487 Alexis Sikorsky

Jeffrey Feldberg: [00:00:00] What if building your first business taught you everything you needed to build your last one?

Alexis Sikorsky started coding and building companies as a teenager, then went on to launch a software firm, grow it for 20 years, and eventually sell in and a deal so large. It put his entire journey into sharp perspective.

Now he spends his time helping other founders do the same by taking small to mid-sized businesses and preparing them not just to grow, but to exit well. He's now a specialist Advisor for CEOs guiding their next phase: scaling, future proofing, and shaping strategy that leads to profitable exits.

He invented what he calls the APEX method, which is a blueprint for growth, team building, and getting the investment needed for real returns.

His book, Cashing Out isn't just about selling, it's about the mindset that lets you build something others want to buy. Alexis's story isn't smooth or linear. It's marked by lean beginnings, crisis periods, moments of doubt, and the [00:01:00] hard lessons that turned into traction. If you care about growing with intention, preparing for an exit, and never leaving value on the table, this is a conversation you'll want to lean into.

And before we hop into the podcast, a quick word from our sponsor, Deep Wealth and the Deep Wealth Mastery Program. We have William, a graduate of Deep Both Mastery, and he says, I didn't have the time for Deep Both Mastery, but I made the time and I'm glad I did.

What I learned goes far beyond any other executive program or coach I've ever experienced. Or how about Bruce? Bruce says, before Deep Wealth Mastery, the challenge I had with most business programs, coaches, or blogs was that they were one dimensional. Through Deep Wealth Mastery, I'm part of a richer community of other successful business owners.

The idea shared forever changed the trajectory of the business and best of all, the experience was fun. And we'll round things out with Stacey. 

Stacey said, I wish I had access to the Deep Wealth Mastery before my liquidity event, as it would have been extremely helpful. Deep Wealth Mastery exceeded my expectations in terms of [00:02:00] content and quality.

And you know what, my Deep Wealth Nation, why they're saying this is because Deep Wealth Mastery, it's the only system based on a nine figure deal. That was my deal. And as you know, I said no to a seven figure offer, and I created a system that we now call Deep Wealth Mastery that helped myself and my business partners, welcome from a different buyer, a different offer, a nine figure exit.

So if you're interested in growing your profits, preparing for a future liquidity event, if that's two years away or 20 years away, and you want to optimize your post-exit life, Deep Wealth Mastery is for you. Please email success at deepwealth. com. Again, that's success, S U C C E S S, at deepwealth. com. We'll send you all the information about Deep Wealth Mastery, otherwise known as Scale for Ultimate Sale. That's where you want to be. You want to be with other successful business owners, entrepreneurs, and founders just like you who are looking to create market disruptions.

And they want to lock in their financial freedom and have success and fulfillment. 

That's the 90 day Deep Wealth Mastery Program. It has your name on it. [00:03:00] All you need to do is take the next step. Send an email to success at deepwealth. com.

Deep Wealth Nation welcome to another episode of the Deep Wealth Podcast. Well, Deep Wealth Nation. You heard the official introduction in the House of Deep Wealth. We have a very special guest. We have a fellow entrepreneur, a post-exit entrepreneur, an author, and I love the book titled, Cashing Out and a colleague of mine who's focusing on how do you get from where you are today not only to where you want to be, but to smash right through that and achieve your goals and your dreams. But I'm gonna put a hold on that. Alexis, welcome to the Deep Podcast. An absolute pleasure to have you with us.

There's always a story behind the story, and I know you have a fascinating one. What's your story, Alexis? What got you from where you were to where you are today?

Alexis Sikorsky: Hi, Jeffrey. Thank you so much for having me. Just briefly my story and where I am now. 2000 in Geneva. I started a two man company in my basement. And that's where the analogy with all the startup stops because we didn't [00:04:00] get to VC and we didn't get to get seven rounds of financing.

So we started bootstrapping our company. at the beginning it was bespoke development company. So 2000. It's basically when the internet goes from being, just a tool to showcase what you do to an actual application tool. That's when you have the beginning of e-commerce and database online and that stuff.

So we started working in this universe. 2003. We had a few employees of another company who joined me. And this company went bankrupt and out of the blue. I still don't know to that day why I made that decision. And this sentence can be used many times in my professional decisions just a gut feeling that I should buy this company.

So I went to the government because the company was bankrupt. I bought the source code and the client lease. And discovered that this company was actually an electronic document management system for private bank. [00:05:00] So we're in Switzerland, private bank is like apart from chocolate and watches that's what we do, right?

So suddenly and the reason I got the deal is because I promised the government that I would hire the whole team. So the government was very like it was important for them that you don't fire people. So I said, okay, I'll hire everybody. So suddenly we go from a eight persons company doing bespoke development to a 25 people company that run an operator software.

So that's the first big switch that I had in my life. 2003 to 2006, I developed this company, developed the product, We had 45 clients, so go talk to the clients. Say, please, Mr. Client, don't leave. I know the previous company went bankrupt, but we are doing really good stuff and we are super cool.

Please stay with us. Work pretty well because the last thing you want is to change your electronic document management system. It's like a commodity, right? So. Don't want to change it. So I did that [00:06:00] for three years, 2003 to 2006. 2006. I was starting to get really bored and I went to see my clients and basically I sat my 10 special clients.

I'll, talk about that often because who do you talk to in terms of your clients? It's an important decision. So for me it was like. Five of the biggest one, three of the one who liked me the best, and two of the one who liked me the worst, to have some kind of, a very good overview of my clients and say, guys I'm bored.

I want to build something new, but before I start building stuff, I need you to tell me what to build. What if I build, you'll be happy to buy? And I was expecting like 10 different answers. Actually, I got one answer and they say, well. You know it's banking. So now we have something new, 2006, right?

