How To Create Generational Wealth In E-Commerce In 2025

Hey everybody, welcome to the podcast. I'm Ryan Daniel Moran. Most of the time on this show we talk about building million dollar businesses, we talk about selling million dollar businesses, we have interviews with people who are doing really big things. But a lot of the time I'm working with entrepreneurs who are building their first million dollar business. And we're dissecting the playbook for how you can get to a million dollar business in a 12 to 24 month timeframe. Today I want to share with you a different perspective that I think will be helpful as you are either building your million dollar business or you are growing. Beyond that, I want to share with you some insights that I wish that I had known a few years ago, both as I was building companies and as I was preparing to exit a company that made me the majority of my wealth, at least at the time. And I didn't know that when I was starting a company that I might be able to sell it for a whack ton of money. And I didn't know that when I went to sell a company that I had the leverage that I had because there was so much money out there in the private equity world, there were so many people whose business was about buying companies. In the YouTube world, the podcast world, the online entrepreneur world, the focus is all about cash flow. It's all about scaling fast and it's about making money really quickly. It is about living a really lavish lifestyle and it's about getting to the goal as quickly as possible. And this is alluring to a lot of entrepreneurs. This is sexy, this is attractive, and it also creates a industry that has absolutely no understanding of how business actually works or how wealth is generated over the long term. And that's why I want to share with you the concept that there are three types of money. The three types of money are cash flow, wealth and enterprise value. Cash flow, I hope you know what that is. This will not be a presentation about the definitions of cash flow, but this is the money you can spend at the end of the month due to the operations of your business. Then there is wealth. This is what compounds because you put your money into investments that you don't control. These are your long term stock investments, real estate investments, private investments, whatever you invest in. And the third is enterprise value. That is what your company can sell for if you ever go to market and you have a buyer for that business. Now, most entrepreneurs in this crazy world that we all live in focus on them in that order. They think about cash flow. In my business, making enough money so that I can pay for my life and have this great lifestyle. Then they focus on wealth building. I'm gonna take part of that cash flow. I'm gonna put it into long term investments so that I can retire one day. And then one day when I've done those two things, then I will think about building a company that has enterprise value and maybe I'll have a business that I can sell. Almost every influencer in the entrepreneurial world will talk about money in that order. I can also tell you, because I have been in this industry for two decades and know every entrepreneurial influencer that talks about this stuff, that most of them are broke. Most of them have no wealth. They have tons of cash flow, but they have no wealth and they have absolutely zero enterprise value. They do not have businesses that they can sell. So my invitation to you as an entrepreneur who is in the dirt, in the grind, building a company that you want to be proud of, is to flip the order of these three types of money to think about enterprise value first. Because if you build a company that you can sell one day, then you can invest it into whatever you want and you will never have to worry about cash flow ever again. One of these two approaches, the cash flow to investor to enterprise value takes an entire career. But if we flip the model and we talk about enterprise value first and we build towards that, it loses in the short run. It does not make as much money in the short run. And I'm talking one to three years, it does not make as much money. But after about three to five years, you start passing pretty much everybody else in the world. And the people who follow that model, the enterprise value first are not usually the people who are flashing fancy lifestyles on the Internet. They are not the people talking about how much money they're making. They are in the dirt for three to five years and then they build a company that is worth something. Alex Hormozi once told me that I should have a headline on my sales pages that says, I help entrepreneurs make so much money that it causes an existential crisis. And they will realize that money doesn't make them happy. Alex said that's the ultimate damaging admission. That would be a, that'd be a great headline. I should probably use that one day. And the reason that he said that is because the enterprise value approach first looks very slow for one to three years and then all of your money ends up coming in in one chunk. But this is, I think, a better way to build a business that lasts. So today, what I Want to walk you through is how we're implementing this throughout our community and how we are changing the structure of some of the deals we do and the brands that we invest in to be enterprise value first. And what I think that this will do for you is give you a different frame to think about your business and it will show you some strategic moves that you can make that over the next one to three years will dramatically change your enterprise value. So let's talk a little bit about how we got here. I started like most of you, just wanting to make something happen, wanting to start a business that paid for my life. And I spent 10 years building up a skill set of Internet marketing. And 10 years into my career, I discovered E commerce. And I discovered that almost everybody in E commerce selling physical stuff knew nothing about marketing. And if I applied my skillset of knowing marketing to an E Commerce brand, that I could beat almost everybody in the industry. And this is why you might see if you follow me on Instagram or if you're on my email list, you'll see us brag on our students who have $25,000 launches or $100,000 