The Founder Money Podcast

Amazon paid $1.2 billion for an online shoe company with no patent, no secret formula, and no unique product. In this episode, I break down the hidden factor behind that price, and how the same factor affects the multiple a buyer will pay for your business.

In this episode:
- Why Tony Hsieh dreaded going to work at LinkExchange before its $265 million sale to Microsoft
- How Zappos made culture its number one priority, including the $2,000 offer to quit
- Why Amazon paid $1.2 billion for a company selling something Amazon already sold
- Five moves to build a culture that shows up on the balance sheet
- How culture affects your EBITDA multiple, and the other non-financial drivers buyers weigh

FULL ARTICLE: https://deepriverwealth.com/company-culture-business-valuation/

RESOURCES:
Learn more / reach out: https://deepriverwealth.com/
FREE 15-minute Business Valuation Estimate: https://deepriverwealth.com/business-valuation-assessment/
Founder Freedom Calculator: https://calc.deepriverwealth.com
Essential Questions to Ask a Private Equity Buyer: https://deepriverwealth.com/essential-questions-for-pegs/
My book, The Entrepreneurship Trap: https://deepriverwealth.com/books/
Podcast page: https://www.foundermoneypodcast.com/

GOT A QUESTION? CALL IN.
I'd rather answer your question than guess at what's on your mind. Call 1-800-231-7960 and leave a voicemail with your first name, the town or state you're calling from, and your question. Keep it general, and please don't leave private personal details you wouldn't want made public. Don't be shy — call in and let's think it through together.

SOURCES:
[1] Amazon.com — press release, "Amazon.com to Acquire Zappos.com" (July 22, 2009); deal closed November 2009, valued at approximately $1.2 billion in Amazon stock at closing, plus $40 million in cash and restricted stock units for Zappos employees. https://press.aboutamazon.com/2009/7/amazon-com-to-acquire-zappos-com
[2] LinkExchange acquired by Microsoft in November 1998 for approximately $265 million; co-founded by Tony Hsieh in 1996. https://en.wikipedia.org/wiki/LinkExchange
[3] Hsieh, Tony. Delivering Happiness: A Path to Profits, Passion, and Purpose (Grand Central Publishing, 2010) — source for the LinkExchange culture decline, Zappos' ten core values, the two-part culture-fit interview, and "The Offer" ($2,000 to quit).
[4] Jeff Bezos / Amazon's stated rationale for preserving Zappos' independent culture following the acquisition. See Amazon press release and coverage of the deal. https://press.aboutamazon.com/2009/7/amazon-com-to-acquire-zappos-com

DISCLOSURES

Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. This material is for educational and informational purposes only and is not intended as personalized financial advice. The strategies discussed may not be suitable for everyone. DeepRiver Wealth does not provide tax or legal advice. Please consult a qualified tax or legal professional regarding your specific situation.

Advisory services are only offered to clients where NewEdge Advisors and its representatives are properly licensed or exempt from licensure. Past Performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by NewEdge Advisors unless a client service agreement is in place. Guest opinions, if any, expressed in this episode are those of the guest and do not necessarily reflect the views of DeepRiver Wealth or NewEdge Advisors, LLC. The content of this episode is developed from resources believed to be providing accurate information; however, neither DeepRiver Wealth nor NewEdge Advisors, LLC, guarantees the accuracy or completeness of any information obtained from any third party, including guest-provided biographical or business details. The information in this material is not intended as tax, legal, or financial advice.

This show includes a listener call-in segment. By leaving a voicemail, callers consent to having their message played, in whole or in part, on the show. Leaving a message does not create a client or advisory relationship, and any responses provided on air are general in nature and not personalized advice. Callers should not include private, personal, or confidential information in their messages.

For most owners, 80% or more of their net worth is locked inside their business — yet only about one in five businesses that go to market ever actually sell. This is how business valuation really works, so you can start moving your number years before you sell.

