Entrepreneur | Part 3 – Raising Capital In A Challenging Economy With Sean Kouplen

Audio Transcription

Get ready to enter the Thrivetime Show! We started from the bottom, now we’re here. We started from the bottom and we’ll show you how to get here. We started from the bottom, now we’re here. We started from the bottom, now we’re here. We started from the bottom, now we’re on the top. Teaching you the systems to get what we got. Cullen Dixon’s on the hooks, I’ve written the books. He’s bringing some wisdom and the good looks. As the father of five, that’s where I’mma dive. So if you see my wife and kids, please tell them hi. It’s C and Z up on your radio. And now, three, two, one, here we go. We started from the bottom, now we’re here. Started from the bottom, and that’s what we’re about to do. Now, there’s a website called angellist.com, if you haven’t got a chance to check it out. And it’s kind of fun, because it shows angel investors and the kinds of things they have invested in in the past. And to even be up on that site, you have to be an accredited investor. And we won’t get into all the nuances, but you can actually see angel investors and what they’ve invested in in the past. It’s a really neat, neat tool. We encourage you to check it out. Before we move on to this next one, I want to ask your opinion here. What was your opinion of the character Kahn from Star Trek II, the Wrath of Kahn? I haven’t seen it. Really? I haven’t seen it, no. Well, just goes to show you. OK, so source number seven. I’m just being honest. He’s being candid. He’s being candid here. Good leader. Doesn’t watch Star Trek 2. So source number seven, personal avenues. The pro, funding through personal avenues can keep out of other funding situations that require a lot of regulation, forms, and paperwork. But the con is that these funding avenues can often cause you added stress. Provide for me an ample example of this real quick. It’s a best-case scenario if you can do it. If you can start or expand a business and you have the cash to expand it, there’s no dilution, nobody’s telling you what to do. I mean, it is a best-case situation. You just have to make sure you have enough cash and you need to maintain enough savings and liquidity to continue to live. You can’t just deplete everything you’ve got because if it doesn’t go well, you really have no fallback position. If you’re watching this, again, the reason why we’re going over all these options is because you might have a little like a combo move. Maybe you put in your own money and then you go get an angel investor. Maybe you put in your own money and then you go get venture capital. Or maybe there’s all these different ways you can do it and all these sources can come together to complete the whole. So don’t feel like it’s all or nothing for each one of these. In fact, I would say the most common of all would be to put in some of your own money, go find an angel investor as a partner, and then go to a bank or credit union to get the funding. That is an ideal scenario when you’re really using three of these all together. For my small mind and maybe for any thrivers out there who just try to comprehend that, you mentioned there’s the three steps. Can you share it one more time just so we can really get it? Sure. Again, what will typically happen is you’ll have personal savings or dollars that you can put in. in, then you’ll go find oftentimes an investment partner. And what they add is they add financial strength so that you can go get bank financing. The fact that you’ve put cash in doesn’t guarantee bank financing because you’ve got to understand as the banker, you’re looking at it and going, this is a brand new venture. Will it work? Can they make the payments on the loan, and if they cannot make the payments, what do I do at that point in time? So if there’s not a lot of collateral, if a lot of it is really just an operating company investment, you don’t have collateral. So that’s why they like that investment partner. So oftentimes, you can bring in an investment partner for less than 50%. You still maintain control, but the bank feels comfortable because they’ve guaranteed the debt and if things don’t go well, they can go to them. So you can get that low source of capital from a bank without giving up control in your company. That right there is unbelievable. All right, moving on here to source number eight. Source number eight, savings. The interest rate on money that you have to invest in yourself is effectively zero. The con is that the money you have saved is generally the money you have earned. So it is often painful to see it go and you may not have much of a cash cushion. That’s kind of what we were talking about earlier. This is a great source of capital. It’s the best source of capital. You just don’t want to deplete all your savings because you do have to, and this is very difficult for us entrepreneurs, we do have to realize that there is a chance that things will not go well. And we do need to have a backup plan in the event that they don’t. And so if you’ve depleted all your reserves in cash and things don’t go well, you could be in a tough situation. If you’re out there and you don’t have a backup plan, just talk to your mom. See if that couch is open. You know, moms sometimes – usually moms are more conservative of an investor. She usually has a nice couch. You can sleep on that with your five kids or something. Mom will say it’s a bad idea, I can tell you. So don’t listen to mom too close. Okay, so moving on to source number nine, borrowing against equity. The pro is you can generally borrow against your equity at a fairly low interest rate. Banks are typically easy to work with on these kinds of loans here. The con is that if your investment goes bad, you may lose your house. Ample example, my friend. Can you share with us? Many people begin their businesses by using a home equity loan. And the advantage is, oftentimes, it’s interest only. So you’re only having to pay interest on the outstanding balance. So it’s a small payment, but if you get to the point to where you cannot make the payment, the bank clearly has the right to foreclose. And that would not be good. Not good. So, source number 10, the 401k. Pro, this is capital that many historical savers may have relatively quick access to. If you’re somebody who’s constantly contributing to your 401k, you could probably get access to that pretty quickly. The con is that rating your retirement savings to fund a business can often be very scary for you. Sean, ample example. Well, this is a great gut check. So here’s what I see oftentimes with people that have an idea for a new business. They have the idea, they are ready to go, but they want to use your money as the investor to do it. They don’t want to use theirs. So if you think, okay, I’ve spent the last 10, 20, 30 years saving into my 401K, worked worked hard, saved all this money. Would I take it and put it into this investment? If the answer is no, you probably shouldn’t do the deal. If the answer is yes, then you probably have a winner. That doesn’t mean you have to do it, but typically there are ways to borrow against a 401K that are very flexible and advantageous. pages. And many times, you can basically take the 401K, if you leave the company and roll it over into an IRA or an individual retirement account, your financial professional can help you do this, and then either borrow against or withdraw that money as well. So it’s basically just using that money that you’ve saved up. Many times, people will go, I don’t want to do this because there’s a 10% penalty for withdrawing from an IRA. But compared to giving up a large portion of equity in your company, this may be a better deal. And Sean, you