Ryan Daniel Moran explains why private equity and major brands are paying millions for online consumer companies. RXBAR sold for $600 million, Dollar Shave Club for $1 billion. The playbook: build an audience, expand your product line, become too valuable to ignore.
You're a business that can be acquired for millions of dollars. We're seeing it happen right now.
There's a brand called, it's actually Ancient proteins, not vital proteins. A brand called Ancient Nutrition had a hundred million dollar raise recently. They were a two year old company. Rxbar was started in someone's basement. Sold for $600 million about five years later. 7th Generation recently sold for $700 million. They sold paper towels and laundry soap.
Dollar Shave Club sold for a billion dollars on the back of one YouTube video. I picked these examples intentionally because none of these are Amazon businesses, but they all killed it on Amazon because they had done the other things. Well.
Now I want you to understand where.
This falls in terms of.
The order of operations.
Because we hear about people selling companies. Who the heck is buying these companies? And this is going to help you realize what you're sitting on right now.
There's businesses like Kellogg's for example. Kellogg's, we think just sell cereal and cereal bars, right? Well, Kellogg's was the company that bought RX Bar.
What you might not know is that Kellogg's is owned by a private equity group that buys up multiple brands.
So you have this brand that buys this brand and that brand buys this brand. And then down here you have investors and other private equity groups who are in the business of raising money from investors who need a return on their money. And the way that they get it is they buy your company. They because you put blood, sweat and tears into a business and it's producing profit. There's other groups who say we have all the money from investors. They want 9% on their money. So we're going to buy your business so that we can pay out our investors and we'll grow this business. And when that happens, there's another brand. Now comes Kellogg's. And Kellogg says, hey, we, we saw you grew that company. We want to buy it for tens of millions of dollars because the only way we know how to grow as Kellogg's is to buy more companies.
They all know that the game is changing. They all know that young, scrappy, hungry entrepreneurs are up to something on this Amazon thing. They all know that you are innovating faster than the big brands can. And rather than change their business model, they come and they buy your company and they pay out their investors. So if you think about this, you have the brand that is looking to buy up companies. You have the private equity group that is raising money from investors and has to pay out a profit to their investors. And the way they do that is they buy you at the bottom of the chain. And when you realize that they all need you to go build profitable companies, as young, small entrepreneurs, we forget that we're the engine behind the thing. Us releasing products, us building audiences, and is the engine behind the big old rich dudes paying out their investors. We're the engine behind the big brands growing and buying our company. It's why I like to say money can't do shit without you.
We all get into this game because we know money makes it easier to have freedom. But what no one tells us is that money can't do anything without without you. And money is chasing brands who have raving customer bases, who have different products, who are moving quickly. It's why I advise my students and my clients to spend every dollar they can back into the business to build a bigger audience, to launch more products, to go more aggressively, to move faster. And as a result, we have students who, who were not entrepreneurs a few years ago selling companies for a few million dollars all the way to 20 and 30 million dollars. And that's at the beginning of the wave. This wave is getting bigger. This wave is moving faster. And it's why what you are building and what you are doing is way bigger than you realize. This is bigger than a little thing that makes you some side cash. This is way bigger than something that you do so that you don't have to work a traditional job. This is something that other businesses are eyeing because they know that you are innovating faster than them. There is money pouring into the marketplace to acquire businesses like yours for amounts that could completely change your future and your financial family tree. This is way bigger than some side thing that you do in order to make some nice cash. If you play this game well.
This game changes economies. It changes your family's future because money needs you to move and it will chase you as a result of you going all in.
