Valuation Expert & Entrepreneur Patrick Donohue Reveals The Playbook For Creating Massive Business Value And Growth (#428)

428 Patrick Donohue
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Jeffrey Feldberg: [00:00:00] Patrick Donohue, the entrepreneurial force behind Hill Capital Corporation, has carved a niche in finance with over two decades of experience. From a young entrepreneur with a lemonade stand to a valuation expert, Patrick's journey is marked by his roles as an investor, stock analyst, and advisor to burgeoning ventures.

At Hill Capital, he directs investments into growth oriented small businesses, demonstrating valuations. His commitment extends beyond businesses. He's a mentor at the Carlson School Growth Fund and a community pillar through 1 million Cups, Eden Prairie. Patrick's personal life is as dynamic as his career, enjoying skiing, boating, and family adventures in Eden Prairie, where he resides with his wife and children.

And before we start this episode, a quick word from our sponsor, Deep Wealth and the 90 Day Deep Wealth Mastery Program. Here's Jane, a graduate who says, and I quote, the Deep Wealth Mastery Program prevented me from making what would have been one of the biggest mistakes of my career. [00:01:00] I almost signed on the dotted line with an unsolicited offer that I now realized would have shortchanged my hard work and my future had I accepted that offer. Deep Wealth Mastery has tilted the playing field to my advantage.

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Deep Wealth Nation, welcome to another episode of the Deep Wealth Podcast, and I have a question for you. When it comes to your company, would you love to increase your enterprise value? Do you want more success? Would you love to hear what a prospective investor or future buyer might say? So, Patrick, welcome to the Deep Wealth Podcast.

It's an absolute pleasure to have you with us. And I'm always so curious at the start of these conversations, because, you know, I There's always a story behind the story. So Patrick, what's your story? What got you from where you were to where you are today?

Patrick Donohue: Great question, Jeffrey. It actually was just in the last couple years I finally realized the story behind the story and for me it was a magnetic vision. Even as a young person I had always been very interested in what helps create value [00:05:00] and so understanding why people pay for various things including businesses or trading cards and so, I always had a vision from a young age to, participate in that in some way, shape, or form.

And so, I've only come to realize that and it's been really fun to kind of have that understanding of my entrepreneurial background and the people around me that really kind of drove me to the work I am doing today.

Jeffrey Feldberg: And what's so interesting with that, and by the way, Deep Wealth Nation, go to the show notes. In the show notes, there'll be a number of links, but one of which is Patrick's book, Breakout Valuation, How to Finance Your Future Today. And there are gems, gems of strategies that's in there. And Patrick, before we get going, what you just said, it actually reminded me of a quote that's in your book.

And hopefully I get it right. I had jotted it down. We sell things of great value for things of very little and vice versa. So what would you want us to know about that quote? Because it's right at the beginning of the book, if I'm not mistaken, boom, right out there for us to read and really think about, which it worked [00:06:00] for me.

Patrick Donohue: Jeffy, love that you brought that up right away because, and why your work is so important. And I know that you've seen this yourself, but when you think about why does somebody, build a valuable business and work so hard and what are they trying to achieve? And it's a subtle reminder to entrepreneurs, to everybody.

To understand what's truly valuable to them and to stay focused on that. Because for a lot of times the things of real value are things that people already have, it's their health, it's their family, it's the things that they're passionate about and that they love working on. And so, While the book is all about building a valuable business and ultimately leading to an exit someday if someone chooses to do so, it's a subtle reminder to not lose focus on the things that are very valuable to that individual today and now.

Jeffrey Feldberg: And I'm going to ask such a general question and you would be Perfectly in your lane to say, well, Jeffrey, that's so general. It depends on the situation, on the person, what's going on. But as you look at that, [00:07:00] because you're speaking with so many entrepreneurs, you're investing in businesses, you're helping them with what you and the team are doing, you're seeing a lot of the human condition, the entrepreneurial condition.

Is it like a Pareto's law or an 80 20 principle where the same, call it 20 percent of whatever it's going to be, challenges, opportunities, actions, inactions that are creating 80 percent of what we're facing? Are there any common patterns that you're seeing and what would those be?

