347 Sunny Vanderbeck

Jeffrey Feldberg: [00:00:00] Sunny Vanderbeek is the co founder of Satori Capital, an investment firm founded on the principles of conscious capitalism. An investor, entrepreneur, and best selling author, Sunny leverages his diverse background as a business founder, public company CEO, and former military leader to drive the growth of mid-market companies.

Committed to creating enduring businesses that elevate humanity, he brings his insight and experience to help business leaders generate long term value for all stakeholders. Including during a sales process. 

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Welcome to Deep Wealth Podcast. While you're hearing the official introduction, we have a fellow entrepreneur in the house, but not just an entrepreneur. We have an investor, a best selling author, someone who's been in the services, has served our country, and so many wonderful things ahead. I'm going to put a plug in it right there.

Sunny, welcome to Deep Wealth Podcast. An absolute pleasure to have you with us. And I'm curious because there is always a story behind the story. What's your story, Sunny? What got you from where you were to where you are today? 

Sunny Vanderbeck: Thanks for having me. My story is kind of a wild ride in and of itself.

So I started college early. I was bored with high school. Had to get out of there. I did that for a year. I didn't like anything about it. So I decided to do the most different thing I could [00:04:00] imagine and join the military with a shot at going to the Ranger Battalion. It turned out I was a good fit for that.

So I spent about four years as an Army Ranger. Got out, went back to school. I promise you, school was way, way easier after that experience. I was like, wow, this is all I have to do, really? And about six months into that, I got a job offer at Microsoft. And I decided to take it. I was like, well, I can always go back to school if I feel the need to do that.

And so I was at Microsoft 94 to 96, neat time in the world. And while I was there, I had this crazy idea that people were going to use computers and the internet to conduct business and to buy stuff. So we quit our jobs at Microsoft, co founders with these great jobs and we had a little spare room in our, tiny little rent house and started a company.

We didn't really know what we were doing, but we knew. What are customers needed? We had a good run at that business. So we grew it 40 percent every quarter compounding for three and a half years. 

So [00:05:00] we were doubling headcount every 120 days, which that in and of itself, like you end up with some new rules. You're like, well, I didn't think I needed a rule for that, but I do. Cause it's pretty fast growth. And again, the first six months of that, you're like, yeah, okay, cool. The last six months that it's eye watering. We went public in 99. I was CEO of the company then in my 20s. Sold it in early 2002.

We sold it to what was probably not the best buyer. But we got a shot to buy it back a year later. stayed on as the business unit head for the combined business. They had a quasi competitive business to ours. That's where I learned I am not a corporate guy. I'm, like, really not good at that stuff.

So I sort of learned most of us entrepreneurs are not really good corporate execs. We're just wired a little differently. Mostly it's cause I think we'll blurt stuff out. Like you're not supposed to say that.

And I'm like, yeah, but it's true. so anyway, I only had to do that for a year, but at least I got to learn the lesson. And more importantly, I got a shot at buying it back. So with some other investors, we bought [00:06:00] the company back. I ran it as a private company for another four years and then sold it in early 2007.

And along the way, another CEO and I had got to, to chatting and, we liked each other enough. We just started hanging out. I probably saw him two or three hours a week. We weren't planning on anything. We weren't like, Oh, let's go do a thing together. It was just like, Oh, I kind of like you. And you kind of like me.

And we're, I think we're values aligned. And turns out we were pretty values aligned. And as entrepreneurs do, we started complaining. That's one of those secrets. Most people don't realize about entrepreneurs, like relentless complaining, but we're also optimists. Like two go together. And so the outgrowth of that is we started complaining about the money guys and capital and.

Investors and how that whole thing worked. And eventually we were just like, well, I guess we have to go fix it because we clearly understand the problem and the investment firm that we wish we could have taken capital from didn't exist. So in the middle of the global financial crisis, [00:07:00] we set out with a crazy idea and the crazy idea was this.

What if you had an investment firm that had an indefinite time horizon? So you didn't have to sell. You could be an owner, partner for. Five years or 25 years, and it was full of people who'd been in the chair before. And for the entrepreneurs amongst us, y'all know you've either kind of, you've made payroll or you haven't made payroll.

And once you've been in that sort of spot where you're like, this is all on me, the world looks very different. And what that also means is like the things that we're trying to help our portfolio companies with, we've actually been there. We've done it. Sometimes not well, if you want to know how to not expand to Europe, call me, I can help you not expand to Europe successfully.

But this is sort of idea of Hey, we can have. Meaningful expertise across a bunch of, you know, things we've done in our career. And then the last piece is this idea around conscious capitalism, and I'll give you the essence of it. There's, whole books about it, but the essence of it, it looks like this.[00:08:00]

If I give first, if I create value for my customers, my employees, my suppliers, my community, whoever my stakeholders are, if that's my orientation to the world, the money stuff will work out. The investor stuff works out. And like a simple example, the companies that are out there who have their best places to work and customers love them and suppliers want to be partners with them those tend to be great investments.

And so that's our thesis. Let's not try to think about what can we extract and what can we get away with. Let's think about how do we create value. And if we do that, the way the world works is some of that value will come back to you. And so when you put those three things together, this operator leader mentality, indefinite time horizon and a real commitment to the non financial dimensions of business, we look like we were crazy and we were in our early thirties.

And so we got a lot of head pats. People are like patting us on our head. They're like, Oh, that's so sweet. We're like, okay. [00:09:00] And we just kept at it and kept at it and, we're 15 years in now. Results so far suggest there's something here to what we're doing. And it's important that we do it differently.

So, and I guess the last piece along the way, never wanted to be an author. And there was a conversation that I realized no one was having. And it's about how to exit a business, but not about all the money stuff. Everybody wants to talk about the money stuff. We use this term value. Lots of people use it as a euphemism for money.

