What I have seen from private equity or venture capital firms is it’s good for the business owner if they are fully sold and get the money at that time. You can get a significant amount of money, life changing amount. Just retire into the sunset and don’t look back. If you have them as a partner or they just provide equity for capital usually it ends up bad except for the PE firm. Next thing they own you and you got little for that. They may run the company in the ground for short term ROI.

It’s all about money for them. Typically they increase their worth. It’s the only reason they are in the game.

WAWI and Fishspanker you guys preach it! I have seen this in the oil & gas industry for years, buy a good company, milk the profits, dump product lines, and at the end of the day the products no longer exist. Except those few who ride out their non-compete and then come back to kick the venture capitalists and their group of young MBA's to the curb. I love it.

Ben gave an excellent presentation that will ruffle a few feathers in the industry. I saw Randy had a reply, what a waste of YouTube space!

Is that you Randy?

Like him or not, he spoke the truth. Never looked at it that way since fishing is my escape from all the BS. I couldn’t imagine trying to make a living in the industry, especially tournament fishing.

He has 543,000 subscribers on YouTube. That’s making him some significant money depending on how many views his videos gets and his subscriber daily engagement rate. With Social Media he can make more than he could make with sponsorship. Potentially a lot more. However, being fishing related it probably has a ceiling on the amount of subscribers he gets on any platform, YouTube, TikTok, Facebook, Instagram. He can still do pretty well.

Before the Social media he would be ostracizing himself from potential to make money in the industry. He would be blackballed by the “corporate douche” as he puts it. Maybe a few smaller sponsors would stay with him. KVD, Swindel, Ike aren’t with Toyota because they love the truck. They might love the truck but it’s the sponsorship money they want. The Toyota deal has to be pretty strong. You don’t see anyone leaving for greener pastures and they get big names in the sport. KVD is deep into the private equity or big firms such as Bass Pro for his revenue. He is about as deep into it as one could get. Obviously the KVD brand is one where his brand has huge value to them. He’s built it over the years. They don’t mind giving him a small part of the huge revenue it creates. Obviously it’s worked for him. KVD has to be very shrewd in business. Beyond being the Goat of tournament fishing he has to have incredible business savy. Fishing was probably the easy part. They will eat you in big business. It’s all about the money. You are not going to see KVD speak out publicly on PM or Corporations. Milliken doesn’t have the same risk as other speaking out. For Milliken his social media is likely more steady than typical fishing sponsors. With them there is always contracts to be renewed, getting let go, etc. Instead by speaking out he gets more subscribers and more views, therefore more revenue. I found one article from a few years back where he stated that his YouTube income had exceeded his previous income as an an inspector of commercial buildings for asbestos and lead paint removal.

He also has a line of merchandise on 6th Sense Fishing. That’s another revenue source. He’s supposed to be part owner of 6th Sense. His videos are helping 6th Sense create revenue. I would bet Casey Sobczak, who started 6th Sense in Willis, Tx, has been offered a bunch of money for 6th Sense. It would be interesting to know exactly how 6th Sense gets its capital to expand, who the investors are and what their investment is. Maybe they have been able to stay away from the Private Equity angle? Probably one of the reasons Milliken has so much distaste for them is he knows PM firms are after 6th Sense. His percentage of ownership and contract would determine how much he would receive in a buyout.

So you do or do not agree with his video?

He had a booger in his nose.

Private equity is a mixed bag, but generally, I think it’s a good business model. They have Limited Partners (“LPs”) who give them significant capital to create/start a fund. In almost all cases, the PE firm puts in 30% of their own cash in the fund, so they are in it to make money.

The firm’s analysts and partners evaluate and buy companies with this fund to create value for their LPs, because there are synergies between these companies, like buying raw materials at a discount, better supply chain management, better sales channels, etc. Most companies sell to PE because they do not have the capital to scale the business further. Others just want to a paycheck and retire, but most PE firms want the owner to stay around and run the business. These funds generally last 4-6 years and all the companies are sold or rolled to a new fund if they are not ready to sell after 5 years. PE firms that don’t return 2.3x to their LPs on a consistent basis, don’t last long. So PE is buying companies and then selling them for a 2.3x return (on average), which is really good.

Is all PE good? No. Are they all bad? No. No PE firm buys a company to lose money and generally the best way to make money is to have engaged customers who buy their products. I can assure you these corporate and PE folks have evaluated the return on sponsorship dollars and if they don’t see a positive ROI, they are going to cut it, just like we’d all do in our personal lives. Also, most PE companies acquire a company and then leverage them at 5-6x EBITDA, which is very normal. As the cost of capital increases (interest rates are 10.7% for most PE portfolio companies), they are going to look to tighten their belts until rates drop.

