How This Harvard MBA Bought A $50 Million Dollar Business For $0

Shaan Puri

I started a private equity (PE) firm alone to buy a business, but it wasn't your typical PE firm. My office—my "quote unquote" office—was just a library at school. There was no fund, like no money. I had a lot of help; I had over 50 unpaid interns come from Craigslist. I had them sift through over 400,000 private companies for a year and a half before I found EggCartons.com. So, a while back, maybe a month ago, I came on here and I was like, "Dude, there's this business. Have you heard of this business called EggCartons.com?" And you're like, "No, what is that?" Well, it's exactly what it sounds like. You go to EggCartons.com, and it's a place where you can buy the packaging—the carton for eggs. But also packaging for a bunch of different varieties of eggs, like huge shipments, small ones, eco-friendly, not eco-friendly, but also just like in general, other packaging materials as well. So I was like, "Yeah, fascinating business, right?" You go there, and it's an old-school looking website, you know? It's like "Dial 1-800-EGGS.com" or whatever to call us to place an order. I was like, "This is fascinating." So I dug in. I was like, "Who's behind this?" I basically found that it used to be owned by this guy who ran it for 24 years. I was like, "Okay, this sounds about right." His LinkedIn picture was him with a phone with a cord in it, and he's got it up to his neck, sitting at a messy desk. I was like, "This looks like the guy who started EggCartons.com 25 years ago." But now I noticed, oh, it says he ended his ownership one year ago. So, who's behind this? I saw that there was this woman named Sarah Moore, who was not what you would expect. It's like, "Oh, this person should be like the CEO of Lululemon or something like that." Why is she getting into egg cartons of all businesses?

Sam Parr

Like, a beautiful Harvard graduate. Yeah, she looks like a celebrity a little bit.

Shaan Puri

And so, I tried to reach out to her, but I couldn't get a hold of her. However, I couldn't resist, so I came on the pod and told the story. It's like, yeah, so basically it looks like she purchased this business. She did one tiny interview about it and blah, blah, blah. But I had done one thing that I didn't tell you about that day, which is I've been experimenting with a format that I wish people would use more on me. When people reach out to me, they're like, "Oh, I'd love to talk to you sometime." I say, "If you have a question, just send me the question. In fact, if you have a bunch of questions, just send me a Google Doc. I'm going to look at it, and if I want to answer, I'll answer. If I don't, I don't." So that's what I did with her. I sent her an email that said, "Egg cartons!" with five exclamation points. I said, "That's hilarious! What a hilarious niche. We got this podcast; I'd love to feature you on it. I have five questions for you in this Google Doc. If you answer them with bullet points, I'll tell your story on the podcast. We get $20 million a year; it'll be great for your business." I also included, "This is me on Twitter, by the way." Whatever, I sent it, and there was no reply for 20 days. Then she emailed me out of the blue. She said, "I couldn't have paid someone to make me sound as cool as you and Sam did on the podcast last week. Thank you so much! I filled out your Google Doc; I think those answers your questions. I would have responded earlier if I didn't think this was spam. Blah, blah, blah. Send me your address; I'll send you some world-class egg cartons." Alright, so I want to read you what she... what I...

Sam Parr

read to her

Shaan Puri

and what she replied

Sam Parr

But did you want any? Are you going to accept those cartons? Very nice! It's really like a very nice story. Very nice of you, Sarah, but thank you, but no thank you.

Shaan Puri

No, dude. Everything in the house could turn into a toy storage container. I have toys forever, all shapes and sizes. Alright?

Sam Parr

what did you say

Shaan Puri

So, I basically said, "Here's my question." I asked, "You bought eggcartons.com. Did you buy it alone, or was it part of a private equity firm?" She replied, "Alone-ish. I started a private equity firm alone to buy a business, but it wasn't your typical private equity firm. My office, my 'quote unquote' office, was just a library at school. There was no fund, like no money. I had a lot of help. I had over 50 unpaid interns come from Craigslist, and I had them sift through over 400,000 private companies for a year and a half before I found eggcartons.com." "What?!" I exclaimed. Then I asked my second question, "How the heck did you buy it? Or no, why the heck did you buy it? What about the business made you want to buy it? Was it the name, the customer retention? What drove you to it?" She explained, "My goal was to buy a business with all debt so I could have 100% ownership. I had no collateral, though, except for my 2012 RAV4. So, I was trying to find something that was already stable enough that I could pitch a bank that the business itself was the collateral instead of my RAV4. I needed historical cash flows. This business fit because it had been profitable since it started in 2001. It had a high barrier to entry given the domain name and over 100 other similar domain names that they own, like eggcartons and misspelled versions like eggcarton.com, blah blah blah." Then she said, "The founder has strategically purchased all these domains over the years to protect their brand. It was simple enough. It was also a simple enough business that somebody with zero operational experience, like me, and average intelligence could operate if they tried hard enough." I was like, "Wow, this is incredible." Then I said, "I live in Silicon Valley. People here are obsessed with crypto, AI, blah blah blah. They would underestimate eggcartons.com. Can you give us a sense of the scale of the business?"