launches within their first 30 to 60 days. It's because we take a marketing approach of generating leads and generating demand first. Then we launch the business to that audience and is a great way to kick off the start of a business which makes it more likely for them to build $1 million business over 12 months. When I was building my E Commerce brands, I was able to beat most of the people in the marketplace. And over a four year period, my partner and I took our supplement company to about a $10 million run rate. And and we sold it to a private Equity Group in 2017 at a valuation of $16 million. We ended up not getting all of that money. That's a story for another day, but we got most of it. And I'm sharing all of this with you because I learned in that process that the money was made in the value of the company. This was something that I did not know or understand until a year before we sold, when we started thinking about what is this company worth? And it helped me understand that cash flow in the short term was not where long term wealth was built. In fact, my partner and I were on salary at that company of $60,000 a year for the first, at least two, maybe three years of the business. And then we had this company that was worth millions of dollars. This was not the model that would spit off so much cash flow that we could drive Lambos and look cool on the Internet. This was the business model. This was the approach that over a course of a few years would make it so that neither one of us would have to work ever again. But I did not know this until almost 15 years into my entrepreneurial career. And this is why I want to share this with you. Because if I had known this 15 years earlier, it would have shifted the way that I did business over that period of time. Over the recent years since my exit, I have been investing into other brands from our community. At capitalism.com, we raised a fund called the Capitalism fund. We raised $1.6 million in March of 2020, which is about the worst time in the world to raise capital. And it was. It's a small fund, but we've been investing into e commerce brands and pushing them in the direction of building enterprise value that grows their business so that they can have an exit that sets them up for life. I love the concept of bringing resources to the table to help entrepreneurs make this shift that I had to figure out all on my own. Because if we can bring capital to the table, advice to the table, if we can bring relationships to the table that free up the entrepreneur to build enterprise value, now, we can build something that is really special. We can build brands that not only make a difference in the world, but make a difference in that entrepreneur's entire generational financial family tree. That's what we're here to do. Now, again, in this crazy Internet entrepreneurial world, it is easy even for me to fall into the trap of talking about selling memberships, selling courses, monetizing things that are cash flow, that pay for the operations of the business. But the real play that we're making@capitalism.com and that I'm making as an entrepreneur and someone who trains other entrepreneurs is to build enterprise value through the community that we are building@capitalism.com and the thing that jazzes me up more than anything is the idea that we as a community have all of these relationships and these resources that we can invest into the entrepreneurs that are doing cool things. And as a result, that business and that entrepreneur get to blossom in a way that they could never have done if they were doing all on their own. In fact, coming up here on the channel, you're going to see a case study with one of the brands that we invested in. The brand is called Integral. The entrepreneur's name is Jake. And Jake built a brand all on his own to about $50,000 a month. We break down how he did that but the real shift for him happened when, when we came on as partners, mentors, investors, advisors, and we brought these relationships and capital to the table. That freed him up to be able to cast a much bigger vision for the company. And as a result, that company is now worth about $5 million instead of about half a million dollars. So it's 10x in terms of enterprise value over about three years. And now he's able to cast an even bigger vision that he could have never done if he was operating as just a solopreneur. And this is the shift that I want you to be able to see and that I want you is possible for you. Because when you're starting out and you're in the grind and you're in the grunt, all you want is to win by having a million dollar business so that it spits off enough cash so that you can live a different lifestyle and not have a full time job. I get it, I've been there. That was me too. But I had no idea the amount of growth that could happen once I shift the perspective to thinking about growing the value of the business rather than spinning off more cash flow. The most valuable thing, the most valuable asset that you will ever build is your business if you are thinking about enterprise value. But if you're always thinking about cash flow, it's going to be hard to make the strategic moves that are necessary to build that enterprise value. Now what's interesting is this is a recurring pattern that I have seen multiple entrepreneurs, including brands that I have invested in, fall into this trap of once you have a million dollar business that's spinning off cash flow, the question becomes, how do we get even more cash flow? How do we milk this as a profit engine? So you start making decisions that are solely based on generating short term cash flow rather than building the long term enterprise value of the business. And as a result, things just start to fall apart. They launch too many products, they get really aggressive with just trying to get buyers for a specific product so they own more market share. They start doing things that are all intended to milk this thing for short term cash rather than build something that has enterprise value over the next three years. So let me share with you what we're doing differently with some of the brands that we've invested in in the Capitalism Fund that are working out. There's a handful of brands that have done extraordinarily well because we've shifted a few