Subscribe on: iTunes | Stitcher | Google Play            Enjoy the episode? Review us on iTunes!

Why Listen:

I reached out to Charles about six months ago, and am so happy that I was finally able to get him on the show. In this interview, we talk a lot about building up specific skills in one’s career. In Charle’s case, he learned skills at business school and then in private equity which both were in line with his eventual career goal: entrepreneurship. And we talk about a form of entrepreneurship you’ve probably never heard about - search funds. So many Veterans want to run a company, but don’t know where to start. A search fund is a way to buy an existing business and then build and grow it. Actually, for most of my time at Stanford Business School, I thought I would do a Search Fund, and I still believe it’s an incredible career path for many Veterans. As I mentioned, I reached out to Charles 6 months ago based on his background… I don’t really think I realized how incredibly smart and capable he is until we had this conversation… as an entrepreneur myself, I’m blown away by the moves this guy has, and on his ability to explain them to our audience. If you do like this episode, check out 

BTU #117: Jim Vesterman: Marine Corps to Search Funds and Buying a Company to Run (https://beyondtheuniform.org/blog/btu-84-jim-vesterman-marine-corps-to-search-funds-and-buying-a-company-to-run?rq=search%20funds) which I’ll list in the show notes for this episode at BeyondTheUniform.org.

And, of course, this interview was only made possible due to the financial support of the University of Minnesota's Carlson School of Management, and I want to share a little bit more about them. Whether you're transitioning to a civilian career or continuing military service, an MBA from Carlson, at the University of Minnesota prepares you for a high impact career in business. Carlson is committed to the veteran community and provides the benefits, experiential learning, and network to accelerate your career. In addition to a resident tuition waiver, all admitted full time MBA military candidates receive generous scholarships and stipends to cover expenses that may not be eligible for the GI Bill. To learn more, you can visit the show notes at BeyondTheUniform.org for this episode, or you can email MBA@UMN.edu.

About Charles:

Charles Mullenger is the CEO of President of Ethos Preparedness, which has been building the most trusted brands in preparedness, starting with Med Sled®, since 2004. A 2010 graduate of West Point, Charles served as a Field Artillery officer in the Army for 5 years, before obtaining his MBA at Chicago’s Booth School of Business. He has served on the board of directors for Purity Zinc Metals, and founded Steel Tree Capital, which led to his ownership of Ethos Preparedness.

Our Sponsor: 

• This episode is sponsored by the Carlson School of Management. Whether you're transitioning to a civilian career or continuing military service, an MBA from Carlson at the University of Minnesota prepares you for a high-impact career in business. Carlson is committed to the veteran community and provides the benefits, experiential learning, and network to accelerate your career. In addition to a resident tuition waiver, all admitted full-time MBA military candidates receive generous scholarships and stipends to cover expenses that may not be eligible for the GI Bill. 

  E-mail mba@umn.edu to learn more. That's mba@umn.edu.

Selected Resources: 

• About Charles

  • https://www.linkedin.com/in/k-charles-mullenger/

  • https://www.ethospreparedness.com/ 

  • https://www.linkedin.com/company/ethospreparedness/ 

  • https://www.steeltreecap.com/the-founder  

• Related Episodes

  • BTU #117: Jim Vesterman: Marine Corps to Search Funds and Buying a Company to Run (https://beyondtheuniform.org/blog/btu-84-jim-vesterman-marine-corps-to-search-funds-and-buying-a-company-to-run?rq=search%20funds)

• Resources mentioned

  • Peter docker interview - https://beyondtheuniform.org/blog/btu-223-start-with-why-peter-docker?rq=peter%20docker

Transcript & Time Stamps:

3:10

Joining me today from St. Louis, Missouri is Charles Mullenger. 

Has entrepreneurship always been something that interested you? 

Yes, when I went to business school at Booth, it really intrigued me. I was introduced to the concept of a search fund during my first year there. It wasn’t something that I dove into right after graduation but I knew it was something that I eventually wanted to pursue. 

5:25

What is a search fund? 

A search fund is an investment vehicle where an entrepreneur is backed by a group of investors to search for a business that they eventually will take over and run. I loved being a platoon leader in the military and going through the search fund process was almost like continuing to be a platoon leader. 

7:45

Why didn’t you go into search funds immediately after graduating from Booth? 

I’ve known many people that have gone straight into a search fund after business school. But I really wanted some business experience first so after school I decided to accept a role at a private equity firm in St. Louis. The role was very operationally focused with some investing research as well. I was in that role for about 18 months before transitioning to search funds.  When I eventually went down the search fund road, I felt much more prepared. 

