I Sold My Business

You're listening to Freedom Fast lane, presented by capitalism.com this is the show about building businesses and investing the profits so that you can live life on your terms. And now, your host, the future owner of the Cleveland Indians, Ryan Daniel Moran.

Hey, guys, Ryan here. Welcome to Freedom Fast Lane. I am actually coming to you today from Tazewell, Tennessee, which is also known as the middle of freaking nowhere. My family owns property here in Tennessee. When I was a kid, we used to vacation to this place called Norris Lake about every other year. And when we got older, my dad had really fond memories of this place, so he ended up buying a property here. And we now vacation here as kind of a family tradition. So I'm just at the tail end of my vacation here, and this vacation has felt well deserved because there's been something going on. Actually, there's been several things going on kind of behind the scenes that I have kept close to my chest that I finally get to talk about here on the podcast. And part of that is the fact that about six months ago, my business partner and I decided to sell a portion of of one of my physical products businesses and we completed that deal. And I want to talk a little bit about that deal today. So I want to back up a little bit and kind of give you a little bit of context for this because what some of you don't see here on the podcast is that public facing, I have Freedom Fast Lane and we put content out on capitalism.com, but what I think a lot of people don't see or overlook is the fact that I have made the vast majority of my wealth. And by vast majority, I mean, like more than 90% of my wealth in my physical products companies like Foxbrim, which is a beauty company that I purchased, like Sheer Strength, which is a sports nutrition company that I'll talk about mostly today. Zen Active Sports, which was a yoga brand that I've documented here with my buddy Sean Coyne. But a lot of people know me here for the podcast, which is kind of interesting. But behind the scenes, most of my income and my wealth has come from my physical products businesses. And there have been some things that over the last six months or so I have had to kind of keep quiet. So here on the podcast, I have talked about other things or done guest podcasts and things like that. But what's been going on behind the scenes is that a little less than a year ago, my business partner Matt and I kind of looked at each other and said, what do you want to do next? We've grown this business to as big as we know how to take it. And I don't know how we're going to take it to 50 or $100 million. We took it to the point where we were about a $10 million company. We're doing, you know, six to $800,000 a month on Amazon. We had just broken into retail and were in about a thousand retail stores across the country through the connections that we made in the tribe and, you know, our retail partners. And we made a whole bunch of mistakes getting there, but we had gotten there. And the question then came up, okay, what the heck are we going to do now? Because we were a small team at the time. We were a team of six. We pared down to a team of four. Four. And we were pacing eight figures. But growing an infrastructure and a team that bringing on the right people was just something that we didn't have experience doing. So it was at that time that we said it might be time for us to go out and get some help or sell the company or let's look at our options. And what ended up happening was we ended up finding just the perfect partner. And we found it by working with brokers and working our network, and we found just what we consider to be the perfect partner. That was a capital group that purchased a majority stake in the company, which allowed us to take some money off the table. And I still, and my partner still owns a significant portion of the company. So we're still vested in the growth of this business, but we have sold a portion of that, and we're benefiting from the expertise of working with this other group. So to make a very long story short, I have exited what was my primary physical products business, and I've put what is now the biggest check that I've ever received into the bank. And when you combine now the businesses that I have built and sold over the years, I have officially received eight figures in cash for selling my businesses, which is a pretty cool feeling. And I still own some equity in those businesses. So financially, my life has really changed over the last few months. Although my overall strategy of growing physical products brands continues to be the same, because I still believe that a physical products brand is the most predictable path to. To making a difference and building wealth. But what I want to share with you today is a little bit of why we decided to sell the company, some insights into the deal and how it came together, what I'm doing with the money that I've received and what's coming next. So, again, it was about a year ago that my partner and I, we actually sponsored a big event with Amazon. We had some cool advertising deals come about as the result of being in Amazon's vendor program, which I have some mixed feelings about, which we can talk about on another podcast. Vendor has its positives and its negatives, but it was at the end of sponsoring one of these big events via vendor that we realized that we had something really special in our company. I think a lot of you who run physical products brands, especially those of you who are doing well on Amazon, overlook the opportunities that are in front of you. And Amazon is growing so quickly. All of the other businesses want to be like you. And that was what my partner and I learned, was that a lot of people had their eye on us, that all of a sudden we were the cool guys in town. So we were growing really quickly and we were getting retail opportunities. We were pursuing the opportunities that were coming our way. And we realized that we did not have the expertise to. To be able to sustain the growth that we had built. Once again, we were pacing $10 million or so, and we wanted this to be as big a company as possible, but we didn't have