strategic pieces and these are things that you can think about implementing into your business as well. There's a snack company called Sinless Snacks that we invested in. And one of the strategic moves that we made for this business is we partnered the brand with an influencer that has a really big following in the space. And the reason we did this is because now we have a distribution pipeline that is unique to all other brands in the space. This is an influencer that people go to and pay $20,000, $50,000 to talk about the business, to talk about their products. We built a personal relationship with this influencer, which takes a long time. And it's a genuine relationship. Literally, he was at my house having dinner last night. This is somebody that has met my children. This is a real relationship. And we put together a structure in which when we work together, the brand grows. Why? Because when he talks about a product, there's new exposure for every product that we want to release. What this does is it gives us a distribution pipeline that is different than just putting a product for sale on Amazon or running ads to a Shopify store. We now have an audience that we can launch multiple products to, and everyone has an incentive for that brand to win. So that's one of the pieces that we brought to the table for this business in order to raise the overall value of this business. And the minute that deal was signed, the value of the company doubled. Why? Because if we go to an investor and we say, hey, we have this snack brand that does $100,000 a month, what's it valued? I mean, not very high. Now, the minute that that deal was signed, the value of that business doubles. Why? Because if we raise capital for that business and we can show that we have an influencer that is part of the business who has an incentive for that brand to win. And we have a predictable way to get every product that we want to release out to the world, that is a more predictable way to forecast growth for the business so we can raise capital at a much better valuation because we have that relationship on the cap table for the business. Once again, these were things I didn't think about when I was growing my businesses. I was thinking about sponsoring influencers so that I could get more exposure from my products and get a short term win. I wasn't thinking about creating incentives for other people to promote my business, but now I can do that as an advisor and an investor in the businesses that come through our community. The second thing that we're doing to that business in order to raise its overall value is we're looking at other brands in the industry and saying, where could there be crossover promotions with this brand versus this brand. And could we buy one of those companies? Could we invest in one of those companies? There is a brand from our community that we have a great relationship with and we're talking about buying a piece of that company because there is a audience that is perfect crossover with Sinless snacks. And we love the operator of this company. He doesn't want to leave. He's super talented and we think that we can help him grow. And these two brands can promote each other. Oh well, this does a couple of things. One, it gets us access to a new deal, a new opportunity. Second, it gives us access to a new audience. Third, it gives our influencer that has equity stake in our other business, another suite of products to promote. So by bringing these relationships to the table now, we're able to raise the awareness of all these products and raise the equity value of these companies. But there's another opportunity here and we're going to do a full video breakdown on the mindset and methodology behind how this works. But when you have multiple businesses that are partnered up and have shared ownership, you can pursue what is called a roll up. A roll up is when you bring multiple brands in the same industry together and you sell them as a package. When you bring multiple businesses together and there are resources or there are team members that work on multiple brands in the portfolio, it becomes a more attractive investment for the big players that want to buy companies. And so when we think about cash flow, we're thinking about how do we sell more of this snack. But when we're thinking about raising enterprise value for the businesses in our portfolio, we're thinking about what relationships we bring to the table, what other brands we want to partner into this portfolio, what strategic moves will raise this value over three to five years, not just what will create cash flow in the short term. So that is how we're approaching brands inside of our fund. Of course, a business still needs to be profitable and focusing on sales is still a very necessary, if not the primary focus of the person who is in charge of the company. But when you can shift the thinking into what is beyond just the short term cash flow, now we can place those chess pieces on the board that over three years make it a much more attractive company for someone else to buy. Now, sometimes that means that a company needs some short term cash in order to pursue the next stage of the vision. So let me give you another case study of how we're working with one of the brands in our portfolio. I mentioned one of our brands Integral earlier, which has done a great job of 10xing over the past three years. But now the founder has a much bigger vision than what he could have done all on his own. And in order to fund that next piece of the vision, it needs more capital. And we have put in more capital into that business. But also now we're at a position where we can say, okay, it makes sense for us to raise outside money to fund the next chapter of this vision. And here's the clincher. This is the big takeaway. Because we've done the foundational work of raising the value of this company. Now if we go raise outside capital, which we're actively doing, we do it at a valuation that doesn't compromise Jake's long term vision. It supports his long term vision. We're not selling a company for two and a half million dollars. We're raising capital at a $5 million valuation because we've done the foundational work of bringing it to that value. And we can cast a vision based on the resources and relationships that