Hey, thanks so much for having me, Steve, it's great to be here.
Well, it's nice to have you, I was a customer of yours, dating back to 2012, if you can believe it. So it's nice to meet the founder behind the product. And I've got a lot to get into today. And I actually want to start by talking about axial market, the company that you founded in 2009, if I'm not mistaken, but before we get into the details for folks listening who may not be familiar with yourself, your background, including axial market, can you just walk us through the arc of your career? And what led you to what it is that you're doing today?
Yeah, sure. So as I've said before, when I've been asked this question, I'm a perfect market timer in terms of getting out of my formal education at the worst economic moments in recent history. I graduated 2001, undergrad in 2008 from business school. And I think it's funny because I think in some ways that has, in some way shaped my career, maybe more than I've ever really thought or appreciated. In 2001 the .com implosion was fully manifesting very, very hard to get an interesting job in, in growth companies. And Wall Street was also in major disarray, and going through a pretty big three year bear market, which was reflected in employment and employment opportunities. And I didn't make the cut for investment banking out of the University of Virginia.
Very Luckily, I had an older brother who co founded Gerson Lehrman group with Mark Gerson. And the year before that, I'd been an intern working for them, when it was just the two of them trying to figure out what the company was going to grow up to be. So I joined Gerson Lehrman group, which went on to become known as GLG, and sort of invented the expert network category, right after college, and I was there for about six years, helping to build that company. It's a platform to access experts on effectively a near real time basis, to ask them questions. And it's used by a lot of investors both in public markets and private market investing. And I had an incredible six year chapter there.
The majority of geologies work in that first five to seven years of the businesses life was really public market investors who we served. And so I cut my teeth a lot on sort of building an information services company in the public market domain. And I left and went to graduate school, I went to Stanford Business School, and I was able to get a internship in private equity. And I was interested in that opportunity set. And that was definitely a fashionable and popular exit path out of graduate school. And I was hoping to see if I could sort of compete for one of those opportunities, I found my way to a great internship. And it was my first exposure to private market investing.
Having been a GLG, where we were very, very steeped in what was the information available in the public domain? And how did that create an opportunity for GLG to become a big and significant business, it was really striking for me to see how little information there was on private companies relative to public companies. And it was that contrast between the two. And in particular, the deal sourcing challenges that that creates, the financial readiness of the companies and all the challenges associated with making a business equitable. All of those things were very, very, very different sort of states of play in public markets versus private markets. For me, that was like a bit of a secret, you know, sort of hiding in plain sight.
And it ultimately sort of led to the creation of axial as a platform to originate opportunities in the private markets. So I'll pause there, but essentially, six years working for an information services company with a lot of expertise and information for public market investors and then realizing private market advantage. Investors were at a great disadvantage in terms of idea generation.
So I have an additional question for you with respect to the founding of Axial but before we get there, there are lots of folks listening to this who are prospective acquirers who are looking for deal flow. Lots of CEOs listening to this many of whom are considering an exit or a liquidity event, either in the near term or at some point. For those people who aren't yet familiar with Axial, can you just walk us through what this product does?
Sure. We provide a two sided platform for buyers of businesses and for owners of businesses to opt into a confidential discussion around a transaction. So a lot of people look at Axial as almost like a dating site for the purchase and sale of small businesses. It's a bit of a dumbed down way of looking at the business. But it helps people understand what we do. And so acquirers use Axial to hunt for and originate opportunities that are a fit for them and that reflect their geography, their industry goals, their financial capabilities, and business owners use Axial, in one of two ways. Usually, business owners are already represented by an investment banker or a business broker and the business broker or the banker is using Axial on their behalf.
For business owners who have not hired a broker or banker for help in the process. We have a referral platform that business owners can use to identify really high quality bankers and brokers that might be ideal to represent them. So we help the sell side in two ways we can refer them to great M&A advisors. And if they've decided that they want to do it on a DIY basis, which we don't recommend we, we have the platform available to them to confidentially engage with buyers. So it's a two sided market, both sides, hopefully you're getting value from introductions in the pursuit of an exploration of small business M&A transactions.
In doing research for this conversation, I was listening to you on another podcast and I think the host referred to Axial as the tinder of small business M&A. So I don't know if you're gonna post that on your website or anything like that. But I thought that was kind of an interesting way to put it.
It is, I would say that the biggest difference between, you know, Tinder and Axial, once you've bought a business, you obviously need to, it's hard to to move on quickly. Right. It's very big, it's right term decision, multi year commitment minimally. So I think it's important to think about transactions differently from those that originated on Tinder. But fair enough.
Yeah, among other differences, which are beyond the scope of this podcast, but I want to go to the I mean, founding is never necessarily like a eureka moment, it tends to be more of a process measured in months, in some cases, years, not necessarily minutes or hours. So I want to go to like, what were some of the compelling events or realizations that led to you becoming a founder? You mentioned, there's lots of information available for public market businesses, very limited information for private markets and private companies. But I'm wondering, what else about the product or the market or the nature of the problem to be solved, kind of coalesced into you taking a very real bet with your personal and professional life and deciding to leave GLG and start Axial? What were some of the more compelling things that got you out of your seat and said, this is absolutely something I have to do?
Well, you know, I mean, obviously, GLG was an amazing experience for me, but you know, it was a firm that was founded by my brother and Mark and always being that I'm the youngest of five, and I needed to separate myself from that business, for my own sort of personal reasons. Because I just really wanted to feel like I was developing a career that just felt like free and clear of, you know, a brother or a father or somebody who sort of had given me an advantage, you know, and so, the way that it's, I had an amazing experience there. But after six years, you know, when I applied to graduate school, and I got into Stanford, I just, I took it because I wanted to move to the other side of the country, and I wanted to kind of cut my own trail a little bit.
I just needed to do that, and, you know, just on a personal basis, and so that gave me like a two year platform to meet a lot of companies, to meet a lot of people, and to interview in a lot of different places. So I wasn't like I left GLG and then Axial got started, like a month later, or, you know, a few months later, I had this period where I was able to survey opportunities. I had this period where I was able to actually work actively, in a first time fund, private equity firm, that was investing in lower middle market American companies. And so I had that period to get close to this domain into this subject matter. I also had a ton of friends at in business school, who were very encouraging of like the Axial idea, because from their perspective, they were like, listen, you know, there's plenty of capital in this market.
