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The Berman Buzz

EP16 - Galaxy Vets - a unique roll up model using ESOP with Emmitt Nantz, COO

That's going everybody this is the ESOP guy and we are on a journey to an ESOP I'm so glad you could join us today if this your first time joining our podcast. I wanted to describe this this is a resource for those that are thinking about utilizing, the benefits of an ESOP whether that be in a transition for their business for an exit or a success some kind of succession planning process, could even be utilized for strategic growth in different aspects of that, So today we're going to talk a little bit about that because we're going to get into a kind of a different structure that I don't think a lot of companies have thought through are considered. So with that the podcast has been going on for three seasons and. If you're interested in other episodes please go to our website at journey to an ESOP calm and again thank you so much for joining today. [1:02] One of the one of the things I like to do in the in the podcast is is delve a little bit into different types of Industries because I think it's very helpful because sometimes. Companies are thinking you know what about my type of business in today we're going to do that. Specifically for veterinarian practices and look at the possibilities of again a different type of structure using some of the components of an ESOP. It's really important to understand there's a lot of ways to do these things and as you as we expose you to this I mean I think it's really. Partly there to help you understand new ideas and different things but this is always going to come back. To asking good questions to your advisors and whether that be your CPA or your attorney or whoever else is helping you so. [1:49] To really get into this today though we're going to we're going to interview Emmett Nance and Emmett Nance is the Chief Operating Officer with a company called Galaxy vets. And. [2:00] M it has really been a big part of Galaxy vets in their growth strategy and how they're putting this structure this new structure together they are more of a startup. But what Emmett and I are going to do is kind of go into how they've structured there, their company and what actually is happening in terms of making this an opportunity for other Veterinary practices that want to join in terms of how they're going about it and again using a very unique kind of structure. So with all that Emmett thank you so much for joining today Welcome to our podcast. [2:35] Thanks appreciate being here great so as we start out it's probably really helpful for everybody just to get to know you a little bit can you give us a little bit just from your perspective your background, maybe with the company and in relationship to maybe your skill set and what you kind of bring to the equation. [2:52] Sure yeah I've been with the within the veterinary space for about 20 years so it's good my career and I've managed to hospitals and a bunch of the stuff in between from software to, Regional management and then company management as well so I've really grown throughout different phases of this career in this industry and have a passion for the people who are passionate about pets that's really high some that up most of my background is in process Improvement and so I go into functional operational improvements to incapacity or improved scalability within an organization and I did that for some larger organizations like Banfield has been a number of times they're they're our largest Veterinary Group within the US has worked for a few years at idexx which is a provider of software Diagnostics within the veterinary space, my main purpose of Galaxy that's that is a CO o is to bring a lot of that experience and consolidate that night clinics to be able to leverage economies of scale. [3:52] And also improve their even a performance so the veterinary industry for quite a few years now has really been gaining a lot of momentum it's gone through a couple recessions is done very well. This is a lot of private Equity coming into the space to consolidate few years ago you could have purchased a Veterinary Hospital door somewhere between five and eight times their evening. Are running 15 to 20 times they're even tougher single practice now wow and groups Consolidated groups or the most recent one actually went for 26 times Consolidated ibadah it's a lot of upside potential very attractive to private equity, but what we found. Is the professionals are usually a little bit left behind feeling pretty burned out and we see quite an opportunity there so esops been attractive to us to help close that Gap yeah, those are huge multiples what makes up the difference for I mean you still have to at the end of the day they have to make that up in a, in the in the deal structure at some point you if you bought it for 26 and which seems just incredibly high or even 15, so how do they how do they justify something that high well you get to gain quite a bit back after acquisition is you consolidate these together so you can make up. [5:00] 7:55 maybe up to 10 times some of that over the course of three to five years just to the consolidation and start to Outsource a lot of these independent clinics take on a lot of the payroll in the management those types of things you can start to convert that into production so you've got growth and cost that's Consolidated so you start to make up quite a bit of that fairly soon, then through through the in the industry what we've got is a lot of upside potential who see an accelerated growth, that ownership okay as well as what we call the human animal Bond so pay attention and spending money on that path so you start to make up some of that, yeah I don't know if you have them off the top of your head but I would imagine just you know you know. [5:40] Intuitively that everybody has a pet now it seems like everybody's got