90% of Your Net Worth Is in Your Company. That's a Problem.

**[00:00:00]** Hello everyone, my name is Armando Perez-Carreno and welcome to the Web Talk Show. Today with us is Steven Pivnik from AIP Advisory. How are you Steven? I'm great Armando. Thank you for having me on the show. It's a pleasure to have you Steven. I am very interested to hear about everything you do in this space and I want people to understand what we're going to be talking about today. So can you tell us a little bit of what you do right now and how you got to this point? Sure. So um I currently am paying it forward in the entrepreneurial community by advising founders of middle market companies on how to strategically plan for and execute and exit for their company. And it's it's really rewarding being on this side of the transaction after going through you know several transactions of my own. I got here by starting growing scaling and later selling a technology company. I grew to over 200 employees across 12 countries. We service like 90% of the global 5000 customer base and after 26 years in business which was a little bit too long. I finally realized a strategic exit and um shortly thereafter like I just mentioned I got into advisory work and I'm really enjoying living vicariously through other founders and helping them them go through a similar journey. That's incredible. I I hear this a lot. Not specifically, you have an an amazing background, but I hear from people that have done well who then like to help others in that same path. And I love that because it brings so much back to why we are humans and why we're different from machines, of course, but also exactly in this era, but but also the rest the rest of of the animals and everything in the world. Like we not only strive to do **[00:02:00]** better, but then also to help others. And that is that is something incredible. and and I admire people that are doing that. What do you think that people should consider when they're doing so well? Like in your case, you were doing very well. You had scaled. You were there for 26 years. And the way you said it may be too long. What's the point in time when when a founder receive like does it make sense to look for an exit? Is it something that everyone should do? Is it something that it's only for some people? Is it a legacy thing? like when should one start having these these thoughts or these conversations with oneself um whether it makes sense or or or start even talking to someone about Yeah, I mean that's that's a great question and the short answer is it's different for everybody. Um but I'll give you some of the things that I feel everybody should be considering, right? Um the right time is going to be different for most. Um, if I had to pick a point in time, I'd say between the 10 and 15ear time frame because at that level of a company, you've pro you've probably established some um serious enterprise value and you've worked really really hard at it. Yourself and your other co-founders have probably put in a lot of blood, sweat, and tears and you should really explore opportunities to see if you can finally monetize what you've created. at least get a benchmark for what you could potentially achieve in the marketplace via a strategic exit or even possibly an investor recapitalization if you want to maybe take a little bit of off the table and continue to go after the proverbial, you know, second bite of the apple in the future. So, it should definitely be investigated and there's a lot of **[00:04:00]** reasons for it, right? It's because a lot of founders have the majority of their wealth tied up in in their company. you know, 90 to sometimes 100% of people's wealth is tied up in their company. That that that was the case in me from for me in my company. And that's a lot of risk, right? Even though the company's doing well, um you can paint a a really decent story and trajectory into the future, but there's no there's no guarantees in life, right? And you know, maybe the next co is around the corner and it it'll imp impact your company like it impacted so many, right? So there's just a lot of risk in continuing to have 100% of your net worth tied up in one illquid asset. So again 10 10 to the 15 year mark is when I believe it should be investigated and then if all the stars align a exit should be pursued and if not continue for another you know two three four five maybe maybe 10 years. It all depends on a lot of factors. That's a great advice and and I like the terminology here that I think most of us haven't heard. So that's what's the second bite of the apple, right? So the second bite of the apple is if you if you find an investor that wants to let's say invest and take over 51% of your company or pick up, you know, investors are different. Some some will go in for a minority, let's say 10 to 20%, other investors will want 60 or 70% of your company. that leaves you with additional equity that you that you roll forward into the um into the venture that that continues with the in with the um private equity partner, right? The private equity partner is almost always not almost will always sell the company again in the future. And when they do, you get your second payday or as they call it in investment banking terms, the second bite of the apple. I see. Oh, this is very interesting. And often just to add real really quick, there's a lot of scenarios where the second bite **[00:06:00]** of the apple in terms of fi the financial check is greater than the first. So you can get a really decent size return um let me do that again. you can you can get a really decentsized amount during the the first round and when the company continues to grow and is sold again that second part while it represented a smaller percentage can actually be bigger than the first part. That happens all the time. Yes, that makes a lot of sense because if you brought people into it, you likely brought them because they're bringing along experience, they're bringing along network, they're bringing along spending power, technology, right? And so that will very likely make the company grow regardless of it was already growing. And so even if percentage is smaller, you might get a bigger gain. That's that's a lot to think about. There's there was this conversation we were having with Matt Midendorp about like the different options, private equity uh or going into ESOP or things like that, right? So, it's like there's there's options and there's positives and negatives in in all of them, of course. But what I've heard a lot from not too many people, but from people who have done exits, sometimes these transactions don't go as one would expect. Like going into it sounds amazing. Oh, I'm gonna get some money from I'm gonna get capital, right? And they're gonna invest. And when you see this big number and then once you get closer, it's like now it's this and now it's this and now it's this and it's still a big number, but you started with this idea and then it comes down and then there's strings attached and then there's a bunch of other factors that **[00:08:00]** you have to stay in there and you have to do a web. And so it sounds like a great dream, but for many it's just a dream and then by the time they get to the end they're so tired of the whole process. They just want to get it over with and then they're burnt out at the end. We just recently spoke with someone and they they did they did