I’ll give Ben credit. He’s created his own revenue stream on YouTube and with 500k viewer, so he has a revenue stream there. HelloFresh is one of his sponsors on his YouTube channel. Guess who owned HelloFresh and helped them go from 200k subscribers to a company with $6B in revenue? Private Equity….They did this by buying Factor, Green Chef, and other smaller competitors and used the synergies to increase their profitability before they went public.

Not all PE is good and not all PE is bad. I can tell you after having worked with PE folks for several years, they are some of the smartest people on the planet, but MOST have zero experience running a company, but they can usually attract board members or operating partners that have run small to big companies very successfully. Those folks serve as advisors. Some of good, some still want to run the company.

At the end of the day, capitalism is cruel and there are winners and losers. Trying to make a living in a skill/sport that has no real audience is always going to be a challenge. The best professional fisherman is never going to be as wealthy as a professional golfer, basketball or football player. There’s no real revenue from tickets, there is no concession sales, and there are no stadium naming rights. Lastly, making a living is going to be tough when most of the prize money is derived from tournament entry fees.

A few anglers don’t make the whole thing most don’t get that far. If you’re already wealthy knock yourself out.
It’s a dream nothing more.

Making it to the very top in any sport, activity, job or industry is hard to do. Only a very small percentage do so in any pursuit. Some people still think someone is gonna pay them to fish and work a boat show or two per year. Those days are LONG gone. Even some of the long time established pros are starting to panic. They have done the same thing year in and year out without changing. The industry has changed and now they are behind the ball. A lot of the ones that went to BPT that had a recognizable name and career probably committed career suicide long term. If they get cut they have almost no options. I think a big driver of all the "woe is me, there is no money in pro fishing" videos etc are driven by guys getting left behind and not able to change with the times.

Millilken built a small fortune including full and partial ownership of some well known fishing companies all from building his own "brand". The Googans built an entire mini empire doing the same. There is a lesson there.. No one is gonna pay you these days to be the good old boy throwing out "awe shucks" we need to catch 'em today quotes when interviewed. If you want to succeed in the game you gotta put a LOT into your own branding too. Those that can't do that or refuse to do that will fade away.

WLB Dallas has good response. PE can be both good or bad. What is important is to understand it and figure out how to positively navigate through it all for your situation to get the most out.

I would say Milliken isn’t wrong but it’s much broader than what he out lays. He is a benefactor of some things he doesn’t like however might not connect that benefit as Dallas gave an example with his association with Hello Fresh.

When you say PE is a good business model- it’s important to recognize who it’s good for, and that’s the investors and the owner who sold- the consumer and many times the employees are the loser here. I’m not saying that’s all wrong but let’s call a spade a spade.

We can agree to disagree. Take HelloFresh because I brought it up previously, they expanded to the US, gave Blue Apron a competitor and prices dropped 18%-22% for the consumer. Blue Apron and Factor had an oligopoly and HelloFresh introduced a similar service, which was good for the consumer.

Also, in fishing, when suppliers consolidate, it generally leads to lower prices. When there are too few competitors, prices go up and generally the market reacts with someone introducing a lower cost product, unless the barriers to entry are too high. In fishing, they aren’t high at all. If that leads to less sponsorship dollars, it’s because the return is not there. If there was a significant return, higher than their cost of capital, they’d be spending millions. Doesn’t seem to be the case these days, but high interest rates and the high cost of capital, has an impact on how companies spend money.

PE are good at collecting money from investors, they throw in some leverage from their banker buddies. They throw mud against the wall and see if something sticks. They generally don't have the best and brightest. They will grab a vp from some company to get a "name" on their mgmt team. If they blow a deal they just go collect more investor money and do it again. They are house flippers but worse because a house flipper who is successful generally knows alot about houses. They know very little about some of the deals they do..... but they think they do. They love to say they went to Harvard business school but they really just paid 10k for a seminar to put it on their resume. I suspect most get about 2 out of every 10 deals right.

Milliken's video was very intriguing and shed some light for me on the way the sponsorship money is shrinking due to PE, supply chain, cost of capital, inflation, lack of profits, etc.

IMO, the biggest factor for the success or failure of many small mom/pop tackle shops and bait companies is Ecommerce. Distribution is key in todays "Amazon" world.

Don't get me wrong, I still love to stop in local shops to browse and buy things that I will never use on the lake fishing, but Ecommerce has made it so convenient to have it sitting on the door step when you get home from work. If you don't embrace it and make your business viable on Ecomm or social media, then you will get left behind.