Patrick Donohue: Yeah, very much so. I, completely agree is, day to day things, the processes that build value and a lot of times what true for everybody is vision. And so it's those things that create the vast majority of value and it's a big reason why I wrote the book and love talking about these things because a lot of, what we could call Wall Street, but a lot of the investment industry has an incentive to create a lot of value.

You know, Smoke and mirrors around what's really building value, because it will allow them to buy somebody's business, and you've had [00:08:00] this experience, and it's core of your work, but it allows them to buy businesses a lot cheaper than what they might otherwise, or to convince entrepreneurs that they're not able to take next step.

And so really, mean, throughout the book, I think what you're speaking to there is that there's a lot of things that people are already doing that are creating value. It's helping them refocus and understand the things that they already have in their pocket and to stay focused on those because it is the 20 percent of something that somebody is really good at that creates bulk of the value.

And often those are things that are already in somebody's control. 

Jeffrey Feldberg: Playing off of that on this podcast, I'm going to speak very generally when it comes to investors or buyers. I've heard some investors or buyers say, Jeffrey, I don't mind when a company isn't prepared when they go to market and they make a lot of mistakes because I'm going to pick that company up for pennies on the dollar and I have the experience, I have the team, I will figure that out, not a problem.

That said, though, the vast majority of buyers and investors have shared, [00:09:00] you know, Jeffrey, I don't want a second full time job, otherwise known as the company I just invested in or I purchased, and I want to have a company that I know once the founder's no longer there. It's still going to be there, and it's generating an ROI for me.

So, for the benefit of Deep Wealth Nation, with what you, Patrick, and the team are doing at Hill Capital, and in breakout valuation, what would you want them to know of perhaps some classic mistakes that us as entrepreneurs were making that just have you either frown or walk away from the deal table that you'd love to see us change?

Patrick Donohue: yeah it's a great point. I know a lot of your work is centered around this, but it's always extremely value to valuable to have this conversation to remind people that's what's really important. And I know you've had several podcast guests that have talked about this. I remember in the 400th episode on the episode that you had done talking about this very thing around being prepared You know, thinking like a buyer, building an advisory team, [00:10:00] executing a launch plan.

Those are some really key pieces. And so what you were just kind of talking about there is this whole idea of preparation is everything in thinking like a buyer. What's happening with a lot of entrepreneurs is that, they have gone really fast to achieve what they've achieved, but they haven't taken the time to build in the right tools.

Repeatable processes or document things, and that's what will hang people up. And so for an investor coming into a business, if they see a really interesting business, yet there is not a way to really document or understand how they've done what they've done and to be able to scale and to build from there, there's going to be some natural hesitations that even gets more pronounced when it comes to a buyer.

Because What you just talked about is exactly spot on. When a buyer's buying that business, they're looking at it, hopefully, as more of a financial asset to build and grow than they [00:11:00] are to buy a job, although that does happen quite often. But they need to buy something that they know they could Bring in other people to run that business.

And so if there aren't things that are, have been done in preparation for somebody else coming in and running that business, owning that business, that's where a lot of money gets left on the table. So that's why your work and the work of exit planners and advisors is very important to help those business owners really understand why it's important to have the systems.

And documentation in place so that business can run irregardless of who's running it, that people can be brought in. And so we do see that as investors quite often, but as investors, we're not as concerned because a lot of times when we invest, we can provide our capital and community the resources to help them get better at that, to build a more valuable business, but it's absolutely critical at point of exit.

Jeffrey Feldberg: And what's really interesting with that whole area, when you talk about that, well, [00:12:00] documentation, systems, KPIs, for most of us, we roll our eyes, oh, that is so boring, yeah, I don't really want to be doing that, but yet, it becomes of key importance, in fact, in our nine step roadmap, Patrick. Step two, X Factors, when you've documented.

All your standard operating procedures, when you have your KPIs, when you have all that transparency for someone like yourself coming in, that's a value because you know, okay, it's written down, it's not in somebody's head. So if we have a turnover or I'm bringing new people on the team, at least we have a base to work from.

Now, I was laughing to myself in a good way when I was on your book's website and right up front you say, warning, investors and lenders do not want you to read this book.

Patrick Donohue: That's right.