the experience to take something from 10 to 50 million or 10 to 100 million. So it was then that we decided to just start to see what's out there. Let's see if there's offers out there, let's see what kind of companies are out there that might want to partner with us. Let's see what types of deals are possible for us. And after going through several offers, we did come to one that we were happy with, and with a capital team that we were really pleased with that had the experience of growing businesses from 10 million to 50 and 100 million, and even taking some of those companies public. I hope to have some of them on the podcast to talk about their experiences and also to talk about how they plan to grow this business. What ultimately was attractive about working with this team was they had experience building infrastructures. And by infrastructure, I mean bringing on people. The first thing that they did was they brought on a CEO of the company. And when I sat down and was speaking with that CEO, his name is George, one of the first things I asked him was, what's your strategy? What is your strategy for growing a company from 10 to 100 million? And he had worked with big corporate businesses in the past, and he said, it's all about your network. It's all about the people that you know when you want to Grow a company, you're going to tap into the people that you have grown up with in the past and said, do you want to help this business as well? And we had Gary Vaynerchuk at our event, which was then called Freedom Fast Lane Live, our first ever event. And he said, kind of famously, if you want to grow a business from 1 million to 100 million, it's about people. It's not a strategy, it's not an algorithm. There's no hack. It is all about the people that you bring on board. So when George, the new CEO, said that, I was really encouraged and I was really enthused by that. So what was really fun for me to see is to see this team start to build around a company that I had built and see them come together and say, all right, we're going to gel together and grow this thing. And they were also flexible to. However, Matt, my partner and I wanted to be involved in the business. I chose to exit the operations of the business and move over into an advisor role, which means that I move into focusing on networking and strategizing. But I'm out of the day to day operations of the business. Whereas Matt decided to stay on and grow the business, focusing on where he is best, which is in product development and knowing the industry that we're in really well. So overall, and I guess to kind of recap this point, a year ago, we got to the point where we had grown this really great business and we were really proud of what we were doing, but we needed some help taking it to the next level. Both of us were kind of overworked and burnt out. We got more burnt out when it came to selling the business because that's a lot of work in and of itself. But we made it through and we have the right partner and we've come out on the other side with a new team that can help us grow some new strategies moving forward that I'll share with you over time. And we got to take a significant amount of money off the table and put it into our bank account. So for the first time in my life, I can comfortably say that if I wanted to, I could retire. And that's a really nice feeling to just say that I'm done. I can at any point say, I don't need this anymore, I'm done. So as long as I don't do anything stupid and I invest the money well, I have enough between my business exits, the businesses that I've sold, I have enough cash to where as long as I Follow the investment strategies that I talk about here on the podcast. And I don't do anything stupid. I'm retired. I'm good now. That doesn't mean I'm not going to work. I'll share a little bit about where I plan to take things next. But it is a nice feeling to know that I'm done. I'm retired. I've made it by the age of 30, which is, I don't think I've ever given myself the credit that I might be due about the fact that I'm 29 years old and I essentially am retired. We'll go into what the investment strategy looks like in a second, but first I want to go into some of the insights of the deal. Because once again, I said earlier that some of you who are on Amazon, I don't think you really realize what you're sitting on. And I would say that old school business people look at our businesses and say, you don't know what you're sitting on. And by sitting on, I mean I have somebody who's in our backroom Mastermind, who owns a large publicly traded company and he said, you guys don't realize the stuff you do doesn't happen in the old world. You growing multimillion dollar businesses out of thin air. These opportunities didn't exist in the past. Y' all should be very proud, y' all should be very excited at the opportunities that you are pursuing. So when we talk about the 12 months to 1 million strategy, the ability to take a product or a series of products and release them on a platform like Amazon.com and predictably get sales, those opportunities didn't exist 10 years ago. Another one of our backroom Mastermind members runs a pretty large, pretty sizable company. A lot of you would recognize the company and they have felt held back over the last few years because they had all these product ideas, but they didn't have a way to bring them to market. But as a result of working with us and having Amazon.com in their back pocket, now they can just innovate and bring products to market really, really quickly. And I think we've taken that for granted in our little entrepreneurial community. Now, I tell you this because the fact that we were so exposed on Amazon was part of the attraction for this other firm to acquire our business. It was part of the attraction because Amazon is growing so quickly. They wanted to learn those systems. They wanted to be a part of the growth because we were so heavily involved in Amazon and had great connections over there and could pick up the phone and call people at Amazon because we had a strong track record over there. And the fact that we sponsored events with Amazon and, and the fact that we're kind of on the