Sept. 16, 2022

Ecommerce Acquisitions with Ruben Amar


Ruben is the co-founder and co-CEO of Forum Brands, leading its Mergers & Acquisitions team.

Ruben began his career in investment banking at Credit Suisse in London, and then joined TA Associates, a US-based growth private equity firm investing out of a $9bn fund globally, as an investor in Consumer and Tech. While at TA, Ruben was actively involved in driving buy-and-build strategies of some of TA’s portfolio companies which resulted in more than 20 executed acquisitions, expansion into more than 10 countries, and significant value creation for shareholders. Ruben was also on the board of 7 different companies interacting closely with founders and CEOs.

Ruben holds a master’s in engineering from Ecole Centrale Paris and an MBA from Stanford Graduate School of Business.
He is on a mission to identify and build the next generation of world-class consumer brands through technology and strategic deal-making.

 

Forum | We Buy & Build Amazon FBA Businesses

Transcript


 Josh Wilson
 Good day, fellow deal makers. Welcome to the deal. Scout. This show is so fun for me because I get to travel around talking with deal makers, hearing their story and then talking deals. Right? The mission and purpose of this show for you, the audience, is to put deals and deal makers together. If you hear one of our guests and you're like, hey, that sounds interesting, their contact information will be in the show notes below so you can connect with them directly and do a deal. With that, on today's show, we're going to have a conversation with a guy who said, I had a short but very intense career history in the world of investing, buying stuff. So from that I want to learn. We brought Ruben, one of our friends Ruben, onto the show to share his story. Reuben, welcome to the show, man. 


 Ruben
 Thank you, Josh. Great to be here. I've been following your podcast for quite a while, so I feel humbled and excited to be invited. 


 Josh Wilson
 Finally we did it. Finally we got you on the mic. Awesome, man. All right, so, Reuben, let's say you and I are hanging out in a coffee shop or something like that, and someone comes up and they go, hey, I'm Josh. Who are you and what do you do? That's how typically people start the conversation. How do you typically respond? 


 Ruben
 Wow. It depends whether we are in Paris or in New York, because the time I have allocated to that is different. Let's say we are in the US. I'll try to be efficient here. Okay, so I'm Reuben. I am today one of the three co founders and also co CEO of foreign brands. I come from Israel, so I grew up in Israel for 13 years, from zero to 13. Learned a lot of things about Israel is that people in the business world know and moved to France when I was 13 years old. I got my degree there and in engineering. I had the choice of either going to do live a traditional engineering work or go to the dark side investment banking. Eventually I went to the dark side. I moved to London in 2015, was working in M and A in the telecom, media and technology team in credit suites, stay there for over a year. 


 Ruben
 Worked on very interesting IPOs M and AI Transcription. Most exciting thing I've done there was really the IPO of Zolando, which was one of the early players in the ecommerce space, which had huge success. Afterwards I decided to move to the investment world, which has always been the most interesting thing I wanted to do with my life. So I joined a company called Tassociates. The Associates. For those who don't know who they are, it's one of the oldest and largest growth equity investors. Growth equity basically means investing in companies that are generally founder owned, family owned, that are in their growth stage, ie. They are becoming profitable, they are growing pretty nicely and they need help from someone else to just come in and help them expand internationally through M and A or through building teams. Ta really found this spot in the early seventy s to get in at that stage and they've been super successful. 


 Ruben
 I was working from the London office and my job was to cover consumer and technology companies in Europe, mainly in France and also Israel. I stayed there for four years, less than four years. I've done many different deals. My biggest job was working side by side with founders. That was the early days of me getting, I would say, infected by the founder disease, if you want. And I worked very closely with them. I helped them do a lot of live, buy and build, which we'll talk about in the Connect of Forum. I worked on probably 25 to 30 M and A acquisitions to help them get into new countries. From France to the US. From France to Latin America, from France to Southeast Asia through M and A. I really seen the value out of this buying bill strategy. Eventually, after three and a half years, after sitting on seven different boards, after doing 30 deals, after being very involved with TA's portfolio management team, I decided, what, it's time for me to take the risk and potentially become a founder. 


 Ruben
 Where is the best place in the world to try to be a founder? I'll ask you, Josh, what do you think the US. Exactly. I said goodbye to the old continent and hello to the new and fresh continent, which is the USA, and actually moved to California where I took my MBA, stanford. While at Stanford really met great people. That's the whole point of the MBA there. It's like meet people from different backgrounds that can challenge you and think differently. It's all about changing the world type of experience. Pretty much met my current co founders. It was Covet and we can talk about the story, but the PL that I met the two of them, were all very passionate about computer and consumer building. We wanted to meet entrepreneurs where they are and literally what was happening during the pandemic, because we started the company while were at school, literally in the early months of COVID, we just realized that COVID, but also ecommerce as a whole, has allowed millions of entrepreneurs to be entrepreneurs. 


