"Unlock your destiny and success when you know how to pivot and profit." - Jeffrey Feldberg and Steve Wells
Jeffrey Feldberg and Steve Wells are successful entrepreneurs. Feldberg and Wells enjoyed a 9-figure exit from their eLearning company Embanet. Th...
"Unlock your destiny and success when you know how to pivot and profit." - Jeffrey Feldberg and Steve Wells
Jeffrey Feldberg and Steve Wells are successful entrepreneurs. Feldberg and Wells enjoyed a 9-figure exit from their eLearning company Embanet. The journey had Feldberg and Wells increase the value of their company 10X in two years. The Embanet story almost didn't happen. The first offer Feldberg and Wells received was 7-figures based on 3-times EBITDA.
How did Feldberg and Wells go from a 7-figure offer to a 9-figure offer from a different buyer?
The Sell Your Business Podcast, and their company Deep Wealth, focuses on helping you grow your company, sell your company, or both. The days of smart and sophisticated buyers ripping off business owners are over. Starting N.O.W.
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Steve Wells: [00:00:00] Hi there. My name is Steve Wells
Jeffrey Feldberg: [00:00:01] And I'm Jeffrey Feldberg. Welcome to the first episode of the sell my business podcast. You know, Steve, we have so much to share with our listeners in the community, and firstly, thank you so much for dropping in and being part of our journey. You know, we could tell you about our nine-figure exit and the growth strategies that we use along the way.
But every story has a beginning. Why don't we go right back to the start and share how we got started from our humble beginnings.
Steve Wells: Sure. And, maybe before we do that, this podcast finds us in a very interesting time. We didn't know when we were planning to begin this podcast that this thing called the Corona virus would pop up.
And, so as we launched this, this inaugural, episode, you may. Find and hear some noises in the background because we're all quarantine. I'm in my home office and I've got six people living in my home and cleaning two little grandkids that are running around like crazy. but you know, that's what life brings us.
And it's a, I actually think it's a great way to start because Jeffrey, when we started our business, it wasn't the, it wasn't the coronavirus, but it wasn't a great time either.
Jeffrey Feldberg: Yeah. Steve, I, I remember that. We had a a jumpstart when we first got going in in 95, but we were on a mission to put ourselves out of business, with the next best idea.
So you can imagine as a business owner. You've been, you haven't been profitable. You finally turn the corner. You, you start seeing some success. You started having some money in the bank that you can call your own. We decided to put that all up for grabs and put it all on the line.
We had an e-learning company called Embanet and we started Embanet 2. Steve, why don't you tell everyone when we started Embanet 2 as it was very similar to what's going on now.
Steve Wells: [00:02:01] Well, it was 1999 and the economy, was in a bit of a recession and starting wasn't a good time to begin a business.
But you know, it was a great time because we, we knew that this kind of online learning needed to get started and, and, and it seems crazy now by having people kind of take it for granted, but back then it was a very radical idea. But you know, the good thing about starting in a difficult time, so I'm speaking to up maybe companies that are trying to start right now, is that when you do that, you're very efficient.
You can't waste money, obviously, and you can't waste your time. So you begin to be disciplined in, and in what you're going to do and, and you, and you react quickly. And that discipline, Jeffery I think really followed us. Throughout our business life and until we sold the business.
Jeffrey Feldberg: [00:02:59] Steve, you're absolutely right.
You know, because we started in a challenging time, and like most business owners, we just didn't have it. We weren't capitalized. We started the company as a cockroach startup and continued running like a cockroach startup all the way through.
And you know, two terms, that come to mind as I think about today where we are in this pandemic from the Corona virus, but also, you know, back in 1999, 2000 of, of what some people call the dot bomb era and when the markets came tumbling down. The two terms that come to mind are pivot and profit and resourcefulness trumps resources. I mean, even if we wanted to, we didn't have the money in the bank to spend, so we had to become resourceful and that just became a part of our, our company culture. Steve, I don't know if you would you agree with me when I say that. If we started with, with a bank full of money, we probably would not have attained the growth levels and the success
Steve Wells: [00:04:09] I know for certain we wouldn't have. And, we may not have time on this podcast because you and I have both been in a situation where we had plenty of money and it, resulted in, not a good ending. We had all the resources that we wanted, we wouldn't have been forced to be creative and come up with solutions that ended up creating huge value for our business and the culture.
