"Successful people focus on progress and not perfection." - Jeffrey Feldberg and Steve Wells
Jeffrey Feldberg and Steve Wells are the founders of Deep Wealth. The M&A journey for Jeffrey and Steve began when they said "no" to a 7-figure unsolicited offer...
"Successful people focus on progress and not perfection." - Jeffrey Feldberg and Steve Wells
Jeffrey Feldberg and Steve Wells are the founders of Deep Wealth. The M&A journey for Jeffrey and Steve began when they said "no" to a 7-figure unsolicited offer. Immediately, the two said "yes" to mastering the art and science of a liquidity event. Two years later, Jeffrey and Steve said "yes" to a 9-figure offer. On the process, Jeffrey and Steve increased their company value 10X.
How did Jeffrey and Steve increase their company value 10X and go to a 9-figure liquidity event?
Jeffrey and Steve created a proven 9-step solution on how to successfully prepare.
The Deep Wealth Experience has you learn the 9-steps of preparation in 90-days. At the end of the 90-days you have a launch plan and certainty that you capture the maximum value.
Why the level of preparation you to do increases the value of your business tomorrow How 90% of M&A deals fail and what you can do about it The importance of realizing the odds are against you How most business owners leave millions of dollars of their money on the deal table How preparation finds the skeletons in your closet Why you must find the hidden Rembrandts in your attic and communicate this to your buyer Why you shouldn't believe the myth of waiting for your competition to give you an offer What you must do to successfully deal with your investment banker The importance of the right mindset from start to finish of your liquidity event How vulnerability in front of your future buyer is a strength and not a weakness What your buyer is looking for in your business X-Factors to increase the profitability of your business Why the wrong emotional mindset is one of the top M&A deal killers One of the X-Factors is your business model and how most business owners drop the bal in this area The importance of knowing the different types of buyers and what they're looking for Why every mistake you make puts your hard-earned money in the pocket of your future buyer How a buyer tempts you into making classic mistakes and how you can avoid these mistakes The importance of your business running without you, especially during a liquidity event Why you must avoid at all costs missing your forecast or having a too good to be true forecat How to tune into the What's In It For Me (WII.FM) radio station of your buyer The origins of the Deep Wealth Experience and how it gives you certainty to capture maximum value The structure of the Deep Wealth Experience to help you create a launch plan Why your exit team can make or break your liquidity event How to select the right advisors to help you with your liquidity event What to look out for in advisors Two roles on your exit team that most business owners leave out at their own expense This podcast is brought to you by Deep Wealth. Are you thinking about a liquidity event? You have one chance to get it right and you better make it count. Enterprise value is created from preparation, and not the event itself. Learn how the Deep Wealth Experience helps you maximize enterprise value. Master the same strategies our founders used to increase their company value 10X with a 9-figure exit. Click here to book your free exploratory call.
Enjoy the interview!
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Your liquidity event is the most important financial transaction of your life. You have one chance to get it right, and you better make it count.
But unfortunately, up to 90% of liquidity events fail. Think about all that time, money and effort wasted. Of the "successful" liquidity events, most business owners leave 50% to over 100% of their deal value in the buyer's pocket and don't even know it.
Our founders said "no" to a 7-figure offer and "yes" to a 9-figure offer less than two years later.
Don't become a statistic and make the fatal mistake of believing that the skills that built your business are the same ones for your liquidity event.
After all, how can you master something you've never done before?
Are you leaving millions on the table?
Learn how the 90-day Deep Wealth Experience and our 9-step roadmap helps you capture the maximum value for your liquidity event.
Click here to book your free exploratory strategy session.
Enjoy the interview!
Steve Wells: [00:00:00] I'm Steve Wells.
Jeffrey Feldberg: [00:00:01] And I'm Jeffrey Feldberg. Welcome to the Sell My Business Podcast.
Steve Wells: [00:00:06] This podcast is brought to you by the Deep Wealth Experience. When it comes to your liquidity event or exit, do you know how to maximize the value of your business? You have one chance to get it right, and you better make account. Most business owners believe that business value is determined during the liquidity event.
