Earn 7X by investing in the second large commodity in the world. My next guest owns a fast-growing company in the agriculture industry. In this episode, we talk about a potential 7X – 8X return over the next 4 – 5 years. We break down what the business is, past revenues, projected revenues, supply chain, distribution, leadership track record, and how investors can get involved. Please welcome Adam Jason.
Payback Time Podcast
Payback Time is a podcast for investors. The goal of this podcast is to help make investing approachable and easy to understand. We will interview beginner and experienced investors and ask them to share stories on how they got started, what challenges they faced, what mistakes they made, and what strategy works for them today. The overall objective is to provide you with a roadmap that helps you become a better investor.
- (0:57) – Background history
- (02:53) – Background as a coffee company investor
- (05:24) – His business model
- (06:58) – The challenges of keeping up with the supply chain
- (08:16) – The difference between green and roasted coffee storage and value
- (10:29) – sales and distribution model
- (12:21) – Net profit and overall numbers
- (16:59) – How his business differs from the traditional farming model
- (13:20) – How to pay zero taxes legally with this model
- (16:25) – strategies to protect the assets
- (23:34) – What is the minimum investment amount?
- (27:29) – The importance of a good team to make that business work smoothly
- (29:36) – What other business his group is investing in?
- (35:36) – The worst investment advice he ever received
- (36:15) – The best investment advice he ever received
- (37:22) – Guest contacts
[00:00:03.430] – Intro
Payback Time is a podcast about building businesses wealth and financial freedom. We try to uncover the challenges our guests faced, the mistakes they made, and the steps they took to achieve their goals. The overall objective is to provide you with a roadmap that leads to your own success. Sean Tepper is your host. Are you ready? It’s Payback Time.
[00:00:32.490] – Sean
My next guest owns a fast growing company in the agriculture industry. In this episode, we talk about a potential seven X to eight X return over the next four to five years. We break down what the business is, the past revenues, projected revenues, supply chain, distribution, leadership, track record, and how investors can get involved. Please welcome Adam Jason. Adam, welcome to the show.
[00:00:58.670] – Adam
Thank you, Sean. Pleasure to be with you. Appreciate it.
[00:01:01.200] – Sean
Glad to have you here. Why don’t you kick us off and tell us about your background?
[00:01:05.330] – Adam
Sure. So I guess maybe going in reverse kind of makes the story more interesting. But I’m talking to you today from Medellin, Colombia, South America, not South Carolina, but I’ve been down here for about five years now. Attorney by trade. Grew up in Buffalo, New York. Long story short, worked in the big law firm world for about eight years. Really focused on representing clients in Fortune 500, Wall Street, banks in SEC, and capital markets transactions. So IPOs, public private equity, debt financing, corporate governance. And I was at the point in my career, and I guess we’ll keep it to business for the background standpoint. But point of my career where you decide, are you a partner at the law firm kind of person? Are you going to go in house and work for a client or do something entrepreneurial? I found Columbia, I guess, kind of by accident. But I was on here, I was here for vacation, spent a month down here. In between. I was moving from one law firm to the next and had a break between looking at the market for some potential opportunities in real estate. Met my now business partner at Legacy Group, which is our firm, and the name you see behind me.
[00:02:20.020] – Adam
And he was just starting with the Green Coffee Company, which he founded and we’ve really ran with since 2017. It’s the flagship business within our portfolio of companies here. But our focus is around bringing high net worth of credit, investor capital into Columbia to build businesses and at the same time giving access to investors, to a new market, to new industries, to something a little bit called alternative or nontraditional, to what they’d find in US. Markets.
[00:02:52.780] – Sean
Right on. So we’ve had a few people on the show that are involved with alternative investments, which I could also phrase as like, maybe angel investing. These are not public companies. These are private companies. You’ve got some interesting opportunities. What I’d like you to do is kind of share maybe a little bit more about your portfolio. Some of the businesses within. I do see here you have, as mentioned, the coffee company. It’s Green Coffee Company, right? Yes, that’s one. We’ll talk about that a little bit and then some of the other businesses you’re investing in. I’d love to learn more. So why don’t you talk more about that?