Anybody can build the right financial model and you know, create the right sensitivities like, you know, that's not really where the value is. A lot of the challenge in the investment business and in the private investing business is building a repeatable process by which to find actionable opportunities and deploy capital in ways that, you know, that are compelling to LPs and that, hopefully are also a win win for sellers. I kept on hearing more and more about this idea, the sourcing challenges in the private markets, again, this is back in 2008, just so that the audience understands and 2007 2008. So, private equity was definitely big, but it was not nearly at the scale that it is here in 2023.
And a lot of the tools have not been built that are in use today, separate from Axial, so there was no pitch book pitch book was just getting off the ground, right. And a lot of others, you know, Prove Co. and other databases and other things that are used to try and hunt, none of that stuff was really out of the blocks yet. And so that's the sort of breeding ground in which Axial ultimately grew. And it was largely a function of my own my own experience at this private equity firm, which I wasn't working for full time, I was working for them as a part time associate during my time at Stanford. But they had had incredible success investing in middle market companies, you know, businesses that I would say, probably had somewhere in the neighborhood of between 25 and $100 million of EBITDA.
And they left that perch, where they had been quite successful and had kind of grown up through the business and went to go start their own first time fund, then they raised about $300 million. And if you bought, you know, if you raise a $3 million fund, you can't buy businesses with you know, 20 200 million of EBITDA. And so the amount of capital that they were able to raise kind of forced them into the lower middle market. And their sourcing engine and their sourcing model, and their whole operating model for sourcing businesses in the lower middle market just didn't work, you know, the relationships that they had were not relevant, the investment banks with whom they had transacted repeatedly were not trafficking in this part of the market.
And so it was just a combination of having a lot of friends who were talking about just the value of sourcing how that is like the real sort of differentiation in terms of getting promoted inside investment firms. And then me seeing, you know, an emerging sort of first time fund, struggling to figure out the sourcing engine for the lower middle market. And I tried to sort of distill it for you, Steve, by saying, like, I ultimately realized that there was just this massive contrast and just the state of information for public companies in America versus the state of information for private companies. And that leads to a fundamentally different structure to the way the capital market works for one type of company versus the other.
And so, sourcing of public companies is, it's very quick, you can do that with like Yahoo Finance, right? You know, they have a stock screening tool, and it will definitively give you the list of addressable opportunities according to industries and revenue and EBITDA and, you know, anything you want, and you get that list instantly. In the private markets, nothing really existed like that prior to, you know, a lot of the innovation of the last 10 years around private market information. And in particular, you know, nothing existed that showed you businesses that were actively looking to transact right here right now. Which is kind of one of the things that, you know, we've tried to really focus on it Axial.
There are other companies that offer databases of private companies, and then you can go and prospect and, you know, reach out to those private companies, any any business that is going to market on axial is actively in a transaction process. So they're going to market when you connect with them on Axial as opposed to just being a row in a database. They're actually a business that's undergoing an exit process.
I'd love to dig into axials revenue model. Because if I if I have my facts straight, and I believe when I was a customer back in 2012, if my memory serves me correctly, I believe you guys started with a subscription based revenue model where you charged buyers only and you allowed sellers to become members for free. But now you offer a structure where Axial takes a success fee from transactions closed within the platform. So I guess I'd love to know why, you know, many years ago did you initially choose the subscription only model and then if you could please walk us through what led to you changing that to the current percentage strands of the transaction pricing model?
Sire, I'll try and give a brief set of answers and feel free to ask more questions. I think at GLG, we started the business with a subscription model and GLG has moved into a phase of scale long since I left where they have consumption based pricing, and hybrids between consumption and subscription. But when I was there, it was a very simple and pure play, subscription business. And we grew that business to 100 million in sales purely on subscriptions within less than 10 years. And so I think just, I didn't really think too much about it, Steve, I had been inside of a business that had developed very successfully with that model. And I think I was just incorrectly stubborn about believing that that was the right way, or the only way to sort of go to market with digital goods or information goods, information products.
And it took the experience of Axial for me to realize that I mean to, in a nutshell, I don't think that we were ever in great alignment with our customers at Axial during the subscription era of the businesses life. And it was also very challenging for us to scale a platform that gets better and better, ideally, with a greater and greater number of buyers and sellers on it, because we always had this subscription barrier up at the initial point of sale. There was no way for, for people to try it out before you know, they bought it and no way for people to determine whether or not it was going to be a good fit for them. And so the way we implemented subscriptions was wrong, I think it's really tough to to price, the value of Axial with subscriptions.
We have some people on axial that are looking for 50, 60, $75 million transactions, we have other people that are looking to buy businesses worth between, you know, two and eight to $9 million in total enterprise value, hugely different value proposition there just in terms of scale of dollars. And so it was just very challenging for us to build a really good healthy customer base. The deal sourcing motion, while it is a permanent motion in certain organizations, and it never stops, it just drumbeats 52 weeks out of the year, in a ton of organizations, the deal sourcing motion is very much subject to an ebb and a flow. If you're a small search fund, if you're a small independent sponsor, you just don't have enough analytical capacity to just constantly be in the market evaluating opportunities.
You have to be able to triage between deals, sourcing, and then evaluating opportunities, and then trying to win deals and then raising capital and so the deal sourcing motion doesn't necessarily lend itself to a subscription model. From that perspective, either people want to be able to turn it on, turn it off, and we had these 12 months and 24 month agreements. And we would pick up the phone to call our customers and say, you know, you're coming up for renewal in a month from now or two months from now. And it was just very arbitrary whether or not it was a good time for them to be renewing their subscription to Axial or not. And that created all kinds of renewal anxiety, operationally at Axial, because I had learned about the importance of retention building GLG was like our number one, you know, sort of KPI at GLG, with good reason.
Subscription retention, it's all about renewal rate. But we had so many customers that said, Hey, we're in the middle of a deal, call us back in three months. And because of our business model, we just weren't able to be sort of customer oriented. It was just very hard. It was there was a lot of on and off and a lot of thrash. And that led to less than stellar renewal rates for the business. It led to challenging sales cycles where people would say, you know, but I mean, I'd say overwhelmingly, Steve, to be honest, we had so many people who said, listen, I love what you guys are doing. I'm happy to pay you a fee if I close a transaction.The number of times I heard that in pitches was just hundreds and hundreds of times and I just sort of stubbornly put my head down and continue to run a subscription business for I think for too long.
You mentioned the concept of alignments, and I'm just thinking aloud here but when you were dealing with members of the platform. So buyers specifically and specifically non serial acquirers. So people who are just looking to do one transaction, I wonder if your product worked, you know, quote unquote, too well, which is that they found their deal they consummated their transaction, once they buy a business, then they likely have no further use for the platform and thus, didn't renew their subscription. To what extent was that a problem for you guys?