we have for it to grow beyond that. Something I'm really excited about@capitalism.com, something I've wanted to do for years as a company, is we're building a marketplace. And the marketplace allows for us to list the brands from our community and actually advocate for them and then crowdsource a capital raise from the community. And most of the time when you're doing a capital raise, you're going out and looking for $50,000 checks, $100,000 checks. And my dream has always been to treat it more like a community. I love the idea of doing deals with a community. That gives me goosebumps when there's a, a large number of people who all have an incentive for something to win. So the way we're structuring it is our minimum on an investment is not $100,000, it's $3,000. So we can crowdsource the capital that we need from accredited investors who also have relationships, who also have ideas, who also have experience. And all of a sudden, one, we can now support this brand in its next chapter of growth. And we have 200 really cool people who are part of this business and have an incentive for it to win. This does a couple cool things. Like, for me, as the leader of the company is where I get really excited. First of all, I can now go to the entrepreneurs in our community, like Jake, and raise capital for them. Number two, what this does is it allows the community to come together and bring resources and align Their incentives for everyone to win together. When we launched the capitalism fund in 2020, we had a meeting at my house. And during that meeting with all the investors and all of the brands that we had invested in, I told the group, I said, hey, I think this is the first mastermind ever where everyone has the same incentive, and it's for us to have an exit together. It's for the brands who are here to be able to grow and exit and for everyone here to win. So this isn't a mastermind where we're going to charge a big fee so that you can learn the insider secrets. This is a group that all has the same intent, and it's for the brands in here to win. That brought so much purpose into what we do here as a company. Beyond selling memberships or beyond selling a course or selling event tickets, it made it so the company had a vision of each person coming through our company and us all having an incentive for them to win and bringing the resources and the knowledge and the relationships that would make it easier for them to have that success. Now, we are able to do that on a much wider scale because we built this marketplace that makes it possible for investors to find the deals that they want to invest in and be part of that business's growth. And it's our job to mentor the entrepreneurs in our community so that they're ready for that type of an opportunity, so that they are ready for the exposure to hundreds of investors who might want to advise or invest in that company. And until that business is ready, it's our job to keep them on the sidelines and mentor them until they have a business that can handle that type of exposure. And that is a different playbook than than just launching four products and getting them to 25 sales a day. So I built and sold a company in 2017 that made up the majority of my wealth at the time. And then I started a fund to invest in businesses. But now we developed a different tool set. We've developed a different skill set and different relationships where we can now bring in investors and relationships and capital to support the businesses that have a much bigger vision than what they could ever do on their own. So what does that look like? What does it look like for us to focus on helping those entrepreneurs build their equity value? Well, earlier this year, we took a minority stake in an infrastructure company called Sellerplex. And Sellerplex specializes in creating shared resources and hiring outside pieces for four physical product brands so that the founder can stay in the owner's seat. The owner's model is something that I teach to our entrepreneurs. It's a methodology of staying in the owner's seat, staying in the visionary seat, and then creating partnerships with other people that do the areas of the business that grow, that add value to the business. But your job is to stay in the owner's seat. It's great on paper, it's a great philosophy. But it can be difficult for an entrepreneur to execute when they're thinking about cash flow all of the time. So we created this partnership and we invested in this company that actually slots in to these businesses and does things like inventory management and marketing and influencer campaigns and TikTok Shop. And now we don't just have a relationship with an advisor that we can bring to the table. We can actually go out and hire people or partner with Sellerplex to implement a lot of the strategies that we want the entrepreneur to follow. So that's something that we do inside of our fund. It's also one of the resources that we make available inside of the capitalism incubator, which is where we're nurturing entrepreneurs to be ready to handle outside capital. We're nurturing them to think about enterprise value. We're getting them out of the weeds and back into a visionary mindset so that they can prepare for an exit or a capital raise and build an eight figure vision that would compel an outside person to buy that company. So that's one of the things that we do tactically to be able to raise the equity value of these businesses. The next thing that we do is we pursue relationships with advisors, influencers, investors and people in our network that we think would add value to the brands in our portfolio. For example, there is a supplement company that we invested in that attracted the interest of someone who was the former CEO of a similar company that sold for about $300 million. That's good. And we've built just an acquaintanceship with this person, but there's a potential for that individual to come on and serve as an advisor to this company, which would allow us to raise capital at a much better valuation and implement the owner's model to be able to free up that entrepreneur to continue building a bigger vision for the company. So the more that we nurture the mindsets of these entrepreneurs and the more that we go out and build these relationships with opportunities that