[00:03:29.000] – Adam
Sure. Our flagship is the Green Coffee Company. We started back in 2017. It was really built as an alternative investment product for traditional real estate investors, so folks that are interested in collateralized assets with the potential for a cash yielding product. What we saw after being in the market was really that Columbia and Coffee are kind of synonymous. Coffee is the national product of the country, but it’s an industry that is incredibly fragmented. About 95% of all the farmers here in Colombia own less than three acres. So you have a shortage of investment. You don’t really have a lot of outside capital coming into the country. Very decentralized from an infrastructure standpoint. And really it’s an industry that’s been propped up by quasi governmental agencies for a long time. So we saw the full scope of the opportunity a few years back, we really opened up the business to a lot of investment. We’ve brought in about 33 and a half million dollars into the business to date, and we’ve grown it to become the largest producer of coffee in the country, which we’re proud of, especially the connection between, as I mentioned, coffee and Columbia.
[00:04:46.390] – Adam
And also it meets our mission of finding exciting opportunities that have the opportunity for, we think, great returns for investors who may have never thought of Columbia as a place to invest before. But people love coffee. They like agriculture. It’s an exciting opportunity. We continue to see more and more interest. We have about 270 investors with us to date, as I mentioned, 33 and a half million. We’re just gearing up for our Series C funding round, which will probably be open at the time that you put this out to your audience. So dive in specifics. Anything you’d like to chat about?
[00:05:25.120] – Sean
Yes, I want to dive into the business to learn because this is what I do. I like to analyze the business and the competition and learn who’s running this business. We call it the forums, and I’m going to ask questions on how our audience get involved with your investment round here.
[00:05:41.000] – Adam
[00:05:41.400] – Sean
So it’s 2017. Can you tell us I don’t know if you can disclose this. What kind of revenues are you generating to date?
[00:05:48.170] – Adam
Yeah, last year we did 1.3 million in total revenues. This year, as of the middle of August, we’re at 3.2 million in revenue for this year. So we’ve already doubled last year. We expect this year to do about 15. The business is very seasonal, so we get basically all of our coffee at the end of the year. So the question, of course, would be how do you go from three to 15 in four months. Right now, we’re not even experiencing our kind of high season and our primary harvest for coffee. A lot of the big increase is due to additional acquisitions of farms that we’ve brought into our land holdings and then making the land that we already have more productive. So when you buy coffee farms, especially if you’re planning from scratch, there’s about a two to three year time frame in which the tree has to mature and then becomes productive. So a lot of the planting we did was back in 2019. A lot of that coffee is really starting to come online now where the revenues are honestly just going up because we have more and more coffee.
[00:06:59.070] – Sean
When I look at a business model like this, I look at two key facets. I know there’s numerous others, but you have it would be the supply chain side, I would call it, which is getting the product. How fast can you get the product? And then number two is how fast can you sell it? So it sounds like you’re buying farms you’re not leasing, is that correct?
[00:07:20.220] – Adam
That’s right. Everything we own, all the farms that we have, we own. Okay. The other source of supply is we do a lot of coffee buying from other small farmers around us. As I mentioned, a lot of these small farmers, if you own three acres of land, you’re not going to export your coffee to the US. So those guys are looking for immediate liquidity. They often need cash, honestly, for their day to day things and stabilizing their home. Everything that you’d expect from a kind of small farming operation. So what we do is we support the local farmers by buying their coffee. We pay slightly higher than market price, but that adds to our production. So we try to stabilize things by having obviously our own production pipeline. We have about 5000 acres right now. And then we supplement it with the coffee that we buy from the surrounding farmers.
[00:08:14.740] – Sean
[00:08:15.380] – Adam
That’s the supply side?
[00:08:17.040] – Sean
Yes. And that’s good to know. And we’ll get to the sales side in a second. With the supply side, coffee is grown in seasons. Are you taking and do you have like a warehouse? You’re putting product away so you can sell it all year round? How does that work?