Jeffrey Feldberg: And so, you know, we can go into so many different, forget an episode, this could be a series of what they don't want us to know, but big picture wise, someone who's not as open as yourself.

So again, maybe a different type of investor or buyer, what are they really looking for in terms [00:13:00] of, well, perhaps they're hoping for us to not have this done or not have that done because it gives them a competitive advantage in terms of penalty on the enterprise value or they can, in other words, pick it up for a better price.

So what would you want us to know?

Patrick Donohue: Yeah. I mean, ironically, a lot of investors, like a little hair on something because they can, in the process of negotiations, come back and say, well, there's this issue, so we're going to lower the purchase price. And a lot of the really good savvy investors know that those are probably issues that are actually probably not all that meaningful and, or things that they can, Fix.

And so that's why, like on that, that podcast episode that you had done when you were talking about think like a buyer, I always to do that role play where you flip on the other side and you think like a buyer because they've got an ability to build and grow value beyond where that business is today.

And if you can get them thinking about that and to know, you know that as the entrepreneur selling the business to them, you can capture some of that value. So when it comes to all the things like. [00:14:00] KPIs and all that type of stuff. That's extremely valuable because one, is that people are thinking about it and there's a lot of things that happen through that whole process that builds value, but to a buyer and to the other side of the table, it shows that someone is prepared and they've done a lot of work on their business to think about the value that this can create and what it could do in the hands another buyer.

And so, again When we think about you see things that are missing when it comes to the point of a sale of a business or some type of a transaction it definitely is a ding. No different than your home. When you go to sell your house and, all of a sudden there's, the kitchen is completely outdated.

Those are things that are going to get dinged on the valuation or whatever the case may be. No different for that entrepreneur in that business as well. So wherever somebody can have. The ability to influence and to control, being prepared and to think through what a buyer really wants and needs, and to reduce any of their ability [00:15:00] to negotiate down during the closing process or during, due diligence, that is absolutely key a successful outcome.

Jeffrey Feldberg: And Patrick, as you're talking about that, actually, you're reminding me of something that really stood out for me in your book. And again, Deep Wealth Nation, go to the show notes, breakout valuation, how to finance your future today. What I really enjoyed, so you really cover everything. So you talk about the importance of cash management in no particular order, you know, cash management or the forecast and the analysis and the capital and everything that's going on there.

But right at the start, I want to say it's chapter two or three. You're talking really about the founder or the entrepreneur and their confidence and how they're projecting themselves. And that does not show up on a P& L. It doesn't show up on a balance sheet or the financials. Yet, it's so important, it's more on the art side of business.

So Patrick, from your point of view, what's going on there? What do you want us to know with that?

Patrick Donohue: Well, we see it all the time with investors And this is something where you see a lot with like startups and where these unicorns [00:16:00] will happen where they'll get a large valuation that is because of at the end of the day the confidence in that founder and specifically their confidence in the future And that's what I like to talk to about this idea of like magnetic vision.

So it's one thing to have a vision, but it's also another point is to have that vision, but to then attract things to it, so thus making it magnetic. And to attract other people, whether it's the employees, shareholders, or whatever the case may be, but that magnetic vision can attract additional purchasers or investors in that business, and that's what can drive a really large valuation.

But it all starts with the confidence of that founder, because no one else can make up that vision for them. It has to start with that founder and then having the confidence of what the world can look like because of their product or service in the marketplace.

Jeffrey Feldberg: And so, Patrick, with what you [00:17:00] very eloquently described just now, take the flip side of that. There is a business, they have a terrific solution, they've actually solved a really painful problem. You're looking at investing in that company, you're looking at valuing that company, and you meet with the leadership team, you meet with the founders.

You walk away, hmm. You know what? Something's not quite there. Something's off. I can't put my finger on that, but that founder, that entrepreneur didn't really Impress me. Sure, great company, but that culture, which really revolves around that founder, I don't know, something's going on with that. In that kind of situation, how would you describe that to us of what do you think is going on and the implications of that, of why that mindset, that confidence is so critical.

Patrick Donohue: It is absolutely critical because they need to have the vision of where that product and service can go on the marketplace and that really needs to start with them. As investors, we can have opinions about, where it can go and thoughts about how we might influence it, but it really has to [00:18:00] start with them.

