In this episode of Diners and Deals, Seth Deutsch is joined by Howard Scott Silverman, founder of Agman, for a conversation that blends intellect, humility, and bold strategy. Scott isn’t your typical investor—he’s what he calls an “investrepreneur”: someone who doesn’t just invest in companies but helps start them from scratch, rolling up his sleeves alongside founders to create lasting value.
With a background in science, consulting, and investing, Scott brings a deeply thoughtful, elegant approach to capital deployment and company building. Under his leadership, Agman has built platforms in real estate, restaurants, insurance, and more—always with an eye on strategic simplicity and long-term partnerships.
From launching a 500-unit restaurant operation to building an insurance carrier from the ground up, Scott shares not just the business models but the mental frameworks and emotional intelligence that drive his success. His story is one of balance—between investor and founder, work and family, strategy and soul.
What You’ll Learn in This Episode:
✅ Why long-term capital and early-stage partnership is Agman’s secret weapon
✅ The origin and mindset behind being an “investrepreneur”
✅ The importance of elegance in strategy—how simplifying complexity creates clarity
✅ Lessons on building resilient teams, managing stress, and maintaining balance
✅ Why finance and accounting are make-or-break in scaling businesses
Scott’s approach is rare: intellectually rigorous yet human-centered, grounded in relationships and long-term thinking. Whether you’re building a company, investing in one, or still dreaming about your next move, this episode will leave you inspired to build with greater intention.
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Episode Transcript
Seth: Scott Silverman. What’s up man? Hey, good to see you Seth. Thanks for being here. Um, welcome to the Diners and Deals podcast, and obviously we are not in the best diner in the world, s and g Diner, 3000 North Lincoln Avenue. I feel like this is false advertising here. It just a little bit, but we like the names so much that we just, we’re sticking with it, so I got a free LaCroix.
There you go. There you go. And like, maybe one day if other sponsors for some reason. Taken interest in this. It’s a budget issue here. It’s a budget issue. Okay. Because we were, I was, my, one of my favorite TV shows is Comedians in Cars Getting Coffee, which a good show with Jerry, which it’s a great show.
And so that’s kind of the vibe that I wanted to, to do here is like just meeting with my friends who do the stuff that we do and just kind of talk shop is if we’re sitting in the diner. But my equipment is not quite yet good enough to block, to block out all the background noise. So we tried it a few times there and we moved to the vocal studios.
Okay. Well here we are then. Here, here we are. So, man, how, when did we meet? It’s, it’s, is it 10 years?
Scott Silverman: Is it eight years? We met at the Art Institute, um, at the, uh, the new wing of the Art Institute. That’s right. Yeah. That’s right. That’s right. I was, um, a giant standing in the corner and I, uh, we were both sort of trying to get away from the mainstream of things Yes.
And removed ourselves and found each other sitting next to the wall. Yeah. Yes. Yeah.
Seth: That’s, I I am not good at. I, I don’t like crowds and I’m certainly not good at networking when there are a whole bunch of people, I don’t know, I don’t know how to begin. I’m awkward at serving those conversations. I’m fine one-on-one, but in that environment, I’m still, to this day incredibly uncomfortable.
Yes.
Scott Silverman: A successful networking event for me usually means that I found a corner where another guy is standing and then I build a relationship on that. So, uh, an end of one return is good for me.
Seth: Yeah. Agreed. Agreed. And it’s been a great friendship and thank you so much for doing this. So I’m gonna start off with a question on your LinkedIn profile.
You are an entrepreneur, what is that?
Scott Silverman: Yeah, uh, so I, I coined the word, um, because I didn’t see a good way of describing what it is that we got up to, uh, at Agman and what I, what I got energy from. And I, you know, I’ve always thought the word might catch on, but it, it has absolutely never resonated with anyone else.
But occasionally people do ask about it, so, yeah. Well, we’re here at vocals,
Seth: so if we need help rebranding it or like, you know, getting a campaign around it, we can talk to read afterwards. Not a lot of economic upside to that,
Scott Silverman: but, um. Yeah. So, uh, you know, I’m an investor and I’m an entrepreneur. Yeah. Uh, probably an investor first, but, uh, the nature of what we like to do and how we partner with entrepreneurs is unique.
Hmm. Uh, particularly for the type of capital that we represent. So, uh, we often, or typically like to be involved with the companies from inception. Yeah. Um, sometimes in, in areas that are more scaled or more traditional, uh, not necessarily high tech areas where a blank piece of paper is really about innovation.
Um, and we partner with those entrepreneurs and we bring our capital to the table and like to build companies based on that. So let’s, let’s
Seth: talk about that for a bit, and then we’re gonna back way up and talk about your origin story and, and how all of this came to be. So tell me about two or three of the portfolio companies within Agman.
Um, what the idea started with, how you found the entrepreneur, what excited you about the thesis, where the companies are now? Just give us some examples of how that manifests in. Yeah. In real examples.
Scott Silverman: Okay. Uh, first one I’ll talk about is, uh, ampler. Uh, so Ampler is a restaurant business that we started in 2016.
Today has about 500 units under our management. That includes, um, I think we’re the largest franchisee of Taco Bell, excuse me, largest franchisee of Taco Bell in Illinois. Largest franchisee of Burger King in the country. Largest franchisee of churches, chicken in the country. And second largest in the country for, uh, little Caesars.
Amazing. So it’s a, a scaled operation. Um, has a fifth business, which is the real estate development business associated with that. Um, but that was a business that, uh, you know, sort of stepped back 30,000 feet. We were approached by an entrepreneur who wanted to start, uh, a business in this space. Uh, he wanted to acquire a bunch of units on the east coast of the United States, and we spent a bunch of time trying to engage with him.
And the nature of what he wanted to do was have us involved for a few years and then buy us out and flip us out. And that’s not our business model. We wanted to build something scaled. And into perpetuity in many cases. And, and, and, and oftentimes for, for longer duration, not necessarily perpetuity, but but a super longer duration, not, not a typical private equity hold.
And, uh, so we couldn’t come to terms with him with anything that made sense, but we were excited enough about the space that we wanted to go figure out how we could become thoughtfulness the space and build a company on our own.
Seth: Hmm.
Scott Silverman: Uh, so at that moment, we just started networking across the industry in the franchise food space.
Uh, going to conferences, meeting with banks, meeting with brokers, trying to identify an entrepreneur we could partner with. And we were lucky enough to find a guy, and I’m happy to get into details of who we, who we partnered with, but we built an entire business, uh, that, you know, represents today, um, behind a single guy and his, his Rolodex, and then a bunch of capital.
Seth: That’s amazing.
Scott Silverman: Let’s, uh, give us another example. So, uh, another company that, uh, we’ve been involved with, um, since, uh, inception or close to inception, it’s actually an interesting origin story would be, uh, Vertus, which is an insurance PNC brokerage business that we’re involved with. And I think the business is around a couple million dollars in scale when we got involved.
And that was, I. Also in the mid, uh, you know, approximately a decade ago. Uh, today the business is about a $30 million revenue business. So it’s grown quite dramatically and almost all of that organically, and the team’s fantastic.
Seth: I’ve had a chance to meet with them. They, they do some work for a number of my portfolio companies that can’t speak highly enough.
Scott Silverman: Thank you. That’s great to hear. And yeah, we, we, we have high ambitions for the business and it’s already, uh, matured a great bit. That was a, uh, a, a bit of more of an odd circumstance, but we have a large real estate practice and, um, we used to think of ourselves as pretty sophisticated in, in all aspects of real estate, including insurance, which is a core part of, uh, how one creates value in a real estate business or preserves value in a real estate business.