a dog or a cat so while the numbers are Is that real and is there any statistics around like how many more pets people have or the amount of money they spent on pets yeah covid-19 was quite an accelerant to pet ownership not only an accelerant that ownership I don't have the numbers in front of me as far as how many more pets through we do have some of that on that on call but we have also recognized in addition to pet ownership just one of the things to note there, is early and covid a lot of the shelter's ran out of pécs lot of people adopted so a lot of acceleration there the other accelerant there is just attention to this because so many people actually end up working from home yeah they're with their pets they recognize symptoms and stuff far more than they used to. And that's actually increase some of the demand. [6:33] What are the opportunities we recognizing is is covid created increased demand but the offset of that the supply which is a service industry, getting some of this burnout and then some created more and more of a gap between demand and supply and demand a lot of what we're going to talk about with the new saw today a lot of what galaxy event is doing is really about attracting that, supply of service okay back into the organization to meet that demand okay yeah so kind of identifying the Gap and then coming in with a solution. So I think a good place to start for us to is just is to help us to better understand the the structure the ownership structure of galaxies vets. So can you go through that a little bit I know like as I alluded to at the beginning you're a startup company but can we explain that a bit. [7:18] Yes I was I've already started to talk to a little bit burnout is a Big Driver of decreased supply Professional Services we need to be able to pull that back in not that long ago the the strategy for veterinarians was to participate in a practice and then buy them up that was their opportunity. Well with these multiples we just talked about that becomes less of an ability for individual buyers plus veterinarians coming out with much higher student debt than they used to have as well so that also makes it less less available to them to buy into these practices we recognize that as well as the consolidation since to be putting a lot of Demand on the entire staff, few people make a lot of money with the multiples we talked about staff is kind of left behind in ruins in some instances so we recognize that as the opportunity. [8:09] We are a startup with a lot of background and experience in the management team but we wanted to come into this with, fixing that couple other things to note that in Arians have a three to four times higher suicide rate general population is twice as high as medical profession in general forty-four percent of the Professionals in this space are actually considering leaving the profession because it's too difficult again we're looking at those as opportunities to close that gap between supply and demand that brought us to the ESOP conversation what we actually set out to achieve is they how can we, how can we create ownership for people who traditionally had ownership opportunities in the longer do and how can we attract them to build their own wealth, so contribute to their own financial success and everybody wins versus a few people with that was kind of our thesis going into this sure so as we started to explore. We were introduced the ESOP. [9:04] We said that that sounds like it's really going to help us out because we exploring sharing ownership there's a lot of Burden associated with tax obligations as it's granted. Esops helps us say look we're just going to give you some ownership and we're going to drive all of our performance in our metrics towards performing any bit of contributions in that growth but we're all going to be on the same page but you don't have to worry about this tax obligation and then as we started to learn more and more. Isak got really really attractive to us just from again continue to move towards that mission of. Bring in veterinary medicine back to veterinarians is how we can see how we surmise that. Sure so the structure of our organization is we have seen investment private Equity investment it's an authority ownership which focus on esops, acquire them 100%, we pay in cash and we roll over an equity with the organization so we end up with eventually in about five years we're shooting for at least 70 to 75 percent ownership is within the organization persons outside equity. So right now on the ESOP what percentage is the ESOP own and what percentage is the other minority owners own. [10:17] Actually where we are very start up so we're just at the point of acquiring our first locations and our hospitals so we're standing this up from the beginning and actually it's a case up yeah so it's a 401k combined with an ESOP. Because an eventual exit option is IPO and so those both qualified plans lost transferability between the two so right now the ESOP is being structured and stood up with the intent of first issuance. [10:41] Will be granting those shares in q1 of 2023 for those that have been in the company. To the end of the year okay yeah so basically and I'll just interpret what you said for people that are listening you've created the ESOP plan. And you've set it up to where. You can basically Grant shares into this and the case and the case Ops situation which is very unusual we did we did a podcast on that before but. It's where we combined you combine both the 401K plan and the ESOP plan they're both retirement plans, and then that's a combined retirement contribution or a retirement plan that people can take advantage of so they can put money in the 401K, they can have it as part of the ESOP and so your your strategy is and I'm just going to bring you in as a new company as part of our Consolidated venture. And then the benefit would be part benefit because I know there's