True Wealth Conversations: Ep. 3 - Preparing Your Exit Plan with Gamal Codner

Hey, welcome back to another episode of True Wealth Conversations with Dominique Browie, and today we are live at Black Equity Con. So we have a special kind of limited edition going on today, and I'm really excited because I have an amazing guest, someone I've actually known for a while. And let me tell you something, to meet someone, see the hustle, see the drive, see the exit, and see just the transformation, the wealth growth after, is absolutely phenomenal.

So I appreciate that.

Thank you. So I want to introduce you guys to today's guest, Gamal Codner.

Thank you for having me.

Yes, thank you. An amazing friend, and as I mentioned, amazing entrepreneur. So can you tell everyone a little bit about you, Gamal?

Quick story: a kid from Jamaica that started a family-owned brand. We scaled it to a few million dollars, and we got acquired in about 4 years. So now I help other entrepreneurs do the same I love it.

That's so phenomenal. And he has like the most beautiful family, beautiful wife, beautiful daughter, just absolutely amazing. So as an entrepreneur, right, now as entrepreneur and now a CEO, right, there's a lot of us that are in those roles and we start our business and we fall in love with our business and our business becomes our baby, right? We can never ever think about separating from it. But most of us ain't trying to work forever. So what would you tell entrepreneurs who are like, look, I started this thing, but what should they be thinking about as they're growing their business? And should they be thinking about exiting? And just what— how should that go down?

All right, so as entrepreneurs, your most valuable asset is probably your business compared to like your stock portfolio, your house, whatever. But most people don't know how to liquidate or get the value from their business. And when you exit, that's probably going to be about 80 to 90% of all the value you've accumulated in your business. So like the money you make yearly doesn't really add up. And so I would encourage entrepreneurs to think about wealth through liquidity events. And when you look at the wealthiest people in America, whether it be entertainers, Elon Musk, whatever, they've all had exits.

Yeah.

Yeah. And so I became more aware of that as I started studying wealth throughout history. So that was one thing. And the second piece is it's very easy to do, but because we don't know about it, we think that it's a mysterious thing, or we think that consumers are going to be— our customers are going to be weird, or they're going to think that we're selling out if we sell. So we're not interested. But the reality is, like, you'd be doing yourself a disservice if you do not have an exit plan as part of your plan as an entrepreneur.

And that's major. And I remember, uh, we were like having lunch or dinner at our house, you were telling us that this exit may happen. And it was eye-opening to me because I've kind of always joked like, oh, one day I would love to sell this thing and like move to Bali. But then hearing and seeing you do it, I'm like, whoa, this is really— this is actually possible. And as you said, a lot of times, especially people of color, we feel like it's not possible because you only hear the Elon Musk. And, you know, Elon, he started and sold a lot of businesses. A lot of other people have started and sold a lot of businesses, and they go on and start the next thing, but we feel like it's not something that we do. Also too, because a lot of times people of color are like, we got to start this business and pass it down to our children, our children's children, and create that legacy. But there's other ways to create that legacy with wealth outside of just having a business that you have to work in forever. So you said this is something that is quote unquote easy. How easy is it?

I should say it's simple, but it's not easy. Okay. The steps are not that crazy. So the main things you gotta worry about when you're selling your business is transferability. So that's the biggest thing. And then strategic value. So I'll talk about those two. So when you start your business, you're oftentimes like the face of it. People are buying into your story and that's great. But then you become into what they call like a dancing bear business where if you don't stand up and perform, show up on social, you don't make any money.

Yeah.

And so you have to wonder, all right, this thing is worth, I don't know, $1 million to me. But if someone else ran my business, would it generate $1 million if I'm not involved? Probably not. So after you get past like the validation and get some good traction, you gotta start putting systems in place and making it transferable if you were to one day like not be there to run it. And the second piece is if you're going to sell your business, the advantage we have as people of color, people with small businesses is that a large business is not like, the other thing that people say is, oh, my business isn't big enough for, Amazon or whatever to want to buy. That's sometimes true, but big companies are bad founders. They don't know how to start. They don't know how to build community. They don't know how to build brand. That's an advantage that we have. So oftentimes when they want to get into something, they just buy something that already exists. They collapse time, right? And so the advantage that we have as founders of color with small businesses is that we know how to build culture and community that can be valuable to a bigger asset. So if you build a community around financial education, maybe a mint.com or Equifax or something, or a Bank of America may be interested in doing something like that. So that's the value you really have. So making sure your business is transferable, but then also making sure that you create valuable, you create value that is worth more to someone bigger than you, more than what your numbers say your company's worth.

Mm, that's good. So what, let's say as a new entrepreneur, they're starting, and they're already starting to think about their exit, which if you're not, you should be doing. What are things— and I know you just gave us a bunch of really great things— but like, what are things that people should be doing now, right? Like before you kind of even get to that part, like the basics as you're starting, because there's ways— and we talked about this before— there's things you should be doing in your business when you start that will make your business easier to sell later instead of how most people do it. And I think you said this is how you did it, when the sale was about to happen, you had to spend all this time preparing your business or getting your business ready to be sold, right? So what are things that even that you've learned, just like, hey, I wish I had done this sooner?