referenced it, but I want to make sure we’re super clear with the Thrivers out there. You’re going to want to work with a financial planner, someone who’s a licensed and certified person if you’re going to attempt to do a 401k rollover or something with that. Just a little wisdom there for you. Now source number 11, the credit cards. The pro, quick access to capital. It’s always just a card swipe away. The con is if you decide to make payments rather than paying off the card in full each month or not make payments altogether, your interest rates can be extremely and punitively, punishingly high. Ample example, Sean. Well, this can be, again, credit cards are nice because the minimum payment on credit cards are typically very low. So there’s not a lot of debt service required. However, they are extremely expensive. So, you’re going to get into rates of default rates of 16, 18, 21 percent if you end up running into problems here. So, this would be one that I would only use if you are 100 percent sure that it’s going to work and you’re going to have quick access to cash flow. So, this is very important. You don’t want to use credit cards to fund something that’s a great idea, but the payday is way out in the future. Because you have to have a way to pay those credit cards back. Now, source number 12, the owner carry we talked about earlier. The pros is your risk is essentially shifted off of your plate and onto the plate of the person who is carrying the financing. Con is this type of funding is hard to come by because you’re asking somebody else to. Basically what you’re doing, I guess, John, is you’re saying that the person who buys your business, you have to say, I trust you enough to pay me on time for the next 3, 4, 5 years. And so it’s sort of that, you can have my business, but you don’t have to pay me right now. Can you give me an ample example of this one here. This one is much easier when you know the person whose business you are buying. So if you know them well. If they come to you through a business broker or referral or something, it’s much tougher. Owner carry is really about creating trust in yourself. They’re looking at you as the buyer. I would have a much easier time today getting an owner carry because of the different companies and the bank and other assets that we own because the seller of the business would say, well, he’s not going to let these things go under. He’s got a lot to lose and he’s got a lot of resources to pay us back from. When you’re early in your career and you don’t have the resources and you don’t have the income, you don’t have those types of things, this is tougher but it can still happen. You just need to create an emotional connection and a high level of trust with that seller. And we have a lot of episodes about this but having relationships is always the big thing that keeps deals and business together. You just you have to be a relationship person. It can’t just be a logical move here. It’s not going to work. Now, Sean, we’re talking now about the five C’s of credit. And we’re going to be getting into these five C’s and really just having you clarify how we build up this credit history there. So for this section, I’m going to read a dictionary definition of each one of these terms, and I’m relying on you to drop the fire hose of knowledge on us and explain to us what it means on kind of a third grade level for people like me who maybe aren’t grasping. So the five C’s here, here we go. One, cash flow. As defined by our good friends at investopedia.com, it’s an accounting statement called the statement of cash flows. It shows the amount of cash generated and used by a company during a given period. Sean, in language I can understand, what does cash flow mean? First and foremost, the reason that we want to cover the five C’s of credit is these are important to banks if you’re going there to get banks or credit unions if you’re going there to get financing but it’s also important to investors. These are the same things that when you’re talking to an investor they’re going to want to know as well. So cash flow is simply your ability to pay back the debt. How much net profit or free cash is being generated by the business or can be generated by the new business, one or the other. It’s the most important C in the five C’s of credit because without cash, a loan or investment cannot be repaid. So C number one is cash flow. Moving on to C number two is credit history. As defined by our good friends at Investopedia.com, a record of a consumer’s ability to repay debts and demonstrated a responsibility in repaying debts. A consumer’s credit history consists of information such as number and types of credit accounts, how long each account has been open, amounts owed, amount of available credit used, whether bills are paid on time, and a number of recent credit inquiries. Sean, break it down for us, credit history. What are we talking about here? The reason that people almost always ask about your credit score is because it is an indication of really two things. One is your ability to repay and the fact that you have not overextended in the past. And two, your organization. So for example, many doctors have the ability to repay. They have a very large income, but they’re so busy and they don’t manage their affairs very well, so they don’t pay their bills on time. As an investor or a banker, you want both. We want somebody who can repay and doesn’t get overextended to where they can’t, but also is organized enough that they will repay on time and you don’t have to manage the relationship heavily. Okay, okay. Alright, we’re moving on to C number 3. We’re talking about collateral. As defined by our incredible friends at Investopedia.com, collateral is defined as property or other assets that a borrower offers a lender to secure a loan. If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup its losses. What are we talking about? You know, banks do not want to foreclose on homes. They don’t want to repossess cars. They don’t want that. They want you to make the payments as you have agreed to make them. Things happen. We understand that. And when things happen, our preference would be that you sell those assets on your own and pay the loan back. In a worst case scenario where really bad things happen and you do not choose to sell the collateral, we have to do that for you. So collateral is basically just anything of value. Real estate, cars, investment accounts, equipment, accounts receivable, inventory. It’s really anything of marketable value value that in the event that a loan is not repaid, we can go take the ownership up, sell and pay the loan back. And again, banks don’t want to take your stuff back. They want you to pay the loan back. But this is just something to make sure we’re aware of these terms. We have to sometimes not knowing these terms can exclude us from opportunities because we’re just not, we’re somewhat not ignorant people, but maybe ignorant of these terms and it makes it where it’s hard for us to get in the game here. So we want to have a mastery of these terms. And the importance of learning the term collateral is it’s going to be critical when it comes to getting bank financing. It’s not going to be as important when you’re bringing an investor in and they’re buying part of your company. But if you want to get bank financing, which is really the cheapest financing you can get, you have a much better chance if you have collateral to back the loan. Now, C number four, character. As defined by the good natured people of integrity who define things at Webster’s Dictionary, this is the way someone thinks, feels, and behaves. Someone’s personality. Sean, what does this mean here? We’re primarily interested in