104 - Selling Online Businesses: A Journey to Financial Freedom with Website Closers' Nate Lind

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional, and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started.

Nay Lin, welcome to Listening with Leaders. You are with Website Closers, which we'll learn about in just a minute and can be found at websiteclosers.com. Welcome to the show.

Thank you very much for having me, Doug.

So, Nate, you do something that I had really never heard. I've seen a lot in my life, but I had never really considered the idea that there are brokers out there, if that's what could be called, that sell cloud-based properties like podcasts and websites and SaaS stuff. And that's what you do.

That's all I do. Yep. Absolutely. Yeah. I'm like a realtor, but I sell businesses and it's all software SaaS, technology, e-commerce, podcasts, content creators, blogs, you name it. Wow.

Well, give us the backstory, how, where all the, how, how you got started and how you came to be doing this kind of business.

Yeah, so it's, it's, it's kind of an, uh, uh, 20-year, you know, overnight success story. I, uh, I spent my, my 20s in real estate. I was buying and selling properties, buying and selling mortgages. I was very, very, uh, knowledgeable about how to do transactions. I spent a little bit of time doing some corporate freelance and consulting and business, you know, process re-engineering work. And then I was trying to buy a business, was actually trying to buy a supplement company, and it didn't pass due diligence. The owner, he was too actively involved in the business, and it was too tied to his persona for me to be able to extract him from it. But I, I was so interested in the the margins in the business, the, you know, mass market appeal of supplements, that I started the company. And it took about 11 or 12 months before it finally hit. And then all of a sudden, April of 2012, it sold $1 million worth of supplements in like 15 days. And I sold out of everything I had. I broke all my fulfillment, my merchant processing. I blew everything up. And Ended up, you know, settling in 2012, making about $4.6 million in gross sales. I think I made about $80 grand in profit. And, but I was hooked. I felt like I was a new age, like gold miner. I've hit it rich. And, you know, in supplements, supplement millions. I actually, I watched and, and watched this thing from Buck Risby and, and this other guy about how to make millions selling supplements. And I was hooked. So I kept after it. The next year sold about $10 million and actually made some good money that year. And for the next several years I started selling it. At one point in time we sold $36 million worth of supplements in 2016.

That's a lot of product.

A lot of product. And that gave me a massive tax issue because in the world of high-risk supplement sales, especially on subscriptions, which is what I was doing, you're oftentimes having to hold 10% of your sales. In reserve. And so I was paying taxes on money I had not gotten in cash and had a massive tax burden in 2016. I also sold some technology I built in 2016 to a shopping cart. And so I had a confluence of things going on there. That was my first taste of mergers and acquisitions. Fast forward a couple of years, some life changes, a divorce, a move, and a couple other things between here and there. I met the founders of Website Closers, Jason and Ron, at an event I was hosting. I used to host a lot of masterminds, and they were telling me that they've got tens of thousands of buyers of these supplement companies. This is in 2019. At this point in time, I had already closed down my supplement company. I sold my software, but the supplement company was— it kind of rode a wave and was going down. And I learned— I knew then, I know way better now that these companies are cash flow companies. You sell them when they're going up. You don't sell them when they're going down. No one will buy them. And, uh, but they were telling me how many of these buyers there were in their marketplace. And I thought to myself, what, really?

You're full of booby.

And, um, I didn't do anything, but like probably 6 or 7 months later I contacted them again and, and started talking to them. And somebody else had, had told me they'd sold their business with Website Closers. And I was like, really? Wow, these guys must really be legit. And, um, I ended up talking to them. I met them at another event and, uh, At that point in time, I had a large mastermind of e-commerce entrepreneurs that were coming to events I was hosting, and they were telling me, listen, you could make a lot of money doing this. And I was like, really? That sounds kind of fun. Tell me more. And I ended up joining them as a corporate broker for about a year. I bought a franchise. Now I've got 2 associate brokers who work for me, and I've sold $100 million worth of businesses. I've had over 25 transactions in the 3 years that we've been doing this, and I love it. I'm doing it every day, all day, all night, and I've got 7 active listings at any given point in time, sometimes as many as 17. And we sell 300 a year. The whole Website Closers team.

Wow.

That's way bigger than you would imagine. Most people have no idea.

There's much more. I had no idea. I mean, people have— that's when you think about it. Yeah.