Something new. It's called compliance. It's very mean people hired by my management to prevent me from doing my job. So now they want all that [00:07:00] stuff for me. They want to KYC, know your customer politically exposed, where the money comes from, which was not in the DNA of these banks, right? Swiss banks. And they say basically what we need is to.

Have a tool where we can have a 360 view of our client. At the time, it was unheard of to have the accounting information, financial information, CRM information document in the same platform. Say, cool, okay, we'll do that easy piece of cake. 2006, 2007, like for eight, nine months, I start building the stuff and I'd say, okay, so my usual, sales cycle is 12 to 18 months. I'm gonna do what all software company do. I'm gonna go to the market and say it's ready. And while the people are designing whether to buy it or not, I'll have time to finish it. And good plan, except four of them bought it immediately.

now with one hand I'm fixing a product, other hand I'm trying to install it.

[00:08:00] Try to convince client that yeah, yeah, we're installing it, but it's gonna take a little longer. So fun times brings us to 2008 and 2008. I'm the king of the world. Like literally I'm like. 10 million revenues two and a half million ebitda. I spend like crazy. I hire the best people in the world, and I think I'm so, so smart.

Like literally, I think I'm the king of the world. Like I cannot do anything wrong. Why would I need to keep any money in the bank? There's no reason thing can go bad. And I remind you the year 2008.

Jeffrey Feldberg: The meltdown of meltdowns. And just before you continue, Alexis I always admire life or the universe, or God, whatever you call it, how our failure, and you haven't even finished your story, but I have a sense of where it's going. From our biggest success from the heights of our biggest success lie, the seeds of tomorrow's failure.

So, but please continue. Yeah. You have me captivated. So what happens next? You're top of the world. You're king of the [00:09:00] world. And then,

Alexis Sikorsky: Yeah. And I'm so smart.

Jeffrey Feldberg: and you're so smart. Yeah.

Alexis Sikorsky: Yeah. Keep that in mind. I like really I, I don't doubt myself for one second. I'm like I'm not even 40 at the time. I'm so smart. I'm like I made it right. And on watch the news one day, and it's the global financial crisis, the subprime crisis. And keep in mind, a hundred percent of my clients are banks, right?

Jeffrey Feldberg: Yeah. Ouch. Not a you're right at, you're right at the epicenter of

Alexis Sikorsky: Yes. So basically on one given Thursday, I lose 75% of my revenue. That's simple. Go from 10 million to two and a half million. Basically all my clients calling me and say, sorry, we're not buying anything from you anymore. So all the current project are stopped and my only revenues are the existing maintenance contract that they manage to keep.

Most of them still lost a couple. So now I'm properly screwed. And from [00:10:00] 2008 to 2014 15, it's the grind and losing 75% of your revenue. That mean firing 75% of your company and all these guys are my friends, right? it's a family company. They are friends, they're family. Literally, some of them are my family friends.

I know their kids once a year. They bring the wife and kids, or husband and kids to my house and I cook a barbecue for them and literally, and I have to fire these people. I have to mortgage my house and every month, i'm thinking like, do I keep going? Is it good money chasing bad money?

Do I give up and I continue because I have no other choice because literally nothing else I know how to do. So I keep grinding, keep going. Fast forward to 2014, in some creative accounting way. You could say the company is back to breakeven.

Jeffrey Feldberg: Okay.

Alexis Sikorsky: So back to 10 million revenue, back to [00:11:00] breakeven, surviving exhausted.

That's something I talk a lot with my client. The exhaustion of the founder is a very big factor.

Jeffrey Feldberg: Sure.

Alexis Sikorsky: And then when I get the phone call from a private equity.

And they call me and you know, you are an entrepreneur. You know, you get this phone call once a week, right? Oh, we are asking,

Jeffrey Feldberg: These days. It seems daily, but yeah. Yes.

Alexis Sikorsky: yeah, yeah.

we want to buy your company. I usually don't take the call,

Jeffrey Feldberg: Yeah.

Alexis Sikorsky: but this one, my brother who was working with me, I mean, listen, they French they know your culture. they created their private equity by selling their software company. So they understand your market and oh, I said, okay, talk to them.

And they come to Geneva, good guys. And I said, I'm gonna be a hundred percent honest with you. Which by the way, I always recommend when you talk to private equity, because if you don't, they will know it. 

Jeffrey Feldberg: That's right. Yep.

Alexis Sikorsky: a hundred percent honest with you. I'm tired. I'm very ready to sell. Actually, I did my due [00:12:00] diligence on you, which was a little bit of a lie at the time, but I trust you.

I'm ready to sell to you, but not now. ' cause right now my company is breakeven. It's not worth much. I say, I'll make you a deal. Come back in two years. In two years. I promise I won't go to an auction. I'll sell to you in two years if you make me a reasonable offer. I acknowledge the fact that you took a risk that you flew to Geneva and you're gonna get first call in two years.

And they say, yeah, no, we're not gonna do that. We are gonna do something a little bit different. I say, you're gonna go home. You're gonna spend a week building a business plan or where you think you're gonna be in two years. We are gonna come back in next week. I said, okay. So I got my brother and we did, extremely optimistic, almost Lala land based business plan for the next two years. I think I came back with 3 million EBITDA in two years where we were losing money for the past six years, and you know [00:13:00] that you are allowed, you don't lie about the past, never, not even a dollar, but about the future.

You're allowed to dream, right? So they came back, they look at our business plan and they said, fine, so this is our offer. We are gonna buy 11 times your EBITDA in two years, and we are paying you right now, 85% cash and 15% turnout. And I thought, okay, so now I'm convinced it's just a France that doing a very sophisticated, practical joke on me.

