Category: Authentic Leadership

Categories
Authentic Business Relationships Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth

Angel Investing & Startups with Dom Einhorn

angel investing: man sitting on a pile of large gold coins

Dom Einhorn is a French-American social entrepreneur and founder and CEO of UNIQORN, the largest rural incubator-accelerator of its kind in the world. Located in southwestern France (Sarlat-la-Canéda), its mission is to give entrepreneurs and their families their lives back while helping them build game-changing technology startups. Dom has a long history of working with startups and in angel investing, and he shares so much wisdom in our interview!

He is also the founder of multiple other successful startups and businesses, including the Startup Supercup. This is a leading tech conference that unites 1000 carefully vetted angel investors, VCs, private equity funds, technology startups and leading media outlets from around the world. The three-day conference takes place in medieval Sarlat France.

Listen in today to hear all about Dom’s work!

Young Dreams

As a kid, Dom wanted to be like his dad, who worked for the French railway as an engineer. Clearly he ended up going down a different route!

The first deal-making experience he remembers was with his magazine route. Students could get a commission for every issue they sold, and Dom outsold everyone else. It was his first time getting compensated, and it sparked his entrepreneurial dreams.

Now, Dom has several major focuses. One major one is UNIQORN, which he returned to France to launch in 2018 (in German Dom’s last name means “unicorn”!). UNIQORN startups are provided with a complete ecosystem for success. This includes direct access to proven funding sources, top-notch legal and accounting representation, access to the world’s most generous business incentives and, most importantly, a dedicated sales and marketing accelerator. All that combined puts a startup’s product or service on the fast track to success.

Art Auction Adventures

In 1996 Dom created the first online art auction company. It quickly became one of the largest in the world, and he was able to turn around and sell it 5 months later.

At that time, Dom happened to have a lot of artists as clients. They were all “starving artists”, including himself! He decided to build the online art auction in order to solve a problem he saw his clients facing. Selling art on a one-off basis was difficult, and didn’t scale well. His solution? An online auction house.

The first few months saw little activity, but one day a major magazine came in and did a report. They skyrocketed from 150 bidders to 20,000+. Overnight, they were in the art business….which they realized they knew nothing about. They were shipping art uninsured, with glass, and found themselves in a logistics nightmare.

One day they got an email from a buyer willing to buy them out; Dom was ready to move on and do something else! The new buyer had infrastructure to handle logistics and shipping, but were lacking on the technical side. Their weaknesses were Dom’s strengths, and they arranged a 6 month transition period. Once their team had the platform knowledge they needed, Dom was fully out of the business.

The fundamental lesson he learned from the online art auction house was that whatever you launch you should serve a legitimate purpose and respond to a problem in the market.

Vanity Business Models

Dom has noticed there are a lot of companies popping up that don’t solve a new problem or reach a new market. He referred to these as “vanity business models”, and noted that they simply aren’t sustainable.

If you want to become a billionaire, help a billion people. The rest will happen by itself.

Early on, Dom noted that if you wanted to be in e-commerce, you needed an Oracle license that cost $32,000. Raising cash was key, because barriers to entries were extremely high. By 2015, if you had a couple hundred dollars worth of technology you could launch an entire business. That’s both a blessing and a curse; there isn’t a natural economic gatekeeper. That means more opportunity for more people, but can also mean there is no real vetting process pushing people to only bring the best ideas to the table.

Back in the 90’s, you had to be in Silicon Valley if you wanted to get backing or support. Now, however, you can be anywhere. Dom shares that when he’s visited Vietnam with his wife they’ve seen co-working spaces the size of Walmart, with teeneagers building out online games that are worth billions now. The market is expanding, and decentralization has really democratized the process.

Dom foresees that we’re heading “back to the garage”, where things first started for technology.

Moving Away from Cities

Prior to Covid, Dom’s UNIQORN team did a study and found that 12% of young entrepreneurs wanted to move away from large urban centers to launch their businesses. Today, 38% say they want to operate outside of large cities.

He feels that the world is coming to the realization that not only CAN that be done…it probably should be done.

Dom shared some great examples of employees who have new commutes of about 45 seconds on foot. He’s seen this new way of living and working lead to better quality of life, with employees who are fresher, less tired, and able to show up in a different way. Now, more than ever, people see what is possible when it comes to living and working outside of major metropolitan centers of business.

This trend isn’t just in entrepreneurship. Large companies are starting to realize that their people can be just as productive working remotely as from inside the office. Employees are also starting to show up to interviews with more confidence to request remote or flexible work options.

From No Cash to Major Deals

In the first 2-3 years of one of his early startups, Dom was ready to throw in the towel. By 1999, however, the company exploded. They had a leg up on the competition, they were gaining traction for clients, and things were taking off. From a handful of clients to 500+, they grew with amazing speed.

One day Dom realized they had run out of money. Because of their fast growth, they had been burning through cash at a much faster rate than he had thought. It was time for payroll, and the reality was: there wasn’t enough money to pay everyone.

Dom was sitting at his desk, trying to get creative with numbers, when he got a call with an offer: someone wanted to buy the company. Although he first held out on selling, the offer was too good to refuse. The seller was building a new technology, and they needed merchant relationships. When the check was put on the table, he took the offer — then rushed to the bank so he could deposit it and make payroll.

When clients are pouring in and business is booming, entrepreneurs often underestimate the need for cash flow and profit. What Dom learned the hard way was that revenue and profit are not the same thing, and profit margins are an absolute key.

Dom shares that when he looks at a new business now, he doesn’t pay any attention to top line revenue. All he wants to see is actual margin, because that’s where you can see how healthy and sustainable a business is.

Building Value

Dom’s had deal-making success throughout his life because he’s built value again and again. From the outside looking in, buyers were able to see that value, and they came to him. That’s a much different situation then being in a bad place with your business and desperately looking for someone who might be willing to buy.

If you focus on solving a fundamental problem, Dom believes that there will always be people out there looking for what you have. He’s never proactively gone out looking for a buyer, because the people who need the solution he’s created have always been able to find him.

To hear more about the ways in which Dom has leveraged strategy, connections, and deal-making, listen in to the full episode!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

Categories
Authentic Business Relationships Authentic Deal-Making Authentic Leadership Deal-Driven Growth

Family Business

family business

This week I was honored to interview not one, but two amazing guests. Farida and Ramia El Agamy are sisters with phenomenal backgrounds in family business. They bring a global perspective to deal-making opportunities and family businesses. This episode is worth listening to in full.