And, uh, we got cold call by a team, Andrew Gray, the CEO of that business. And he pitched us on providing support as a broker. And we said, um, sure, why don’t you guys give us an assessment? And they came back and, you know, embarrassingly they found $800,000 in savings across our real estate portfolio.
That’s just pure profit for us. And, uh, so our response was, sure, we’ll take those savings. We’re happy to give you the business. Um. But in exchange for moving our business over you, we’ll, we’ll take, take our contribution and equity mm-hmm. Uh, from moving the business. And, um, then we have, you know, two stipulations.
One is that we’re gonna go build a really big business together, and two is you’re never allowed to accept a deal like this again from any other, from any other investor. Uh, but it was a great sort of hit the right circumstances, right moment. And as, as I mentioned, we’ve obviously scaled that business a great bit since then.
Yeah, it’s fantastic. And
Seth: I’ve had a chance to meet a number of your, uh, your founders and your, your eye for talent, the people that you bet on and invest with and develop, or a pretty amazing bunch. So, we’ll, we’ll get into all that more. I want to get into the psychographic profile of the people that you like to bet on in addition to the industries.
But let’s back way, way up and talk about where you come from.
Scott Silverman: Where you, where you grew up? I’m a, I’m a native of the city we’re sitting in right now, so native of Chicago, born and raised, uh, just a few miles north of here. Yeah, 4,200 North by the lake.
Seth: And what was, uh, what was growing up? Like, what were your influences?
What were the things you were interested in? Did you think about going into business as you were growing up? Or was there, were there different paths you were thinking about pursuing?
Scott Silverman: Yeah, different paths would be an understatement. I think. I, I know where you’re going there. Um, so yeah, my, you know, I grew up, uh, a couple different ways.
One, I grew up, uh, pretty sheltered in going to a private school in downtown Chicago. Went to the Latin school for 14 years, so that wasn’t exactly a, a broad survey of the, of the universe and. You know, we knew about things on the south side of Chicago, but we never went there. Yeah. Um, and, um, you know, I think as a, as a kid growing up, in those circumstances, most of your role models are people from pretty traditional backgrounds.
So I, I was very interested in science and my idea of what it meant to be interested in science was that you became a medical doctor or a surgeon. And so I was very oriented towards medicine, uh, from a very young age and had very few examples of, uh, you know, mentors who did otherwise. Hmm. From an intellectual perspective, outside of the sort of traditional academic teachers and professors over the years and as mentors, uh, I did have the benefit of coming from a family that was very, uh, investment oriented.
Mm-hmm. So, you know, officially I’m a fourth generation investor. My great-grandfather was an investor, my grandfather was an investor, my father was an investor. Different types of investing over time. Some of them were related than others, but I did always have. People in my life who were very investment oriented and, and constantly reminding me about the values of what it meant to be an investor.
I’d say the other, you know, piece of, uh, benefit that I had was that my, uh, my family’s originally from Omaha, Nebraska. Mm-hmm. And having Warren Buffett as a mentor indirectly, obviously was always something that, uh, I considered a unique opportunity or a unique privilege. Yeah. And really benefited from studying, studying what he was up to is up to.
And, you know, reading Berkshire Hathaway materials and all the various other reports you can read about, of course, Berkshire over the years.
Seth: So let’s, let’s scratch into that for a second. You talk about the values of being an investor. What, what, what, what is part of that in terms of your DNA? What does that mean to you?
Scott Silverman: So, you know, as. I guess there’s a couple of different ways to think about that. One is how we partner with entrepreneurs, and I guess the other is how we’ve built our firm. So, um, you know, in terms of how, uh, we’ve built our firm, uh, over time, you know, we started admin was basically, which is the investment firm that I run, started basically just as a fund to funds.
We were investing in managers that we, we thought were talented managers who had, uh, sometimes more generalist approaches, sometimes more idiosyncratic approaches. Um, and we were excited about what they represented. Over, over time, we, we became much more of a direct investment firm, um, and the way that we interact with our entrepreneurs, uh, partner with them to build companies, durable businesses in, uh, typically less innovation oriented areas and more strategic areas.
As I mentioned. Um, all of that I think, was very much born from the history that our family has as investors, particularly on the real estate side. And, um, I think inspired by the way, Berkshire Hathaway structured its relationships to, its its investors
Seth: or its to its companies and that, and that’s a big leap going from investing in fund managers to direct investing.
And so I’m curious to know what gave you the courage and conviction to do that, and then how you had to change the firm to be able to do that. We’ll come back to that in a second. So, ladin school science and medicine, where did you do your undergrad? What did you study?
Scott Silverman: So, I have an undergraduate degree in biochemistry and molecular biology from Dartmouth College.
Mm-hmm. And I did an honors thesis there. Um. And I’ll jump to the next question, which is where did I do my graduate study? So,
Seth: and I have to, I
Scott Silverman: have
Seth: to pay homage really quickly to my, uh, to my nephew and my intern, drew, who is in his freshman year, um, at Dartmouth. And I’m excited to see him over Thanksgiving and get him back interning, um, you know, over the, uh, over the winter break.
Keep going.
Scott Silverman: Oh, that’s great. So, uh, undergraduate thesis at Dartmouth was more substantial than what one would prepare for, uh, a master’s thesis at Oxford, uh, university in the uk. And I was fortunate enough to win a scholarship to go study originally philosophy, which I would’ve been very poorly suited for.
Uh, and I was walking around with my undergraduate thesis and they’re like, well, you could just go straight into a PhD program with that. And so I pivoted rapidly into a PhD program. So my. My graduate degree is officially called the dfi, but it’s the equivalent of a PhD in England or at Oxford. And it’s in, uh, the title is, uh, clinical Pediatric Molecular Genetics, which is basically, I was at a teach, I was at a teaching hospital.
Yeah. The Rad John Radcliffe Hospital, uh, studying in the pediatric department, molecular genetics. Fascinating. And so
Seth: that program ends, there’s a little horn for us. And what did you do? What was the first thing you did? What was your first job coming out of, uh, that graduate program?
Scott Silverman: Yeah. It, it wasn’t too long into the graduate program that I realized that I was not cut out for a career in, in science.
Um, and so, uh, there’s a pretty consistent path where, where, where people have the opportunity to interview with some of the top consulting firms. So I, I interviewed with a couple of the firms that everyone would know and I had the opportunity to go work for BCG. So I. Wound up making my way back to the States and New York and worked for BCG and the strategy group focused on technology and life science companies.
So if you, if you think about,
Seth: and, and this is not, um, atypical, um, where we see STEM students that then pivot into consulting. We see STEM students that then pivot into accounting. What is it about though you have, you have your upbringing in investing and the family legacy of investing and then you go down this particular educational path.
What are the things from that educational path though, that are completely unrelated to business that became ingrained in you, that you carry forward with either how you think, how you work today?
Scott Silverman: Yeah. I would give a lot of credit to BCG for having trained me to, to think. Properly, uh, and strategically, so I, I, I feel like, um, I very much came of age intellectually at BCG, and part of it was, you know, when you’re a student, you have your head down and you got some tasks in front of you, and you can work very diligently to those tasks.
Whether or not those are the best tasks for optimizing your career or your happiness or any other dimension is, uh, is a different question. But I, I was very task oriented as a student and very good at managing towards tasks. Um, in terms of, uh, you know, learnings. You know, I’d say that between undergraduate and graduate school, one of the concepts that really has stayed with me was this notion of an elegant solution.