In this episode:
- The simple two-variable formula behind every valuation (EBITDA × your multiple)
- The four levers you control that move your multiple — and your price
- Why the "tricks" owners use to inflate profit don't fool a real buyer
- How EBITDA is actually calculated, plus the difference between EBITDA and SDE
- Free tools to estimate your valuation and see if it's enough to retire on

FULL ARTICLE: https://deepriverwealth.com/business-valuation-ebitda-multiple/

RESOURCES:
Learn more / reach out: https://deepriverwealth.com/
FREE 15-minute Business Valuation Estimate: https://deepriverwealth.com/business-valuation-assessment/
Founder Freedom Calculator: https://calc.deepriverwealth.com
Essential Questions to Ask a Private Equity Buyer: https://deepriverwealth.com/essential-questions-for-pegs/
My book, The Entrepreneurship Trap: https://deepriverwealth.com/books/
Podcast page: https://www.foundermoneypodcast.com/

GOT A QUESTION? CALL IN.
I'd rather answer your question than guess at what's on your mind. Call 1-800-231-7960 and leave a voicemail with your first name, the town or state you're calling from, and your question. Keep it general, and please don't leave private personal details you wouldn't want made public. Don't be shy — call in and let's think it through together.

SOURCES:
[1] Exit Planning Institute — business owner net worth concentration (~80–90% of net worth tied up in the business). https://exit-planning-institute.org
[2] SCORE / Exit Planning Institute — business sale success rate (~20%, or roughly one in five, of businesses that go to market actually sell). https://www.score.org
[3] Gallup — cost of employee turnover (replacing an employee costs one-half to two times their annual salary). https://www.gallup.com/workplace/247391/fixable-problem-costs-businesses-trillion.aspx
[4] Trinity Study / 4% rule retirement withdrawal guideline. https://en.wikipedia.org/wiki/Trinity_study

DISCLOSURES

Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. This material is for educational and informational purposes only and is not intended as personalized financial advice. The strategies discussed may not be suitable for everyone. DeepRiver Wealth does not provide tax or legal advice. Please consult a qualified tax or legal professional regarding your specific situation.

Advisory services are only offered to clients where NewEdge Advisors and its representatives are properly licensed or exempt from licensure. Past Performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by NewEdge Advisors unless a client service agreement is in place. Guest opinions, if any, expressed in this episode are those of the guest and do not necessarily reflect the views of DeepRiver Wealth or NewEdge Advisors, LLC. The content of this episode is developed from resources believed to be providing accurate information; however, neither DeepRiver Wealth nor NewEdge Advisors, LLC, guarantees the accuracy or completeness of any information obtained from any third party, including guest-provided biographical or business details. The information in this material is not intended as tax, legal, or financial advice.

This show includes a listener call-in segment. By leaving a voicemail, callers consent to having their message played, in whole or in part, on the show. Leaving a message does not create a client or advisory relationship, and any responses provided on air are general in nature and not personalized advice. Callers should not include private, personal, or confidential information in their messages.

Most business owners don't have a cash-flow plan. They watch the checking account balance and redo the same mental math every time a big payment lands. In this episode, I walk through a simple cash-flow waterfall: seven steps, in order, for where your money should go so your business supports your life today and becomes more valuable tomorrow.

In this episode:
- Why your money has too many jobs, and what that costs you
- Paying yourself on purpose and setting up a tax reserve
- How much operating cash your business actually needs
- Why business owners need two emergency funds, not one
- Funding growth and exit readiness before pulling out excess cash

FULL ARTICLE: https://deepriverwealth.com/cash-flow-waterfall-business-owners/

RESOURCES:
Learn more / reach out: https://deepriverwealth.com/
FREE 15-minute Business Valuation Estimate: https://deepriverwealth.com/business-valuation-assessment/
Founder Freedom Calculator: https://calc.deepriverwealth.com
Essential Questions to Ask a Private Equity Buyer: https://deepriverwealth.com/essential-questions-for-pegs/
My book, The Entrepreneurship Trap: https://deepriverwealth.com/books/
Podcast page: https://www.foundermoneypodcast.com/

GOT A QUESTION? CALL IN.
I'd rather answer your question than guess at what's on your mind. Call 1-800-231-7960 and leave a voicemail with your first name, the town or state you're calling from, and your question. Keep it general, and please don't leave private personal details you wouldn't want made public. Don't be shy — call in and let's think it through together.

SOURCES:
1. The claim that cash flow problems are among the leading causes of small business failure is most commonly attributed to a U.S. Bank study by Jessie Hagen, which found that 82% of business failures involved poor cash flow management or a poor understanding of cash flow. See, e.g., SCORE, "The #1 Reason Small Businesses Fail — And How to Avoid It": https://www.score.org/articles/1-reason-small-businesses-fail-and-how-avoid-it/

DISCLOSURES

Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. This material is for educational and informational purposes only and is not intended as personalized financial advice. The strategies discussed may not be suitable for everyone. DeepRiver Wealth does not provide tax or legal advice. Please consult a qualified tax or legal professional regarding your specific situation.