Ultimately what we'll get into being able to create a company that sold for 9-figures. But during that process, we had no idea that it would actually get that large.
But looking back, we realized that foundation that we're able to instill. And the 200 people that worked for us and our marketing model and our service model all were really, influenced by those beginnings the year that we started
Jeffrey Feldberg: [00:05:17] Absolutely. And, to our listeners, as you begin this journey with us, I want you to think about something. You know, whether you want to keep your business forever or you want to sell it tomorrow, the little-known tips and strategies that we're going to share with you work. They work in the pandemic times and they work in the boom times.
They just work all the time. And, more importantly, I nothing frustrates me more when I see people charging good money for something that they've never done themselves. Everything that we share with you, we are in the trenches. It's from business owners to business owners.
And Steve I want to go back to the beginning now and start with how do we get here? Why did we start Deep Wealth? Why do we start this podcast? What is this all about? And really, who are we to even be in a position to share what we're going to share.
Steve Wells: [00:06:23] Right.
Well, you know, this podcast, and this is the first one, so you're going to hear us talk only on this one, but in the future, a podcast, you're going to hear people that have exited or are going through that process or interested in buying companies, other people and other experts. We thought that this podcast would be helpful because we after our very successful, exit to share our, information. We were asked how do you do it? And through that process, we've talked to just literally hundreds of people. And, that through that process we thought, well, you know, this podcast would be a good way to, to begin to give a glimpse into some of the methods and the reasons and the strategies for executing a very successful strategy in exiting your company. And, we're going to get to why Deep Wealth. Jeffrey you can talk a little about that, but I think it's important to not to beat a dead horse, but the difficult time we're in. You know, it's may not be the best time to sell for most people. And it's like when we started, it's not the best time to start a company, maybe, but you know, this is the perfect time to build. And so when Jeffrey mentioned, you know, to pivot and change, this is now an opportunity if you have a business to look and see where it's weak, to, to understand his weaknesses.
You know, in this economy, there's a lot of service sectors. Travel and, food sectors, like restaurants that are really having a tough time. And, you know, they're, they're rethinking their whole business model. And I think that can happen with anyone. So it's a good time to do that.
And we're going to help businesses through that process. But Jeffrey, maybe you can tell a little bit about, why we started a Deep Wealth and what it does.
Jeffrey Feldberg: [00:08:16] I'm going to take our listeners back to the beginning. The honest truth is we started the company. We had no money, no experience, and no team. It was an idea for the e-learning company and we had no business being in business, and the results showed. It was pure grit and passion that kept us in the game long enough to be able to experience success and with success we came on the radar of different people out there. One of, the people that approached us at the time was a sophisticated, experienced and smart buyer. And this buyer came to us and gave us a 7-figure offer that was based on three times EBITDA. And the buyer knew that.
We didn't know what we didn't know. That was a lot of money for us when we said “no” to the buyer. The buyer was not only shocked, so were the people around us, our friends and our family. Steve, they knew that we were crazy, but that just proved that we were certifiable when we said “no.
But when we said, “no” to the buyer, to the 7-figure offer, we were saying “yes” to mastering the art and science of selling a company. And so for the next two years we dedicated ourselves and, and Steve, as you mentioned, we spoke to anyone and everyone who would speak to us. We spoke to people that had success in growing a company and selling it. People who had lost big on selling a company and how do you get success?
Success leaves clues. You find other people that achieve success and you mirror what they're doing. You do less of what doesn't work. You do more of what does work.
Steve Wells: [00:10:15] if I could, if I could just interrupt quickly, Jeffrey, we're not financial experts.