 Ruben
 While if you go back to the even the 90s, in order to be an entrepreneur, you had to have live a degree, you had to go to a certain school, you had to have access, privileged access to a network of people to finance you. What Amazon has done so well, for what it's worth, is that it has decreased the barriers so much that any person around the world with a computer and more importantly, with the Hustler mindset, can just become a millionaire entrepreneur. And were fascinated by that. We decided that's the world in which we want to build something, and the something is called New York Rents. We started a company in July 2020 Incorporated. We raised multiple rounds of fundraising. The first one from NFX, which is Live, one of the largest seed investors in California. That was in September 2020. We then build the team. 


 Ruben
 We hired our first employee in November 2020, bought our first business, our first brand, in January 2021. We did our series in May 220,001. And since then, we've grown very nicely. We moved the office to New York, and it's incredible. Very energetic city. That's why we moved here. Yeah, now we have close to 100 employees, and the vibe is amazing. We're all very excited about what we are building. And so that's the storyon. 


 Josh Wilson
 Got it. You got infected with the founder bug, right? Like, what a dangerous bug to get incued with that is far more dangerous than any other bug out there. I agree with you. How old are you, man? You've done a lot of deals and a lot of cool opportunities. How old are you? 


 Ruben
 I'm 31. 


 Josh Wilson
 Okay. A very short but intense deal. Making history. Now that's how you describe yourself before we hit record is short but very intense. What do you mean by what was intense about it? 


 Ruben
 Yeah, so as you probably saw from my description, I moved around quite a lot. Right. I never stayed in a city or a place for more than five years. I loved moving around. The reason why I say it's short is because I consider myself still pretty. It's not about being young. It's more about being humble with what I've learned in my live. I think I should be learning all my life and considering what I need to learn still in my life. It's so early in my career. That's for the short piece, the intense piece is just that I'm always fascinated by what is available out there in terms of knowledge and connections. I literally built my life, whether it is personal and more importantly, professional, through meeting people. The one thing that is important when you have this mindset is that it's not only knowing that you will meet people, it's to seize the opportunity. 


 Ruben
 When you meet people, that's a very big difference. Right. You can just meet people and say, oh, it was nice meeting them. Maybe one day they will be helpful. There's another mindset, which is literally my mindset, the way I live on a daily basis that wow, these people. I need to connect with them because one day or another, I'll do something with them. I don't know what, I don't know when, but I know that there's a reason why I met them at this particular time of my life that in the future, whether it is short, medium or long future, I'll do something with them. That's the intense part because you always need to be thinking leaving your meetings every day. 


 Josh Wilson
 Yeah, this is really interesting, but I definitely want to dive in there. Let's place a pin in that topic about meeting people and season the opportunity. Super important before we do that. 13 years old in Israel, what's your national origin? Live. You have a very unique accent and you spend time everywhere, so you probably picked up a blend of accents from all over and I just have no clue. 


 Ruben
 Yeah, it's so funny that you say that because every time I meet someone they like, oh, you look French, you sound Latin American. You have the face of live a European guy. Yeah. When you talk, you are as aggressive as an Israeli. So it's very confusing, I must say. Yeah, I think it depends on how I think about things. My mental mindset is very much of an Israeli person just because I think what I learned in my 1st 13 years I can summarize in one word and maybe you would know it. It's something that it's coming from the Yiddish language which is called hootspa. Yeah. Hoopla know that people know that in the US. If you have listeners around the world, they probably don't know that. But kutzpa basically means being audacious. Audacity, right. I think that's how I've lived my life. When you work with me, when you hang out with me, you can see that through how I interact with people and that's really how I could define myself from my Israeli origins and I left when I was 13. 


 Ruben
 The way they educate you in Israel is to never be scared from failure and always see life in a way that is opportunistic. The more you fail, the closer you get to being successful. That's something that is pretty powerful in Israel. That's why Israel now is one of the strongest tech hubs in the world while being a tiny, tiny country of 6 million people. There's a reason for that. That's the chutzpah is this one thing they teach you since you're a kid. 


 Josh Wilson
 The more you fail, the closer you get to actual success. I'm probably really close because I have failed a lot. Okay, so I love this. In 1998, where you were in Israel because you were probably born 91 ish. You were in Israel in the 50 year Jubilee, right? Yeah, my whole family went to Israel to check it out. There we had a group of Live 50 family members that came in and hung out. We might have crossed path if you were 98. 


 Ruben
 I was Live, eight years old, not even. If you saw me with handling fireworks in the street. I was the guy. I was this kid. 


 Josh Wilson
 You're the firework dealer, right? 


 Ruben
 I was that one. Oh, yeah. I mean, we could talk about my experience in sales, but yeah, it started very early in the fireworks. 


 Josh Wilson
 Well, talk to us about that because I think that because you said the hustler mindset bit by the entrepreneurial bug. It sounds like on the streets you also were an entrepreneur. What did that look like? 


