What we talked about
Rich Thomson is the Founder and CEO of Dreamliner Luxury Coaches and Caprice Capital Partners. He spent 20 years in banking and lending at GE Capital, Citibank, and Brightwood Capital before making a pivotal decision: to stop financing other people’s companies and start building his own.
Show notes
Rich Thomson spent 20 years financing other people’s companies at GE Capital, Citibank, and Brightwood Capital before deciding to bet on himself and build his own. Today he runs two very different businesses at once: a luxury transportation company serving music tours and major leagues, and an alternative lending firm that has deployed over $700 million into founder-owned companies.
What we covered
- What it actually takes to run two very different businesses at the same time: Dreamliner, a luxury transportation company serving music tours, NFL, NBA, PGA, and NASCAR, and Caprice Capital, an alternative lending firm.
- The logistics of live event transportation, why professional drivers matter, and what sets Dreamliner apart from rental services.
- The art of custom bus building and the unique experience of bus travel for high-profile clients.
- Why founders often misunderstand what private equity is really selling, and what a better capital partnership looks like, having deployed over $700 million into founder-owned companies.
- The hardest lessons from year one of Dreamliner, how he hires people he can trust to run things without him, and learning from mistakes and bad hires.
- Why someone with his lending background still feels the pull to build rather than just invest, and his advice for aspiring founders: go all in.
About Rich
Rich Thomson is the Founder and CEO of Dreamliner Luxury Coaches and Caprice Capital Partners. He spent 20 years in banking and lending at GE Capital, Citibank, and Brightwood Capital before building his own companies.
- LinkedIn: https://www.linkedin.com/in/richthomson
- Website: https://dreamlinercoaches.com
Episode 156 of the PreVetted Podcast.
Full transcript
Federico Ramallo (00:00) Welcome back to the pre-vetted podcast where we spotlight extraordinary people and remarkable talent reshaping our world. Today, I am joined by Rich Thompson, his founder and CEO of Dreamliner Luxury Coaches and Caprice Capital Partners. Rich spent 20 years in banking and lending at firms like GE Capital, Citibank, and Brightwood Capital before founding two companies.
the luxury transportation business servicing business music tours and major sport leagues and an alternative lending firm that helped developed over 700 million into founder owned businesses. Rich, welcome to the show.
Rich Thomson (00:44) Thank you very much, I appreciate it. Happy to be here.
Federico Ramallo (00:47) It’s an honor for me to have you here today. So for people meeting you for the first time, can you expand a little bit more about what you do?
Rich Thomson (00:58) Sure. My primary business, Dreamliner, we’re the largest live entertainment transportation business in the US. Our business serves kind of all live event touring, primarily music. So we do all genres of music, but our coaches, all Prevo coaches take the crew, the band, the management and the artist from show to show.
from their house to rehearsals to the show all around the country. So we do the buses for that and then we also do the trucks that move the equipment. So we have trucks and trailers that take the stages to and from stadium shows and to other arenas. And then we also have 53 foot vans, so trailers that pull all the production equipment.
So lighting, AV, rigging, creative, et cetera, are all pulled in those trucks. So basically these live events, to make them happen, we take the people that make it happen, from the artists down to the people helping just the labor around, of putting stuff together at the venues, to the stuff they put together at each venue. And these guys work real hard and do a lot, and we try to give them the most comfortable, secure rides to and from their locations.
Federico Ramallo (02:07) I imagine that the logistics must be overwhelming,
Rich Thomson (02:11) It’s a lot. mean, if you saw the routing of one of these tours, your kind of head spins and think about how many different venues, locations these guys go to in a weekend, let alone in a week, weeks, months, months of a tour. And all tours vary, right? Some are short and get a lot done. Some are long and get less done. It varies. But yeah, the logistics are crazy when you look at how much goes into one tour.
Federico Ramallo (02:35) Right, right. And what made you walk away from a senior banking career and build a bus company?
Rich Thomson (02:45) I mean, listen, I’m very fortunate, kind of very fortunate, blessed to be where I’m at. I actually, coming from finance, started Caprice Capital, which was more of what I would spend my career doing in finance. had an opportunity to start a credit fund. So I started my own credit fund focused on what I’ve always loved doing, which is, know, meeting with and spending time with founders and entrepreneurs, people that started their own company, hearing their story, learning how they got there.
you know, whether they started it in their garage or it was an idea with their wife or their buddy from college. And you hear about them grow real businesses. so starting Caprice was like kind of a life dream and opportunity that you had to jump and take the risk and try. And the first deal I looked at when I started Caprice was a tour bus business. And so I was super intrigued by it. I spent a bunch of time learning about the industry and the space and it was
There are so many things that just tied to kind of my background of kind of assets, asset-based finance, cash flow, underwriting, minority equity, senior debt, junior debt, all these things that I’ve done most of my career was like, this is actually a really interesting opportunity. Unfortunately, I passed on the deal at the time. So it was not my first deal at Caprice. But about a year later, I got a phone call during COVID.
while I was still very much focused on Caprice. And there was a guy was looking to sell 12 buses. And so for me, I said, well, this will be a great investment because that industry is great. As much as it was COVID, you know, I believe the world would start again at some point. And so I said, well, this will be a great investment, literally a side investment. And so I stayed focused on Caprice, but I bought the 12 buses and said, I’ll find someone to lease these buses.
