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If you love stories about founders who grind, win slow, and end up building empires while everyone else sleeps, today’s edition is for you.

Because this story isn’t about tech bros, AI founders, or Silicon Valley hype.

It’s about…

a 50-year-old accountant

a 20-year-old college student

a failing aerospace side business

and one of the most profitable acquisition machines on the planet

This is the HEICO story — and it’s WILD.

Today you’ll learn:

• how the Mendelsons cracked an industry dominated by giants

• how regulation became their moat

• how they turned “tiny acquisitions” into a compounding empire

• how they beat the S&P, Berkshire, and almost every fund manager alive

• how a $25M company became a $40B titan

Let’s unlock this beast. 🚀✈️

🧨 PART 1 — The Accidental Discovery

Late 1980s.

Larry Mendelson isn’t an aerospace engineer.
He isn’t a pilot.
He’s not an inventor.

He’s an accountant — with:

• a nose for distressed assets

• a deep understanding of cash flow

• and a “buy cheap, fix aggressively” mindset

Meanwhile, his son Victor, still in college, is looking through small public-company financials (because that’s what the children of accountants do for fun 😂).

He stumbles on a weird little company:

HEICO Corporation

— losing money
— mismanaged
— distracted by a failing medical lab division
— and sitting on a forgotten aerospace parts business

And here’s the kicker:

Management owned zero stock, had zero incentives, and zero urgency.
The market cap? Roughly $25 million.

To Larry and Victor, that smelled like opportunity.

But the real insight came when they dug deeper into HEICO’s aviation division.

✈️ PART 2 — The Hidden Monopoly Nobody Talked About

HEICO’s aviation business maintained replacement parts for jet engines. Sounds boring.

But here’s what Larry saw:

Airlines were being price-gouged.

Companies like:

• GE Aerospace

• Pratt & Whitney

• Rolls-Royce

controlled 90%+ of replacement parts and charged CRAZY markups.

Sometimes 3× to 5× the real cost.

This was a legal cartel, protected by:

• FAA regulations

• long sales cycles

• brand trust

• limited competition

• complex engineering

Larry’s brain went on fire. 🔥

“If pharmaceuticals can have generics…
Why can’t jet engines?”

If HEICO could:

1. reverse-engineer parts

2. prove they were safe

3. pass FAA approval

4. undercut the incumbents…

They could break the monopoly.

Not with innovation.
Not with disruption.
But with regulatory judo.

So Larry made a move most people would NEVER attempt:

He went hostile.

He waged a proxy war.
He seized control of the business.

In 1990, HEICO was his.

🛠️ PART 3 — 1990: The Turnaround Begins

Larry and his sons — Victor and Eric — inherit a mess.

But they get to work. Hard.

Here’s what they do immediately:

• Cut the failing divisions

• Fire underperforming management

• Focus 100% on aviation parts

• Build engineering capability

• Study FAA regulations in microscopic detail

• Set up manufacturing lines for reverse-engineered components

This is where the magic begins:

They weren’t building “cheap knock-offs.”

They were building FAA-approved equals.

This mattered because in aviation, regulation is the moat.
If you clear that bar, you can compete with ANYONE.

But the giants didn’t like this at all.

⚖️ PART 4 — 1993: The "Generic Drug" Strategy

HEICO’s big moment arrives in 1993.

They reverse-engineer a jet engine combustion chamber — a highly complex, safety-critical part — and submit it for FAA approval.

GE and Pratt freak out.
They sue.
They lobby.
They try to crush HEICO with legal pressure.

But the Mendelsons stay calm.

The FAA reviews the part.
Testing, analysis, data, compliance.

And then… approval.

HEICO can now sell a multi-million-dollar part for 30% cheaper.

It’s “generic drugs” but for jet engines.

This was the crack in the dam.

And once it cracked?
It shattered.

🌍 PART 5 — 1997: The Lufthansa Masterstroke

Even with FAA approval, airlines were hesitant.

Aviation is conservative.
People don’t want to crash to save 30%.

Larry needed a proof point.

A big one.

So he pulls off a genius partnership:

He convinces Lufthansa Technic — one of the world’s most respected aviation engineering groups — to buy 20% of a HEICO subsidiary.