Unfortunately, most business owners are wrong. Your enterprise value is a direct result of the depth and quality of your preparation. Who are we and, how do we know? We're the 9-figure exit guys. We said "no" to a 7-figure offer based on 3-times, EBITDA. Two years later, we said "yes" to a 9-figure offer based on 13-times EBITDA. Despite having the same people, the same company, the same services, we increased our business value 10 times.
How did we do this? We spent millions of dollars and years of time to uncover strategies that level the playing field. The end result is the 12-week Deep Wealth Experience.
We've created a proprietary solution that is relentless, resilient, and gets results. Learn how to master the art and science of a liquidity event. We've leveraged the same strategies that took us from 7-figures to 9-figures.
The Deep Wealth Experience levels of playing field so you can dominate and win.
Book your free call today to find out if you have what it takes for the Deep Wealth Experience.
Visit www.deepwealth.com/success to book your free call.
Jeffrey Feldberg: [00:01:39] Welcome to episode 31 of The Sell My Business Podcast. Steve and I are delighted to have a Q&A session for this week's episode. So, Steve we've been getting requests on what are some of the more common M&A deal killers. And as we all know, as business owners, we have one chance to get it right and we always want to make it count. So, Steve what's at the top of the list for the M&A deal killers.
Steve Wells: [00:02:04] Jeffrey we've spoken to many, investment bankers or people or companies buying businesses. And it's astounding, to me that in some cases, 90% of deals fail. This isn't something that is, remotely. possible. It is more likely possible that if you don't follow some of the plans and the suggestions and the practice that we do in the Deep Wealth Experience, your deal is going to fail.
The odds are against you. One of the first ones is preparation.
The level of preparation that you put in today is what's going to increase your enterprise value tomorrow. So, what do we mean by that Jeffrey?
Jeffrey Feldberg: [00:02:47] As we're out there, literally speaking to business owners around the world, you have business owners who have never done any kind of transaction before. They haven't sold a business. They haven't raised capital and you even have business owners who have sold a business and they have raised capital.
But what's interesting is when we're speaking with them, we're seeing so many common flaws in the thinking that it's going to hurt them. There are two stats that really stand out for me. And one of them is that depending on who you speak to up to 90% of mergers and acquisitions fail. And right up there, again, depending on who you speak to most business owners are leaving anywhere from 80% to 90% of the deal value on the deal table.
Or in other words, you're leaving 80 to 90% of your deal value in your buyer's pocket. That's your hard-earned money that you're giving up and putting into your buyer's pocket. And so the question becomes, how can you prevent that? And as we know here at Deep Wealth with our Deep Wealth Experience, we focus exclusively on the preparation. Because what we've seen your value, isn't determined from the process itself.
The value during your process, it's like a rear view mirror, and you're looking back in time at the depth and the quality of the preparation that you've done. . So, when you put the time in, you spend the time you spend the money, which are both rounding errors, compared to the increase in value that you're going to get. When you put the time and money into prepare, that's when you're doing everything right. Because for us, Steve, we talk a lot about this when you're preparing what you're essentially doing are two key things.
The first thing is you're finding the skeletons in your closet or what we like to call the blind spots. And you're having an opportunity to correct your blind spots to fix those blind spots before you actually start your process because in the mergers and acquisitions world, you're guilty and you're never innocent.
So, in other words, if you show up to your investment banker and you have all of these skeletons in the closet that you have in fixed, in the back of your investment, bankers mind is going to be the doubt and the questioning of, okay. If Mike missed these particular skeletons, what else is he missing? Yes, he fixed them, but what else don't I know? And I don't want to embarrass myself. I don't want to lose credibility. With the buyers that we're dealing with because I'll deal with these buyers’ time and time again. Your investment banker is in business to be in business and we'll have a book of business with the same buyers over and over again.
So, they're not going to risk it. And the second thing that we like to talk about is finding those hidden Rembrandts in the attic. And Steve why don't you talk about the hidden Rembrandts in the attic and why preparation is critical to finding what those are and broadcasting that to the world.
Steve Wells: [00:05:53] Sometimes the Rembrandts aren't obvious and probably they aren't obvious to you. And it takes some, exercises to see those. And we work with, the businesses and the business owners in the Deep Wealth Experience to find those Rembrandts, because those are going to extract extreme amount of value.