Federico Ramallo (04:07) You
Rich Thomson (04:26) and it’ll be a great side investment. And that was the start of it. And I still continue to focus on Caprice and I still have Caprice to this day. I still have myself and a team that manage assets for Caprice. But the bus business just really, all the things I liked about it when I first saw the industry were true. And the more I got into it and learned and met people, the more I believed in it. And the more opportunities kind of came my way. Listen, timing was great.
I was the one very interested and opportunistic when most people were kind of, you know, putting every penny away and hiding and trying to figure out what to do during COVID. And I was, um, again, very blessed to be, you know, have the opportunity to kind of think through what could I do and what, you know, what opportunities are there. Um, and so that’s, that’s really how it all got started, but it wasn’t a plan. wasn’t like, I’ve, I’ve known about the tour, the tour bus industry, or I’ve known a lot about live event touring. was just, uh, an opportunity presented itself.
I jumped on it, took the opportunity and grabbed it, took a little risk. And here we are today with 225 coaches and a bunch of trucks and trailers and it’s a real cool thing.
Federico Ramallo (05:30) That’s amazing. That’s amazing.
How did your 20 years in lending shape the way you think about building a business?
Rich Thomson (05:40) The 20 years of lending, I’d say, brought me a lot of core fundamentals and thoughts and views around investing and how watching other companies, founders, entrepreneurs, and companies succeed and fail. I got a chance to meet with entrepreneurs and companies for 20-ish years, I guess.
That’s a lot of companies you get to meet with and hear the story and watch whether they’re performing or they’re flat or they’re having a tough year or they had some bad years and they’re under restructuring. You know, I fortunately got to see a lot of that. so from a lot of reps and looking at a lot of different companies, you get to kind of just start having bits and pieces of stuff you take away. Why do you think that, you know, I’d always have my view, which I never shared with the other founders very often, but you’d have your view on why, well, now I know why that one failed or, you know, why that didn’t work.
And so it basically taught me right or wrong, it taught me things that I thought made more sense to do. And my focus in life, and I’d send this back to my parents who owned a small frozen yogurt shop in Chico, was focus on the customer. What does your customer need? What does your customer want? If your customer’s happy, you’re gonna have business. If you service your customers, give them what they want, they’re gonna be happy.
you know, from a small frozen yogurt shop where you go in and get, you know, cookies and cream with some cookie dough on top or peanut butter cups on top. That’s it’s not a lot different in our business, right? If you treat your customers well and give them what they want, you have the product, you have the service and you treat people well. I think you’re going to win, right? At least you’re going to win your fair share and you should do all right. Granted, you have to have the product, right? And you have to have the team to back that up. But to me, that’s
That’s what gave me confidence. And that’s what I really feel that this industry needs. I mean, it still needs it in a lot of places. The live event touring industry is still, a lot of it’s the wild, wild west, right? So, you know, I truly believe that you got to bring some infrastructure, bringing some professionalism to, you know, to busing, which most people don’t look at and think that way, is something that’s needed.
And there’s a lot of people out there that are starting to realize that. we’re, you know, we’re getting the benefit from that from some places saying, you guys are paying attention to safety. You guys are, you know, paying attention to, you know, how things are built from compliance, safety things, which are, are huge, you know, drivers, what it is when people on the road breakdown servicing them. So I don’t want to drag on about that, but I think there’s just a lot of things that are, you know, infrastructure and development in the.
in the bus transportation space that is real opportunity for us.
Federico Ramallo (08:14) Right, right. It’s very interesting when you can learn from other people’s experiences that allows you to save so much time and so many problems further down the road, right? Because now you can pick on where things are working and see the patterns and then from there be able to move faster.
Rich Thomson (08:34) Great.
Federico Ramallo (08:37) So what does Dreamliner do that a company just renting vehicles cannot do?
Rich Thomson (08:42) Well, boy, I’d have to take you out walk around our facility to show you the differences. it’s a I like the question because I do think that there’s a lot of people out there that believe when they want a tour bus, it’s like going to a rental car facility and saying, want a bus. Just give me a bus. How much does it cost? want it. But what a lot of people don’t realize and don’t see is that that bus, you know,
A, it’s not something that can sit on a lot and you go pick up and hop in and drive it, right? You need a professional driver with experience to know how to drive that thing, maneuver it on the roads, let alone in places that people want to go when you’re going through a big city. And you’ve got the largest vehicle on the road, a 45 foot Prevo, you got to know how to drive it and drive it safely around people and in the cities and even just on freeways. you know.
the driver aspect of it, you don’t want to hop in and drive that thing outside of needing a CDL and it being illegal. You don’t want to get in and try to drive that thing. You want a professional to drive you. And that driver, the professional drivers that we employ, they actually know how to work on them too. So when something happens on the road, whether it’s a mechanical thing with an engine transmission or otherwise, they can typically help get it fixed. They can call our 24 hour on call guys who can help them.
and fix it or they can find a place to get it fixed on the road with the help of our team. The other big, big item is that every one of these buses custom and built somewhat differently, right? So even though we build them all ourself in-house by hand, each one of them has their own quirks to it. And so when you build everything by hand, even if you build it consistently each one, different things go wrong.