[00:08:31.750] – Adam
The way we sell it is right now, there’s basically three pillars to the business. The fundamental one is selling green coffee. People who are not familiar with coffee won’t be sure what that means, but it’s basically the pre roasted coffee. So it almost has like a greenish hue to it. But that’s the coffee you would sell in like tractor trailer sized containers to a Starbucks, for example. And then in their roasting facilities will roast it to a dark, a medium, a light. However, they want to kind of facilitate the end product. But right now, where we’ve been to date, and we can get into kind of what the future looks like. But to date, the focus has been on those tractor trailer size 38,000 pound containers of coffee that we offload in Colombia or that we sell internationally. If we sell them here in Colombia, it’s like a three day payment cycle. We basically process the coffee, we take it to the large exporters, they buy it, and then they send it to their clients overseas. We can also sell direct to large importers, which we do as well. So there’s no real storage. There’s incredible liquidity and coffee.
[00:09:42.420] – Adam
It’s the second most highly traded commodity next to oil on a global basis. So it’s kind of one of those things where as much as you have, somebody will buy if it’s at the right price.
[00:09:55.720] – Sean
I did not know that it was the second highest commodity next to oil. That’s incredible.
[00:10:01.020] – Adam
[00:10:01.670] – Sean
Wow. It shows you the demand of how many people need their cup of joe?
[00:10:06.690] – Adam
2 billion cups. 2 billion cups a day globally.
[00:10:10.230] – Sean
Oh, wow. Okay.
[00:10:12.830] – Adam
Yeah, everybody needs it.
[00:10:15.810] – Sean
Now, this is a big part of your business, and it sounds like you’ve got a great handle on the production side. I like to hear things like 5000 acres. If it’s like 500, it’d be like, okay, we have limitations here. 5000 is pretty significant. On the sales side, you’ve got distribution partners in place, so it sounds like you’re finding distributors. How many countries are you selling this product to right now?
[00:10:41.300] – Adam
We sell direct in Colombia. That is, direct to the exporter. And then, of course, they’re moving it to other international clients. We also sell directly to importers from the US. We sell coffee into the Philippines, we sell coffee into Western Europe. And then the people that are buying these huge orders are then distributing it further. But we have direct clients that are located really all over the globe. And how we decide where we’re going to sell the coffee really comes down to can we make we have to consider the price, but also the cash flow cycle around the sales process. As I mentioned, if we sell in Colombia, we basically get paid same day. If we’re selling internationally, it’s usually a 30 day payment term. So we have to play that consideration as well. We’re in a unique situation from a market perspective where usually the international prices are higher. Right now, you have an invert where the prices in Colombia are higher than they are on an international basis. So we’ve been moving more coffee this year than in prior years just within the country because of the price and the time for getting paid.
[00:11:53.240] – Sean
Sure. Got you. That makes perfect sense. I like speed of cash flow as well. Great to know you’re paid almost immediately within country.
[00:12:03.620] – Adam
[00:12:04.400] – Sean
The 30 days is still pretty good because my background is working with a lot of larger businesses, and I can see that being 60 or 90 days, depending on the product.
[00:12:14.040] – Adam
[00:12:14.950] – Sean
Right. In 90 days is like, oh, you’re killing me here. So 30 days. I think you’re in a good spot.
[00:12:20.790] – Adam
[00:12:22.290] – Sean
I wanted to circle back to the numbers here. That’s really good to know. It’s like 1.2 to three point something to 15 million. That hockey stick growth looks really impressive. This is good to know because we’re going to get into how can an investor get involved? What are the net profit margins from a percentage standpoint right now?
[00:12:42.620] – Adam
This year, we expect to do about 1.5 to 2 million in EBITDA.
[00:12:47.980] – Sean
Wow. Okay. Out of the three?
[00:12:51.810] – Adam
Out of the 15?
[00:12:52.960] – Sean
Out of the 15. Okay. That’s not too bad.