we can bring to the table, the more the equity and enterprise value grows of these businesses. And now we don't have to think about the day to day cash flows as much. Still important, obviously you need cash flow in order to continue operating a business. But because we're able to think about the enterprise value, we can grow something that is more in alignment with our vision rather than something that is just going to pay the bills of the founder. Because guess what, if that's your focus, you're probably going to fail. So how do you make the switch? How do you make the shift from having a mildly successful business that might pay for your lifestyle to pursuing a much bigger vision? First of all, that is a strategic decision. It's totally okay and normal to just want to have a seven figure business that pays for your life, that you operate for a very long time. One of the, I think undervalued things in this crazy entrepreneurial world is the value of having a cash flow business that grows 10 to 20% per year for 10 years. The company returns on those are fantastic. But if you want to make a play, if you want to pursue something much bigger in a shorter timeframe, the playbook does change. And the thing that changes, first of all is realizing that once you're at seven figures, you need a different level of support. You need a different level of contribution from the people that you're working with. It's no longer a good idea to have all of your work done by outsourcers that you're working with on upwork. It's no longer sustainable for you to be managing a bunch of outsourcers who do every little thing. And it's probably unlikely that you are going to become an expert at any one thing in your business that will take you to eight figures. What this means is that you need the support from other people. This can come in the form of hiring better people, which is it's own animal and its own adventure. It can come in the form of partnerships and it can come in the form of strategic relationships with advisors. For example, when I sold my company, one of the things that the private equity group sold us on was the fact that they had built $50 million companies and they would bring that list of resources and experience into our company. That ended up not happening. But I understood what they were saying. When you are a solopreneur, it is very hard to become an expert at any one thing that drives the company to eight figures. When you are managing all the chaos that is going on in the business, outsourcers on upwork and emails and interruptions from people who have opportunities that they want you to consider and should I work with this agency or this agency? All of your time gets sopped up by operating the company and you're no longer in a visionary seat to be able to cast the next chapter of the company, that's what we have to fix. That's what needs to be solved for in order for you to go back into the owner's model. The way we do that practically, we@capitalism.com took a stake in an infrastructure company that we partnered with and we now plug into the brands in our portfolio. So some of the first things that we free up are inventory management, some marketing, influencer relationships, TikTok shop management, all of the things that the entrepreneur wants to pursue but doesn't have the ability to do because they have no time. When we free up that time, all of a sudden the entrepreneur can think about what he wants the company to be. A good example of this is one of our clients. Her name is Vanessa. Hi, Vanessa. We're so proud of the transformation that she is making inside of the capitalism incubator because she came in with a business doing $1.7 million but very little profit. And she was spending a lot of her time managing inventory orders and keeping SKUs in business and answering a lot of emails and just the operational things that happen when you run a low seven figure business. We brought in our infrastructure to free up about 60 hours a month of her time. Those relationships actually drove down her costs. So she had more margin, she had more profit in the business, and now she has the space to launch products that match her vision, not just the products that are going to win on Amazon or that the data says would be good. She can now launch products that match her vision, and as a result, the enterprise value of her company will go up at least a million dollars as a result of her going through this process. This is how we start to shift the entrepreneur out of this operator's mindset into an owner's mindset. We free up the things that are taking up a lot of their time that they're not actually that good at, and then we place them back into a visionary seat, which requires that you give up a little bit of control so that you can have the space to think clearly about what you want to build next. The second strategic shift that happens when you're at about seven figures is you start thinking about the product line that you want to launch that may not match what all of your internal data that got you to this point point suggests. For example, a lot of people will look at the sales volume on Amazon.com and they will look for gaps in the marketplace or they'll look at what other companies are selling with Facebook ads, and that is a really great way to get to seven figures. But that is almost never the playbook that takes you beyond that. In order to break out into that next chapter of growth, you start thinking about launching the products that are specific to the person that you're serving, the audience that your business is there to support. Sometimes that means creating a brand new product that the marketplace has never seen before. And there's no data to suggest that that product's going to work, but it solves a specific problem for your person. Oftentimes those products don't match the Amazon Data or the Helium 10 data or the Jungle Scout data. That said, this is going to be a winning product. But because you know your audience so well and you know the problems that they deal with, and because you have the customer list and the sales pipeline, meaning you know how to sell product, we can now put our energy into launching those types of products that change our little corner of the universe, that change our industry, that impact our audience