Your question touches upon a, a broader issue at play too. If we get any whiff that, the. Culture is toxic or that the people aren't really, engaged or have a good team in place. For us as investors, it's a massive red flag. Chances are we're not going to invest in that deal.

That would be a non starter from the get go because these early stage businesses, these small businesses, the number one asset is the people. It's all about that founder, their vision, where they want to go, and if we get any sense that it's not good people, it doesn't matter how awesome it is of the product they developed, what patents they have, none of that stuff matters in comparison to the mindset and the people that are working with each other each day, showing up and executing.

So we do look at that and it's a big part of our due diligence is getting to know the people.

Jeffrey Feldberg: And as you're talking about that, I would love to hear you say, Jeffrey, you're on base or off base. You know, oftentimes, Patrick, we'll speak with [00:19:00] a founder and entrepreneur and we'll hear something along the lines of, I'm not a salesperson. I have my salespeople and they're going to do what they're going to do.

I'm just going to really stick to my lane. of whatever that is. And it's okay if I'm in my office just kind of doing my thing and I'll let the salespeople sell and I have that team around me. I'm not really comfortable in front of people. I don't really like selling. I'm not really in sales. To that kind of a founder who's sharing that narrative in his or her head, what would you say to them?

Patrick Donohue: I would say don't worry about it too much. Be who you are, because when somebody shows up being genuine and transparent and speaking from the heart, that's what really moves the needle for us as investors, because a lot of those other things, if it's selling the product, those are skills that can be hired and so forth, but for a founder, it's really important that they just show up Being genuine on who they are and where they want to go, that moves the needle for us big time.

It may not, by the way, for others, but for us it does move the needle because it's really about [00:20:00] the people. Where founders can get really hurt is where they know they have those weaknesses and then they go try to put on a facade. And try to be something a bit different than who they are.

And that just never plays out well. in my experience, it just doesn't play out well. And it loses trust. And founders have to remember that there's only two things that move money. It's trust and emotion. Now, the emotional hook can come fairly quick, but that trust takes time. Somebody can build trust maybe within an hour and so forth, but it would be foundational trust of like just getting started and so forth.

But if they're coming in with a facade, that's gonna ruin it out of the gates. And so just show up and be authentic and share with your investors that you're not a great salesperson or whatever the case may be. That you're shy or, whatever. But we always have a a very open relationship and dialogue with our founders.

And we're always very grateful [00:21:00] when they're just very vulnerable and talk about, what they're good at, what they like to do. And more importantly, what they're not good at and where their weaknesses are, because as investors, we could help with that. We could help them with additional ideas on, You know, maybe hires or seats on the bus or whatever it is that they need to be successful.

Jeffrey Feldberg: So true as the saying goes, Patrick, you're never a profit in your hometown. Deep Wealth Nation, you've heard me talk exactly what Patrick's been sharing.

Patrick Donohue: Yeah, there you go.

Jeffrey Feldberg: trust is the currency, in a liquidity event, in M& A, in your exit, the currency isn't money, it's trust. Can I trust you? And if I can trust you, then I'm likely to, one, have a deal across the finish line and perhaps even a higher enterprise value.

And to us, again, Jeffrey on base, off base, we talk all about that in Step 5 Winning Mindset of how my mindset, I know for that seven figure offer, Patrick, you As myself, I'll just speak for myself, not my business partners, I was selfish. I wasn't thinking of the buyer or the investor. What's going to happen for me?

What's in it for me, as opposed to the other way [00:22:00] around? Let me tune into WII. FM, the world's favorite radio station, the what's in it for me radio station, but not for me, it's for the stakeholder that I'm speaking with. And Patrick, what you're sharing is so spot on with that. Let me ask you this though, I want to go back to the book Breakout Valuation.

Deep Wealth Nation, again, click on the link, get the book, but for those that haven't read it just yet, can you share with us, what is the concept, when you say breakout valuation in simple terms, what does that really mean for you?

Patrick Donohue: Breakout valuation, for me, is a mindset of abundance. that whole idea of breakout is just this idea that there is additional abundance. Because having a breakout valuation is really about empowering freedom and empowering choice. It's not necessarily about, bigger dollars at the end, but it is getting paid for what you think and know that this business can do in the future.