Oh, they're gonna do, but as it was like, they literally made me an offer I couldn't refuse. Signed the deal, got the cash and I end up making more from the due deal than I made from the earn out that I made from the cash.

Jeffrey Feldberg: Wow. You know, every entrepreneur's dream. Alexis, as you're talking about that, and. You come really back from the phoenix, from the ashes as the saying goes. But let's go back for just a moment and we're gonna talk in a moment how you've now taken that experience, your [00:14:00] insights, your wisdom, your smarts, if you will, and you're helping other entrepreneurs follow in the same footsteps.

But let's go back because you said it yourself for some reason, this company that went bankrupt, you decided to look into it and you ended up buying it, and you shared the whole story with that. Some people call that luck. Some people call that circumstance serendipity. For me, there's no luck. We will often make our luck and sometimes intuition, God, the universe, whatever you'd like to call it.

So go back to that point. I mean, what had you at that point say, you know what? Maybe there's something a little more here than what meets the eye. And I'm asking that because it would've been very easy for you to walk away from that. I'm busy, I've got other things to do. I've got my company, forget about this, and you move on, but you didn't.

So when you go back to that moment. Anything come to mind as you look back today?

Alexis Sikorsky: Yeah, so many time in my career I will call it luck. Like the fact that the private equity who called me was actually a good private equity and not pure gangsters like [00:15:00] some of them are, that's pure luck. The buying of logical access in 2003, that was not luck. That was instinct intuition. And it's also rooted in the fact that I love M&A my whole life and my whole career.

I have a passion for M&A. For two reasons. First of all, because I think it's an excellent deal. Usually it's basically get you growth very cheap. In that case, it was like literally dirt cheap. I think I paid the company for $600,000, something like that, that I had to borrow and, and it was dirt cheap because it was bankrupt, right. I still, to that day don't understand how he managed to bankrupt that company. But and we had, I don't remember, but it was like. Five or 6 million a RR and I got that for 600,000. So it was really dirt cheap. And the other resonates. It's fun, emanates fun, it's exciting, it's merging. Culture is bringing lots of new people at the same time.

So one of the advice [00:16:00] I tell my client a lot, it's is learn to love. I, I mean, it's fun.

Jeffrey Feldberg: And we're gonna get there in, in just a moment with that. But yeah I hear you on that. And Deep Wealth Nation, if you're listening to this and you're someone who, well, I'm into the spreadsheets, and if it's not on a spreadsheet, it just doesn't exist. Listen to what Alexis just shared with us. It was a hunch, it was intuition.

It was God or the universe winking. And when he opened that door, unbeknownst to him at the time, that led him through later what would be a massive Exit. So there's a lot to be said for intuition and going quote-unquote off the books into something. Well, hey, I'm having fun. Or, let's look into this, or, I've got a good feeling about this.

Not to say that it always will work out or that it's always the right thing to do, but at least be open to that. And then as you're going through that, Alexis, you said something else that was interesting and would love to hear your thoughts on it. You went back to the customers and we use different terminology here and at Deep Wealth and the nine-step roadmap in step two X-Factors.

We call it the magic wand question, and you said a little bit differently, but we're [00:17:00] really saying the same thing. And that's going back to our saying, Hey, what's keeping you up at nights these days? And you did that and that one comment from that customer. Created a market disruption for you that had a huge ROI for your customers, for you, for the marketplace.

Talk to us about that. Where again, did that instinct come from to even know to ask that question?

Alexis Sikorsky: Well, just to give you a very quick story of the previous question about intuition, because it's important. I work with my brother. I worked a lot with my brother. Now. We don't work together anymore because he's. More in the vc segment, which I don't understand anything about, and I'm more in the p which like at least is grounded.

But always give this story. He's a very type A person. He's a very Excel spreadsheet person. So I say, I describe how we buy a new camera. So when I want a new camera, I go to the camera store and I say, give me the most expensive one.

And I live with my camera. My brothers goes open an Excel spreadsheet, spend three days on the [00:18:00] internet comparing features and reviews and everything, and then he goes to the camera shop and buy the same one.

So it, it's like they both work. I'm not Yeah. Yeah.

my main thing is don't. Try to be who you are not. If you are a type A person, it's fine. Do your Excel spreadsheet, but don't expect me to be because that's not who I am. And listen, the biggest mistake I've made in my life, God knows I made many, is when I'm trying to be who I'm not. Let's do a, proper SWOT analysis, a pros and cons. And I say, yeah, that seems to be a really, really bad deal. Let's do it anyway. So, and to answer your question is how do you know what question to ask? You don't need to. They do

It's something a tool. I give all my clients that the simplest and easiest tool in the world, buy your client a beer.

I mean, I'm in the UK so I'm biased buying a beer. It's a big thing in the uk, but that works anywhere in the world. Buy your client a beer and sit and listen.

People [00:19:00] love to tell you how they feel and that, for instance, that's my main tool. when I do a due diligence for private equity, people tell me, how do you do due diligence on private equity?

It's so complicated. It's so not.

It's or not, it's a two step process. When you tell the private equity, I want to do a due diligence on you. Please give me five people. I can call people that you bought and I can call. Obviously I take this fine number and never call these people because that's the one they want me to call.

Then I go on the website and I call five other ones, find them on LinkedIn and say, Hey, Mr. X, my name is Alexis. I'm being in, I'm in negotiation with private equity XI know they bought your company, can I buy you a beer? And you tell me about your experience. I'm yet to meet an entrepreneur who said no to that, and I, yet, I'm yet to meet someone who lied to me about that.

So I don't need to know what the question as, just listen to them. They will tell you. I'm a golfer, so [00:20:00] I got lots of my ideas playing golf with my clients. Never beat them though.