I know you don't, and I'm really appreciative of that. They say value, they mean money. And as it turns out, this is like this one way street, right? When you sell a business, you can't unsell it. I got super lucky getting two, two shots at it. So I wrote this book. It's called Selling Without Selling Out, and we'll talk more about what the big idea was, but that was a little bit of a side trip, because I never thought I'd be an author, and I realized no one's talking about this, so if not me, then who?

And here I am as an author to also. 

Jeffrey Feldberg: My [00:10:00] goodness, there is so much there to unpack, and by the way, Deep Wealth Nation, if you go to the show notes, Click on the link, pick up a copy of the book, Selling Without Selling Out, How to Sell Your Business Without Selling Your Soul. And isn't that the truth, which we'll circle back to in just a moment.

Question I had for you though, Sunny, because it sounds as though, and you can tell me, Jeffrey, you're on base, off base. So if I got it right, when you're in the services, you're the section leader of the 2nd Battalion, the 75th Ranger Regiment. And that was a profound statement. really chapter in your life.

How did the services coming out of that, how did that really change you as a person when it came time to set yourself up for business? Are there some correlations of what's going on? I don't want to use the word battlefield, but in the service field, if you will, and compare it to the corporate arena, some parallels there?

Sunny Vanderbeck: You know, There's some, parallels and there are some important distinctions. I think one of the lessons I had to unlearn is not everything's life or death. Like, It was for real like, okay, life's [00:11:00] for real like, every day you're doing stuff that life and limb, even in training scenarios, would, were very dangerous and I think once I sort of unlearned that, that like, everything's not existential the calm that came from that was actually really helpful.

It was a wild ride. We had, crazy. com ride up, crazy. com ride down, 9 11, GFC, like just constant, tectonic shifts in the world. The ability to take a deep breath, figure out what the next most important step is and do it is actually really useful. As you might imagine that experience and skill base was useful in COVID as well.

Cause particularly during the early days, the first 90 days it was the great unknown. We had no idea what was coming, what the implications were, what was going to happen next. And all we can do is do the next most important thing. So I think that being able to be calm in the face of a good bit of chaos is important.

I think the other thing though is a little bit like my comment about until you've made payroll, it's hard to understand what that's like. I think there's a quote [00:12:00] floating around somewhere about, being an entrepreneur is, is like staring into the abyss and chewing glass. It is. Way more difficult than anyone realizes.

It just is. And there's nothing I can tell you about how hard it really is until you get in there and you start to do it and you realize most companies, maybe even all but certainly most companies have at least one moment where a day And how that day goes is going to determine it's over or you made it.

And I can think of multiple stories along the way where that could have been the thing. That makes the end of it. And so it's just, it's nonstop. And the faster you're growing, the harder it is. And the more different thing you're trying to do in the world, the harder it is.

And so that having experienced being relentless. Just utterly relentless. You cannot get me. I'm not going to give up. Man, that's a useful skill. And the secret, by the way, to all of this stuff, all the selection and [00:13:00] training, and there's, 80 percent of the people that show up don't make it.

They're like, whoa, what was, what was the magic there? I was too dumb to quit. I just, everything I would like, well, okay, I'm going to go see if I can do that. And sometimes it wasn't like, I'm going to finish the, long road march or whatever. It was just like, well, I'm going to get to the next bend or that log over there.

And I'll see how I'm doing when I get there. I just never got around to quitting. And so you get to the end and you're like, well, okay, here I am. is a lot to be said for that skill and experience in bringing a company into the world. 

Jeffrey Feldberg: Interesting. And, speaking of bringing a company into the world or even transitioning a company from where it is today into the next area or the next inflection point of what's there.

So you're at Microsoft from 1994 to 1996 and you have the foresight of saying, hey, there's this thing called the internet. Really small right now. Maybe it won't even go anywhere, but we have some big visions for this. And you went on with data return, which as you're saying, [00:14:00] 40 percent growth and mean, just crazy growth.

And I may be overgeneralizing and you can correct me if I'm off base. At the time, Microsoft. Microsoft back then was a titan of business. You saw the internet, generally speaking, Microsoft didn't. It almost put them out of business. As we speak today, they've made a remarkable comeback and they're right back in there now.

What was it that had you see what you saw that Microsoft at the time, that titan of business just missed the boat completely? What was going on? 

Sunny Vanderbeck: Yeah. So, so the inside out view was this at the time Microsoft was viewed mostly through the lens of a desktop company. It was Windows and Office. What I saw was the narrative was wildly different than the reality.

So Microsoft would get discounted as a market participant over and over again. And when they would finally shake it off and go, okay, time to go in that market, they would end up with half. And everybody quietly managed to ignore that it happened. And so, so I saw this happen. I'll give you an example. [00:15:00] No one cared about Microsoft's email products.

And then one day they, kind of won. It was like everyone had it. And it was 10 years later. you saw it happen with databases. You saw it happen with operating systems in the server world. Everybody would ignore Microsoft and go, oh, Sun Microsystems. Y'all remember Sun Microsystems?

Anybody ever heard like, this is ancient history now? 

Jeffrey Feldberg: Yeah, we're dating ourselves, Sunny. Absolutely. I remember for sure. Yeah. 

Sunny Vanderbeck: Well, how'd it turn out? That was Microsoft's big competitor that everybody said they're behind and they'll never catch them and they're just gone. So what I saw at Microsoft was a very unique and unlike many companies ability to actually plan over a longer time horizon and just execute towards that.

And so I'd seen this happen over and over again in all of these markets. It started with, they would ignore them and then they would ridicule them. And right, I'll not try to repeat the quote, but I literally watched this happen and then one day they would get half. And so I did learn a little bit about strategy from watching that happen to say like, if you have a [00:16:00] differentiated strategy, it does often look nutty in the early days.