So, you know, and they’re made to be to be used in work. So when they sit in idle and there’s no power and they’re not run, the generators not run, the engines not run, like stuff goes wrong more often. So you really need to understand, you know, how custom, how much time and effort goes into building them, to maintaining them and managing them. And so, you know, the rental car, you go, you go literally grab the keys, hop in and goes right. And
whatever the condition is, it is what it is. Here, you don’t do that. Like, you’re not going to go group, just grab one. And by the way, if you do find a place that says here, I got one, yeah, just go, I’d be pretty cautious, right? I would want to be in that big of a vehicle. I’d want to be, you know, working with someone that has a, you know, has safety as a focus, right? Has a build shop that has service and reliability to make sure if we go somewhere on a trip with the family to go to Zion,
and go to a national park, I would want to know that if something happened on the way that they were going to take care of me. That someone was going to be there to show up and fix the bus or get me where I want to go if something did happen. Because we all know whether it’s a rental car or a very fancy couple million dollar tour bus, shit happens on the road. It does, like just stuff just happens. can’t drive 100,000 miles a year and not have stuff happen. So it’s about how you service it and how you handle it.
I have a tough time putting the rental car and our business in even the same conversation honestly. But I do think there’s an element of the world out there that seems to think that, I’ll just rent that bus. And it’s just not that simple. And even if you could go rent it and have someone ride in it, it’s not something I’d want to do. I wouldn’t want to put myself, let alone my family or my friends or my partners or my business people in a bus where we hadn’t thought through.
you know, is it dangerous? the driver, has a driver had a drug stream? Is he in good health? You know, has he been vetted or trained? Has he been qualified? You know, like those things to me are pretty important that I’d want to know. And obviously the bus is a big thing too. Don’t get me wrong. The bus is, the product’s very important. And we take as good a care of those as anyone out there. But that driver part for me is, it’s so important, right? I mean, it’s, they’re guiding you and whether you’re driving you overnight while you’re sleeping.
or they’re taking you during the day to a guys trip to go play golf. I want to know, got a professional out there taking us there, getting us where we need to be.
Federico Ramallo (12:43) Right, right, because it’s it’s a it’s a project where a lot of things could go wrong. You have so many risky situations that if you if your team doesn’t manage, manage them correctly, don’t plan on the risk situation before they happen. Right. It could become you remember the movie airplanes, automobiles and trains. Right.
Rich Thomson (13:06) Yep.
Federico Ramallo (13:07) I
mean, it could be a disaster like that, or it could be a fantastic experience that the journey becomes kind of invisible because it’s like, well, we got there, But you don’t know how many storms, how many situations has the driver fixed, right? And I think that’s the outcome, right?
Rich Thomson (13:26) That’s right. And by the way,
that’s exactly right. And, someone asked me the other day, they said, they said, what do you want your clients to, to say on the way out of the bus or while they’re exiting the bus or how do want them to feel? Right. and one of the answers, like that was really interesting that one of my colleagues said, because I don’t want to get off the bus. That was so great. That was so comfortable, relaxing. Like I didn’t even notice that I was in the bus for six hours driving. Right. It was so smooth.
you I didn’t notice anything. And like you just said, the driver might be like, there was so much traffic, there was so much going on, we almost got in a wreck or this guy almost hit us. And in the back, smooth and silky, right? We didn’t notice anything. We just got there and you get off and you’re like, that was so comfortable. So that’s, that’s the way it should be, right? That’s what you’re paying for that comfort, that like confidence that I’m going to get there safely.
Federico Ramallo (14:18) And as you said, it’s important that the driver, not only that you vet for a driver, but also the driver can handle all situations because when they are out there on the road, they are alone, Albeit they have the support of the rest of the company, but any support that you can provide is going to be with a delay, right? So the more independent and autonomous he can be to solve…
all the situations that happened there, the better,
Rich Thomson (14:51) That’s exactly right. Yeah, and that’s why, you know, I mentioned this, but that’s why we have three guys that are on call 24 seven. So no matter where a bus at what’s happening, we have the number you can call and there’s someone that can help you and make sure that bus gets where it needs to get on time safely. And if there’s something that is bigger happening that we have a way to kind of solve solve for any issues.
Federico Ramallo (15:16) Right, right. And the difference with a company that it’s planning is that all the experience for all the passengers is going to be smooth, right? Whereas otherwise it’s like playing lottery, right? Sometimes it works, sometimes it doesn’t work, And that unreliability becomes an issue, right?
Rich Thomson (15:36) Yeah, and remember a bus or a plane, you got to go to an airport. You got to deal with people, you got to wait in line, it’s got to take off or not. We don’t have to deal with that. You want to come on a bus, we’ll pick you up at your house, we’ll drop you off at the front door or wherever you’re going. Right? So you don’t have to deal with those types of delays and crowds and people. You get to get in your own private space and you go from door to door. So will it take longer? Yes. Can it be faster too? Yes.
But it’s a very different experience, hopping in your own little house on wheels, hopping in your little Four Seasons on wheels to get you somewhere versus going to commercial airport and dealing with delays and the crowds and crowds of people.
Federico Ramallo (16:14) Right, right. I mean, it’s a I mean, I drive motorcycles, right. And I enjoy the driving. Right. And, you know, it’s just me. Sometimes it’s my son. it’s, know, the the goal is to drive. Right. Enjoying to drive. You know, sometimes you can go faster. But but the intention here is not that not the transportation, but the destination. Right. That’s what the
the passenger is looking for, Even if it takes a little bit longer, they are comfortable, it doesn’t matter. They need to arrive at a specific time and follow the schedule, right? And that’s a whole different experience, right? The other thing that I have seen happening with motorcycles particularly is that we will go fast. will pass buses and trucks and whatnot, and then we will stop. And then the
the same tracks that we passed will pass us again. So in average, we will go at the same speed. We will go faster, but in average, we will go together, which was fun.