Jeffrey Feldberg: Yeah. Rule number one in business, never beat your client, but I love that because you're so right. And actually, Alexis reminded me of one of my mentors. Jeffrey, you've got two ears, one mouth. Follow the numbers. Just listen. Ask the occasional question. Shut up and listen Jeffrey and everything else you'll need to hear, you'll hear people, you're absolutely right.

People do love to talk and to get that out there. So you're asking people the questions, you're letting them talk. We're gonna get to private equity in just a moment. And so that was a pivotal moment for you. So you had this Exit, it was a game changer for you. Little bit of luck, a lot of skill along the way, a hard work determination.

Going through some of the good times and not so good times with the great recession back in 2008. And Alexis as, as you look back on that before we switch, I mean we start talking about your book cashing out and how you're helping other entrepreneurs. Looking back on that, is there one thing that you can distill?

One bit of wisdom or a [00:21:00] strategy, a low hanging fruit that, Hey, Deep Wealth Nation, coming out of this episode. If you did this one thing, may it work for you as well as it worked for me, and it can do wonders for you. Anything that comes to mind for that.

Alexis Sikorsky: A few. If I have to choose one, I'll choose one, but there is a few. First of all, the total cost of my mistake. I actually did the mental exercise of calculating it. Say, okay, mental exercise. I'm starting new access now, knowing what I know.

Jeffrey Feldberg: Uhhuh.

Alexis Sikorsky: How do I sell it? And when, and the answer is 50,000,005 years,

Jeffrey Feldberg: Okay.

Alexis Sikorsky: right?

The total cost of my mistakes is 50,000,005 years. Got lucky. Could have been way worse, could have been bankrupt. Literally we were multiple time a week away from getting bankrupt. So I'd say the number one rule, and it's so not sexy and not fun, but the number one mistake is have a war chest.

Jeffrey Feldberg: Yeah.

Alexis Sikorsky: Seems like super basic.

You'll be so surprised how [00:22:00] many entrepreneurs at the five, 10 million revenue mark don't have a war chest and have a significant work war chest, like depending on your business. If your business is highly recurring, you can get away with six months. I'm be more comfortable if you have one year burn rate in your.

Jeffrey Feldberg: Yeah.

Alexis Sikorsky: that's one. The other one and another one that's very simple. Okay, I have 10. Another one that's very simple is know your company and if you think you know your company, you don't know it better. Get the right number, get them monthly. I talk to people who do 5 million revenue and get the numbers once a year.

It's like flying an airplane. And your GPS tell you, oh, by the way, you overshot your airport by 500 miles too late. You know what I mean? Another one. Don't confuse what's urgent with what's important. That's specific for the founders. All founders do that. They spend lots of time extinguishing fire and not enough time.

My, my partner tofu says, spend more time [00:23:00] on the company and less time in the company. So that's like the three that come to mind, but there is many.

Jeffrey Feldberg: Such wisdom in there. My goodness. And you're taking me back. You may not know this, but when you look at me, you're looking at a guy with two belts and two suspenders. And to your point, exactly. When I was running my company E at my E-learning company, I had six months of reserve and I worked towards the year.

And I gotta tell you, when I got below that year and I went back to the six months, I started to feel a little bit nervous. Everyone thought I was crazy. Jeffrey, what are you doing? Why do you have this money just in cash? You're not earning anything on it. Do something with it. But you're right because you don't know what you don't know until you do and then it's too late.

So, terrific advice on having a, a reserve and obviously the type of company and the type of revenue that you have, the number revenue that you have, that's all gonna make a difference in terms of what that reserve is. But six months to a year is generally a good rule of thumb.

Alexis Sikorsky: You don't know what you don't know, but there's one thing you know, will happen. The only question is when and how big, but will happen. It doesn't have [00:24:00] to be global financial crisis, we're due very soon and the world is very ready for something big happening.

Jeffrey Feldberg: Absolutely be prepared. And so you've been there, you've done that. And like we're talking offline, this is not theory. This is not some textbook being taught in the classroom. This is the real deal. You've lived it. And you're now taking these strategies and this wisdom, you're paying it forward. And by the way, Deep Wealth Nation, go to the show notes, and in the show notes, pick up a copy of Alexis's book, cashing out the Business Owner's Guide to Selling to Private Equity and go through it.

You'll come out a whole lot better, stronger and wiser than when you went into it. And so let me ask you this. I love how you set the book up. There's seven steps, effectively, the seven chapters in terms of what you've done, all of it. Accumulating with the Exit, which is the end goal. But I love how you put all this together and you start right away in the first chapter.

Part one, chapter one, where are you going?

And I love that because [00:25:00] for most founders, they can't answer that question. They'll tell you, well, I'm doing this and I'm doing that. And they're confusing activity with progress, but they can't tell you where you're going. And some of the questions that you're asking.

Deep Wealth Nation, check this out. Do you want a lifestyle or a growth business? Are you a leader or a manager? You're a leader and most of us aren't. What type of a leader are you? Where are you on your journey and what's your number? And the list goes on and on. Not gonna go through all of that, get the book, but fundamental questions that give clarity that most entrepreneurs, most founders, I know the early Jeffrey, when I first started my career as an entrepreneur.

I couldn't answer any of those questions and eventually I learned, but Absolutely. And bit of an unfair question, the offline, you're sharing with me how you're blessed and you have children, and it's almost an unfair question I, I'm gonna ask, it's almost like saying, Hey, which one is your favorite child?

But have the different parts of the book, the different chapters, is there one that's your favorite over the others for the different chapters?

Alexis Sikorsky: Yeah, I think the assessment part is super [00:26:00] important. And for the record, I had no clue of most of these things. It's super smart in hindsight, I had no idea if I was a growth business or a lifestyle business or what my number was, I was forced to answer this question very fast when the private equity called me.