[00:12:55.680] – Adam
Yeah, sorry. Ten to 20% we’d be looking at, and there’s a ramp up where those margins get even better. I mean, where we’re going, as I mentioned, there’s really three pillars to the business. The first was establish the fundamentals and sell the coffee we’re growing. Get a nice revenue base, get a sales base, basically start transacting and moving coffee so that we get a name in the industry. The next step is we talked about green coffee, but what we’re focused on is moving a lot of coffee in a roasted coffee format. So what does that mean? It’s basically when you cook the coffee and it shows up in that blackish brownish color that people are used to buying in roasted milk or whole bean form. Why do that? But the margins go up substantially. For green coffee, for example, our cost to produce, about one dollars ten a pound, and we’re selling around 250. For roasted coffee, the cost goes up because we have to bring it into the US. For example, there’s transport costs, but it will be about $2. And then for the quality of the coffee and what the markets are doing, even on a conservative basis, we should be selling that for about $650 to $7 a pound.
[00:14:12.280] – Adam
So you can see the jump in margin that you get from selling roasted versus green. The other part of the business that is crucial for bringing up the margins but also tying the story together is when you pick a coffee bean, about only 20% of it is actually the bean. It’s like a cherry. The fruit that we’re used to eating. You have the skin, you have the water, you have the pulp, everything else that goes into it. The history of the coffee industry is that is all treated as waste and unfortunately, sometimes burned, put into water sources. Some people try to use it for fertilizer, but it’s not incredibly productive. This year we’ll have coming off the farms about £13 million of coffee. 80% of that will be call it waste. Our idea is circular economy. Turn everything that we grow into a revenue source. So right now, we’ve already ordered the distillation equipment to turn all of that extra product into a high grade ethanol that can be sold in a B to B format or that can be sold B to C as a competitor to traditional vodka. The sugar content in the Cherries allows for that distillation.
[00:15:23.020] – Adam
There’s a ton of other applications, things that we’re exploring, but the message for investors and people that are interested in the business are strong fundamentals. Try to make more money on the fundamentals by going from green to roasted and then turn all the frankly garbage into an additional revenue source. That only adds on to the profitability of the business. The revenues on the byproduct business, the ethanol that I mentioned, are incredibly high because again, we’re just repurposing garbage. So it’s a cost that is swallowed up elsewhere. But all these kind of things that are coming together where the revenues one should really spike here in the coming years and the profitability should really spike in the coming years as well. So happy to dive into that. But we’re on basically a four year timeline from where we are today to at least getting the investors that we have some kind of liquidity through a public market listing. Our target is obviously in the US. Or if we’re doing something interesting enough for a Starbucks or Nestle and they come along and want to buy us or do something like that, we’re fielding those conversations as well.
[00:16:37.240] – Adam
But we’re focused on building the maximum value in the business that we possibly can.
[00:16:42.020] – Sean
That’s really good to know for investors here because that’s the big touchdown they would be looking for is that IPO or getting acquired by Nestle. And it’s good to know. It sounds like you get a short time horizon here. We can make this happen. I like that as well because there’s got to be a lot of coffee companies like yours. I know Colombia is their powerhouse country for this product. You probably don’t want to sit on a business like this for ten or more years. You want to build it quickly, do it right, but exit.
[00:17:14.730] – Adam
You know, it’s interesting, there’s actually not a lot of businesses like ours because of that decentralized nature of things. Like people say, who’s your biggest competitor? And it sounds, I don’t know, I guess arrogant. But we really don’t have a competitor in the sense that one, if you look at it from an investment standpoint, the business is based. It’s all structured out of the US. So it’s a Delaware holding company that owns assets in Colombia. Everybody that’s an investor is invested in a US entity, us. Law, governance, they hold equity and same tax treatment as you would if you invested in Apple. You’re not going to find that. And then the other guys are the other companies that are and companies is used loosely. Sometimes it’s family members that hold a bunch of land and they share resources. The other companies are, I’d say, 40 years, not exaggerating behind in terms of technology investment that they’ve made, and there are a lot of barriers to entry in the market for somebody else. Another popular question why doesn’t somebody just splash $100 million and do exactly what you guys are doing? Our acquisition strategy is not we’re going to get a broker and we’re going to buy holding companies and LLCs and plug them into our operations.