Rich Thomson (17:25) That’s right, that’s right. Tortoise and the hare, right?
Federico Ramallo (17:29) Right, right. yeah, and here on you have the comfort of the passengers, you have the schedule to follow, and you also have the logistics of all the equipment that they have to bring with them, right? And I’m assuming sometimes you have to send the equipment before. It’s a multi-vehicle operation, right?
Rich Thomson (17:51) Yeah, I mean, most all tours are, know, the people have the different parts of the crew have different schedules, the artists have a different schedule, the band has a different schedule. So there’s a lot of different, I mean, sometimes you’ve got three or four groups of vehicles going just on the bus side. And on the truck side, it’s the same. You’ve got different pickups from different vendors across the country getting pick up and they’re all meeting at rehearsals.
Some do multiple rehearsals in different places. So you’ve got different vendors, different trucks going to different vendors, going to two or three different rehearsal places. All that stuff happens and the team, our team that manages trucks and buses for that matter, it’s amazing. And they get to know it because they’re all experts in doing it for 20 years, but it’s amazing to see how much logistics they can move around.
A truck’s got to go grab this, do that and be out there tomorrow. And then who can get in that one and move that and switch. you know, every one of these tours has changes every day. Something changes or, we can’t do that now. So this one, we canceled this or we’re shortening that, or we got to leave earlier or we got to go later. And all those things impact the next show or the next drop off or the next pickup. So there’s just a lot, a lot of moving parts to all this. And it’s what makes the, you know, the team and the people in this industry special because everyone has to adapt.
I want to adapt, change and roll with it. And again, that’s from the artist all the way down to the labor just helping put stuff together. They all work really, really hard to make these live events happen.
Federico Ramallo (19:18) Right, right. So I think that what happens is that, I mean, the bus is the delivery mechanism, but you have all the logistics and all the supporting team around it that it’s the value at. It’s not only, you know, I have a bus, right? It’s everything else, right? And I’m being able to fix all the logistics, right?
Rich Thomson (19:40) That’s right.
Federico Ramallo (19:42) Yeah. So going back, sorry, going back to when you said you bought the 12 buses, what was the hardest part of the first year at Dreamline?
Rich Thomson (19:51) Well, A, not knowing anything, right? Outside of I think the world’s going to start again and I really hope it does because otherwise I made a really bad big bet. You know, it was learning the industry a little bit but you know, that time I was probably less worried about it than I am today because I’m hearing it day to day now. Whereas back then wasn’t, know, in the day to day it was more hire a guy and have a lease them.
The concern back then though was really just, you know, when’s the world going to start? You know, I bought the first buses in October 20, so very, pretty early days of COVID. And I thought, man, world will probably start early next year, you know? And then I was like, well, okay, spring, it’ll start in spring. And then, okay, well, summer, for sure it’ll start in summer. You know, and fortunately it started in August, you know, had that gone another six, nine months, probably six months. I’m not sure where I’d be or what we’d have.
Federico Ramallo (20:40) you
Rich Thomson (20:41) because I didn’t have that much runway. But it worked out and we had our first tour in August of 21. And the ball started rolling then post-COVID and kind of full steam ahead from there on out.
Federico Ramallo (20:56) Right, right. Amazing, amazing. Something that you mentioned before and I have an address is that all buses are a piece of art, right? They’re custom made, right? We get so used to cars being, know, serial manufacturer and the quality of production is so high that, you know, they become ubiquitous, right? But with a low volume of buses,
Each vehicle is unique, It’s a different way of thinking. And when you have these vehicles stopped for a long period of time, know, months, a lot of the mechanics require more maintenance, right? The longer they’re stopped, right?
Rich Thomson (21:41) That’s right. Yeah, I I think of them like race cars, right? Race cars are meant to be driven. You don’t set them down like you got to drive them. And it’s very similar in our buses. listen, they’re all very custom on that front and they are all meant to be run or they will have high maintenance. So you’ve nailed all that. think, you know, works of art. I take that comment just to go as far as to say.
Federico Ramallo (21:46) Right.
Rich Thomson (22:03) It is, you know, if you, if you asked, I’ve got 22 guys, you know, the business building here, custom building these things by hand. And to them, I mean, they love what they do. They’re building, you know, every cabinet, every galley, every wall is done by hand. And they’re, know, they’re making sure it fits perfectly against the wall. And as much as we use Prevo shells, you know, not every shell.
has the same exact build by the time you start getting to walls and insulation and the other things that we do. So they really, it’s a work of art for them to make sure it fits perfectly in there and that it’s gonna last for 20 years. So, you know, the quality of the builds as important as it gets. like I said, you say art, if you go back there, those guys, some of them in their 30 years with us, like they love what they do and they’re so prideful in it. You know, we take people on tours once in a while. And if I let the guys, they would sit and they’d talk for hours.
about what they’ve learned, what they did, what they used to do, how they do it, because they just love what they do. And it’s the coolest part of the business from my perspective. It’s so neat to see these guys. And these are all trades that people, I think over the last 20 years have started dismissing more and more, like carpenters, electricians, plumbers, right? These guys, what they do, it’s so cool, it’s so special. we can’t find enough of them.