LISTEN HERE

About Farida

Farida F. El Agamy is a social entrepreneur by conviction, and a lawyer by passion and profession. Since 2008, she’s been the General Manager of the Tharawat Family Business Forum, the first knowledge resource and networking hub for family-owned companies in the Middle East and North Africa. Farida’s main interests lie in the advancement of corporate and family governance systems, the economic impact of family firms on the economy, and the support of individual family members within the family business context.

About Ramia

Ramia Marielle El Agamy is the Editor-in-Chief of Tharawat Magazine, (@Tharawatmag), a global publication for family businesses that attracts over 3 million readers (online and print) per year. The magazine encompasses a library of over 1000 articles. She is also the host of two podcasts: The Family Business Voice and WiFB. Ramia is also a strategic advisor in the Tharawat Family Business Forum as well as a Director in her family business’ board. Since 2017, Ramia is also CEO of Orbis Terra Media, a content studio and an award-winning publisher that stands for the highest standards in content production and omnichannel strategies. With a data-driven approach to content marketing and distribution, OTM specialises in helping brands achieve a consistent narrative across multiple platforms and to reach their audience.

Early Starts for These Citizens of the World

When I asked the pair what they had wanted to be growing up, Ramia nominated Farida to share first, as the older sister. Laughingly, the sisters noted that family businesses require respect for the family hierarchy. 

Farida shared that, early on, she was interested in societal questions. Her father had studied archeology, and he would bring his children on hikes to old dig sites. In addition, they would visit extended family in Cairo and visit ancient sites. These early experiences grew Farida’s interest in archeology as a possible career when she was a girl.

Ramia noted that, even as a child, she could see herself working in the family business. Seeing her father traveling frequently, and missing his presence, she imagined being able to pack a calculator into a bag and travel with him. She also had a very entrepreneurial spirit, and remembers opening a detective agency, a travel agency, and several shops with her sisters.

(Ramia and Farida also noted that they have a third sister in the family business as well. They thought it might be too much to bring all three of them onto the show!)

The sister’s mother is from the Netherlands and their father is from Egypt; they were raised in rural Switzerland and consider it home. However, their international roots and extensive travel histories, including studying in the UK and living in the UAE, have made the world their oyster in many ways!

First Deal-Making Experiences

Culturally, deal-making is perceived differently in various parts of the world. Looking at their father’s generation and work in the business, the sister’s agreed there were fewer activities that may have been directly considered “deals”.

In fact, the first deal-experienced Farida recalled was assisting a family business in getting out of a deal. A nephew was finding himself in a very bad situation with a possible deal involving his uncle. They could see it going south, and needed to intervene.

Ramia notes that both her sisters are lawyers, and often see deals through the legal and business lens. As an entrepreneur herself, she feels she’s been making deals her whole life. When you start a business with nothing, everything is a barter, a trade, and exchange, or some other way of growing and deal-making. She remembers many skill exchanges that grew in size and significance as revenue grew.

She also shares that she thinks the first deal entrepreneurs make is with themselves. Deciding to go into business requires trading time and energy and capital. 

Negotiations in Family Business 

The family business, as a construct, is a constant negotiation. This is true both internally and externally. Every day you enter into your family business, you’re entering into an emotional negotiation with your family. There is a constant need to recalibrate, adjust behavior, and figure out how to incorporate your personal and professional lives.

Part of this is holding people accountable when they are part of your family. It is challenging to have a parent or sibling that you have to challenge, hold to high standards, and question. Handling these ongoing family business negotiations on a daily basis requires you to truly leave your ego (and childhood patterns) at the door.

(There was an amazing conversation about ego here that’s worth listening to!)

The sisters note that family businesses are often stable and thinking long term. In addition, they are perceived as having “skin in the game”, and are often quite regionally embedded. Attributes such as these make family businesses a popular choice for others looking to make a deal.

In addition, the whole family business as an entity is an ongoing deal.

A Major Myth About Family Business

There are many family businesses in the world….and just as many myths about them! Since I had the experts on the line, I decided to ask their thoughts on a major common myth I often hear.

If You’re Not First Generation, You’re Not an Entrepreneur

Some people question whether someone in a family business can truly consider themselves an “entrepreneur”. Many entrepreneurs in the US are first generation entrepreneurs. Even if their parents were also entrepreneurs, they are often not involved in the same business. Across other parts of the world, however, many entrepreneurs are working within multi-generational family businesses.

The sisters noted that there is a difference between a real family business, or enterprise, and an enterprising family. They consider entrepreneurship to be the force that compels any family business to keep growing. They also encourage each generation to think of themselves as founders of a startup, in terms of needing originality, adaptability, and other entrepreneurial skills.

Being part of an entrepreneurial family doesn’t mean you’re not an entrepreneur. It does mean, however, that you have a heritage of entrepreneurship and usually the support of your family.

(Listen in to why they consider family business an “extreme sport” in the entrepreneurial world! This includes the weight of legacy, which can feel like a “backpack full of stones”, and the “ghosts around the table”.)

Layers of Governance

Imagine the most difficult professional situation you’ve ever been in, in your life. Then, imagine the most difficult family relationship you’re currently experiencing. Now, put those two together every day of your professional life.

That’s family business.

The emotional toll that family situations can take on you, and your business, are much greater than you may expect. That’s why governance in family firms is so vital (and so difficult). There are many, many layers to governance within a family business, and often the laws pertaining to family business are less clear than other legal statutes.

For example, there are rarely laws requiring a family business to utilize a family council to learn to regular their behavior as a family. Some families have waited for too long, growing more and more misaligned. Eventually, it can become too late for change.

Families who have aligned decision making as a result of internal deal-making have a much greater chance of making it in the long term. They are also better equipped to handle unexpected challenges, such as Covid-19.

Ramia and Farida share so much valuable insight on family businesses. Listen in today!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

Categories
Authentic Deal-Making Authentic Leadership Deal-Driven Growth

2021 M&A Outlook

2021 M&A Outlook

This week on the solocast we’re checking out the 2021 M&A deals outlook. It’s been interesting to take a look at what people are seeing, and what might be around the corner. M&A deals tend to be especially easy to find information on, and often give indicators about other deal-based forecasts as well. 

As always, there are no guarantees in the deal-making industry!