specifically. Those are the types of products that can really break out. So when we start to make this shift to go beyond seven figures, we're looking at freeing up the entrepreneur and now operating more creatively in order to take some strategic risks. Because you can three step your way to a million dollar business, it's a little bit harder to three step your way to a $10 million business or $50 million business. Getting there requires that you think more creatively and you solve problems for a specific group of people. In order to support the overall growth of that process, you might need capital, you might need to think about raising capital from outside investors, which can be done. When you have a track record of building a seven figure business and you have put the strategic pieces in place to support the next chapter of your growth, which is something that you will see play out in the next few videos here on YouTube. You'll see what, why, and how we're raising capital for businesses to be able to support their next chapter of growth. Sometimes it makes strategic sense to not just take all the profit out of the business and put it into the next chapter, because that makes you feel weird and scared and it feels risky. But it makes all the sense in the world to raise outside capital from people who are supporting the business. And now you have the ability to strike, to go in the direction that you want to go while still maintaining control over all the decisions of the business. So the pivot point is freeing up yourself from the things that you shouldn't be doing, which is, by the way, a hard transition for a lot of entrepreneurs. It's one of the reasons why we partnered with Sellerplex, our infrastructure partner partner, and we slot that into our brands and the brands inside of the capitalism incubator. It just makes it easier for people to get out of the weeds because there's actually talented people who know what to do. The second thing is you start looking at launching products and going in a direction that matches the vision and you start building the relationships with the strategic advisors and the investors and the influencers that can support the next chapter of the business. And then you might raise capital in order to support the growth of that. This is a different playbook. It's a different playbook than getting to seven figures, but it's the playbook to building a business that has enterprise value. And what we're doing here@Capitalism.com is building the different resources that make it possible for an entrepreneur to go through that transition. Yes, we sell memberships and we sell communities for entrepreneurs who are getting to the first million and we mention those entrepreneurs and have a pretty darn good track record of helping entrepreneurs get to seven figures. But beyond that, there's a different set of resources that are necessary. You need people, you need capital, you need mentorship, you need access to relationships that you wouldn't have if you have your nose and your computer and you're operating on a day to day basis in a business. So that is why we have the capitalism incubator which helps entrepreneurs start to make this transition to building enterprise value. This is why we have the fund that puts capital into businesses. And now we're launching a marketplace on capitalism.com that helps those brands that are ready for investment crowdsource a raise for their business to support the next chapter of their growth. Early on in my career, this is back in like 2012, I was part of a mastermind with people that I thought were were light years ahead of me in terms of business success and they were in terms of cash flow, they were making way more money than me. They were the leaders in the space at the time. And all I wanted to be was like them. I wanted to make as much money as them. I wanted to be as in control of my business as they were. I wanted to be able to make fast money like a lot of them were able to do. And now if we Fast forward about 13, 15 years, there's a few people in that group that built companies that could be sold, me being one of them. Most of the people in that group have not. And they are still doing the things that they were doing 10, 15 years ago. And some of them have gone completely out of business or they started entire new businesses because those big cash flow businesses had a short time frame and they burned out. I wanted to be like them, but once I shifted into building businesses that I would call real businesses, a lot of them reached out to me and wanted to be like me. Now I still am not as good as a lot of them in terms of generating short term cash flow or launching products that have really high margins or selling corporations. Actually not very good at selling that kind of stuff. But because I put my skill set into building things that could be scaled and sold, I ended up passing a lot of those people and they ended up reaching out to me and saying, how did you do that? Or what did you do differently? In the same way I look at people that I was in a group with or that I met that passed me people that in the same timeframe, looking at what I did versus what they did, they did way bigger things than me. And the example that I'm thinking about right now is Andrew Wilkinson. I was at dinner with Andrew Wilkinson eight or nine years ago when he didn't have any following or any notoriety in the space. And on paper, I was beating him in the measuring contest that is entrepreneurship. I may have been making more money than him at the time. He now has a billion dollar portfolio. I am a modestly successful entrepreneur. There's a chasm there. What is the chasm? It's the same difference that put me ahead of the people of the group that I was once a part of. And that's that he put all of his energy into creating companies with enterprise value. And I did some of that and have been successful. But he went all in on that direction, punted the payday even further. He bought companies, advised companies, and he built a portfolio. And I have watched that transition and said, hmm, okay. I thought I understood it when I had an exit. I thought I understood it when I saw some of my investments mature. I thought I understood it when I passed those people in the mastermind. But now I'm really starting to