Right? The finding of those guys that have been doing it, that have the pride they do in what they do day to day, it’s rare. It’s rare and it’s special.
Federico Ramallo (23:35) Right, that’s what I chose to use, piece of art, because I’m a builder as well, so I can appreciate the amount of love, care, dedication, and detail that everyone needs to put to be able to put a piece of machinery together, right? It’s as close as these mechanical watches, but with four, six wheels. I don’t know how many they have, but…
Yeah, it is very interesting how they are built.
So going back to Caprice Capital, what does Caprice Capital offer that a founder cannot get from a traditional bank or private equity firm?
Rich Thomson (24:14) Great question. So the goal in creating Caprice and what Caprice does different than most firms was, I would say we bet on the jockey. So typically founders, you know, growing businesses, they get to a point where maybe they have some friends and family that help them get it started, you know, borrow some money. They probably have a local bank or someone that gives them a line of credit or helps them grow with some kind of basic traditional financing.
But if they want to make a big leap or they need to make an acquisition or otherwise, they run into options where, they just might not know who to go to. And who they wind up going to is one of 10,000 private equity firms, right? Sure, I’ll write that check for you, but I want control and I want 80 % or majority of your company. Or you have some lenders that say, can’t give you enough. The bank says, I’ll give you.
I know you need 10, man, but I can only give you five. And so they end up with like not knowing kind of various types of alternative asset managers to know what to get. And what Caprice provided, because I spent most of my life in lending, was let’s look at what the banks will do. Let’s look at what the equity firms will do. And let’s try to provide kind of solution, a single stop solution.
that maybe stretches a little further than the banks will do, like, you know, could be, you know, 10, 20, 30 % beyond what the banks or 2X what the banks is in some cases. And as long as the bank, as long as the company can support that debt, maybe we do the whole thing as debt. And instead of them having to give up 40 % of their company, they only give up 10 or 20%. And by the way, once they pay up our loan, they can buy back their 10, 20 % that they gave up.
So that way the entrepreneur always has the opportunity to keep full control, keep full ownership, and not give up equity in their company. Because I can tell you from my companies, there’s not a whole lot you care more about than it being your own business, maintaining all your own equity, and having control of your own business. Because once you’ve been an entrepreneur, you don’t want to go work for somebody else. You don’t want someone else to make the decisions on your company and what you do and how you do it.
I mean, I love nothing more than having advisors and smarter people than me telling me what I should do and how I could do things. But I want to make that ultimate decision myself, right? So Caprice is very focused on the entrepreneur, on the founder, working with them and trying to pick the right ones to say, I’m going to stretch a little bit with you here. I’m going to take less equity. I’m going to get paid a premium on the cost of the debt, but you get to keep more equity.
And the guys that believe in their business will do that every day of the week because they know their equity is worth a lot more than the cost of debt. And if they know they’re going to perform and get through it, they’re going to pay off the debt or refinance us with typical bank debt. And they might even have enough to pay us off and get us out of their picture and go back to owning 100%. So for me, it’s always been a people story. And when I say believe in the jockey, I mean it. It’s the people.
Because listen, there’s a lot of great businesses, but even the businesses that are not maybe the best or the sexiest or coolest businesses, if you got the right jockey, the right founder managing and running that business, that business will be just fine. And I believe in that guy forever.
Federico Ramallo (27:31) Right, right. And you can use the equity as a security, but, you know, and the incentive for the founder will be to, you know, get back the equity and get back the freedom, but also have the loan to expand their business, right? And when you set those aligned properly, then you can have a big impact.
on the founder and you can see how his business grows and flourishes.
Rich Thomson (28:04) Yeah, I mean, the best stories are the ones where we invest and I’ve got a couple probably out of my 30, 40 deals at Caprice. You know, there’s a couple of them specifically that like we kind of stretched on smaller deals, but we kind of stretched on. But within three years, they paid us back and they bought out their equity. And as much as I would have loved to stayed in and ridden that longer, like we did great. Our firm did great. Our investors made a great return.
And I get to watch this entrepreneur like, you know, double, triple his business in three years. Right? Like, I mean, how cool is that? I got to be part of it and watch it and learn a bunch about, you know, a successful entrepreneur, a cool business. And you learn, right? And that’s, that’s the good stories, right? There’s bad stories. Trust me, there’s, there’s losses and there’s things you deal with, but that’s where you learn. And that’s what, that’s what makes it fun. But you’re right. You, the word you mentioned there is key is alignment.
Right. If there’s good alignment with Caprice and the founder, that’s where it’s going to work the best. Cause we want to both be supporting each other and helping out, whether it’s through a good situation, you know, or a tough, you know, hiccup that the company’s going through, you need to be aligned and you need to be able to work with them. Like we need to be able to stretch if they need help, they need to be able to kind of step up if something goes sideways and it’s not looking great. So that alignment’s really important.
Federico Ramallo (29:21) Right, right. How do you gauge founders? How do you make the decision for loaning or not loaning founders?