And again, that's why I come back to this mindset of abundance. So really what we want to encourage, I want [00:23:00] to encourage entrepreneurs to really think about and to take away is that breakout is all about getting the value today based on what the business can do in the future. Take care. And so that's how I think about that in very simple terms.

Jeffrey Feldberg: And then, to take that, and I love what you shared with that, and yes, the abundance mindset as opposed to the scarcity mindset, you also discuss, exactly what you said, financing the future today. And so, for someone who's listening to you, and this is something new, they haven't heard this before, how could someone in the Deep Wealth Nation apply the principle?

In their day to day, in their business of financing the futures day, what does that really mean for them?

Patrick Donohue: yeah, what that really means for them is to think about what they are doing within their business that's driving value today. And so that is what is absolutely key because book is not about exit or exit planning, it is all about helping people understand building value today. And [00:24:00] when people have the mindset of building value, that unlocks a lot of things.

So for example, employees want to work for a valuable business. And so when there's a culture of building value, it attracts employees. It attracts quality vendor relationships. It attracts stakeholders and people around the business that want to support it. Unlike a business that doesn't have the mindset of building and creating value, because employees want to be part of something that's building and growing.

And so, that's why it's really important to think about this concept of financing the future today. It's all about the steps that you can do today to build that value today and to be able to take advantage of that value today versus having to wait for an exit to At some point in time, and that's what really empowers choice.

And that's why I talk about freedom and empowering choice, because with [00:25:00] founders, especially if they still own 100 percent of their business or still have control, they have a choice whether they want to continue to build that business, to hand it over to the next generation, if they want to sell it to their employees or to create an ESOP, if they want to elevate themselves and just to become an owner someday and to reap the rewards of that business.

Or if they want to go hyper growth mode and bring in large amounts of venture capital or to ultimately sell, but it's that freedom of choice that is really key to having value today as a founder is how I think about those things.

Jeffrey Feldberg: And Patrick, as you're talking about that, I have no doubt that the people in the Deep Wealth community, these are the logical people, the numbers type, everything's in a spreadsheet. What we're talking about is probably frustrating them because it doesn't show up in a spreadsheet. But it's so crucial It is. if I, connect the dots of what you were just sharing, and again, you can share Jeffrey on base, off base, with what you're talking about, it goes back to the culture.

What are we doing here as a culture? [00:26:00] What's our mindset? You talk about this in the book as well. What's our mindset? What's the culture like? What kind of value are we creating for our team members because to that point, it's always interesting Glassdoor, we talk about this a lot in the Deep Wealth community, they did that famous survey where they asked people, well, what's either keeping you in your current position or what had you leave your position to go to this new position?

And at first blush, we would think, well, it's going to be the salary, the compensation, the bonus system that's going on. That's going to be number one on the list. It was at the bottom of the list. Patrick, to your point exactly, it was, okay, what's the culture like? What's the leadership like? What's the vision of both the leadership and the company like?

And that's what was keeping people in their position, even if they were being paid less than market value, that was worth more to them than dollars and cents. I would love your insights as a thought leader, an author, and an investor. What's going on there?

Patrick Donohue: It's absolutely spot on. And I'm not an HR in people expert by any stretch, but we see this [00:27:00] day in and day out with companies all the time. I see it within my own company is that and with myself is people show up and put their best foot forward when they know that they're working on something and creating something long-term that has impact.

And people may have their own definition of impact that may be for them personally or impact to their community or to the world, but they are working on something that is building and growing. And so as I think about that, it's building value value again can be something beyond just dollars and whatever that looks like for that person.

And so that's absolutely key. And that's why. What we're talking about today is so important, Jeffrey, because I'm a spreadsheet jockey as, with the best of them. I've done, tens of thousands of hours of financial modeling. I've done valuation work and fairness opinions and all that type of stuff.

You can talk about discounted cash flow models and all these boring things with the best of them. But at the end of the day, it's what goes [00:28:00] into creating those numbers. It was what matters. And it's why I wrote the book and I'm passionate about, sharing these insights with, the Deep Wealth Nation and with others is to really help entrepreneurs and those around them understand that it's about the things that are happening that create those numbers, because the businesses are not a multiple.