understand the difference of how your wealth and your life can unfold. When you focus on the long term valuation of the things that you own versus the short term cash flow of the things that you control. It's a chasm of a difference. The transition to acquiring help in the forms of employees or outsourcers is bumpy. It can be hard and it's a different level of risk that a lot of entrepreneurs are not willing to make, which is why, why they don't go in this direction. But I'm thinking about a conversation I had with Gary Vaynerchuk back in 2019. I think it was, I was sitting at dinner with him, Lewis Howes was there, Jay Shetty was there. There were, there were like six of us around the table. And he had just acquired a company called 1:37pm it was a me it, I, I think it still exists. It's a media company that he had in the, the Vayner X portfolio. And he told me that he acquired this business and that they were making all of these investments to grow this media channel. And I asked him, I said, Gary, how are you after acquiring this business, how are you funding the investments to make this business grow even bigger? And he said the most interesting thing he said by driving down profit margin. And I was stunned because what he was saying was I'm reinvesting all the profits into people growth and opportunities to grow this business. And I was like, wow, he really doesn't care if he loses. He is not thinking about protecting the profit margin. He is thinking about reinvesting as aggressively as possible to make that business grow. That takes a different level of confidence, that takes a bit of comfort in losing. And I don't know that most entrepreneurs have that type of attitude that Gary Vaynerchuk does. But if you look at what he does, he puts money into a business like Empathy Wines and in a couple years it's a nine figure exit. He grows a company off of his audience and he sells it like he did with Rezi, he did with Empathy. He's done with several other brands as well. So that takes a different level of commitment and sometimes capital to be able to make that transition. And sometimes that means that the most appropriate thing to do is not to reinvest all of your capital, not to reinvest all of the profits into the business so that it is tied up. It's to go out and partner with investors who fund the next chapter of growth. And that is something that we actively do inside of the fund and something that we're doing with the next chapter of our company, which is the capitalism marketplace. When Alex Hormozi was preparing to sell Gym Launch and Prestige Labs, a story that he tells publicly in his content, he lived here in Austin and we spent some time together. And I listened to Alex way whether or not to sell the business. And when he decided to go in the Direction of having an exit, he had to make some changes to the business that compromised the short term cash flow of the business. For example, I remember Alex sharing with me that the ads that they were running that didn't feature his face didn't convert as well as the ones that did feature his face. And there was a transition there in which they had to find new messaging, they had to find new faces, they had to find a new way of saying things in order to replace the productivity of Alex being in the ad. Why does that matter? Well, if Alex can't step away from the business, the business isn't worth as much. This is part of the transition of making investments into equity value, into the enterprise value of the business versus the cash flow. If Alex was only focused on squeezing out as much cash flow as possible, then he would have just kept running more ads with his face on it. But he would have never been able to step away from the company. And that would have compromised the value that they would have gotten when they exited the company. So that was one of the big transitions they needed to make, which hurt the short term cash flow of the business. And sometimes when you are making the pivot into I'm going to build something that I can sell, you will have to make decisions that don't look good in the short term, but they build that long term enterprise value that way make up for any lost cash flow that you miss out on in the short term. It is really hard to build a business with enterprise value, as a solopreneur found. It's possible. And there will undoubtedly be case studies of people who build AI companies that sell for hundreds of millions of dollars. And they were the only founder that is 100% coming. But as of right now, the idea of being a solopreneur caps out at a few million dollars. It's really hard, and I'm sure there are exceptions, but it is very hard to go beyond seven figures when you are doing doing everything yourself. This is why people who have partnerships statistically win more often than people who are solopreneurs. This is also why at a certain point you have to make the decision of do I want to have a little lifestyle business or do I want to learn to deal with people? Do I want to learn to lead? Do I want to learn to accept support from other people? And that is its own transition. Because if you raise capital from somebody else, there is a part of you that feels a little bit indebted to the people who backed you. That's healthy, That's Normal, you want to do other people. Well, one of the traps that we fall into as entrepreneurs is we're thinking about what we can extract from the marketplace and we're the only one that is affected by that. But when you have a partner, when you have employees, when you have shareholders or investors, you have to make a switch into thinking about creating value for all stakeholders. That means customers, that means investors, that means employees, and it means you. When it's only you, you can fall into the trap of just pulling as much cash flow as possible. When it's not you, then you can actually create things that have ripple effects, sometimes for decades or generations, and that's when you can create generational wealth. I think the clincher there is not necessarily that bringing on a partnership makes you more valuable, but when you can flip your energy into being about other people, that's when you do things that actually matter. That's when you build something that might be attractive for somebody else to buy. Because you can't