I'm really far from it, so it's not like we came in with this idea and with a lot of financial training. I wouldn't call ourselves financial experts, but we're, experts on this process because we successfully did it and we've learned. But, we, we had to educate ourselves a great deal.
And that's what we did for those two years.
Jeffrey Feldberg: [00:10:47] For all of you out there who are marketers and strong in the sales area, but not great in the numbers area. I got great news for you. That's us. So, to your points know that we didn't that financial, background that may be thinking you need.
But you know, when you surround yourself with the right people, and we'll talk about that, anything is possible. So when we said “yes” to the next offer, which was two years later, it was saying “yes” to a 9- figure offer that was based on 13 times EBITDA. But here's a strange thing, and here's the question I'm going to put out there.
How did we increase our company value 10 X when it was the same company with the same people, and the same service? What changed Steve? Do you want to want to tackle that?
Steve Wells: [00:11:41] Well, there are a lot of things that changed. It was mainly us. The company didn't change. Our product didn't change. What changed was how we looked at the company and some of the things that we did, and how we structured and, how we positioned the company.
When it was all said and done, the value of the company was always there. I mean, it was so interesting when you look at people and they try to create valuations and we've talked to people that want to sell their companies and then they go, well, I'm going to get this valuation from this person.
I mean, what does that really mean? I know there's formulas and there's industry standards, but you know, and we'll talk a little bit about this, if someone had come and valued our company, and they did, they would have put it at the three times EBITDA, but it ended up selling for 13 times. So their value was wrong.
And these are experts. So one of the principles is you use experts and you build a team and you're going to build a very important team called an exit team, But you cannot trust what someone says. Not that they're necessarily malicious, but they're just misinformed
Jeffrey Feldberg: [00:12:53] What was amazing, at least for me, the old saying, you're never a prophet in your hometown. I think for a lot of people, and in the earlier years, I'd put my myself in this, a belief is you never profit in your own mind, or I was never a profit in my own mind.
I didn't appreciate what it was that we had achieved. And so after we had our 9-figure exit and increased our value 10 X, entrepreneurs and business owners would approach us from time to time and ask how did you do it? Can you give me some tips? What can I do?
But it was around, I'm going to say year and a half, two years ago now, that close friends of ours, also business owners approached us and said, guys, we want to do what you did. We’ve grown the company. it's time for us to move on. Can you tell us exactly what you did? Can you give us your playbook of what you use as strategies that you use to sell your company?
And you know, we said to them sure, but what we'll give to you is not going to make a lot of sense to you because we wrote it in a way that was specific to us. We understood it and it was really more for us then for everyone else. Tell you what, let us look to the outside.
Let us find you a seminar, a book, a conference, a person who can give you the, the best practices and teach you. And so we looked. And we looked and we looked some more. And what we've found was astonishing. What we found were people charging a lot of money to share the so-called secrets. But these people were making their money, not because they were in the trenches and they did this themselves.
They were making the money from selling people on something that they never had done in the first place. And the other thing that, that we learned, I had naively thought that the first buyer who came to us with that three times EBITDA, offer, he knew the company was worth more than three times, but he used the old tactic of let me throw some money in front of these entrepreneurs, these business owners.
And let the money lead the way that they'll say “yes” to me when the otherwise shouldn't be saying “yes.” You know, I thought we were the exception, not the rule that this wolf in sheep's clothing gave us this offer. And I thought that most buyers didn't do that. And you know, here we are, as entrepreneurs, we take the risk, sleepless nights, we make a difference in our community.
We provide jobs, we're solving problems, and when it's time to cash in the chips and move on to the next chapter in our life, we get ripped off. And that turned out not to be the exception, but the rule. And Steve, remember that conversation that, that we had a year and a half, two years ago when we discovered that that was the exception, not the rule.
Steve Wells: [00:15:49] Well, you know, we had our friends coming to us and through that process we would start to interview and talk with other people and we saw them being ripped off. I mean, as you said, Jeffrey, I mean, they were taken advantage of it because most entrepreneurs, there's a lot of reasons why they don't succeed in the exit.