cutting edge of these strategies made the acquisition of the business attractive. But it wasn't just Amazon. The fact that we were in retail and had diversification of sales was important. The fact that we do Facebook marketing, the fact that we have a customer list, the fact that we were in retail, these all played factors in the attractiveness of the deal. And I tell you this because a lot of you listen to me for Amazon strategy or business strategy when it comes to physical products. And yes, Amazon is incredibly important. I think a lot of you miss how much faster a business can grow if you do some off Amazon marketing, if you put in the hard work of learning Facebook ads, if you build up a customer and prospect list, if you are just running ads to get Facebook likes so you have an audience so that you have something that's attractive to a retail partner. If a retail partner looks at you and sees that you have 600 likes on Facebook, that's not very attractive for them to bring you into their store. It's also not very attractive to an outside person who might want to buy into your business, or an investor or a marketing partner who wants to be part of what you're doing. And then the other thing that made us attractive as a possible business to acquire was the fact that we were going someplace, that we stood for something, that we had goals in mind. And I tell you this because I know a lot of people who listen to the show just want to sell product, but if you have a mission and you're going somewhere and you have a very clear, direct target market, that's a much easier story for people to get behind. It's why inside of our brand builder Bootcamp, the first step is getting really clear on who it is that you serve and what. What it is that you're going to do to help that customer get closer to their goals. And that's going to come in the form of releasing three to five products that help them on their customer journey. Because if we're just selling ipod holders, that's very different than if we're serving runners and we have three to five products, one of them being an iPhone holder that is going to lead them closer to their goals. It's just easier to get behind and rally behind that company if you're going somewhere. If you have momentum and you're serving a very specific demographic or target customer. And finally, I'm speculating a little bit, but I think part of the attraction was the fact that my partner and I could be replaced in the business, made the deal possible. If we were not replaceable, I'm not sure that this deal would have gotten done simply because if we were the only magic sauce to the business, I'm not sure that the deal would have been possible. It's one of the things I love about physical products, the fact that you're building something bigger than oneself. But because we had a business that had some loose structure, but some structure that allowed us to be replaced, I think that made it a little bit more possible for the deal to get done. But at this point I'm speculating that never came up in our conversations. So, for example, if you look at the story of Quest Nutrition and we've had Tom Bilyeu on the podcast, he's also spoken at our events. He started the company, but the company became much bigger than Tom and as a result, Tom could exit the business and the business continued to run without him. In fact, as far as I know, he's not involved at all. All. And there are other people who are now running Quest and he is just the lead advocate of that business. Our deal allows me to be kind of similar. I'm incredibly proud of what we did over at Sheer Strength. I'm very proud of the products that we released. I'm really proud of the products that are coming down the pipeline. But it does not require that I show up every day or that any one person in particular show up every day. The business has a mission that is bigger than that and I hope that we have the same meteoric growth that Quest enjoyed as a result of following the strategy that they employed. So I have shifted into being out of the day to day operations and what I'm excited about is to be able to watch a business that has grown companies like ours into the stratosphere. I'm excited to watch them actually do it for a company that I'm a part of. I don't know the ins and outs of Quest Nutrition, but I think that they followed a similar path where Tom, if you're listening, please write me on Facebook and tell me if I'm right. But I believe that Tom grew it to a certain point and then a partner like, you know, a private equity group like we worked with came in and started to grow them by building out the executive team. And that's exactly what the team that took over my business is doing, is they're building out the executive structure. They are bringing in people who have been a part of big businesses in the past that are now using those same strategies to grow shear. And I'm very excited to now watch the baby that I had hand in birthing grow and it'll be interesting to document that experience. I've documented basically the entire experience of growing a company from 0 to 1 and then 1 to 10 and now I'll see what happens to go from 10 to 100.

Hey guys, you know that my financial strategy is two to build businesses and to invest the profits. And when it comes to investing the profits, I look for cash flow. I look for it to be backed by something real and I look for tax efficiency. It's why when I recently sold a business I called the good folks over at Four Peaks Capital Partners and today's episode is brought to you by them. You've heard them on the podcast before when I interviewed Mauricio Rauld on the topic of Mailbox Money and why investment funds could be a source of passive cash flow for some entrepreneurs. I use investment funds like Four Peaks as part of my long term strategy and I'd encourage you to go listen to the episode called How Rich People Generate Mailbox Money and you might want to check them out if you're looking for opportunities. Right now with asset prices as high as they are. I am mostly looking at cash flow opportunities, which is why I had them on the podcast. So make sure you check out that episode on Mailbox Money with Mauricio Rauld.