And then as the world begins to move towards what you saw. You wake up with a big part of the market if not all of it. so I had a very different understanding of Microsoft than the prevailing sort of narrative. And that was part of our strategy, by the way, was to take advantage of that. So the narrative was Microsoft was behind all these things, on all these things.

Don't take them seriously. What that created for me was a competitive environment where virtually all of my competitors were focused on not Microsoft. Because Microsoft isn't, it wasn't a real platform, it wasn't going to work, X, Y, Z. What I saw in their enterprise customers that we talked to every day, they were using the stuff.

And no one was going to come in there, frothing at the mouth, talking about how Microsoft stuff didn't scale. So these big enterprises were like, well, we've chosen it, please make it work. And so my strategy at Data Return was to say, well, God, if Microsoft always gets half and a hundred percent of the market is [00:17:00] ignoring this customer base, I'm going to build my brand around that customer base.

So that's what we did. We built our brand. We said, Hey, we're all for Microsoft. We like their stuff too. We're the, one of the only places in the world that knows how to make this work at scale. And it worked. People wanted to talk to us. They bought our stuff. 

Jeffrey Feldberg: Wow. So there you were, you were carefully watching, you're observing, seeing what was going on.

And I get what you're saying from the outside looking in, it just looked like madness. That they didn't get it. They were slow to start. And oftentimes it's interesting what you're saying. And again, data point of one, this is Jeffrey's data point of one here. Really being from the other side, not being in Microsoft, but really being an end user.

It always seemed that it took Microsoft three times to get it right. So when a particular office product came out, it was the third version. Yeah. They finally got it. Or Windows, the third version. Yeah. They nailed it. So it's interesting, but it sounds like that made. An impact on you as you watched, you learned, and then you built that in to data return and perhaps even Satori Capital right now, would I be on base with that, off base with that?

How am I [00:18:00] doing? 

Sunny Vanderbeck: Yeah, I would say a series of life events that keep building the same thing. It's okay if the world doesn't agree with you yet, that's an okay place to be. Make sure you haven't lost your mind. If you just sort of woke up from a fever dream and saw something, be careful. And it's okay.

And in a lot of cases, it's desired that the world just can't see what you can see yet. That's how you get advantages. You're able to see a version of the future a little more clearly than others. And so, and I'll give an example here on Satori in 2008, these things that I talked about, they were crazy talk.

Again, people were just, they were. It was worse than dismissive. It was like not even condescending. Now a lot of the things that we say, people are like, oh yeah, of course. And I'm like, yeah, that's because we sort of looked at the world and said, we think this is coming. And in our case some part of it was like, we don't even care if it's not coming.

Even if we go 20 or 30 years and it takes everybody that long or it never, [00:19:00] okay, hey, I'm leaving the world a better place than I found it. Like rule number one, if you can leave the world better than you found it. Great. And whatever way makes sense for you to do that, go and do that. Now in this case, as it turned out, people started to care more about these things.

And a lot of the things that we learned to be true about the world and about humans in the tech business, that was the sort of breeding ground as an example for culture, prior to the nineties, like you didn't have a lot of overt conversations around culture. It just wasn't a thing.

And then all of a sudden in tech, it became the thing because your ability to attract and retain talent and have them be motivated and engaged was a significant portion of competitive advantage. Now that in the next 20 or 30 years has changed. Diffused into most industries now where culture is a real conversation.

It's viewed as something you should have strategic intent and make a priority and so I think [00:20:00] that, willingness to be different and that one goes a little bit back to the competitive advantage. If you can't clearly articulate to a customer why they should buy from you instead of someone else.

You got to have an issue. So if you follow too closely what the general knowledge and understanding is it leaves you in a position where you're entirely undifferentiated. And man, that's tough. There's no tough business in the world. Like I'm just like all my competitors. And all I have left is the out hustle.

That's hard. 

Jeffrey Feldberg: Yeah. Yeah. I know you're talking a language at Deep Wealth in our nine step roadmap, Sunny, we call that step two X Factors. That the fail mistake a lot of entrepreneurs make is, yeah, I'm the same as the competition. I just work harder, different logo, perhaps different theme, but we're all the same.

And it absolutely isn't true. If you look deep enough, there are at least three to five areas that every business is world class. They're unique. They just don't know it yet. But once we find that, we can take that out to all of the stakeholders, communicate that and make a difference. But let me ask you, [00:21:00] so you had this experience, you saw with your own company, you saw really the ups and downs of the M& A marketplace.

And I know you're not into this. We're not into this. We don't believe it's a zero sum game, but for many, it is a zero sum game. And so now comes along Satori Capital after you did phenomenally well, started a company, sold it, bought it back, did some amazing things with that. You saw for you what was working, what wasn't working.

So, for starters, when it comes to story capital, for a lot of people, they will say private equity and venture capital in the same sentence. They're interchangeable. There's no difference, but there are differences. And even within each of those areas, private equity, venture capital, there's differences in and of itself in each of the areas.

So from your viewpoint of the world, Sunny, really, and I think we're coming off the same page as entrepreneurs. I mean, isn't that our mission? To solve painful problems, to your point, make the world a better place? Take pain away from people through doing something so outstanding that they become our raving fans and off [00:22:00] we go to create a market disruption.

So from that perspective, where does Satori Capital fit in for private equity and what you're doing and really your secret sauce of what makes you different? Probably not a fair question. There's many questions layered in there, but let me pass the baton over to you to get your thoughts on that. 

Sunny Vanderbeck: Yeah, so I think look, it's certainly Ends up expressing itself in a lot of different ways.