First, the skill set that they use to build their company is not the same to sell a company. Plus, for a lot of people, it's not fun. It's just as enjoyable. And so when we tried to send friends and colleagues, you know, to a resource, we couldn't find one because it just didn't exist.
People were making money trying to sell programs on something that they'd never done themselves. So, you know, we said, we’ve got to do something about this and so we created a company to do this very thing, not because we needed to do this, but we really wanted to do it.
And, the word Deep Wealth originated because we saw this deep wealth within entrepreneurs’ companies that was just being wasted. And we wanted them to be able to extract that deep wealth, for themselves and for their families and for their community. It was an emotional motivation that led us to create it.
Jeffrey Feldberg: [00:17:28] Absolutely. Steve, I know I speak for you when say that for us, the days of entrepreneurs getting ripped off end right now, because we've made it our mission to level the playing field, to give entrepreneurs, to give business owners the tools that they need to succeed and to claim the value to find the deep wealth that they never knew they had.
I don't know about you, Steve, but I know nothing has me cringe more than when I speak to a fellow entrepreneur and I hear this story time and time again. You're not going to believe it Jeffery. I got this unsolicited offer from this buyer. It was a lot of money on the table and man, did I knock it out of the park!
And not only did I knock it out of the park, but look at all the time that I saved. I mean, he came to me. I didn't have to pay a commission to a broker or an investment banker. I saved money there. I saved all the time and, look at all the, the zeros that I have in my bank account. And, while I'm happy for that person on the outside, on the inside, I'm crying because I can't even begin to imagine the millions or the tens of millions depending on the company size that was left on the table.
The money that was literally stolen from the business owner's pocket and put directly into the buyer's pocket. From well-known tactics and strategies that buyers use to rip business owners off when buying businesses and that has just got to stop so that that is our creed. That is our Anthem.
That's what Deep Wealth is all about, to turn the tables, level the playing field, and give business owners the advantage in the process of letting them find the next chapter in a way that they can help people prosper and succeed.
Steve Wells: [00:19:31] And you know, the great thing about these principles, if your, vision is to sell your company, I will increase a higher value.
But these very same things are going to build a better company. You know. Even now, everyone knows we're in a difficult time right now. So it's probably for most companies, not a great time to sell, but you know, you don't know. You didn't know that. you know, a few months ago before the coronavirus and the same token, you don't know when this great opportunity is going to be.
It could be market timing, it can be something is happening in the industry. Who knows? So what you always want to do is get your company. Prepared and the preparation takes a little while. So this is a great time to do that. there's, there's structure, there could be some tax structure that you need at least a year.
There could be some personal and organizational structure that take you a year or so, and product structure. But all those things and all the tips and all our playbook. Every one of those tips is going to help the company be more successful, be more profitable, and at the end of the day, the company is now prepared to take advantage of opportunity if it comes or to shift and go in a different direction.
Or maybe you want to give it away to your family. Whatever your choice is going to be in the future, you're going to be in such a much more powerful way by taking the time. Going through to learning the principles of understanding the mechanisms that are, really against you that you don't even know they're there and attacking those head on instead of letting them attack you. Doing all that stuff right now, could make a huge difference. Two years from now is where your company's going to be.
Jeffrey Feldberg: [00:21:26] Steve, you're absolutely right, and as you're sharing that a thought that had just crossed my mind.
Just as any entrepreneur, the first day that you're open for business is that success? Even the first year that you're in business, is that a success? No. It takes time. You, you have to figure out how it's going to work. You have to find the right people. It takes you a while to put together the right team, the right employees around you, so that you can go out into the marketplace so that you can dominate and win.
So why would it be any different when it comes time to sell your company, if you choose to sell your company? You know, there's a saying that the, the person who wins the negotiation is the person who cares the least. There's a lot of truth to that when you're prepared. When you master and implement the strategies, the growth strategies that we'll share with you in, in what we call the Deep Wealth experience that we've put together.