But that's part of the five years, 50 million, if I knew where I was going, first of all, I would have weathered the global financial flooding in two years, not five, and I would have sold in 2009, 2010. For $150 million not $100. It's that simple. So this question are very key and know who you are.

It's really important. And it's hard to switch. Like actually after my three years retirement, when I sold the company, I was starting to get bored and went to an executive MBA in Oxford. And

One thing I learned is the difference between a leader and a manager. And I was like, yeah, I'm a leader.

I'm not a manager. [00:27:00] Thank you. Why? Nobody told me that 20 years ago. So I wouldn't have wasted so much time being a bad manager. And trying to make checklists and PowerPoints and all the stuff I'm terribly bad at. And that's what you do if you're a leader. You lead. If you're a manager, you manage, but very rarely do you see people who are good at both.

I'm still yet to meet one actually.

Jeffrey Feldberg: Absolutely. And you know, Deep Wealth Nation, you don't wanna be in the management category. You wanna be the leader that you are and you wanna step up to the plate and really make the difference. That's why founders are so unique, so rare and special. We take it for granted or we don't see it in ourselves, but we really, when we task ourselves with doing the right things and just going within, and I love your advice, hey, just be yourself.

You're comparing you and your brother. With my brother, he likes putting the spreadsheets and analyzing everything. I'm very different. I'm not gonna do that. Just be yourself. Be who you are, and that's 90% of winning whatever particular opportunity you're looking at. I wanna switch now to the book and your system, and I [00:28:00] wanna talk about private equity for just a moment.

It's changed a lot from when you exited, from when I exited. Private equity looks nothing like it did back in the day. So as we're recording this today. What would you wantDeep Wealth Nation to know of private equity today?

Where we are and where it's gonna be in the next 1, 3, 5 years?

Alexis Sikorsky: Okay, so the main thing about private equity, they are good at many things. They're very bad at. One thing is communicating about what they do.

One of the result of that. So they do two things. First of all, they try to drown you with jargon and trying to make you feel that what they do is very complicated, but it's actually very simple.

It's a leverage business. It's pretty much exactly the same as real estate. Is how much they can borrow to buy your company and how much they're gonna make on the capital they actually put in. A company P is nothing but a leverage business. And the other thing that them communicating badly has led, it has led [00:29:00] to fear of private equity.

Oh, private equity are gonna buy my company, fire me, and try to pretty much screw me as much as they can. That's not the truth. If you do your due diligence on your private equity company, most private equity are actually very aligned to your goal with one caveat, and you need to understand that and be very clear about it.

When you sell your company, you sold your company, you don't own the company anymore, you are now an employee.

Jeffrey Feldberg: Yeah.

Alexis Sikorsky: You kept on board, you kept 25% of the share. You're still the CEO. You work for them. That's something you need to understand. If you're not ready to that, if you want to still own and run your company, don't sell If you want to.

Get out, take your check and never Work with the company again. Don't sell to a private equity. The better deal to be had in a strategic deal, [00:30:00] if you want to sell to a private equity, you and them are aligned. You now a shareholder of the company, your goal is to increase the value of your share. So it's their goal is to increase the value of their shell, so, or their share.

So your goals are aligned when you understand this concept and when you know how to do your due diligence on a private equity, they become your best friend. And going back to my story, I told very briefly that I did more about the earn out than I did. And so why did they accept my super crazy, optimistic business plan and pay me 85% cash?

It's because all the stuff they know that I didn't know. And that's also why I help my client get better deal. And you do the same, right? So you know what the private equity bring to the table? First of all, they have a concept that I knew nothing at the time, that now is part of all the deal I negotiate.

It's what they call the nominal ebitda. But you have 2 million ebitda. [00:31:00] Actually, there's a good chance you have way more than that in nominal ebitda. Nominal ebitda, it's the EBITDA without all the stuff that are one time that are like without the salaries of the people, you're gonna fire without the extra free coffee for the employees with all the stuff that you can get rid of.

And that's already in their calculation, right? I come, I do that, I do a little bit of cost cutting. Suddenly my abit die 50% higher than it was. So all this concept, and another thing they can calculate that you can, is the value of what they bring to the table. Their international companies, they know they have new clients for you.

They have new employees for you. They have new. Systems for you? Like for me that actually it was me who asked them that immediately I say, Hey, I need a CFO, because by the way, when you are stuck at your five, 10 million plateau, there's a good chance that your cousin who does your number is actually not A CFO, you know, all that stuff.

So they know what they bring to the table and they [00:32:00] actually, that's their growth, right? And you don't get a penny of these growth because you don't know.

Jeffrey Feldberg: Yeah, so true. And deportation. If you're wondering, we are throwing around these acronyms and these terms, Hey, what does it mean? Ebitda, it's a fancy word, and it's simply standing for earnings before interest, taxes, depreciation, and amortization. It's a mouthful. That's why it's ebitda. And when we're talking about nominal ebitda, exactly what Alexis was talking about.

This is where we're going to have the EBITDA that's not been adjusted for inflation or other kinds of things that's going on. And it's different ways of looking at it. And in fact, a lot of times when we talk about this Alexis in the nine-step roadmap, when we go to step four due diligence, when we run our business, oftentimes it may be, well, I have triple the inventory that I need, or I have my family on payroll, or I like the.

Arts or culture. So I have seasons tickets, and I run that through the business and it's all above board. There's nothing wrong with that, but it's gonna lower the profits. And my [00:33:00] accountants are telling me, Hey Jeffrey, well you're paying less taxes and you have a gain that's here. And to your point when you're running the business, that's fine.

But when you're selling it, it's not fine because if you don't adjust for that ahead of time and you now go to the future business owner, the private equity firm, well, you know, I don't need three times inventory, so I'm going to take that back and my profit levels are gonna increase again. Yeah, Jeffrey, not happening.