an exit and it was do like home services company doing great and all that, but then like you see them and they look like gray. You know what I mean? Like it's like and so I I I totally know what you mean. Yeah. Yeah. I mean and unfortunately this is definitely on par for the course. It happens a lot if if the proper planning wasn't done significantly way uh in advance. If there's a lastminute opportunity that somebody takes advantage of and then you you're you're definitely going to be at the mercy of the person that's that's doing the deal, right? There's a lot of deals that get re the term for it is repriced. you know, they get repriced along the way. Um, terms and conditions change. Their requirement for you to work or not work changes. It could go from a lot to a little or vice versa depending on what they find in due diligence. So, all of this stress can be avoided or most of it I should say is if the proper planning is put in place and you architect a proper deal that you personally want. For for example, in with in my case, I want I wanted to make 100% sure that I was not part of the deal. And the way I did that was I brought in a CEO, you know, 3 years prior to the actual exit. So that when the exit came, when we went into due diligence, it was 100% clear that I was no longer an integral part to the day-to-day operations of the business. Now, other people may never want to leave their baby, right? Because they're emotionally attached to their company. their personal identity is wrapped up in their company and they definitely want to stay. Well, in that case, a deal can be orchestrated from the very very get-go and those terms and **[00:10:00]** conditions can be laid out even before you go into a due diligence and if you're brave enough, you can tell the acquirer or the investor saying these following five terms, they're non-negotiable. If at any point in your due diligence you discover something which makes you uncomfortable with these five terms whether it's the amount my involvement my employment my employee my employees involvement etc etc please walk away from this deal and they mo most will be very very upfront like I I actually had one deal prior to the one that actually closed where we told them at the very beginning do not repric this if you come back with an adjustment to the enterprise value that's on the term sheet walk away And we went into due diligence. In 3 weeks, they said, "You know what? You asked us to walk away if we couldn't commit to that number. We're walking away." Fine. And guess what? They came back three years later and paid 50% more. Yes. Yeah. Wow. That's that's a great example. You have to stand your ground, right? So if you have the right data and if you're not taking advantage of anyone like one if you if you believe in something I think that's what people say right so if you really believe in something then then stand your ground and and you'll get more out of it for both sides like in that scenario don't just do it because you're arrogant right no if you have the data to back it up then yeah because there are things that are non-negotiable and that's a great great idea to put them up front don't be scared about it and say these are the things now what I really liked uh uh my what's his name my golden or sorry if I missed the name but he he um recently said something about why he never **[00:12:00]** got emotionally attached to a deal since the very beginning cuz he started from the bottom, right? And and he was saying because he learned about the percentages. And so he said if you go into a negotiation in business, just regular transactions, if you get tied up in that deal and you think you have to close that deal, then you h you're on the lower hand, right? And and then you're gonna you're going to be on the losing side. If you don't think of it that way, if you if let's say you're doing very well, then typically you don't have that. You you feel confident and and you you close more deals when you're doing well. So, it's like, but how how they were asking like how how do you not feel that way? And so, he talked about averages. He said, well, because I know I don't have to close that deal. I know that I need to close a deal. So if I'm doing X amount of conversations, then that means that I'm going to close a certain percentage of them. So I just go into all of them the same way because it doesn't matter if that one doesn't work. I do need the money, but I don't need that money, right? So So changing that framing is just a little thing. So I think it applies to to many things like you're saying now, which is which is incredible. Yeah. I mean Yeah. I mean trying to be emotionally detached from from outcomes is incredibly important. I mean, that's that's important with a conversation with your kids. It's important with a conversation with your spouse. It's definitely important in negotiating either either um sales for your company or the sale of your company because when when emotions get involved, then like you like you said earlier, all of a sudden you're you start losing a little bit of leverage to potentially a lot of leverage and uh you're not going to get the best deal possible. We talk about some of the concepts and and uh different phrasing that many people will understand but then there's **[00:14:00]** there's some listeners that that are not in the business space and have never been. So can you help us understand a little bit more about the terminology like when you say middle market what type of companies what type of size are we talking about? Everybody has a slightly different definition. If you if you Google it you'll probably get a slightly different number. I I consider middle market anywhere from like 20 million to $500 million in annual revenue. Okay. Okay. And does that change with headcount or is it mostly revenue based? It's mostly revenue based. And you'll you'll have, you know, that same type of revenue being accomplished by different amounts of headcount depending on the industry, right? If you're a software company, it'll be smaller. If you're manufacturing actually hard goods, it's probably going to be larger. So headcount is always going to differ but middle market typically refers to revenue. Okay. Excellent. And now if we talk enterprise value for a company again many people know about revenue they know about profits right but what what does enterprise value mean for a company? Sure. And so enterprise value is what your company is worth to an or what your what your company's worth to an acquirer. Right. And that value gets calculated different ways again depending on industry and depending on size. And it's what's the majority of the calculations are one of two things. It's a multiple of revenue. So for instance if you're a SAS company software as a service you can if your and your company is let's say doing for round numbers $10 million a year in annual revenue your enterprise value is probably going to be anywhere between $40 million and $70 million. four to seven times sometimes if you're in a really really hot space like anything AI related it could it could be you know 10 or 20 times on revenue um most other businesses are evaluated you know based on their profitability or IBIDA and those multiples range from anywhere you know 4 to 12 times what your annual **[00:16:00]** profitability is. So that could be that can equate to your enterprise value. Oh interesting. And