2021 Industry Predictions

Many experts are predicting a robust year for 2021 M&A deals. This is in line with what I’ve been experiencing, and other statistics are bearing it out as well.

Big publications and industry newsletters for tech, insurance, pharmaceuticals, biotech, logistics, and more seem to be reporting that trends are looking positive. Why? What’s leading to such a robust 2021 M&A outlook when we’re in the midst of a global pandemic and other economic issues?

Well, in the economy overall we’re seeing few things happening.

  1. More Positive Deal-Making Outlook

We’re seeing our way towards the end of the pandemic. Vaccines are going out, and we’re seeing the light at the end of the tunnel. That may trigger an expectation that the economy will be opening up more, and contribute to the positive M&A deal outlook for 2021.

Also, the second half of 2020 was unbelievably strong. That was mid-Covid, with no end in sight. Although the spring and summer of that year was rough, things really did recover and we were on an upswing prior to 2021. That means there must be other major factors at play here!

  1. Impact of the K Economy

A K-based recovery speaks to the idea of both upstrokes and downstrokes as part of the overall economic repair. This fits 2021 because we’re seeing that some industries, like retail and restaurants, are suffering. Other industries, however, are booming. 

The downstrokes speak to reasons that deals would likely slow down or struggle. The upstroke, however, denotes areas where deals would possibly be growing and seeing massive success. Logistics, tech, pharmaceuticals: these are businesses that have seen robust growth.

I’ve also seen that both the upstroke/downstroke of a K economy can lead to increases in deals. In a boom economy there are major amounts of capital available. In fact, there are trillions of dollars of private equity money available as investment capital right now. That’s significant when it comes to funding deals. On the flip side, in a down economy companies are looking for ways to survive. This can include sales, combining multiple businesses, and major pivots that result in deals. Companies need to consider how they can add more value, alter their business models, and reevaluate what they’re doing.

In a K economy, deals are available for a plethora of reasons, and that may be contributing to the positive 2021 M&A outlook. Regardless of the size of your company, you may find that you can benefit from deal-making in the upcoming months.

What Are the Trends?

Even if you aren’t large enough to be a trendsetter yourself, you can still benefit from looking at current trends. Where are large companies spending money? What deals are they making?

You may find yourself discovering trends within an industry, niche, technology, or platform that you can take advantage of in your own way. Perhaps growth, product/service development, or deals of your own will develop as you identify the trends impacting the market.

At the end of the day, there is no crystal ball. No one knows exactly what’s happening next. All you can do is remain aware, do your own homework, and make informed decisions for yourself and your business. I’m cautiously optimistic, especially as I’m operating in many sectors experiencing an upstroke in the current economy. I’ll continue to stay aware, examine trends, listen to insiders as I make more 2021 deals.

If you’re interested in the 2021 M&A outlook, check out the full episode!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

 

Categories
Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth

Post Merger Integration

post merger integration
Matt Sonnen is the founder and CEO of PFI Advisors. He provides strategic operational consulting in the RIA industry. In addition, he helps existing RIAs tackle various operational and strategic issues that they encounter as they grow. Matt emphasizes how important it is to think through post merger integration as part of deal-making. The work is not done when the deal has been made!

Early Deal-Making Experiences

At age 8, Matt wanted to be the third baseman for the CA Angels. By age 18 he wanted to be Eddy Van Halen. He certainly hadn’t considered being a strategic operational consultant in the RIA industry!

An early deal he remembers is baseball card trading during recess. His deal-making prowess has certainly grown since those days.

Now, Matt is deeply involved in the RIA industry. PFI Advisors first went to market as breakaway specialists helping advisors start RIA’s. Recently, Matt noted that they’ve been receiving a lot of traffic from buyers who have just closed their first large RIA deal, and who don’t know what to do next. Billion+ dollar firms are buying million+ dollar RIAs, and finding they don’t know how to integrate. Systems are difference, specializations are different, and there are many details that aren’t considered until after the deal is done!

This is also the result of diversification. Large firms are looking to bring on RIAs that offer something different….but then find that almost everything is so different that integration becomes challenging. Matt sees this trend continuing into the future.

After The Fact Issues

Many firms report that just getting the deal done is often perceived as the challenge. Unfortunately, however, this means they are prioritizing the “yes” without considering the “how”. Once the deal is done, this leaves all sorts of issues on the table!

Matt notes that the actual work begins when it comes to fully integrating the new acquisitions. I see the integration conversation as being a fundamental part of due diligence, and encourage firms to be forward-thinking when considering possible deal opportunities.

After all, a successful outcome will mean you MUST successfully integrate. It makes sense to consider the logistics of that before you finalize a merger or deal.

Preparing for a Smooth Post Merger Integration

Matt suggests that firms can ask questions on the front end to help minimize back-end problems during a post merger acquisition process. Often, he notes that the buyers avoid in-depth questioning. This is often attributed to not wanting to “scare” the seller away by appearing bureaucratic or demanding.

However, forward thinking firms understand that the two sides do need to get on the same page. A mutual understanding of what changes might be coming around the bend, and what an integration may look like, create a foundation for a strong transition.

Operationally, things like branding, emails, tech stacks and more might all be on the table. Post merger integration really can come down to nitty gritty details. These are things that people hardly think about day-to-day. If asked to change, however, they may feel resistant, even after the deal is done.

Minimize Client Pain Points

Matt notes that core technology changes that are often connected to post merger integration include performance reporting tools, CRMs, financial planning tools, and client portals.

For efficiency’s sake, its preferable to choose a single platform/tool that each company will be using. That way employees and owner of each are familiar with the language and user experience, and are sharing a common experience.

Buyers who want to get in the M&A game really should be in relationship with the major custodians. That way the seller is able to keep their clients in the systems they are already using. (This applies in RIA-to-RIA deals). That prevents the need for the seller to repaper all their clients, which can be a huge sticking point.

Finding out during the post merger integration that repapering is going to be required is extremely frustrating. Ideally, this would be avoided!

Biggest Lessons Learned

Matt shares one major lesson he’s learned is that outsourcing is somewhat of a myth! What he’s found from experience is that, even when outsourcing, it is vital have someone in-house who understands what was outsourced and how it works. Your team needs to know how the data and systems work, and what options you have.

You can save yourself a lot of time by knowing how the major functions that you outsource actually work. Somebody (often the COO) needs to know how every system works! Ensure that an outside firm isn’t the only one who knows what you have going on.