other benefits, would be we're going to we're going to Grant you shares in this esops that we've created and then over time that esops going to grow in terms of number of shares and. [11:48] Participants and of course value of what I'm guessing. [11:52] Absolutely and our primary communication around this is that we're all shared owners in this so whereas some of our competitors might. With the horse for lack of better term to get the production and improvements through we're going to have much more of a line communication on the proof we do these things we're going to see these benefits and we all get to win mom from those journals improvements. So when you say kind of startup how many how many practices are starting off with you guys. [12:18] Yeah so we're just a few months into the setup and structure we have a management team that's very experienced. That a strong is up and a 401k background we have some CFO CEO Cielo management people culture we have. [12:35] Actually a lot of the ESOP and some of the other things that we're doing we've attracted 350 hospitals and we call inbound leads so we're most of our competitors are doing cold call outbound, lead generation we have 350 practices that have reached out to us saying hey can we join you really so we're working those through the pipeline another component of this too is we have in this space I've already talked about burnout and 44% of professionals only considering leaving so most of our competition in consolidation space, Devon veterinarian space open for 10 to 12 months they spend 40 to 50,000 dollars minimum to try to acquire we have over 1100 and potential employees, you're signed up wanting to join us so we've also closed that Gap and have attracted a lot nice up has been a big, they can only look so we're going through the first deals of bringing the first Acquisitions in the organization we have a pipeline of 350 more to analyze the bring in as well to structure this up front, to get the results I just talked about as far as attraction. [13:37] So once so kind of doing some Acquisitions that I've done in the past I mean there's a lot of work that has to be done to acquire them and integrate and and get everything implemented. [13:49] How do you set it up to where it says it streamlined or is it is it you know because every practice is probably unique all right because you have. Different owners of these practices that are now you know looking at this as a possibility yeah we said we focus very. [14:06] Very diligently on process design and process Improvement continuous process Improvement so we leveraged kanban pretty. Pretty diligently as well so we set up that process we measure how much time each is spending in each phase so we have what we call an upstream and downstream approach Upstream being before a position Downstream post acquisition and so we manage them through the point of marketing team sales qualified lead to, proposals and letter of intent and through due diligence and actual clothes so Grant through each of those and we do it with what we call liquids and manage how much we have in each so we have predictable flow through an improvement opportunity then we continuously improve so we don't put the bottlenecks in the barriers in the processing and flexed improve knows how many do you think you could do in 2022. [14:56] Our Target is to be. [15:00] Specific about what we bring in 2022 to establish those processes and accelerate the 2023 and Beyond yeah so we're targeting somewhere between 10 and 15 depending on the size of the deals that we bring through 10 to 15 locations in 2022, again Define those refine those processes and then accelerate our goals in five years we'll have 220 locations. And one of the cool things about Galaxy that's as we're building what we call a hub-and-spoke design and galaxies vets would call it a solar system so that's why I have a centralized. Star which is a special specialty emergency Surgical Center and we have what we call planets these are the quired locations that are general practice and we have internal referral type of capacity there which will also accelerate the scale growth to the humidor. So we have that that strategy we're going to work through a lot of our thesis in the first year to make sure that it's solid before, sure absolutely no it's very unique very interesting so when you approach I mean you got 350 in your pipeline so it sounds like people are starting to get to know who you are. [16:03] What I know the esops attractive and there's there's a lot of benefits to them and I know that that you kind of address the burnout rate which sounds pretty. Um It's pretty high I mean compared to other Industries so what's really attracting companies to this model mostly is it the financial benefits. [16:25] In a just wanting I don't know I mean you know I'm just curious about that. [16:30] That we've done some surveys of the potential been stripped out there and don't understand what is what are those drivers and the top three number three is actually compensation so it's not really about compensation although a lot of competitors in this space offering significant sign-on bonuses and contracts for production. Kind of some some immediate wealth associated with that. Okay but the first and the second is really about work-life balance and then the culture within the organization that they're working for they've identified the veterinarian specifically identified they need more balance what we know in the space. Is that it's about 80% female and that's shifted over a period of time and so we're seeing certain things pop up and required needs to be able to balance life and work, and not be a 40 to 60 hours a week commitment. [17:22] To what they do as a profession so we're flexing some options in addition to the ESOP and having ownership of participating there but we want to be able to say look we can provide benefits at lower rates so how how, how many days