Speaker 1
Hi, so I’ve got a question. How would you get a fee or retainer from a company or what’s the best way to charge a fee or retainer? This is a quite contentious issue for me, actually, because I have always thought the thing that differentiates us from all of the normal advisors and business turnaround people and the kind of snakes in the grass that are out there preying on poor insolvent companies is the fact that we, basically, put our money where our mouth is. So we take equity. We get a much bigger upside potential, but we take the risk alongside our partners.
Speaker 1
So as soon as you start to take a fee, I think you kind of fall into the same category of these kind of needy people. And I always used to kind of say, when our competitor in a deal with somebody that was looking to take fees, I always used to say, “Well, if they need to take a fee to pay the mortgage, they’re probably not very good at business turnarounds, are they?” And it would differentiate you immediately from any of the usual kind of suspects that were in that.
Speaker 1
Yeah, generally, all the money is in equity. You get these capital events from the sale of the equity. Now, I’m not saying that it’s impossible to negotiate a fee. In equity, lots of people do it every day. I just choose not to. Of course, also remember that typically, particularly in the insolvent space, you tend to be getting involved in businesses that are pretty desperate and pretty much struggling. So any cash that you take out is just cash that’s being immediately taken away from fixing the business and trying to solve the problems of the business.
Speaker 1
If you’re looking to replace your income, because I understand that people need money to live, if you’re looking to replace your income using that [buybo 00:01:46] strategy, I discuss on the course, is a much more efficient way to do it.
Speaker 1
In fact, there is another question that somebody asked about buybo. So I’ll probably do a video covering the buybo structure again in a bit more detail. But basically, you’re taking a stake in a business and you’re selling it back to them using that loan company model so that you get that repeating income on a month, on month basis. That’s a much more powerful way of generating a predictable income without having to work for that income. So it’s a a bit more passive than a retainer would be. And yeah, I think that’s a much better way of getting income replacement, if that’s the kind of nature of the question.
Speaker 1
So I hope you found that helpful.