That whole thing is just it's mind candy, it's interesting. That is correlation, it's not causation. And what we're talking about, Jeffrey, is causation. What causes the value? Yes, an exit may happen, or one could peg a number to it, and one could say it's X times, this cash flow, or whatever the case may be.

But that's, it's not the multiple that drives value, it's the people, it's the culture, it's the vision, it's the mindset, it's all those things that go into it that actually cause the value.

Jeffrey Feldberg: So interesting there as we're going down, such a fascinating topic, we don't hear enough about that. So let's take a big assumption that we've got the culture right, we've got the [00:29:00] vision right, the leadership team and the team itself are doing the right things. So when we go back to what we're speaking about earlier with financing the future today is perhaps a bit of an unfair question, I'll ask it anyways.

Of all the different strategies that you talk about and what I can do to finance the future today, is there a favorite one that you have or is it one that really moves the dial that you want us to know? So coming out of this podcast, hey, if I just do this one thing that Patrick was talking about, that will make the difference.

Patrick Donohue: Well, let's, tie it together for people who love the numbers. What is absolutely important is that this does need to come out in the form of a forecast for a business and to really be thoughtful and strategic about, what is the business creating? And how does it get paid for it?

And what does it need for capital to be able to build and to grow? And so that financial forecast is very important. And then to make sure that the company is properly capitalized to get to where the founders want it to go. And. [00:30:00] Again, that all has to be dependent upon those founders and that management team to have that vision of where they want to go because somebody on the outside, like an investor like me, can't just put together a forecast and then guess, they've got a couple of choices, do they want to grow fast, do they want to go moderate, do they want to reinvest relaunch, that's all valid.

But to make sure that company is properly capitalized and that vision is properly capitalized is absolutely critical. So at the end of the day while it may not be the most fun exercise for founders, it is very important to. To do financial forecasting and understand how the numbers all work.

And one can keep it simple. That's why in the book, I talk about it in terms of entrepreneurial numbers to cut out the jargon. We don't need all the fancy words and all the jargon that, the accounting profession and wall street has thrown So, at us as entrepreneurs, but really understanding cash in and cash out of the business and making sure that business has what it needs [00:31:00] achieve its ultimate goals.

So, at the end of the day, as a business, it does need to result in that financial forecast and having a thoughtful approach on, the forecast is only so good as its numbers, but it's the act of actually putting it together and analyzing it that creates a lot of value.

Jeffrey Feldberg: And Patrick, as you're talking about that, you actually bring me back very early on into my entrepreneurial journey. This is before what we now call the Deep Wealth Mastery System, where I was buying into those common myths. And you actually debunked it a short while back in our conversation, because most entrepreneurs, they hear one of two things.

If you want to sell your business, well, sell your business right now, otherwise, just keep on doing what you're doing. So, it's an either or, there's nothing else that you can do. And I later learned that couldn't be the furthest thing from the truth. To your point, and the strategy that you talk about in Breakout Valuation, what you're doing with your team when you're investing in companies.

And, you know, what we're doing here at Deep Wealth is, well, sure, you could follow that. It's not the right advice to follow. You could actually follow [00:32:00] strategies that make it a more valuable company, a more dynamic company. So that when you do show up for an exit, for a liquidity event, it's You actually have a more valuable company.

You have a lifestyle, which is likely why you started the business in the first place. So let me circle back now to Heal Capital and what you and the team are doing, because you're presenting a different option there than it's either an all or nothing where, Hey, I can get a lifestyle. I can get some help now that I likely wouldn't have had access to otherwise.

And it's something that. Left to other devices or other things that are out there, it's really not happening anywhere else. So, what's the secret formula with what you and the team are doing at Hill Capital?

Patrick Donohue: Well, it's a great question on the heels of our discussion around financial forecasting. So, what we are doing is really diving in and helping a business understand the economic engine. And in our underwriting and our due diligence, we put together our own financial forecast by month for five years in [00:33:00] forecasting the balance sheet, P& L, cash flow.

That whole exercise is to understand the cash balance of that business and how it fluctuates period to period over a longer period of time. And that is really important because that's what allows us to make an investment that is fit appropriately for that business in that point in time. And that's a really important, it takes extra work, but it's really important for founders to.