the way that someone behaves. At the end of the day, if you are coming to us for a loan or an investment, we want to that you do what you say you’re going to do, and that you can handle adversity. Every small business owner has to handle adversity. I don’t care who it is. You’re going to go through difficult times. So as an investor or a banker, we are trying to determine, are you the type of person that will stay in the game? Or are you the type of person that will fold whenever times get tough? So we’re going to go through adversity. And you’re just saying, it’s going to happen. You as an investor know it’s going to happen. When you invest in someone, you know, OK, buddy, you’re going to go through some stuff. Will you keep it together? Exactly. And will you tell me the truth? And will you portray the situation as is without just providing the good news without the bad? That’s what you want. You want somebody that you have full faith in. The reason we’ve done deals together is because that’s the way I feel about you. All of my business partners, we are in business because we trust each other. I think that is so big, and we’re not going to get off topic here and really dwell on this, but we have some great training on Thrive about character. At the end of the day, if you do every single thing on Thrive but you don’t have character it won’t work. So just make sure that you don’t minimize the value of that. Number five, capacity. As defined by those wonderful wordsmiths at Webster’s Dictionary, the ability to hold or contain people or things. When you’re talking about capacity, what are you talking about? What we’re really talking about here is financial capacity. So we’re talking about the ability to absorb unexpected downturns. A lot of times this is defined by your net worth. It’s defined by savings that you have, liquid assets that you have, a guarantor that you might have, somebody backing you. And so what you’re doing is you’re basically looking, as an investor or a banker, you’re saying, okay, if things don’t go the way that we hope, do they have the ability to still stay in the game and turn it around? Okay, so capacity. Capacity could deal with your net worth, your ability to stay in the game and turn things around if you needed to. Now we’re moving on here to Capital Concept number six, the 11 keys for putting your best foot forward. Sean, as we get into this here, and we talked about putting your best foot forward, I’m going to just kind of, the way we’re going to do this is I’m going to bring up the big idea, and I’m going to have you bring some clarity here. Here we go. One is prepare a detailed financing package. Sean, what does it mean to prepare a detailed financing package in your mind? It happens very often that an individual will come to either the bank or to an investor and present their idea and then really kind of ask them what they think is fair. Okay, so I want you to invest money in my company, but I don’t really have a proposal for you. So, it’s important when you’re coming to the table for either one, A, that you have your numbers all in a row. You have a profit and loss statement, projections, balance sheets. You really know your numbers and you know why the numbers are that way. And that you have a good idea of what you want. You can’t leave it. Investors don’t have the kind of time to sit around and work up the deal. You need to bring to them, it’s kind of like if you’ve ever watched Shark Tank. On Shark Tank, the investors bring the deal. If the investor, excuse me, the entrepreneur brings the deal, if the investor doesn’t like the deal, they’re done. There’s not a lot of back and forth, counter, offer, offer. You need to know what you want. I think that’s huge that the investors don’t have the time. I just, I want to, I know it seems hard to grasp this if you’re watching this, I mean you desperately need capital for your business, but these investors, a lot of the times they invest in a lot of different businesses. And time is their biggest asset. A lot of times they have more money than time. And they’re saying, hey, I don’t have time to factor in all the numbers. You need to do it. And then I’ll just analyze whether it makes sense or not. That concept has been hard for me to grasp as I’ve kind of, my journey from starting out because it’s an amazing thing. But a lot of investors really, they look at what, multiple deals a day. And so they just want to have a good idea of what you’re offering there. Company history. Sean, talk to me about why I should be, I guess, talking about my company history as I’m putting my best foot forward. Well, we’ll talk about whether you have an existing company or a new startup. On an existing company, your history just gives comfort about the fact that you’ll be successful in the future. So talking about your history, I think, is important. If it is a startup, then what you really need to talk about is your personal history in the industry and why you believe you can be successful. So why you have all the, we recently invested in a startup oil and gas processing firm, but the individual had been an executive at a very similar company, was bringing an entire team with him, and so it just gave you great comfort that they should be able to move over here and do the same thing that they’ve been doing for years. So again, if it’s an established business, show the company’s history. If it’s a new one, show your personal history. Correct. Moving on to point number three, industry analysis. Sean, when you say industry analysis, break this down like fractions for us, my friend. What does this mean? You need to understand the industry that you are working in. So let me just give you two excellent examples. Let’s take oil and gas versus the dry cleaning industry. Oil and gas, if you’re going into that industry, it’s really on the rise for many reasons. We see it here in Oklahoma. Oil prices are going up. Natural gas prices are starting to go up. That’s a very positive, upwardly moving industry. The dry cleaning industry on the flip side, which I’ve also been in is going in the opposite direction Really? Yeah, people are dry cleaning their clothes less and less more casual work Oh, yeah So as you look so you need to you need to know that as an investor that you know You can still be successful in it. There are very successful dry cleaners, but it’s a tougher industry because you’re fighting against a Negative trend the dry cleaning business for you and me will never go down though. That’s true. I’m always gonna wear a tie. I might be the last American to wear a tie, but I’m always wearing a tie. I’ll be right there with you. Okay, all right, so now we’re moving on to point number four. Personal experience. Sean, I don’t mean to get too personal, but personally speaking, what do you mean when you’re talking about personal experience? This is really what we’re talking about when we’re talking about your track record and history individually. So what I want to know, and our friend Lee Cockrell just said this last week in a speech I heard him in, when you’re hiring somebody or when you’re investing in someone, what you want to know is how they have overcome adversity. That is the key. We can all function when times are good, all of us, but who can take the punch to the gut and survive and make it to the late rounds? I mean, that’s what we’re looking for. So you need to portray that and obstacles you’ve been through, experiences you’ve had, and why I need to invest in you. I love this. It’s how they’ve overcome adversity. That’s huge. I would have never thought about that. That’s something you want to bring up. You want to share that with the investors when you’re putting your best foot forward. Point number