I mean, that is all true. But that wasn't what drove us to make the huge leap. And it was a hugely, and we really didn't know if it was going to work. The main thing that drove the decision was we had a huge number of prospects, who said, you know, happy to pay you a success fee, if you help us close the transaction, that's the way that people get paid in this business. And why don't you guys work that way? So we had very strong, just customer and prospect feedback that we were just constantly fighting through and swimming upstream against. We also felt very confident that the business was priced very imperfectly, and what I mean by that is, if a customer successfully acquired a business on Axial, let's say they paid 10 $15,000 subscription, and they bought a $15 million business, arguably, they radically underpaid for the value that Axial had created. Right.
And some people would argue with that, but generally speaking, people would agree with that say that, you know, the market price for that is for facilitating that transaction is substantially more than a 10 or $15,000 subscription. And so, in the cases where Axial was successful, our pricing model did not seem to really reflect the value that we had helped to create. And didn't put us in a position to capture that effectively. And then, in the deal business, which is an incredibly low success rate business, not in terms of the deals themselves, but in terms of finding them every year, you know, we have plenty of customers who are subscribers to Axial, who never closed the transaction in a given year. And it wasn't because they didn't have a lot of at bats, or they didn't submit some LOIs, it's just they didn't close any deals that year, or the deal that they closed, they sourced it directly, or they source it through a relationship or a proprietary process or conversation.
And so then at the end of the year, you know, the customer essentially looks at their subscription Axial and says, I closed no deals through Axial, why would I renew this? And so there were those were sort of the primary reasons why we said, you know, this just isn't working. Customers are essentially looking at this as a binary decision, a binary outcome, did we close a transaction through Axial or did we not this year? If we did, and let's renew. And if we didn't, then why are we renewing, and then when they did consummate a transaction, you know, they had the benefit of a subscription price, as opposed to a transaction based price. And so those were just the things that in our view, ultimately made it a highly imperfect business pricing model for the offering that we have.
So two quick follow up questions, again, going back to the days or weeks during which you made that change. So the first thing I'd say is that, you know, making a change like this to your revenue model, you know, presumably your profitability, your incentive targets for your sales tonight, and this is a big, big change. So as the leader, take me back to that time, what was the self talk? What was going through your mind? What were you scared of? What were you excited about? Like, just take me inside your head, when you decided to make a change of that magnitude?
I think I'll tell a quick story that gets right at this question that you're posing. So I had stayed in quite close touch with the CEO of GLG, who's a bit of a business mentor for me, and his name is Alexander Saint-Amand a longtime CEO of GLG. And we went out for dinner, and he said, you know, are you excited about the version of the business that you're building? This was like, I don't know, seven, eight years into building a company. He was like, Are you building the version of the company that you want to build? And I never been asked that question before. And the answer was no. As I just explained to you, Steve, you know, we were struggling with these customer acquisition challenges where people wanted to pay us when they close as opposed to something upfront.
Struggling with the renewal motion in light of the way that you know, the ebb and flow. And so, it was a very, very piercing question to me because I basically revealed to me that like, there was no real version of the future for Axial that I personally was excited about, and I was essentially like in the CEOs seat, and the founder and CEO seat and I was just kind of grinding my way through the business model, because I felt like I had to find a way to make a success out of it. But I wasn't building the version of the business that like I was really excited about. And so ultimately, that's kind of what gave me the, I guess, the courage and the will to to make the change, because it was a really big change. And we had raised some outside capital, and we'd raised outside capital under the pretense of subscriptions.
And this was a massive change in the visibility and the forecastability and viability of the business. And so it was very, very challenging news for me to present to the board, very understandably. But ultimately, I just was very confident that as the founder, I just wasn't building a version of the business that I myself was excited about anymore. And I thought that the transaction based model, which is 100%, performance based, we only get paid when our customers are succeeding was just like a really solid position for us to try and reinvent the business around, and it would come with its own challenges and lots of complexities for sure, but that, I would feel really good about that value proposition. And if it worked, you know, I would still be really excited to wake up in the morning and keep trying to build company.
And so that really kind of galvanized the effort, which started in in 2017, I did put my toe in the water by beginning to sort of, you know, drop it into renewable conversations. So I didn't like make 180 degrees, I didn't like wake up one day and just say, that's it, we're burning the boats, and it's completely, we're going in a different direction, I did make a little bit of a rounded turn. But truthfully, I should have made a, like 100 nav return. Because by putting my toe in the water for a little while and getting a sense for it, I actually just kind of delayed things. And in some ways, it made things more precarious. But anyway, those were some of the key key questions that I feel that from people who I trusted, and that ultimately gave me sort of the gumption to take a crack at a 2.0 version of the business.
As a CEO, and now as an investor, I've encountered this question many times, which is, how to think about valuing subscription revenue versus what I'll call transactional revenue. And this shows up in a bunch of different areas, it could be if you have like a payments part of your product, do you charge per transaction? Or do you just charge like per seat per month, for example? You mentioned that you raised capital for Axial, and knowing that the subscription based revenue model is, you know, in a way kind of viewed as like the Holy Grail revenue model.
How did your board and your investors react when they invested on the basis of this subscription based business only to later be informed seven years later that, we are abandoning this holy grail revenue model, and we're going for something transactional? I mean, you articulated the reasons why it wasn't a great fit for your particular business. But I had to imagine, I have to imagine that there was a lot of pushback from investors saying, hey, is this company as valuable as we thought it was yesterday, when we were predicating our valuation on a subscription based business?
I had a CEO coach who used to call these win or leave moments. And this was definitely a win or leave moment. And because it really did divide the board and I think the board was trying to do its best to figure out how to advise me and to develop the business. But I'll sort of break it into like a couple of buckets. Right. So there was a set of board members who said, listen, we should totally do this because it's not like we're in some position. It's not like we are disrupting some amazing existing business that we had. Axial had, you know, mid teens ARR, but we didn't have great customer acquisition and, you know, retention economics. We were not a world class, subscription unit economics business with negative net retention, and just sort of like all this sort of characteristics that make the subscription version of businesses really, really attactive.