But if you were to start with, who are these people? Just that question who are these people? And what are they like? And who do they care about? It's one of the things I actually talk about in the book is like, figure out who, whether you're selling to a strategic or taking an investment, but go to their office.

And sometimes you can figure out who people are by who they surround themselves with, how they treat those people, what the culture is like, and this is a funny little thing, but it turns out maybe it's a bigger marker than you would realize. We noticed that everybody else noticed wow, you have dogs on your website, like in your pictures.

I'm like, yeah we kind of like dogs [00:23:00] we have dogs in the office regularly. I saw Moose earlier today. Moose is aptly named. This is sort of enormous dog. And he's one of the sweetest dogs in the world. It's at the point now where we actually have a dogs of Satori page on our website.

We would just have a little fun with it. But as you can imagine, Our environment to work is different than many. And we we're really fortunate this year to be recognized as the best small company in Texas to work for, which is just amazing. I mean, I get no, no credit to me.

On that's the team thinking about every day. Like how can we be a better place to work? And it's in a thousand little things, but here's the point. Can you show up here and you just hang out with us for a little bit? You're going to feel it and you're going to feel like, who are we? And what are we like?

And then you go elsewhere and you can feel what is often a very different and you just got to figure out what fits for you. There are people that we're just not a good fit for at all. [00:24:00] so there's. This sort of base layer differentiation that just lives in who are we and what do we like to be around and how do we approach problems but then you get into more, specific things.

we like situations where we think we can make a difference. So it's one thing to buy a company and say, well, we're going to buy it. We're going to do some stuff to it. And then we're going to flip it like a house flipper. Like you guys have seen the house flippers on TV. A lot of our industry feels like house flippers and they got a bunch of words and they say partnership and all, but like practically it's house flippers, man.

That's not the exciting part for us. The exciting part is when one of our portfolio companies has some, Breakthrough. They accomplish something they never accomplished before. They have a big win. It's the, it's that day to day stuff in business that, that actually, that's really where we get our energy from.

The exits are great. Look, it's our job to make a return for our investors. So we have to do that, 

Jeffrey Feldberg: but 

Sunny Vanderbeck: how we go about doing that can be wildly different. And so in the day to day, [00:25:00] this journey, our revenue size ranges are roughly 50 million to 500 million. It's the world we work in.

And so one of the common patterns might be we invest somewhere around a 40, 50, 60 million and we're there to help try to get it to 150 or 200 million. So that's a lot of fun and it's dramatically different. Like for those of you that have been through a couple of cycles, like zero to a million is.

That's its own thing, but from a million to five million, a lot of stuff changes. And when you go from 40 million to a hundred million, it's a different world. It's a very different world. It's the sort of what got you here won't get you there. And so being able to be a good partner through that, to be able to say, look, this, when you hit a hundred employees, this new thing is going to show up that I know you're not expecting it.

It got me before. I've seen this pattern six times here's what we can do to get out ahead of that. It are, we're going to be business builders in our mindset and we use M& A to do that and we use organic growth, a little bit of a [00:26:00] bias towards organic growth, I think, given who we are. 

do our job right, we feel like partners and our CEOs should want to pick up the phone and call us and say, hey, I was thinking about X.

Can we talk through that? Versus, yeah, these knuckleheads make me go to this board meeting every quarter, and I've got 85 pages of reporting, and our CFO gets yelled at about accounts receivable, and like, so I'll leave you this sort of one final thing. Our lens on the world is business, not finance. I think that basic difference is a big part of all of the individual pieces of evidence that you see that, that might be about how do you build a sales force?

How do you do marketing? What if we could value engineer this piece of the product so that we could make more of them in a day? All of those things. And the finance stuff is it's downstream from that. 

Jeffrey Feldberg: I hear you. Such really nuanced, but really important distinctions. And before we get there, first, let me circle back, a lot to unpack with what you just said.

And again, Deep Wealth Nation, go to the [00:27:00] show notes. We have actually a link to all the dogs at Sartoriet. And I got to tell you, Sunny, as a former owner of Labs, and I got to tell you, Lola and Moose and Rita really Pull all my heartstrings just seeing them reminding me of my labs and you're not joking about that.

And it's interesting because when, I mean, here you are at a really, I'm going to call it a high end firm making a change out there and they have dogs on the website. And then when you're looking at the area in the website with your culture, I mean, I was laughing and you're looking at the pictures and I'm saying, yeah, this would be a fun place to be.

to be at. Not that I'd make a good employee, I'd probably fire myself on day one, but if I was going to be at a place, this would be one of the places where I'd want to be, where I'm having a lot of fun, I'm enjoying myself, because let's face it, We oftentimes, we'll spend more time with our team members, with our colleagues than we do actually our family members.

And so are you enjoying it or is it just same blank, different day? And going back to what you're saying, and again, for the listeners of Deep Wealth Nation, go to the show [00:28:00] notes, pick up a copy of the book, Selling Without Selling Out, How to Sell Your Business Without Selling Your Soul. It really resonated with me in chapter five, How to Find the Right Buyer.

And I know here, Deep Wealth, that's actually step three for us, where we're talking future buyer because you can have very similar offers, they are completely different when you take into account. The culture of who is this investor or buyer? What does that look like? Because the best deal isn't necessarily, and you can tell me if I'm on base or off base, the best deal isn't necessarily the one that has the largest number on it, the best deal is finding the best investor or buyer with the best cultural fit.

Thoughts about that? 

Sunny Vanderbeck: I think it's, it is central to the book. There, there are a couple of key ideas. Even if you're not going to stay, I would argue you probably care about what happens the day after close. Like that, most people don't talk about the day after close and so they end up talking about the biggest headline number and I got a simple thought experiment for you.