five, SWOT analysis. Sean, are you talking about the special weapons and tactics group here? Or what are we talking about here? Oh, no. Oh, no. Oh, no. business plan and you’re going, here’s our strengths, here’s why we think we are successful or can be, here’s our weaknesses, here’s opportunities that we see in the market, and here are threats that could make us less successful. And here’s the deal, an investor or a banker, if you’ve gone through all of these things and done all of this, just the fact that you’ve done it is going to give you a leg up on 90% of the people that are coming in to apply. That’s huge. and threats, really just having a mastery of that information. Correct. All right. Moving on to number six, investment proposal. Know what you want. We talked about that earlier a little bit. We did. But as far as the, I guess, are you just saying like at the end of the day, have like an offer sheet page that says, this is what I want, or what should we have when it’s all said and done? That’s exactly what we should have. Basically, what I need to know as an investor is how much you’re looking for, how much equity you’re willing to give up, what you think my return on investment is going to be, and what kind of deal are you proposing. Okay. Now, number seven, understand the numbers. Sean, when you’re talking about understanding the numbers, what are we talking about here? We say, understand the numbers. When you, in particular, when you’re doing a startup and you’re raising the money for it. A lot of times what people will do is they’ll go in and they’ll prepare an Excel spreadsheet that gives their projected net income and they’ll just copy it forward and add 10, 20 or 30 percent to it every year. And the question becomes why do you feel like you can do that? You know, real life is not an Excel spreadsheet, you know, that we copy with the formula where we add 10%. Real life is tough with competition and people trying to take your clients and people challenges and cash flow challenges. So the question is, why did you put these certain numbers in here? And if you put them in here and you don’t know why, you’re not going to get the money. Okay. Now, point number eight, highlight your personal equity injection. It seems somewhat common sense, but I want to maybe clarify, if you’re looking at a deal and you say highlight your personal equity injection, just maybe talk to me in a little more detail what that means. Yeah, oftentimes it’s not real clear, the money that you’ve put into a company. And your example here is a great example, where you’ve basically brought, many times you’ve brought in individuals that are working at a below market rate, you’ve put a lot of money into developing the company up to that point, but it’s not as if you’re just walking into the room with a check. These are things you’ve done over a long period of time. So you need to portray, as you’ve done very well, to an investor what you have in the deal, you know, and what you’ve put in the deal so that they realize that you believe in it and you have risk in it just as much as they do. Okay, now point number nine, three years tax returns, both business and personal. That’s sort of a, you just have to do it. Standard, yeah, this is just very standard, but I would say you ought to have this both for a banker or an investor because it just provides proof of your financial performance. People are not going to lie on their taxes, they can’t, because they don’t want to pay more taxes than they have to. Yeah. So if you see a profit shown and good gross revenue numbers shown on a tax return, it’s the real deal. You know, anybody can type up a P&L and make it look great. But but taxes are real and there are huge consequences for being a dishonest on taxes. If you want to find an example of what not to do with your taxes, just Google Isley Brothers or Wesley Snipes and you can find some great examples there. It would be a great way to… Okay, now point number 10, the current balance sheet, business and personal. Sean, what all should be included in the business and personal balance sheet here? So a balance sheet is a listing of all the things that you own and all of the things that you owe and you subtract the two to come up with a net worth. So what a balance sheet shows is that both personally and business-wise, what are the assets you have and what are the things that you owe on. And it just gives the investor or banker a good snapshot of where you are right now. And we’re going to go ahead and put a little graphic on the screen right now just so you can get some clarity with this. That’s all the things you own versus all the things that you owe. And that’s going to determine your net worth. That’s basically a simplified version of that. Now, point number 11, your current year-to-date profit and loss. Illustrate for us, my friend, what you’re talking about here. Well, we talked about having three years tax returns, point number 9. The year-to-date P&L is just saying how you’ve done this year. So it’s given a very recent financial picture of how your business is doing right now because that’s not going to be captured. Tax returns are only at your physical year-end. So we want to see how you’re doing right now. Okay, now we’re moving on here. This is the final segment of the good stuff we want to cover to help you raise capital in a challenging economy. If you’re somebody who’s thinking, man this economy is challenging, this is for you. So we’re talking about the eight mistakes to avoid here. So we’ll go through them. Mistake number one, lack of proven cash flow. Sean, what does it mean to have lack of a proven cash flow? Well, it just means you don’t have any business history. You haven’t done business. You haven’t made money. You just don’t. Your business model is not proven. This doesn’t mean that you can’t get money. As I’ve already mentioned, you can. It just makes it more challenging. If you don’t have a proven history Ideally the way that it would work is you start up a business with your own money and friends and family Okay And you prove it up for for at least a year and then you’re able to go get investment because you’ve shown what you can do So that’s what we’re talking about here now mistake number two leaving minimal equity in the business Sean What does it mean to leave minimal equity in the business? This is a very important one for businesses that are trying to bring in investors or bank capital to grow. Okay, so if you have an existing business and as you’ve made money, you’ve pulled it all out, you know, you made a million dollars last year, you pulled out a million dollars and went and bought cars, boats, big home, etc. What that shows is that you now have no cushion left in that business if something were to go wrong. This happened a lot back in 2008, 2009, and 2010. Business had been doing very well. Business owners pulled all the money out, lived high on it. And then when times got very difficult, they didn’t have any cash or paid-for assets in the business comes first and You personally come second We don’t want somebody that’s going to suck all the cash out of the business and just you know Leave it flailing and this is all about again the cash cushion here and I want to just share with you we talked about it earlier, but I want to just Obsess on this for a second. You’re going to have problems when you run a business. You’re always going to run into obstacles, and when you do, you need a little bit of cushion. So that’s what people are looking for here. Correct. Now mistake number three, unrealistic assumptions. Sean, are we talking about unicorns here, or what do you mean by this? We’re not talking about unicorns flying to the sky. Okay. What we are talking