I think if we had were in that position, it would have obviously not, we probably would have never come to this crossroads. But I think if we were in that position, I think it would have not a reasonable idea. The reason why it was a reasonable idea was not because like, I just wanted to like, do something new. You know, the reason that it was a reasonable idea was because customers were not, it was not resonating with customers. And you could see that in customer acquisition cost, you could see that in LTV to CAC ratios, which were manageable, but not awesome. You could see that in account executives, you know, attainment issues, and you could see it right. I mean, we assembled a reasonably strong team of competent people in a variety of seats in the business.
And of course, you can always have a better team, but I mean, we were doing a lot of the things right, but the business just didn't have the genetics to be a great subscription business. That being said, you know, there was still a portion of the board that was like, no, like, we're going to keep going with this subscription business, we're going to tear it out, we're going to explore different tiers of subscription better, and let's not throw the baby out with the bathwater. And then other parts of the board were like, Listen, this business model doesn't work. The market wants what Axial has to offer, we're getting in our own way, we're making it harder for us to aggregate a larger number of buyers and a larger number of sellers, business is more valuable, you know, if it can be operating at a greater level of scale than it is today, where there's more buyers and more sellers, and more sort of marketplace aggregation being achieved.
And so, yeah, it was a very, very demanding time for the board, and trying to figure this out and figure out how to argue about it and constructive ways and productive ways, but it was sort of the crossroads that the business had come to. And I think part of the reason that I think I did put my toe in the water a little bit was to try and help the board, and help myself sort of see whether or not there was a validated, you know, alternative version of the business model. The challenge, of course, is that when you move to a transaction based model, you know, maybe in a payments company framework, it's like millions and millions and millions of payments. But in the world of M&A, these transactions are actually quite infrequent. And so in order to really validate the new business model, you really did need to take a multi year leap of faith.
You needed a meaningful number of customers to be on the new model, and you needed a meaningful number of them to begin pursuing and sourcing deals through the new model. And then you needed a meaningful amount of time for them to go from, you know, being at the top of the funnel on those transactions to then submitting LOIs. And then, as you probably know, Steve, like, you know, roughly one in two signed LIOs and the lower middle market tends to break. So you know, then start to finish, you have to be willing to spend one to two years really trying to figure this out. And that was really challenging, we got a little lucky with a great client. Actually, it's a division within the Blackstone organization that buys smaller businesses. And we got a little lucky and they were under LOI on a transaction.
And that began to show us that there was a willingness to pay significant amounts when and if you were sourcing deals or Axial successfully, so that was a bit of a shot in the arm during a pretty dark portion of the crossing of the desert, so to speak. But yeah, it was a very, very challenging period with a lot of uncertainty, you know, employee uncertainty, board uncertainty. But the truth is that we just didn't have a huge amount to lose. In my mind, Steve, we weren't building a version of the business that we were excited about. customer churn was higher than we all wanted it to be. Customer Success was constantly feeding that back to us. Employee satisfaction is always higher in businesses where the product and the business model and everything is kind of working well and connecting well to one another.
So employee satisfaction in the business with high churn is typically lower. So, a lot of things were sort of lining up to indicate that it was time for us to take a big risk and make a big, make a big change and see what would come of it.
It's fascinating. I guess it can be argued that Axial is in the software business. It's in the market making business but it can also be argued that you're in the transaction business, at least to some extent. So in light of that, I'm curious to what extent have you grown Axial through M&A or at least considered growing axial through M&A?
We have not grown, we have not done any M&A, we have gotten close a couple of times. We've gotten close on some content opportunities, we've gotten close on a software, a software business that made things more, it was a pretty interesting product that was used by investment bankers to run a sell side M&A process with greater productivity, greater levels of automation. But we have not made any acquisitions yet. But I think part of that is, there's a couple reasons for that, I'd say, you know, once we were transitioning to this new business model, we obviously needed to make sure our house was was, you know, was solid before thinking about being an acquirer. And so I think that that put a pause on really being credibly acquisitive, ourselves.
And, you know, then we obviously got delayed by COVID, and things like that sort of as part of the business model change. And so I think that that is probably as big a reason for why Axial has not been sort of acquisitive, with a couple of opportunities and ideas over the last few years is anything. I'd say the other thing is just, again, there's just been a lot of innovation in this category over the last call it five to 10 years, whether it's, you know, the sort of big gorillas like Pitch Book and stuff like that, that have gone on to build really big information businesses. You know, in the overall private market category, or other organizations that have had success at maybe lower levels of scale, just wasn't a lot of those businesses.
When Axial was growing up, you know, sort of between 2009 and 2015. The big names when we were growing up was like Capital IQ. And then Virtual Data Rooms, those were kind of like the two forms of like, software tech and data in the m&a category. And Capital IQ had very, very poor data on private markets. And therefore, they created a nice opening for PitchBook, which I think PitchBook did a brilliant job of executing on. And then the virtual data room companies have had a huge amount of sort of much more efficient, cloud oriented storage businesses come in and disrupt the bottom end of that market. So what used to be sort of a market that was shared by Merrill and Intralinks.
And was really highly priced and has now gotten much more chopped up and much more disrupted by Cloud Storage businesses that were built in the sort of cloud native portion of the internet's history. \And ShareFile was a really good business, I got bought by Citrix. Fermax, which is, I think, a Toronto business, actually, Steve is done a great job in the lower middle market. So those were kind of like the two categories. When axial was growing up today, there's just there's a more mature set of businesses that I think over the next five years could become great partners to Axial, we can be great partners to them. So I could see there being more acquisitions, just generally in this category over the next five years than over the last five years.
So final Axial specific question for you, before we get into like the state of lower middle market, M&A more broadly, I wonder if you've ever felt as if Axial has, in a way become a victim of its own success. And what I mean by that is, you know, with larger and larger numbers of buyers on Axial, a skeptical acquirer might think, hey, if any given deal is posted on Axial, chances are it's been picked over, it's been viewed by several hundreds of other comparable buyers. And as a result, it's likely to yield a process that won't produce a palatable entry multiple for me. So said another way, there's too many buyers on axial, it's too competitive, therefore, it's sure to be too expensive. To what extent has that actually manifested and how might you respond to that skeptical buyer?
Well, I think that I think it's, if I were a buyer, I certainly would be trying to understand the answer to this question and trying to figure out whether axial or any other sourcing channel is a good use of time. Because you know, because of that, what what I have seen in the data from our platform, which we obviously look at really carefully every week and look at it in different ways is. What ends up happening a lot of the time in the lower middle market is, even if a business entertains dialogue with a meaningful number of buyers at the top of the process, like at the top of the funnel, what we tend to see is just tremendous drop off rates, in terms of follow on engagement on a particular transaction.