[00:18:37.220] – Adam
It is making connections with local farmers in the area that have large holdings and doing deals on a one on one basis. Frankly, people at Starbucks, Nestle, other potential competitors just don’t have time to play at that level. So we’re trying to build something that is strong from an acquisition standpoint. If somebody wanted to basically save themselves, let’s say, at that time, five to eight years of work to build what we’ve built, but also that can on an independent basis, if we want to run it into perpetuity as a public company, it can stand on its own. 2ft.
[00:19:16.470] – Sean
Sure. Well, that’s really good to know. I did not realize that about the lack of competition.
[00:19:21.690] – Adam
[00:19:22.530] – Sean
Let’s take a quick commercial break. Hey, this is Sean. I just want to say thanks a lot for checking out this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for checking out this one. Could you do me a quick favor? If you haven’t done so already, could you leave us a five star rating on either Spotify, Apple, Podcasts, Google, or any other platform you use to listen to podcasts? What this will do is help us rank higher in the podcast search engines, you could say. So that would be much appreciated. Also, if there are any questions you want me to ask the guests for a specific topic you want me to address, please go to our Tykr Facebook group. You can leave a comment there, and I’d love to hear what you have to say. All right, back to the show. I’d like to jump over to the team sure. Who’s operating as a CEO.
[00:20:12.910] – Adam
Sure. So our CEO, we hired him back in 2019. He is half Colombia and half Germany. He really grew up in the flower industry here in Colombia. People say, like, oh, my gosh, flowers to coffee. It seems so different. Flowers are actually the most sophisticated agricultural industry here in Colombia. About 70% of all the flowers that we buy in the US. Come from Colombia. Why is it so sophisticated? Because flowers die so fast. So all the logistics, transportation, handling of the product, all of that is way more sensitive than coffee. You or I, Sean, could taste the coffee that’s been sitting on a shelf for six months, a year and probably not have a strong differentiator but you know, if a flower is dead or not. So it’s that logistical experience, managing agriculture, a lot of cultural connections, everything. So he’s our CEO, super talented. When he left the flower industry, they were doing about 45 million a year in sales of flowers into the US. 250,000,000 globally. So we have the right guy position for sure.
[00:21:25.860] – Sean
And how many years in the industry? Including the flower industry, 28. Wow.
[00:21:31.150] – Adam
Okay, so he’s a bit older.
[00:21:32.460] – Sean
[00:21:33.100] – Adam
[00:21:34.230] – Sean
A seasoned veteran. That’s good to hear.
[00:21:37.000] – Adam
[00:21:37.680] – Sean
Yeah. How many people in the company? How many employees?
[00:21:41.850] – Adam
We have right around 100 full time. And then when we have our main harvest, we have about 400 additional folks that come and help everything in coffee because of the way it grows, basically one ripe bean next to one non ripe bean, and also the fact that everything basically grows on the sides of mountains. Here in Colombia, it is not possible to have it all done by technology machineries drones. The technology doesn’t exist where we currently are. Things have to be picked by hand. So we have a lot of folks who work with us on a seasonal basis as well.
[00:22:18.120] – Sean
But 100 full time, that makes sense. Especially when you’re dealing with some kind of food product. You’re going to have those seasonal waves of hiring more people. They could be part time right. For a while, and then they drop off. I’ve seen that before. Let’s transition to how our listeners can get involved in this investment. And I know I kind of alluded to talking about other businesses. We can do a high level in a little bit, but this green coffee business is actually very intriguing. So do you limit this to only accredited investors or is it really open to anybody?
[00:22:52.670] – Adam
We are limited to accredits.
[00:22:54.250] – Sean
[00:22:54.730] – Adam
[00:22:56.100] – Sean
Okay. And what about investors? Can they be from anywhere in the world? Just have to meet the minimum requirements.
[00:23:03.250] – Adam
Exactly. We have investors, I would say probably 90% of our investment bases from the US. But we have investors here in country, in Colombia, we have folks from Australia, Europe. There’s no limits on that.
[00:23:16.820] – Sean
Got it. And just a refresh for the listeners. Accredited need to be making two hundred K a year on your own, otherwise, if you’re married, it’s 300K or need a net worth of a million, excluding your home. Correct.