Also, there are somethings that need to happen in-house or on-site. Practical, day-to-day implementation, monitoring, and application shouldn’t be so fully done be an external agency that the COO doesn’t have clarity around what is happening, and how. This is especially true when it comes to compliance and audits.

Strategy & Operations

If you want to get to the next level, your strategy and operations have to evolve. Matt notes that right after launching PFI Advisors, he read The Emyth Revisited. (He wished he had read it BEFORE he launched!) He recommends checking it out. You can listen in to some of his favorite examples from the book by listening to our full interview!

Owning an advisory business is a whole skill set onto its own. From tech stacks to workflows to management – Matt often sees that these areas get pushed to the side in new companies. This is partially because actual revenue generating activities are being prioritized. This is why, at some point, he often recommends bringing in a professional management company to ensure that all angles are covered. Matt finds this is especially key during times of growth.

Feel that administrative tasks are slowing things down, or that client needs are slipping through the cracks? It’s probably time to let your advisors focus solely on client services and business development. Obviously administration and management is still required! That’s where a professional management company comes in.

Sacrifices and Growth

In the RIA space, there is money to be made as a lifestyle business. If that’s your desire, you may not need to reevaluate your management needs. However, if you’re saying you want to grow and you’re serious about it…you may need to make some sacrifices. This is also something to consider if you’re looking to sell down the road.

Matt shares a great example of an owner who described the scrambling of the first year. That was followed by the up-leveled investments (using most of their profits) of the next years. Those were sacrifices that came into play before they finally started seeing huge growth. Short term sacrifices are often required before true, sustainable growth is achieved.

Listen in the full interview for more from Matt Sonnen!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

 

Categories
Authentic Business Relationships Authentic Leadership Authentic Negotiating Deal-Driven Growth

How to Hire the Best

How to Hire the Best: Dr. Sabrina Starling on DealQuest Podcast

Business psychologist, How to Hire the Best author, and Tap The Potential Founder Sabrina Starling is back with us again! This time she joined me for an amazing interview we conducted live on Facebook. Dr. Starling has coached thousands of entrepreneurs to overcome the day-to-day struggles of business growth by getting out of their own way and developing a success mindset that propels them to higher and higher levels of success (and profitability). Last time we talked we focused on transforming small businesses into highly profitable, great places to work. Today, we focused in on her latest book in her How to Hire the Best series.

Small Business Owners with Growth Opportunities

Years ago, Dr. Sabrina realized she was working with small business owners who were passing on growth opportunities because they didn’t have the capacity to take on anything new. They were stuck in that place so many entrepreneurs find familiar: running their business reports, ordering supplies at Staples, and wearing so many hats they were ending every day drained and exhausted.

Even though they were reaching the point where more and more opportunities were naturally coming their way….they had maxed themselves out and could no longer take advantage of their natural momentum and growth. If they did happen to have an employee or two, they were often what Dr. Sabrina calls “warm body” employees. That is, they were technically hired to work there, so they were there. They didn’t really have that A-Player, above-and-beyond, valuable asset energy of someone who could help you reach a new level.

Dr. Sabrina knew what they needed: to hire A-player employees and increase their capacity! However, she also knew that hiring is a huge commitment. From candidate searching and posting your job, to screening and interviewing, to onboarding and then releasing responsibilities to this new team member — the time, expense, and potential for things to go wrong make it feel prohibitive!

That’s why so many small business owners and entrepreneurs make the choice to put off hiring until “later”. The truth of the matter is, however, that you will never magically become less busy. If your business keeps growing (which is usually desirable!), you’ll actually have less time and capacity. You have to choose to either “cap out”….or find a way to expand!

For Growth, You Need A-Players

As a business psychologist, she tried coaching business owners on how to turn their “warm body” employees into something more…and it just didn’t work. The alternative, however, seemed to be hiring top-line employees. A lot of small business owners didn’t feel that was possible. After all, the more skills and experience someone has, the more they expect to be compensated. 

This felt like a true dilemma, and was one Dr. Sabrina herself believed for quite a while!

One morning, however, she woke up with this question: “What if it’s not true?”

That question resulted in the search for small business owners who already had employees they considered A-level. She started interviewing them, and kept asking how they had found them and hired them. Their answers, again and again, were “I don’t know!”. (They also requested she come back and tell them if she ever figured out, because they all wanted to do it again!)

I see that as “unconscious competence”, which Bob Proctor has done lots of work on! Somehow, some small business owners had hit the hiring jackpot. Since they weren’t clear on how they had done it, they weren’t able to truly profit from it.

Eventually, Dr. Sabrina found that networking and word of mouth seemed to be the key for success. (Very similar to the most proven marketing techniques for finding clients.) Because the small businesses employing these tactics weren’t aware WHY they were working, they hadn’t been able to consistently and methodically employ them for ongoing, repeated hiring success.

Traditional Hiring Methods Don’t Work

When you follow traditional hiring methods, you have a 1 in 4 chance of hiring an A-player. (And a 3 in 4 chance of ending up with another “warm body”.)

Traditionally, you decide you need to fill an opening. You make a job ad, and put that out into the world. As applicants respond, you complete interviews, then you pick someone. That’s how we tend to do it….and that’s the method that offers a 75% chance of missing the best fit for the role.

In How to Hire the Best, Dr. Sabrina teaches employees how to leverage her non-traditional method that’s been proven to work consistently.

Part of her approach includes starting with the end in mind, and employing best practices in a strategic way.

The first question I had is, “When does all this start?” I knew it probably wasn’t going to be “Once you realize you need someone.” – and I was right!

A-Players Think Differently

For one thing, Dr. Sabrina notes that traditional job postings tend to attract people who are unemployed. This can mean they’re willing to accept anything — even if they aren’t that excited about your company, mission, or values, they’ll position themselves as if they are because they need the job. 

A-Players, however, move from one opportunity to the next. They are looking for opportunities, and they transition when people in their networks let them know about promising positions. You should be networking for A-Players long before in the position of desperately needing to hire.

The best time to hire is when you are generating consistent business leads. As soon as you hit your rhythm here, you should be tapping into your networks and using them to look for your next A-Player. I appreciate Dr. Sabrina’s technique here, and see that it would fit into the bucket I call “entrepreneurial freedom”. 