This was a trust hack.

It signaled:

• “We trust HEICO.”

• “We’re giving them our data.”

• “We’re partnering on parts.”

Overnight, HEICO gained:

• credibility

• technical specs

• prestige

• access

• global legitimacy

The result?

Sales EXPLODED.

This one deal unlocked the entire industry.

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🧩 PART 6 — 2000s: The Acquisition Machine Awakens

Once they nailed the PMA model, the Mendelsons executed the most powerful long-term strategy in the aerospace industry:

They became a serial acquirer of tiny niche aviation manufacturers.

These weren’t sexy tech companies.

They were:

• cockpit-display shops with 12 employees

• underwater-beacon makers

• niche sensor manufacturers

• aerospace electronics firms

• companies making obscure components for old planes

HEICO’s genius was simple:

Buy SMALL.

Buy PROFITABLE.

Let founders keep running the business.

Don’t integrate too tightly.

Give them resources.

Don’t mess with what works.

This is the opposite of how most M&A operates.

Large companies:
“We bought you, now follow our 200-page integration manual.”

HEICO:
“We bought you because you’re great. Keep doing what you do.”

This created a loyalty loop:

• founders wanted to sell to HEICO

• employees stayed for decades

• margins improved

• bureaucracies didn’t form

• innovation stayed local

Over the next two decades?

They bought over 100 companies.
Mostly small.
All profitable.
All sticky.

A decentralized empire.

📈 PART 7 — 2010s: The Compounder

By the 2010s, HEICO wasn’t a parts company anymore.

It was a:

• recurring-revenue machine

• FAA-approved monopoly breaker

• diversified aerospace conglomerate

• acquisition platform

• compounder

Its stock price went thermonuclear.

Over multiple decades…

HEICO outperformed Berkshire Hathaway.

Let that sink in.

A small penny stock turned into one of the strongest stocks in the entire S&P 500.

Early investors became millionaires.
Employees got rich.
Founders of acquired companies built second fortunes.

You almost never hear about them because the Mendelsons stay quiet.

No flashy interviews.
No Twitter threads.
No PR stunts.

Just execution.

🛡️ PART 8 — 2023–2025: Succession & The Legacy

The 2020s brought a new chapter.

The Mendelsons — Larry and his sons Victor & Eric — had been running HEICO together for more than 30 years.

In September 2025, Larry passed away.

He left behind:

• a $40B aerospace titan

• a decentralized empire of niche manufacturers

• an FAA regulatory moat almost impossible to replicate

• one of the greatest compounders in modern history

• a company that turned thousands into millionaires

Victor and Eric, who helped run the business for decades, continue to lead today.

HEICO isn’t flashy.
It isn’t trendy.

But it’s one of the greatest long-term wealth machines of the last 40 years.

🧠 Deal Lift Founder Lessons

HEICO is a case study founders should study for life.

Here are the big takeaways:

1️⃣ Find the regulatory moat

Most founders avoid regulation.

Winners learn how to weaponize it.

HEICO didn’t need to beat GE in innovation.
They beat them in FAA paperwork.

That’s power.

2️⃣ Build where incumbents are lazy

Big companies ignored small replacement parts.

HEICO owned them.

That’s how you win.

3️⃣ Decentralization beats micromanagement

HEICO let its acquisitions run independently.

Low bureaucracy = high growth.

4️⃣ Boring businesses often have insane margins

Jet engine parts aren’t sexy.

But they’re:

• high R&D

• high regulation

• high switching costs

• high lifetime value

In other words:
PERFECT.

5️⃣ Build slow. Compound forever.

HEICO didn’t “explode.”

It compounded.

That’s how you get from $25M → $40B.

🔥 Deal Lift Takeaway

Some founders chase “disruption.”
Some chase hype.
Some chase headlines.

The Mendelsons chased:

• overlooked assets

• regulatory knowledge

• tiny acquisitions

• boring businesses

• long compounding cycles

And they walked away with one of the greatest track records of any family in the public markets.

The lesson?

You don’t need to invent the plane.

You just need to invent a smarter way to maintain it.

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