Mm-hmm. Um, so, you know, I think, you know, the average person would look at science and think it’s all just very esoteric and difficult to understand and, and that’s, that’s true. But when you get into it and you start to become really knowledgeable about it, you can see that there’s lots of different types of science and there’s different quality of scientists.
Yep. And the types of questions they ask or the types of. Uh, answers that they can come to with their papers or otherwise can be very elegant or not. Uh, and how you ask that question, uh, scientifically really matters. And how you express yourself scientifically can really matter. So. Uh, elegance is, is a core part of how I’ve thought about our businesses and, um, simplifying down complicated situations to be able to think about them in a more elegant way.
I, I think that’s
Seth: a great point, and I think that, um, I spend a lot of time. Working on that and doing that, especially in a number of the businesses that I’m involved in. One, one in particular right now. It’s the really, the first time that outside investment has come into this industry. And so we find ourselves spending a lot of time educating people on what is private investment, what is private equity?
How does this work? How is value created? Um, when they look at it on paper, there’s quite a bit of disbelief that you can create those types of returns in, in the private market. And so we have to make things very elegant. I like that word. I used to just use the word simple, but I really like the word. You can borrow.
Elegant. Yeah. There. No thank you. There’s, there’s no fee on that. I’m gonna borrow, I’m gonna borrow that one from you. So, so, so, B, c, G. Now also remind me along the way, when did you meet your wife?
Scott Silverman: Well, that’s actually gonna rewind a lot further than that. Okay. So we, we, let’s go back to that too. We, we, uh, we, we officially met, we, we didn’t get married, but we met when we were 13 years old.
Wow. So we’ve been, we’ve been together for, uh, 21 years as a married couple. But we, we met at a birthday party in eighth grade. Uh, she went to a rival school in Chicago that had, uh, had no boys left at the school. So they were importing boy, boys to birthday parties. And so they, they imported me to a birthday party and, and we can recall sort of the, the moment we, we met at the party and then, you know, fast forward a few years later, we reconnected at a reunion for the schools.
Seth: That’s amazing. We’re in our twenties. That’s, that’s amazing. So you’re, you’re, you’re at, uh, and congratulations on coming up on 21. Nadia and I are coming up on 19, but 24 years together. Yes. Prob probably similar. Yeah. Yeah. It’s a, it’s amazing how time flies. But, um, so you’re at BCG. You’re learning a lot.
And then what?
Scott Silverman: Yeah. My, my job at BCG was largely, um, starting writing business plans to start small companies out of big companies. So I was working with some of the biggest pharmaceutical and biotech companies in the country, and we were writing these business plans occasionally interacting with venture capitalists and, um, you know, the science of it and the business models.
That was, that was a fun thing to do. Mm-hmm. But I really had no, it was very clear to me that I had no comprehension of whether or not there was a, a market for what it, the business plans that we were creating. And we were trying to interact with the business community, the, the, the investment community.
And, you know, in hindsight, one of the business plans we wrote was really quite comical. Right. Like, it was just, just had no, it would, it would never have resonated with any traditional investment firm and. And didn’t deserve to be financed, but it was a, it was more of a scientific, intellectual exercise.
Hmm. And I really, I was frustrated by that, especially coming from the investment background that I had. I, I felt like there was a real ignorance that that reflected and it was, you know, not necessarily criticism of the company we were working with, or BCG, it was just that it was a lack of knowledge and understanding there.
Yeah. Um, but when I started interacting with the VCs and hearing how they thought about businesses and sometimes involved, you know, at that time this was, you know, 20 years ago, the, the biotech VC guys weren’t creating companies from scratch so much. It was just starting to happen. Now it’s, now it’s systematic and a core part of how those firms work.
Um, so I got excited about being on the other side of the table mm-hmm. And really understanding what it is that allowed. New ideas to, to flourish. Yeah. And being part of the process of creating that flourishing.
Seth: And so once you had that, that realization that that’s where you wanted to be, what did you do to actualize that?
Scott Silverman: I doubt they do these today, but Yeah. They had recruiters that were actually looking for, that was, you know, sort of the birth of the biotech mm-hmm. Venture community. And so they were recruiting people who came from the, the, the very background I had, they wanted PhDs, they wanted, uh, people who had some consulting or investment banking experience.
And that was a. There was, there was opportunities I interviewed and I got lucky enough to go work for one of the early innovators in the space. Who was that? Where did you start? A firm called Oxford Bioscience doesn’t exist today. Okay. Uh, it died. Probably deserved to die. It wasn’t the best investment firm ever.
Uh, I was there for a couple years and then I went to go work for a firm named Atlas Venture, which is very much around today and, and thriving. It’s one of the top firms in the world. What did you
Seth: learn in that at, at, at, at Oxford? What was it that didn’t make that sustainable and then what made Atlas more sustainable?
What is, what, what were the differences in the approach that that led to long term sustainability?
Scott Silverman: Yeah. Uh, so Oxford had a collection of partners. The partners didn’t really spend a lot of time interacting together to think about strategy and what were the right places to be deploying the dollars, which the limited resource they had was the dollars and time.
They were smart people. They just, they weren’t thinking as strategically as they needed to be. And thinking strategically about the science as well, it was more, uh, what came in through the door. Uh, is this interesting or not? Yeah, let’s invest in it. Versus the, the inverse, which is, okay, here’s a few areas we’re really excited about.
Let’s go pursue these areas and let’s go fund the best science and people to go pursue these areas. Yeah, and I think that more intentional approach, particularly in a group like Atlas, what they’re up to today, um, tends to be more profitable.
Seth: I, I think that also applies to most private investing. I think those firms that are thesis driven.
Have a perspective, have a talent pool as well, an experience pool, you know, within the firm that are, that are taking a very, a specific approach versus a generalist approach. Especially today with the proliferation of private equity. I think that those firms stand out much more from a returns perspective than general.
Yeah. I think
Scott Silverman: they stand out probably a few different ways. One, they stand out to the entrepreneurs and business people who are looking for capital, right? You, you wanna work with someone who knows what they’re doing and particularly as it relates to your space. Um, and I think, you know, it stands out from a return perspective and, and from LPs too.
Like LPs want to support Absolutely. People who have some conviction in an area and some knowledge. And rather than just generalists, although I would describe myself awfully as a generalist, but that’s a. I don’t have lp, so it’s a different conversation. That’s, that’s right. That’s
Seth: right. So, so how long were you at Atlas and then what was the next move for you?
Scott Silverman: I was full-time at Atlas from, uh, 2004 to 2008, so roughly four years. Um, then was consulting with them as I was transitioning to Crate Admin, which is our investment firm.
Seth: Yep.
Scott Silverman: Um, right around the time that the great financial crisis started to take off, so. My timing was impeccable.
Seth: So let’s talk about that both that decision and the timing you decided to, to form Agman.
Um, what was the process of formation? What was the original thesis? Where did the investment capital come from? Um, how did that, how did that come about?
Scott Silverman: Yeah, I, I, I wish it was more thoughtful, um, than, you know, in 2005, the, the old people in my family were getting old. Yeah. And they were accumulating capital that they weren’t deploying.
And you know, in fact, my grandfather, um, was just sitting on a bunch of fixed income and cash and. I looked at that and I thought, this is pretty silly. This is a guy who’s got more money than he needs, uh, to live on, and yet he’s investing like he’s an 80-year-old guy versus investing it on behalf of his grandkids.
Who are the ones who are gonna really benefit from this capital. So my pitch to the family was, let’s invest this money as if it was being invested on the behalf of the people who are really gonna benefit from it.