and is that why then some people say, well, yes, you could invest in something like real estate, but then you could also invest in companies because they they can produce, right? And then the valuations are not like, oh, that company is not worth $3 million because it makes $3 million. It's actually worth a lot more. Exactly. So, it's it's typically worth more because it's companies are typically priced on future earning potential. And again, deal structures always vary. Um the that that value can be paid to the seller upfront or it can be paid to the seller in the future based on based on future performance, which is very common. And I mean, I highly suggest against it because there there's a way to actually get all your money up front. But um if if if you go down that route, it's typically called an earnout. and the earnout. Let's say let's say the comp let's say the seller wants $70 million for their company and the buyer only wants to pay 50. You could come to terms saying okay this the buyer the seller gets 50 million today but you can get an extra 20 million over the next three years based on performance and then there's a whole bunch of you know measures that are put in place to to measure to measure that and um sometimes it works out sometimes it doesn't a lot of times it's in the middle there's a whole bunch of factors that come into play. Well, I bet especially with what you said like you're in case if if you don't want to be a part of the company necessarily because you're moving, you're doing your second business venture, whatever. Um, if you do the earnout route, it's likely that you're going to be pulled back in to make sure that the performance is met. Otherwise, you're not going to get your So, it's not required%. It's it's it's like very likely and in the in the vast majority of the cases, the the the owner will stay on for the duration of the earnout. And if **[00:18:00]** there's an earnout component in somebody's deal that somebody may be listening or watching, it's really really important to maintain control over the elements that that will dictate the earnout, right? The um the salesforce, the marketing efforts, and the the accounting procedures that are being used. Because if you get swallowed up into a much larger organization and let's say you lose control over the salesforce or you lose control over marketing efforts and your your your part of the company which is now a division of a bigger company isn't getting the love that it used to be getting then your performance isn't going to be the same and your your earnout will suffer and that's going to cause some serious friction between you and the acquirer. That is very logical. I've many of the deals that I've heard about they go in it's a bigger entity and so they already have their finance department. They already have their marketing and that's why I was going to ask like why do they let go so many people many times after acquisitions? Probably because they already have a a component of that in Yeah. I mean every every Yeah. Every single deal is different, right? And in a lot of organizations, they will completely cut out any duplication. And in other deals, they're going to leave some some if not all depending on how unique the acquired company is to the to the bigger organization. Yeah. And but the problem is in many of those cases like that marketing effort or that finance department that was what made that company grow the way it was growing. So what you say makes perfect sense. It might decline right after the acquisition because they let go everyone who was actually holding it up. Exactly. Exactly. So again, so these things need need to be carefully carefully thought out, planned and and um architected in a way to to maximize the the results for everybody involved. **[00:20:00]** When you have a company that's doing well, but you are the head of the company very publicly, you're the brand. In your case, you sort of stepped out earlier, maybe three years before, right? It's a good idea. But let's say it's someone's like really in it. That's like a Mr. Beast, right? Like Mr. Beast is Mr. Beast, right? It's he is his company. Correct. Right. So is there any way to get to the shift right uh of something like that or or when when it's completely personal brand based does that just not happen? It's really risky and there's there's a lot of things that are valuation killers and valuation being enterprise value, right? Let's say the industry is saying that this company should be worth five times revenue for for as an example. If if the acquirer finds out that there's a very very high dependency on the founder, that valuation is going to get discounted because that represents risk because obviously the acquirer is going to want to make sure that the individual, you know, comes along, but there's no guarantee that the person's going to stay. You know, they may leave for a variety of reasons in the future. It could be health related, it could be a new opportunity, it could be boredom, it could be a million things, right? So founder dependency represents risk and is a valuation killer. So my advice to anybody is to slowly but surely you can still be very much involved in in your business but make sure that the company can run without you. Best way to prove that is go on vacation for 3 months. Take a three-month sabbatical. See what happens with your company. If it's in the same shape or better, you've done a great job of eliminating founder dependency. if you come back to a mess, you got work to do. It's a great idea. And in some cases for for the like content side, especially **[00:22:00]** 2026, it's all about the content. And we had a conversation on the show a few months ago where we were talking about like building a brand and the brand persona and all that. And in some instances, the founder or the owner is the main head, but it doesn't have to be, right? So you we hear about doing content and every company should do content but what what an expert that came on was talking to us about is well it it doesn't necessarily have to be that person. It could be multiple people in the organization. So it could be the people who are in the trenches who are actually doing the things doing the work that they they could have a few different faces that are showing up and and doing all the content such that again it's not completely dependent on so the company still creates content and still creates rapport with people in this age but it's not solely like owner I mean yeah I would actually argue that that actually raises the perception of the brand right because if the if there's only one phase to the brand Then again, there's this perception of dependency on that face versus if there's multiple faces to that brand, then it's it's more diversified and therefore less risky to whomever is looking to acquire them. Would you say that somebody who is in the scenario of having a company that's very valuable or could be very valuable but they are the person and they want to raise capital but it's going to be too risky or it's going to be heavily discounted for VCs or private equity. Could they go the crowdfunded route? Could that make sense? Because then the crowd is also maybe a fan of the person. like you could do the capital raise and at the same time like reduce that. What do you Yeah. Um founder dependency is a little bit less um negative from a from a capital raise perspective