It’s important to note that A-Players aren’t necessarily people who are superstars on every level. An A-Player might be a role player with a very specific ability or capacity — but in your business, that ability is what enables them to shine. You can’t be the best at every single thing, and your employees can’t be either. It’s not fair to expect that from them!

Hiring an A-Player is more about bringing on the people who have the gifts, talents, and personality strengths to do what you need them to do. They also need to resonate with your business’ values and culture. When you can get them plugged in, the change is powerful!

So who are these magical people? Well, they are go-getters, problem solvers, and autonomous agents who know how to use resources. A team full of people who think like that can change your business from the inside out!

Build Your Team to Create Your Desired Lifestyle

Regardless of what you do, building a team enables you to create a lifestyle business that will allow you to step away as needed and have your business continue to run without you. (Your A-players are there making it all happen!) 

This could mean you’re setting yourself up for a 4-week vacation, or that you’re working on a future transition plan. Dr. Sabrina notes that no one comes along and says, “I hear you work 70+ hours a week in your business. I’d love to buy it!” No one is looking to buy a job, they want to buy a business.

When you learn how to hire the best, you’re setting your business up for success, both now and in the future. The more A-Players you bring on to your team, the more value you are adding.

Dr. Sabrina notes that if you currently have many players who are more like D-Players, it can be overwhelming to know how to fix it. She encourages business owners in that position to focus on hiring up as they grow. That might mean you have the chance to replace someone, and you find an A- or B-Player for the open position. Once you hit a tipping point (say 3 out of 5 are strong employees), those who are lower performers will either choose to leave, or will rise to the challenge. 

Gradually, your culture will shift!

If you’re looking to hire the best, you NEED to listen in to this interview!

 

Categories
Authentic Business Relationships Authentic Conversations About Difference Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth

HR Insider Knowledge

deal-driven growth and negotiations


Ashley Paré is a Leadership Coach, Negotiation Advocate, TEDx Speaker, and HR Change Maker. She holds a vast reserve of HR Insider Knowledge that she’s gathered over her career. She’s also the CEO & Founder of Own Your Worth, an organization dedicated to breaking glass ceilings. Her signature leadership program, The Activator®, takes clients on a journey within to uncover the hidden blocks that are holding them back from stepping into their power. This is so they can take action to negotiate the career, business, and life of their dreams!

You may have seen her on Good Morning America, TEDx, New York Times, CNN, and more!

Early HR Ambitions?

When she was younger, Ashley wanted to be an author, psychologist, and live in London. (Looking back, she feels like her HR work was a little like being a psychologist!)

The first deal that stands out to her was her first post-college job. At the time, she didn’t know the “rules” of applying for jobs. She did know she needed to be able to make enough to afford housing and student loans, and when she got offered $15 an hour she countered with $16. (They met her in the middle with $15.50!)

That early success enhanced her confidence and showed her that it was possible to ask for more! However, that was a lesson she’d have to continue to learn how to activate as her career continued to grow. Ashley has seen that many women have a similar need to learn how to speak up and negotiate for what they desire. 

[Note: Ashley specifically works with women, and we focus on women’s issues in this interview. I do want to be clear that we both recognize that “women” are not one monolithic group, and that each person is unique and faces unique challenges. In addition, not all humans identify on a binary spectrum. No matter who you are, I think you can find some gems in this episode!}

Avoiding Your Own Core Truth

Many times young girls have no problem asking for a bigger slice of cake, so to speak. As they get older, however, they often stop.

Some of that may be connected to socialization, which often encourages women to be people pleasers, or to play the “good girl” role. Ashley believes that it goes even deeper, however. Somewhere on the journey, many women begin to lose their sense of self. We abandon our truths to ensure that we are liked and to avoid potential negative consequences.

Because speaking up for ourselves can lead to negative responses….we have a tendency to stop. Our sense of worthiness and self becomes dependent upon external validation, which is never fulfilling in the long run. If we don’t build our own sense of self through self-awareness, of course our inner confidence takes a hit!

This can lead women to retreat into their “shell”. It doesn’t have to, however! By digging deeper, women can tap into their core truth and own their value and their voice. 

In my own work, I see how being disconnected from your own core truth and value significantly impacts your ability to be a deal maker.

HR Insider Knowledge

As a former HR leader and business partner, Ashley had access to salary data, leaders, policies, and the best training. Yet, she still struggled to grow her career. She realized she had stopped self-advocating out of fear of what others would think of her, and focused so much on proving herself until she finally burned out. 

She realized that having the tools to navigate a corporate career is important, but what matters most is having the confidence to speak up and use them. Now she’s dedicated her career to sharing her HR insider knowledge to help clients define and articulate their value and effectively ask for what they want. 

Ashley notes that, in her experience, a vast number of companies prefer to be seen and experienced and flexible and open, especially to incoming candidates! When they offer you a position and potential salary, it’s often expected that you may counter with areas that matter to you. In fact, it might even be encouraged! Negotiating should never be seen as problematic.

The worst thing that can happen is they’ll turn you down; that’s okay! Even if you don’t get everything you asked for, it’s likely you’ll learn more about what your options are and where there may be flexibility within the company. That’s a good thing! 

Confidence in Negotiating

Ashley notes that she offers a variety of packages and rates for clientele. As an early business owner, she was apt to negotiate with clients over those rates. Now, however, she rarely does. She is well established, she owns the proven value she has consistently created over the years, and she sets her rates annually.

When she first started as a speaker, her contracts with larger companies and organizations were more likely to involve negotiating. Now, however, she’s found that she has not only raised her rates, but she’s also started getting more “yes’s”. Her ownership of who she is and what she does, and her confidence in communication, has decreased the amount of negotiating involved in getting the rates she desired.

We both see this phenomenon happening for many of the people we work with and around in our careers. Those who own their value and communicate it with confidence are able to command better rates, broker better deals, and have more success at the deal-making table.

Listen in here for the full interview!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

Categories
Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth

DealQuest BEST OF: Financing

BEST OF Financing: [black background with yellow, orange, and green dollar signs scattered about and reflecting on black surface]

This week’s guests feature some of DealQuest’s Best OF Financing experts! They share about everything from finding little known funding sources to minimizing taxes, gaining freedom, and funding your next start-up. Listen in here to get a sample from each of them. In addition, you. can click their name to listen to their full featured episode!