Now, this all takes a little bit of work and that's in the preparation stage, but now is the time to do that preparation because when you're in the middle of the battle, you don't really have time to discover these Rembrandts or you don't have time to fix the skeletons. You've got to do that now. The other thing is when you're in the middle of the exit or the liquidity event, you've got to be running your business.
So, you've got to put a lot of this work upfront because you're going to be juggling. It's going to be confusing for you, going through the process because you've never done it before and there's going to be a lot of things coming at you. That's why preparation as you hear us over and over again, say this is the key to what you need to do.
The second area that we see a lot of is why some business owners have the wrong emotional mindset and what that does to the deal. Jeffrey, what do we mean by that?
Jeffrey Feldberg: [00:07:04] This is such a key area and it's an easy area to both overlook and to just miss the boat altogether. Now, Steve, a few moments back you said something interesting about that. The preparation you're having to run your business. Now, here's something interesting for you because a lot of business owners that we speak to, it's all too common for them to say, I'm too busy running my business.
I don't want to spend the time. I don't want to spend the money. I don't want to have to pay commissions. I'll run my business and I'll let my competition come along give me an offer and I'll just go with it. Offer and life is good. And it's a myth if you believe that, stop it today because you're selling yourself short more than you can ever imagine.
You're leaving that 80 to 90% of your deal value on the deal table. When you do the preparation in advance some of the things that you're going to be saving are number one, your health. You're not going to be as stressed, not to say that an exit or liquidity event isn't stressful. It is, but it can be less stressful when you do the preparation in advance.
And the other thing is you're saving money because it's you and your team that are learning different aspects of your business. You're not paying these very high and exorbitant rates to your advisors to do that work for you. So, when you do the preparation, you're also going into the event with the right emotional mindset.
When you do the right preparation, you're walking into your exit or your liquidity event with the right mindset of how do you approach your future buyer?
How do you deal with your investment bankers? It's really tuning into our favorite radio station, WI FM. The what's in it for me. Radio station. And the what's in it for me. Aren’t you, it's tuning into what's in it for your buyer, your investment banker, your advisors? And you may be saying, why am I having to do that for my advisors?
I'm paying them after all. So, why should I have to do that? And that's a whole other topic that we can spend a lot of time on, but simply know this. You are a very small cog in a large wheel, and the odds are stacked against you. When you have the right emotional mindset, you know what you should be saying, when you should be saying it, and how you should be doing this.
And that's often the difference between success and failure. So, Steve, I've taken some broad-brush strokes on the emotional mindset side of things. Is there anything else that you'd like to offer up?
Steve Wells: [00:09:41] This is probably going to be particularly if you're exiting the biggest event, financial business event, of your life. And there's going to be a lot of emotion involved in that Jeffrey. I remember when we were selling our company, we got on the phone for the final deal and it was sometime, I don't remember, like in the afternoon or around lunchtime, I saw my wife and she's brought me lunch and then she brought me dinner and then she went to bed.
And we were on the phone and she wakes up in the morning, comes downstairs. I'm still on the phone. You and I are on the phone. We've been on the phone all night, long, hammering out this deal. I remember I was emotionally just rung out. And that might be a unique example in that it took that long, but you're going to have to be prepared to handle all kinds of emotional things they're going to attack you. And you're the difference between winners and losers many times is their mindset. So, we work with you to give you some tips. To first to prepare. , I remember Michael Jordan, the documentary.
His mind was ready for that game. We're going to get your mind ready for the game that you're going to go into because you might have to hit a cut shot. The more you practice, the more you prepare for that, you're going to be on your top of your game when it comes to your liquidity event. So, it's a lot to talk about that, but that’s all we can hit today, Jeffrey. So, let's look at another one.
So, why not being perfect in the eyes of a buyer is a strength and not a weakness. Why if we show our imperfections, why would we want to do that?
Jeffrey Feldberg: [00:11:16] It's a great question. And here's another area where so many business owners think that in the eyes of their buyer, in the eyes of their investment banker, they need to be absolutely perfect. They don't make any mistakes. They get everything right. They've squeezed out every last penny that there is to squeeze out and that's just going to be the winning edge for them.