 Ruben
 Let me tell you. Maybe you like stepping up . I think that having self skills is maybe one of the most important professional skills everyone should develop. No, Mattio, what they do, whether you are an R amp D, when you are live dan PR and D engineer or whether you're properly like a software salesman, you need to know how to sell. Because whether you sell your project, your product, yourself, you need to know how to sell. I've learned that within the hard way. Let me tell you a quick story. I was 21, my English was really poor live. I couldn't speak proper English. I was like, how can I learn English very fast in the most efficient way? I get to know this opportunity to go to Fort Lauderdale in America. It's the first time I traveled to the US. I got live a job which was being a cosmetic salesman in the mall of Fort Lauderdale. 


 Ruben
 So I was the guy. 


 Josh Wilson
 Which mall? Sawgrass Gmail? 


 Ruben
 I think it was that one. Yeah. 


 Josh Wilson
 It's huge. 


 Ruben
 It's huge. 


 Josh Wilson
 I used to ride my bike there. 


 Ruben
 No way. Yeah, we crossed. 


 Josh Wilson
 You're following me. 


 Ruben
 Okay. Sorry I interrupted you. It was 2011 and you remember in those malls you have those kiosks in the middle? One of those kiosks was me. I was literally selling that C cosmetics products. My work was literally to annoy people that were walking on the mall and trying to sell them those random cosmetics products like nail kits, location mud. It was so hard mentally because for the first two weeks I got probably 1000 nos and no. Yes, right? Like. No. You bother me. No. It's constantly failing and failing. After two weeks, I came to my boss who was not selling, but he was there. I told him, look, man, his name is Tomer now. He lives in Miami, actually in Tampa. But I told him, tomorrow. I cannot deal with that anymore. I'm constantly failing. I've been up 11 hours every day for two weeks. 


 Ruben
 I didn't earn any buck because were only paid on commission. What am I doing here? I'm going to go back. And that's it. He told me the most important sentence I will always remember in my life. I should even write it out on my wall. He told me, Reuben, listen, you need to understand that failure is part of the journey. If you really believe that the more you get knows, the bigger the yes will be, you'll be successful. Me, 21 years old, I look at him and I'm like, what are you talking about? Book me a flight back to Israel. He told me, Reuben, give it a try. Believe it inside of you when you go to work tomorrow and you'll see the results. Three days later, I did my first ever sale with a woman who was in wheelchair, couldn't speak a word in English. 


 Ruben
 I was speaking no word in Spanish. I sold her like $300 worth of product. Why? Because I believe. When you believe that success is going to come, everyone can sit in your eyes and everyone can see the energy. That's how you become a better salesperson. If you can remember that every day in your life will be very different from everyone that is listening. 


 Josh Wilson
 So powerful. The thing that I think is so important for us to hear is that your boss believed in you. Sometimes if we don't have someone that if we don't believe in ourself, sometimes we need that boss, that friend, that mentor, that looks at us and say, you've got this. I believe in you. Yeah, right. Because I think that sometimes, many times, especially after massive failures in my life, I've been bankrupt, been on food stamps, I've been in venture capital and private equity. I've also had to work on the back of a moving truck to put diapers on my baby's butts. Right? So lots and lots of failure. When I failed massively and I lost belief in myself, it took someone looking at me and go, you've got this. The amount of no more noise equals a bigger yes man. Let's do this. I love this. 


 Josh Wilson
 Thank you for bringing this up. Now that you're working near founders, you get to look at them and say, I believe in you. Let's work through the nose. Let's get through that. When you have someone sitting across from you, how do if someone has what it takes when you're looking at them and you go, okay, Josh, I believe in you, what do you look for in a founder? 


 Ruben
 Yeah, so I will talk about with the lens of when I was a business investor, because I think right now in forum, what we do is we talk with founders who want to sell their business. So it's a little bit different. It's more about whether we can believe in what they built. So it's a little bit different. Mindset address your question because I also do some busy investors. I meet a lot of founders as angel investors myself personally. Also I did some VC work back in a year or two years ago. I think the biggest thing that I look at when I see founders is their ability or the way they show up, that no matter what happens, they will never live ups. This is important because it's much better to have a great founder in a large market with an idea that is not fully set versus a founder that has not a very strong mentality in a market that already exists with the idea that it's incredible because if both of them fail, you know that the first guy will find another idea in a second. 


 Ruben
 This first entrepreneur will fight his or her way to turn around and pivot. I much rather invest in a founder that has the mentality of taking the failure in a positive way and trying to move fast around it. Because we live in such a connected world that great ideas are in every corner of the street. People are smart. You can hear great ideas everywhere. What makes the difference between a great entrepreneur and someone who will not make it, in my opinion, is their ability to challenge their thoughts and be able to move fast if things are not going in the right direction and just accept failure and say, okay, if that angle didn't work, let's find another angle. Some people just remain so focused on the failure, they just cannot pivot. That's where failure becomes consistent, and that's where entrepreneurs don't make it. That's really what I'm trying to look at when I met entrepreneurs. 