So on Axial, a couple of things, you know, to remember the first is that the seller can decide how many people they want to invite in the process. So unlike this buy sell, which is a posting site Axial actually gives the seller control over how many people they want to invite in the process and gives them the ability to specifically choose them one by one. So if you wanted to invite Mineola search into a sale process on Axial, you can invite them into the dialogue, you know, on a named basis. And so that creates a range of outcomes on Axial, some are processes that are being run where they're speaking with a lot of buyers. And then there are other processes on Axial where the seller is incredibly skittish wants to run a very narrow process.
And you can see that out of like two or 300, potentially relevant buyers on Axial, they're only approaching like, you know, a dozen. So there's a range of processes, they get run on Axial, which is different from other platforms, certainly the sort of historical business for sale ones, I think the more important point is, and I think it's important for buyers to appreciate this, whether they're using a platform like Axial or not, is, at the end of the day, it ends up typically being a fairly small number of people who are very seriously interested in the businesses. It just, the process can go from like, 100, or 200 buyers that have been shared the opportunity, like in that kind of a setting on Axial, you would probably see somewhere in the neighborhood of like 10, to 20 buyers that might sign an NDA and read the SIM.
As I think you guys all know, like, a lot of times people read SIMs to like learn about a market and learn about an industry, they're not necessarily even that serious. So you already have drop off in genuine interest at that point. And then when you kind of get to the sort of LOI stage of these transactions, it's very, very, very likely that there may only be somewhere in the neighborhood of like two or three parties that are really going to be very seriously, you know, focused on trying to pursue the deal. And so I think that's not like a frothy auction environment, that's a pretty manageable environment for a buyer to be able to win in that context, that's a lot less efficient than, you know, what you see a market.
It just is. And in up market, you also don't, you don't have 90 days of due diligence. Under exclusivity, you don't even have exclusivity of market a lot of the time. So I think it's it's still in many ways, like a pretty attractive market for serious acquirers. But I do think you have to obviously have to figure out how you want to spend your time in the lower middle market as a buyer, but I don't think that whether it's on Axial, or whether it's a sell side bank, or just running a relatively broad process, I think buyers should remember that at the end of the day, you know, you can usually count on less than one hand the number of acquirers that are really really really excited about and really serious about the business.
And if you look at closing multiples on Axial, like the closing multiples on axial are not like, it's not like these businesses are trading, you know, for multiple turns of EBITDA north of where they would otherwise. Like we look at the businesses and we see the trading prices, we know the trading prices in every situation because our invoices are generated based upon them. And so we have access to the closing prices. And, you know, businesses are routinely trading for somewhere between three and six times EBITDA in the lower middle market. And those are businesses that had plenty of signed NDAs and plenty of shared SIMs. And so it just doesn't seem like it's creating a perversion in valuation, at least not yet.
I think it's a good transition point to discuss like the state of lower middle market M&A more broadly, we're recording this in October of 2023. We just finished talking about certain competitive dynamics. There are a lot of acquisition entrepreneurs who are worried today about the prospect of middle market private equity firms going down market and starting to look at smaller businesses than they otherwise would, particularly given the number of funds that were likely raised in the relatively heady days of, you know, late 2020 and 2021. So, I guess the question for you is, you know, what are your thoughts about this risk for acquisition entrepreneurs looking for smaller businesses, let's say sub four to $5 million of EBITDA? And to what extent does the data suggest that this is actually happening? Because I remember 11 years ago, when I raised my search fund, I had the same worry.
Yeah. Look, I'd say there's one thing that not at all be worried about, in my view, and then I think that there's one thing that is sort of worth being worried about. I'd say the thing that's worth being worried about, is really more, you know, sort of programmatic strategic M&A in the sub 4 million sub $3 million EBITDA category. Where private equity backed or otherwise, you know, aggressively growing, you know, inorganic platforms are capable of going down market building systematic M&A, and sourcing efforts and making acquisitions of businesses that might otherwise be acquired by an acquisition entrepreneur, I think that's a reasonable thing to be worried about. And not worried to the point where it's like, don't become an acquisition entrepreneur, it's a fool's game.
I don't think that's true. I just, I do think that if you read the reports, if you look at the data, you can see that like, there's just a lot of add on M&A activity that is driving private equity strategies, private equity returns are more driven by add on M&A success than they were when private equity itself was less competitive. Private equity, I think now feels like more rigor around needing to create value and generate IRR and returns by growing businesses with a lot of acquisitions, I think that it was a little bit more of a call option in the 1990s and the 2000s. And I think they would underwrite businesses in a less competitive private equity category with less AUM, they would underwrite them to make money on an organic story.
Now, I think in some cases, when they buy these platforms north of 10 million of EBITDA, in order for them to be the winning buyer, they have to underwrite them, and price them in such a way where if if, where they really need to execute good m&a In order to drive returns. And so I think that is a big source of sort of sub $5 million M&A activity that I think is competitive for, for acquisition entrepreneurs. I think the ability, that's the thing to worry about, the thing that I worry about, in my view is, is, you know, like private equity firms writ large, kind of like coming down market and purchasing businesses below three, 4 million of EBITDA. And the reason why I don't think that's worth worrying about, is because it's really, it's a difficult business model for them to execute.
It's an easier business model for acquisition entrepreneur, and an acquisition entrepreneurs, LPs and investors, it's a much better business model to drive returns for an acquisition entrepreneur down market than it is for private equity. Once you've raised the committed capital pool of fund, and you've got to spend a couple 100 million dollars really, really, really hard to justify spending a lot of time buying businesses with two or 3 million of EBITDA, it really is. It's just so hard to put all the capital to work. And as you know, Steve, and as everybody who has been an acquisition entrepreneur knows, takes a lot of time to get small deals done. One of the problems with small deals is they take more time to get done in many cases than big deals.
Because the businesses are so not ready for exit, there's so much work to be done before the checks can clear, and so that all those transaction costs actually create friction that just does not appeal to lower middle market, committed capital, private equity, it's just too much work for not enough return, they have too much capital under management to drive a return from that. So I think the thing to worry about is acquisitive, competent, well managed portfolio companies or platforms coming down into the market. And, you know, in some ways, maybe that's new, or more new or more significant than it was but it's not like they didn't exist in the 2010s they, you know, they were there then they're more sophisticated now, and there's more of them now.