And in reality, it couldn't be further from the truth. It takes a strong a person to be vulnerable. Particularly when you're at the deal table, your buyer knows what your company did yesterday. Your buyer knows what your company did last year, and for the past two to three years, possibly more, depending on the amount of information that you've shared.
The only question that your buyer is asking, what are you going to do for me tomorrow? And if your answer to that question is, I've done everything perfect. There really aren't any new opportunities and there's nothing for you to do. That is a deal killer in the biggest way. Your buyer wants to know that because you haven't been perfect because there's been areas that you've, let's call it for what it is that you failed in.
Your failure is your buyer's opportunity. And in the Deep Wealth Experience, we talk a lot about this in the various modules that we cover. We dive into the areas that you probably haven't done the best job that you could. One quick example would be your business model. I suspect, and we have a whole eBook on this and Hey, no offense.
Your business model sucks. What are you going to do about it to make a difference? Steve. I remember as I look back to our liquidity event, before that, years
before that we changed our business model and what we did with our business model took the company from zero to hero and it made all the difference.
But even with what we did in our business model, do you remember some of the failures that we had of what we weren't able to do? We didn't have the money. We didn't have the time. We didn't have the experience. And when we shared that with our buyer, when we shared our shortcomings. What was the reaction? What was that like?
Steve Wells: [00:13:28] To them it’s an opportunity. If we are so good that we've extracted all the upside value and potential out of a business. What is a buyer going to get from that? They are looking for opportunity to increase the value of the business, not to keep it where it is, particularly if they're a financial buyer.
Now, maybe a strategic buyer might see things slightly differently, but you don't know who your buyer is. So, you got to be prepared to have the upside opportunity. And there again, we were just. Talking with someone on, their liquidity event. And they had different people coming in to bid for their company.
And remember, Jeffrey the low was 20 and the high was like 50 million. Huge difference. Everyone's looking at the exact same numbers. So, they're seeing something, they see opportunity. Some of those buyers and other buyers did not see that opportunity. Your job is to make sure that first, your audience and you know who your buyers are going to be, but you give them the opportunity that they want for their business.
OK. Let's look at another M&A deal killer. Avoid at all costs, missing your forecast or present a too good to be true forecast. Why Jeffrey is that so important?
Jeffrey Feldberg: [00:14:40] The first thing that most business owners don't realize in the mergers and acquisitions world, it's a zero-sum game. And look, perhaps it shouldn't be, we don't invent the rules we're just sharing what they are. And every mistake that you make. Benefits your buyer. Every mistake that you make is taking your hard, earned money and figuratively, and literally putting that into the pocket of your buyer.
Your buyer is going to do things to have you make mistakes. They're going to test you. They're going to challenge you. They're going to want to see if you take the bait. And all too often during the due diligence process, the buyer is going to try and push you towards having these crazy forecasts. Hey Mary, you have such a terrific company.
I see that you had some terrific growth last year. What can you do this year? And now your EGO IS on the line, and you're trying to impress the buyer and you're trying to show the world how good you are and you say a few things.
Oh, I believe that we can increase our revenues by 40%. And so now the buyers, Oh, 40%. Terrific. you know what, when you put together your forecast, we would love to see what that looks like.
How you're going to do it. What's that going to mean for your expenses? You're going down that rabbit hole and you've put together this forecast that is simply impossible for you to make. And so, you may be asking, why what's the big deal.
Steve, what is ahead for the business owner? When they put these forecasts there, what's going to happen when all is said and done to that forecast, once the deal is signed and the deal has closed
Steve Wells: [00:16:21] So, when you paint a picture, that's not reasonable, you've got some liability, that you don't want, it could be, we don't suggest anyone have earn-outs, there might be a small portion that is an earn-out or, is dependent on some kind of performance.
You're going to lose that. If you tie your employees up to something that they can't achieve, you're going to hurt those employees and not to mention your own credibility, of projecting something that is completely unreasonable. And you've got to be honest and give a reasonable, plan for your buyer.