So I'm gonna share something I don't think I've ever shared publicly. So prior to starting my business, I actually spent some time in M&A, raised $10 million a couple times to like buy and invest in companies. And I learned a lot and I wanted to be the person who was getting checks, not the person giving the checks. And so I decided to start a brand. I wrote a one-page business summary on how I would exit my brand in 3 to 5 years and the buyer who would buy it. And that actually happened. Like the M&A and acquisition team from the company moved to another team and they were the ones who acquired my brand. So like it legit worked. So I'll share what I did. And so you wanna think about congruency in branding. So Previous companies on the S&P 500, years ago, the most valuable companies were based on finances, like their financials. The past 15 to 20 years, the most valuable companies are based on goodwill, which is really like brand, community, and image. So I literally took the company who I wanted to be acquired by, and I had my brand team create a brand that would be congruent with theirs.

Wow.

So as we built, they It caught the attention of them.

They're like, oh, this is the kind of thing we build at a high level.

So if we're gonna acquire things, we might as well acquire things that are already in alignment with what we're doing.

Wow, that's smart. That's really smart.

So that was a simple thing that you can do very ineffectively, very cheap. And the other piece is just making sure that you have a north star so that you don't make decisions that would make you less attractive as you go. So I was thinking 3 to 5 year decisions, not what am I gonna do in 6 months to make a quick dollar? So that's what I'd recommend doing.

That's good. That's really good because a lot of times, like, we're creating our businesses and we're like, we need it to be so different and so unique, and you want it to be, but you also want it to be attractive enough to the brand that you may want to acquire it at the same time. So that's really good advice. So now that you've had this exit, which I know you can't disclose how much, but, you know, I'm sure you balling out here. What do you feel like, what's next for you?

Yeah, so the first thing as an entrepreneur, you make so much decisions, you don't show up to family functions, you miss birthdays, et cetera. So we spent like the past 8, 9 months on a sabbatical where all I did was just try to be a better husband and a better dad, right? Spent time with my daughter. I got to see her take her first steps. Oh, congrats. Thank you. And so that was what I needed to recharge. And now since I've done this, a lot of friends have been hitting me up and they're like, hey, I'm actually thinking about doing it too. It's like the 4-minute mile concept, right? It seems like impossible until you know someone who's done it and you're like, it seems more realistic.

Yeah.

So I've been helping a lot of them like with strategy around that. So I, I am launching a con— I have launched a consulting practice now that that's what we're doing. We're helping online brands prepare to build a brand that could be exited.

Wow.

So if you're early stage, we'll help you get the foundations and if you're kind of a year to two out, we help you get everything together so you can go to market more successfully.

That's awesome. That's, that's so amazing. So obviously I'll be reaching out very, very soon after this session.

And there's simple things though, like I was mentioning before the call, like one brand that we started working with since January, they had an offer for 8 figures and but they didn't start doing the stuff that they should have been doing like 6 months to a year ago. But just in a 1-hour conversation, I told them something that they could, they could present, and it got them an extra $600 grand in 1 hour. So there's so many—

not a little bit of money. That is amazing.

Yeah, that's why I said it's not easy, but it's simple. There's just a couple of things that you need to do that if you know to do it, you can get, you can get the benefit.

Were they even thinking— well, obviously they reached out to you, so they were considering exiting, but were they like— when you met with that specific client, were they far along? Like, do you feel like they were far along enough in their path to make the exit, or do you feel like there was a lot of things that still needed to be put in place to get there?

There's a lot of things. So ideally, if you're 1 to 2 years away from an offer, that's a great time to do things because you can slowly do it without disrupting your business. So they're kind of like, you know, 6 months is kind of too short. And they thought about it and then they got an offer they couldn't refuse and they're like, damn. But the offer comes with contingencies. So oftentimes people hear the money and they think like, oh, let's say $50 million. I'll do it. But what you don't know, there's details. So if you're risky or if you're too much the face of the brand, they may say, we'll give you $50 million, but over the course of 5 years versus all on day one.

Yeah.

So there's things you can do to make it more advantageous to you if you plan ahead. So that was their, that was their main thing. They didn't know that they could just ask for something that would, you know, ultimately come up to $600 grand.

Yeah. A lot of times, too, with these types of exits, do you I know they'll kind of like turn into acquihires where maybe you end up working for that company for X amount of time. Do you feel like that's more common versus like completely, like a company completely buying your business and you just walking away? What do you see is like most common nowadays in like acquisitions?

That is most common typically because the founders haven't put processes in place to do that. So we did not want to, we wanted to like, maximize upfront what we were able to take away from it. So we— the things that I was the key decision makers of, I got other people to do that. So when they said, hey, we want you to stay on, I was like, okay, well, let's talk about what you need me to do. And it comes to find out you actually don't need me for those things because we already have people in the company who could do it. So if you strategically set your business up, you can choose to if you want to, but you don't have to.

Mm-hmm. That's okay. All right. Well, I'm excited to have the conversation with you for sure, how I could potentially Exit. All right, well, thank you again, Gamal. How can people find you if they're interested in learning more about your coaching, your consulting or coaching services or programs you have?

Yeah, the easiest place is to find me on Instagram, GamalCodner.com or Gamal Codner, or on my website, GamalCodner.com. So all the information will be there.

I love it. I love it. Well, thank you again for spending time and sharing this information. It's also just really dynamic to see more people that look like me having these conversations and thinking so big and broad and showing us what is possible. So thank you so much for sharing all the things that you're doing.

Thanks for giving me the stage to get my message out.

Thank you. So that's another episode of True Wealth Conversations with Dominique Broadway. Thanks again to our guest, Gamal Codner, and please make sure you start preparing your exit plans.