But I think there's a way to win against them. I think there's a way for an acquisition entrepreneur to outmaneuver those buyers, at least in some sell side contexts, maybe if they're paying 50% more than you. It's hard for you to win but if you can be in the zone of value and create a compelling alternative for an owner who doesn't want to sell to a private equity backed portfolio company and lose the full identity of their firm and a lot of control. I think you can win those. So I think there's some good news and some bad news.
Throughout the course of this conversation, we've been talking about the microcap market, the lower middle market, whatever you want to call it. We've been talking about the beauty of its inefficiency, right. inefficiency creates challenges. But as as you know, certainly my career has been predicated on the idea that inefficiency creates opportunity. Now, Axial has certainly been making a dent in this universe over the past decade or so making the market more efficient. But if you kind of take off your Axial cap, and just put on your market observer cap, is the lower middle market as inefficient as it was, let's say two years ago, or five years ago, even 10 years ago, and why or why not?
Well, the way that I've answered this question in the past is the way that I think I'll answer it this time, which is to say that I think the lower middle market is more crowded today than it was 10 years ago. What I mean by that is, if you just looked at the number of active entities that are attempting to acquire businesses in the lower middle market, and, you know, sub 10 million sub 5 million of EBITDA, I think no matter where you cut the line, Steve, I think you would probably see that like, just the number of entities that are pursuing transactions here. That number is growing, right, and it has grown. And so the crowdedness of the market, I think, is higher. There are many, many people that have left behind big tech, and sort of big city living to explore holding company versions of SMB M&A, acquisition, entrepreneurship, eta search funds, it's just there's a lot of it.
And there's a lot that's been the numbers of people that come out of Stanford and Harvard, and go into search fund categories today versus when I was there is totally different. There were like three or four of us who did a search fund out of Stanford in 2008. And today, it's like double digits, guaranteed every year. So I do think there's more people in it. I don't know whether that makes it more ultimately more efficient or not. It just doesn't, I think it definitely is more crowded. And I think that that has created some really significant challenges for the brokerage community. It's just the business brokers and M&A advisors that there's just so many people reaching out to them. So much by side outreach. Hey, this is who we are, these are the kinds of deals we're looking for. Do you have 30 minutes for a call?
Do you do you have 30 minutes, have us stop by your office, when we're in town, there's just so much of that. And so I think that that kind of creates a bit of overwhelm for a lot of the M&A advisors. I think there's also a lot of direct sourcing. And there's a huge explosion of like the use of tech stacks, whether it's HubSpot or Outreach, or, obviously Grada has built an interesting product that's getting a lot of use from acquisition entrepreneurs. And so that creates a lot of direct sourcing volume. And so then you have business owners that are receiving just so much outbound email. And I think they don't really know how to make heads or tails of it either. And so I do think that it's more crowded, there's more outbound email activity, there's more sort of blasting and email techniques.
And I think that creates, I think that creates an a more intense set of challenges for the sell side broker and M&A advisors to sort of parse their way through that. And I think it also ultimately creates, you know, more complexity for business owners to sort of navigate all those different buyers and buyer types, it's not like sell to a private equity firm or sell to your, you know, strategic buyer that's active in your market. I think now, there's just a lot more options on the table. And I think that that, in some ways is obviously a great thing, right? It's a good thing for business owners who want to exit to have more choice. But I do think, I do think it creates confusion. And I think that you know, it's making the process a little bit more complicated.
So I'm not sure it's more efficient is I think, the long answer. I think it's more crowded and I think there's a lot more that you have to parse through as a seller to figure out what you want to do. But I'm not sure that it ends up being more efficient. I think in some ways it ends up being a bit more chaotic and maybe as inefficient as ever. So it's hard, it's hard to know exactly sort of how the market is going to take shape with all of this technology and all of this outbound and all of this growth in sort of new alternative buyer types.
As a prospective purchaser appealing to a business owner is one thing, but appealing to a broker is a different thing entirely. I mean, if it with respect to the former, again, to your point, as long as you're close enough on valuation, you could offer different structures, you could appeal to non financial more emotional type interests. But brokers, you know, the risk of painting with a broad brush don't necessarily care about those types of things. So for prospective purchasers listening to this, who are trying to get on the radars of these brokers, who to your point are increasingly overwhelmed.
Is there a one or two things you recommend they do to stand out among this very crowded universal buyers, and particularly buyers that kind of look and feel like the other buyers that are bombarding this poor broker? Like, I don't know if there's like a silver bullet or a panacea, but are there any, like best practices or ways of thinking about crafting the pitch that will help any randomly selected buyer stand out or be memorable to these overwhelmed brokers?
Well, usually what happens when markets get more crowded is differentiation emerges. I mean, for a very long time, private equity was like, by definition, generalist private equity firms were opportunistic pools of capital raised to find privately held businesses and buy them for X and sell them for 3X. Right. And there was not a lot of industry specialization or otherwise, I think as the category has grown, whether it's private equity, or whether it's acquisition entrepreneurship, and I think what ends up happening is, the brokers ultimately need some heuristics by which to remember you. Some rule of thumb, right some some way to like, you're like, well, if I have an insurance brokerage, I call Steve and because like, he's got a firm that's 100%, focused on, you know, buying insurance and HR brokerages, or something like that.
So you've definitely seen private equity respond to the differentiation imperative over the last five years. Without a doubt, like way more sector specific, private equity, funds have gotten started, if they're generalist, they typically divide the firm up into like, something less than generalists. And they pick like two or three industries, they'll be like, we do transportation logistics, we do industrial machinery, you know, they'll like pick a couple of categories, and they'll try and drive more of a specialized narrative into those markets. I do think that that's reasonable, and probably a reasonable approach for acquisition entrepreneurs. I think it's really hard as an acquisition entrepreneur to just like, figure out where to spend your time sourcing, if you don't have any angle. It's just really hard, it's very hard for you to know where to spend your time.
Again, you're gonna have a whole bunch of brokers saying, you know, you and the next guy getting like phone call after phone call email after email. So I do think specialization for acquisition entrepreneurs makes sense. Obviously, the narrower you get, the more afraid you are that like you're not going to have a successful search because you're too narrow. I think it's more likely that the opposite is gonna happen. So I would certainly advise specialization, it doesn't have to be in an industry. It could be a geography. It could be that like you're focused on making a ton of acquisitions, right? Like we've got a client at Axial, who's 100%, dedicated to rolling up veterinary clinics and doing it in a way that he thinks is more interesting and more humane than sort of the historical private equity consolidators, that's really easy, right?