[00:23:31.370] – Adam
[00:23:34.490] – Sean
Okay. What is your minimum investment amount?
[00:23:37.940] – Adam
[00:23:39.690] – Sean
[00:23:40.090] – Adam
[00:23:40.810] – Sean
And when that’s deployed, can investors, are they expecting some kind of dividend payments quarterly, yearly? Or is it just to make an investment? Where we’re marching forward towards an event such as IPO or acquisition, we have.
[00:23:55.470] – Adam
Basically a 6%, called it a preferred position, but basically an accrual on an annual basis. So each year that you hold the investment, you get an additional 6% that you’d be due at the time of an exit. We’ve really found that we can reinvest and create a lot more value than we would if we just paid out money and then had to go raise it again and reinvest. So I always tell investors to look at it as four to five year olds. And it’s a grow your net worth investment versus a passive getting cash flow investment. But the increase in net worth, we think, could be pretty substantial. And the modeling that we’re doing for investors is high. We’re really talking seven to eight times on your money in that range.
[00:24:48.990] – Sean
That’s where things get exciting. See, this is where angel investing is something I’ve done in the past, highly risky because landing on a business that truly is product market fit and has some serious momentum is very hard to do. So you guys have done that. That’s great to see.
[00:25:05.210] – Adam
[00:25:06.000] – Sean
Right. You’re an in demand products around the globe, so that’s awesome. You got a CEO in place that knows what he’s doing and you get the right. It sounds like you guys really know what you’re doing. From the investment firm standpoint. I was going to say, you put in 100K for four or five years, you get seven or eight X. You’re going to turn that in close to 1 million.
[00:25:26.070] – Adam
That’s the goal. That’s the goal. And I think it’s very reasonable. We have guys coming in, guys and gals, of course, investing, I think a very modest valuation. We have 30 million of, call it unencumbered assets on the balance sheet. So book value, net asset value, however you want to describe it, 30 million asset base with no liabilities on it. And then we will add that to boost the returns. We have to people say, why don’t you have that? It really is a function of working in Columbia. You basically have to build it before you can lend against it. So that’s why we’re heavy on the equity side. We’ve built the infrastructure, bought the farms. Now it’s finding the right debt sources, but low valuation, very high potential returns. And honestly, we know that that’s the scenario investors need to see to make a potential jump from public equities or multifamily real estate investing in the US. To say, you know what, I’ll put some money into Columbia. If we were returning the same as the S and P, nobody would do it. But if we can build a business and an opportunity that’s big enough, it gets a lot of interest.
[00:26:40.030] – Adam
And we’ve had, as I mentioned earlier, a good response to date.
[00:26:44.640] – Sean
Right? And one thing to point out too, is being at the second most in demand commodity in the world aside from oil. That says something. So, yes, that right there stands out to me. So I think for the investors out there listening, you have a 100K you want to potentially play with. This might be a solid opportunity, probably do your own due diligence, have a discussion with Adam and his team. And I would say another good point is get to know the CEO a little bit. I always like to do that. If you make angel investment, is getting to know the CEO, how are they running operations how are they building relationships with more distributors? That stuff? A lot of fun conversations there, but so far so good.
[00:27:29.470] – Adam
Yeah. I agree with you that it’s always critical to know the team. A good team can make up for a modest business, but bad team is going to make a good business work. So that’s important because of the five years and where we’ve built the business to, I would say we’ve de risked it in many ways, just having that asset base that would collateralize essentially any kind of investment that comes into the business. And a lot of people will ask me, like, could this go to zero? I’m like, I guess in some fact pattern it possibly could. But it’s really the same as I invest in a single family home and name your city in the US. There’s some value to it, there’s assets there. So we’ve done enough to de risk that and again, keep the valuation low enough where investors have a nice backing to the positions that they’re taking.
[00:28:30.060] – Sean
Right, that is a good point. And something I like to think about the businesses I invest in is how can it go to zero, how can it go down? And I like to look at the behavior of people in the demand. For example, I invest in a lot of tech, and I like cybersecurity. And my response to that is people can never not like corporations will never not use cybersecurity. Sure, right. And you look at the behavior of people drinking coffee. Are a huge mass of people going to wake up one day and be like, you know what, we’re all going to quit on the same day. Like drinking coffee? Probably not.