Rich Thomson (29:29) Again, I go back to the people side for me. It’s about sitting down and spending time with them, know, numerous phone calls, whether it’s dinner, lunch, spending a day in your offices. To me, it’s lot of looking someone in the eye, having wholesome conversations and trying to get a read on who they are. You know, is this someone you can believe in? Is this someone you believe, you know, has the right morals, ethics? Is this someone that you believe is
cares more about this business than anything and is never going to let this business fail. So there’s a lot of, most of the lending investment will say intangibles that I look at because again, I’m betting on the jockey more than I am the horse. I really think the numbers, the metrics, the models and a lot of those things, although vital and key to what we do in underwriting aren’t as important as
making sure you have the right guy running the show, making the decisions. Cause you want to have that guy that would do anything to keep this business going. If something happened tomorrow, if COVID happened, you want to that guy’s like, listen, I’m going to fix it. I’m going to make you whole, but I’m going to fix it. Stick with me. Right. And I think the, you know, my turnoff of the private equity side versus the entrepreneur founder side is that if you’re, if you work for a private equity firm in a bad, bad scenario, they might throw you the keys.
They might be like, well, we’re going to go focus on this other good one. That didn’t work out so well. If you’re aligned and you’re working directly with the founder, we’re not throwing you the keys. We’re in it with you. What can we do to help? How can we help you? Right. The team wants to step up and help. you know, that’s, that’s been my belief most of my career. And that was what was so exciting for me to start Caprice was, you know, everywhere I worked and I worked from big companies like GE to, you know, to banks, to smaller family owned funds. And,
All of them, everyone as you start scaling or getting too big, starts building a box and starts getting less personal. And so you don’t want to do that. And if I pivot to Dreamliner real quick, that’s what I’m trying to focus on here as we’ve gotten much bigger is making sure that people know I’m the owner, I’m the CEO. I’m still here every day in the office working next to the leasing team who’s here every day.
next to all the other guys in the shops around here, whether they’re working on an engine, paint, body, interior, building a new bus, we’re all here. you know, we’ve got to keep that like kind of family dynamic. You got to keep that like culture of people that want to work together, that like working together. That’s really important, no matter how big you get and how successful you get.
Federico Ramallo (31:51) I completely agree. I I know we’re kind of going to another topic on this, but I think that the…
the idea of managing the visibility of the team becomes much more important than the output. I mean, the output is important, right? But if somebody is doing a good work, but nobody recognizes it, then that person is going to quickly be demoralized and will not be more involved in the company as it used to, right? They used to. And they…
from my perspective is they lose purpose. What is the point of me being here? What is the point of me, you know, making the extra effort, right? If, you know, my peers don’t recognize it, you know, the hierarchy above don’t recognize what I’ve done, right?
Rich Thomson (32:40) Yep, that’s that’s very very very true again It’s harder to do the more people the bigger you get but it’s so true it doesn’t it doesn’t matter the role It could be the guy that’s just cleaning up the parking lot, right? But walking by one day and saying hey, you’ve been doing a great job like appreciate what you’re doing I mean it means a lot right or if it’s your you know Your CFO down the road that you talked to all day everybody stepping back sometimes and saying hey, dude Thanks so much for staying late and helping me knock that out right because no one wants to be taken for granted
No one wants to feel like they’re not appreciated. And people want to feel that when they need help or something or something’s going on that they’re supported. Something’s going on personally at home. Go take care of your family. We got you. The team’s got you. We got you. No problem. And that stuff can get taken advantage of too. But you could ask any one of the 550 plus employees here.
I’m not going to and the team’s not going to say if you’ve got a family emergency that we’re not going to support you. We will find a way to you out. Whether you’re a driver on the road, whether you’re working on the shop, or whether you’re finishing a bus that’s got to be done in two days, you got a family thing, it’s family first. Okay, you take care of them, the team’s got your back, we’ll figure it out, you go take care of your family. So that type of stuff to me is really important and I think that’s something that can’t get lost in any company, let alone companies besides.
Federico Ramallo (34:03) Right. And, you know, going back to the founders, the work ethic and the level of commitment, it’s you can actually see that happens when they have bad weather, right? Or a stressful situation, right? Where, you know, that’s when you can really see, you how people are going to behave, right? That’s where, you know,
Good friends in good times are easy to find, right? But in bad times is when you see the true friends, right? And I think the same apply for founders that are seeking an investment and companies that are supporting employees, right?
Rich Thomson (34:42) You’re spot on. I’ve got plenty of memories on the Caprice side where I believed in somebody and really just read them wrong. Or maybe I didn’t read them wrong. Maybe just like going through a really tough time, people change and they adapt and they do what they need to do. And so I’ve had some really bad situations at Caprice I’ve dealt with people-wise and you get through them, but you learn a lot and you try to be smarter the next time you invest or bet on somebody.
And I’ve had the same things Dreamliner, right? People that you believed in, that you trusted with things, and then they end up just totally screwing you over. And all you can do from those bad situations is learn, right? Try to make a better decision the next time and accept that you made a mistake. You hired the wrong guy. You put the guy in the wrong role. You gave someone more rope than you should have. You trusted someone with something you shouldn’t have.
All these things happen. So it’s reason I have all the gray hair I have, right? Is you go through things like that and you end up going, shit, I should have learned faster and I wouldn’t have as much gray hair now.
Federico Ramallo (35:34) You
Right, right. I call it horror stories of bad hires, bad situations. Actually, I’m finishing my book and I put a lot of those horror stories in the book, which is about managing engineering teams across borders, right? And I explore the human aspect of that, right? So I think that there’s a lot of overlap when you have a…
Rich Thomson (35:56) cool.
Federico Ramallo (36:07) team on site than remote and its own challenges. But here we have an overlap. But I also wanted to, I don’t want to scare the reader of all of the things, bad things could happen. But then on the other hand, it’s like, this was my experience, this is how I learned. So I had to work.