One quick point. This is partly why I haven't been doing income reports for the last few months, because I don't really know how to document income that I'm no longer the sole driver of. So it feels a little bit disingenuous to report on the success of a business when I'm selling a majority stake in the business and I'm no longer the primary operator. So I wasn't really sure how to navigate that. And also during the terms of the acquisition there were just things that I didn't feel comfortable talking about, so I moved away from doing income reports and I don't really know how I feel about doing them moving forward. I'd be interested in hearing your thoughts over at the Show Notes, but as of right now, my interest in doing them is low and I'd rather just do periodic updates of the different businesses that I'm involved in. So that's what happened over the last couple months. We decided to sell a majority stake. We found the right partner that team is now building the infrastructure to be able to grow us. I'm really proud of who we're working with and how things came together and I'm excited to see what happens moving forward. I'm also hoping that we get the members of the team here on the podcast to talk about their experiences and also what their plan is for growing a company like ours. Because this is new for me and also really exciting for me and I think it'd be educational for you to hear and benefit from their experiences. I want to move into now about what I am planning to do with the money because up until the day that I got the check, I had a lot of heaviness over what I was going to do with the money. How am I going to invest it right now? I feel like if you heard the episode that we did with Jonathan Twombly, we talked about how things are so darn expensive right now, I don't really feel comfortable investing it just about anywhere right now. And some of the best advice that was given to me came from my friend Kamal Ravikant. He's been here on the podcast before. He's an investor in Silicon Valley and incredibly well respected successful investor in Silicon Valley. His brother has been on the Tim Ferriss podcast several times. Kamal was a final editor of Tools of Titans by Tim I was walking over one of the bridges in downtown Austin, Texas and Kamal said to me, he said, hey Ryan, you know, if this deal goes through, the best thing that you could possibly do with the money is nothing for the first six to 12 months. Because your temptation is going to be to get rid of that money. It's going to be to put it in this investment, put it in that investment, just sit on it for a while. And I have almost 100% taken his advice. It's only been a couple of months now. In fact, it might only be like 30 or 45 days at this point. But I've almost taken all of his advice. The only thing that I am actively investing in is the things that I've been talking about here on the podcast. You might have noticed that part of my conversation has shifted more towards investing. That's because my interest has been in investing lately. So the only things that I have been investing in have been the investment funds that I've talked about here on the podcast and looking at capital preservation strategies like capital warehousing. So these are the things that I have played with or I'm looking at. But I am not just going and buying index funds. I'm not buying additional real estate, although there are some real estate syndications that I'll at least look at. But for the most part, for the vast majority, I am keeping money on the sidelines, except for the investment funds that I've talked about here on the show because I believe in them. All I care about right now is generating cash flow from the money that I have. Sitting around and taking a percentage of the money that I've received and putting it into these businesses allows me to basically have, you know, a six figure income, mostly tax free, just from, you know, renting out my cash, which is nice. I'm not going to lie. That's. That's a pretty nice feeling to have. So that's my primary strategy right now. Eventually I'd like to have the majority of that cash in things like real estate and other businesses. So I still continue to look for Shark Tank style opportunities with members of our tribe. And my strategy moving forward is going to be to create more of those types of experiences inside the tribe to court more of those businesses that we really believe in for me to back them with my capital and for us to bring in our team to grow those businesses. I love this model. I don't just blow smoke about physical products. I love the model of using capital that I have or we have and backing entrepreneurs in our communities and helping them grow by bringing in the right people. And that's going to be the focus of the community of the tribe. Moving forward. I think you're going to see a really cool and noticeable up leveling of of our communities. Both because my brain has changed and I've evolved as an entrepreneur as a result of going through this process, but also because I'm disattached. I'm no longer connected to the bank account offreedom fastliner capitalism.com I can just grow this business as an incubator because I don't need any of the money. The sales that we make go into funding the type of experiences that we want to create. It becomes our playground rather than a business that has to pay for my life. I don't even take a salary from it. So it's nice to be in that position where we can just grow the business and let it be all about the experience that we give to our customers. The other thing that I am investing in is people. So we're actively hiring and building the executive team of capitalism.com and capitalism.com is really the house under which Freedom Fast Lane falls. The tribe falls, the brand builder Bootcamp falls. Our mastermind falls. Our content on capitalism.com is grown inside of that team, so we're hiring