There’s so many ways to go about getting into search funds. I know people that have joined search fund accelerators. With the backing of the accelerator, you spend about two years to search for the company that you will eventually take over. I was looking for a little bit more autonomy than an accelerator so I worked with investors that were more geographically focused around St. Louis. 

Even though I was very intentional about looking in St. Louis, the majority of investors will want you to search nationwide within a particular industry.

18:00

Can you discuss the search process?

The first thing you will need to do is put together a private placement memorandum. The memo lays out exactly what you want to do and why. Once you’ve established the memo, you start pounding the pavement and looking at different businesses that could potentially be a target. 

My wife and I are both from St. Louis and I think that really resonated with different businesses that I talked to. They knew that if I took over their company, I would really be invested in its success. An investment bank in St. Louis connected me with Med Sled. That ended up being the right opportunity and I moved forward with taking it over. The search lasted five months in total. 

I did a self-funded search. My wife was working and I was looking exclusively in St. Louis so I didn’t need to raise that much money to fund my search. But then when I found the Med Sled opportunity, I went to investors and asked them to help me buy the company. 

24:14

What was your elevator pitch as you looked for investors to go in on this with you?

I would sit down with them and explain why the St. Louis community was so important to me and I wanted to invest in that community. I would share my relevant background and experience and why I felt I would be successful as a business executive. 

27:05

How many companies did you look at total during the search? 

I seriously looked at 20-30. There was one other business where I submitted an indication of interest but it didn’t end up working out. 

When I was interested in a company, I would do a market analysis and look into the company’s market reputation. Based on the company’s financial documents, I would try to come up with a value for the company. I would also seek out additional information on human resources, size of the company, etc. 

As an artillery officer, I had to wear many different hats depending on what was going on at the unit on any given day. The business environment is no different. You have to be a business athlete and be willing to adapt to change. I think veterans are extremely well suited to that because we’re all used to having to handle many different things while we were in the military. 

34:40

Can you talk more about Med Sled? 

We sell a tactical line of flexible litters that we sell to military and hospitals. I was familiar with the products before I even looked at the company. I knew how valuable these products were in medical communities. When I started looking at the company, I was also really excited about the team and the people working for Med Sled. I looked at the market as a whole as well and felt that Med Sled had a real competitive edge that we could push even further. 

38:00

How large is the company? 

There were 14 employees when I first bought it and there are now 16. We made an acquisition about six months ago and added a couple employees that way. We also brought on a digital marketing manager a few months ago. 

COVID-19 has put a wrench into some of our plans but I think long term there will be tailwinds in our industry. 

39:30

What were the first few weeks like as the person in charge of Med Sled?

At first, I just wanted to listen and ask the right questions. I sat down with everyone on the team and tried to get to know them. I also tried to get on the road as much as possible and understand markets around the world and where our product could fit in. 

Beyond the first 90 days, I started focusing more on our strategy and I shared my vision for the company with the other company executives. 

42:00

Do you think business school was necessary for you? 

What I gained from the military was the ability to get to know people and also how to have difficult conversations with people. Because of that experience, I’m comfortable being in front of people and motivating them. 

From business school, I was able to build a framework around a particular problem. And from my experience in private equity, I got that hand on experience. I learned how to quickly evaluate a company. 

43:50

What is the story behind Redfora?

I had a classmate at Booth that was also doing a search fund. He connected me with Redfora, a seller of medical equipment and supplies. I started talking to the entrepreneurs that had started the company and ultimately acquired the company. We created an umbrella brand called Ethos Preparedness. 

Ethos is broken up into two divisions - organizational preparedness and individual preparedness. We’re trying to build both of those to become the top provider for emergency equipment and training for hospitals and other medical organizations. 

For such a small and agile team, we are lucky to have people that have been in this business for many years and have a strategic vision about the future of emergency preparedness. Our mission is to inspire preparedness in order to save lives. It’s really a perfect industry for military veterans. In the military, we were trained to always be prepared for the worst case scenario. The emergency preparedness industry is no different. 

53:00

What advice do you have for people considering search funds? 

When you’re conducting a search fund and considering a potential target company, certainly you need to do your business due diligence. But on the personal side, ask yourself whether or not you really love the product, the customers, and team. If you don’t, it might not be the right opportunity for you. When I started thinking about Med Sled, I knew it was right for me because I loved the product, customers, and team. 

55:20

Is there anything else you’d like to share? 

I recommend reading to any veteran transitioning out of the military. I recommend What It Takes, The Ride of a Lifetime, Start With Why, and Indistractable.