Whenever he's out in the market, talking with the sell side, whether it's with a veterinary practitioner, or whether it's with a broker, he's the vet guy, he's the vet clinic guy. Anytime somebody is touching a business that has to do with dogs or cats, he's probably going to get a phone call, right and get an email. So I think finding memorable heuristics that are relatively specific, either to a transaction type or something like that, you could be a divestiture, guy. All you do is divestitures. All you do is carve outs, all you do is turnarounds. I think there's a number of ways to sort of become specialized. It doesn't have to be industry specific, but I think that really helps. The other thing that I've seen brokers and they're requesting this more and more and more from us at Axial is to get the buy side to upload some form of demonstration that they have capital availability to close a transaction.
And we'll be developing some of these tools on Axial in the next 12 months that allow buyers to upload, essentially proof of, you know, various listen to demonstrate that they have some amount of backing, it doesn't mean that you have to have committed capital through a legal LP vehicle, but a pledge letter, you know, from a family office that's backing you, or if you're a searcher and you've got a couple of people who you've raised some search capital for, you know, an ability to sort of showcase and demonstrate that. So just things that make it easy for the the sell side to sort of get a sense for sooner rather than later who is already done some of the work to be in a position to close, but I think the first one is probably more important.
Yeah, yeah, I love the point around specificity. I'm thinking back to 2012 when I started my own search, and of course, I had absolutely no idea what I was doing at the time. And I think this actually might have been my very first broker meeting. And I still remember who it was with, I still remember the conference room I was sitting at, of course, because I was scared shitless at the time. But I remember him asking me in some way or another, like, what type of business are you looking to buy? And my answer was in retrospect, hilarious, I think I said something to the effect of, well, you know, I'm looking to buy a recurring revenue business that is asset light, in a growing market with tailwinds with a long history of profitability anywhere in Canada.
And this poor guy, he was very nice, he kind of smiled at me in the way that like, you know, a kind parent might smile at their kid, and said, oh, so you're looking for the perfect business, and you're looking for the same business that every buyer on Earth is looking for. And I think he worded it in a more diplomatic way than that. But what I took from that very early experience is that you have to be memorable, you have to be specific. And to your point, you know, it might not be as specific as Oh, that's the vet clinic person. But there's got to be some reason why the broker specifically thinks of you, as opposed to the 500 other buyers that kind of look and feel like you in their database.
Yeah, we have another client who loves to pursue high customer concentration businesses, he feels really competent at at bringing down that risk. And he feels really good at underwriting and assessing that risk. And so he looks for those businesses, because he knows that the great majority of buyers are going to turn around and probably run or at least deprioritize. That deal. Right? So again, you can do this in a variety of ways. It doesn't have to be industry, you know, he's really focused on industries where there is really high levels of customer concentration, which that tends to be government services, government contracting, utility service businesses. So there's a number of ways to do that. I also think that this recurring revenue thing is, I mean, obviously, it's a great thing to have recurring revenue.
But, you know, sometimes the opportunity is not to buy a business that has recurring revenue, the real opportunity is to take a business that can have it and create it and convert it. I mean, I was looking at your business, Steve, that you bought, and I think, at least you mentioned in your profile, like the business had, like 40% of its P&L was recurring when you bought the business, and when you exited, like 80% of the business's P&L was recurring. So I think a lot of times people probably should be spending a little bit less time thinking about, does this business have recurring revenue and should be spending more time thinking about, okay, can I make this business recurring? You know, because, again, those are businesses that to your point earlier, you know, those businesses tend to trade at lower multiples.
So if you can buy businesses that have not built good recurring revenue capabilities around them, but that credibly could move in that direction. And maybe that's like one of the biggest ways that you create a huge amount of value for yourself as an acquisition entrepreneur and for whatever investors go along in the ride for you. And there's a lot of businesses like that, right. I mean, I've seen a lot of IT services businesses, that were one time in revenue, and I've seen a lot of entrepreneurs convert them into highly recurring. There's a lot of and it's not just like IT services. You see it happen in landscaping, you see it happening in home services. So yeah, I think trying to go against the grain on some of this stuff without shooting yourself in the foot in the process is obviously some of the art that's still left in the whole process.
But I do think that if you're the enth acquisition entrepreneur looking for an asset light business with high recurring revenue that's highly resistant to recessions? Yeah, you're gonna get a lot of those sort of crooked smiles from brokers, because, you know, it's, it's going to be competitive for you.
Yeah, yeah. I can only imagine the conversation that that broker had with his colleagues after he left the meeting room with me, but that's a discussion for another day. Okay, so we are at the top of the hour, I want to conclude with, I guess I can call this a bit more of a personal question. But this one was one that I wrote down early, if for no other reason than to satisfy my own personal curiosity. So you are someone who has been exposed to a countless number of transactions across a countless number of industries and business models and buyers. So you've seen it all in a way. So in a hypothetical world, if you were not allowed to run Axial market, and you were not allowed to buy Axial market or anything like it, and you had to buy a single business and put all of your professional eggs into that single basket? What type of business or into what type of industry would you personally want to buy? And why?
So, since you were kind enough to give me the questions that in advance, I hope it's okay, if I answer this in a little bit, because I thought about this, I hope I answered this, you know, concretely and specifically as opposed to, to hypothetically. And it's pretty interesting and funny, because it does come a little bit back full circle to this private equity internship that I had, in grad school, they were experts that buying testing and measurement businesses, in regulated industries. And this is a not particularly well understood category of business, they often get referred to as test measurement businesses by those who know them, but it's not like some category of the S&P 500, or, you know, some NAICS code.
I won't name the business, but I have a friend who actually just bought this business about a year ago, and it's a perfect example of a testing and measurement business, that is a combination of hardware, software and data. And the demand for the product is designed in from a regulatory perspective, by a variety of federal agencies. They provide noxious gas monitoring instruments, in cold storage facilities, and in like E commerce warehouses and fulfillment centers. And it's an instrument that gets installed and they have to install certain number of instruments, it's driven off of square footage, and it's an instrument that is persistently measuring, you know, dangerous gas levels in the facilities.
It has to be on, it is required to, it has to work, and it has to be on and it gets serviced from a regulatory perspective, on a recurring basis, multiple times a year. It has a natural hardware life that needs to be replaced. And there's an accumulating data set on the performance of different facilities and various achievements and whether or not you're at code or below code or in violation of code. And there's benchmarking data related to you know, other facilities, and there are federal agencies that require these things be installed at any place that's that's doing business with, you know, with these gases in them. Usually, these tests and measurement businesses tend to be really, really incredibly sticky, highly protected, lot of intellectual property.