It was harder for me to write the lessons and set the frameworks without getting, without scaring the reader, right? Because then just, right.
Rich Thomson (36:36) It’s balanced, it’s balanced, right? You have to balance the,
you you can’t tell them all the bad things. You just got to throw something in here and there so it’s not all honky-dory, you know? It’s not like everything works out every time.
Federico Ramallo (36:49) Right, right. At one point I realized I am killing the hope of the reader, right? So I have to go back and rewrite it in a more positive way, right? Yeah.
Rich Thomson (37:00) Yeah, but it’s good though. think
it’s not mean listen, it’s not for the faint of heart, right? I mean, everyone wants to go try it. And some people try it and run back or turn back around some go for it like, why the hell did I do this? It’s good for people to hear right? Because I tell everyone you want to take the job, you should take it. Right? But but go for it. Don’t don’t be willing to tuck tail and go back the other direction. Go and go all in. Right? Don’t just don’t go half ass. Say you go all in. Don’t have a backup plan.
Go for it. I think that’s huge. But they should also hear that like, it’s not going to be easy. Like you’re not just going to smooth sale into big success and all the things you want. Like there’s going to be bumps in the road. Some days it’s going to feel like there’s more bumps than you can handle. You just got to be willing to put up with them.
Federico Ramallo (37:42) Right.
Right. Right. When my son was born, it added stress to my family, to me, you know.
having this little creature that it’s defenseless and you have to protect it, it pushed me towards making changes in my life that at that time it was risky, it was crazy, but now looking back, I don’t have any regrets because
All of that made me stronger, made us better as a family, to be in a better situation, better life. So it was overall a positive change.
Rich Thomson (38:28) I think, I mean, kids are, kids will test you, right? I’ve got three myself and I think all the learnings for them are good the whole way through, you know, from newborns to toddlers. I’ve got a couple teenagers now and they test me in different ways, but it’s still good because no matter what happens at work, good, bad, or otherwise, when you come home and you see those kiddos, like,
It makes everything worth it. Right. And you also, you you learn when you get home sometimes, like you’re deep into whatever happened during the day and you come home and your kids, you know, my 10 year old little boy, he’ll say something that like is a great question. But I’m like, man, is life that simple? Like that’s your question. That’s what you want to ask dad after your, you know, your whole day and dad’s whole day. Like, man, they just, they get it right. There’s a lot of things. There’s a lot of things that make you, make you question why you’re so focused on.
growing and work and all those things when you come home to the kids and ask those funny questions.
Federico Ramallo (39:32) Right, right. And it’s hard to, you know, switch off the mind about work, right? Especially, you know, running to companies, juggling too many things at a time, you know, and that you know the back of your mind that things are still happening while you’re out there, right? And, you know, but also kids, you know, don’t know that and they ask for our attention. So we have the duty to, you know…
be there for them, right? And be able to spend quality time with them, right?
Rich Thomson (40:04) Yeah, absolutely. Yeah.
Federico Ramallo (40:07) Yeah. So what do you think most founders get wrong when they’re looking for outside capital?
Rich Thomson (40:15) When they’re looking for outside capital. I’m not sure I’ve asked that one.
I mean, my knee jerk, which I haven’t thought through is that they’re maybe trying to get two better terms. like, and listen, my background was finance, so I probably looked at things and thought I should get better terms on X, Y, or Z, and I should get this, and they should give me that, and I thought through this really well. Sometimes you over-negotiate.
I think you, you know, again, this is my knee jerk, but I would look at it and say that when you have an investor that’s excited, that wants to be a part of you, believes in you, even if they seem a little expensive, even if the terms seem a little tough, don’t walk away just over the terms because similar to underwriting at Caprice, if you’re looking at an investor or someone who’s going to loan you money or equity or sub debt or whatever it is,
If you feel good, if you feel that person believes in you and trust in you, I think paying a little extra is worth every penny. And I know for a fact, I didn’t believe that when I was younger, before I started these companies. I always believe I can get better terms. That extra 2 % here, that extra 3 % equity, that extra 4 % interest, all those things I was looking through every single little detail. I look back and like,
Yeah, I might have done okay, done the right things. But I think looking back, I would want to choose the person that believed in me the most. And I’d be willing to pay little extra for that because I think that the person that believes in you as a person, the business you’re building, what you’re growing, creating, will be a better, longer term partner for you than the guy that gives you the best terms. The guys that gives you the best terms are going to be looking to get repaid and probably want to get paid more.
for something else they’re gonna do for you down the road or they’re gonna want something else from you, right? The guys that give you the best deal want some other product, want you to go do something else with them or want you to refer them to something, most people want something else. The guys you might pay a little more for, they might just really believe in you and be a better partner. I don’t know that’s the right answer, but that’s definitely something I think that I spent more time on that I would change when I went back on some deals that I probably over-negotiated.
Federico Ramallo (42:27) You
Rich Thomson (42:37) because I was like, is my baby, I’m doing it, it’s all mine, you’re gonna give me the best terms or I’m not doing it. I probably could have done some stuff in different ways.
Federico Ramallo (42:45) Right, right. It’s an opportunity cost, right? I mean, if you focus on reducing the term, fighting for the terms where you can use those resources to bring more revenue, that if you can bring more revenue, then those terms becomes less and less relevant, right? mean, yes, you pay a little bit more money for the finance, but if you can achieve your goals, then it becomes less important, right?