And it's this, you have two [00:29:00] buyers, they're identical in all respects. They have identical offers. And just before you pick which one, one of them comes to you and says, look, we've had a little change in our strategy. So our offer still stands, but we're going to need to let everybody go right after the transaction.

Jeffrey Feldberg: But 

Sunny Vanderbeck: we know you probably don't like that, so we're going to pay more. How much more do they have to pay for you to be okay with them firing everybody? Oh, man, it just got real. Now, usually when I talk about that and I'm like doing a, in person talk, You can see these CEOs nearly wanting to throw a book at me or pencils or walk out because it's like most of us, our default answer is There isn't a number and a string of expletives come out of their mouth and it's basically get out of my office and don't ever come back.

what does that mean? Like If our emotional response to that question, what does that mean? Oh, it means we do care about somebody else besides ourselves and it means we care about something more than money. So the [00:30:00] essence of the thing is to figure out what you want. Actually figure out what you want, not what you think you're supposed to want, not what everybody else wants for you.

Whatever is important to you like, I tried really hard not moralizing the book and tell people what they should want. I just want you to figure out what you do actually want and not inherit other people's beliefs. Once you figure out what you want for yourself and your stakeholders, your customers, your employees, your suppliers, your community, what have you, then you can figure out if a buyer is a good fit.

Jeffrey Feldberg: And 

Sunny Vanderbeck: so I'll give you a funny example here, and this is again we're into, it can get some nuance. If the most important thing in the world to you is getting your product into the hands of more customers, because you think it changes their life. You might be okay with selling to big mega conglomerate corp that kind of has a crappy culture because your mission of putting this in the hands of 10 million people or a hundred million people, [00:31:00] you care more about that than anything else.

Okay, great. That's on you. Like you, it's your call to make. Just figure out what's important to you and then you can figure out if it's a fit. And so at Satori, straight out tell people, I go, look, if you want money that will just like leave you alone, you just want to get a check. And again we're investing in profitable companies.

So these are now five to 50 of EBITDA. If you just want to check and to be left alone, we are not a good fit. I'm bad at that. This stuff's too fun. And it's too interesting to just get a report every quarter and grade somebody's homework. And that's just not us. Like If you want a partner and somebody that's.

I'm going to wake up thinking about how they could help we're a great fit and we'll have a lot of fun doing that. So if you want somebody, and this is, actually a common refrain that I hear from CEOs in this journey from, a hundred employees to a thousand employees, but I need somebody to talk to that can help me process through these ideas.

And stuff I'm worried about and plans, and I'm thinking about doing X, what do I [00:32:00] need to know about that? And how could I think through that? And what are the implications to my organization? What I hear from our best fits, these are people that, they actually want a partner in the room. They want somebody that has some stake in the game.

And it's, it's a funny thing, a little sidebar on advice. In almost all cases, advice from people who don't really have a stake in the game is bad advice, or it's just not, it doesn't have enough context to be really useful, 

Jeffrey Feldberg: right? 

Sunny Vanderbeck: It's entirely another thing. If somebody's written a check into your business and you come and ask them a question, the way they're going to relate to that, they'll probably think deeply about it and care a lot.

If you bump into somebody at a cocktail party and say, yeah, I'm thinking about, expanding to Germany. You'll get a one liner or two, and that's all you're gonna get. 

so for us, we tend to be a best fit for somebody who like they want to grow their team is a way to think about it and have more people in the room thinking about stuff at their level to help them build to the next scale.

So figure out what you want and you got a [00:33:00] decent shot at getting it which includes if you're going to stay around, who are these people and what it's like, and if you're not going to stay around, what culture are you going to toss your employees into, right? All these people that helped you build your hopes and dreams and now you send them to the corporate Borg and they're calling you crying, like you'll never guess they laid off Sally, but her mom just got canceled, all this terrible stuff that's on you.

No one else. That's you. And you just have to figure out who you care about and what you want for them. 

Jeffrey Feldberg: Sunny, as you're talking about that, you're taking me to chapter seven in the book. And really a few things jumped out for me, having gone through this process and right off the bat, very early on, nothing's going to change.

Don't believe it. So you're dispelling that myth right away. So true. And actually, we talk a lot about that in the Deep Wealth Mastery Program. It's step seven, timing and communication. When we're speaking, not just with our team members, but all of our stakeholders, the last thing you want to say is, don't worry, nothing's going to change.

It's a lie and people see right through that. But what really hit home for me was, you're talking about culture in the post merger, [00:34:00] and then the new identity in the post exit, and how true it is because for us anyways, and again, you can say, Jeffrey, on base, off base. For most business owners, they believe the lies that they tell themselves and they're saying, listen, I'm too busy right now.

I can't even think about having some kind of liquidity event. It's years away. I'll get to it just before. And by the time they get to it, it's already too late. It's done before it's even begun. Now they're in market. They have this full time job, otherwise known as a liquidity event above and beyond running the company.

And things like, well, what is the culture of our company? What's the culture of some of the other investors or buyers at the table? Because your point, Sunny, if we make a mistake on that, wow, it's a big mistake and you can't undo that so easily. And talk about a legacy that can just poof in seconds, go up in smoke because you made the wrong decision.

You weren't prepared. You're under pressure. Maybe you had deal fatigue and you're now negatively impacting the company. The entire company, the lives of the people that help get you to where you are. So there's a [00:35:00] lot on the line with that. And I appreciate in the day after how you bring that to life for people to think about because really they often don't.

And when they do, it's already too late. 

Sunny Vanderbeck: Yeah. It's your job, just straight up, no punches pulled, how it goes after the transactions on you and nobody else as CEO. And you're too busy to, so you spent 20 years of your life working on this thing or 10 years of your life working on this thing, and you're too busy to figure out how it ends.