To think about why that is important because what happens is if they just go to market and to sell equity and somebody says, well, I'll just give you 10 million because that's the minimum check size I can do as a VC, but the business only really needs 2 million, that business might not be able to achieve enough sales to be able to have that business be worth 100 million.

And then the VC and others will basically Shut down that business or we'll call it a failure because they ended up only doing 15 [00:34:00] million in revenues when that felt like a home run for the founder, but for the VC, that was an absolute loser. And so that's why we're always encouraging and why I love how you started off with the podcast talking about the founder and what they want to achieve in their vision.

But we have to start with the end in mind. It sounds so cliche, but that founder really has to start with the end in mind because then we can back into how do we best get there. And that is what we're doing day in and day out at Hill Capital Corporation is really understanding who we are. What that entrepreneur wants to achieve and how can our capital and community help them get there?

Because if it doesn't have some level of design and design right, what I call capital matching for what they want to do too much capital can just be as or more dangerous than too little capital. And so it's a really important thing for founders to think about if they truly care about what they want their, 10 to 20 years from now to look like.[00:35:00] 

Jeffrey Feldberg: And Patrick, so key what you're saying, because let's face it, the skills that start a business are very different than the skills to grow a business, and certainly very different than the ones to either receive some capital or have an exit. And to your point, if I'm getting too much capital, more than what I need right now, I'm probably not asking questions while whoever's investing in me, they're Probably going to be charging my company interest.

There's going to be fees. There's going to be expectations. They may get tired or bored of my company because I'm not perhaps large enough or growing fast enough. At the time, it seemed like a good investment, but now they moved on and, oh, look at that. There goes the company. So to your point, hey, Not for everyone, but what we're doing at Hill Capital, if it's the right fit, we can accelerate that growth and actually have you with a bigger and brighter future, which is so interesting of that very specific need that you found and that you're now really solving and helping and really making a difference.

Patrick Donohue: Exactly, and that's why I get up and as Warren Buffett would say, you know, I dance to work every day and absolutely love to do what I do [00:36:00] because I do love, helping entrepreneurs and empowering them to, to build something valuable and again, value could be something well beyond and very different than just dollars, value might be something to them that's impactful to their community or whatever the case may be.

But it's so important because Jeffrey, The thing that really bothers me and really drives me to do what I do is that I know way more companies that were over capitalized that took on a whole bunch of money and were shut down and business is, worthless, even though it was a nice little business, than I do know of companies that are successful and became that unicorn or even a hundred million dollar plus thing.

Becoming a really valuable company in terms of like stratosphere type of stuff, unicorn type of stuff, like billion dollars. It's 0. 001%. It's it's a very tiny number. And there are business models. There are entrepreneurs that can and do it without a doubt, but.

For the [00:37:00] rest of us, 99 percent are going to have companies that are worth a million, 5 million, 10, 20 million. And that's great. Just so as long as that founder understands and appreciates what they're building and that they own enough of it at the end of the day. So if, and when they do sell it or whatever the cash flows look like. That they have something where they got paid for all the risk and effort that they put in over the years, because I think as you've seen, Jeffrey and probably underlying, the motivation to your work as it is mine, I am really tired of seeing entrepreneurs who, at the end of the day, wind up with something that is less than if they would have just had a mediocre paying job over all those years.

And that happens quite often.

Jeffrey Feldberg: Yeah, and unfortunately, it happens more often than it ever should, given, as entrepreneurs, we're solving the painful problems, we're enriching our communities. And quickly, before we go into wrap up mode, speaking of communities, you're really an interesting fellow, because, well, you have a CFA by [00:38:00] designation, but you're not just a numbers guy, we've been talking about all these different concepts, but you're also involved in the community.

And so, if I said one million cups, the Eden Prairie, what's going on there, Patrick? What's it all about for people who don't know the million cups?

Patrick Donohue: One Million Cups is a program started by the largest foundation in the United States dedicated to supporting entrepreneurs, the Kauffman Foundation. There's approximately 200 One Million Cup groups throughout the United States that meets every Wednesday morning, typically at 9 a. m. local time. And all what they do is we have a cup of coffee and we listen to one or two entrepreneurs share what they're working on.