Many times, they see through this. They see something and they're going to discount you if they don't believe you're really very accurate in what you're doing, they're going to apply some type of discount to your numbers. The other thing is, and this is getting to the second point on forecast, many times you're in the middle of these, processes that could take six months to complete. It could take even a year. You're going to have to hit the numbers that you say you're hitting, because what is worse is if you say next quarter, we're going to hit a hundred and you're only hitting 80. Now you've cast doubt on your entire business model and your whole plan.
They are going to apply a severe discount on what they're willing to pay for your business. So, you've got to hit your numbers and they've got to be accurate numbers. So, you may ask, how am I going to do this when I'm in the middle of this process? And I'm trying to sell my company at the same time, I'm trying to run my company.
That's a good question because it's going to be difficult. That goes back to what we've been saying before is it's all about preparation. It's all about selecting the right team and this getting ready for that time so that you cannot take your eye off the ball of running your company while you're still looking at selling the company or getting your financial liquidity event to happen.
You've got to do both of them at the same time. And the only way you'll do that is with the right preparation and the right forecast.
Jeffrey Feldberg: [00:18:28] Steve, you brought up an interesting point. And while the liquidity event is taking place, running your business, you will have given forecasts and they're going to be watching carefully.
Your future buyers will be watching carefully. Are you doing what you said you're going to do? In the world of mergers and acquisitions, the currency isn't money. Believe it or not, the currency isn't money it's trust. And if you don't hit your forecast, if you miss your forecast, you now have lost trust both with your future buyer who may ultimately walk away from the table as well as with your investment banker.
One great example is unfortunately we're in a pandemic. So, in a pandemic, if you miss your forecast well, it's understood. Not only is it understood in many ways it's expected, so you have a way out, but pandemics aside, if you're missing your forecast, there is no excuse. How many times Steve, have we heard on the podcast when we've had investment bankers in, or we've had business owners who have been on the other side of the table. They've been investment bankers, they've been buyers. And they said, I was working with a company, everything that they told me, the business owner said was true. And so when they did that, they built my trust up along the way.
And when something was to happen and they told me that was going to happen and it did happen, I built my trust up with them and I said, Oh, okay. if they told me that and they were telling the truth about it, if something else happened and they told me the truth about it, they're honest people.
I can trust them. I can do things with them. It's when you don't have that trust, that's when you're running into problems and you have to remember, Steve, why don't you give a range for most buyers, they're going to spend give a, a low end to a high end on the due diligence process. What would that be?
Steve Wells: [00:20:16] It depends on the size of the company, but I would say, just in the auditing process and the due diligence, I would say a $100,000, $200,000 if it's going to be, anywhere. We're like a 50, a hundred-million-dollar price. It can go up multiple times more than that, depending on how many, potential buyers you have.
In our case, we had an auction and what did we start off with Jeffrey? I think we had about what 80 people probably signing LOIs or more than that.
Jeffrey Feldberg: [00:20:47] It was at least 80. I want to put it up to, over a hundred Mark, 110, possibly 120.
Steve Wells: [00:20:53] So, when it got down to let's say it was around the bottom 20 or so 25, those people were spending. 200,000 or 300,000 each to do due diligence on our company. So, a lot of money is going into this process. They're going to be looking to get all the detail that they can and prove that they're right, on making this purchase.
And, it's funny, you mentioned, we have talked recently to so many people, the buyers and the sellers that they got down to the end and you'd think, with all this money and with all these numbers, it would just be a cut and dry, spreadsheet and you'd know who's going to buy and who's going to sell, but it always seems it gets down to the emotional part.
The buyer feels something about the owner that they trust and they then commit. The seller, feels something about the buyer and they want that buyer to take their legacy or to be with their employees. And these are intangibles. They are things that you need to think about before you go into the process so that, what's really important to you when you get down to making those final decisions.
Jeffrey Feldberg: [00:21:58] And for our listeners, here's something that I want you to think about. Put yourself in a buyer's shoes, you're taking a quarter million dollars of your hard-earned money. And you're going to put that into the diligence process. Are you going to spend that money on a company that you don't have the confidence or the trust in, or if you're seeing some issues early on are you going to call it today, walk away from the table? There are so many other opportunities out there for you and take your money and spend it on a company that does what it says and says what it does. And so, this is really what the issue is here in terms of, if you're going to make a promise and a commitment, you need to make sure that you hit that promise and you hit that commitment.