and building out that infrastructure. So I feel really liberated as an entrepreneur to be financially set and to be able to just go and build the type of business that I want to build because it's fun, because it's what I want to be. My long term project, sitting on the beach or here in Tazewell, Tennessee is only fun for so long. It's great. But I want to be building an empire that swings elections and puts businesses on the map. Those are my two goals for capitalism.com to have an audience so big that we can take a business like yours, give you the training inside of our community so that you start something great. Have you featured on capitalism.com or interviewed here on the podcast? Blow up your business, get you the funding that you need, get you the connection into retail, and as a result of working with us, you've become a nationwide known brand. That's what we're doing here. And at the same time, we can swing elections and put messages and we can put charities and we can put causes on the map with a blog post because of the impact that we can have. That's what we're building here. That's what jizz or jazzes me up. And it's what I consider to be my commitment as an entrepreneur. I'm getting excited just talking about it. And what I'm so proud of is the fact that we've gotten to this point now, where I have gotten to this point now financially, where that can be my focus and that can be my gift. And I'm proud of that. And I am. I'm really excited about that now. One thing that I had to get really honest about was once I sold my company or the majority stake in my company, I also knew that I could not get to the next level in my career doing things the way that I had been doing them up to this point. So I essentially fired myself@capitalism.com I sat the team down and I said, guys, I am burnt out. I don't feel like I'm being an effective leader and I also don't feel like I'm being an effective messenger here on the podcast or in our videos. I don't feel like I'm being an effective CEO and I need you to replace me. If this company is just about Ryan Daniel Moran, we have failed. If people just show up because they want to hear me talk, that's cool. But that's not the business that I want to have. It can be part of the business, but it can't be the entire business. So we've been going through a shift where the company has been forced to grow up, to replace me, to come up with ads and to come up with products that don't directly involve me. And that's been a difficult transition, but a necessary one if we're gonna grow into the type of business that we need to be. That has freed me up to. Well, it's actually been reading and journaling and charging my batteries and focusing on hiring the right people and thinking about where we're going as a company. It's freed me up to think about those things. And it has challenged the rest of the team to step up and to do things a little bit differently, because I have an insight or two along the way. But if I'm the business, this business is not going to get very far. So I am learning how to lead again and lead in a different way than I have led in the past if I am going to bring this company to the vision that we have. And that is a new type of evolution for me as an entrepreneur. It's also an evolution for the rest of the team. And you get the benefit of seeing how that plays out, because I document it here on Freedom Fast Lane. So that's where we're going. That's what's been going on. I sold a majority stake in my primary physical products business. It came as the result of our exposure on Amazon and the other things that we had in play, like retail and the total direction of the company. The way they're growing the business is by bringing on a strong executive team that has experience in growing businesses like ours in the past. I'm sitting on the majority of the money right now, but I'm investing in investment funds that I have talked about here on the show. I'm preserving as much capital as possible and waiting for the right opportunities. Those opportunities are probably going to come in the form of businesses that we incubate inside of the tribe and our other communities. And I'm building out my own team here@capitalism.com to build out the vision that we have of building a media empire. And that media empire exists to put businesses like yours and those in our community on the map and get them a tremendous amount of exposure, and also to put messages and swing elections and put important things that we believe in on the map in front of millions of people. That requires me to. To change, to shift, to grow, and to become a better person and a better entrepreneur. And I feel very blessed to both be in the position to pursue that opportunity and also for your support to have your support along this journey. So I hope you found this interesting and I hope you'll continue with us as we build out the next stage of this vision. I feel very proud, very honored, sometimes very tired and overwhelmed because it's been a wonderful but exhausting journey that I am just now recharging from. I'm just now getting my batteries back, getting my mojo back from running multiple companies, leading multiple teams, being stretched in multiple directions. But I feel really thankful to now be aligned behind a one central mission and message. I'll be sharing moving forward on an upcoming episode all about what the business structure looks like behind my different holdings and actually how it all fits together into one centralized vision. I think it'll be interesting and helpful for you to see what that long term wealth strategy looks like and I'll be sharing that on an upcoming episode. So make sure you're subscribed at freedomfastlane.com/itunes and that will show up as soon as it is ready. I appreciate your support here on Freedom Fast Lane and over at capitalism. Com. Thanks for listening and I'll see you guys on the next episode.