Seth: Mm-hmm.
Scott Silverman: And so we took a much more aggressive approach than, you know, a bunch of fixed income that makes sense that, that that doesn’t move the needle and can’t keep up with, you know, natural friction over time.
So, uh, that was officially in 2005 and that was, you know, just obviously a part-time exercise while I was doing other things. And then, you know, 2008 or so, um, it became clear that. It wasn’t a good idea to manage capital passively with a small percentage of my brain, particularly as opportunity sets were being created by the great financial crisis and so compelled to make it a full-time job.
That
Seth: that makes sense. And so with the financial crisis coming, what were the moves that you made? How did you deploy capital initially into the market? Yeah. To the extent you can talk about
Scott Silverman: it. Yeah, no, so, um, open book here is amongst friends, right? That’s right. It’s just us, man. Just us. Um, so we were, uh, fortunate and I think this speaks maybe a little bit to your comment about, uh, who we’ve partnered with.
We were fortunate enough that two of the hedge funds that we were involved with at that time, um, out of like maybe I think 10 in the entire planet, had made substantial bets on the subprime mortgage mortgage crisis. So they had, uh, they were involved heavily in the CDS trade, and so we had really good returns from a hedge fund perspective.
Yeah. Um, you know, 50, 80% type returns in a portfolio, which was great, but it wasn’t nearly as good as it could have been. And that was because we weren’t really paying attention. Mm. In fact, it was, it was worse than that. Um, I remember discussing one of the, uh, reports from one of our hedge funds and the cost of being in the CDS trade was a really considerable cost.
And they were losing money for more than a year. Yeah. Paying out, uh, effectively to buy these insurance policies. And I remember my dad throwing a tantrum about it. He is like, these guys don’t know what they’re doing. They’re wasting money. Uh, I, I won’t go into all the details of the problems that that little rant caused, but um, uh, you know, we, we weren’t really doing the math.
And if we had done the math the way these two very thoughtful, uh, managers had done, we would’ve participated far more substantially in that very asymmetric bet. And I think that would’ve been really obvious to us just with having the two partners that we really trusted.
Seth: Yeah.
Scott Silverman: Uh, but we didn’t. And that’s because it wasn’t a full-time job for me.
So that’s when it became really obvious, like we’re, we’re missing opportunities if we don’t make it a full-time job. So yeah. Became a necessity. That makes sense.
Seth: And, and so let’s fast forward a bit and take me to the point where you started to decide, or you made the decision that being a fund of funds was not going to be necessarily the full future.
Of the firm. Firm and we can talk about today, what is the mix of fund of funds, if any, remains versus direct investing? What was happening within you and, and within the returns of the fund that said, it’s time for us to make this pivot?
Scott Silverman: Yeah. Well, um, so you, you, you asked about mentors earlier, and I’d say there’s a couple different answers here.
One is I got bored, and this might sound crass, but like, just counting dollars in your bank account gets kind of boring over time. Like, you don’t have an emotional attachment to the success. You don’t
Seth: Yeah.
Scott Silverman: You don’t know what’s driving it. You don’t really develop a thesis, just reading the quarterly reports.
Um, and there was no really way to action that. So for me it wasn’t, it wasn’t emotionally satisfying. Yeah. Even if my bank account was getting bigger. Um, and the other was that, um, I. I, I, I had the privilege of meeting with, uh, I’m gonna forget his first name now, but it was, uh, the father of Jimmy John. Leo Tod.
Seth: Okay. Yeah.
Scott Silverman: Um, maybe, I think it’s Richard. And he, um, he was in Chicago, YPO He is one of the founding members of Chicago, YPO. Um, and he was a neighbor of my father, and he sort of just took a liking to me and we sat down and we had lunch one day. And, uh, he was a probing guy. He comes from a analytical background and, um, and a little bit of a psychotherapeutic background.
Mm-hmm. So he likes to understand how people function or what motivates them.
Seth: Yeah.
Scott Silverman: And, um, he was, you know, just took on the, I think the challenge of helping me understand myself a little bit better. And, uh, over the course of lunch, he just asked me over and over again, like, what gave me energy? Mm. And what, and I, I had a very hard time answering that question.
So the way he rephrased the question is like, what’s, you know, what’s the most excited you’ve ever been in your life?
Seth: Hmm.
Scott Silverman: Can you think about a time where you, you know, you, you had more energy, more excitement than ever before. And, and the moment that I recalled and described to him, which he had a very direct response to, was, uh, I was a sophomore in college, so this was 1994.
Yeah. So that’s a long time ago. Um, we’re getting old. We’re getting, we’re getting old. And the internet was, was awfully new and most people didn’t have email addresses and most people didn’t know how to write HTML and Yeah. How to build, uh, websites. And I built a website and I, I walked around my, uh, college dorm.
You can imagine how much of a nerd I was if I was doing this, showing people this individual webpage that I had built, which was my personal page, which is what people did back then when they were excited about the web. It had flashing text and all the sorts of things. But what did
Seth: it say?
Scott Silverman: I’m curious. I mean, it just was a list of stuff that I liked.
Right. What did you like, uh, what was on there? I’m sure there was like, do you remember it would’ve been science? No, no. It, it was, it was a very small page and there wasn’t that much available on the web at that point anyway, so. Um, you know, at that point, Yahoo, which was the main search engine, wasn’t a search engine.
It was, uh, aki bono.stanford.edu was the name of the website. And it was a list of stuff like that’s how, that’s what web, web crawlers were, didn’t exist. It was people manually curating lists of stuff that was available on the web. So I, I built my, my personal version of that. Yeah. And I showed it to people and they, they thought I was an absolute jackass.
I had, like, they didn’t, they didn’t know how to react to what I was showing them, and I thought it was the coolest thing in the world. I kept saying, anyone in the world can see what I’ve just built. This is available publicly for anyone. Yeah. Um, with a computer. And they continue to look at me like I was, uh, an alien.
But, um, but Mr. Leo Tod’s response to that was, you’re an entrepreneur. Hmm. And that was really the first moment where, um, you know, I thought about that process of creation and how much. Energy and excitement I got from creation. Where did you feel
Seth: that, when he said that to you? How did that hit you physically?
How did it hit you mentally? How did you feel
Scott Silverman: that, you know, I knew there was something that wasn’t satisfying me about the job that I had. And you know, if you think back to Atlas, the time I was at Atlas, we weren’t really doing a lot of company creation. We had, we had done a couple of those and I was part of a couple of those as well, but it wasn’t a systematic process.
Mm. And then fast forward to my time at Agman and I’m doing this very passive form of investing and it’s not giving me energy. And so for me it was really just, it, it gave me license to think about something in a very different way. Yeah. And if you married, you know, this new hat that I had as a entrepreneur with my investing, uh, background and, and the circumstances I was in, that’s what gave birth to the name investor preneur.
Right. So I was an investor who really wanted to be an entrepreneur, but also liked the notion of having a portfolio of opportunities, recognized that my skillset wasn’t in necessarily any individual area. But that I had some skills that were really transferrable to how entrepreneurs might start and grow their businesses.
And so yeah, there was a, there was a strategy there for me to take advantage of my background. So then what was the
Seth: first, what were the steps you took? So you have, you have that conversation, this unlocks a chain reaction within you, and while you don’t have outside LPs, you have family investors as well, and you’re going to go do something different.
How did that, what were the next steps you took? What were, how did you action that?