Sam Parr

that's a really good way to frame that

Shaan Puri

10 minute revenue

Sam Parr

That's a beautiful way to frame that question. Because you nagged her a little bit, like you said something a little rude. You're like, "Yeah, you know, it's probably not that big, but maybe it is. You know, like impress me."

Shaan Puri

Right, I would think this is small, but you know, I'd love to be surprised. Would you say that this is more than this and less than this? So, anyway, she came back with, "I'm in the middle of something that prevents me from sharing the numbers publicly. All I can say is that our revenue is less than $50 million." I was like, "Oh, okay, but that's not less than $20 million. If it was less than $20 million, I feel like you would have said less than $20 million. I feel like that would be the case." I said, "How'd you negotiate the deal?" She said, "Ah, there's a bunch of context here." She goes, "In summary, I harassed the owner until he replied. Then we hit it off, we came up with the valuation together. Then I contacted over 100 banks, most of which told me to f*** off. One of them threw me a bone and agreed to an uncollateralized loan. The final deal was 75% bank debt and 25% the seller's note." So, she bought this with no money down, like the bank financing and the seller financing. She said, "Before buying the business, I overpaid an accountant to check my work and do an audit of the business because frankly, I had no idea what I was doing. His fees got rolled into the deal itself." So, she used an accountant to cover her ass but also paid him out of the deal itself.

Sam Parr

this one's amazing

Shaan Puri

Any other fun tidbits or anecdotes I could share? Here's what she says—this is where it gets great. She goes, "While searching for their business, I participated in several research studies just to make money. While I was doing my search, I went legally blind from a deodorant study for a bit, so I had to take a break from working until I could read again." She continues, "My response rate was awful. I started doing borderline insane things to get a reply. At one point, I took a photo of myself wearing a sweatshirt that said, 'I wanna buy your business' with a massive grin, and I faxed it out to thousands of businesses a day. To this day, I run into owners who recognize me from those faxes. One of those owners is actually my neighbor." Then she says, "The library we worked out of required a school ID to enter. Most of my interns didn't go to the school, so we had to get fake IDs for all the interns to get into the library. Every time we hired someone, there was a lag because we would need to get more IDs." "Before COVID, I used to fly to China and needed to examine the egg cartons. On my first trip to India, I got held by Indian customs and interrogated for hours because they didn't believe that I was coming to India alone. They did not believe that I was coming to investigate egg cartons related to India. I almost got killed there. I rejected a shipment from an Indian vendor; his whole family lived there. He was furious and started chasing after me. The hotel put me into incognito mode for my safety. My driver, luckily, was at the door that I ran out of; otherwise, I'd probably still be there, buried underground." She goes on, "When I bought the business, I considered it an egg company, but now I think of it as specialty packaging. Forty percent of our business comes from things entirely unrelated to eggs. You'd be very surprised by our customer base. Think big brands like Boeing, SpaceX, Disney, Madison Square Garden, Crayola, etc. Anything that requires protection and separation is fair game." Anyways, there's one more she said, but dude...

Sam Parr

what's the other one

Shaan Puri

is sarah moore not my hero is she my hero or is she not my hero

Sam Parr

This woman is wonderful. Why didn't she talk about this publicly more often? I feel like there were tons and tons of stories.

Shaan Puri

There are some people who are so in the game that they're like, "Oh yeah, what am I gonna stop and chat about the game? I'm in the fucking game!" That's the feeling I get from her. I've met some people like this. It's a combination of them not realizing how story-worthy their story is until quite a bit later. The second thing is that they either prefer privacy or they're like, "Yeah, I don't really know why I need to do that. Why would I do that? It's gonna be kind of braggy and weird. What's the benefit? Maybe I'd just rather be personal." I know a handful of people that I'm like, "Dude, I wish I could tell their story on the podcast because they're epic!" But they just don't see the value in this. They're also not consumers of it. That's the other thing I've noticed: most of those people don't listen to a bunch of podcasts or take inspiration from them. So it's kind of a foreign idea to them. They're like, "People will care?" It's like, "Yeah, of course people will care about this! This is awesome!" So anyway, I was totally inspired by this story, and she is kind of amazing. She is one of us. No small boy stuff for Sarah Moore.

Sam Parr

So, I think she's only... when you Google her, you basically can't find anything. I mean, there's next to nothing on her. There are like 1 or 2 pictures, and there's very little information. I found one article where it says that she's 28, and it mentions that she answered a question: "What inspired you to start buying companies?" She says, "Freedom." When asked, "What is your mantra?" she replied, "Don't take counsel from your fears." That's pretty much all she has shared. This woman's amazing! Why can't we find anything about her? There's a lot going on with her. We need to convince her to come on.

Shaan Puri

There's a 30% chance she's a fat guy named Craig. So, you know, if we could be getting catfished here, I wouldn't put it past her. But I'm going to go with what I see. I think she's amazing.