 Josh Wilson
 Yeah, hootspa. You're looking for hootspa, right? Their ability to go, I might need to take a knee for a minute, but I'm back in the game. I'm going to pivot. I'm going to run. I'm always going. I'm always going to fight. Talk to us about a time where you got in the world. Did you go from selling cosmetics to investment banking, VC? How in the world did that transfer happen? 


 Ruben
 Well, when I was selling cosmetics, it was just like a summer experience. I was going back to school after university. I did a bunch of different work. I don't come from a very privileged background. My family never really gave me any money to go on holiday, so I had to basically do a bunch of things to get some bucks and be able to hang out with my friends and meet people because I knew that it doesn't grow on the trees. You have to go and seed the tree. That was one experience. I was a waiter many times. I was a private mathematics teacher. I was selling surfboards when I was 13. I did a bunch of things just to get the extra back, to be able to enjoy some of my childhood, in a way. I really wanted to get into the finance world. It's through my school and people I met that I got to those places. 


 Josh Wilson
 I think everybody in the world should have to be a waiter at one point in their life because I agree with you. It is one of the toughest jobs ever. 


 Ruben
 People don't realize that. 


 Josh Wilson
 They don't realize that. 


 Ruben
 People realize that. Oh, my God. Opening the bottle of wine in one of the most fancy French Rross tree in Paris with live one hand. Oh, man. How many bottles have I broken? If this guy here listens today, I'm really sorry. He broke live ten bottles before I managed to open one. 


 Josh Wilson
 Yeah, I still have nightmares, and it's been 20 years or so. I still have nightmares of being triple sat on a Sunday and people waiting out the door. I still have nightmares about it. It's crazy. 


 Ruben
 Tell me about it. 


 Josh Wilson
 Yeah. With this, you said one of the things that people must be able to do, entrepreneurs and deal makers, is they need to be able to challenge their thoughts. Now not coming from a background of privilege. 


 Ruben
 Right. 


 Josh Wilson
 You had to take where you were and turn this. Now you have 100 people that, 100 founders that you're working or employees, and you're building some pretty cool stuff, and you guys are doing pretty well. There are some thoughts that you had to go back and rewire in your own life and your own growth. What were some of those major hurdles from not coming from a background of privilege but creating now wealth for you? What are some things that you had to challenge in your own mental thoughts? 


 Ruben
 Yeah, it's a great question. It's actually something I'm trying to work on a daily basis. It's interesting when you don't come from a privileged background, it's almost like you're always trying to get more and more, in a way, every step that you overcome, you don't feel satisfaction, or at least you don't feel that you should be feeling satisfaction, because there's always more. That's the like, issue when you're trying to build your place in the world. Not coming from a privileged Vworldc is that you're pushing yourself, which can be an advantage because it's a driver, but at some point, it can still harm you because you're never really satisfied with what you're building and with your live. That's something I had to really combat from my, I would say, background of not being from a privileged background or live family, because in a way, I need to be happy when I come to the office. 


 Ruben
 I need to show energy to the 100 employees we manage. I need to show the dream. If you're not satisfied with your live, you cannot show up well. You have 100 sold that rely on you. You're the captain of the ship. If they don't believe in you, whether it is from a communication perspective, but also physically from your energy, people will not work hard to help build the ship. I think that was the thing I really had to work on, which was just be happy, be satisfied with what you built already. It's already good. Of course you can do more, but you'll always be able to do more. That's the beauty of life. There's always going to be more you can do, but at some point, you need to step back, look at your journey, and just feel happy and satisfied, because that also can help in being a better person. 


 Josh Wilson
 Yeah. So good, dude. I want to know how you started making those change, and what was it that sparked where you woke up one day and you're like, man, I need to grow. I need to do some personal growth here. What was that moment? 


 Ruben
 Yeah, I think it's interesting because I haven't talked about my co founders, which is true, because they are a big part of my life. Today. I work with two great co founders, brenton Holland and Alex Copco. Brandon comes from New York. He's American. He worked at McKinsey in Chicago and then worked in a private equity firm called Coville Partners in Boston. Was the first employee. So very smart, dude. We share the co CEO together. Alex is coming from he grew up in South Dakota. So, like, a real big hustler. Really big hustler. He did much more crazy experiences. Team chat I did in my live, trust me. You should interview him at some point. He has ten years of experience in ecommerce, both from Target and Amazon, and he's really like the ecommerce technology guru in the company. The tlbi that were very complimentary, both from experience but also from a personality perspective, very complimentary. 


 Ruben
 That's the beauty of building a company with complementary cofounders. Important because you don't want to have a mirror of yourself sitting with you in building a company. You just don't want to do that because it's not efficient. More importantly, forget about efficiencies building a company. It's like a yoyo, right? Live. It's literally. You have days where the happiest day in the world, you have days where you feel like you're failing, and you need to go through those ups and downs all the time. If you don't have someone that has a complimentary personality to yours, it's very hard to balance it. I find the most resources with my co founders. To answer your question was, when we did the Series A, it was a great milestone for the company. Let's be very honest. Not a lot of companies get to Series A. They were the happiest guy ever, and I was happy, but I was thinking about, oh, maybe we could have done better terms, or maybe we could have raised more. 