Scott Silverman: Yeah, so I, I think it’s easy to take baby steps, right? So everything, if, if you look at it now, it looks like a pretty broad portfolio that’s active in a number of different areas. But it didn’t start that way. And, and that, and that wasn’t the, the initial intention.
What became obvious, uh, right around the same time was that there was gonna be a lot of opportunity in real estate. Mm-hmm. And the family historically had been a real estate family and the old people who’d been involved had not, not been building or buying real estate for quite some time. Uh, but we were managing our own real estate.
So we had knowledgeable real estate people around the table. And again, I wasn’t knowledgeable in this area. My background obviously was not Yeah, in real estate. But recognizing that we could find opportunities to make 20% plus returns with very high probability buying stuff that other people weren’t able to hold onto, made a lot of sense.
And there was some value add aspects of what we were doing, but it was mostly just buying other people’s bad circumstances, stress or distress from a financial perspective. And, and in fact, you know, if you could buy someone else’s cap table distress or stress and solve it just with capital and there thereby get a good return, like that’s the easiest form of investing in.
So, yep. The, the knowledge and capabilities we had, we, we stood up a real estate team that was able to go about acquiring and, um, we had a captive property management business that we’re still involved with today. Yep. And so we had, we had all the right ingredients, we just weren’t, weren’t configured for it.
And so that was, that was my effort to go create that and then, then to put the capital behind it. Yeah. And so what, what does that
Seth: become, what does that now represent in terms of percentage of the portfolio?
Scott Silverman: Yeah, so that’s roughly, uh, about 20% of the portfolio today is in, um, various different forms of real estate.
Real estate Yeah. Which is predominantly multifamily real estate. Yeah. Uh, we have a hospitality practice though that’s distinct from that. But we have a multifamily practice that includes about 20,000 units that we manage, uh, about half of that we own. And, um, you know, that’s worth, that’s more than a billion dollars in, in real estate today.
Seth: And so then. What was the next, because obviously you, you talked to us a little bit about, about some of the, uh, the Ampler, for example. So then you have some other companies that are provide services out of that real estate, whether that Yeah, that’s, that’s exactly right. Fast food, hospitality, et cetera.
Was that the next move or was there something that, that came before that? In terms of the direct investing strategy?
Scott Silverman: Uh, there’s some stuff that came in between there. We probably won’t talk about all that stuff. It’s
Seth: okay. We don’t, we can talk about whatever you want.
Scott Silverman: We can, we can skip over the, the bad stuff and talk about the good stuff, but yeah, you’re right to point out that, um, there’s a, there’s a line that can be drawn from, uh, you know, starting in real estate to thinking about something as distinct as, uh, insurance or the restaurant business.
Mm-hmm. Right. So, you know, as a, as a owner of real estate, we had, we’d had commercial real estate, we had parcels, and those parcels would have a. Um, franchise restaurants on them. And so we understood, we understood them from that perspective. And in fact, in many ways, we looked at our restaurant business as a, let’s operate really good restaurants.
We can make money off of that, but we can also make really good money off the, the real estate aspects of things and which, which is what we do. And that’s one of the distinct advantages that we had at the time. We knew other people who were building similar types of businesses, but because of the nature of their capital, they’re prohibited from being involved in the real estate aspect of stuff.
Yep, yep.
Seth: That’s right.
Scott Silverman: So with our flexible capital, we were making, certainly over the last few years, it’s gotten harder as interest rates have gone up, but we were making the best IRRs on our real estate, but also making good money on, on, on owning the restaurants. Distinct from that. Yeah.
Seth: And, um, so that’s, that’s a pivot.
So you’ve got the restaurants, you’ve got the hotels. When you take a look at at, at hospitality and and food service, about what percentage of the portfolio does that make up today?
Scott Silverman: Uh, the, on just the restaurant side is probably closer to about 15% portfolio.
Seth: Yep. And then what are the areas then, you mentioned verus, and so then you’ve got, you’ve gone into, um, insurance and other, other sectors and
Scott Silverman: hopefully at the end we don’t total this up to a hundred percent.
’cause of my No, no, no. Don’t worry about that. My numbers gonna be off.
Seth: Well, while, while we are sponsored by a financial services company, we, we’ll see if Timmy and the, the team at C-Suite are, are, are keeping score good. And so, so there’s that segment of the business. And then is there a third and fourth leg from, uh, investment perspective?
Scott Silverman: Uh, yeah. Insurance pretty broadly these days. So we, we got to insurance with, with the story that I mentioned, uh, on the brokerage side, but, uh, since then and, and in fact it was a little more of a mandate than I, I alluded to. So yeah, we had a real estate portfolio and yeah, we thought we were sophisticated, but the reason why our team was paying attention to solicitations from.
Um, from random brokerage businesses that were subscale when we had our, you know mm-hmm. Sophisticated internal folks and big fancy brokers. Was, was because I had put out a mandate saying this, this seems to be an area that is of interest, so let’s, let’s go make ourselves more thoughtful insurance. And I, I don’t, we didn’t have a thesis on it.
We just, we just knew it was super strategic as investors, particularly real estate investors. And we fell in love with, uh, the PNC, uh, brokerage business. And we have since made, um, two new investments in businesses, both of which started in our, in our offices. So we have a business called, uh, AEN Entity, which is a excess and surplus MGA business, which I can talk about.
It’s one of the fastest growing businesses in our portfolio. Hmm. And we have a business called Omaha National, which is a workers’ comp carrier. It’s a fully integrated carrier, so it takes its own risk. Fascinating. So let’s, let’s talk about those. How did
Seth: those come to be?
Scott Silverman: So, um, I’ll start chronologically.
So, Omaha National was, uh, founded in 2016. There was a team of folks at Berkshire Hathaway that had been running the workers’ comp business for, uh, for Berkshire. They wanted to see what it would be like to build a business from scratch without the burdens of an existing operations, without, uh, the legacy of computer systems and management teams and bad decisions from previous people that you were managing through.
They wanted to start with a clean piece of paper, which as I mentioned, is an area that I, I like and absolutely have expertise.
Seth: Yep.
Scott Silverman: And it made it a little bit easier that we were working with a team that had already twice before done exactly what they wanted to do. Now they had done it under different circumstances.
Yeah. They’d done it in the context of big companies where they were fixing things and, and creating scale. Um, but, you know, we wanted to do it.
Seth: I’m gonna pause you there for a second. How did you all find each other? Obviously you’re from Omaha, but, but how did, how did your knowledge of each other
Scott Silverman: Yeah.
Seth: How did that come together as well?
Scott Silverman: So, uh, in 2016 when we, uh, this was, it was just fortuitous, right? So in 2016 when we were interested in insurance, the word InsureTech didn’t exist. Mm. Right. So there’s another, uh, what’s, what do they, there’s a word for when you, um, mento, I think or something. Yes. When you, when you merged two words.
So InsureTech didn’t exist as a concept. You’re really
Seth: good at this. Yeah. We’ll, we’ll keep it going.
Scott Silverman: Um, and I, I don’t know that I can take credit for that one, but, but we, but we did want to create, uh. An insurance business that had a strategic difference. Right. So you, you obviously can’t just go about, you know, subscale beating people at their own Yeah.
Business. So, uh, what do we think that these guys represented as unique? Well, they were gonna apply technology to workers’ comp and they had a, a systematic way that they like to think about workers’ comp that was strategically different from most other folks. And you married that with technology and with the great management team and the right, you know, source of capital and you can build a different business.