Advisory services are only offered to clients where NewEdge Advisors and its representatives are properly licensed or exempt from licensure. Past Performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by NewEdge Advisors unless a client service agreement is in place. Guest opinions, if any, expressed in this episode are those of the guest and do not necessarily reflect the views of DeepRiver Wealth or NewEdge Advisors, LLC. The content of this episode is developed from resources believed to be providing accurate information; however, neither DeepRiver Wealth nor NewEdge Advisors, LLC, guarantees the accuracy or completeness of any information obtained from any third party, including guest-provided biographical or business details. The information in this material is not intended as tax, legal, or financial advice.

This show includes a listener call-in segment. By leaving a voicemail, callers consent to having their message played, in whole or in part, on the show. Leaving a message does not create a client or advisory relationship, and any responses provided on air are general in nature and not personalized advice. Callers should not include private, personal, or confidential information in their messages.

Most retirement advice was built for someone with one paycheck and one employer, not a business owner juggling fluctuating cash flow, a business that's hard to value, and a possible exit down the road. In this episode, I walk through a six-step framework for balancing what you invest in your business with what you build outside it, including a worked example using a free calculator.

In this episode:
- Why traditional retirement advice doesn't fit business owners
- Why a personal safety net outside your business comes first
- The two types of business owners, and why it changes your plan
- How to run the numbers and find the gap between where you are and where you want to be
- The three levers for closing that gap: more time, more money, and more value

FULL ARTICLE: https://deepriverwealth.com/retirement-planning-business-owners/

RESOURCES:
Learn more / reach out: https://deepriverwealth.com/
FREE 15-minute Business Valuation Estimate: https://deepriverwealth.com/business-valuation-assessment/
Founder Freedom Calculator: https://calc.deepriverwealth.com
Essential Questions to Ask a Private Equity Buyer: https://deepriverwealth.com/essential-questions-for-pegs/
My book, The Entrepreneurship Trap: https://deepriverwealth.com/books/
Podcast page: https://www.foundermoneypodcast.com/

GOT A QUESTION? CALL IN.
I'd rather answer your question than guess at what's on your mind. Call 1-800-231-7960 and leave a voicemail with your first name, the town or state you're calling from, and your question. Keep it general, and please don't leave private personal details you wouldn't want made public. Don't be shy — call in and let's think it through together.

SOURCES:
[1] SCORE. "The Current Rise in Small Businesses Being Sold Over the Next 10-15 Years." Cites that only 20–30% of businesses that go to market actually sell. https://www.score.org/princeton/resource/blog-post/current-rise-small-businesses-being-sold-over-next-10-15-years

[2] U.S. Bureau of Labor Statistics, Business Employment Dynamics program. Establishment survival data shows roughly 1 in 5 (about 20%) new businesses fail within the first year, and roughly half fail within five years. https://www.bls.gov/bdm/ and https://www.bls.gov/opub/ted/2024/1-year-survival-rates-for-new-business-establishments-by-year-and-location.htm

[3] Warrillow, John. Built to Sell: Creating a Business That Can Thrive Without You, and The Value Builder System™ research on business-owner psychographic profiles. The script's "craftsman" and "freedom fighter" categories correspond to Warrillow's published "master craftsman" and "freedom fighter" owner types. https://builttosell.com/

DISCLOSURES

Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. This material is for educational and informational purposes only and is not intended as personalized financial advice. The strategies discussed may not be suitable for everyone. DeepRiver Wealth does not provide tax or legal advice. Please consult a qualified tax or legal professional regarding your specific situation.

Advisory services are only offered to clients where NewEdge Advisors and its representatives are properly licensed or exempt from licensure. Past Performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by NewEdge Advisors unless a client service agreement is in place. Guest opinions, if any, expressed in this episode are those of the guest and do not necessarily reflect the views of DeepRiver Wealth or NewEdge Advisors, LLC. The content of this episode is developed from resources believed to be providing accurate information; however, neither DeepRiver Wealth nor NewEdge Advisors, LLC, guarantees the accuracy or completeness of any information obtained from any third party, including guest-provided biographical or business details. The information in this material is not intended as tax, legal, or financial advice.

This show includes a listener call-in segment. By leaving a voicemail, callers consent to having their message played, in whole or in part, on the show. Leaving a message does not create a client or advisory relationship, and any responses provided on air are general in nature and not personalized advice. Callers should not include private, personal, or confidential information in their messages.