 Ruben
 Or like, I was thinking about those things that at the end of the day, don't matter too much once you get through the series. When I talk to them about this feeling, they looked at me and said, ruben, you need to be more happy. You need to be more satisfied. I know it's one of your strengths that you are ambitious and hustler, but you also need to be satisfied with what you have. Since that moment the tipping point, I start working on that thanks to my co founders. 


 Josh Wilson
 Shout out to the co founders. It is so vital to have team people around you because entrepreneurship could be super lonely. And I've had some very public failures. The first thing I want to do is retreat. I want to suffer in silence and in solitude when I'm having a rough day or a deal goes south or deal goes wild. My business partner is extremely optimistic. I'm very optimistic, very outgoing. But my pendulum swings pretty heavy. I'm more emotional. Hey. 


 Ruben
 Yes. 


 Josh Wilson
 I'm more emotional as well. 


 Ruben
 I'm very emotional. 


 Josh Wilson
 I am very emotional, especially. Let me share this with you, and I'd love your thoughts on this. When I invest in people, I love people. My mission on this earth is to invest in people. Right? I'm not extremely money motivated. Now my investors want me to be, right? I am very people in mission motivated. We've invested in people and it didn't work out for whatever reason. I take that personal and that hurts. My business partner scoops me up and he's like, come on, buddy, there's more out there. Let's go get them. He used to be a race car driver. So he's like, let's freaking go. 


 Ruben
 That's right. 


 Josh Wilson
 So I need that. You mentioned something and I got to get this from you because you and I could be like twin brothers. I might be your older brother somehow. 


 Ruben
 Sure. We have the same blue eyes. There we go. 


 Josh Wilson
 I have a hard time being satisfied and content. I am massively ambitious. So how do you manage being satisfied? Content, ambition. Right. How do you manage that? Because I am not a very balanced person. Nobody said Josh is a balanced person. I've never heard that in my life. How do you do that? 


 Ruben
 Yeah, great question. I would say it's a combination of three things. One, meditation. I started doing meditation a year ago, roughly every day, 20 minutes when I wake up. Help a lot to self reflect on your life. It gives you the power of breathing and gives you the power of just disconnecting from your very strong, driven ambition and just thinking about life. Trees, light, birds, start listening to those noises. It's kind of like, interesting. I could not believe in that. My mental model was not believing in meditation. I started doing it and it helped a lot. One, two walks. I feel that this emotion is coming up where I'm upset about something or I'm too excited about something or I feel like I could do more, I just go for live a 1015 minutes, walk around the corner on my own, don't take my phone. 


 Ruben
 Just when it's sunny and not snowing, In New York, just looking up in the sky and just walking around. That's number two and number three, which is the result of number one. Number two, sometimes. I'm sure you work a lot on the desk, right? Sometimes the posture of how New York is by being very live, leaning in the desk, right? We are so invested that were leaning in the desk. Sometimes what I do, and I don't do it often, but live once a week or once every two or three weeks, I literally just throw myself out, literally throw myself out of the desk as far as I can. I look around and I'm like, my life is not too bad. My life is not too bad. And then I go back. This are three things I do help me when I have those meeting. But look, I'm still working on that. 


 Ruben
 It's not the perfect situation solutions, but in the last couple of weeks, six months to a year, it helped me appreciate more what I do. I still haven't lost my hustler. I still haven't lost my ambitious, but I can balance things more, which has been helpful. 


 Josh Wilson
 Yeah. Meditation, walks and pausing for moments of gratitude and thankfulness. It's gorgeous. It's beautiful. Gratitude walks. There's massive research on walking. There's a Latin phrase and I'm going totally butchered and someone's going to throw me some hate mail, whatever it's ambulata solitor or something like that. The solution comes from walking. Socrates did it. Plato did it. Jesus did it. All these people, they would walk and talk or just walk in and spend time and even just like walking around a lake, walking. There is so much power in that time of walking. 


 Ruben
 I went from not walking at all a year ago to doing 15,000 steps a day. Of course, there was some health reasons because I wanted to be more healthy, but also because it just helped my mental balance in a way that I was not expecting. That. Seriously? Yeah. 


 Josh Wilson
 So good. 


 Ruben
 How many languages do you speak so fluently? English, French, Hebrew. I speak some Spanish and Italian. 


 Josh Wilson
 That's pretty cool. All right, do this. You pick a language and I want you to do an intro to say, welcome to the Deal Scout, or something like that. In any language you choose other than. 


 Ruben
 I'm going to do it in Hebrew. 


 Josh Wilson
 Okay. I love that. 


 Ruben
 More uncommon than the other. 