about, though, is coming up with numbers in your business that have no basis. And I’ll just give you, here’s, I have many examples of these where you look at it and this is almost the norm rather than the exception. Individual comes in, their business has performed at this level and they say, if you make an investment, it’s going to go like this. It’s been growing at 5% a year, but with your investment, it’s going to grow at 40. Why is the question? Why? Now it may be, it may make perfect sense with additional capital, we can do this type of marketing, and we believe it would bring in more clients. But more often than not, that doesn’t, this doesn’t typically happen. If you’re ever thinking about investing in a deal and someone references unicorns and space travel as part of their assumptions, maybe that’s something you look out for. Yeah, that’s, I think that’s number, capital concept number eight, okay? We’re in the tunnel okay, so I’m mistaken mistake number four not giving the entire story Sean are you talking about not being long-winded when telling jokes and stories or what what do you what do you represent? Well, we all have a tendency to accentuate the positive. Yeah, okay? You’re all you’re much better off when you’re either raising investment funds or bank dollars to just be honest about the whole situation. This is what happened. We were very successful. We ran into these challenges. This is what we’ve done to overcome them. I had an embezzlement within the organization and it’s because my financial controls weren’t in place but now they are. Just being honest because what happens is the investor or banker are pretty adept at finding out the truth anyway. And so if you’ve come forward with a story that isn’t accurate, but you just think sounds better, you know, or you just want to avoid talking about the negative, they’re going to find out the negative. It’s going to hurt your credibility. So you’re just much better off giving the whole story about your business, your history, and kind of, you know, why things have happened the way they have. Business mistake number five in Spanish that’s business mistake L5. A business built around one person. Sean we talked about this earlier a little bit but just hammer home why this is such a bad deal. We may have just lost all of our Hispanic listeners but if you’re still around. Mistake number five. I took two years of Spanish and that’s what I have mastered. Mistake number five. Business is built around one person, is just because there’s too much risk there. Okay, so if the entire business, if you are the engine, if you have all the relationships, you have all the ideas, you have everything, I buy the business or invest in the business and something happens to you, what do we have left? Probably nothing. So that is why that’s a big mistake. You have to, even if you’re a one person or a very small business, you have to show that the processes, the relationships, everything would continue even if you were not around. I see this all the time in small business where nothing’s documented. It’s just a bunch of verbal, oral traditions, tribal knowledge kind of stuff. If you’re watching this, make sure everything’s documented. It’s just super important. And moving on to mistake number six, poor personal and business credit history. How could poor business credit history affect a deal? You know, there are reasons that people go through financial challenges, no question. And you know, most of us have had this happen. But when you have a pattern of making late payments or not making payments on obligations you have, it just really deteriorates the trust that an investor or a banker would have. Okay. Mistake number seven, the inability to give the global picture. Sean, are you talking about the inability to travel to the International Space Station and to be able to look down upon the planet, or what are you speaking of? No, no, that’s not what we’re talking about. What we’re talking about with a global picture is the ability to explain all of your business activities. What happens a lot of times is an individual will own multiple businesses. They come in for a loan and they only tell you about the one that they are borrowing money for. However, the others can take them down and take your loan or investment down just as well. So you need to invest in an accountant to provide you with good global profit and loss numbers, balance sheets for all of your businesses so that you can portray what you look like in total, not just the one that you’re talking about. Okay, so we’re moving on to mistake number eight, the inability to document the income. What when you say inability to document, are you talking about tax returns here? What are you talking about? What I’m talking about is many times people will function with cash. So somebody comes into my business and they pay me cash and maybe I don’t run that through the cash register and maybe I just stick it in my pocket and that way I don’t have to pay tax on it because that is illegal but we all know that it happens. And then the problem becomes the individual wants to portray to an investor or a banker that the company makes a great profit, but it’s nowhere to be found on the tax return. So they say, trust me, trust me, you know, I’ve taken in a lot of money that you don’t see here, and that’s problematic on a couple of fronts. One is there’s no way to prove it. The other one is they’ve been doing illegal acts. So trust me, I’ve been breaking the law consistently for years. Is that kind of like how it comes across? It does. It does. And so it doesn’t typically go well. Okay. Now the final, this is a bonus one that I’ve put together that I feel like this isn’t a mistake to avoid. I did some research, talked to some guys, and I want to see what your thoughts were. This is a bonus. This is totally, Sean has not seen this. He knows nothing about this. This is something I have, our team, we’ve done some research. We talked about it. Having a bowl cut. I realize that having this mistake could really hurt your chances of raising money. However, did you ever have a bowl cut during high school? I don’t. I’ve had some bad haircuts. Let’s be honest. I had the feathered look. That was probably my worst. Would you agree that having a bowl cut could hurt your chances? I would agree with that. I have to say, I’m going to have to add it to my presentations going forward because there is no question, having a bowl cut generally speaking is a sign of poor decision making and you haven’t really thought through the consequences of your actions or you have no attention to detail. And all of those are bad when it comes to raising capital. You just don’t want to put the bowl on your head and let someone shave around it. That’s a bad deal. No. You’ve got to invest the $7 to get a haircut. Okay, now Sean, I appreciate you going through all this. This is awesome. These are the steps to raising capital in a challenging economy. I would also say the steps to raising capital in a great economy. This is just how you do it. And I was just wondering, the final question I had here for you, and I’ll let you go. Is there any point that we’re going to be able to release some of the old school footage of your basketball game when you’re back in your All-State days? No, I don’t think they had footage back then. Really? No, I think everything was kind of, you know, scribed on stone, you know, so I don’t know if we have any of that. Well, for anybody who can just visualize this, Sean used to just shoot the three-pointer from way downtown. It was incredible. So he knows about the financial knowledge, but he’s also just a kind of a closet basketball dynamo. Okay, so I would say one final thing that I would mention, Clay, to