do that when you're only thinking about how much short term cash flow you can pull off the table and put in your pocket. That's only you thinking about you. And therefore, how are you going to build something that is valuable enough for somebody else to buy? They don't, because they don't want to buy your job. They don't want to buy the thing that pays for your lifestyle. They want to buy an asset that is creating value for other people. And therefore, one of the steps that might be necessary in the transition is for you to learn how to have other people who benefit from your success in the form of investors, partners, employees and other stakeholders. That's a hard transition and it's a strategic decision that you have to make for yourself. But if you want to make that transition, that is something that we have resources to be able to help you do. Over the coming weeks, I'm going to be sharing some new things with you. I'm going to be sharing with you some case studies of brands that we've invested in so that you can see what the advice looks like and what the transition looks like to go from a seven figure company to casting a vision that is much bigger than that. You're also going to see a preview of some of the resources that we're building@capital capitalism.com including the capitalism Marketplace. This is something we've been building for the last year. It creates the opportunity for investors and brands to come together. And I'm really excited about this for our community because this is the opportunity both for people who are investors to get involved in brands that they're excited about. But it's also the opportunity for the brands that we've mentored and nurtured and to now have this support in form of capital and relationships so they can start to make this transition. We're doing some tests on this right now, and if they go well, it will be a tool that will serve our community for years to come. If you want to be on the investor list, by the way, to see what deals we're nurturing, you can go to capitalism.com marketplace. You'll see the deals that we have active right now, and you can get on the list for the deals that are coming down the pipeline. You need to be an accredited investor in order to participate, but you can go see the deals that we're working on no matter where you are in your journey. Another thing I'm going to be sharing with you is a model that is beyond anything that I have done myself. But I have met some individuals who are pursuing a bigger way of playing the game that I find really interesting. And it is 100% focused on enterprise value and how you drive that up as much as possible and as quickly as possible. It's beyond my skillset and my knowledge base, but it's inspired me to think differently about how I advise the entrepreneurs in our community. And I want you to see some of the takeaways that have come from learning their model. So stay tuned for what we have coming on the channel. I hope it inspires you to think bigger. If you made it this far in this video and you're still at the beginning of your journey, the best place for you to get plugged in is to download our free resources or over@capitalism.com playbook. And if you're already at seven figures and you're looking to make this transition, you should at least check out some of the things that we have available to help you stay in the owner's seat. Because the resources that we bring to the table make it possible for you to actually build a business that matches your vision, not just something that pays for your lifestyle. And you'll feel a lot less alone in the journey as well. These are the things that I wish existed when I was building my brands. All right, everybody, thank you for watching. We're really excited about some of the things that we have ready for you@capitalism.com so I appreciate you being part of this journey. Thanks for watching and I'll see you next time.

And now a quick word from Tristina Tim, one of our members from the capitalism.com community.

We joined the incubator because we knew the things that we didn't know. So we didn't know E commerce at all. And we needed that. We needed somebody to tell us where to go and what to do. Right now we are on track to hit the 3 million mark this year. However, I think next year is just going to double that. We have so many plans for the future and just executing the plan that the incubator brought us, it was fantastic. Step by step, what to do, how to execute it. And then if we did fumble the ball, we had somebody there to help us through it and walk us through our plans for the future. Of course this year we have 3 million and then next year 6 and we're hoping to get to 10 million within the next three to four years. Freedom is everything to our family. I homeschool and I love that our family can wake up together every morning. Nobody's running off to to school, nobody's running off to work. If I had to work at like a 9 to 5 job, there's no way that I could also homeschool. I get to set my own hours and they're not as many hours as a normal job would be. So that's really fantastic. But again, freedom is everything for our family and I don't. It's strange that our kids don't know any other way. Mom and dad are home every day. I would describe the kids capitalism community as family. When you go get so many tips from people, we give tips and I think that we're going to start to work with a lot of our fellow community members and everyone really is rooting for everybody else. Nobody is like in competition at all. Like everyone is everyone's biggest cheerleaders.

If you found value in this podcast and you're ready to go Deeper, here are three resources where we can help you. One, you can grab my book 12 months to 1 million on Audible or Amazon. It has over a thousand reviews and it's the playbook to building a seven figure business. Second, you can join our community of entrepreneurs who are following a plan to build a 1% net worth by building businesses and investing the profits you can get plugged in@capitalism.com 1. And third, if you're looking to go deeper and build a seven figure business that you can sell, you can work closely with us inside the Capitalism incubator and you can get on the waiting list and find out what we do over@capitalism.com inc. That's capitalism.com incident.