 Josh Wilson
 Exactly. I have no clue what you said, but it sounded awesome. Thank you for that. All right, man. This is so good. The reason I love the show, we haven't even talked much about deals, right? We haven't even talked about the business yet. There's so much depth that you've provided for us, and I'm thankful for that. Now we got to dive into deals . Okay, so you've experienced many different types of deals and many different types of participation in deals. From the investment side, you started out as I'm going to be an engineer, and then you're like, I'm going to the dark side, investment banking, right? In this paint a picture for the different types of investment groups, right? You mentioned private equity, family investment banking, you mentioned venture capital, angel investing, live you've touched a lot of different sides. Paint a picture of maybe of the ones that you participated in, what they are and how do they participate in business. 


 Ruben
 Yeah, okay, so I'll try to be as precise as possible. So, first of all, there are two different ways of investing. First of all, you have the what I would call the VC money, and then you have the more traditional private equity money on the VC side. Basically, I participated in precede seed series A, series B, series C, until I feel those investments are called primary money investing, which is basically what doesn't mean and Joshua would not have there's an investor who will value your business at a certain number based on the investors believe, on your business, on your KPIs, of course, on the market, on the economy, etc. E. And they will inject new money. They will inject that's what we call primary because it's an additional cash that is incued in the business. You as a founder at this stage, do not take any money out. 


 Ruben
 You will not cash out anything. This is done in order for you to be able to grow the business further, because you need cash to grow your business naturally. As you go and grow those series ADC means that you reach certain scales and the more you reach scale, the higher valuation you can get and the less dilution you can have naturally. The one thing that is important in that type of investment is that when you have a family business. This is typically not something you want to go with because the DC will impose a certain speed of execution and because they have certain. I would say. Constraints with their own investors. They need to show what we call mark to market live mark ups on an investment. Meaning 18 months after the investing. How much they've done on a paper in terms of return investment. 


 Ruben
 This ups ask it all the time, which means that the traditional BC, which will push you to do a new fundraising every 18 months on average. That's like what I call the VC Vworldc, Silicon Valley type of startups, very much start ups, tech heavy. This is what I did more recently. Before that I was in more traditional private equity. This is a very different world because in this situation you oftentimes work with family owned businesses. Basically businesses that have been able to what they call grow bootstrap, ie. Never really meeting external capital because they found a business model that just is profitable enough for them to grow the business without external capital, or they have invested from their own family money. The bottom line is that they didn't have any other investors. This businesses are typically slower grower or more under the radar. They took like two to three times more time to build the business and reach out and scale. 


 Ruben
 You have those private equity PMS like Ta, like Summit, Live, KTR, all those big names that people have heard about that are trying to get a piece of the cake that is so unique, because no one has never really invested in those companies. The way they will do it is that either they acquire a minority stake, like less than 50%, the family or the founders still own the business, like more than 50%. In this situation, normally they will not put any debt on the business, but every dollar that is invested, it's not primary anymore, it's secondary. That's the time where the founders can actually take some money out. In the VC world, the status quo is that you do many series ABB, and then at some point your IPO, that's when you get your money out. In the PE world, you build a company slowly, you don't take any external, you own 100% of the business, and then someone comes in years later, invest, and you get some money out, and you have a minority partner on the table. 


 Ruben
 You have the last type of transaction, which is the thing I work most on when I was a private investor, which is LBO leverage buy ups, where you look at the business, you buy majority. You put a bunch of debt and leverage on the business because the cash flow can afford paying down the debt over time. That's how they make the best returns because of some deleveraging maths. The bottom line is that they put a lot of debt majority, and from operational improvement of the business and the growth of the business, like real estate, they can make more value in the equity. These are the two Vworldc, and within each world you have different types of transactions, different types of entrepreneurs, different types of stories. I can get into more details if you want any of those. But that's the high level. 


 Josh Wilson
 Yeah. 


 Ruben
 Awesome. Yeah. 


 Josh Wilson
 Thank you for painting that picture for us. Dig on the LBO, the leverage buy out. Paint a situation where this is good, because I think it comes with maybe a connotation that is it good, is it bad? Who is it good for? So, in your experience, give us more detail of the LBO and how it works. 


 Ruben
 Yeah. The LBO works in the following way. You have an investor. Let's say I'm an investor, I work at Ta. You do have a company that does let's say 10 million of profit. Let's say I value the business at ten times your profit. For me, you're worth $100 million and I want to buy 100% of the business. So you want to cash out everything. You're going to be on your boat and I will work and change things. The way I will do this is that I will look at the business. Ian Hill look at your cash flow profile. Are you very cash generative, like, for example, very capital generative business are software, for example, because they have very high gross margins. Everything else they basically don't have working cap and they barely have some capex. The free cash flow is really attractive. That's typically a situation where if Josh, you had 10 million software business, I would put probably like four to six times of debt, right? 