Can't prove it. I'm not gonna take that chance. I'm about making money, not losing money. So we wanna take those kinds of adjustments well in advance. Hopefully run the company two, three years with those adjustments out and having a straight old, good old profit line. We'll pay more in taxes, but we get more coming out of it.

So some terrific insights that are there. Let me ask you this, and I know you go through this. When you're working with your clients, your specifically helping them find the right private equity for them. What would be red flags of, Hey, Jeffrey, run but the other direction as fast as you can because here's a red flag with this private equity company.

Or, Hey Jeffrey, run towards [00:34:00] 'em. Yes, this is a really solid private equity candidate for you. What would you want me to know?

Alexis Sikorsky: I'm gonna answer that, but just one more on what you just described about running the company ready to Exit. I call that addressing the bride.

It's dressing the bride. And I give you an example. My earnout was calculated on a multiple of the profit. So for example, once a month I would go to Paris and for a board meeting,

And they say, how come you never expense the plane ticket or the hotel, when you come see me say, why would I.

Like a thousand dollars plane tickets that I get a thousand dollars now in two years, it's 10 time ebitda that's $10,000. So why would I expense that? So that I made them laugh and at the end when I get so much money off my earn up the guy who big, he's now very close friend of mine, he said, you screwed us.

Like I should have kept the earnout. And he said, would you have signed if I kept the earnout? I said, you're kidding. I didn't even [00:35:00] think the earnout. What's gonna ever happen. So of course I would sign him and say, oh, you're an asshole. you cannot blame me. to, if I'm playing better at a game, you set the rules, right?

So he laughed and he was actually super happy. But yeah, that's, dressing the bride is super important because if you don't do it, they're gonna do it for you. And instead of you getting the money, they're getting the money. The big red flag is a client actually find the term that I find super smart, he called it fish and chip.

So they fish you with a very high valuation, and then they ship at it during due diligence. So they say, I give you a hundred mil for your company. You sign the letter of intent, you're super happy. They do six months of due deal, which if you're not very well prepared for it, I call it the six months colonoscopy.

They go through the six months colonoscopy and and they come and say, well, we don't really like what we saw in the due diligence. So I think we don't have a deal unless obviously you'll accept 85 instead of 100, and you know what? You are human [00:36:00] being. So for now six months you haven't worked in your company because all you did was due diligence.

You are exhausted. And if you are a regular human being in your mind, you already started spending the money. Or if, you, me, in real life, you already started spending the money, so you don't really have, you tend to take a worse deal than you would before the due diligence, and that's a very bad process.

And it's a big red flag. And the reason, the way to avoid it if they do that. There are good chance they did it before. So where you do your due deal, when you talk to previous sellers to this private equity, they will tell you that. And that's one of the question they ask, what's the difference between the letter of intent and the amount they actually paid?

And for us, it was actually very interesting because I got so lucky that these guys were super honest. There were one things that we got from a client, an exit fee. Which was pretty, and the guy say, Hey, [00:37:00] I'm not gonna pay you being doing an exit fee as part of the ebitda, they were a hundred percent right.

There is no questioning. And I look at the guy, I say, we split it. I said, okay. And we split it and that was it. That was the only thing that they did in the due diligence. So I got super lucky because everything I describe about due diligence, of course, I didn't do any of that because I didn't know at the time.

So, yeah, that's a big ad flag.

Jeffrey Feldberg: You know, you don't know what you don't know. And Deep Wealth Nation, you've heard me ask this question before, I'm gonna ask it again right now. How can you win at a game you've never played before? Because your future buyer, whether it's a strategic, which means it's perhaps one of your competitors or a company who's not a competitor but wants to get into your industry, it's another company who's buying you.

They're not necessarily in the business of buying other companies all the time, like private equity. They see a reason to buy you, or it's a private equity company, or it's some kind of other buyer. It doesn't really matter. They are buying. They have that expertise. They've done this before. They have the [00:38:00] experience.

The skills to grow a business are not the same ones to sell it and preparation. That's what I love about preparation. It's the gift that keeps on giving. Now speaking of preparation, you have your Apex method because you're talking about, okay, growth team and investment. So when it comes to your APEX system, what would you want the deep Deep Wealth Nation to know of where that's coming from and how that's gonna help them?

Alexis Sikorsky: So listeners. Of all the stuff Jeffrey has said, there is one sentence that you have. You should print it and put on your office when you're ready to sell. Growing a company is not the same as selling a company that super key, super important knowledge. What you're good at is not what's needed right now.

You need something, a completely different skillset, and the answer is talk to people who have, it's that simple. Like you need people who have been there, done that, been through that, and That's why Jeff and myself find business, because we've been [00:39:00] there, we've done that, and we are here to help.

Jeffrey Feldberg: Such a game changer. And to your point, when we're preparing and when we've done that work, as we like to say here at Deep Wealth, and you say very similar things and just in different words, when you find those, as we call 'em, the skeletons in the closet. It's a rhetorical question, is it better that we find those skeletons that can either put us outta business or they're lowering our profits, or the future buyer or investor finds it, who will walk away from the table or worse yet put a penalty on the company?

So when it came to those kinds of things in your journey. In terms of, okay, this was a very interesting private equity group. They agreed to work with you. They bought into your vision. They knew some things that you didn't know. You perhaps knew some things that they didn't know, but in the end, it all worked out to everyone's advantage.

What was the biggest surprise for you that they brought to the table? 'cause you said some interesting things. Hey, I need a CFO. They found me. CFO, perhaps they even got you. Other clients, other business. So what were some big surprises that you wouldn't have thought walking into it back in the [00:40:00] day that you would now look for or even expect from a private equity group?

Alexis Sikorsky: A few things. First of all, I was surprised how hands on there were, most private equity are structured, you have a gp, a general partner who's in charge of your company, and you have a guy who's in charge of the day-to-day of the company. So you usually meet the GP once a month.