can we commit there we also know that burnout is a matter of, if you think about a veterinarian they went to school for many years to get a degree that's very specific to providing the service right big drive for that goal. Most days in a general practice Veterinary Hospital is fairly redundant, they go from really pursuing a goal for a long time to kind of a monotonous we're done the type of Engagement so something else for standing up is we're going to be leveraging telemedicine very strategically in this organization others tend to bolted onto there, their operations it's Central to what we do we also have some other services to where we can offer some variety to the Daily work you can work in a GP you can work at a central location you can work tell a medically make some of those up and also Flex Flex the hours what we know from a supply demand piece is as long as we can attract enough Talent back in we can have that flexibility steep still need operational news so that's what we're going for and that's attractive to quite a few folks how does how many hours is a vet work on a normal basis just on a given week if they have their own practice. [18:42] If they have their own practice they're generally working 60 to 70 plus so they work full-time 100% And the value, of their retirement essentially is locked into the asset, they're so right now the seller has quite a quite a few options because those multiples are high lot of lot of interest but the other veterinarians in that space are also working 40 to 60 hours a week. [19:05] And most of them are on whether called Pro cell so production on top of salary and so it's based on production they create another unique component of Galaxy that's as we're offering straight salary. So we're going to offer them a salary based on the production that we've seen before but lock that in instead of. [19:21] Is that just going to improve some of the flexibility within our Network concept bill or fur and provide. Provide good care versus focus on the transactional components and we're offsetting that with a few other things like membership services. Yeah and so instead of them having a compensation that's based on how much I bill out every week. You're going to give them base a base salary right makes it a little simpler a celery and a base salary is going to make it it's easier for them is there. They know they got apparentiy kind of income that they can Bank on but it's going to significantly improve the collaboration between professionals to provide care for the BET and make sure that they get what they need sure. [19:59] Well you know so as I listen to you talk about this one one thing that kind of comes to me is like. With esops in what we talked about a lot on the podcast a lot of what we do is aimed at. Helping to provide an exit and so your it is yours kind of really aimed at helping people find because it sounds like there's that they're being set up to, in a good way being set up to kind of transfer transfer their practice into a larger group so they can kind of work more balanced out work-life balance has and, but just be paid as much as they had before meanwhile building a retirement account in the ESOP is that kind of the main goal. [20:42] Yeah that's what we found when we started exploring these opposites usually used to to provide an exit for truck owners and sell to employees so a lot of the partners that we engaged from a trustee as well as other advisors like oh this is a pretty cool concept for us it seems like a natural fit to achieve what we're trying to achieve here, assuring ownership so yeah we want to take beginning of this conversation we talked about the significant value that can be created with these multiples within the space, we wanted to reinvest that back into the team now then create their own Welsh we're all participating in that but we have a common cause and we know that this gives us a very competitive advantage. As we're consolidating and we're looking for like-minded theirs. Over 20 this 22,000 practices individually owned still in the US we're looking for 220 there's only one percent of them. So we're looking for owners that aren't looking to exit right now they're not saying hey I need to cash out and go live in the Bahamas. They want to continue to practice a lot of them that have engaged us are committing to at least another five years or more in the profession. [21:49] They really attracted the idea of sharing ownership with their employees because they don't have that vehicle very well within their individual practice but they recognize the value of the entire team brings to their success. This is actually proven to be very attracted to a subset that we want to partner with. Yeah okay so that that helps a lot so the getting so getting kind of a target of 220 practices. And what you're saying is by doing the consolidate by doing the roll up I mean they could take their multiple and it could go to 26 right and so the value proposition for that as much better on there than on their own. [22:28] It's true yeah and this is something that came up and it done a couple podcast on this and it's the idea of how do you use a rollup scenario with an ESOP. Indeed do it do you take the do the roll up and then go esops or do you do it kind of utilizing an ESOP and I think that your model is pretty interesting because I actually we had this question in Seattle recently. For the ESOP NCO conference I did a presentation in this guy raised his hand and he said how could I use a roll-ups, you know how could I use the ESOP for the roll-up and we kind of talked about all kinds of things but I don't think we really nailed this down this is a really I think an interesting way to go about it. Well the key components of how we're setting this up when we roll over Equity from the hospital owners were not rolling that part into these sub so we have five different Shara types is preferred and common because you're