because when **[00:24:00]** when somebody is making an investment in the company they're betting on the not just the founder they're betting on the team. So it's really important that the investor have a lot of faith that the founder and the team is going to be a great steward, you know, for their money and for their investment. So it's a little bit less risky for them because that's actually who they're betting on. They're, yes, they love the product, they love the company, they love the profitability, but they're betting on the team. So from that perspective, it's really important to show how great the team is. Um, crowdfunding is, you know, definitely an option for any sort of raise and they're going to obviously crowdfunding does a lot less due diligence and a lot of the um details of the company are going to be, you know, less available to a crowd. But I would be less concerned about founder dependency from a from a capital race perspective and more concerned from a from a um from an from an exit perspective. Yes, that makes perfect sense. when when people exit companies in your experience because you you help people with this whole process. Is it something where maybe they they do one business they do really well they have an exit? Do they typically relatively soon after just create another venture and then and then do it all over again and then do that or or do they just stop like is there or is it not there's no percentage really? Yeah. Yeah, I mean I I've seen it all. I I've seen people, you know, serial entrepreneurs, they they go from, you know, one to the next. You know, they just be being an owner of a company is what defines them. You know, running a company is what defines them and what they they love to wake up every single morning doing. So, they sell one, they go start the other, they're success now that they have a playbook for building and selling a company, they do it again. And I'm not going to say it becomes easier, but the process is better known to them. There's others that just, you know, completely retire. Um, I personally, I had a whole bunch of **[00:26:00]** endurance sports hobbies. So, I kept myself very busy doing triathlons, iron man, and mountain climbing before I started doing um taking up more hours doing advisory work. And there's others that you know take on take on board seats this way and or advisory roles you know like myself because this way they can participate in the growth and give a lot of advice and suggestions on the growth of a company without having to be involved you know 40 to 60 hours a week and they can spread their knowledge across multiple organizations which is very rewarding to some. So there's a the best part about an exit is it gives you a lot of optionality, right? And you you get to decide what you're going to do next when when that deal closes. Yes, that's a good point. If someone has done an exit recently and they're wondering what to do with their time, yeah, advisory is a great way to go. boards. That's all. Yeah, there's a there's a lot of people if you've had a successful exit, there's a lot of people that are in your shoes or that were are in the shoes that you were in a couple of months ago or a couple of years ago that would love to pick your brain and you know get your ad advice. And that can come as a kind of loosely formed advisory type role or it could be a much more official you know board board role where you actually have a you know a stake in the company and you know fiduciary responsibility to you know perform in its best interest. And there's also philanthropy work. A lot of I've seen a lot of people just go into philanthropy. They made so much money that they decide that you know what I'm going to give away most of it but I want to be in control of where it goes. And you know um Bill Gates you know perfect example. He's spending the majority of his time giving away his billions. Well, you get to a point it's so much money that you you can't spend it all, but you can use it in good ways and and I think that **[00:28:00]** control part is important too because sometimes you donate things, you don't know what they're doing with it, uh, etc. If you're at a place where you can actually have a foundation or have the supporting structure to make sure that those funds are executed properly, then that's exactly that's amazing. So when when you talk to companies, you're advising companies, they they might be close to that area where where they might be considering an exit. Do you see the same patterns? Like is it is it something that most people just hit the same sort of walls time and time again? The Yes. And I I I love the term pattern recognition because you know after doing it you know for myself for my own company for 26 years and after advising you know a lot of other companies there's a lot of patterns that develop. Um the the the biggest challenges is really around team and having the proper executive leadership team in place in order for the company to continue um to succeed. I say this all the time. All founders, myself included, are incredibly loyal to their staff, especially to the folks that have been with them from the very beginning. And as a company grows, it's almost inevitable for a company to outgrow the person's capabilities and skill set just because it's it's not a knock on the individual. They've just never operated at a certain level. Um I like to pick on sales because it's it's the easiest to quantify. If your head of sales was was with you from day one and your company, let's say, has gotten to $10 million, um he or she has never run a $10 million sales organization. They don't have a playbook on how to take a $10 million company and bring it up to a $20 million company. They're they're gonna they're going to figure it out, you know, as they go along. And some of them can and some of them will, but many of them won't and they're going to suffer. So that's that's a, you know, telltale sign that you need some, you know, **[00:30:00]** professional sales leadership. And everything I just said can be applied to your head of product, to your head of finance, to your head of marketing, to your head of support. The list goes on and on and on. and just look looking at the team and then and then and this is the interesting part. When you're done looking at your team and you've potentially made some upgrades and you know moved some chess pieces around then it's time to look in the mirror and say are are you the right person to continue running this company or is the company better suited to have a professional you know CEO in place which is exactly which is exactly what I did. I did it for two reasons. I did it because I wanted to make sure I wasn't going to be part of the exit. And I also wanted to make sure to put in case there wasn't an exit, I wanted to put my company in the hands of a professional CEO for day-to-day operations so that I can do other things and the company would be in great shape. Yes. Yes. I don't think most of us realize until we're in that position the severity of of what you just said. It can sound from far like you're one can be arrogant and say oh oh they now they're saying they need like the big league players right and one of our guests was giving that analogy of like he played hockey before so he was like yeah he works in family office and all this and and he was explaining how yeah maybe you have your the person who helped you