your viewers, is if you are considering raising capital for any type of investment, you really need to have good advisors around you. This is not something you want to do on your own. You need to have legal documents written up. There are rules as to how you can raise capital that we just don’t have the time to get into. So I would say this. You always want to have a good accountant around you. You really want to have a banker that you can trust. You’re going to want an attorney that has experience in structuring investments, and you’re going to want to have a financial advisor, someone that manages investments for a living. And if you can get all four of those together, present them with what you’re trying to do, you don’t have to have a huge amount of money. Many people will invest time with you just because of the future possibilities that you have. And that will help you make sure that you follow all pertinent laws. Think about all issues that maybe we haven’t covered here today. And I just think that’s very important to keep in mind. So a quick recap. We’ll put these on the screen here for you. The four advisors you want to have as part of your team before you go out there and raise capital is one, an accountant, two, a banker, three, an attorney, and fourth, a financial advisor. Make sure you have that dream team around you so that you can avoid some of the legal issues and make sure you have all your numbers right and just a great team to help you along the way. You bet. Sean, I appreciate it. Thank you. Appreciate it. JT, do you know what time it is? 410. It’s T-Bo time in Tulsa, Oklahoma, baby. Tim Tebow is coming to Tulsa, Oklahoma, June 27th and 28th. We’ve been doing business conferences here since 2005. I’ve been hosting business conferences since 2005. What year were you born? 1995. Dude, I’ve been hosting business conferences since you were 10 years old, but I’ve never had the two-time Heisman Award-winning Tim Tebow come present. And a lot of people, you know, have followed Tim Tebow’s football career on the field and off the field. And off the field, the guy’s been just as successful as he has been on the field. Now the big question is JT, how does he do it? Well they’re gonna have to come and find out because I don’t know. Well I’m just saying, Tim Tebow is going to teach us how he organizes his day, how he organizes his life, how he’s proactive with his faith, his family, his finances. He’s going to walk us through his mindset that he brings into the gym, into business. It is going to be a blasty blast in Tulsa, Russell. Also, this is the first Thrive Time Show event that we’ve had where we’re going to have a man who has built a $100 million net worth. Wow. Who’ll be presenting. Now, we’ve had a couple of presenters that have had a billion dollar net worth in some real estate sort of things. But this is the first time we’ve had a guy who’s built a service business, and he’s built over $100 million net worth in the service business. It’s the yacht driving, multi-state living guru of franchising. Peter Taunton will be in the house. This is the founder of Snap Fitness, the guy behind Nine Round Boxing. He’s going to be here in Tulsa, Russel, Oklahoma, June 27th and 28th. JT, why should everybody want to hear what Peter Taunton has to say? Oh, because he’s incredible. He’s just a fountain of knowledge. He is awesome. He has inspired me listening to him talk and not only that, he also has, he practices what he teaches, so he’s a real teacher. He’s not a fake teacher like business school teachers. So you got to come learn from him. Also, let me tell you this, folks, I don’t want to get this wrong because if I get it wrong, someone’s going to say, you screwed that up, buddy. So Michael Levine, this is Michael Levine. He’s going to be coming. He said, who’s Michael Levine? I don’t get this wrong. This is the PR consultant of choice for Michael Jackson, Prince, for Nike, for Charlton Heston, for Nancy Kerrigan, 34 Grammy Award winners, 43 New York Times bestselling authors he’s represented, including pretty much everybody you know who’s been a super celebrity. This is Michael Levine, a good friend of mine. He’s going to come and talk to you about personal branding and the mindset needed to be super successful. The lineup will continue to grow. We have hit Christian reporting artist, Holton Dixon in the house. Now people say, Colton Dixon’s in the house? Yes! Colton Dixon’s in the house. So if you like Top 40 Christian music, Colton Dixon’s going to be in the house performing. The lineup will continue to grow each and every day. We’re going to add more and more speakers to this all-star lineup, but I encourage everybody out there today, get those tickets today. Go to Thrivetimeshow.com. Again, that’s Thrivetimeshow.com. And some people might be saying, well, how do I do it? What do I do? How does it work? You just go to Thrivetimeshow.com. Let’s go there now. We’re feeling the flow. We’re going to Thrivetimeshow.com. Thrivetimeshow.com. Again, you just go to Thrivetimeshow.com. You click on the Business Conferences button, and you click on the Request Tickets button right there. The way I do our conferences is we tell people it’s $250 to get a ticket or whatever price that you can afford. And the reason why I do that is I grew up without money. JT, you’re in the process of building a super successful company. You started out with a million dollars in the bank account? No, I did not. Nope, did not get any loans, nothing like that. Did not get an inheritance from parents or anything like that. I had to work for it. And I am super grateful I came to a business conference. That’s actually how I met you, met Peter Taunton, I met all these people. So if you’re out there today and you want to come to our workshop, again, you just got to go to thrivetimeshow.com. You might say, well, when’s it going to be? June 27th and 28th. You might say, well, who’s speaking? We already covered that. You might say, where’s it going to be? It’s going to be in Tulsa, Russell Oklahoma. It’s Tulsa, Russell. I’m really trying to rebrand Tulsa as Tulsa, Russell, sort of like the Jerusalem of America. But if you type in Thrivetimeshow and Jinx, you can get a sneak peek or a look at our office facility. This is what it looks like. This is where you’re headed. It’s going to be a blasty blast. You can look inside, see the facility. We’re going to have hundreds of entrepreneurs here. It is going to be packed. Now, for this particular event, folks, the seating is always limited because my facility isn’t a limitless convention center. You’re coming to my actual home office. And so it’s going to be packed. So when? June 27th to 28th. Who? You! You’re going to come. Who? You. I’m talking to you. You can get your tickets right now at thrive timeshow.com and again you can name your price We tell people it’s $250 or whatever price you can afford and we do have some select VIP tickets which gives you an access to meet some of the speakers and those sorts of things and those tickets are $500 It’s a two-day Interactive business workshop over 20 hours of business training We’re gonna give you a copy of my newest book the millionaires guide to becoming sustainably rich You’re gonna leave with a workbook. You’re going to leave with everything you need to know to start and grow a super successful company. It’s practical. It’s actionable. And it’s TiVo time right here in Tulsa, Russia. Get those tickets today at Thrivetimeshow.com. Again, that’s Thrivetimeshow.com. Hello, I’m Michael Levine, and I’m talking to you right now from the center of Hollywood, California, where I have represented over the last 35 years 58 Academy Award winners, 34 Grammy Award winners, 43 New York Times bestsellers. I’ve