Drug-Seeking Founder Warning

Jeremy shares a cautionary tale about ignoring character red flags when acquiring companies.

"A friend of mine who buys similar types of companies did a deal where they flew in the founders to meet them in person. The first night, the founders wanted to know where they could get drugs. That in and of itself is not a strong signal, but in that context, in that situation - it's kind of what more do you need to know?

It turned out they were doing a bunch of stuff they didn't disclose. It's always things like that - someone who's really flashy is almost always a bad sign. In my own worst deal case, I introduced the person to different friends and experts, and they all said 'this guy is really something' and 'I don't know why you're dealing with this person.'

It's funny how you get blinders on when something looks so good. We've all made that mistake. That deal turned out there were things we didn't know about, it went very badly and we lost all our money. Fortunately it was a really small check, but that one was pretty rough."