BEST OF Financing: [black background with yellow, orange, and green dollar signs scattered about and reflecting on black surface]

Finding Little Known Funding Sources with Kedma Ough

Kedma Ough of Target Funding is a “small business superhero,” who has worked with over ten thousand entrepreneurs and small business leaders in the last two decades, helping them to attain capital and resources to grow their businesses. Kedma is also the author of Target Funding: A Proven System to Get the Money and Resources You Need to Start or Grow Your Business. She is a fifth-generation entrepreneur and small business funding expert who believes in breaking down barriers and leveling the playing field for small businesses and fellow entrepreneurs.

If you bring to mind the image of a pizza, most people see a single funding source as being the whole pie. However, Kedma notes that you need to look at funding sources as being single pieces, all of which make up the whole thing. You can access so many sources, opportunities, avenues and approaches to filling out your “whole pie” — you don’t need to make one source your make or break solution. Many different funding sources create the foundation for successful funding. 

Kedma’s best advice: Target what funding you need, and use variables unique to yourself to make it happen.

LISTEN HERE for all her tips!

Raising Capital and Avoiding Taxes with Joel Block

A money business insider, Joel Block is a long-time venture capitalist and hedge fund manager (gobbledygook for professional investors) who lives in a Shark Tank world like on TV. Since selling his publishing company to a Fortune 500, Joel keynotes conferences worldwide, delivering business strategies and the inside track for money and success to business executives and their teams.

Now, Joel lives in the world of funding and money! He’s amazing at raising capital, and has great insight on how to make it happen. He advises business owners to consider looking for strategic money. Big companies are looking for alignment with startups and new businesses. Often, they are actively seeking innovation, they want access to fresh new ideas, and they’re often much easier to work with than VC firms. You may get better terms, amazing partnerships, and lifelong advantages if you develop these relationships throughout your business’ life.

Raising capital is an art form. It’s an evolving practice that you continually adapt, and you have to look at it that way. Striking a balance between being investor friendly and promoter friendly is a huge key. If terms are onerous to either side of the deal-making table, things aren’t going to work out well!

Joel’s best advice: Big companies operate, small companies innovate. That’s why partnerships between the two can be so powerful! 

LISTEN HERE for all his tips, including taking advantage of tax breaks!

Entrepreneurial Freedom and Community Building with Niles Heron

Niles Heron has been a part of a number of startups — a few exits, a few exciting failures — and has invested heavily in trying to make paths like the one he took more accessible to the under-represented spaces he came from. He also taught and mentored at incubators and accelerators (TechStars, Gener8tor, Detroit’s TechTown), spoken across the country at events about the value of entrepreneurship and startups to founders and the communities they live in, and is a respected voice in the Detroit Startup ecosystem. In addition, he was honored by Crain’s Detroit Business as a 20 in their 20s award winner in 2015.

Niles notes that helping people make their product actually work is essential. He’s found that entrepreneurs are often raising money to solve the wrong problems within their business. After all, it’s easier to say that marketing, organization, or something else is the problem. However, too often there is a reluctance to reexamine your product and the way it is tailored to your client or customer. He notes that even a Tom Ford suit will look bad if it’s not tailored to fit the wearer. Your product is no different.

You have to be able to get honest with yourself about exactly what it is you need. Capital can certainly help you grow your business, but only when it serves the actual needs within your business. Raising money for the sake of “having” it, or to solve any problem other than the real problem, are never going to lead to entrepreneurial freedom and ultimate success.

Some of Niles best advice: Money isn’t the total solution, and it’s not the only problem. It’s never “just” money.

LISTEN HERE for more of his advice!

Launching & Funding Start Ups with Peter Dolch

Peter Dolch is the President and Co-Founder of Thaumaturgix, Inc. (Tgix) which was twice ranked in the Inc. 500 Fastest Growing Private Companies list. Peter also acts as the Managing Partner at Tgix; the CTO of Biospectal SA (a Swiss-based MedTech Startup); the Managing Partner at AEON Foundry, a NYC-based fund investing in and mentoring early-stage startups; is on the Advisory Board of American Diamond Mint, a new way to buy, sell and trade diamond assets; and is a Science Advisory Board member of DietPower.

There is an advantage of being part of a bigger investor group. Larger groups have the ability to pull money and act as a deal lead, which is powerful. An individual or small fund often has to take whatever terms the lead investor negotiated, rather than set your own terms. However, being part of something larger allows you to be at the table, creating the most desirable possible terms. This lets you be part of even better deals!

Over the last 20 years, the industry has dramatically shifted, for both better and worse. Preferred equity, cap notes, and SAFE options are all options now, but they aren’t created equal. Peter counsels entrepreneurs that what investors tend to really want is preferred equity. If you can create that, you’re much more likely to bring in partners who are invested in your success in a deeper way.

Peter’s best advice: When it comes to bringing on investors and gaining funding, alignment is essential.

LISTEN HERE for more of his advice!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast..

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

Categories
Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth

Strategy for Intellectual Property

Leverage strategy for intellectual property: white background, three white binders stacked on top of one another

David Kalow is a University of Chicago law graduate, and now focuses exclusively on intellectual property. According to David, most companies – both large and small – need help to improve their strategy for intellectual property (IP). This includes making it even more valuable, cost-effective, and revenue-enhancing. IP strategy leverages a company’s most critical assets in the 21st century global economy: ideas and creativity.

Ultimately, he helps you to create and implement an effective, long-term strategy to manage your valuable intellectual property assets, including assets you may not even realize that you have! 

Was Intellectual Property Strategizing Always in the Cards?

David shares that his earliest goal was to be a space pirate. These dreams were based on his interest in sci-fi, and he was sure they’d come together at some point. As he grew up, he assumed he’d find himself working in science, or some other “nerdy” field. He never visualized business!

Once he completed law school and entered the field, David found that he learned deal-making slowly and academically. Starting his own law firm, and later his own solo practice, was his own way of being an entrepreneur. It may not have been what he planned, but he’s excelled!

Now, David’s objective is to make it easier to expand and accelerate business development while reducing legal fees. Your improved IP strategy can strengthen market positions, increase valuation, assist with funding and VC, energize deal making and strategic partnerships. It can even improve hiring, marketing and sales. It benefits early stage startups as much as small, medium and Fortune 100 enterprises, as well as those who finance them, such as VC’s and private equity.

Strategy for Intellectual Property

Any business has intellectual property, and David believes most business owners and entrepreneurs aren’t taking full advantage of it. He does see pharma, medical device creators, and biotech companies tending to appreciate IP and use best practices to strategize it the most. However, even there he tends to see many mistakes made.