aware of the ESOP has to have the highest common share associate with us or is he saw his comedy shares all employees US based employees participate in that, that structure we have also common be we use the company for rollover equity and for employee participation. [23:40] So the mix of all five types it's us there but we're using the comedy for the rollover equity and they accommodate for the ESOP, when you bring them in are you guys doing any kind of valuation on the practice and put in absolute and if you are doing that are you are you. Putting any money out on like our saying hey this is how much will give you. Or is it because that's like a normal acquisition or are you just saying hey this is what it's worth this is the value of your common B shares and so they're going to be, holding on to those in their basically contributing those is that how it works. [24:13] Yeah so we pay for we pay cash for part of the transaction and we roll over Equity sure another portion of that transaction so that's why we raise funds outside capitals or the pit of the cash part of it, participants within this have significant upside potential because it were able to rollover part of the equity at a low Share value and then a five years were 126 plus there's this discussions out there of even going to 40 times even in certain shit next opportunities for some groups that are out there considering it now wow so that type of upside potential allows individual owners right now that want to stay in the game to participate on much larger exit in the future and take out a mini exit hmm well yeah I mean those numbers are big I mean yeah. So now you take your model which we've I think we've done a good job of over given a good overview and you compare it to the private Equity roll-up model, how are you guys different and how are you I mean you're a little similar in some sense but how are you how is that really. [25:18] It has a different from the the equity full 100% participation yeah private private Equity comes in and says hey well we'll pull these together will give you a his your piece of money and then we'll give you, you reinvest that money and then you know then you can sell again later once we finish the big roll-ups. [25:36] Yeah most of most of the private Equity consolidators have a few owners and so ownership is is majority owned by the private equity and then top management has a minority stake. So most of what we see in those organizations is a top-down drive that's really focused on short-term and even improvements all right what we were able to create here is by including everybody and ownership. [26:02] And put in private equity in a minority position were able to focus on long-term so I didn't attend to refer to sudden Senate come this we're really trying to build an infinite game design versus a finite 3 to 5-year exit, that's going to perpetuate and you think really influence the future of the industry and we're getting a lot of momentum to that so bye-bye. Putting private equity in minority position were able to focus on the Improvement of the hospitals and the eve of the acceleration, travel a lot of talent experience within our organization to do and that's going to line everybody that's our primary thesis there's everyone and every location is committed to the same desired, how come we're not doing it for somebody else for doing it for ourselves and then we all get to participate and win what we're seeing is that gives us a competitive into Edge. In the space that the veterinary industry is in right now to be able to attract talent and perpetuate growth Mmm Yeah. It's very interesting yeah I mean and and I think for If people really understand the what's behind in a private equity. Deal I mean I think what they're doing is they're primarily just targeting someone's Exit Plan I mean you want to get out you know we're going to get you as much money as we can and your case you're targeting something a little different with your want the ongoing you know. [27:21] 40 something year old person maybe even in their 50s that wants to work some more time and build more value and in they're really kind of maximize their exit as well. But for a 65 75 year old person who's got the vet practice does your model make sense. [27:39] Yeah we can accommodate, those types of situations they're not the ideal scenario for what we're trying to achieve because that longevity perpetuity but mainly what we are looking at is that if that seller is a producer. Because this is a service industry and so they're adopter and they're producing we need to figure out offset that because otherwise we acquire the asset value that sa goes down immediately because we've lost that production but in some instances of a lot of those owners are already out of the production component they moved slowly in the management and we can start to offset some of that we still look at a vesting period so they're not they're not going to. You're not going to get the full value it's not besties but it's that they're not going to get the full value day one I still have to hold on to it for five years turn that are outside of production we can start to accommodate that type of design they just have to hold. [28:29] And part of that whole infinite game design I mean as things do ramp up I mean I would imagine in this is true for every company that does. Anything is that there's usually an ongoing need for. [28:42] You know bringing up the next group of whoever it is and this case would be vets that practitioners who probably come into traditionally come into a vet practice with. The the Elder and then the apprentice and whatever and then they end up be there buying out the practice which I've seen, you know work pretty well are you guys going to have like this this Gap at some point are you do you have a plan for succession in bringing up new people. Yeah actually I think the ESOP is would is a key contributor to helping us