360 Andy Lee

[00:00:00]

Jeffrey Feldberg: Andy Lee founded Parallaxes Capital in 2017. Previously, he was with LoanStar Funds, focused on investing in the Americas. He began his career at Citigroup and has been featured in publications including The Wall Street Journal, Capital Allocators, Institutional Investor, NBC, Forbes, ReOrg Radio, and Fitch's Lev Finn Insights.

He has spoken at events and conferences for organizations such as the Association of Asian American Investment Manager and leading academic institutions, including the University of Illinois, University of Pennsylvania, and Texas Christian University. And before we start the episode, a quick word from our sponsor, Deep Wealth and the Deep Wealth Mastery Program. Here's Sanjay, a graduate of Deep Wealth Mastery, and he says, the investment I made in the Deep Wealth Mastery Program, it's a rounding error compared to the value created today and the future value I'll receive.

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Welcome to the Deep Wealth Podcast. Well, you heard the official introduction, but let me ask you a rhetorical question. When it comes to taxes, do you know everything that you should know about taxes?

And are you even thinking of the fact that it's not how much [00:03:00] you earn, it's how much you keep? And taxes is a huge portion of that. So today's all about taxes, all the things that you should know, but you probably don't. And that's where our guest Andy is going to be coming in. So Andy, welcome to the Deep Wealth Podcast.

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

Andy Lee: Absolutely, and thank you for having me on here, Jeff. So real quick, I'm from the middle of nowhere, Champaign, Illinois. I had the opportunity to go to college a little early. I went to college when I was 15, and when I graduated, I was 17 and a little too young to sign a lease in New York City. My dad refused me to sign, to help me guarantor my lease, and so he wanted me to pursue a PhD.

And being in a rebellious Asian American kid we met in the middle and I did a master's. I did a master's in taxation. Just to be clear and to be frank about this, there were only two reasons I did it. One, there were no coursework requirements for the master's in tax, so you didn't need to show up to [00:04:00] class.

And two, that was an open book exam at the end of the year. For someone who didn't want to go to class, that was an absolute godsend. With that, moved on to investment banking. I started my career at Citigroup where I worked on the buyback of a tax receivable agreement between two parties, RealTenso, the major mining company, as well as Cloud Peak, a coal producer.

And in during that transaction, I was like, this is so fascinating. Tax is such a large, unexplored world, but filed it aside and moved on. Started my, Moved on to an investing firm called Lone Star Funds down in Dallas, Texas. And there I was basically told the only way you get promoted is for you to create something.

And I was like, what does one do to create something? Some of the items and products that we worked on include the likes of monetization of error rights. So if you ever thought that drones were inevitable in our lifetime, then you would try to buy all the error [00:05:00] rights along the Hudson here in New York City.

And anytime someone flies a drone across, you would charge them a toll. Unfortunately, Liberty State Park, as well as some of the public easements put a huge hole, rendered a huge hole in our investment thesis, and so that never got off the ground. What got off the ground was in the creation and monetization of tax receivable agreements.

Seven years ago the firm asked, how much can you deploy annually into an opportunity like this? I said 150 million. They said, that's literally missing a zero. Why don't you go do this by yourself and we'll give you some money to go do it. So I left seven years ago. We've raised, I was, we recently raised our sixth fund.

We've collated about half a billion dollars of capital and it's been a labor of love.

Jeffrey Feldberg: Wow, Andy, there's so much there to unpack, but did I get this right? You're one of these super young geniuses that you finished school really early. Was I picking up on that with what you said?

Andy Lee: I would say I'm semi intelligent. I would not go that far to say I'm super smart.

Jeffrey Feldberg: You're very modest. So [00:06:00] getting to that point where you're just smart and you're hitting it out of the park from a school system perspective and with your family, I'm just always curious, how did growing up as a child with your experiences, how did that really forge who you are today?