I mean, these businesses are easy. They're easy to transfer. That's the thing. That's the beauty about this. You could be living in Houston with a fulfillment company out of Denver. And sell it to somebody in Bangladesh. Like, they don't care, you know. And, or you could be running a media company out of Florida and your team is totally remote and somebody in New York can buy you. And especially since the pandemic, most, most companies, they've moved all their employees remotely, especially these lower middle market ones that almost nobody has an office anymore.

Right.

So there's nobody saying like, oh, hey, I'm going to have to move to buy this company. It almost never happens. Now they're all— these businesses are all operated through Gmail and, and, and Twitter and Zoom.

That's incredible.

Is it—

is the broker— is the broker's business unregulated?

It is in the lower middle market. When you start doing publicly traded deals, you got to get a broker-dealer license. And in some states you have to have a real estate salesperson's license. Like, I don't know what that means, but in Florida you have to be a real estate salesperson, a couple other states too. But in Puerto Rico, No licensing.

None.

None.

Yeah. So you— how long have you been in Puerto Rico?

I've been down here for 2 years now. I moved down here in June of 2021. And yeah, I had a— I had a $25 million business closing in October. I got down here in early June so I could establish my residency.

Thank God.

But yeah, that was, that was a killer, killer transaction and year for every million dollars worth of profit. $40,000 worth of taxes is all you spend when you move to Puerto Rico.

Wow.

Yeah. So it's like the equivalent of a house, a $300,000, $400,000 house in Texas. I would have spent on taxes had I stayed in Texas that year.

Wow. Huh.

Kids' college tuition. Not that I'll send my kids to college, but yeah.

Wow. What kind of fees do you get? I mean, is it typical, like real estate where you're getting a percentage commission?

Yeah.

Yeah.

So it's a percentage of the enterprise value of the business. It can be anywhere from 3% to 10%. For small, small deals, they go up as high as 15%.

And I presume, are there brokers on both sides of the deal usually, or not?

Usually.

So Website Closers, we're the sell side representatives only. Occasionally a buyer has a buyer agent that they're paying them on their, on their own. But at the firm we do have like my listings. I— they're open to other brokers who have relationships with buyers and I cut them in on my commissions. So they do get a piece of the action. So in that case, yeah, there's kind of two brokers, but we're technically both representing the seller, not even the buyer at that point.

And so if you, if you went to the website, Closers website, you'd see all— you see all the listings.

Yeah, there's thousands of them there. We've got over 100 listed live right now.

Wow, that's amazing.

Yeah, that's— it's so funny to like to be able to talk with people about this. Like, I meet people all the time and they have no idea that this sort of, this sort of thing goes on. And these are, you know, quarter million dollar companies to $20 million companies. We've got— I've got one right now for $32 million. We've had the biggest one I've personally have had was $110 million. So most of these companies, they just don't get that big., but a couple million bucks is a big company. Like that's still, that'll put some, that'll put some cheese in your war chest. Like you can go after some real estate, you know, any of us that read Rich Dad Poor Dad, like you can go get some big deals with a couple of million bucks. You can get after some apartment complexes or some shopping, you know, some shopping centers and some other stuff with, you know, $3, $5, $10 million when you, when you sell one of these businesses. I think it's the best way. And that's, I mean, I mean, I'm a Rich Dad, Poor Dad devotee, and I think this is the best way. This is how I see so many people sock away a war chest of money to then actually go get that passive income we all read about. Right. Because most people's businesses don't become a passive income machine for them.

No, no, mine never did. So mine, none of mine are. But I'm a service professional. I provide a service too. So yeah. Quite active. So I'm curious, as you looked at all these online businesses of all different types, are there any attributes that you see or characteristics that stand out that describe the successful online business from everybody else?

Yeah, the number one key factor is that over the trend of the last 2 to 5 years, Uh, it is growing profitably. So it, it has a profit. It's a profit-first-based company.

So you have to figure out how to monetize your content or whatever it is.

Absolutely. Your content, your product, your service, whatever it is. If you're not making a profit, you're not sellable, at least not in, in our, in our, on our marketplace.

And, and there are so many different kinds of ways to make money online. What are you seeing if you push it through all the grass, how are—

what's made—

what attributes do you see in people that are entrepreneurs that make them profitable as opposed to the 99 other people who are just losing their ass?

Well, they find a way to make their customer pay.

Okay.