The problem with them is that they tend to be a lot of times in lower growth categories. What's really interesting about this business in particular is that it you know, it has access to sort of the whole e commerce and cold storage expansion. And so in addition to being a business that has like, you know, very steady 25, 30% EBITDA margins, it has the ability to sort of grow as sort of ecommerce and cold storage rates expand in the United States. So it's an amazing business. Obviously, there's lots of great businesses out there. This is, you know, one version of a business that I'd be pretty comfortable sort of putting my capital on the business and throwing away the key for decades and just trying to have great managers run the business.
But highly protected from a regulatory perspective, software and hardware and data sort of all working to create pretty cool Moats. And there are some really interesting businesses that are like this that exists in a lot of end markets, a lot of different categories, you find them in aerospace defense, you find them in petrochemicals, you find them in health care, pharmaceutical manufacturing. So really cool businesses usually would like great founder engineers who started them and worth paying up for.
So those CEOs, running testing and measurement businesses and regulators, prepare to have your inbox totally lit up within the next week or so. You know, what's so funny? I'm often asked, do I have an industry preference as an investor and one of the reasons why I say no is is based upon the reality that most of the businesses that I invest in operate in industries that I had never even heard of prior to reading the SIM. I mean, there's such a staggering number of businesses operating such a staggering number of industries that you and I have still never heard of. And one of the coolest businesses that I heard of, I was telling my wife about it, somewhere recently, is very similar to what you just said. So I think it was a bit subscale, otherwise, I would have been all over it. But it was in the Sci Fi, seafood distribution business.
So basically, as crazy as the sounds, when you transport lobsters from the boat to the dock to the seafood wholesaler, or restaurant, there are very specific requirements for transportation, there can only be so many lobsters in a given cooler, it has to be stored at a very specific temperature. Otherwise, the lobster spoils. It can only sit in a given cooler for so long. And so what this company does is it combined hardwares little sensors that you could put on coolers and software, which gave buyers analytics about freshness, the extent to which it was transported safely and effectively. And it had a mix of hardware and software revenue, it was a small fraction of the total operating budget. But if this thing stopped working, you didn't know if you were serving your customers spoiled lobster or not. So anyways, it struck me. I don't know if that specifically fits the testing and measurement business in a regulated industry. But that struck me as.
That is absolutely tested measurement. And that's what I mean, it shows up in lots of markets. And it's hard sometimes from the outside in to realize that these, you know, that these scenarios exist. You know, like, I'd never heard of that one. And I spent a year trying to create a market map of testing and measurements when I was working for this firm. And I never came across the end market of you know, of seafood freshness. And that's what's so interesting about it, I think when when there are these regulatory requirements also built around it, that can be a really, really powerful mode for the business. For example, when you are a pharmaceutical manufacture, and you manufacture drugs, like Crestor, or Lipitor, or Ambien or any of these things, right, the you have to test those pills for dosage accuracy.
If a doctor prescribes a 10 milligram pill, with a certain amount of active molecule, it has to be perfect. You can't accidentally have you know, 10, 20, 30% variance in the active ingredient. And so they, you know, these companies, these pharmaceutical companies have tremendous margins, they have incredible intellectual property around their product portfolio. And to purchase the testing and the testing hardware, the testing software, the tracking the ability to record the logs, share the logs with auditors, share the logs easily with the FDA. I mean, it's a completely non discretionary expense. They have to spend it, they're not going to mess with the process unless it's not working well. So there's very low incentive for them to switch out. And that just creates these fascinating little protected businesses and lots and lots and lots of end markets.
Yeah, yeah. I mean, the coolest part about what we do, or at least one of the coolest parts is that I mean, you and I are gonna retire. Still not having scratched the surface of the number of businesses operating in a number of industries that are out there. Which makes it one of the most intellectually interesting parts of being in this market. I guess the other side of that coin is that, that is also makes it harder for any given buyer to be very specific with a broker about what industry they're looking for. Because if you say, I want to buy an IT service provider, a security alarm alarm monitoring company, or a vertical software business, I mean, you know, that's a fraction of a fraction of a fraction of the addressable market that you could be targeting as a buyer, but you're, you know, you don't know what you don't know. So you can't say I'm the seafood distribution, freshness guy. So there's a bit of a push and pull there, in my experience.
I agree, I think you can get to close to the sun, and then you know, you're just, you're like, a specialist to the level that you're just not getting enough return for all that specialization. I think one of the things to obviously look at is just what's the level of fragmentation in the category. So for example, to be a test and measurement specialist, in pharmaceutical manufacturing, that's really, really, really specific, but to be focused on test and measurement businesses across the broadly defined sort of set of end markets or, you know, broadly defined manufacturing, it's really different. For you to be exclusively focused on vertical software you know, in construction. That's really, really specific. And there's a finite number of names there, and they're only going to trade so frequently.
But if you're a specialist in Mainstreet Insurance Brokerage that you know, that sells a set of high frequency lines of insurance, you can get very specific there, and you still have a large TAM, right, because there, there are literally 10s of 1000s of insurance brokerages. And so I think a lot of it, I think how you ultimately end up figuring out and settling on altitude is, you know, should be dynamic, and you should allow yourself to make changes there. But I do think that one of the inputs to settling at a good altitude is just what's the total unit count of acquirable entities in this sort of rough end category that you're targeting. If you can count them in the double digits, it's just probably too small.
You know, particularly if you're just getting started as an acquisition entrepreneur, if you maybe had a huge amount of momentum in that category and multiple prior exits, or you are an established investor in it, maybe you can get more specific and you can have enough activity. But I think you need to be looking at at least double digit unit size, you know, probably more four digit. And markets in terms of entities that you can, you know, theoretically pursue. Otherwise, it's just too tight of a market, it doesn't trade frequently enough.
Well, Peter, this has been a lot of fun. Like I said, I was a customer of yours dating back to 2012. So this is a really cool, full circle moment for me. I could probably do it all day, but. But for folks who are looking to learn more about Axial market, whether yourself or the company, where should they go to do so?
They can go to axial.com, it's axial.com You can sign up and get started for free there. Again, businesses performance based now if you're an acquirer, and for those who are thinking about selling a business, we provide all of our services and tools for free. If you're interested in picking up the phone and connecting with me, you can reach me through LinkedIn or just drop me an email at at firstname.lastname@example.org. I spend a lot of time talking with I mean, I love to talk to the market, love spending this time with you, Steve and I love spending time with you know, all the portions of the ecosystem. So happy to connect with anybody who's interested in talking more.