Andy Lee: Look, I really would articulate it was a big part of monkey see, monkey do. Unfortunately, I wish I had some random blueprint for how to raise a child. My sister had embarked on a similar journey and being the younger child, I was like, well, if she could do it, I can definitely do it. And obviously for my parents, Papa and Mama Lee, They were very happy with that insofar that they were like, we can just drop both of them off at SAT school or drop them off with the same extracurriculars and they all end up in the same path.

So I think that was a very big element, but also just growing up, like my parents instilled a big love in us and reading. And so even to this day, I'm constantly reading new books absorbing new content to understand the ideas and [00:07:00] philosophies that others who have come ahead of us espouse. So like, A random Sunday might find my dad taking us to the likes of a Borders or Barnes and Noble in order to learn and find a book.

So our reward for joining him in that journey was that we got to bring our new book home every weekend. And that was a tradition that I very much cherished.

Jeffrey Feldberg: Interesting. So interesting background, and it sounds like very high expectations for you, which you've parlayed into what you're doing now professionally. And so before we get into Parallaxus and what you're doing there, I'm just curious what you're saying with, okay, there's going to be some drones.

There's going to be some air rates. Let's figure something out that we can charge for that. But you're seeing this way ahead of the curve. And as you're talking about that, you're reminding me of our nine step roadmap and step one, big picture. This is where we identify an inflection point really early on.

So as an example, let's take drones. When they first came onto the scene, I give you credit with your super brainpower there. [00:08:00] Thinking about, okay, there's going to be a lot of these drones one, you know, one day and how do we capitalize on that? So for that particular idea or looking at the big picture, but years or sometimes decades before it's even here, how are you doing that?

What's your superpower with that, Andy?

Andy Lee: I think there's a big element of exploring idea mazes where you can inflect a new technology, such as what mobile apps did to the modularization of the browser, one, or two, what artificial intelligence is doing, randomly, Papa Lee was an AI professor in that camp. When I think about some of the ideas that you describe, every primary market We'll need a secondary market.

So what's the primary market? Me buying a car from a new car dealership, ultimately. I can drive the car till it's can't move it anymore. Or I can sell it to a used car dealer or someone else. And in that [00:09:00] regards, like what I do today, I provide a secondary market liquidity solution. But in that same way where I just said, every primary market requires a secondary market, each of them require an ecosystem around them and the appropriate lawyers protect their needs among others. And so those are all things that you can look at a, something analogous to it. So for drones, you can look at. Boats, what are water rights? Who owns those water rights? 

For cars, it's obviously via roads. Planes, you can't fly over someone in the country. So there are guardrails through which that you can understand, but for many. And what I would describe as inventors, like there are wide open spaces for people to explore that just haven't been well defined, but once things are well defined, it becomes a scale game.

But your ability to go from zero to one and create and [00:10:00] understand Analogies and ultimately create parallels will facilitate the capacity and capabilities for you to ultimately raise capital against a concept. Because I think the one thing that Andreessen Horowitz always says is there's no bad idea, there's only bad timing.

And so the likes of what we know today of Amazon's delivery Instacart, among others, those all existed. 30 years ago as concepts, they were just not, they were just too early.

Jeffrey Feldberg: Interesting. And so as you're looking at the secondary markets and what's really the powering of these, is that where Paralexis came in on the tax side of what you're doing now? Is that something similar?

Andy Lee: Absolutely. Like it was in 2017, a large, but growing market. And that was something where I saw primary opportunities being created, inevitably. Secondary markets would need to be created. Similar to how you sell a business you are creating a business today, [00:11:00] that's a primary opportunity. A secondary opportunity might be a private equity, a venture capitalist, a growth equity firm taking over that business.

What we're basically seeing with the boomer generation, where they have built, put in their entire life's work of 40, 50 years and blood, sweat, and tears into a single item. And now they're looking to monetize that in earnest.

Jeffrey Feldberg: And so let me ask you this, because you're focusing on something that's relatively new, a tax receivable agreement, a TRA. And it's only been around three decades, give or take, so you've come along and I'm sure most of our listeners, whether they're on the sell side, whether they're on the buy side, they may not have heard about this.