in the bank at the beginning and they're very good and all that but once you're at 20 million that it's a whole other ball game and so you probably need to bring in a different type of professional level. The same way he he gave the example of like you I could have had a magnificent hockey coach or football coach in in high school, but then if I go pro, I'm not going to use the same coach. Even if it if they're great, like there's there's different levels. And and same goes for what you just said, like sales. Maybe you run an ecom and you're how you're doing great. You're selling a 100,000 **[00:32:00]** units a month and you're amazing, right? and and your staff has done it, but then you grow and that person is not going to be as practiced as someone who's selling a 100,000 units a day, right? It's because and then so if you bring someone in that has done that before, then they understand the scale and all the complexities that come along logistics wise and everything with that. Yeah, exactly. And and this is um I'm not going to say the downside because growth is a wonderful thing, but this is just one of the challenges and sometimes stress stresses that come with growth in a company that um s it's it helps to understand this from the very very beginning knowing that you know the the people you have around you may not be the same people 5 years from now when the company continues to grow. In some cases they will be and God bless and that's that's a fantastic scenario and some cases they won't be. What do you think about the concept of coaching as you're growing both for for yourself as an owner CEO as well as for key people in your business? Yeah, I'm I'm a huge huge fan of it and I don't mean this to sound self- serving. I'll talk about it like when I was um in it took me too long to bring in a coach and an adviser because you know I I was you know young and arrogant and the company was successful and it was growing. I'm like I I'm doing great. The company's doing great. I don't need any help. Well, when I finally got some help, we were doing even better and everything was even smoother and things started going that much better. I mean it it's it applies to like like the sports analogy is perfect. If if you're a naturally gifted individual and you're a great hockey player, you you'll become a phenomenal hockey player, you know, with the right coaching. So that applies **[00:34:00]** to leadership, I'm sorry, to ownership of the company and definitely to various people in on the leadership team. For instance, like I had a head of sales and um we had I hired a coach um to you know help him and he was incredibly appreciative because some people think if I get if I get this person a coach they may think that you know I'm not happy with their performance. It was the other way around. My head of sales was so appreciative. He's like, "Wow, you're making this investment in me and my career. Thank you." And and he was um super appreciative for it. And we benefited because the sales performance um improved. So very long answer. Huge fan of coaching across the board. Yeah. Wait, I hear it again and again. There's many guests have come on the show where we bring this topic up because there's two sides. There's people who see coaching as like a handicap. They're like, "Oh, no. I don't want to be seen like like like if you were going to therapy or something like no, no, no." Well, first of all, therapy is good. But if you need it, you need it. It's good. But coaching like it's not that you're not doing good. It's not that you're not good. It's that that person has already overcome a lot of the barriers that you're about to face and you can just skip over them. Like it's it's it's like going on the street and there's a boulder in the road and then there's this guy with a crane that could just lift that boulder away and you can keep going. So yeah, I'm I'm a big fan too. And I think unfortunately there are a lot of scams and people who sell coaching who haven't been in it. We at the at the very beginning of our call before we were recording, we were talking about like how sometimes numbers are thrown out and people people are talking about an industry but they've never played at a certain scale, right? And it's not helpful for the client, right? **[00:36:00]** I I know exactly what you're talking about. I met some I was at I was at a networking event yesterday in Princeton, New Jersey, and somebody came up to me and they said, "Hey, Steven, I was told that I really need to meet you. We should we should compare notes. I said, "Sure, great to meet you." And he's like, "Yeah, I I do executive level coaching." And he started talking about what he does. He's like, "I'm certified in this. I'm certified in that." And um so I asked him, "So so have you ever run a company?" He's like, "No, no, no, but I I I took this class. I have this MBA." So it's great. I'm not I'm not knocking him. And I'm sure he's giving phenomenal advice, but what he's missing is the actual experience of being on the ground and being in the person that he's coaching shoes and, you know, having to fire your best friend, staying up all weekend because you can't make payroll, dealing with a customer satisfaction issue of your number one customer, which represents 40% of your revenue. They've never been in at that at that type of stress level, and they can only make, you know, they can only get give textbook advice. So to avoid the scams that you mentioned, which are definitely out there, make sure that the person has actually been in the shoes of the individual that that they're coaching because then the chances of success are going to go up. That's that's very good advice. That's a great way to look at it. Like have they played that game before? Sometimes there's a tricky part here. Sometimes someone might look new. So giving the other route, right? Someone might look like, oh, they just got started, but if you peel off the layers, oh, but they worked at these three giant companies and worked on all these deals and they were the number one in all these deals and now they're spun off and doing their own thing. Oh, okay. So, they're new, but they've done this before. Right. Exactly. And and then there's those on the other side who will say they worked on the deals but they were doing paperwork or something working in said company and then attribute some of those **[00:38:00]** numbers um to to make it look good. So you just have to be careful of that. But that aside, yeah, for sure coaching, getting advice from people like yourself who have done these things and and I've seen the issues because there's when you run a business, it's and it's different for all businesses. Like if you run a food services business, like all the things that can happen. If if you if you run um CPG, there's a whole thing. If you're doing uh manufacturing, it's a whole other level of different like they're they're all very different. and being able to provide that advice or get that advice and accept that advice is helpful for for both sides. Yeah, that that's that's the hardest part right there is actually taking the advice and doing something with it because it's otherwise like when I first started coaching um it was very very frustrating when I would have meetings with folks and they appreciated everything I had to say. They took copious notes and they said, "Great idea. Great idea. Great idea. I'd come back a month later. Let's go through the list that we agreed that we mutually agreed on last time we met. What'd you get done?" He goes, "Oh, I don't have time for that. I don't have money for that." Like, why? Why'd you agree to do any of it? And when this same exact response happens, you know, three months in a row, you know, that that that that's not a very fruitful relationship for e either side. Yeah. Do you think some people are coachable and some people are not coachable? 