Well, I can tell you how that often turns out. That turns out with, well, I got a big pile of loot, but I'm not happy. and it doesn't have to be like that. If you go and talk to people who have had an exit the disappointments in that process. More often than not are going to be in the intangibles.

They're not, well, gosh, I had to buy a used jet instead of a new one. That's not what people sad about. It's, well, they took the thing I built [00:36:00] and they ripped it apart piece by piece until there was nothing left. That happens. Like strategics are they're good at that. Not all, it doesn't always turn out that way.

But again, it's just being clear about that. so I think my point here. It's like price is not the only thing that matters. There's a lot to value beyond price. Culture's a big one. And in fact, I got a story for you. We had one of our portfolio companies, and this may give you a little insight into kind of who we are and how we're wired.

it made sense for somebody else to be the right owner. Long explanation about why but the leadership team came to us. And usually if we have an exit, it's still, it's driven by the CEO and leadership team saying, Hey, We see X, Y, Z, and here's why we think we should do A, B, C. And we tend to be smart enough to know we're dumb enough to not override that.

So we just go, okay, great. Let's figure it out. So in this case, they had run a process and they've gotten it down to two that they liked, and there was a price difference between the two. And I said to the team, I said, look, y'all were going to get to pick, [00:37:00] not us. And I know there's a price difference and there's economic consequence to us as a result of this price difference.

We're going to let you pick because you got to live with the decision and in both cases, the CEO and leadership team are going to stay on for the next, next journey in the company. So I said, this one's going to affect you more than us. You pick, but before you pick a bunch of what you've said about these two buyers is hearsay and rumor. So my ask is that you go find out for sure. And that includes get on a plane and go there, go to headquarters, hang out for the day, chat with the CEO, see what the office is see what the people are like, this is conversation we've had, so far, go find out and whatever you decide will support you in whichever direction you want to go.

And the funniest thing happened, a full 180, they got on a plane, they spent a day at each of the two buyers headquarters. And after that day, and it wasn't even, [00:38:00] there was no like, well, it's down to the wire, but if we consider X, Y, it was none of that. They came back from the two one day trips and said, it's crystal clear who we're going with.

Okay. That's interesting. Cause that's 180 degrees from where we started. Like in, in the beginning they were like, oh, these, buyer's knuckleheads, they will never work there. The culture's terrible and these are perfect. And they did the in-person visit and changed their mind to the opposite that they had to live with it.

We let that one go to them, but the important part of it is. You're guessing we are in no guessing land. It's an irrevocable decision. Go figure out for sure. And if you're selling to a company that makes a lot of acquisitions or an investment company do reference checks. Call the last, the CEOs of the last three companies that strategic big megacorp roll up thing is buying and ask them how it's going.

Because you may have this sort of view of them in the market as, oh, they're terrible, and it's a sweatshop, and they're a fire, and you call these three CEOs. And you hear, these people are amazing. I love [00:39:00] my job. I get to do all this stuff we couldn't do. Like they're effusive about, now be careful.

Sometimes you got to read between the lines, right? If they're like, yeah, it's okay. And they honored all of their obligations. And you know, when you do those reference checks for somebody and you have to pry every word out of the person and they never really, you get off the call and you're like, they never said anything.

They didn't not say anything. They never really said anything. They were scared to tell the truth. Pay attention to that because that's data too. It's sometimes Get on the phone and find out if you're going to take an investment from a private equity firm, get on the phone with their CEOs and see. my hope is our CEOs, they will say, here are the situations where Satori is really good.

But by the way, be aware if you do X, Y, or Z, like it's, you're going to feel not great about how they related to you. I'm sure we do dumb stuff. No one's perfect. What you're looking for though, is transparency about reality. It's nothing's perfect. Like disavow yourself of that notion as much as the world is not a zero sum game, like I will live and die on that hill.

There may be [00:40:00] some trade offs. You may trade a little bit of this for a better culture, a little bit more growth for having to defend your team against the culture. We had one of our CEO friends I talk about in the book. There's a story in there about a dress code. You want to see some crazy corporate stuff on the dress code?

It's in there. It really happens. We're from HR and we're here to help. So you can get out ahead of a lot of those things but the real point is just no guessing, don't guess, go find out. 

Jeffrey Feldberg: Yeah. So interesting, really in many ways, you are eating what you're baking, your culture in terms of, hey. Do your diligence, come back, whatever you choose, we're going to support, really speaks volumes.

And so I'm wondering, I mean, for starters, in terms of your advisory board, I mean, you have some heavy hitters there, people that have created in their own right, many market disruptions. As you're looking onto the landscape, because I know your DNA, your ethos is elevating humanity, finding the companies that you're going to help invest and take it to the next level to elevate humanity.

So as we record today, [00:41:00] how's that coming along? Anything that you can share with us, anything that's really, yeah, look at this. This is, it's a little bit early now, but give us some time and wow, we've got something really good ahead for everyone. 

Sunny Vanderbeck: so I'll give you a couple of nuggets here. So one, we defined our purpose as to create, fund and inspire businesses that elevate humanity.

what does it mean to elevate humanity if you make rivets? Yeah. Yeah. Yeah. Or office chairs, or just some, like the world is full of businesses that do these really important things, but it's not like the latest kale chip that they're helping people eat healthy. What does that mean? My belief is that a high functioning leadership team, With a great culture, it's doing good work for its customers by its very existence, makes the world better.

How many people go to jobs that suck a lot? What if my jobs don't suck? What if people feel like they can live their best life at the company? What if we did a little video work with one of our [00:42:00] portfolio companies recently, man, we had this guy talking about our training and development program At Satori, we helped the company build this sort of development program. This guy was talking about, he's able to give his kids a life that he didn't have growing up. Like I got hit right in the feels, like, how cool is that? So is it a kale chip? No. Is it, there are hundreds of families that live better lives as a result of this.