close that Gap because they have ownership they don't have full ownership but they have collaborative ownership not with a not only within that location. For the other locations so you know something this kind of a side note oftentimes you'll see. Two locations that are competitors across the street for example the competing for the for the customer base they might both be acquired by the same company but because they're still individual units held accountable to their own production and performance they're still competing. Within this type of model now their collaborators and so they can share Services back and forth we can see those that accelerant associated with that collaboration across the organization so we know that we're able to. To pull them in moving a common Direction and help to perpetuate the growth of the entire company and we really think that that. Is the opportunity to offer ownership. [30:07] Collaboration a lot of this is is generational to so as we move into new generational veterinarians at work life balance is far more important than for ownership. But they still are attracted that's the traditional way of, veterinary medicine is to end up owning a practice of your own so we really think these up again is closing that Gap and giving them a bridge to ownership but work-life balance and I think it's gonna help us get there so just the last part of your question there. If they're into that model in that collaborative design and it's for about professional development. [30:43] So they can increase their skill set go from general practitioner to specialized surgeon for example and there may be more salary social about there's also more production into the bottom which grows the business which they share value measured ownership. Yeah I'm curious about something too because it sounds like, the lot of the administrative functions you know the things that really are headache you know when you run your own business it's like I got to do my payroll I have a sales tax auditor I have this in that going on there kind of set free from a lot of that is that kind of how you're working. [31:16] That's true and that's going to be going to be a most consolidation type of design so you can take Independent Business and roll them into a group, you can also add payroll vendor management you get buying power and pricing analysis you get a lot of upside potential by consolidating some of those services and vice versa you're freeing up, generally the owner is a doctor so you're free up capacity for production which increases top ones as well, yeah I bought you know and my firm I bought other CPA practices and that's and that's one of the things that I collect I can now just focus on being. A professional doing what I do and I have to go back and worry about this other stuff that kind of creeps in so it's got to be a nice benefit you know and when as you guys do that. What is your so you have you know this is happening I guess all over the place so 220 practices could be anywhere what's your Geographic coverage and then how do you provide that level of administrative support when it's you know all over the place. [32:13] Yeah another unique consideration Galaxy vets as we don't have a central office home office we are distributed team the CEO and I am have worked remotely for. [32:25] Over five years individually we know how to stand up a business and do this so that's giving us the flexibility to attract Talent, Nationwide and actually International as well we have Canadian and European employees as well to help stand this up and take on some of those administrative costs are tasks. Our Focus as far as acquisition is the u.s. right now just future capacity the Plex into Canada Europe Australia. But right now we're focused on the US and there's kind of a few different things were looking at there is this Consolidated solar system I referred to before where we can get a group of hospitals geographically and we start to get economies of scale such a with that there's also quite a few hospitals throughout the country who are already fairly strong and they're even a performance they know how to manage a weekend to the point you're making minute ago. We can start to offload some of the, Bergman so she would be the back office responsibilities increase the capacity for growth and allow them to leverage buying power and some of the economies our efficiencies we know how to do operationally to improve them so we call them asteroids in our model, okay we intended they'll still be a standalone location it won't participate in all the economies of scale of the solar system but we still bring some of those efficiencies to them and they could see Top Line and bottom line and programs as part of that ecosystem. [33:45] Okay so kind of really depends on what they have going in and what their needs are where they fit in the solar system. [33:53] And what we see is their future potential for growth and improvements right right so go and taking the camera and looking a little bit deeper on the employees I know you guys are going to do in 2023 you'll do a. All the employees are participating in the ESOP. Tell me a little bit more about like how you know with with esops in terms of the employees getting those shares obviously they're going to be put in the retirement account they're not paying for those shares because that's that's how esops work. Um I guess my question is is just you know the questions that people always ask like. How would this look from the employees perspective in and how would you kind of explain it to the employees that are coming into this kind of program. It's a fantastic question from we have some trial and error to go through so introducing this and getting some feedback and improving on it, continuous Improvement as we talked about earlier but our intent of this conversation really is around first leveraging the knowledge Associated 401k and that's somewhat. [34:55] The