100%. You you got you got to figure out who's and and just because somebody says they're coachable doesn't mean they ask them to give you examples, right? You know, give me an example where you know you were doing something and somebody told you to do it differently and you actually, you know, took took that advice. And if they have a hard time **[00:40:00]** with that, then they're pro they're probably not coachable. And it's funny because somebody might not be coachable now and then hit an important situation and it clicks and now they're coachable, right? 100% or it could change. Maybe they were Yeah. Maybe they were never in a position where they actually really got good advice from somebody who was more experienced than them. And when they finally came across that individual, they're like, "Hm, I maybe I do want to take this person's advice." Yeah. Yes. I really look up to the older generation who has come before us, who's still here, who have done everything and gone through like pattern recognition you're talking about that have gone through all these loops many times throughout their years, right? because everything sort of repeats and and then they leave the workforce and they're doing nothing and many of them a big percentage of them and and I always think like there's so much value that we can get from both sides for them to maintain themselves active uh and for us to learn from them because they already went through 60 years 70 years of examples of all the unique situations that can happen in a business environment, whether they were in a an executive role or were the ownersh. There's so much that can be gained from just talking to people because you can tell them what's going on right now and they're like, "Oh yeah, that happened to me 40 years ago. We just did this thing." And you're like, "Oh, come on." Like you've been spending a week thinking about what what you could do. And for them, it's it's nothing. So, I wish there was some sort of way to to get um that sort of back and forth going **[00:42:00]** with with this this huge concentration of knowledge that we have. Um because like in your case, you're you have so much experience and you started doing advisory very early on, right? like at a young age you're doing this where like imagine all those people who are retired really retired not like I retired at 30 but and and then how how much value we could get out of that what what are your thoughts on that? No I I I couldn't agree more. interesting. Something came up on my social media today and it said you have to immediately go out and become good friends with 10 rich people or richer people than you and just just to so you can be in those circles and and hear what they what they talk about and get advice from them. So very similar to what you're saying like I I think a stroll you have to go where these people hang out. I mean these people typically hang out um I would say in country clubs or in resorts. So I was going to say like golf. Yeah. And they they love to share. There's very few of them. I think if like if somebody came up to me and just said, "Hey, I just I let me can I ask you a business question?" There's 100% chance unless I was rushing to some place, I would definitely I would listen to it and I would give them advice. So people to our very very earlier point, we are the only species that likes to help others. Um, and I I love this saying, a candle doesn't lose its flame by lighting another, right? So, you can still remain at what level level you're at and just, you know, light some light somebody else's flame and, you know, let let them grow as well. It doesn't hurt you. It doesn't take anything away from you at all. So, if you seek it, you you'll find these individuals that can give advice. Yeah. I have you seen the school of hard knocks? Uh he's he his videos, right? So **[00:44:00]** if if any listeners his videos are awesome. They're really good. He's doing mine on the street, right? So that's basically the concept of someone walking around the street being filmed and asking questions to random people. So he obviously now has a way to find the right individuals, of course, but he goes on the street and he finds millionaires, billionaires now, right? And and uh he asks them questions and he's like, "How did you get rich?" and uh what can you tell people about overcoming whatever right depend and he's really good at at thinking of quick questions to ask them and you can see what you're just explaining now which is most of these people except the very select few are very happy to provide the advice of course he he comes in directly gives some like social proof like hey I've talked to 43 billionaires in the past few weeks right and so they're like yeah I I built a channel with 22 million followers yeah and so so he he does that first, but then but then he talked but at the beginning he didn't have that and he still did it and he got to talk to a lot of people and that's how he grew. But people are happy to provide that advice even at that level even if they're with their friends or or whatever like as long as they're not like rushing to something like you were saying which brings me to an interesting point that my wife and I talk about all the time. really successful people like really really successful people are not busy like they're busy right because they they keep their time busy but they're not busy like you can stop them in the middle street they can stop because the world will stop for them right it's like it's it's very different that you see people who are successful they're like no no no I don't have time for this blah blah and you're like if you were really successful and it interested even you a little bit you were like yeah yeah yeah everything else can wait it's fine like unless you're like I have a conference now that I'm going to give um then yeah but other than that you can typically call someone up and they'll be like and Don Martell said I can I can just call up any billionaire friend I have and they'll **[00:46:00]** take my call right because because they can Yep. Oh, 100%. And short short of waiting outside a country club and wait interviewing people that are that are coming out of Rolls-Royces and Lamborghinis, you can just go to this wonderful tool we have called LinkedIn. You know, find somebody who's very very successful, you know, and pop them a message and I think you'd be very very pleasantly surprised with the responses. As long as you come across you sincere and honest without selling them anything, say, "Hey, congratulations on all your success. I'm in this type of I'm in this sort of predicament and this type of business. Just wanted to have get your two cents on this." Yes. Yes. Oh, I can vouch for that one. When I was starting the show, one of our first guests, LinkedIn, I was talking to people on LinkedIn and things like that and and I connected with Colonel Joe Frank and uh he was telling me it was very