How Selling a $20 Product in a Soccer Field Led Me to Doing $20 Million Deals
In this video:
Marty M. Fahncke
What I didn’t know, because if the me now could have gone back in time to the me back then and said, “don’t sell the company for cash”, that million and a half dollars sounds like a wonderful deal. But what you should do, is ask questions. The questions I should have asked are, “Who are you and why do you wanna buy my company?” I didn’t ask those, I just said, “Is your check gonna clear?” Right? What I found out was that it was a private #equity firm who was rolling up our #business into, consolidation of other sporting goods related businesses. And eventually they rolled that up into several well-known public entities that you’ve brands that you’ve heard of and probably have in your house today. And, and went public with it in a big way. I went back and did an analysis and had I taken equity instead of cash, I would have, we would have made $24 million.
Because there’s a huge #arbitrage difference in #valuation of a business that’s doing a million dollars a year versus a business that’s doing a billion dollars a year. And these private equity firms that are doing these roll-ups understand that, and I didn’t understand it at the time. So what I wish I would have done, and I wish somebody would have told me is, hey, take half the cash and put the other half in equity, which would have given me personally a quarter million dollars when we sold the business, which is plenty.
And it would have given me, you know, would have given us as a collective partnership, you know, about $12 million to split. So 4 million bucks each, 12 years down the road. Would I rather have had that? Heck yeah. So that kind of was the beginning of my journey into buying and selling companies and understanding the value there and then the creation and how all that works and what got me into doing mergers and acquisitions. Because I want to help other #entrepreneurs who have businesses to be able to accomplish their dreams with their business, whether it’s selling all of it, whether it’s selling partial, retiring, or leveraging that business to create something new, #BuyingBusinesses to scale their businesses, there’s so many things and it became a passion for me. But it was really those first customers, $20 apiece, in a soccer field that led me to now doing instead of $20 deals doing $20 million deals.
This is an excerpt from the First Customers Podcast with Paris Vega. The First Customers podcast is on a mission to learn how entrepreneurs, founders, CEOs, and sales & marketing experts found their very first customers.
Check out the full episode at the links below…
View here:
Listen here:
Apple https://podcasts.apple.com/us/podcast/54-marty-m-fahnckes-billion-dollar-journey/id1487739303?i=1000644059559
Spotify: https://podcasters.spotify.com/pod/show/first-customers/episodes/54-Marty-M–Fahnckes-Billion-Dollar-Journey-e2farkk
To learn more about Marty Fahncke, Business #Acquisitions, and Westbound Road visit our website: https://www.westboundroad.com