represented a lot of major stars and I’ve worked with a lot of major companies. And I think I’ve learned a few things about what makes them work and what makes them not work. Now, why would a man living in Hollywood, California, in the beautiful sunny weather of LA, come to Tulsa? Because last year I did it and it was damn exciting. Clay Clark has put together an exceptional presentation, really life-changing, and I’m looking forward to seeing you then. I’m Michael Levine. I’ll see you in Tulsa. James, did I tell you my good friend John Lee Dumas is also joining us at the in-person, two-day interactive Thrive Time Show Business Workshop. That Tim Tebow and that Michael Levine. Have I told you this? You have not told me that. He’s coming all the way from Puerto Rico. This is John Lee Dumas, the host of the chart-topping EOFire.com podcast. He’s absolutely a living legend. This guy started a podcast after wrapping up his service in the United States military and he started recording this podcast daily in his home to the point where he started interviewing big time folks like Gary Vaynerchuk, like Tony Robbins, and he just kept interviewing bigger and bigger names, putting out shows day after day. And now he is the legendary host of the EO Fire podcast and he’s traveled all the way to Rico, to Tulsa, Oklahoma to attend the in-person June 27th and 28th Thrive Time Show 2-Day Interactive Business Workshop. If you’re out there today folks, you’ve ever wanted to grow a podcast, a broadcast, you want to get you want to improve your marketing, if you’ve ever wanted to improve your marketing, your branding, if you’ve ever wanted to increase your sales, you want to come to the 2-Day Interactive June 27th and 28th Thrive Time Show Business Workshop featuring Tim Tebow, Michael Levine, John Lee Dumas and countless big time super successful entrepreneurs. It’s going to be life changing. Get your tickets right now at thrivetimeshow.com. James, what website is that? ThriveTimeshow.com. James, one more time for the sports enthusiasts. ThriveTimeshow.com. Even if I’ve got three stripes, I’ma go for it. This moment, we own it. I’m not to be played with because it could get dangerous. See, these people I ride with, this moment, we own it. Thrive Time Show two-day interactive business workshops are the world’s highest rated and most reviewed business workshops because we teach you what you need to know to grow You can learn the proven 13-point business systems that dr. Zellner about I have used over and over to start and grow successful companies We get into the specifics the specific steps on what you need to do to optimize your website We’re gonna teach you how to fix your conversion rate. We’re gonna teach you how to do a social media marketing campaign that works. How do you raise capital? How do you get a small business loan? We teach you everything you need to know here during a two day, 15 hour workshop. It’s all here for you. You work every day in your business, but for two days you can escape and work on your business and build these proven systems, so now you can have a successful company that will produce both the time freedom and the financial freedom that you deserve. You’re gonna leave energized, motivated, but you’re also going to leave empowered. The reason why I built these workshops is because as an entrepreneur, I always wish that I had this. And because there wasn’t anything like this, I would go to these motivational seminars, no money down, real estate, Ponzi scheme, get motivated seminars, and they would never teach me anything. It was like you went there and you paid for the epic chocolate Easter bunny, but inside of it, it was a hollow nothingness. And I wanted the knowledge, and they’re like, oh, but we’ll teach you the knowledge after our next workshop. And the great thing is we have nothing to upsell. At every workshop, we teach you what you need to know. There’s no one in the back of the room trying to sell you some next big get-rich-quick, walk-on-hot-coals product. It’s literally we teach you the brass tacks, the specific stuff that you need to know to learn how to start and grow a business. I encourage you to not believe what I’m saying, but I want you to Google the Z66 auto auction. I want you to Google elephant in the room. Look at Robert, Zellner, and Associates. Look them up and say, are they successful because they’re geniuses, or are they successful because they have a proven system? When you do that research, you will discover that the same systems that we use in our own business can be used in your business. Come to Tulsa, book a ticket, and I guarantee you it’s going to be the best business workshop ever, and we’re going to give you your money back if you don’t love it. We built this facility for you, and we’re excited to see it. And now you may be thinking, what does it actually cost to attend an in-person, two-day interactive Thrive Time Show business workshop? Well, good news, the tickets are $250 or whatever price that you can afford. What? Yes, they’re $250 or whatever price you can afford. I grew up without money and I know what it’s like to live without money, so if you’re out there today and you want to attend our in-person, two-day interactive business workshop, all you’ve got to do is go to Thrivetimeshow.com to request those tickets. And if you can’t afford $250, we have scholarship pricing available to make it affordable for you. I learned at the Academy at Kings Point in New York, acta non verba. Watch what a person does, not what they say. Good morning, good morning, good morning. Harvard Keosak University Radio Show. Today I’m broadcasting from Phoenix, Arizona, not Scottsdale, Arizona. They’re close, but they’re completely different worlds. and we have a special guest today. Definition of intelligence is if you agree with me, you’re intelligent. And so this gentleman is very intelligent. I’ve done this show before also, but very seldom do you find somebody who lines up on all counts. And so Mr. Clay Clark is a friend of a good friend, Eric, Eric Trump, but we’re also talking about money, bricks, and how screwed up the world can get in a few and a half hour. So Clay Clark is a very intelligent man. And there’s so many ways we could take this thing. But I thought, uh, since you and Eric are close Trump. What were you saying about what Trump can’t, what Donald who’s my age and I can say, or cannot say, what first of all, I have to honor you, sir. I want to show you what I did to one of your books here. There’s a guy named Jeremy Thorn, who was my boss at the time. I was 19 years old, working at Faith Highway. I had a job at Applebee’s, Target, and DirecTV. And he said, have you read this book, Rich Dad, Poor Dad? And I said, no. And my father, may he rest in peace, he didn’t know these financial principles. So I started reading all of your books and really devouring your books. And I went from being an employee to self-employed to the business owner to the investor and I owe a lot of that to you and I just want to take a moment to tell you thank you so much for allowing me to achieve success and I’ll tell you all about Eric Trump I just want to tell you thank you sir for changing my life. Well not only that Clay, you know thank you but you’ve become an influencer you know more than anything else you’ve evolved into an influencer where your word has more and more power. So that’s why I congratulate you on becoming. Because as you know, there’s a lot of fake influencers out there too, or bad influencers. Yeah. So anyway, I’m glad you and I agree so much and thanks for reading my books. Yeah. That’s the greatest thrill for me today. Not a thrill, but recognition is when people, young men especially, come up and say, I read your