Give the trust. Don't give any reason at all for the buyer to walk away from the table, because you said something that didn't come true. And your forecast is the one area. It's so easy to measure. It's the one area that all eyes are on your forecast because based on that your buyer is going to do all the extrapolations and the calculations to see where that's going to take them.
So, hit your forecast. One of the things that we teach in the Deep Wealth Experience, you can do your forecast in a certain way that actually takes it to levels that you never been to, but you do a few things in there that you've probably never done before. And we talk about that in the Deep Wealth Experience and it can really make all the difference in terms of walking away a winner or walking away a loser.
Steve speaking of the Deep Wealth Experience, we referenced that a number of times let's briefly take a moment out and talk about that and let's go back to basics. Steve, why did we create the Deep Wealth Experience in the first place? What moved us to do that because as we've been very fortunate then.
We do what we do because we choose to not because we have to. So, why the Deep Wealth Experience?
Steve Wells: [00:23:51] We were very fortunate in our exit. When we went through the exit process, as we've said before, we got to a nine figure exit, which just literally less than two years before it was seven figure and all the things that we did to get there, we thought we were unique and the obstacles that we were overcoming and after we've, sold the company, we had so many people ask us for help and, we would help people and their friends and we explained, what we did, what our thoughts were. It got to the point where we needed to put this down into a way that was easier for us to explain and really look at the playbook that we had created and really make it a playbook so that we could give it to other people.
Until we had the Deep Wealth Experience, we saw people would take some of our advice, some wouldn't and we saw how many business owners literally were taken advantage of. And, the more we saw what happened to us, we thought, we were very fortunate. We did these things and we were studied to do these things, but not too many people are doing these things.
And this makes a huge difference. We keep saying it over and over again, these valuations that people get. and that's a lot of times where a business owner starts. They want to know what's my company worth. There is not an answer to that. And you can talk to the most quantitative accountant, our M&A specialist, and they will tell you if they're honest, it depends.
It really depends on what the market will pay, who the buyer is, how you're presenting your company. All those things change value. A value is not a given. So, when we saw how many people were really being taken advantage of, we said, let's use our skills as educators to help business owners prepare for what it's going to be the biggest event in their life.
Jeffrey Feldberg: [00:25:40] And it's interesting when we decided to put this together. To really level the playing field for business owners. Steve you'll recall, we sat down and had many strategy sessions of, okay, what can this look like? And ultimately, we've developed over nine different principles through a 12-week step-by-step proven solution of what you need to do to prepare.
Steve, one of the things that's been going on with the pandemic as of late is all these Zoom meetings and people are going online. Perhaps they haven't done this as much before. And I think you'll agree with me. It's a hassle to have to be somewhere at a specific time. And if you're dealing with people that are across time zones. It's a lot of things that you're juggling to make those meetings happen.
So, Steve, what did we do to get around that, to make it what we call anytime, anywhere learning that it's so convenient and just so easy to be able to do, to be part of the Deep Wealth Experience.
Steve Wells: [00:26:39] Don't get me wrong. You need to spend time to master these skills, but we realize you have a tremendous amount on your plate. So, we have created an experience that is going to maximize your time, meaning that you can do this any place anywhere, any time. And you're also going to have the advantage of doing this with other people in a mastermind like process to engage and share and understand each other's problems and opportunities.
Now we use something it's called asynchronous communication, big word, but what it means is that you can actually be in a meeting, unlike Zoom, where it's at the same place, same time, but you can be in this meeting throughout the week and it's threaded and it's visual but you're not all there at the same time in the same place.
So, you can do this at night. You can do it in the morning, but you're, communicating at a very high level. And because of our background being in this, and we have seen outcomes studies done and we had outcome studies done in our previous business where this type of learning engages you to actually higher levels than even in person learning.
So, the benefit is not only do you save time and it's very flexible. You're going to be given a methodology in a system that is going to allow you to learn these principles and skills at a very quick pace. And you're going to retain them.