But, you know, to specifically to your question, um, that concept didn’t exist amongst other investment firms. There was no one else looking for that. Yeah. Which was our opportunity. So these guys had, they weren’t super sophisticated capital markets guys, so they didn’t talk to that many people, but the people they talked to said, yeah, that business is not, doesn’t make sense from an investment perspective and in particular didn’t make sense to them because of the timeline necessary to build value.
Yeah. Like this is not something that can be built in five years. Yeah. But if you have a 10 to 15 year horizon, you can build a multi-billion dollar business. And that’s, that’s what we think we’re in the process of building.
Seth: Curious about that one before we get onto the next as well. And two things I wanna, I wanna ask you about.
So, um, and, and I went through this journey personally. You’ve been through, uh, this journey as well, uh, in your own way. But, you know, when I started out my career, well started as a basketball coach. We’ll skip over that, but I went to startups and then I went into big companies for a long time and then I came out and went into lower, lower middle market private equity.
And I would say that I was unprepared for a lot of the things that showed up and I had to kind of, you know, learn. As I went and I’ve gotten better and better. I’m on like my ninth iteration now, and so I hope that I keep getting better and learning from my, my mistakes. Uh, but I always think about this and I’ve had another, you know, guest, um, on Steve Carroll who left, um, who left Walmart to go start his HVAC company.
Um, and he had done some other entrepreneurial things, but spent a lot of his formative years at large companies before becoming an entrepreneur and working with that team that had certainly done startups, but within a large corporate umbrella. Were they emotionally, psychologically, financially prepared for what it meant to start?
Something from scratch. Um, how did you, what was the gestation period that they went through? How did you help support them in doing that? How, how is Agman geared Yeah. To help founders do that?
Scott Silverman: Yeah. That what you’re describing is, uh, I think particularly problematic in a space like insurance too, where Sure.
Where by definition people are risk averse. That’s the nature of, of the business. Uh, fortunately in this particular circumstance, these folks had already left, right? Mm-hmm. We, we weren’t spinning out a team that we had to convince to spin out. They, they had already made the decision that this was something that was essential.
And there was a whole bunch of things that probably were pulling them and pushing ’em at the same time. So it was, it was fortuitous that way. But, um, you know, I do, I think in hindsight they would say that this was as easy or linear a path as they were anticipating. No. Uh, and do I think that they would’ve expected that the pricing of this market would’ve come down in half over the course of the entire life cycle of the investment so far?
No, they wouldn’t have wanted that headwind. Yeah. Um, but obviously headwinds create opportunities and we can talk about that separately if you’d like, but, uh, yeah, I, I think the entrepreneurial process is something that is very hard for people to really appreciate. Now, the benefit of having been at a big company is that they know what a, they already know what things need to look like, right?
Yeah. And, and we would talk about this, like he knew, uh, the CEO here is at Regan pfo. He, he, he knew that what it would look like to build a $500 million revenue business. He knows exactly what needs to exist for that. Yeah. Versus trying to figure it out as he’s going along so that that part of him being an entrepreneur is much more attractive to an investor when you’re starting from zero.
Yeah. Because we, we know that we have the scale on a team that’s capable of, of managing to scale and configuring the business over time to get to accommodate that scale. But it’s a, it’s a tough road. Right. And these are not, you know, building a. Um, when you started, it’s a very different market. Obviously.
There’s externality markets, there’s capital markets, there’s the nature of the market. You’re pricing in the competitive market. There’s all sorts of markets and cycles that are going on. Yep. Um, and keeping people incentivized and recruiting people and, and building a, a, a big business. It’s, it’s really hard work.
It’s a lot, it’s a lot. It’s a lot of, it’s, it’s not for everyone. Right? No.
Seth: It’s, it’s not. Let’s, let’s, the other thing I wanted to ask you there is, as you think about building that firm, building the other, the other companies in your portfolio, I want to turn to, I. Kind of, let’s say the, the, the office of the CFO and the maturation of the finance and accounting department.
Typically there’s a certain type of talent that you can attract at the beginning. You’re bringing in outside capital. Um, and obviously you guys are building something over the long haul where traditional private equity, you’ve gotta typically achieve extraordinary things in a very, very short window of time.
And if you’re buying a small company to begin with, typically the folks that are there have never had debt, they’ve never had outside investors. There’s so much that has to be done that it’s, it can be very difficult for the existing team to make that transition. But as you think about financial reporting, KPI reporting finance and accounting, uh, well within your portfolio, what’s your, how do you think about building out over time the finance and accounting.
Division. And what are the lessons that you’ve learned in building out that function over time? I used to, um, underinvest there at the beginning. Now I overinvest because I need visibility and I need a strong foundation and I need cash flow forecasting and I need covenant management and all these things.
And the more I can do that upfront, I find that the smooth, I eliminate a lot of friction over time versus under investing in that area. How have you thought about that particular functional area of these businesses?
Scott Silverman: It would’ve been helpful to have that advice, you know, a few years ago. Yeah, we, we’ve always underinvested I’d say, and you know, when you start with a blank piece of paper.
The finance function when there’s zero revenue is, feels like the thing you wanna spend the least on. Yeah. Um, but it’s also becomes very rapidly one of the areas of biggest pain. And, uh, it’s, you know, it’s not just keeping track of dollars and cents and making sure that you can pass your audits. Uh, the finance function is, is super strategic.
And you mentioned a number of different ways that it interacts with the development of a company, particularly, you know, as it relates to, to capital, capital, availability, that all the above. Yep. And, um, you know, keeping your investors content and, and understanding and you know, so there’s no slip ups and so, you know, you don’t make promises you can’t meet and, you know, you’d never lose the confidence of investors, whether it’s our captive investors or syndicate of investors, all that, all that really matters.
And so, yeah, I think in hindsight, uh, we’ve, I. I would certainly say one of the lessons that we learned is that we should be investing more in the finance function. Yeah. Um, and that a little bit of our experience has been, we’ve just sort of been tolerating different levels of incompetence. Yeah. Or, or maybe that’s, that’s a bit of a harsh word, but It’s okay.
Seth: I, I, I agree. Right. I, I agree wholeheartedly. And I think, um, I, I did have a, you know, I just reconnected. It’s been many, many years since Mike Burke and I chatted who, who, uh, I worked for initially when I joined aecom. And Mike started at KPMG. Um, he was, he was a lawyer, but, um, and he brought over a really sophisticated team with him to, to aecom.
Um, and, you know, I think about myself as an entrepreneur. Um, I think about many of the entrepreneurs and the founders that I support. None of them came from finance and accounting. I’ve got a few friends who came up to, who rose to the CEO ranks, like Mike, kind of through, you know, the finance and accounting track.
And I think that, that I love by the way, um, CEOs that came up through. Um, that track. I also love, you know, I’m the type of CEO that came up through sales and marketing. There are CEOs that come up through operations, and so each of them are unique and we have to kind of compliment them. They need a business part, they need a CFO.
Business partner because most of the companies that I back, and I don’t know about you, most of the founders did not come up through finance and accounting. They came up either through operations in the business, they came up through sales and marketing. And so they need a really strong business partner.
So, yeah.
Scott Silverman: And I think they also, uh, I agree with everything that you just said, but you know, they also underestimate how strategic finance is, particularly in a scaling company, a rapidly scaling company. Yep. You know, the, the role that, um, you know, debt for instance, is playing absolutely in one our, one of our insurance businesses.
Absolutely fundamental. And it can make a profound difference in the trajectory of the business because having more capital available allows an insurance company to grow much more quickly. So we back multiple, multiple of our companies that way. And the same thing with our restaurant. The, the, the leverage that we’re applying is really critical and how we’ve.