 Ruben
 The more I can put that, the less I can put equity. The idea is that once I want to sell, let's say the 100 becomes 200 in five years, okay? The company has only doubled in value from $100 to $200. I put 60 of debt on the first stage and 40 of my equity. Let's say that the 60 I managed to pay down the debt over five years because you generate so much cash, right? I get the 60 to let's say 20, which is probably doable my equity suddenly becomes 200 -20. So 180. While the company went from 100, 200, my equity went from 40 to 180. My return on investment is substantially more interesting than only the value. That's the goal of every private equity. That's the basics of LBO. Now, of course, that's the ideal situation, right? The dial scout where you did a good job in valuing the business well, you managed to group it, you managed to get a better multiple at exit, you managed to deleverage the debt. 


 Ruben
 So that's in the best case scenario. Now things can go sideways when you don't do a good job, when you don't give empowerment to the management team of your LBO, when you don't recruit well, and then the cash flow profile is deteriorating, and then you have your debt if you need to pay for. Of course, as that can get to very poor situations where you can actually lose your business just because of the debt. The most important thing in LDL in a way is to find a business in which you can come in and help the business in being better operationally. Don't go to an LBO if you think things are already going well and you have nothing to do there, it can be a good opportunity deal for you. Oftentimes where private firms have really done very well is when they saw an opportunity to change the way the business operated because they have amazing people in the private equity team. 


 Ruben
 They've done a lot of those deals in the past. They know how to do it. They come in, they held the management, the incentive by the management to do well because they can have exponentially more returns. They do a bunch of things that make the operating of the business better and more efficient. That's how LBO works. I think, in my opinion, LBOs are I know they're not always good reputation because people think about it as live, squeezing the juice as much as possible and changing the mentality of the business. It's going from a family business to a private equity business. At the end of the day, if you look at the stats and there's a lot of market studies about it, private equity and particularly LBO, have been one of the biggest driver of employment creation in the history. You grow a business, you tend to hire more, you tend to invest more in people. 


 Ruben
 I think stats have shown and I'm not even creating this stat, I'm telling you live real studies that show actually net private equity has been very beneficial for the economy. Even though you have some exceptions of this that didn't go as well on a net basis. It's been a positive contributor to economy growth through the cycles. Yeah. 


 Josh Wilson
 Awesome. Fast forward to where you are now, and I definitely want there are a few things that we need to get. We don't have much time left. I know, man. Gosh. One of the things that I promised you is one that will give people a chance to learn about your business. You said that there was something happened in your twenty s that was live a pivotal thing for you. I'll just let you explain before we hit record. You said, something happened in my twentys and I was like, Stop. Don't tell me anymore. Let's save it for what I talked about. Awesome. I'm glad we got that across the plate. All right, so then now we get to talk about where you guys are at. You've had all these experiences, you did some venture, you did private equity, you worked with some big family groups, you've done amazing stuff, you got bit by the entrepreneurial bug, you started a business. 


 Josh Wilson
 Tell us about your business. 


 Ruben
 Yeah, amazing. So we've been around for two years. As I said, we started business with Brendan and Alex that I talked about earlier. We really all got really excited about the ability to innovate in the consumer space through acquisitions, which is something that PNG, Unilever and many other giant consumer companies that we all see around the world have been doing for the last 75 years, but is the only exception that have been doing it in the brick and mortar space and offline consumer space. The three of us got together in college. Like July 2020. We saw a ton of white space in what I call the creator economy with consumer goods to do something similar. With something similar where you can leverage best in class practices in merchandise. Digital merchandising. Best in class practices in digital marketing. Best in class practices in M and A and technology building to create eventually a platform of consumer brands that we hope and really expect to be prominent on the digital shelf for many years to come. 


 Ruben
 That was the real pieces. Today we have a platform that is very much technology driven. Everything that we do is driven by a lot of technology and this technology helps us identify, acquire and then grow ecommerce consumer brands and that's what we do. So we do deals all the time. Going back to the topic of this podcast, we buy ecommerce businesses from entrepreneurs from the most random places around the world every month, super and try to do a better job than them, even though it's very hard because this entrepreneurs are just incredibly talented and it take a note of time and effort from us. Even though we are 100 and have a lot of technology, it takes a lot of time to take out their knowledge and get it to forum brands so hard, but that's what we try to do. 


 Josh Wilson
 What's the end game for you, right? You've gone through series, you've raised, you've built awesome team, 100 employees. What's the event name for you? 


 Ruben
 Yeah, the end game for me and for us, the vision for three founders is to really build the next generation version of what a large CPG company looks like, right? In the traditional world, before the ecommerce started really increase this penetration, the traditional CPG were basically like retail bracket, motor and nothing else. Right now we are in a world where data is our biggest friend and things are connected to a speed that you can't even imagine. Today our vision is that the new version of what a group of CPG consumer brands should look like is a combination of ecommerce and traditional retail. All of that fueled and powered by data and data tells us a lot about each consumer. The more we have data, the more we know how to best approach every consumer around the world with their willingness to pay, with their consumer habits, with all the things that you need to know about a consumer. 