[00:29:08.070] – Adam
People say it, and it’s not my favorite way to describe it, but it really is a drug. And it’s such a cultural thing, just connected so much to daily life. It’s impossible. Honestly.
[00:29:22.290] – Sean
It’s essential. A lot of people kick off their day. It’s a social thing. People go out for coffee, you’re going to learn about each other’s business or catch up with a friend or whatever. So many facets that coffee is involved with.
[00:29:35.100] – Adam
[00:29:36.270] – Sean
Real quick here. Sure. What other businesses Legacy Group helping investors get involved with? Can you keep it high level here?
[00:29:44.540] – Adam
Sure, absolutely. So my business partner who founded the coffee company is the founder of Legacy. I teamed up with him back in 2017. We kind of take the Berkshire Hathaway approach to investing. Where we go big, concentrated bets on things we’re doing. Coffee, for example. We have about 2.4 million of our own money in that from a personal standpoint. But we also where I’m talking to you today at a company called Polygonis. Really the top, I think, VFX video game and design studio here in Columbia. These guys, we seed funded them back in 2019. Small team, four guys, grew up together, super talented artists. The office. I’m talking to you from. Today is probably the nicest office in the city. 100 employees. And this year, they should do about 6 million in revenue from 7000 in revenue when we invested back in them in 2017. So that’s a business that’s growing on its own. The cash flows are supporting it. Haven’t had to bring in any additional capital, but the growth trajectory is big. These guys want to basically create a filming city within the city where a lot of the movie production, there’s a lot of attention.
[00:31:03.100] – Adam
If you’re watching Netflix or all these streaming services, they’re all looking for different areas, and it’s a content war, essentially. But they need teams to be able to handle the production, the filming. These guys have all that talent. So I think the big kind of investment for them coming up will be, how do you build that professional studio that Netflix says, okay, if you film there and you meet our specs, we’re willing to fund a project. The financing for that can come either through equity investment like we’re doing, I’m sure, because there’s a real estate component. There’s availability for debt financing, selling. A big thing here is selling out. You build a city, you put a bunch of retail locations, the sale of the retail funds, the main part of the operations, which would be the studio. So we’re exploring a lot of different things there, but we really say, what businesses? And those are the two. Green Coffee Company and Polygonist are the two within our portfolio. Now, of course, they all have their different business streams, but we keep it simple. What would we put a lot of our money into, and what would we put a lot of our time and effort into?
[00:32:11.980] – Adam
And honestly, we take on a big, I would say responsibility and fiduciary duty when we open up opportunities to outside investors, outside capital. If you ask me what my focus is, it is doing an amazing job on the coffee business, where we have our investor base, because then we can explore a lot of different things, go in a lot of different directions. Because we’re proven, we know we have to prove Columbia, we have to prove us, we know we have to prove that we can go from start up to IPO, although we’ve done that in our professional backgrounds for other companies. We got to prove that to our investor base that we can do it specifically for them. So highly focused right now, and then we’ll see what the future brings.
[00:32:56.750] – Sean
I do like that because I’ve seen firms like yourself, they’ll just be bringing in as many opportunities as possible. Like, we’re talking 100. And you can’t help manage. You can’t keep track. There’s no quality. It’s kind of like we’re going to swing as hard as we can, and we’re going to try to hit one home run out of the reinvesting.
[00:33:17.980] – Adam
Yes, we don’t like that model. And honestly, I’m not smart enough. The coffee business. I now know backwards and forwards. We sit on the board, we’re in all the strategy meetings, we hire the team, we do all the fundraising. For me to have the conversation with you that we’re having today, I need that level of hands on touch to be able to, one, feel good about talking to you, about even investing it or telling your audience about it, to be comfortable around the numbers, the modeling, to know the team well enough. I don’t want to put my money in people that we don’t believe in, that we haven’t hired directly. So it just takes time to throw money at a bunch of investments. Of course, there’s examples of how that’s worked, but I don’t want to lie is too short to have to explain 99 failures and wait for that one success. It’s hard.