book, changed my life, I’m doing this, I’m doing this, I’m doing this. I learned at the Academy at King’s Point in New York, acta non verba. Watch what a person does, not what they say. Hey, I’m Ryan Wimpey. I’m originally from Tulsa, born and raised here. I went to a small private liberal arts college and got a degree in business, and I didn’t learn anything like they’re teaching here. I didn’t learn linear workflows. I learned stuff that I’m not using, and I haven’t been using for the last nine years. So what they’re teaching here is actually way better than what I got at business school. And I went what was actually ranked as a very good business school. The linear workflow, the linear workflow for us in getting everything out on paper and documented is really important. Like we have workflows that are kind of all over the place. Having linear workflow and seeing that mapped out on multiple different boards is pretty awesome. That’s really helpful for me. The atmosphere here is awesome. I definitely just stared at the walls figuring out how to make my facility look like this place. This place rocks. It’s invigorating. The walls are super, it’s just very cool. The atmosphere is cool. The people are nice. It’s a pretty cool place to be. Very good learning atmosphere. I literally want to model it and steal everything that’s here at this facility and basically create it just on our business side. Once I saw what they were doing, I knew I had to get here at the conference. This is probably the best conference or seminar I’ve ever been to in over 30 years of business. You’re not bored, you’re awake, you’re alive the whole time, it’s not pushy, they don’t try to sell you a bunch of things. I was looking to learn how to just get control of my life, my schedule, and just get control of the business. Planning your time, breaking it all down, making time for the F6 in your life, and just really implementing it and sticking with the program. It’s really lively, they’re pretty friendly, helpful, and very welcoming. I attended a conference a couple months back and it was really the best business conference I’ve ever attended. At the workshop I learned a lot about time management, really prioritizing what’s the most important. The biggest takeaways are you want to take a step-by-step approach to your business, whether it’s marketing, what are those three marketing tools that you want to use to human resources. Some of the most successful people and successful businesses in this town, their owners were here today because they wanted to know more from Clay and I found that to be kind of fascinating. The most valuable thing that I’ve learned is diligence. That businesses don’t change overnight. It takes time and effort and you’ve got to go through the ups and downs of getting it to where you want to go. He actually gives you the road map out. I was stuck, didn’t know what to do and he gave me the road map out step by step. We’ve set up systems in the business that make my life much easier, allow me some time freedom. Here you can ask any question you want, they guarantee it will be answered. This conference like motivates It’s up to you to do it. Everybody can do these things. There’s stuff that everybody knows, but if you don’t do it, nobody else is going to do it for you. I can see the marketing world cake. It’s just an approach that makes sense. Probably the most notable thing is just the income increase that we’ve had. Everyone’s super fun and super motivating. I’ve been here before, but I’m back again because it motivates me. Your competition’s going to come eventually or try to pick up these tactics. So you better, if you don’t, somebody else will. I’m Rachel with Tip Top K9 and we just want to give a huge thank you to Clay and Vanessa Clark. Hey guys, I’m Ryan with Tip Top K9. Just want to say a big thank you to Thrive 15. Thank you to Make Your Life Epic. We love you guys, we appreciate you and really just appreciate how far you’ve taken us. This is our old house. Right, this is where we used to live a few years ago. This is our old neighborhood. See? Nice, right? So this is my old van and our old school marketing. And this is our old team. And by team I mean it’s me and another guy. This is our new van with our new marketing and this is our new team. We went from four to fourteen and I took this beautiful photo. We worked with several different business coaches in the past and they were all about helping Ryan sell better and just teaching sales, which is awesome, but Ryan is a really great salesman, so we didn’t need that. We needed somebody to help us get everything that was in his head out into systems, into manuals and scripts and actually build a team. So now that we have systems in place, we’ve gone from one to 10 locations in only a year. In October 2016, we grossed 13 grand for the whole month. Right now it’s 2018, the month of October. It’s only the 22nd. We’ve already grossed a little over 50 grand for the whole month and we still have time to go. We’re just thankful for you, thankful for Thrive and your mentorship and we’re really thankful that you guys have helped us to grow a business that we run now instead of the business running us. Just thank you, thank you, thank you, times a thousand. So we really just wanna thank you, Clay, and thank you, Vanessa, for everything you’ve done, everything you’ve helped us with. We love you guys. If you decide to not attend the ThriveCon workshop, you’re missing out on a great opportunity. The atmosphere at Faze Office is very lively. You can feel the energy as soon as you walk through the door, and it really got me and my team very excited. If you decide not to come, you’re missing out on an opportunity to grow your business, bottom line. I love the environment. I love the way that Clay presents and teaches. It’s a way that not only allows me to comprehend what’s going on, but he explains it in a way to where it just makes sense. The SEO optimization, branding, marketing, I’ve learned more in the last two days than I have the entire four years of college. The most valuable thing that I’ve learned, marketing is key, marketing is everything. Making sure that you’re branded accurately and clearly. How to grow a business using Google reviews and then just how to optimize our name through our website also. Helpful with a lot of marketing, search engine optimization, helping us really rank high in Google. The biggest thing I needed to learn was how to build my foundation, how to systemize everything and optimize everything, build my SEO. How to become more organized, more efficient. How to make sure the business is really there to serve me as opposed to me constantly being there for the business. New ways of advertising my business as well as recruiting new employees. Group interviews, number one. Before we felt like we were held hostage by our employees. Group interviews has completely eliminated that because you’re able to really find the people that would really be the best fit. Hands-on, how to hire people, how to deal with human resources, a lot about marketing and overall just how to structure the business, how it works for me, and also then how that can translate into working better for my clients. The most valuable thing I’ve learned here is time management. I like the one hour of doing your business. It is real critical if I’m gonna grow and change. Play really teaches you how to navigate through those things, and not only find freedom, but find your purpose in your business, and find the purposes for all those other people that directly affect the business as well. Everybody. Everybody. Everybody. Everyone. Everyone. Everyone needs to attend the conference because you get an opportunity to see that it’s real.