And you meet your guy once a week, right? Participation director, whatever his title is. This guy was become a really one of my best friends and he was at least, I'd say, halftime on the company at the beginning, which is a lot. And the GP that you usually means once a month. I met with him once a week.

They were super hands on. I give you an example because it's interesting. I had a lease line, the company when I sold was I think 150 employees, and when they sold it was a bit over 500 employees. And we had a pretty strong development center in Singapore, [00:41:00] and we had an internet lease line between Geneva and Singapore that was costing us, I don't know, a lot, like half a mil per year.

And for the past five years, I tried to get rid of that and my CTO was explaining why it's not possible for lags and stuff. And I'm a tech guy, so I'm I believed him and he was right. It was actually impossible. And the GP came and say, yeah, we are gonna get rid of the lease line. So I explained why it's not possible.

He say, yeah, okay. Yeah. Excuse me one second. Pick up the phone, call the CTO and say, in three months we shutting down the lease line. Just to let you know, three months later the solutions were in place. We didn't lose a penny. We didn't lose. They just find a solution because they had no choice. So that's the kind of stuff that surprised me, how good these guys were in my business.

But again, I got lucky. When you talk to them at the beginning, there is two main topic you should discuss with them and be sure you are [00:42:00] comfortable with their answer because they're not gonna change. So how hands on you are, which the pending question is. What is gonna be my latitude?

and for me, it was very clear. They say You are free to operate in the guidelines we give you. So as long as you keep doing what you're doing, we happy. But if you want to change the business one way or another, if you want to do an M&A, if you want to do, then you have to ask us, which was fair.

And I give you one example. We were old licensed, maintenance based model. And I've always wanted to switch to a SaaS model. And the problem with doing that is for a couple of years you change your model so you don't get the new licenses. So you see a dip in your revenue. And they say, no, we're not gonna do that.

I said, we recognize it's a very good strategy. The problem is we have an investment committee. We have our investors that we talk to once a year, so we cannot show a deep [00:43:00] in revenue. So it's a very good strategy, but it's gonna be for the next one that, that's an example. So one is how.

Independent how free will you be to run your company? And the other is something you need to negotiate a lot and people forget to do that is you, your work contract. Like at the end of the day you become an employee. So what's your contract? For example, they tripled my salary immediately because I was paying myself what I thought was a pretty decent salary, and they thought it was ridiculously low.

So they tripled my salary. I was fine with that, but then we had conversation is what happens to my share if I leave the company?

That's a very key question because lots of private equity has a good lever, bad lever, clause.

Basically that if you leave the company on your own, they buy you at evaluation, they put in place, and if they fire you, they buy you at evaluation.

That's calculated. Complicated stuff, but that's super important. And they said you don't have a [00:44:00] bad lever clause and say all the other employee did. And that was a lot of fighting within the employees. But they say you cannot force the CEO to stay anyway. If you want to leave, you leave. So that's the kind of stuff like negotiate your own contract with them and usually it's an easy negotiation because they don't really give a flying F on, if they're gonna pay you half a million or 600,000.

Makes a very low difference for them. Very big for you at the end of the year.

Jeffrey Feldberg: And it goes to show what's at stake for them. Hey, we'll triple your salary because we know we're gonna have 10 x, 20 x, maybe 50 x what you're gonna add to the bottom line by the time that we're done. And I love what you said earlier, publication. I hope you're paying attention when you decide to sell your company.

Part of it, all of it, whatever the structure's gonna be. The fact that you're having a liquidity event, it's no longer your company. And so you very fortunately, like in your situation, you watch the company do some wonderful things, they were the right group. That doesn't always happen. And when you sell your company and if the new owner decides to run it into the [00:45:00] ground, you don't own it.

You're just an employee. Well, so sad, so bad. That's just how it goes. There's nothing you can do, so eyes wide open when you're going in, which is why it's so critical. You mentioned this earlier, we do the same thing here at Deep Wealth. You must do due diligence, your own due diligence on the future buyer and even the future investment banker, even before you go to market to see what's going on.

Let me ask you this. We're starting to bump up again some time. I barely got through the questions. Is there a question I haven't yet asked or a topic, theme or message we haven't yet covered that you wanna get out to? Deep Wealth Nation?

Alexis Sikorsky: Yeah, just very quickly who I'm talking to now, because I think that's important, right? I'm a Advisor of founders when they want to grow and sell their company, but that's very wide. First of all, I call myself an Advisor because I'm not allowed to call myself a coach. Because coach are not allowed to give their opinion, and that really doesn't work well for me.

Like more than 45 seconds it's not gonna work. So I'm an [00:46:00] Advisor but it was too wide and, you know, I wrote the book and I got lots of people calling and I was keep saying no, that's not where I bring the value. So now I understand exactly why I bring the value. And you listener will probably relate or some of you will relate to that.

You hit a plateau at some point usually between five and 10 million revenues, you hit a plateau. And there is three main reason you hit this plateau. There is many reasons, but three main that are easy fixes. First one is you tired. Nobody tells you that. You don't even admit it to yourself because you want to be the hero and you work 16 hours a day, but you are tired.

Believe me, you are tired. You spend way too much time. In the company, not enough time on the company. You spend way too much time confusing what's urgent. It's what's important, and you're tired and you don't have clarity of vision. That's a very, actually, a very easy fix. We help you identify the task [00:47:00] you uniquely qualified to do, and we help you form out all the other tasks.

And I know you have a big ego because you're a founder. You think you're indispensable to. It's actually not that many. The task you uniquely qualified to do and it's way less than you think. So that's the first thing you, second thing, you don't know your company well enough. Believe me when I say that and like I said, oh no, I have very good numbers.