 Ruben
 My vision is that 510 years from now we'll have live a group of we are looking only at five specific verticals in the consumer world which are pets, baby sports and outdoor health and personal care and home goods because those verticals are the ones we really believe in. We hope to build a group in each of those verticals of 1020 30 ecommerce brands that we can build into worldclass consumer brands and basically sell those products to anyone around the world, no matter where they shop, whenever they shop. 


 Josh Wilson
 That is awesome. Pets, babies, sports, outdoors, personal care, and home goods. Those are the exactly. All right, so if there's an ecommerce founder out there who would like to have a conversation with you, what's a good place to connect with you and maybe do it? 


 Ruben
 Yeah, it's great. So there are two ways. The easiest way is to go to our website. It's Ruben forum brands. There is a form of contact us where basically the ecommerce entrepreneurs just put some details about their brand, and we'll reach out no matter what. Whether it's too small for us or whether it fits very well, we'll reach out to you in 24 hours. That's one way. The more complicated way to send me an email. Because I have a lot of Gmail, I'm not always very responsive. So it's Ruben forum brands. I would say if they really want to reach out fast, they should just go on the website. Very easy. Also, ask flofr some basic information, and if it fits very well josh, the process is very quick. Within 48 hours, we'll jump on a call. Look, we talk with probably 15 to 20 sellers every week, and so we listen to the most crazy story every week from 15 to 20 people. 


 Ruben
 It's incredible. And once you do this call. Which oftentimes last 30 minutes. Where half of it is listening to the founder story. The other half of it is presenting forum. Then if there's a feed. We'll ask for basic information about their PNL. Some data about their Amazon account. And from there. Once we receive the data. Within 48 hours. We send them back a deal that we can do with them. If they accept the deal, we sign the ROI. Within 30 to 45 days, we can close the deal and wire the money. 


 Josh Wilson
 Super cool. Ruben, during this interview, there's probably a question I should have asked you that I completely screwed up and did not ask you. What is that question? 


 Ruben
 Maybe the one thing for the listeners, for you, is the most important thing I've learned from building a business from zero to 100, and I think you mentioned that. The answer to this question you said it earlier people. I cannot emphasize enough the importance of people in whatever you build. We were so lucky to hire smarter people than us, and because of that, the company is doing well. It's not because of me, because of the founders, not because of our vision. It's because of the engines of any machine that you build. This engine is the people, not the founders. The founders give direction. The people build a company. This is important. Everyone thinks that they change the world because they are the smartest or the most visionary. They're wrong. People are making great ideas, not founders. 


 Josh Wilson
 Yeah. You mentioned one thing during the beginning of the interview that I promised I would touch on, too, is when you meet people on seizing opportunities. When you see it, live us a point. Give us some advice, some wisdom from what you've learned on what to do and how to do that. 


 Ruben
 Yeah, two things, very easy, depending on the personality of each of us. But two things important. One, when you meet people, no matter where they're from, no matter what background they have, no matter what education they have, always be humble. Always be humble. Never consider yourself superior to anyone on Earth because you don't know what you don't know. Always come in with huge humility, and people will see it and appreciate it and build a conversation with you because you will showcase trust. That comes to the second point, which is once you showcase trust and once you have the conversation, actively listen to your audience. When I say actively listen, it's actually really caring about what they have to say. Trust me. Once you go to conversation with those two in mind, first of all, you'll learn much more about things in life because you will digest more information. 


 Ruben
 Number two, you will build better relationship. If you combine number one, number two, you'll build your network and you'll get more opportunities. 


 Josh Wilson
 The first one is being humble, and the second one I wasn't listening. What's the second one? I'm just kidding. Got it. All right, so let's do this. We got to wrap up today. You're awesome, man. By the way, fellow deal makers in the audience, as always, reach out to our guests. Thanks for being on the show. If you have one of these businesses and you want to start a conversation with Ruben and with his team, his contact information will be in the show notes. Once again, this is the purpose and mission of the shows. Put deals and dealmakers together. If you have a deal and you'd like to come on the show and talk about it, head over to the deal scout.com, fill out a quick form, and we'll get you on the show next. Till then, talk to you all on the next episode. 


 Josh Wilson
 Bye, everybody. 

Ruben Amar Profile Photo

Ruben Amar

Cofounder & Co-CEO

Ruben is the co-founder and co-CEO of Forum Brands, leading its Mergers & Acquisitions team.

Ruben began his career in investment banking at Credit Suisse in London, and then joined TA Associates, a US-based growth private equity firm investing out of a $9bn fund globally, as an investor in Consumer and Tech. While at TA, Ruben was actively involved in driving buy-and-build strategies of some of TA’s portfolio companies which resulted in more than 20 executed acquisitions, expansion into more than 10 countries, and significant value creation for shareholders. Ruben was also on the board of 7 different companies interacting closely with founders and CEOs.

Ruben holds a master’s in engineering from Ecole Centrale Paris and an MBA from Stanford Graduate School of Business.
He is on a mission to identify and build the next generation of world-class consumer brands through technology and strategic deal making.