[00:34:12.990] – Sean
Yes. And you’re definitely, in my opinion, in doing it right. That’s how I would do it. Focus on quality. I would probably lose my mind. I would. Jumping from one meeting to the next, you get a half hour sliver of information on this business, and you just stack your meetings all day.
[00:34:31.710] – Adam
You just don’t need it. You just don’t need it. Let’s build a couple of great ones. And it only takes one.
[00:34:39.870] – Sean
Exactly. Well, cool. What I’d like to do next is transition to the rapid fire round. This is the part of the episode where we could find out who Adam really is.
[00:34:49.320] – Adam
[00:34:49.970] – Sean
Yeah. If you can, try to answer each question in 15 seconds or less. Ready?
[00:34:54.230] – Adam
Perfect. I’ll try for ten.
[00:34:57.030] – Sean
All right, first question is what is your favorite podcast that you listen to these days?
[00:35:03.490] – Adam
I’m liking the all in podcast.
[00:35:05.870] – Sean
Nice. Put it on the list. All right. What is your favorite book or recent book you read and would recommend?
[00:35:13.650] – Adam
I love the biography on John Rockefeller. It’s called Titan super applicable to the same trends that he saw in 1870 to lead the oil industry I can see now in coffee in Colombia 150 years later.
[00:35:27.840] – Sean
No kidding. Good to know. All right, what is your favorite movie?
[00:35:33.150] – Adam
[00:35:34.420] – Sean
All right. Classic. What is the worst business or investing advice you ever received?
[00:35:44.490] – Adam
You know what? The things I’ve seen in markets recently, a lot of the momentum investing and following the trends. A lot of free I think free capital available, but easy capital to invest. If you read the newspaper today, even the professionals, like a SoftBank, are taking $25 billion write offs because they didn’t do their homework and invested in what they thought was going to keep going up. And markets find a way to correct and show people that’s not always the case.
[00:36:13.340] – Sean
Right. Good point. So let’s flip that equation. What is the best business or investment advice you ever received?
[00:36:21.930] – Adam
I’m a believer in, again, the Berkshire Hathaway model of find good businesses at a good price and be patient. And it doesn’t have to be more complicated than that, but you do have to be disciplined, I think.
[00:36:36.850] – Sean
Right on. And the last question is the time machine question. If you could go back in time to give your younger self advice, what age would you visit and what would you say?
[00:36:46.770] – Adam
I would say to be patient, because most things work out the way that they ultimately should. I couldn’t have told you 15 years ago I’d be in Columbia. I was going to law school and thinking about what my future was like, really just buying time to figure out what I was going to do. But now we have some businesses I’m proud of, a wife who I love, who I met down here, and it seems to work out. I hope everybody has that same experience as they go through the different phases of life and business.
[00:37:20.790] – Sean
Awesome. Well, where can the audience reach you?
[00:37:24.760] – Adam
Sure. Anybody can contact me directly. Again, we talked about the CBC’s for GCC. If you want to learn more, potentially invest with us. My email is Adam J at legacygroup. Co ends in Co for Columbiacom. Or you can see us at legacygroup. Co and connect to us through the website.
[00:37:46.980] – Sean
Awesome. Well, thank you so much for your time, Adam. This is great.
[00:37:49.990] – Adam
Thank you, Sean. I appreciate your time as well, and I’m grateful. I appreciate it.
[00:37:54.110] – Sean
We’ll see you.
[00:37:54.770] – Adam
See you. Thank you.
[00:38:01.030] – Sean
Hey, I just want to say thanks for checking out this podcast. I know your time is valuable and there’s a lot of other podcasts out there you could be listening to. So thanks for taking the time to listen to my guest story. If you did enjoy this podcast episode, could you head over to itunes and leave a five star review? That would be much appreciated. Thank you. And last but not least on this podcast, some episodes we do talk about stocks. And please keep in mind, this podcast is for entertainment purposes only. So if you did hear any buy or sell recommendations, please don’t make those decisions based solely on what you hear. All right, thanks a lot. See ya.