No you don't. No you don't. Because the number of CFOs who can get you really good monthly results are way too expensive for you to pay. So your numbers are not good. Even if you think they are good, you are missing crucial. Information on your own company. You don't know your unique selling proposition.

You don't know your market. You don't know your customers well enough. You think you do, but you don't. So that's also, these are easy fix. We help you understand your own company better. And the third thing, and that's the hardest to fix, and that's where we came with a good solution, is you to the point where you need sea level people.

To grow a company [00:48:00] past 10 million and to bring it to a hundred million valuation, which is basically bring it to a hundred million revenue. You need C-level people, but if you are at 5 million revenue, you 1 million ebitda, CFOA proper CFO will eat half of your ebitda, so you cannot afford them.

So these are the three reason, and that's why we focus on. This actual company because we can help very easily on these three points. There is many other, but just very simple on that. 

Jeffrey Feldberg: As the old saying, goes, nation, been there, done that, and that's what you're hearing from Alexis in terms of, Hey, you don't know what you don't know. You're great at growing your business when it comes to selling your business. That's a whole other conversation. I've been there, I've done that. Let me help you avoid the speed bumps and get you to where you want to get a whole lot quicker and likely with a whole lot less pain along the way.

Absolutely love that. And that said, it's a terrific segue as we go into wrap up mode. It's a tradition here on the Deep Podcast. It's really my privilege and honor where I ask the same question to every guest. It's a fun question. I'm gonna set this [00:49:00] up for. 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 and you look outside your window. This is the fun part. The DeLorean car is not only curbside, the door is open and you're gonna hop on in to go to any point in your life. Alexis has a young child, a teenager, whatever point in time it would be. What would you tell yourself in terms of life lessons or life wisdom or, Hey Alexis, do this, but don't do that.

What would that sound like?

Alexis Sikorsky: You're never gonna believe me, but literally nothing. There's literally nothing I would change. Yes, I could have gone five years earlier and 50 million more, but then what? Yes, I would have saved a lot of pain during the hard years. But pain is how you learn. Pain is how you grow. I don't know. Maybe I would tell myself to build a war chest.

Maybe I will, I don't know. Tell myself to divorce my first wife earlier. I don't know. But like all [00:50:00] that stuff I've been through yeah, it better so I don't get my first heart attack at 55, but so what? Could I be happier than I am now? It's hard to imagine, honestly it's like I'm so freaking lucky.

Like it's hard. Who says that if I change stuff I would have better luck. I think I would have had worse luck. I think somebody up there is watching for me and I think if I didn't make all the mistake, maybe he wouldn't feel that I needed so much help. I don't know if that makes sense. There's no like. I would, I lost a hundred Bitcoin. I would be happy not to have lost my a hundred Bitcoin because I was a techie. I get a hundred Bitcoin at the very, very beginning where there were 50 cents and they were in an old laptop. I love the old laptop. So yeah, we'd be happy to find that old laptop.

But we did change my life, not so much.

Jeffrey Feldberg: And deport nation you are hearing live in progress, if you will. You're baking and you're [00:51:00] eating what you're baking. As the saying goes, you're just being yourself. He gave a very honest answer how many people would be, oh yeah, Jeffrey, I would change this, or I would change Jeffrey. I wouldn't change a thing.

And what I love about that, you're in terrific company because I have to share with you for so many guests on the Depot podcast, Jeffrey, I wouldn't change a thing because I love my life where I am. And if I change one thing back then is the butterfly effect, the ripple effect. How do I know that I would be where I am today?

I probably wouldn't be, and I wouldn't have this, I wouldn't have that. But it's also a testament as challenging as it was for you back in 2008 when things blew up for the company, for the business, for yourself. Looking back that made you part of who you are today, made you better, made you stronger of who you are today and offline, and our thoughts and prayers with you as you had that heart attack and that personal health scare.

Well, here you're today, you're better and wiser for it, and you're learning from that. It's all part of the journey. And we look back so we can look forward with a brighter, better, prosperous tomorrow. Absolutely love that. And as we wrap things up [00:52:00] here. Someone in the Deep Health Nation, they wanna work with you, they have a question, they wanna speak with you.

Where would be the best place online to reach you?

Alexis Sikorsky: Just get my LinkedIn. It's super easy. I'm lucky enough that my name and name is not Paul Smith, so when you get my name, you'll find me pretty easily on LinkedIn and you'll have all the. Stuff there, then like just get in touch with me via LinkedIn or what? Whatever.

Jeffrey Feldberg: In Deep Wealth Nation, tell you what, we're gonna make it even easier than that. Go to the show notes. It's a point and click. It doesn't get any easier. And as we love to say here at Deep Wealth, congratulations, it's official. This is a wrap. May you continue to thrive and prosper while you remain healthy and safe.

Thank you so much.

Alexis Sikorsky: Thanks Jeffrey. 

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 [00:53:00] 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.

Are you ready for it? 

The dramatic pause. I'll just wait a moment. Drumroll, please. Subscribe. Please subscribe to the Deep Wealth podcast on your favorite podcast channel. When you subscribe to the Deep Wealth Podcast, you're saving yourself time. Every episode automatically comes to you, and I want you to know that we meticulously craft Every one of our episodes to have impactful strategies, stories, expert insights that are designed to help you grow your profits, increase the value of your business, and yes, even optimize your post-exit life and your life right now, whatever you want that to look like.

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So all that said. Thank you so much for listening. And remember your wealth isn't just about the money in the bank. It's about the depth of your journey and the impact that you're creating. So let's continue this journey together. And from the bottom of my heart, thank you so much for listening to this episode.

And as we love to say here at Deep Wealth, may you continue to thrive and prosper while you remain healthy and safe. 

Thank you so much. 

God bless.