And they make their customer pay a lot. This is not the startup world. This, like, people don't come to me like looking to raise seed capital looking to like, you know, looking for angel investors or venture capital, that sort of stuff. I turn them away. They're worthless in the world of lower middle market investment. We— it has to be at least 2 years old and they better be making at least $250,000 in profit before any of our buyers will take notice. And the bigger, the better. But the key attributes for people are they're just getting down and dirty and getting in like me and making sales. That's, that's it. You know, I've I've been a member of Entrepreneurs Organization and a number of entrepreneurial ventures, and everybody at those organizations, they'll say, until you make your first million bucks, the only thing you need to be focusing on is making your first million bucks.

Right.

So, yeah, I think the key thing is, like, people— I tend to be talking to folks that are mature in their life cycle of their professional career, and if they're thinking about wealth management or tax strategies or tax sheltering, estate planning, that's usually when they're thinking about me too. Like they're, they're thinking about what's the value of my business worth? And at that point, you know, they've, you know, they've done their grinding and hustling and they've gotten past like those, those early days of sales, which unfortunately that eats most people alive. Like it's, it's few that make it to the, you know, multiple million dollars of sales range and are pocketing some cash.

Right. So what kind of buyers come in to buy these businesses?

What are they looking for? All sorts of buyers. It's so interesting. We've got buyers that they're in some cases they're just accredited individuals. You know, they've made a couple million dollars. I've got several of them that are corporate executives. They've made a couple million bucks and they're burnt out and they're traveling, road warriors. They're traveling all the time, you know, for some mega corporation, big petroleum company, something like that. And they're just burnt out, but they've got some incredible skill sets. They can manage massive teams and they're really logical and really procedural. And they're perfect for some of these businesses where the founder is really creative and the founder is really inspiring, but they're not very procedural. They're not very meticulous. So those buyers make great buyers for the $1, $2, $3, $4, $5 million businesses and they borrow money from an SBA-approved lender for 80% of the business and they put down 20% like a house and they buy the business and they run it and they grow it and then they flip it.

Wow.

That's one group of investors or buyers. And then another group could be strategic buyers. So if you're already in the media business, there's already a bunch of other media businesses out there and they're looking to expand their networks and consolidate. And take out the competition, take out the competition, add some additional cash flow, expand their consumer base. That happens all the time. If it's businesses that are selling a physical product, we have so many physical product aggregators and companies that are consolidating physical products and they will look at the demographic of what your product is selling to. If it's women over 35 and they're also aligned with selling to women over 35, They're very interested.

Wow.

Could be men over 50. You know, the, the big, the, the big demographics with pocketbooks, men over 50 and women over 35. And then we've got institutional buyers. We have family offices, hedge funds, private equity funds, private equity sponsors. So people who have sold businesses before and they've got a couple of million bucks and then they'll go to these private equity conferences and raise money. And they'll go and look for deals and then they'll insert themselves as the new operator owner of the business and then tag on some lending partner, you know, to the business. Those tend to be bigger deals. They're usually over $10 million. That's when the capital markets open up for, for these types of deals, which it's, it's impressive. These businesses don't have any hard assets. They have no real estate. The only assets they usually have that's hard assets is inventory. And that's not a great asset.

No.

So these are very much cash flow-centric transactions. The analysis and the debt service is all analyzed on how much cash flow can the business make. And that's where lenders will step in.

How much can it be scaled up? Yeah.

Yeah. How, how can they get scaled up? You know, what's the profit potential of it? But most importantly, what's it, what's it been doing? What's it been doing for me lately? And showing that track record.

Wow. So what is it that's unique about you that's made you successful in this business?

A couple of things that I'm quite unique. I have run multi-million dollar e-commerce businesses. I've sold and exited software technology. I have a ton of experience in dealing with dealing with transactions and the counterparties to transactions. And for a while I had a stint as a relationship management executive with, with Fannie Mae and Freddie Mac back during the Making Home Affordable administration. So I was working as a liaison between the United States Treasury Department and the executives of Wells Fargo and Bank of America. Wow. And GMAC before they became Ally Bank. And so I, I've, I've had a lot of, I've had a lot of sales experience. I've done a lot of door-to-door sales to buy foreclosures. So everything from like knocking on people's doors, getting them slammed in my face, or getting invited into their house and buying their house at their, on their kitchen table, to working with United States Treasury executives and directors and, and, and, you know, corporate executives at the largest financial institutions in the world in a relationship management role.

Wow.

So it's a lot of negotiation, a lot of communication, a lot of listening.