So broadly speaking, so for the people that aren't as smart as you in the room, what's the TRA? What do you want them to know about this and what is Parallaxes doing about it?

Andy Lee: So let me put it as two sides of a coin one as an asset, and two as a liability. So in any m and a transaction, there [00:12:00] are inherently tax assets that are being transferred from the seller to a buyer here in the us. Oftentimes that includes the likes of a net operating loss a step up in basis.

among others that a buyer is receiving as part of their purchase from the company. What public markets, and this is a creation of incredibly intelligent lawyers and accountants whereby public market investors, as a result of the migration away from active investing to passive investing, Ignore the value of tax assets.

And so sophisticated private equity firms would say, look, we have two companies that are identical in all respects. Each worth 100 million of EBITDA, each worth 10 times EBITDA. If I said that one of them had a billion dollar net operating loss, a sophisticated investor like yourself, Jeff, would say the one with the net operating loss It's worth [00:13:00] marginally more.

Public equity investors would disagree with that notion. They would say our valuation metrics, because we're algorithmically based, would say that we look at things on a revenue, a growth, and EBITDA basis, none of which capture the value of tax assets. And so they ignore the value of it. Sophisticated private equity firms, take the likes of AKKR, Acarla, have said, if you're not going to pay us for it, let's just keep it for ourselves.

And so that was a asset and the operating loss to step up that was delivered to the public company whenever they went public. On the flip side of the coin, these private equity firms then created a liability. Think about it almost like doing a dividend recap specific to the tax asset. So this liability be paid only and only if those tax assets get used.

So to the extent that you are able to utilize your net operating loss, [00:14:00] value is then delivered back to the private equity sponsor. And by doing so, they're effectively creating monetization for a tax asset. So that's a primary transaction. What we do is a private equity firm with a finite fund life. Say 10 years, they may take a company in public, year 60, year eight, they can't hold a law and ask that maybe 10, 15, 20 years.

So, in your tent, they might say, Andy, we've gotten a lot of value from this tax asset. Can you buy it from us? That's where we stop it. We say, Jeff, instead of waiting for those 15 years, we'll give you money today for it. And so, that's at least the genesis of Our Opportunity set.

Jeffrey Feldberg: So you're taking something present day value, you're putting your own spin on that. You're taking it off the books. They're getting some revenues. You're going to be collecting it later on down the road. And again, so for our listeners, you have some terrific logos on your website. Shake Shack would be one of them that many listeners would know, or maybe they're even [00:15:00] customers of.

So for Shake Shack, as an example, Andy, when you came into the scene, what was going on there? Just to illustrate what we've been talking about. We

Andy Lee: Yeah, so in that instance, Shake Shack have been backed by a number of prominent investment firms, such as Leonard Green obviously Danny Meyer, and in that instance, they were previously a pass through entity, so think in the U. S. an LLC, a limited partnership, And they went public. In the US, in order to go public, you need to be a C corp.

That transaction, whereby they went public, created a large tax asset. That tax asset was owned by the pre IPO shareholders, private equity sponsors, co investors, high net worth individuals, among others, the founder. And what we did there was we went to a number of stakeholders and we said, You're going to be holding this asset for 15 years.

Why don't we just give you money today for it? And that's what we did. [00:16:00] Effectively capturing delivering value to the seller because they didn't want to hold onto the asset longer term. And then we got the benefit of those annuity like cash flows for the next 15 plus years.

 So in sales, many times, Sales personnel get paid on commission, among others, and these commissions typically can range on the appropriate metric to deliver it on. It might be on contract value or revenues, or it can be on gross profit.

I think many business owners oftentimes start with the former sales and then realize that I really need to align it. relative to what I'm actually going to take home or gross profit. I think there's a big failure in our educational system here in the U. S. that we don't focus and orient people towards understanding what is your take home pay.

When it's all said and done, when comparing two equal, two similar [00:17:00] opportunities. So obviously an opportunity in New York looks very different than an opportunity in Florida, primarily because you're paying very different taxes, but also having a very different withholding as a result.

