
What is CloudStrike Ventures?
Over the course of the last couple of years, I’ve developed a skill in SEO, and website monetization.
So with my tactical skills of SEO, SEM, marketing, and monetization in hand, and my strategic skills in building and managing a team, I made my first acquisition.
My first acquisition, which is a small business website, cost $70,000 and had a historical two-year track record of consistent traffic and profit of about $2,800 per month (approx. $34,000 per year) for a 25X monthly multiple. The acquisition seems like a no-brainer considering the 50% YoY return, and in the last 3 months, we’ve nearly doubled the revenues which make the ROI even better.
I’ve since made three more acquisitions, all of which have similar returns, and now have a team of five people including an operations manager, SEO specialist, content writer, web developer, and an admin person starting next week. You can visit the website for CloudStrike here.
I expect that over the course of the next six months I will make another six to ten acquisitions, and expand the team accordingly.
Website Assets: The Next Major Asset Class
I’ve written extensively about real estate for the last two years, in particular, multi-unit-residential (MUR). You can download a FREE copy of my book here. and I’ve also written about how an investor can make a 110% IRR inside of two-years in MUR real estate,
One of the challenges with real estate is that CAP rates are trading at historically low multiples approaching 3% or lower in many North American cities. At those levels, real estate, and MUR specifically, is a more challenging long-term play at the moment, and it is for those reasons that I am looking at alternate asset classes. Digital assets, buying and monetizing websites, offer the best returns I’ve seen in a long time.
My only challenge now is that I have to build a team.
The Power of the Remote Team
The interesting thing about this business is that there is no office, frankly, we don’t even have a phone number, and while I have to be careful not to say the word “never”, I don’t expect that I will ever open an office. All of our team members work remotely.
It isn’t just my team that’s working remotely. Many businesses around the world have been forced into a work-from-home mode, and with that, comes the realization that if you’re going to hire someone to fill a role, that individual doesn’t have to be in the same city, or, frankly, even in the same country as you or your business.
My focus at the moment is hiring the best people to do their respective roles and putting the processes in place so that I can step away from the tactical side of the business by fall 2021.
My initial investments are going quite well.
So far we are achieving a 100% IRR, and I expect that rate of return to continue for the next three years.
*** if you want some clues on how I’m achieving those types of returns, you can read this article: How to Make a 600% Return on a Business Investment Inside 24-Months
Best of all, I am enjoying the process of building a new business, especially considering I am stuck at a desk for the foreseeable future.
The Non-Work Side of My Life
My wife and I were fortunate to have our two kids home for the holidays. They’re both doing well – my daughter is in university, and my son graduated from university last spring, and is now gainfully employed as a software developer.
We’re spending a lot of time indoors, and considering my aversion to cold weather and snow, I bought a treadmill, rowing machine, and have built a small gym in my house.
We’re hunkering down, keeping a safe social distance from our friends, and making our way through the cold Canadian winter.
My portfolio has done quite well in 2020 up almost 10% for the year, which is excellent considering my targeted return of 5%. I haven’t taken any outsized risks, and am still very conservatively invested, although I did buy some bitcoin, gold, and more tech stocks during the spring of 2020 which definitely helped drive much of those returns.
2021 and the Next Year
Between Covid, the up and down of the financial markets, the state of many small businesses including restaurants, and anything in the travel and hospitality space, the challenging job market, the psychological toll that isolation has had on many, and the heated state of political affairs in the US, 2020 likely won’t go down in the history books as a banner year.
Remember though that every cloud has a silver lining, and when the world hands you lemons, you can still make lemonade.
I still do believe that now is the best time in the last 30-years, maybe even longer, to start a business.
We’re at the precipice of many generational changes that are all happening at the same time including health, financial, and political. There hasn’t been a time in my lifetime, where I’ve recognized so many opportunities.
If you’re stuck in a job that you can stand, working for a crappy boss, then find another job, or, start a new business. Stop making excuses. Stop saying the words “I can’t”, and start saying “I can”.
Start dreaming of your ideal future, and go achieve your dreams.
When you say the words “I CAN”, your subconscious will then take that as a command. You will be programming your subconscious and will begin the path toward your future success.
Make 2021 your year to accomplish your dreams. Write them down, both short and long term, and then focus your energies on accomplishing them.
Good luck, and stay healthy
And by the way, if this is your first time here, you can read my backstory here.