Rich Thomson (43:14) Yeah, and I mean, listen, it’s been not even that long, long ago for me, even with Dreamliner and Anacapris, where it was like, I could do this like all with debt and keep all the equity or I could give up some equity and probably be a lot more comfortable. You know, I’d say the first, you know, five, four or five years of, you know, being an entrepreneur, you, you go, I want every dime of equity. I don’t care. I don’t care what it costs. I don’t care what the terms are. I’m keeping every dime of equity. And then as you get older and you go through it more, you’re like, listen,
Like to not have that extra half turn of debt or to not have that extra debt service sitting on the top of me or not have to grow by another 10, 15%. Like I’ll give up a little more because I want to be comfortable. Right. I don’t want to be in that dress position. I don’t want to be in position where, you know, I’m dealing with the bank or the credit lender, the lender and saying, should I get this didn’t happen. What are we going to do? Because now, now everything’s on their terms. Right. Whereas in the equity scenario, you’ve got a partner.
You have a lot more alignment there. And even if you gave a little more, you’ve gotten to more alignment. And you’re going to sleep better at night versus being stressed out about hitting your budget or growing X percent to kind of make sure you get where you want to get.
Federico Ramallo (44:24) Right, Amazing. We’re running out of time, but I want to ask you one last question. What advice would you give founders to be able to achieve the level of success that you’ve been able to achieve?
Rich Thomson (44:38) Advice, advice. Well, I’d say God first, right? I I attribute everything to God and my family. I wouldn’t be here today if I wasn’t, you know, kind of blessed with everything. I’ve been blessed with a great family, friends, and God supporting me. But I think, you know, outside of those basics, to me, it’s believe in yourself. Don’t have a backup plan.
go all in and do your work, right? Do the work around what you’re trying to do from the due diligence of what are my competitors? Why am I going to win? You know, do I have the capital to do this? If I do fail, how am I going to make it work after, you I shouldn’t say if you fail. When you fail the first time, you know, how are you, what are you going to do next? How are you going to, how are you going to, what are you going to do to fix, you know, the first mistake, error or failure?
Listen, again, I’m no poster child. I’ve failed and made so many mistakes, I couldn’t count any of them in the last month or two. But I think you just gotta be willing to go for it. You gotta be willing to admit mistakes, learn from mistakes, adapt, and keep pushing forward. And then the other probably couple things I’ll say is the people you surround yourself with.
you know, some of the most important things in the world, right? Some of my biggest fails have been the people that I’ve hired and they’ve made my life the most difficult. So shitty people, bad people in general can really screw up your business no matter how good your business or your team, one bad or two bad eggs here and there can ruin everything. So do your work on the people you hire or who you go into business with. And even if it’s your best friend, then you better think through it because, you know, there’s a reason they say don’t get into business with friends and family. It can be difficult.
I’ve dealt with the family side as much, but I’ve dealt with the friend side. It doesn’t always work out perfect. So just really think through all the things. Ask a thousand people questions about what they like, what they didn’t like about doing it, what’s good, what’s bad. I asked so many people their thoughts and ideas when we started my company and I got, hell no, don’t do it. Go for it. You’re crazy.
You know, I got all sorts of in the middle stuff for people to go try and do it. You know, I had to, you know, I had my third kid right as I was starting this. So, you know, three young kids at home and that’s the smart, common conservative guy says, you don’t take the risk and go do that. But, you know, I felt I asked enough questions and I was like, if I don’t do this, I’m gonna regret it. So that would be my last thing to say to everybody is like the biggest regret.
Federico Ramallo (46:52) Wow.
Rich Thomson (47:09) I have and that I would think a lot of majority of investors would tell you that they have it going out on their own is that I didn’t do it sooner. Right? I wish if I could have started this business five years earlier, ten years earlier, man that would have been awesome. I would have loved to have started sooner. So don’t sit around and wait for it. Don’t do it. Believe in yourself and go give it a shot.
Federico Ramallo (47:33) Amazing, amazing. Yeah, I agree on everything. Having friends, hiring friends, it can become very messy very quickly. And you lose friends. It’s a great way to lose friends, right? Yeah. And even though, if it works, that the friendship now doesn’t, it becomes different because it affects the friendship because now,
Rich Thomson (47:47) That’s back.
Federico Ramallo (47:56) you have a hierarchy, now you’re not peers anymore and that becomes, breaks the foundation of the friendship.
Rich Thomson (48:03) Very rarely does that work out to where you’re all still the same buddies doing the same stuff all the time. There’s always something and honestly I think the more success you have the harder it gets to stay close friends.
Federico Ramallo (48:09) Right.
Right, right. And the more successful you become, the lonelier you become unless you actively work on that.
Rich Thomson (48:23) Yeah, yeah, let me know less people you can talk to about what you’re doing when you lose your close friend or you lose friends to talk to and discuss those things with because you can’t talk to them about it. It’s just not a or easy conversation to have.
Federico Ramallo (48:28) Right.
Right, right, completely agree. Rich, thank you very much for joining us today. I truly appreciate it. And I think we learned a lot about how you run your companies and how you’re being able to turn them into the success that they are today. So thank you.
Rich Thomson (48:54) Thank you Federico, appreciate it. This was lot of fun. I always enjoy the conversation, so thank you for having me on.