Gotten ourselves to be in a position to be sophisticated enough, whereas the entrepreneur side of it had they, they have no experience with no experience
Seth: and they typically didn’t have to. Right. I mean, I think especially if they’re coming outta a big company, that would not be a function that they would, it’s, it’s not a function.
I mean, it’s one of the first, it’s, it’s something I speak to the founders a lot about, like the, the one thing that I was most unprepared for really, I just call treasury management. Right? Yeah.
Scott Silverman: Someone gave you a bunch of money and you’re gonna make sure the cash sits in the right account. Right. Making savings.
Yeah. Yeah. Yeah. It’s
Seth: a big, big, big learning curve. Um, let’s talk about the other. Company that, that, uh, that you founded in
Scott Silverman: here in the last, uh, yeah. So in 2020, what year? We, 2022. We founded a company, um, maybe a shout out to, to YPO here. I was, uh, friend friendly with a guy who was active in insurance in YPO and we obviously had a couple different insurance, uh, companies as I mentioned.
And, uh, he announced on LinkedIn that he was leaving his business. Uh, he didn’t have a, he didn’t have a plan, but I immediately reached out to him and said, Hey, you know, we, we talked about insurance in the past. We got a couple of companies, love to talk to you a little bit more about what you’re thinking about doing.
Um, and very quickly we, uh, together came up with a thesis in an area that he was knowledgeable again, marrying, uh, smart strategy, uh, technology in our capital, in, in a way that, um, others were not doing. And, uh, again, probably call it an InsureTech company. Mm-hmm. But, uh, so that’s the excess and surplus MGA business that.
We started with Nick, Nick Davies in, uh, 2022. And fast forward to now, it, uh, has more than a hundred million dollars in premium, uh, which, uh, and particularly relative to other companies that we started a similar time or a few months after us, that that borrowed a lot of the language from our website. Um, we’ve, we’ve done it with a small fraction of the capital and gotten much further and done it with fewer employees.
So we’re sort of the, the trifecta there.
Seth: That’s amazing.
Scott Silverman: That’s amazing.
Seth: Um, I wanna, I wanna take a pivot for a minute and I wanna go back to family. So, um, two things. Let’s start with the first question, um, which is, uh. Doing what you’ve done, starting the fund, making this pivot, being involved in starting these businesses, um, can take a massive amount and, and obviously you connected to something now that you’re extremely passionate about, that’s visceral from you.
But you, you’ve spoken a number of times about the amount of energy, the amount of effort that it takes to develop and mature these businesses. Um, I don’t think that any of us can do this without significant others in our life. Right. And, um, how have you all managed the balance in your relationship in terms of, you know, being able to prioritize your marriage, being able to prioritize spending time with the kids?
And I’m sure you also see this with your founders as, as well. Can you talk a little bit about some of the things that you’ve learned about finding a way to balance all of this with, with home life as well? I
Scott Silverman: wouldn’t say that I’m necessarily a perfect expert on this topic either. None of us, none of us are perfect at it, but it’s good to talk about.
But we’re, we’re still married after 21 years, so I guess that counts for something. Um, you know, everyone obviously has different relationship and, you know, I think it’s a, like, uh, what they say about family offices. You’ve seen one, you’ve seen one. Um, but, uh, you know, my wife is, uh. Really good at being skeptical about people.
And in fact, she was even, uh, more skeptical about people than I initially was. And that was to my detriment. And you know, I, so I think I’ve learned a lot from her and, and how, uh, you and I share, you and I share a lot
Seth: in
Scott Silverman: that. Yeah.
Seth: My, my, my wife the same and I’ve learned a lot from her.
Scott Silverman: Yeah. I mean, I, so I, I’m a classic entrepreneur, a glass half full, everything’s exciting.
Let’s go, go, go. And, and, and she’s the opposite, right? So I don’t know if that, um, is the best configuration or not, but that configuration works for us and it, and it keeps a lot of balance and it gives me a lot of perspective. And I think I’ve, I’ve, I’ve benefited a lot from it, and hopefully she’s benefited Yeah.
From some of the, the risks that I take in, in my career. So, um, but I, you know, I, I, I’ve also been given, um, you know, long leash by my, my family to go do what I do. So, yeah. Um, that is also, you know, something that, um. I give a lot of credit to just how we’ve configured the investment firm and
Seth: yeah.
Scott Silverman: And, um, you know, I don’t like to talk about business too much at home and, you know, I think I would drive my wife crazy if I was always talking about it because a lot of what I do is very stressful and we lose a lot of money a lot and, you know, sometimes we make money and so far it’s worked out great, but, uh, I’m not the happiest person to be around when, when we’re losing money and we sometimes do that in large quantities quickly.
Um, ’cause we take pretty concentrated Absolutely. Risk, risk to how we do things.
Seth: Yeah.
Scott Silverman: So, um, yeah, I, you know, I, the other thing I, I think that keeps me sane, um, more than. More than just trying to compartmentalize is, is also exercise. Uh, you know, I I, there was a period of time, particularly in the early sort of, you know, baby development making phase Yep.
Of life where you, you’re prioritizing all that and, um, neglecting maybe your exercise. And I found that that wasn’t something that was sustainable. And you know, so we, we’ve gotten pretty good at, you know, like we’ve got defined mornings that we work out and, and I’m pretty religious about my, my exercise.
And, uh, absent that, uh, I think strong religion, I think I’d have some real difficulties. Right. I’m, it it emotionally very difficult to do what you do. Yeah, it’s a lot of stress. And if you’re not managing it, um, I think particularly with things like exercise, which is a very powerful drug as far as I’m concerned, I think about it, uh, very directly as.
Well, a little bit as an addiction, but also as in my medicine.
Seth: Absolutely.
Scott Silverman: Uh, more importantly probably as my medicine. But, um, yeah, I think that’s made the big difference. And so her understanding of that and tolerance of it Yep. Is maybe more than embrace of it. Tolerance of it is, has been pretty critical because
Seth: it’s another thing that takes time.
Yep. Right. But it’s, but it’s, it’s critical. I also, in addition to that, I need creative outlets in addition to creating in, in business. And so for me, um, music and exercise are the, and podcasts. And podcasts. And this, this, this has been, this has been a wonderful gift. This has a great creative outlet for me.
I love doing this. And I just hope that, you know, a big part of what motivates me, it’s probably the biggest thing that motivates me is just helping people. And, um. I just appreciate you being here and being so open and just chitchatting. And I, I think there’s a lot that hopefully we can help people, you know, learn from, from our experiences.
We’ve gotta start passing it down. And so I hope that, uh, I hope this helps. Let’s also talk about the kids and as they’re watching you and the example that you’re setting in work and, uh, um, what are they, have they talked to you about the family business? Have they expressed any interest in it at all, or are they, do you see their interest developing in, in, in other ways?
Scott Silverman: Yeah, so we’re, I mean, hopefully they’re not listening to this, but yeah, a 17-year-old daughter and a 14-year-old son and, um, you know, I, I think they would know, they would call it a family business, but I also think they think of the individual businesses more than they think of it as a family business, and we don’t really talk super explicitly about, I.
Capital and sources or magnitudes or anything like that? Sure. Um, obviously they recognize there’s some scale to some of the stuff that we do, but, you know, they’re, they’re young kids, so they, yeah, definitely don’t, they’re not so good at arithmetic, uh, that way. Um, but yeah, no one has expressed any interest in it.