And so for many, Call it new graduates they just think about the headline number. Someone's going to pay me 100, 000 versus someone's going to pay me 90, 000. And 100, 000 in New York, 90, 000 in Florida. They don't fully appreciate that the after tax savings that one might be delivered by being in Florida could be significantly more valuable than the former in New York.

Obviously, there are puts and takes to that. But I think there's a lack of uh, Understanding and education by our system to help people better assess and understand the financial ramifications, because tax is the largest pull that one would have on your daily life. It's the largest asset class in the world and it's permeates the social fabric of our civilization.

Jeffrey Feldberg: And so I think it's interesting because [00:18:00] there's that saying, beauty is in the eye of the beholder. So for some, they're looking at the tax side of things and, Oh my God, what are we doing with this? This is just weighing us down. We can't do anything with it. It's even a liability. On the flip side, you may be looking at it saying, Hey, This is terrific.

You're talking our language. We can do a lot with that. There's some money to be made here. So it's interesting how two different perspectives, same situation, but really you're bringing all the parties together. I know tax is huge, Andy, and as you're talking about this again, I'm looking to the Deep Wealth nine step roadmap in our 90 day Deep Wealth Mastery Program. Step four, due diligence. And step six advisory team, we are all about the taxes and getting the right tax advisor on board as early as you can.

Because again, what I said earlier is not how much you earn, it's how much you keep. And oftentimes, sadly, tax is an afterthought. And if it's an afterthought, you've already lost before it's begun, particularly for the quitting event or an exit. If that's the key to your financial freedom, [00:19:00] you better make sure that you have all your bases covered.

So, Andy, I'm curious. Because really what you're doing and from the tax side of things, there's different ramifications if on the one hand, I'm a company. And perhaps I'm going to be having some kind of liquidity event, raising capital or having some kind of full exit, or on the other side, I'm a buyer, I'm private equity, I'm venture capital, I'm a large fund, and I'm looking at acquiring.

So how can we fold you into the mix? Or how should we be looking at taxes from both vantage points to really maximize the opportunity here? Because it sounds like this is really flying under the radar, sadly, for too many people, and we're missing some opportunities here.

Andy Lee: Yeah, absolutely. And I think it goes to a number of points as to what you're trying to achieve. And so, for many sellers, oftentimes, they're given the opportunity to roll over stock into the new buyer. And so, there are reasons [00:20:00] why they may or may not, but very few of them, when they look at it oftentimes, they would take a bunch of money off the table and pay a bunch of taxes but fail to understand, like, where do I reinvest my dollars?

Oftentimes, the best reinvestment opportunity might have been just rolling in that transaction. It could have been doing a seller note because oftentimes some of your listeners might have taken a seven, eight, nine figure paycheck, payday from the transaction. And they're like, okay, now with this, do I go buy a bond index?

They could have just lent money and got a potentially a higher return with the buyer. of the transaction. So there are so many formats that are you trying to achieve some level liquidity today? And what is your on go for risk profile? For many, they should invest behind the businesses that they know best.

The business that they just sold. And so there are various elements that they should be thinking a lot more about that can [00:21:00] above all create incremental alignment with the buyer of their investment. And for your private equity listeners out there, everyone loves to hear that their seller is rolling off.

It creates incremental alignment that you are someone who wants to eat his own cooking, that two, you're not potentially buying a lemon on accident. Like those are very great signaling to the buyer of an opportunity and may result in them gaining incremental conviction and potentially being willing to pay more for your business than If you didn't, haven't done any of those items but yes, absolutely working with world class tax advisors to understand your personal situation and what you're trying to achieve.

So if you were going to do it into a donor advice fund, you, were you going to give the money away? a university among others. Those are all great avenues. Why would [00:22:00] you sell a business for a hundred million dollars with the understanding you're gonna set, give it all away, and then pay $20 to Uncle Sam and only give $80 to a university that could have all gone straight into the pockets of the university if that was your ultimate goal.