spirit within this population we're engaging some hospitals have a 401k the teams already understand what the value is for future, value creation of future web creation within a 401k and deferred tax compounding so we'll start to leverage that and say the ESOP just like that except it's within the business that you're participating so you have direct participation in the value of, your ownership here we also have conversation around esops are generally. I think four to five times more valuable than a 401k from an individual level ours is actually going to be a little bit more than that from our anticipated design because we're most esops are actually tied to a percentage of salary, so that over time the value of the shares that you get less shares in the upside potential is actually decreased because of that we're actually granting shares a solid subset of shares based on level within the organization each year, so it's outside of, value of the shares and it's actual quantity of shares that will grant by level within the organization so we still meet the testing socially with even distribution a distribution of ownership, that's going to give us a way that we can help them grow to the main point of our communication is we want to haul share in the. [36:15] Gross and the success of this organization we're going to match the 401K and the ESOP together in the case up so you have options to invest your own cap own cash for your own salary, to your future success we also going to participate collaboratively with the rest of us to create wealth, in combination with the putting those two things together and talking really about individual wealth creation and collaborative environment is the key of our communication there no I think it's and that's something that. [36:45] Every company that transitions to an ESOP they do want to make sure the messaging is correct they want to. It's hard for people and employees don't get esops I mean the the truth is it takes a while for them to really understand it so I was curious out. How that's going to go and you know who you're talking to at the vet you know who's in charge of this practice is they're going to have to explain to their employees to and. So I'm sure that's going to be an important part of how you put it all together. [37:13] There absolutely is that but we're encouraged by the response that we've got just by putting out in Marketplace man that all those 350 inbound things I talked about 1,100 employees that I talked about. Part of that is in response to we're going to be an employee-owned company and a complete employee-owned company has some others, have shared ownership but it's just for veterinarians or it's just for key staff right on right now that's a very interested in this organizations to participate yeah I think that's phenomenal I mean that's and that's the whole Spirit of esops really when you get down to it as sharing. Sharing with everybody depending on the contribution they are making into the company. Now you had mentioned Canadian and European obviously your company is going to be it's a u.s. [37:56] I know in other countries they have different forms of esops are you going to set this up in Canada and then in Europe too, if we if we intend to expand hostile operations in the spaces then we'll look for more specific design that is similar to the ESOP and go there where we have a few independent employees, we're sharing foreign ownership through common be but we'll do it in the same format as the Khamenei so it's Apples to Apples as far as, growth potential and the ownership of the shares so short term it's granted shares is common be and then long-term if we go into the spaces will look for more sophisticated and aligned program okay make some that's very like I said very interesting I mean, I learned a lot and I hopefully everybody else did is we kind of close out I kind of wanted to give you any anything else that you wanted to mention about how you guys are structured or. Again the benefits that might be available to those that are that are interested in what you're doing. [38:54] Appreciate that pill part of its just to kind of reinforce what makes us unique within the space so there's there's a lot of competition and there's a lot of cash but there's quite a few people that own hospitals that don't want to exit you're not just looking for a lot of cash right now they want to take care of their team, they want to continue to participate and they're willing to let it ride for a little while because it a lot upside potential within this space so we're really looking to bring in those like-minded participants that are going to help us grow. And. Focus on our key objective is burnout prevention there's no need to burn people out with in this profession we can balance supply and demand. Enable people to do what they do my primary motivation has been for a long time I've done it many times and one of the best results I got was when the doctor said thank you for that Improvement because now I get to go home and have dinner with my family. Sure yeah is what I'm trying to achieve what we're all trying to achieve within this and that's the people who want to participate with what we're doing here so hope to replicate that now I think that's a really good a good purpose behind it also, I love what you guys are doing it's really cool so thank you so much for joining today am I really appreciate your time and, hopefully everybody else got a lot out of this you know in terms of how you guys are structuring and and if you guys need help with this and specifically are interested. You can contact Galaxy vets directly and get some more information and what they're doing. [40:20] Absolutely let us know on thank you so much for having me on Pedal Pusher great so so for everybody else thank you so much and we will see you on the next step on this journey to an ESOP

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