Yeah, man, that's a good thing. That is a very good thing in the world. Here's the other thing. It also sets the example for others. So in the case of this company. The culture in the industry wasn't very good. When we started improving the culture at this company, it put the industry on notice, Hey, you can't, do this anymore.

This is 1960s style management game. That's over because we're getting all your good people. That's what really happens is you build a good culture and. The other good people in the industry start coming there. And so hopefully we had some effect on the competition as well. so I think everything we do moves that [00:43:00] along.

And ultimately our real hope is that the things that make us different aren't different anymore. When we wake up and we go talk about this conscious capitalism stuff and trying to treat customers and employees right and build good culture and long term thinking. And somebody says to me, yeah, you and everybody else.

Good for you. That's not different. Then I'll know it's time to retire. My work's done. Will that happen in my lifetime? I don't know, but we can make it better than it was yesterday and just keep moving it forward and keep moving it forward. And I think our industry is getting a little better about this every day.

There is nothing like being able to set the example, say it can be like this. It's okay to be like this. 

Jeffrey Feldberg: Well, Sunny, what I'm hearing you say, you don't really hear a lot out there. It's actually refreshing and I hope I'm on base and you can tell me either way about that. Really, what I'm hearing you say is, hey, Jeffrey, it's not about, is this a new innovation that hasn't been done before, that's really going to revolutionize.

Whatever's going on out there, perhaps it could be, but it's not just about that. Maybe [00:44:00] it's an old school manufacturing kind of facility. We're bringing jobs back to the community. It's A1 on quality and it's an incredible culture. It's serving a really important purpose out there, not only in the community, but in the country in terms of what we're doing and worldwide because of the quality of the product.

Yeah, we took that from defunct and almost out of business, lousy culture. Look at it now. Even though it may be an older technology or nothing that's revolutionary, that, hey, look at the difference that we made because of our approach, because of our leadership, what we're able to instill in this company that can now be an example for the industry, for the community, and beyond.

How am I doing with that? 

Sunny Vanderbeck: Very well. Very well. I think we, as leaders, often underestimate our wake. The, every one of these people, if somebody comes to your company and works there for three or four years and leaves. What lessons about the world do they leave with? What lessons about life do they leave with?

What if they had a great manager and they went [00:45:00] somewhere else and they got to become someone else's great manager? Like this ripple effect is not just the thing you see on every Tuesday and some culture survey and these things, good or bad, go out into the world. Not everybody stays at the company forever.

And what about the lesson your employees kids are learning about relationship to work? And what their boss should be like, and what companies should do or the topic du jour, is capitalism even good? That we're having that conversation makes my head hurt, but we are. Healthy, high functioning businesses create an extraordinary amount of good in the world.

And yeah, you don't have to make the latest, greatest medical technology thing, or put a rocket into space to have the world be a better place. And part of this is don't just like make up purpose stuff and BS yourself. I have a friend with an industrial, so a friend of mine bought this industrial business years ago.

It was a solid business, good business, and I think he was a good owner [00:46:00] for it. And he went on this purpose journey and it took him almost five years to figure it out. And what he didn't do at the end of it was have some made up crap. Because sometimes you see it as sort of like, no one actually believes that thing.

Like you can put it on the wall, no one believes it. It was real. He's you know what? The most important thing this company does is to provide opportunity for its employees. The rest of it, it's fine. The product they make was fine. It serves a need, but it's not changing the world. It's like traffic cones or something like that.

Not changing the world, traffic cones. But, largest employer in a small town, good training and growth and development. That company provided meaningful employment and development for its employees. And he ultimately just said, actually, that's why this business exists, is to create a better life for these hundred people.

Okay. Cool. How awesome is that? 

Jeffrey Feldberg: Yeah. It's refreshing, Sunny. We're going to have to wrap up. Sadly. I mean, we can just go on and on here. It's just refreshing to hear because again, from my perspective, it seems as [00:47:00] though, at least to me, it feels like we've lost a generation or two of entrepreneurship through venture capital, not pointing fingers per se.

But just this greed, I mean, the Gordon Gekko greed that you saw on the Wall Street movie that really pervade entrepreneurship. Yeah, I don't have to have a real company. I don't have to have real customers. I don't even have to have profits, but I'm going to build this thing. I'm going to sell out, make a gazillion dollars.

And that's all that it's about as opposed to really what you're sharing right now. And to me, what entrepreneurship has always been. Making a difference in our, it could be just our town, if that's it, hey, amazing, terrific. Or if we can have an affect and effect bigger than that, amazing, but really getting back to the roots of entrepreneurship.

So I love what you're sharing with that. Before we go into wrap up mode, Sunny, is there a question I didn't ask or a topic we haven't covered or a message you'd like to share with Deep Wealth Nation?

We hit on this a little bit but it's, so important. I'll hit on it again, figuring out who you care about and what you want for them is your job. If you're thinking about [00:48:00] an investor or a transaction and you do it without regard to the people that you care about and without regard for the day after the deal, everything that happens next is on you, but it's doable.

I do also think you have to write it down. So the funny little thing, I ended up making workbooks that go along with the book. And you're like, well, why did you make workbooks, man? These questions aren't that hard. Here's what I've learned about myself. And I think this is true for a lot of CEOs. When we have something rattling around in our head, we're pretty sure we know it.

Oh, I know who I care about, Sunny. Yeah. Okay. And I know what I want from him. Okay, cool. Write it down. And this funny thing happens. You go to write it down and you're like, oh, that wasn't as clear as I thought it was. And you look at it again the next day, and you're like, oh, okay, here's how I can tune it up.