And so those are all avenues through which working with a tax advisor can help you under, who understands your goals, can help better align those expectations from a seller. That can help drive incremental value from a buyer.

Jeffrey Feldberg: And Andy, it's interesting as you're talking about that, what some people call seller financing or in different markets, vendor take back if it's real estate. But this is where, as you're saying, you're rolling over your capital back into the deal. And what you're saying, yeah, you know what, Jeffrey, if you want to put your capital, we normally, we would have written a check for X.

If you put X back into the deal, that's attractive to us. Perhaps you're going to save some financing fees or some interest or whatever the case may be. We can bump that up. You'll get a high return and it's a win for everyone.

Andy Lee: Absolutely.

Jeffrey Feldberg: And [00:23:00] so that's on, let's call it the seller side of things. What would you want the sellers, whether it's a huge company, a small company, something in between, What would you want the sellers to know that the buyers perhaps don't want them to know, or maybe the buyers do want them to know to make it a better deal?

What should they know that they're typically overlooking or not even realizing, even with the best tax advisors? Because Andy, I'm going to put you in a league of your own with what you're doing. Very specialized, very focused, and it's something that's not as common as out there. So what should we know on the seller

Andy Lee: Look, clean books, like ultimately is like the biggest item. So no buyer of a business wants to get down to the one yard line and find out that you have a IRS investigation among other, or an audit ongoing. That's not something. That any buyer who has expanded three, six, nine months on invested behind a transaction, they may love your business and want to ultimately buy it.

But then they find a [00:24:00] tax issue, and that then creates a crisis of confidence for them. If they're not able to get their books in order are there other elements within their business that they may not have in order? And well, buying what I thought I was going to buy? So that crisis of confidence.

is something that can be very challenging and not something that on the one yard line, after you invested six to nine months, blood, sweat, and tears into a process, educating a host of buyers, ultimately picking one to get to the one yard line and then just give up. No buyer wants to do that. No seller wants to experience that.

So yes, I would say at times on the margin. Savvy buyers may not may use it as a negotiating tool, but ultimately many of these buyers by the time they've invested nine months of blood, sweat, and tears, they don't want to see a deal die because of taxes.

Jeffrey Feldberg: As you're talking about that for the investment banking crowd, that's part of our community, even for the private equity, for the buyer [00:25:00] side, what would you want on their behalf? To say to the entrepreneurs and business owners who are going to be out there raising that capital or taking some chips off the table in a full or partial exit, have them be open to this because it's a different way of looking at things.

But what could you share with them that they should really expand their horizons on a new topic, a new way of looking at tax and what they can be doing to really not an us versus them, not a zero sum game, but instead it's a win win win for all involved.

Andy Lee: Yeah, absolutely. And so I think the big element that I would articulate, let's just talk about the um, Items and Everyone's Incentives. Real quick, a seller is incentivized to find oftentimes, if it was your life's work, not only the best price, but also the best home for their business. One, two, for the intermediary, they want to be known as the counterparty of choice that was able to guide a seller because [00:26:00] they're not in the transactional business, they're in the relational business, whereby I sell it the first time.

You tell your best friend who also owns another business, I then get referred. for the seller to have a bad experience and not transact, it's not something that a seller or a investment bank wants to have. And finally, the buyer. The buyer wants a deal to happen. Sure, they might want, have diametrically opposed interest to having a slightly lower deal value.

But ultimately, if you think about these buyers, they are paid We are backed by endowments, foundations, leading universities. They are backed by similar counterparties and all of them are in the business of investing money behind world class businesses that these entrepreneurs, founder leds have created.

everyone has an interest in getting a deal done. And so as few things that can create or are flagged early [00:27:00] can be very helpful in expediting and minimizing. Challenges, because look, the one thing, the only non renewable resource in life is time. You can never get that back. For a seller, a buy, an investment bank, it's all a return on their effort.

And so they're very focused on For many buyers, it's, is there actually a transaction to be done? Is there a value that makes sense? If not, let's kill this transaction and move on. Because there are hundreds of businesses for us to learn more about. For a seller, they don't want to go to the finish line with, The one yard line with someone who's not serious about buying their business or doesn't have the money to buy their business.