interesting. We did the connection and he asks people like, "Hey, why did you send me a connection request?" He starts a conversation and so I talked back a little and and then he's an older gentleman and uh he he said, "Oh, let's chat." So we get on the phone, we talked for like two hours. We're just chatting like and he was telling me about like uh how how like the parallels between corporations and the military and and a bunch of other stuff. And then he came on the show like that was just a chat, right? And and it was so refreshing to see that humanness of of someone who I mean clearly is is very successful but but also very highly positioned individual and and they gave so much time to just chat with a younger person about business. Right. Yeah. Exactly. And and then we did the show, right? And so that that to me was amazing. And so LinkedIn Yes. It's a great tool. He was **[00:48:00]** actually one of the first people to use like he was telling me the story about how in the first days when he was actually using it to help people uh sort of transition from from the military to okay the corporate world because there's so many parallels between what they do in managing like ships and fleets and things like that but the language they use is so different. So when someone in the corporation asks, "Hey, have you done this?" You're like, "Well, no, because the language is completely different." But then he would help them explain like, "No, no, just frame it this way." And it's just changing the wording and they're like, "Oh my god, you have so much like you're overqualified for this role." Um, because you've had like 200 people under you plus like supplies plus maintenance plus inventory. like so and and he was saying how in the early days he would talk to to like the main people at LinkedIn and like something wasn't working and they would go in and fix it like it was it was back right and uh it was it was very interesting so yeah definitely LinkedIn but do you do you think people this is a question I' I've asked myself do owners founders successful people people who have exited etc use link LinkedIn for real or is it only like people in their companies that are using LinkedIn? Because I get this question asked all the time like do actual decision makers use LinkedIn? Um I I I think they do. I mean I think it's in just the usage numbers alone, you know, speak for themselves. It's a it's an incredibly popular so business social social media tool and I think you know people across the board whether they're actively involved in the businesses or just after the fact because there's just so much great information there and everybody especially really smart people are just naturally curious right so even a retired person I think will continue to be naturally curious about what's going on in the world and obviously they read they can read the Wall Street Journal which they probably do or the or or any **[00:50:00]** other newspaper But it's just such a unique way to get, you know, to be kept up to date with things that are going on and different people's opinions and perspectives. And so I I think the answer is yes. I think even folks that are are retired, you know, continue to utilize it just to to continue to learn. Ah, that's an that's a very interesting use case. I hadn't thought of LinkedIn like I use it that way. I go in and I see because my feed now is a little interesting. Before it was all HR stuff and things like that. That's what you would see on LinkedIn, but now people do actual content. And so it makes sense that people can go there and the same way I consume my news or whatever I'm interested in the tech world in X, right? Yeah, you could you could do the same on LinkedIn and it's a little more vetted, I think, in the sense that you see the trail, right? I think that's really the differentiator of LinkedIn that I can in two seconds see how you and I are connected via other people and see okay is this people is this person legitimate enough to be in certain circles or are they just making slop up and I should listen to them. So yeah. Yeah. Exactly. Exactly. That's that's great. I I think people should should follow your advice uh and and actually talk talk to people that I there's no loss in it. It's I like to share like even where I am I like to share there's always going to be someone who is in the position you were before and there's always going to be someone that is in a position where you're going to be. So yeah, so if someone comes up and has the same issues that I saw before, I'm happy to tell them. And then if someone tells me what what I'm missing from from where I want to go, then then I want to listen to that, too. It's Yeah. On that topic, I saw another really interesting post today. Um Ryan Sirhand, who who's like one of one of the big realtors in New York and in many other big cities now, his post today was when I when something bad happens, I **[00:52:00]** need to blow up some steam and I need to go chill. I just go for a walk around the block and I make sure to talk to one stranger. And today I just talked to a random person. He was from Texas. He had no interest in buying real estate in New York, but his cousin was doing some sort of development project in California that was potentially looking for some assistance with and he put me in touch with him. And who knows what's going to come of it. Maybe nothing. But that's how that entire connection started, just by me saying hello to a random stranger on the street. So yes, yes, I I got similar advice many years ago when my wife and I moved to Manhattan and the advice was speak to one stranger a day and I I I literally went to a bar. I was I was running errands and I I stopped in to get lunch and I just struck up a conversation with the person next to me and it was so interesting. I can't believe that I didn't continue that because if I that was only that was one time. If I would have continued to do it and I got into a habit of it, I think that would have been that's just a great habit to get into. Yes. Yeah. I don't know when we get shy. So you're a kid. You you you want to talk to everyone, right? It's like you just don't stop asking. You don't stop talking. You don't like that's what you do. And then there's a point in time where it's like no, now I'm shy. Now I don't want to ask people something. I guess it's probably to everyone something happens where you ask enough times and then someone says like I think our our our curiosity is satisfied with electronic devices right now. So we're curious about something we'll go to a feed versus before that phone was there and you're waiting online to board your plane which is which could be a half an hour. You're going to turn around and talk to the person behind you probably just just to kill the time. And same thing once you actually sit down, everybody instantly opens up their laptop, open ups their phone, starts watching a movie. Before that was available, you've got six hours to kill with two strangers. Why not try to pick up a conversation? And if they don't want to **[00:54:00]** talk, they'll let you know. And but at least you've tried. Yeah. Yeah. I've got a good example of that. When I was in college, well, I just graduated college. I I went to a supercomputing conference in Hamburg by myself and it was very interesting, had a lot of fun, etc. On the way back on the flight from Heathrow because I then did like a Europe