And there's something cathartic about this process of writing it down. It gives you a chance to reflect on it and decide whether or not that's really what you meant, and were you clear about it. And there's one other little secret here. If you go to your advisors, you have, accountants and [00:49:00] lawyers and investment banks and all the people that are in the mix in a transaction and you say all this stuff about you care about your culture and X, Y, Z, they don't believe you.

And the reason they don't believe you is because they've seen that movie a bunch of times where somebody spouts off a bunch of stuff. And then they get to deciding time and they make the decision based solely on the biggest cash at close number. So they've learned that through their experience, that you popping off at the mouth in the meeting, they can ignore it and they're probably right, but I promise you when you show up and it's in writing and you say, these things are important to me and I'm serious about it.

They will absolutely pay attention to you. They will believe you when you tell them, I care about culture, or I care about this supplier base, or employment in the factory is a go no go for me in this deal. If it's in writing, they'll actually listen and pay attention, and you're far more likely to get what you want.

I'm just here to help people figure out what they want [00:50:00] and get it. But if you don't really know what you want, you're never going to get it. 

That's terrific advice, Sunny. In our terminology, we call that well ahead of time. We're talking years before you ever show up for your liquidity event. What are your deal points?

What are your no fly zones? Deal points. If it's not in the deal, I'm walking away. I don't care what number is there. If it's not there, I'm walking away. And it could be some of the points that we spoke about earlier. No fly zones. If it is in the deal, if it's in the LOI, I'm not even moving forward. It's a non starter.

It's just not going to happen because it's a no fly zone. I know what I want. I know what I don't want. And to your point, when we prepare well in advance, it gives us, I'm going to use the word deliberately, that luxury. We have that clarity, that peace of mind. I know what I want. I know what I don't want.

This is my culture. This is our ethos. This is our DNA. This is who we are. And when you can communicate that up front. Sure, some are going to self select themselves out of the process, but that's okay. Why waste the time in the cycle? And the ones that stay in, they know what they're getting. There's no surprise with that.

So really, I appreciate that. And Sunny, with that [00:51:00] said, we're going to go into wrap up mode. So Sunny, with all that said, it's a tradition here on the Deep Wealth Podcast where I have the privilege, the honor of asking every guest the same question.

So here's the question for you. It's a fun one. When you think of the movie Back to the Future, you have that magical DeLorean car that will take you to any point in time. So imagine now, it's tomorrow morning, you look outside your window, not only is the DeLorean car there. But the door is open, it's curbside, it's waiting for you to hop on in what you do.

And you're now going to go to any point in your life. Sunny, as a young child, a teenager, whatever point in time that would be. What would you tell your younger self in terms of life lessons or life wisdom? Or, hey, Sunny, do this, but don't do that. What would it sound like? 

Sunny Vanderbeck: Yeah, a couple of things would show up.

First, I would carry a copy of my book with me. I know I sound like a book promoter, but I wanted to write the book that I wish I could have read 20 years ago. 

Jeffrey Feldberg: So, 

Sunny Vanderbeck: so that would be one. Hey, you need to read this before you do any transactions or anything. Like, Please read this. It might have helped me a lot.

the second piece of advice and this is all sort [00:52:00] of roughly call it the 25 year old Sunny. where I'm dropping the advice. The other one is going to be, Hey, you're going to have a couple of years that are a really wild ride between the sort of com implosion and 9 11 and all the recession that comes after that.

Stay optimistic. Don't let the pessimism creep in. I had to learn that a little bit. It took me probably three years after all that, where I had that sort of experience where like the world melted down. It was pretty rough. And I think it caused me to be a little less optimistic about kind of everything.

Now, I wouldn't say I got cynical. I just wasn't that sort of unbridled optimist after having been kicked around a bunch. I think I would give myself advice to be a little more tempered. Okay, learn from those lessons. And as you move through those events, It's time to go back into, everything's going to be great, be a more of an optimist, that kind of mode.

So I [00:53:00] missed out on some time of, being my, natural optimist self as a result of that. And that was, things could have turned out better here and there, had I been more of an optimist. 

Jeffrey Feldberg: Wow. Terrific advice. So stay optimistic. Don't let the pessimism creep in. We just let things happen. So really it sounds like being, I'll just say in the moment, very conscious of what's going on out there, how you're feeling, what you're thinking. Be optimistic. I absolutely love that because really.

It's our mindset. It doesn't show up on a balance sheet. It's not in a complicated formula, but it's our mindset. That's often the difference between really unleashing our true success. What terrific advice. And Sunny, before we wrap up, if someone has a question, they want to speak with you or the team, maybe even explore how you can become part of their team through some investments, where would be the best place online for them to reach you?

Sunny Vanderbeck: Yeah. So I've got a website. That's my name. It's Sunnyvanderbeck. com. Or you can find us at satoricapital. com, either one. I'd love to hear from you. 

Jeffrey Feldberg: Terrific. And kind of share with you, Deep Wealth Nation, take [00:54:00] Sunny up on his offer. I'm speaking to him offline and what you hear is what you get. So take him up on that very generous offer.

Well, Sunny, it's official. It's a wrap. Congratulations. And as we love to say here, Deep Wealth, may you continue to thrive and prosper while you remain healthy and safe. Thank you so much. 

Sunny Vanderbeck: Thank you too. 

Jeffrey Feldberg: So there you have it, Deep Wealth Nation. What did you think? So with all that said and as we wrap it up, I have another question for you.

Actually, it's more of a personal favor. Did you find this episode helpful? Have you found other episodes of the Deep Wealth Podcast empowering and a game changer for your journey? And if you said yes, and I really hope you did, I have a small but really meaningful way that you can actually help us out and keep these episodes coming to you.

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