According to David, most of these mistakes are common and avoidable when you know what you’re doing and understand the field.

For example, a strong strategy for intellectual property looks at all of an organization’s potential intellectual assets. It then uses every possible IP tool: legal and procedural, formal and informal. The first things people think of, like filing patents, trademarks, and copyrights, are really just foundational basics in what should be a much more comprehensive strategy.

Assuming that doing those basic tasks is enough is a huge mistake (and a very common one)!

Intellectual Property Isn’t Just for the “Big Guys”

David finds that strategizing their intellectual property is most important for startups and small businesses. Why? Because in the beginning, that can be all you have.

There are three major property types: land, personal property, intangible. Most of today’s companies aren’t based on owning large amounts of land or unique personal property (like factories, et). Rather, they are based on intangible assets.

If you don’t know how to use, understand, and appreciate IP, you won’t last. Missing opportunities to strategize your intellectual property will injure your revenue making capacity and potentially ruin your business. On the show, David and I discuss a few options for entrepreneurs and business owners to leverage their IP. One important option?

Use an appropriate blend of patent, trademark, and copyrighting.

There are so many ways to leverage your IP! You have to think about how you can leverage them in order to accelerate and strengthen your business. This includes deal-making with those intangible assets, as well as getting protection to ensure that you’ll retain downstream usage of your IP.

The worst use of your IP? Getting it wrapped up in litigation! Think through the fight if you want to avoid the fight, and get the protection you need to confidently strategize for using your IP on the market and within your business.

Think Creatively & Build Your Long Game

For 20 years, David had a client who collected hefty royalties from well-protected IP. By using patents and trademarks across multiple dimensions (software, chemicals, engineering, etc), they were able to bring to market a product that was necessary…and that simply couldn’t be provided without their input.

Rather than only protect their output, they found ways to protect their valuable processes, systems, and tools that made that output possible in the long run.

For years it was standard for computers to have CD-ROM players. Of course CD’s were patented, and the IP involved in their creation and use allowed the creators to benefit for years. It wouldn’t have been market-friendly to have every system use a completely different tool, and the best-positioned one was able to earn the whole market (and the financial gains that came with it).

Cartier watches were able to use trade dress (appearance of goods as the trademark) in a powerful way that enabled them to stand out in the luxury watch market. There are so many ways to leverage intellectual property, especially when you’re familiar with how the field works and what your options are. (This part of the episode reminded me of Bill Cates interview on leveraging IP!)

Make Sure You Protect Your IP Rights

Make sure you have the right agreements with employees and contractors to ensure that IP is flowing into the company. You must own your own rights, and sometimes when you work with freelancers or others on the work-for-hire market you don’t always have the ownership you think you have.

Rather than open yourself up for disputes down the road, you’ll want to do your due diligence on the front end to ensure that you’re protected!

Another note: IP doesn’t mean you have to become greedy and Scrooge-like! Strategy for intellectual property can be good for you, your business, and the world. David notes that research has shown that open federal patents are rarely utilized. Why? There is no ownership incentive, so it’s hard to generate funding or find people willing to invest time and energy to build them out. After all, whatever they create isn’t really theirs.

When you protect your work and have ownership, there can be a positive incentive towards building and investing.

The real reason behind patents is to reward owners and investors. After all, if there is no chance in a return, there is likely no one who will invest. Whenever money gets put into an idea, there is no guarantee that it will work out as planned. Having that idea protected and invested in gives it a chance to take its shape and change the world!

Patents also allow us to maintain and share ideas, without losing our rights. There are so many technologies of old, based on trade secrets, that are simply gone forever. Why? Because the inventors kept them secret, and no one knows how they worked! We diminish the power (and losses) inherent in trade secrets when we make it safe to share our discoveries and work.

Listen in to learn more about how to best create strategy for your intellectual property!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast..

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

 

Categories
Authentic Business Relationships Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth

Deal-Making is About Relationships

deal-making is about relationships

Here we are at the end of 2020. What a year! Today, I’m offering up a solo-cast that leads back to the most basic truth about deals: deal-making is about relationships. As I share often, almost every business deal is either the start of a relationship, or the continuation of an existing relationship. There’s just no way around it, and it’s a key part of how I teach about the deal-making process.

Also, we just celebrated our 100th episode with guest Joe Apfelbaum! It was an incredible interview, and Joe shared awesome insights about his deal-making prowess and partnership experiences. 

Relationships are a Key Deal-Making Ingredient

Whether you’re in an acquisition or merger, or you’re creating deals with partners, vendors, or suppliers, relationships are a key element. You name the deal, there’s likely going to be a relationship being established, built, or leveraged. 

The journey towards a deal is usually paved by relationships as well. Your broker, your agent, your banker, your partner, your friend — these are the relationships that position us to know who we need to know, get people to the deal-making table, and start the deal-making process.

That’s what makes relationships such an important part of both business and deals, not to mention our day-to-day lives!

2020 Highlighted How Essential Relationships Are

In 2020, relationships played a key role in my life for even more reasons than usual. 

The support, guidance, connection, and opportunities that came from relationships during this hard, long year were key for me. Not just for growth, but for peace, strength, and stability. Now, more than ever, I know that connection with others fuels me, fuels my personal growth, and fuels my business.

I know that many of you have had to make major pivots this year, and I’ve seen again and again how relationships can truly pave the way to make those successful. Even as things have been hard, relationships with family, friends, and industry professionals often provided a key element that allowed us to turn things around, make the best of the options available to us, or otherwise find a way to navigate this year.

If you’ve been part of my relationship network this year as a client, a friend, a podcast listener or guest, a DealDen member, or otherwise: thank you. I truly appreciate you, and I hope to continue together with you into the new year!

Know, Like, Trust: Business Relationships Pave the Way for Deals

People want to do business with people they like. It’s just the truth! 

When it comes to deal-making, nothing much changes. When you’ve built that know, like, trust factor via real relationships, you’ll find opportunities seem to naturally appear. Why? Because when someone is thinking about who to offer a partnership to, who to strategize with, who to make a deal with, they feel best if they’re doing it with someone they know, like, and trust. 

Being in a relationship with someone builds confidence.