And similarly for an investment banker, they don't want on either side of the equation, a seller with unrealistic expectations and buyers with no money. Everyone is focused on getting a deal done. And so if you could flag, here are some areas of weaknesses, and here's how we could remediate that. We can't [00:28:00] do it in the time that we have now pre process, but this is how we would think about solving that.

Constructive buyers can very much see past some of those inherent challenges. And I think you have built confidence that you wouldn't have Things buttoned up. And yes, no business is perfect. Everything that you love has works on it in some way, shape, form. People are very understanding of that.

They're just neat, but no one wants to have something come out of the closet skeleton in the closet in the 11th hour of a deal.

Jeffrey Feldberg: Absolutely. And again, you are preaching to the choir here, Andy, because I know for us, going back to Step Forward to Diligence, we absolutely insist at Deep Wealth and the Deep Wealth Mastery Program that we do an internal audit before we ever speak to an investment banker, before we're ever in market.

We're finding those hidden skeletons in the closet. Removing them, if we can't remove them, we're putting them out with some narratives of why they're there and how we're dealing with them to the areas that we're world class in, what we call X Factors and Rembrandts to make the buyer aware of that. So we are spot on with you in [00:29:00] terms of, hey, shouldn't be any surprises when it comes to diligence.

They shouldn't be at the 11th hour finding about some things that could derail the deal or have it just go off into la land forever. So that said though, Andy, let me ask you this. In terms of these TRAs, If I'm a startup and I happen to be backed and I'm literally losing countless dollars, millions upon tens of millions of dollars in a startup mode, or I'm an established business and I'm going down a new path, lots of R& D, it's going to be a while before I see some profits.

I'm going to be racking up some losses. Do you look at those two differently? Do they represent different opportunities for you or for these companies if they're looking to monetize what's been going on?

Andy Lee: Longer term, potentially. Today we're very focused on Businesses that are publicly traded that are investment grade, near investment grade in time, as we demonstrate the capacity, but also the expertise we could change the underlying risk profile [00:30:00] of the businesses that we are seeking to engage with but that's at least not what we do today.

Longer term, that is part of the overall product roadmap as a source of capital. I think the big challenge has always been for many of these. Startups they're going concern risk as always, like, how do you solve that? And for some of these smaller businesses Or do you, I won't what is your exit plan longer term?

And so for us, those are risks that we can't, or don't have the capacity to underwrite today. As well as the go to market teams in order to access those efficiently. But in time, that is part of the product roadmap that we hope to bring to bear.

Jeffrey Feldberg: Okay. So future wise, that's where you're looking to head. So for today, for our listeners, what would be your sweet spot? What would be a situation where you're like, yes, this is exactly where we want to be. And this is how we can help.

Andy Lee: Unfortunately, incredibly narrow. Look, as we get larger, we have more history with our stakeholders. Endowments [00:31:00] Foundations they'll give us incremental degrees of freedom. But today, on average, the businesses that we look at are north of 800 million of EBITDA. They are public and they are investment grade or near investment grade.

So a relatively tight knit box.

Jeffrey Feldberg: Okay. But within that box, so very large on the balance sheet and the revenue side, but what does that look like again? Because we have in the Deep Wealth community, it is a whole mix from really rounding errors on the one hand to very big rounding errors on the other, everything in between. So for a listener out there who could benefit from you, talk to them.

What do you want that listener to hear or know about what you're able to do, Andy? What does it look like?

Andy Lee: Effectively, we service As a factoring solution, so think about what pharmaceutical royalties were in the 2000s, what musical royalties were in the 2010s. We effectively capture and help provide a factoring solution where you might not want to wait [00:32:00] 15 years for estate planning purposes or just a need for liquidity where you have a significantly better investment opportunity set.

Like we provide an upfront solution, giving you dollars a day. In return for hopefully more dollars over time.