Jeffrey Feldberg: [00:28:08] And one of the nice things that we did, and again, having been so fortunate in our e-learning company to work with professionals from around the world who were going through online learning. That was our sandbox where we saw what worked, we saw what didn't work. And we put together this online formula, this online learning formula that really made the difference.
And part of that difference is having a live success coach who's there to walk you through the system step by step. And Steve, you mentioned something interesting as we have our business owners go through the various modules, let's quickly talk about how those modules are set up because over a two week period of time, the first week you're learning the strategies, the tactics, what you need to be doing on the preparation side, that's going to make all the difference.
And then the second week you do something really interesting. What is that Steve in the second week that our business owners are doing in a Deep Wealth Experience?
Steve Wells: [00:29:05] Now you're going to apply what you've learned. So, it's not just theory. You've probably all hired consultants and you get this book and then you have to implement it. That second week is the implementation phase where we've studied something and then that second week, you're going to practically put that into your particular business and you're going to develop whatever that topic is that we're working at. It's like a coach, I could read a book on how to work out, it's so much better if I understand how to do the perfect curl. But if I have a coach, they're showing me and I do it, then I'm going to get the benefit of that workout. This is the same thing. This is not a theory. Only. There's a lot of information, but we're going to give you the time and the coaching and the framework to then apply what you've learned in that second week.
Jeffrey Feldberg: [00:29:51] And not only is it with the success coach, you also have the benefit of your mastermind group. These are other business owners, CEOs, entrepreneurs, founders, who aren't your competition. And you share with them what your implementation plan is to get real time feedback. And one of the wonderful things that we've seen time and time again, when you bring successful people together from different industries, you avoid the group think.
And as you're presenting your implementation plan, you're going to hear from other business owners who are going to tell you yes, you're on the right path. When we did that, we hit it out of the park. Keep on doing that or, Hey, just a heads up when we tried that it didn't work out so well. So, you may want to think twice before you do that.
So, when you come out of it and you've presented to your CEO's, and again, it's through the asynchronous learning at your time at your convenience, you're now getting real time feedback. Now, Steve speaking of coaching, let's go from coaching to advisors or what some people call the exit team because in a very real way, your advisors are coaching you along the way.
And one of the biggest M&A deal killers is when you choose the wrong advisors. Who you choose can make the absolute difference between success and failure? So, Steve why don't you share some thoughts on that, of how do you choose the right advisors and what would the wrong advisors be and how am I choosing the wrong advisors in the first place?
Steve Wells: [00:31:21] Remember, you're going into battle. You need an A-Team with you and you need people who have been through this process before you don't want it for the first time. Now you may have had the best accountant in the world, and he's a great friend and you play golf with him, but if he's never been through this, that's probably not the guy you're going to want to develop your financial plan, your financial data room. You're going to need someone else. So, you've got to find the people who are experts in their particular field. And remember we were saying, you're going into a time that's going to be very busy. So, they need to do their job because you need to do your job, not only helping the process along, but you got to keep that company running at the same time.
Now, hopefully you've developed a good management team and you can step away from it to some regard. And that's another whole strategic part of the Deep Wealth Experience. But these advisors are going to be the ones who are going to bring it across the finish line. Jeffrey, maybe you can outline who's on that team?
Jeffrey Feldberg: [00:32:27] It's going to vary. In some of the more common people that you have on the exit team, it's going to be yourself as the business owner, it's going to be either part or all of your management team, possibly key employees. When you go outside of your company. You're going to look at tax advisors, accountants, a mergers and acquisitions lawyer, and investment banker.
And has you do need an investment banker for those of you that are wondering, Hey, maybe I can save some money or some commission and do this on my own. Don't even think about that when you choose the right advisors. Every dollar that you spend on those advisors, it's a rounding error compared to the value that you're going to get by the right kind of preparation and ultimately in your business.
So, knowing which advisors to choose, where to look and what to do is absolutely essential. And in the Deep Wealth Experience, we share the kinds of questions that you need to be asking. What you should be looking for. And Steve it never ceases to amaze me. We speak with investment bankers and they tell us these horror stories of how this business owner had a wonderful business, but was personal friends with the lawyer, or maybe the lawyer for the business was a family member and elected to have that family member or that friend be the lawyer for the transaction.