Jeffrey Feldberg: [00:22:39] When you put those strategies in place and you have a thriving and profitable company, when you have the mindset that you can pandemic proof your business, that you know how to pivot and profit. You now have choices and choices are powerful. Do you keep on running a company that continues to be thriving and profitable?
Oh, that doesn't sound so, so bad to me. Or when the opportunity comes that you have the ability to take advantage of that opportunity and sell your company. That doesn't sound so bad to me either. That the, the point is that you have choice and choice is King in good times and challenging times in everything else in between.
It doesn't make a difference. Choice is king and having that can make all the difference.
Steve Wells: [00:23:22] And you know, that's obviously one of the purposes of the podcast is to begin to allow people to learn some of these principles and to hear examples from other people. But you know, what we have done in Deep Wealth is create a more formalized structure.
And since we were in the online learning industry and background, we, we've, we've spent a lot of time to create. What we call learning experiences where, it helps, the business owner understand these principles and they, and, and to do it within the, the protection of a small group, and doing it in a very efficient time and in a way that doesn't disrupt the business. So when we set out to think about how do we communicate these principles, we knew the for business owner. time is critical. I've never met an entrepreneur, any business owner that said, oh, I'm just bored, I don't have anything to do.
So we know time is critical and we know that attention is going to be distracted because you're running a business. So how can we help people get this information in a way that they can begin to apply it very quickly. That was, that was a forefront of our mind when we put together the Deep Wealth learning experience.
Jeffrey Feldberg: [00:24:47] I'll take one small tidbit out of the learning experience that we put together. And if you get nothing out of this podcast episode, but this one will take you forward with a growth strategy. Sometimes common sense isn't common sense, you know, for all of you business owners out there.
I have a very simple question. Does your business run without you? It's so simple. I'm going to ask it again and I don't want to hear excuses. It's either “yes” or “no”. Does your business run without you? And I pick this one specifically because I know this is one of the mistakes that we made. And yes, we had a 9-figure exit, but it could have been even more. For most businesses, and I’ll put ourselves in this category. We were the, the sun, the moon, and the stars. Everything revolved around us. And In the scheme of things, if you want to grow your company, if you want to be a market disrupter, if you want to be able to pivot and profit during challenging times, the truth is your business has to run without you.
You can't be in the day to day. You have to be working on the business, not in the business. And that's one of the things in the experience that we talk about. In the experience, we also put you into a mastermind group where you can share what you're doing with other business owners who aren't in competition with you to see what works, what doesn't work, and how you can put yourself in a business that runs without you.
Steve as we look to these challenging times that we're in right now, and we talk about the power of a business running, I can't imagine how much more we could have done. How do we follow that and put that principle in place from day one?
Steve Wells: [00:26:49] As you said, we are, we had a very successful exit, but we didn't do everything right, by any means. We use those, those examples and those lessons. The playbook 2.0 a lot better than the playbook that we used, even though it was a great playbook for us.
Over the years we have revised the playbook through conversations with people who had a different experiences and different kinds of companies. And so we've really picked some good tips and examples from other people in other industries.
We had the benefit of, of history. We've gone back and had discussions with people that, were negotiating with us and on our behalf and, and even against us and, and dissected the process. And that was very interesting. I'm going back and getting some real honest conversations about, you know, how some of the things we did that really benefited us and some of the things that we did left some money on the table.
So that process is very good. We’ve developed a Deep Wealth, experience, again, in a way that we would never have thought would have been so important in this time of this coronavirus. I mean, everyone's on Zoom and everyone's doing live teleconferencing.
But everyone's is Zoomed out. This synchronous communication is overwhelming people. People are trying to work from their homes and they can't get into the offices. Well, we created the learning experience in something that's called asynchronous communication. Meaning it's, it's utilizing video and it's utilizing conversation.