I would say that, um, my daughter is very, uh, science oriented. In fact, if you, uh, you know, put my hair on her, she sound a little, sound a little like me, uh, in many different ways with sort of eerie how much, uh, she sounds and acts like me. So we’ll see how that progresses. But right now she wants to have a career in medicine, which is exactly what I said at her age, but I’m trying to make sure she keeps her doors open just as That’s right.
Just as I did and as I was encouraged by my, my father in particular.
Seth: Yeah.
Scott Silverman: My son, um, you know, if you could bottle the conviction and confidence of a 14-year-old boy, it would be the most valuable commodity on the planet.
Seth: Yep.
Scott Silverman: Uh, so is he still
Seth: gonna play in the NBA? He, he’s, as far as, as far as everyone on this podcast, he’ll,
Scott Silverman: he’ll be in the NBA and after that he’ll go on and make a trillion dollars.
He wants to be the first trillionaire. Got it. Okay. And, and he said that very clearly. I like those ambitions without irony. Right? Yeah. Um, so yeah, he, he, um, he has all the confidence of a 14-year-old boy, which is a beautiful thing, and you never wanna discourage any of that. But yeah, and he has expressed interest in investing.
So he’s been investing, uh, his own public equity portfolio for about a year now. Um, he has very high conviction on some of my investments. He’s told me how much of an idiot I am for some of my investments that have gone poorly. He’s, he’s just be pretty good after the fact of pointing that out. Uh, I’m not sure about a.
Um, and in fact, and I won’t mention the investment, ’cause a group that we’re affiliated with did just conclude an investment, uh, just acquired something.
Seth: Hmm.
Scott Silverman: Um, and he, he, uh, was so convinced that it would be a loser that he’s, he, uh, it was very up upside down be he’s like, I, I, you know, if you, if you lose money on that, I want to, he’s like, I want a dollar for every dollar you lose.
Like, that’s not a very good deal for me. Wow. Wow. I’ll stay outta that bet. But, um, he was pretty convinced that, uh, it wasn’t gonna be a good investment, but I, I think it will be. But yeah, the time will tell for that. Um,
Seth: anything as we kind of conclude, uh, this session that I give you two kind of tracks to go down and if you don’t like either one, you can pick your own track.
One would be, you know, the things that if you were to bottle up some of the two or three things that you have learned as an entrepreneur that you think you’d like to pass on to those. Listening that come with the wisdom of what you’ve done over the last 20 years. That’s track one. Track two is, as you look forward over the next four or five years, um, what are the things that you’re looking into that, that really excite you, that you are interrogating from a thesis perspective?
And if you don’t like either of those, we can talk about. Your choice of track three for final
Scott Silverman: thoughts. Yeah. I’m not creative enough to come up with track three, but I think, you know, so for the, the, the former question, which was, uh, some collective wisdom that had come out of things and, uh, there was another part of that question,
Seth: collective wisdom and things that you’re, you’re really looking into.
Yeah. Um, you know, if you could go back and to, and, and with the wisdom you have now until the you that’s sitting there, that is getting ready. I just met by the way, with some young entrepreneurs who are, uh, about to start their own fund, have bought their first company. We were sitting down and talking about, um, how they want to distinguish the fund.
I’m, I I, it gives me so much energy Yeah. To be able to, to, to, to talk to them and, and to help them and to pass some wisdom down. But, you know, think of, think of young you. Yeah. And if you could give a few pieces of advice at the beginning, what would
Scott Silverman: those be? Yeah, no, I think people are convinced that making money is really hard and it is right, but it, it doesn’t need to necessarily be complicated.
It goes back a little bit to the elegant solution that we talked about earlier. Um, you know, one of the things that I, I’ve also learned with, with, with deals, individual investments, is that sometimes you make, you know, you, you start off with a thesis and, and it seems clean and easy, and then, then you start making excuses as it gets more and more and more difficult, more and more complicated.
And, and you realize that by the end you’ve made so many different excuses that the original thesis is gone and, and it’s just gonna be a really hard way to make money. Right. And you just sort of fell in love the deal or whatever circumstance led led to that. But, so the, the lesson I’ve learned many times, and, and again, going back to when I was a, a scientist, was that, you know, sometimes things don’t need to be super complicated and, and the easier, elegant.
Path where you have, you know, generous tailwinds and things that are helping you move along is a, is sometimes a lot more fun way to, to make money. Yep. Um, and I’d say the same thing about people too. Right? So I would, I, I think the other thing is, you know, in addition to obviously finding tailwinds and elegant solutions and working in businesses where you don’t have to grind just to be successful, um, you know, BCG had this thing called the, like the beer test.
Like if you got trapped at an airport Mm. And you were with a another person and you know, you had to share a beer with them for a few hours because the flight wasn’t gonna take off, was this gonna be a pleasant experience or was it gonna be miserable? Yeah. Um, life short, you know, you get old quick and um mm-hmm.
If you’re gonna spend a lot of time work, let’s spend it with time with people that you like. And there’s gonna be a lot of challenging. Like, that’s just the nature of this type of business, right. Shit’s gonna go south and it’s gonna be hard and be grinding and everyone needs to trust each other and everyone has to be able to enjoy spending time with each other despite all the challenge.
And you might disagree with people and you know, it’s a bit bit like a marriage, right? So like you, that’s right. In the end, you have to have some essence for respect and appreciation and, and, and enjoying each other’s company. Um, so if, if you put those two things together, I, I think it makes it a lot easier to be successful.
I think it’s great.
Seth: I think it’s great advice. Second track, anything that is on the horizon for you that you feel comfortable talking about that excites you coming up, uh, you know, as you look at additional feces or areas to invest capital?
Scott Silverman: Yeah. So, um, you know, it’s, it’s an interesting problem, right? When you get to 50 and if you think you have a 15 year window that takes to build a company, uh, uh, that, that makes me.
Kind of old. Yeah. Um, so I’m very careful. I, you know, I think probably have, you know, one, one more bullet that I maybe like to, to use, um, in terms of building a new company. Mm-hmm. We, we’ve taken a slightly different approach with how we’re partnering with, with managers. And maybe it’s almost like a, you know, reverb, right.
So where we started a bit as a fund of funds. Yeah. The relationship we originally had as a fund of funds was entirely passive and we weren’t partnering with people. Yeah. Whereas today we’re thinking of our, uh, fund of funds type activity, which we’ve always had, um, to varying degrees. It’s more of a partnership with the, with the, the gps.
Yeah. Um, that partnership will both allow us to deploy capital as a limited partner, but also allow us to deploy capital directly. Directly. Sometimes in areas where we have more expertise, but we’re. Where we aren’t necessarily putting in as much of our shoulder as we’ve been putting in the past. Yep.
That allows me to keep the team lean at admin and it allows us to benefit and learn from skilled people who are, who are expert in their trade. Um, and it allow us to get involved with a, a broader set of companies then we might normally get involved with. So that thematically is something that we’re expressing ourselves both in, you know, in venture and private equity and, and in public equity as well.
So I, I think you’ll see, you’ll see more of that over time, more
Seth: of that. Yeah. I think that that makes sense. That makes sense to me. Well listen, you’ve been very generous with your time. Thank you so much.
Scott Silverman: Especially with, especially with no meal. I mean, I a
Seth: snow meal, I mean, I’ll take you out afterward if there you want, I’ll feed you.
Um, that’s good. But, uh, this has been a ton of fun, man. I really appreciate you being here and um, and I hope that I get to come up to Colorado and we get to, uh, play some pickleball
Scott Silverman: that that can be Ha that can definitely happen. And thanks very much for the time. I appreciate you including me. Course, course.
This been fun. We’ll talk soon. See you.