Jeffrey Feldberg: Interesting. Okay. And so based on that, what would it look like in terms of your secret sauce here? So I'm company, I'm hearing what you're talking. Yeah. Andy, that sounds a lot like us. Walk me through part of your process. How long does it take? What can I expect? What does it look like?

Andy Lee: Yeah. So look, we're a secondary market solution. Everything that we do, we've already pre identified and are proactively reaching out to them. We've also undertaken the process of proactively underwritten every name in our opportunity set. So think about it like In the musical royalty space, like you could probably know every single musician or major musician over a certain size.

And you know what, how many streams they have on YouTube, on Spotify and [00:33:00] everything. And you could probably create a price for it within some framework. We've done that exact same thing for our entire universe. And so whenever there is a transaction to be done, we can probably move within two weeks to get a deal done.

Jeffrey Feldberg: Saying, and again, Andy, you've painted a future roadmap, where you are today, where you're heading, but I'm curious, independent of that, As you look to the marketplace, and I know it's a crystal ball. If we knew what tomorrow was going to bring, whole different story, very different conversation. Where we are today though, best guess, what does this look like?

How do you see the financial markets? Are they going to be changing more or less the same, just. Different story, same day, different story. What's going on with that? What do you think?

Andy Lee: Yeah, look for what we do, like it's Tax is the largest market out there. It's growing and there are so many avenues to access it. Might that be via one, think about when you travel to Europe and perhaps your significant other buys something in a store [00:34:00] and you're eligible for a VAT tax refund.

There are just so many ways to create value in tax.

Jeffrey Feldberg: Interesting. And so big picture wise, if there was one action, a low hanging fruit, low effort, high reward from what we've been speaking about or something you'd want our listener to know about, what would that be from your perspective?

Andy Lee: Invest in tax. Getting tax personnel who are worth their salt. requires an investment from your perspective in order to help them become business partners. That's an element that is requisite. Otherwise, all you have from a tax director perspective or tax accountant is a compliance oriented individual.

Tax personnel, if they understand your goals, they can help prepare and strategize for helping you drive the outcomes and deliver the outcomes that you want. And so that's an element that. The tax profession has done a very poor job at many tax professionals fail to speak English.

Jeffrey Feldberg: Terrific point. And Andy, for the benefit of our listeners, can you clarify for [00:35:00] them? Because oftentimes with the listeners, again, tax is an afterthought, if even at all. And in their minds, Hey, Andy, I'm seeing my accountant. My accountant knows the business. I've been working with them for many years.

And not all accountants are like this, but I'm going to say most accountants, they do what they do really well. Tax though, it's an entirely different area. And generally speaking, always exceptions, but generally speaking. A terrific accountant likely is not covering off the tax area as well as they should.

So for our listeners out there, what would you say to them when it comes to, yeah, Andy, I got it covered. I have some terrific accountants. They know what they're doing, or it's one of the big firms. We got it covered. Thank you. 

Andy Lee: I'm a hundred percent with you. I think it's all about the partnership that you need to create. With your tax personnel and tax is you might spend hundreds of hours behind being best in class in your business, but shouldn't you be best in class with someone who takes away potentially in an LLC format, 40 to 50 percent of your business, like shooting off your [00:36:00] net income.

That's something that you should invest. Some hours of your day and understanding most business professionals barely understand anything about the tax code. What is deductible? What isn't deductible? Tax, the tax code is meant to shape behavior. The U S government wants you to do certain activities and not others.

And so they very much incentivize things such as R and D. Tax credits, they incentivize people to keep people on payroll during the likes of COVID. Those are all avenues through which the tax code is trying to incentivize certain behaviors and promote them and disincentivizing others. And very few are doing that.

Spend the time, even though a day or two a year would be sufficient for you to understand what the ramifications are on your business. People are unwilling to spend, they might spend 250 days a year on their business, a day or two or one or 2 percent of that they find too much to ask.[00:37:00]

Jeffrey Feldberg: Yeah. It's a small input, huge ROI, huge return on that if you find the right individual who's an expert in that area. And it's like anything else, if you have a question you need, heaven forbid, something on the health side, something very complicated and intricate, you're not going to go to your family doctor to perform that procedure.