But what it means is that these meetings don't take place in a live time our place. So for business owners, they can participate with their mastermind group in a structure during the week. It's structured. It's not a free for all, but they don't have to be there at 7:00 AM Eastern time or they don't have to be in a physical place.
And now we can have all those types of things, but we, we can't expect business owners to be as engaged all at the same time, at the same moment. With, with us personally helping them we knew that was a powerful tool coming from the education background.
Given the environment we're in today, we didn't realize how it's an essential tool now.
Jeffrey Feldberg: [00:29:39] Steve, you're absolutely right. I know when we're speaking to different business owners and they said, you know, guys, I really want to learn how I can grow my business the way you guys grew your business.
Back in the Embanet days in our e-learning company, we were growing so quickly. Internally we would joke. One year in our e-learning company was like a dog year that would be worth seven years in every other company because we were growing by leaps and bounds with these resourceful strategies that we had put in place.
We've heard from business owners who said, look, I don't have the time. I don't even know if I want to spend the money on something like this. Why should I do it? Why should I care? Why should it even be a concern? Life is all about choices and the choices that we make today, shape our destiny for tomorrow.
Where I think a lot of business owners get off track is if this business doesn't work out, or if I sell this business today, I'll start another business tomorrow and it'll be bigger and better and even more successful.
The truth is that that's probably not going to be the case.
One very quick, I mentioned that we started our e-learning company with no money experience or team and, and we had a 9-figure exit. Well, Steve alluded to this earlier. After the 0-figure exit, we started a new business in healthcare. Now this time we did have the money and the experience, and we even had the same team.
And Steve, remember how we shot up to seven figures so quickly and that healthcare company? Why don't you share with everyone what those seven figures were?
Steve Wells: [00:31:31] Well, the problem with the seven figures is that they weren't in black font type. They were in red. That was a negative seven figures that we lost.
The reason was we had too much money, but we didn't have enough attention and time. If it was so simple, that money just solved all the problems I think business would be pretty easy. Just throw a bunch of money at something but it doesn't work that way.
I always find that if it was discouraging then, but I find it encouraging, when you talk to young people, entrepreneurs, like the people I'm mentoring and they always say I just need an investor here and will you put money into here? Money is the least problem that you have.
If you have the intelligence, the character and if you have the physical time, and you have relationships, you'll be able to use those other tools to find the money. But money, I'll buy it without those things, it's just going to be a failure.
Jeffrey Feldberg: [00:32:47] Absolutely. So why is it that the e-learning company on paper should have failed and the healthcare company on paper should have been a runaway success? Why was it the opposite? For me anyways, it was lack of passion. I just didn't have the passion. It was all about the money for me to make even more money than it was with the e-learning company.
We share that story with you to get a point across that the business that you have right now, this may be the best thing that you have. Hopefully it isn't. Hopefully down the road there'll be something even better, but the statistics say otherwise. So if this is the best chance that you have, to me it makes sense that you want to make the most of it. You want to put the growth strategies in place to grow the company and generate as much profits as you can because it means you're helping people solve painful problems. You're taking their pain away. And it puts you in a position where you do have a choice.
And so that's really what it's all about. And, and with the Deep Wealth experience what we've done is to surrounded you with a mastermind. You have a live success coach that's there to help you at any time. The only a silly question is the one that that's never asked. And we are here to support you.
As we begin to wrap things up and start looking, towards the future with you, we want to give you hope in these challenging times. Tomorrow is a better day, and that you will get through this. There are strategies that can and will make all the difference for you.
But you have to start somewhere. And so let's start with today. Let's start with this first episode and let's begin our journey together of helping, helping you get from point A to point B, the smart way and to work hard, but to also work smart.
Steve Wells: [00:34:58] In the coming weeks ahead, you'll hear interviews with people who are going to give you a practical tips who've been through recessions and had various companies and what they did and what they are doing now to thrive and redirect their company. if you're interested in more information, you can find us at deepwealth.com That's www.deepwealth.com We enjoyed, today and appreciate, your interest and look forward to more episodes.