And it was just a disaster after disaster. And long story short, the opportunity was lost. So, when it comes to choosing your advisors, make sure that you want to do it quickly. But two other people on the AXA team that often get overlooked, one would be your clients. We talk a lot about that in the Deep Wealth Experience of which clients to choose and how you can work with them to be prepared.
And then one position. And this is new for a lot of people. It's something at Deep Wealth that we're big proponents of. And in many ways, the Deep Wealth Experience is this position. And that is a chief exit advisor. See, what the heck is a chief exit advisor? What does this person do?
Steve Wells: [00:34:33] This is a term that you probably won't hear anyone say, they'll say, Oh, you have your lawyer, you have your, investment banker. The people who have used the chief exit advisor as a role probably didn't even call them that. But what that is someone who has no bias, someone whose only concern is your best interest.
And you would say, aren't everyone on my team? Don't they all have that. no, there's biases. even your investment banker. Even though that person's going to bring you the buyer, that buyer may have multiple deals with that investment banker. So, not that they're going to be, blatantly, dishonest or not forthright, but they're biased because they're going to be dealing with these buyers potentially many deals and you're just a one-shot deal. When you say, how am I going to know who this is? Who's going to help me get through this process? that's the chief exit advisor. That person may not even ever be in the room with all your other people. And that person though, is someone that can stand back and look at what's going on in situation and just give you honest advice or perspective on the situation. Obviously, this person needs some experience. They need to have been down this path to be best the advisor for you, but it can be invaluable. And, we've talked to people who have used this position very effectively and, they don't feel they would have gotten the deal that they got without having that person.
Jeffrey Feldberg: [00:36:02] Another thing with the chief exit advisor. The chief exit advisor is someone who looks at the big picture. Oftentimes your exit team, your advisors, they are so focused on their specific area. That is very easy to miss something in the big picture. So, from a holistic side of things, your chief exit advisor sees what's going on and is there to give you the right advice.
And the fact is you don't do this every day, so you don't know what you don't know. But your chief exit divisor does. And what Steve was saying, which is interesting is your chief exited advisor, the only agenda and the loyalty is to you and you alone. They're not having to answer to anybody else. They don't have a book of business with anybody else. They're with you.
They’re supporting you. They are there for you in every possible way to help keep things moving forward. So, the wrong advisors, the right advisors make all the difference in the world. It's one of the top M&A deal killers. This is our last topic on the M&A deal killers is your ability to choose wisely.
Because as we often say, you only have one chance and you better make it right when it comes to your exit or liquidity event.
Steve Wells: [00:37:21] We can't get into the details here, but when we talk with you and the, Deep Wealth Experience we'll give you some tips on how to compensate this team, because that's really critical. And some of the compensation models that we talk about then you can use we'll, really incentivize them to bring you more success and also to keep some biases away from infecting your deal. That is a whole other topic and it requires more time and strategy to talk about.
Jeffrey Feldberg: [00:37:50] Absolutely. And thank you for bringing that up Steve if it's a critical part. Again, something that's often overlooked. Something that we spend a lot of time on in the Deep Wealth Experience, just prepping you for that. Steve let's do a wrap up.
Why don't we go through the top five M&A deal killers? And we started with the first one, which is the level of preparation you do today increases your enterprise value tomorrow. Coming in at number two.
Steve Wells: [00:38:16] Why the wrong emotional mindset is one of the top M&A deal killers. Number three,
Jeffrey Feldberg: [00:38:22] Here we talked about why not being perfect in the eyes of your buyer is a strength and not a weakness. From there we went to number four.
Steve Wells: [00:38:31] Which was avoid at all costs missing your forecast or presenting a too good to be true forecast. And finally, number five.
Jeffrey Feldberg: [00:38:40] We rounded it out with why you welcome M&A deal killers into your life when you choose the wrong advisors.
So, there you have it. Those are the top five M&A deal killers. We want to thank you so much for taking time out of your day to be with us and to hear about what you can do to change your life, lock in your financial freedom, your financial independence, when you do the right level of preparation and you get things right on either your exit or liquidity event.
Thank you. We're grateful for both your time and your continued support.