I was on my next question. How important is listening to you and your work?

It is so incredibly important. I, my, I have fine-tuned my active listening skills to listen to what someone's saying, repeat back to them, give them feedback that I've heard what they've said, you know, ask them to clarify, you know, get more information, ask for more specificity. You know, try to understand what's the feelings behind it, what's the emotions behind it, what's the pain behind it, and then start to figure out what solutions can arise from that. I do that all day.

Yeah. You run across a lot of people that don't know how to listen well, don't you?

Everybody.

It's kind of, it's kind of like it's pandemic, isn't it? Yeah.

Yeah, it is. It's, uh, It's, it can be quite frustrating. But what's, what's really, I found that's, it's really cool is even just being one person of a group of 4, 5, 6, as long as one person's listening, like we can still move the ball.

Right, right. And that's the secret. I have a phrase I use when I teach and coach people on deep listening. I call, call it listening other people into existence. And for me, the listening process is not only about just getting information from people, but it's validating them as a human being so that they feel deeply heard. And when people feel deeply heard, it builds instant trust, loyalty, engagement, productivity, intimacy, and personal relationships. It's really powerful.

It's super powerful and it's effective in all modalities of relationships.

That's right.

Romantic relationships, professional relationships, friendships, spiritual relationships, like all of them.

That's why I say it's the foundational skill of life. And I mean, I had an epiphany about the skills that I teach back in 2005, but it wasn't until 2010 that I really acid tested them in the Prison of Peace Project that I co-founded with my friend Laurel Kaufer, where we were walking into California maximum security prisons, training incarcerated people serving life and long-term sentences how to be peacemakers and mediators to stop prison violence. And we were successful at training them and they were successful at stopping the violence. We started in the largest, most violent women's prison in the world. And 2 years into the project, we got a letter from the warden, unsolicited, saying, "You guys have really changed this prison." Pretty cool. So I actually asked and tested all these listening skills. That's the very first skill we teach them on the very first day. Is, is how, how to listen, and, and in this deep emotional listening called affect labeling that we teach. And, um, that changed my life, and now I'm dedicated to teaching as many people as I can how to do this stuff.

That's incredible. Thank you.

One more question, I'll let you go. What's the one thing about you, Nate, that we wouldn't know anything about unless you revealed it to us?

You might not know that I am a student of transformation. I have, uh, I have radically transformed my physical body, my emotional universe, my spiritual— my spirituality. At one point in time, I was 360 pounds. I've done 3 Ironmans. Wow. Um, at one point in time, I was destitute, bankrupt, divorced, depressed, and, and now I'm affluent, happy, in a loving relationship, the best relationship of my life with my children, living in a Caribbean island, by all means, looking at just the tropics and a beautiful life.

So that's beautiful. I appreciate it. Censures on my back because I, I didn't, I didn't have the overweight problem, but I sure had a lot of other problems. So I I understand the journey and it's wonderful, isn't it? Especially— it is incredible. You can live a life of service to others too.

That— and that's the beautiful part too. I love what I do. I, I've sold my own businesses. I have so much more passion and desire to help my clients sell theirs. I love providing for the family provider.

There you go.

And help guiding the family provider. And it's really meaningful to me. I've carved out a little you know, nook of the universe where I can help people put away and create financial literacy and financial freedom for themselves and their family. And I'm, I'm blessed. Every time I do it, I get a video testimonial. People can go to Nate Lynn, the Online Business Broker, and look at dozens of videos and testimonials from clients that I've literally changed their lives. In some cases, I've helped them retire. In other cases, you know, they told me they were on the edge of bankruptcy. And then I was able to pull out a multimillion-dollar transaction for them. So I love that.

Really fulfilling and satisfying.

It's the best.

Thank you so much for your time today, Nate.

Thank you, Doug.

Doug Noll here. Thank you so much for listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, would you please share this episode on social media? Just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that would be a great guest, tag them on the social media to let them know about the show and include the using the hashtag #ListeningWithLeaders. I love seeing your posts and guest suggestions. We are regularly putting out new episodes and content. To make sure you don't miss any episodes, go ahead and subscribe. Your thumbs up ratings and reviews go a long way to help promote the show and mean a lot to me and my team. Want to know more? Go to my website, DougNoll.com, or follow me on LinkedIn, Facebook, and Instagram. That's @DouglasEnoll. Thanks for listening, and we'll see you on the next show.