Watch on YouTube: https://youtu.be/g0Wo5VcYGyw

Most business owners plan to sell their business to fund retirement, but few businesses that go to market actually sell. In this video, I'm walking you through everything you need to know before you go to sell your business, including:
• How to know if your business is actually sellable
• Why you need a business valuation (and how EBITDA multiples work)
• The 4 people you need on your team before you sell
• The 5 types of buyers — and the pros and cons of each
• The pitfalls that can cost you hundreds of thousands (like earn-outs)

RESOURCES:
Learn more / reach out: https://www.deepriverwealth.com/
Qs to Ask a Private Equity Buyer: https://deepriverwealth.com/essential-questions-for-pegs/
Founder Freedom Calculator: https://calc.deepriverwealth.com/
Podcast page: https://www.foundermoneypodcast.com/
FREE 15-minute Business Valuation Estimate: https://deepriverwealth.com/business-valuation-assessment/
My New Book, The Entrepreneurship Trap: https://www.deepriverwealth.com/books/

SOURCES:
[1] "Most Small Business Owners Don't Do the Math on Their Most Valuable Asset." CNBC, July 17, 2022. Statistic originally reported from an M&T Bank poll. Available at: https://www.cnbc.com/2022/07/17/most-business-owners-dont-do-the-math-on-their-most-valuable-asset.html

DISCLOSURES
Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. This material is for educational and informational purposes only and is not intended as personalized financial advice. The strategies discussed may not be suitable for everyone. DeepRiver Wealth does not provide tax or legal advice. Please consult a qualified tax or legal professional regarding your specific situation. Advisory services are only offered to clients where NewEdge Advisors and its representatives are properly licensed or exempt from licensure. Past Performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by NewEdge Advisors unless a client service agreement is in place. The content of this video is developed from resources believed to be providing accurate information; however, neither DeepRiver Wealth nor NewEdge Advisors, LLC, guarantees the accuracy or completeness of any information obtained from any third party. The information in this material is not intended as tax, legal, or financial advice.

9 out of 10 of business owners enter retirement with nothing to show for their business. Not because they didn't work hard, but because running a profitable business and building a sellable business that can be converted into real wealth are two completely different skills.

In this video, I break down exactly why this happens, what the "Entrepreneurship Trap" really is, and the 3 concrete steps you can take this week to start building a business that's actually worth something at exit.

Resources:
The Entrepreneurship Trap Book: https://www.deepriverwealth.com/books
Learn more / reach out: https://www.deepriverwealth.com
Founder Freedom Calculator: https://calc.deepriverwealth.com
Podcast page: https://www.deepriverwealth.com/podcast
FREE 15-minute Business Valuation Estimate: https://deepriverwealth.com/business-valuation-assessment/

Sources:
[1] Exit Planning Institute – industry exit outcomes / business owner retirement outcomes
https://exit-planning-institute.org
[2] Exit Planning Institute – business owner intent to sell statistics
https://exit-planning-institute.org
[3] Exit Planning Institute – business sale success rate (~20% cited industry figure)
https://exit-planning-institute.org
[4] Trinity Study / 4% rule retirement withdrawal guideline
https://en.wikipedia.org/wiki/Trinity_study
[5] SCORE – retirement planning gap among entrepreneurs
https://www.score.org/articles/why-entrepreneurs-should-be-saving-retirement
[6] PLANADVISER – small business owner retirement confidence survey reporting
https://www.planadviser.com/nearly-one-seven-small-business-owners-not-confident-retirement/
[7] CNBC – business valuation awareness among owners
https://www.cnbc.com/2022/07/17/most-business-owners-dont-do-the-math-on-their-most-valuable-asset.html

Disclosures:
Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. This material is for educational and informational purposes only and is not intended as personalized financial advice. The strategies discussed may not be suitable for everyone. DeepRiver Wealth does not provide tax or legal advice. Please consult a qualified tax or legal professional regarding your specific situation. Advisory services are only offered to clients where NewEdge Advisors and its representatives are properly licensed or exempt from licensure. Past Performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by NewEdge Advisors unless a client service agreement is in place. The content of this video is developed from resources believed to be providing accurate information; however, neither DeepRiver Wealth nor NewEdge Advisors, LLC, guarantees the accuracy or completeness of any information obtained from any third party. The information in this material is not intended as tax, legal, or financial advice.