You're going to find a specialist. It's really the same thing. And what I'm hearing here is Tax is an entity in and of itself, and the accountants are one part of that, but there's a much bigger part with the right kind of advisors, the right tax advisors who are really well versed in that area. So Andy, all that said, let's go into wrap up mode here. It's a tradition here on the Deep Wealth Podcast. It's a fun question. I'll set this up for you. When you think of the movie Back to the Future, you have that magical DeLorean car that can take you to any point in time.

Andy, imagine now it's tomorrow morning. You look outside your window. Not only is the lorry and car there, the door is open. It's waiting for you to hop on in, which you do. You're not going to go back to any point in your life. You're yourself as Andy, as a young child, Andy, as a [00:38:00] teenager, whatever point in time that would be.

What are you telling your younger self in terms of life lessons, life wisdom? Hey, Andy, do this, but don't do that. What would that sound like?

Andy Lee: Sales. You need to learn sales. Sales is the single most important skill set and most senior skill set in life. You've had to sell your significant other on marrying you, your kids on eating vegetables, your people to buy your business people to work with you and for you and people to be business partners with you, customers.

among others. And so that's an element that very few tell you. We as a society prize and teach technical skills. Might that be being an accountant? No one tells you how to sell your accounting skill. So, when you're done with that, no one tells you how, like you created a great product.

Now, how the hell do you sell it? Like those are things that people don't think a lot about and they very much fail in to deliver the value proposition that their buyers ultimately want and need and [00:39:00] access that buyer base that will ultimately drive and scale their business longer term.

Jeffrey Feldberg: Horrific advice. Something for us to think about life is all about sales, whether we realize it or not. And Andy, before we call this an official wrap. Somebody has a question. They want to reach out to you. They want to learn more. Where's the best place online for them to reach you?

Andy Lee: Yeah, I'm accessible on LinkedIn. Andy Lee and would love to meet, I am your great guest and your stakeholders.

Jeffrey Feldberg: Terrific. And for our listeners, go to the show notes, it's a point and click. It's all there. Well, Andy, it's official. It's a wrap. Thank you so much. And as we love to say here at Deep Wealth, may you continue to thrive and prosper while you remain healthy and safe. God bless.

Andy Lee: Thank you for the time, sir. Be well.

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 [00:40:00] 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.

And every time you subscribe and a fellow entrepreneur subscribe, it's a testament to how together, Yes, we are. We are changing the social fabric of society. One business owner at a time, one liquidity event at a time. So don't let the momentum stop here. Subscribe now on your favorite podcast channel.

You'll never miss an episode. You'll be the first to hear from the top industry leaders, the innovators, the disruptors that are really changing and shaping [00:41:00] the business world, and maybe you're commuting, maybe you're at the gym, maybe you're taking a well deserved break that we spoke all about on this episode.

The Deep Wealth Podcast, it's your reliable source for the next big idea that could literally revolutionize your business. So once again, please hit that subscribe button, stay connected, inspired, and ahead of the curve. And again, your next big breakthrough moment, it might just be one episode away. Maybe it was even this episode.

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.

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 [00:42:00] 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.

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.

And every time you subscribe and a fellow entrepreneur subscribe, it's a testament to how together, Yes, we are. We are changing the social fabric of society. One business owner at a time, one liquidity event at a time. So don't let the momentum stop here. Subscribe now on your favorite podcast channel.

[00:43:00] You'll never miss an episode. You'll be the first to hear from the top industry leaders, the innovators, the disruptors that are really changing and shaping the business world, and maybe you're commuting, maybe you're at the gym, maybe you're taking a well deserved break that we spoke all about on this episode.

The Deep Wealth Podcast, it's your reliable source for the next big idea that could literally revolutionize your business. So once again, please hit that subscribe button, stay connected, inspired, and ahead of the curve. And again, your next big breakthrough moment, it might just be one episode away. Maybe it was even this episode.

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.