thing to know places. Speaking of like meeting people, amazing. Just just meeting people anywhere because I had nothing else to do but just go hard. the the person sitting next to me at the time, I I had a recording studio. I I really liked everything to do with music and audio and all that. For some universal coincidence, the guy next to me is not closing his laptop. You know, the attendant is like, "Sir, sir, can you close your laptop, sir? Sir, we're gonna sir." Mhm. And so I I turn around and I see some some formulas and and uh so he closes and I'm like, "Oh, what do you have any like acoustics kind of thing?" And he's like, "Oh, yeah, yeah, I'm the dean of architectural acoustics at RPI or wrestler poly technic." I'm like, "Excuse me?" So, I had like a six-hour flight talking with with the dean and it was such a fun conversation and I learned about like really amazing things. That is awesome acoustically and then he invited me over that I and then I got a tour of the of the university and all that like it just because you're not you don't shy away from just talking to a stranger. Exactly. And pe people people aren't shy about letting you know that they don't want to talk. You can if as long as you're good at reading body language and responses. I mean I'm like that. I mean I can either be one-word answers or like full sentence answers. And if the person most of the time the person will will get the message that I don't want to I I got something to do. I don't want to talk. But most of the time hell I'll talk. **[00:56:00]** Yeah. Yeah. Yeah. If you see someone with AirPods in, leave them alone. Yeah. Right. Exactly. But but but if they're like, "Yeah, that's excellent." So if if someone is um I don't know, they're doing well. They're they're maybe 20 million or or so and and they've heard it from friends, they've heard it from shows like this one, and they're considering maybe the possibility of an exit sounds interesting. What's the next step for them? What What should they do? That's a great question. And just to tell your listeners and viewers that we did not stage this because this is something that I wanted to share. So that's a great question. So what the what the the what what I've recently launched is something called an exit readiness assessment. Cool. So it's a series of questionnaires. It's very simple to fill out. It's going to take no more than 10 to 15 minutes to fill to fill out and it's going to give you a value builder score for your business across eight different categories with um and compare it to industry averages. So it'll show you where you stand on eight different drivers of enterprise value. So we can have a conversation on where the levers are red or yellow and how they can be improved. And if the if the levers are green, got to make sure that we concentrate on, you know, keeping those levers green. So, and in addition to that, I do something called a prescore personal readiness assessment where kind of just it's a series of questions. There's there's not that many a person's psychological readiness to exit their business. Like, are they emotionally attached, you know, to their company? Um, does does their family work there? Is their personal identity wrapped up into this business, etc., etc. So there's also like just a number a score on what your psychological readiness to sell your business is and then something called a um personal freedom score from a financial perspective. H how are how much how dependent are you on your company for your current lifestyle that **[00:58:00]** you want and based on a whole bunch of factors we can figure out are you 100% dependent which obviously at least on my earlier point you've got a lot of risk you know in your company right now because it's 100% of not only your assets but of of your cash flow that you need to um to have your lifestyle. So, you know, these three tests give somebody a really good indicator of where they stand and from there they have a game plan on what to do to improve or they can say, you know what, I got it. It is what it is. Now I know my numbers and um I don't need to I don't need to do anything. So, it's a it's a really nice, you know, tool and process to go through and I'm happy to share the information with your listeners. Yeah. Yeah. Please, please give me the link and I'll put in the show notes. It's uh I love these little tests and assessment kind of things because they can very quickly give you a lot of information that you would have spent a lot of time trying to figure out and it's based on data from people who are in it right so it's very different for my case we build software and AI and things like that and so for someone to think oh I want to build this product does this and this and this might just think yeah it could be done but they don't think of the 11 things that you have to like actually think about and if they tell me I'm like oh but did you been think about this and what about this and this other thing and this other thing and like oh and now they can expand their thing. So in your case like it it's so important to get that structured answer based on years of experience in the thing because you know which questions to ask. So I'm glad that it's like an open thing that people can actually just take. Um and I really like that you have the three of them. So it's like how's the the company, right? But then how are you psychologically attached to it? Are you ready for it? That's really important. I hadn't really really heard that too much. And then also the attachment like how dependent are you separate from from as an individual? **[01:00:00]** These are great. So are they on the same page or are they three separate separate things? So it's it's it's three different assessments, you know, three different questionnaires, you know. Um the the company one will take about 10 minutes to complete. Um the other two will take about 5 minutes to complete. Um it doesn't require a ton of information and it really forces somebody to truly think and as long as they answer honestly I can give them not only the the the results that the assessment produces but like my interpretation of the results having you know lived having been in their shoes and lived through many of these exits. Amazing. I'll definitely put those in the show notes. And Steven, if someone wants to talk to you or your team about like how all this works, they're interested in like doing a little more getting a little more in depth, how can they find a little more about uh Sure. How to I mean, you can find everything about me on my website and it also has all of my social media handles and that's stephvenpnick.com and the best way to to contact me is via LinkedIn and my handle there is also StephvenPick, one word. Excellent. I'll put those in the show notes as well. Again, Steven, this has been amazing. A super fun conversation. I learned a lot. I'm sure our listeners learned a lot as well. So, thank you so much for sharing all your knowledge with us. Thank you for having me on the show. I really enjoyed our conversation. It's been a true pleasure. And for those listening, if you haven't, please like and subscribe to the show so that you can learn whenever we have new episodes coming out like this amazing one with Steven. And be sure to follow Steven as well so you can get his continued excellent advice on his socials as well. Thanks everyone and we'll see you in the next one.