Worried that you’re not well positioned when it comes to relationships? Well, there is no magic pill that will develop them overnight! In fact, it can take a long time to build relationships. As the old Chinese proverb says, however:

The best time to plant a tree was twenty years ago. The second best time is now.

Another note: Just because deals are technically transactions doesn’t mean that your relationships should be described that way! People sense when you’re only interested in them because you want or need something. If you only set about to build relationships because you’re trying to get something, it won’t work the way you hope.

Instead, practice nurturing your current network. Add value. Seek to serve. Find a way to genuinely support someone else. Connect with people you’ve possibly just “not seen” in the past. If 2020 taught you anything, let it be that relationships matter and are always worth investing in.

Listen in to hear my full thoughts on the connection between deal-making and relationships!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast..

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

Categories
Authentic Business Relationships Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth

High Energy Purpose

High Energy Purpose: Space view looking down on the earth, dark sky, lights on

Joe Apfelbaum is the CEO of Ajax Union, a business-to-business digital marketing agency in Brooklyn, NY. He’s been featured in Forbes, Entrepreneur, Inc, The Wall Street Journal and more. His newest book, High Energy Purpose: How to Be All in On Your Life and Find Your Truth, is out now.

Before we dive in, I’d love to share that this is my 100th DealQuest episode! This is a huge mile marker for our show, and I’m proud to have consistently released episodes for over two years now. If you’ve been a long time listener, thank you! If you’re just joining us, welcome in!

Making a Living Helping Businesses 

As a young kid, Joe watched his mother try to make a living. He knew that one day, he wanted to be successful so his own kids and family wouldn’t have to struggle so much. At the time he didn’t know you could make a living helping businesses. Now, however, he’s thrilled to be the CEO of Ajax Union, where he gets to do that every day! It’s been part of his own journey to high energy purpose.

Joe’s company works with large companies to build marketing funnels. Typically they work with the in-house marketing director to make sure that there are marketing systems and processes that will yield results. Qualified leads that convert are key, and randomized acts of marketing won’t cut it!

As Tony Robbins says, the right strategy will save you a decade. Rather than wasting time, Ajax Union helps companies market smartly.

Joe’s other company, Evyrgreen, helps influencers, coaches, consultants, and businesses make strategic use of their online time. They have a course and coaching program to help people leverage LinkedIn so they can get in and use the platform to make a difference in their businesses. This is worth checking out if you’ve wanted to uplevel your online presence in the new year!

Deal-Making History

Joe’s mother always told him, growing up, that he could never trust anyone else in his business. Although his mother worked hard as an entrepreneur, she never surpassed the million dollar mark. Joe wanted to go further, and for him to do that, for his own business, he was going to need to bring in other talent. He needed support from others in order to focus and get things done!

Early on, Joe had a business partner who turned into a close friend. They started their business together without considering anything beyond a 50/50 structure. There was no real strategy, other than building a million dollar business. Unfortunately, however, it wasn’t gaining traction. At the end of 2008, they sat down together to brainstorm. At the end of the night, they decided to offer SEO to small businesses. Although they weren’t 100% sure if it would work yet, it seemed worth trying.

They used a prepaid, recurring model in order to grow a steady income. Soon enough, they were closing 10 deals a month. When Joe approached the CEO of the company he was working for full time, he was encouraged to strike out on his own and focus on growing his business. In fact, that company even ended up signing on as his biggest client! (You can hear more about that in our interview!)

We Have to Focus to Achieve Success

At the time, Joe had multiple side hustles going on: IT management, tech, eBay sales, and other services. He had to think seriously about whether it was worth it to scrap all those side hustles and grow only the main company. His partner, however, told him it was non-negotiable if they were going to grow together.

After contemplation, Joe decided to go all in and focus. With his partner, they quickly grew to one of the fastest growing companies in America. They were making millions in revenue, but didn’t have the cash they needed to grow even more.

They didn’t have cash flow, but they had relationships with people. (Although at the time Joe didn’t really know how to move beyond transactional relationships and build real relationships for deal-making.) His partner approached a friend, who offered a hundred thousand dollars in exchange for 50% equity in the company, and the guarantee of a full time, paid position within two years.

They turned him down, but they also realized that possible partners could be interested in exchanging cash for equity. This was news! Joe and his partner were in a strong place because they were a strong pair. Rather than flying solo and appearing to be a flaky entrepreneur (which Joe says he was!), their partnership added stability and credibility to their work.

Taking on Investors

Their first investors offered money for small portions of the business, and it was thrilling. It was also clear that they absolutely had to become a five million dollar plus company if those investors were going to make their money back.

Joe was loving the growth, and avoiding the paperwork. He let his partner handle all the contracts, legal paperwork, conversations with lawyers, and more. That was a mistake. He was completely out of the loop when it came to what was happening in the business. He also didn’t realize that his own sweat equity in the business was worth something.

The biggest problem ended up being that there were no exit clauses. There was nothing; no way out, no clear end point.

Looking back, Joe considers it a miracle that they grew the business to the level they did, because they had no idea what they were doing. He thought he was the smartest person in the room, and he lacked the awareness to see what he didn’t know.

Now, he knows disastrous things can happen within partnerships without clear agreements. He absolutely recommends that ALL parties are involved in the creation, understanding of, and implementation of these agreements. The language must be clear. Everyone involved must know what the company’s future is, and what the terms are.

If you have a partner and are growing a business, you cannot think things will just “come together”. Definitely don’t disregard elements that seem too future facing. Having clarity is life-giving and creates a foundation for everything in your future. Don’t take that lightly!

Living With Your High Energy Purpose

Expectations for growth can create pressure sometimes. And when you take in significant capital, you can seriously stress your business.

Joe noted that he had no idea how to deal with their investors. He didn’t know how to communicate with them, and he didn’t know what they were allowed to do, or not do. Now, he notes that if there is a specificity problem in your business, you are responsible for that.

You have to lay down what is expected, and how things work. If you don’t know, invest in resources that will help you! Joe notes that joining EO is what made him realize he didn’t have things like core values, team huddles, and processes. Creating those things helped him shift himself as an individual and build a business that serves a much larger role than anything he could have created just flying along and focusing on making money.

These lessons have also taught Joe the integrity he needs to not only be a CEO, but to be a husband and father. As he’s learned to embrace and embody his values and integrity, he’s found how he can live with his best, high energy purpose and create a life he is proud of.

Listen in to learn more about partnerships, integrity, high energy purpose, and building a business you can be proud of!