And as a community, we ask the simple question, What can we do for you? I love 1 Million Cups. I helped start the one in my local community because there is no membership, there's no cost there's, people don't have to sign up for anything. They just show up, have a cup of coffee and and utilize it for what they need to build and to grow, in their journey.

And so, it's a wonderful Wonderful group. It's very different than, a typical [00:39:00] networking thing. It's it's an event really structured in the best interest of entrepreneurs, and that's why I support it.

Jeffrey Feldberg: And Deep Wealth Nation, in the show notes, we'll put a link there. You can see if there's one in your community, because let's face it, Patrick, it's lonely at the top. Like we spoke about a little earlier in this conversation, there's issues as entrepreneurs that we can't talk about with the team necessarily, or even friends or family, but other entrepreneurs They've been there, they've done that, they get that, and it's just a nice outreach to, hey, you have some support, you're not alone in this, you have people that have been down this journey a whole lot longer that can definitely help you.

So Patrick, let me ask you this, my goodness, there are so many questions that I have not had a chance to ask. Before we go into wrap up, is there one particular question that I didn't ask that you want to put out there, or is there a theme or a topic that we haven't yet covered that you'd like to share with the Deep Wealth Nation?

Patrick Donohue: Yeah, I really appreciate that question, because Jeffrey, you do a wonderful job, and you really kind of dug into all the things that I am very interested in sharing [00:40:00] insights about we already talked about this, and so I will just use the opportunity to kind of reiterate, but as entrepreneurs, You have the answers.

You have so much of this in your back pocket. These are things that you know and understand and so I really encourage entrepreneurs to just have that confidence that they can build their businesses and be in control of what those businesses will achieve over time. That they have tools like your work and with my book and so forth to be able to continue to learn and to grow.

But please, as entrepreneurs, just have your guards up so you don't get fleeced out of your business. And that's really the core of what I care about. And is so important to reiterate.

Jeffrey Feldberg: You know, as you're talking about that, Patrick, it reminds me, I believe it was Jim Rohn, one of my favorite quotes, we are the five people that we spend the most amount of time with. And so Deep Wealth Nation, look around, who are you spending your time with? Are there other entrepreneurs, incredibly successful, they're there to guide you, to help you, to give you life advice, business advice, or [00:41:00] sadly, is it negative people perhaps that are holding you back or giving you the wrong advice?

Look around carefully, take stock carefully, and make sure you're with the right people, that's some wonderful advice. And speaking of advice, Patrick, it's a perfect segue as we wrap things up. Here on the Deep Wealth Podcast, it's our tradition where it's my privilege and honor to ask this one same question.

The one question is a fun question to every single guest. Let me set this up for you, Patrick. The question is as follows. 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, Patrick, here's the fun part. Imagine now it's tomorrow morning, you look outside your window, not only do you see the DeLorean car curbside, the door is open, it's waiting for you to hop on in, which you do, and you're now going to go back to any point in your life.

Patrick, as a young child, a teenager, what would you do? Whatever point in time it would be, what are you telling your younger self of life wisdom, life lessons? Hey, Patrick, do this, but don't do that. What would that sound like?

Patrick Donohue: So, I would, sitting right next to my desk is a [00:42:00] picture of myself and my cousin, Chad, when we were five years old with our lemonade stand. And I absolutely love that photo. I'd go back to that moment, one, just to kind of enjoy that very sweet and innocent time as a young person.

But I would always encourage I would encourage my younger self to really, to enjoy the ride. To enjoy what you're doing along the way and not get too anxious about the things that are happening the here and now. And that's actually come out in my book. We actually talked about it quite a bit, Jeffrey.

That's why I encourage people, and I love how you started interview with that quote, but just a reminder that we have so many things that are of value today. And don't waste those valuable things today because it's not about the monetary event at some point in the future. We have a lot of things that are very valuable today.

And I would, remind my younger self of that very early on because that's really important. It's really easy throughout somebody's life or entrepreneurial [00:43:00] career to get caught up and to work hard and then to skip out on the family dinner or, not take a family vacation or whatever the case may be.

And that's what breaks my heart when I see entrepreneurs people, working too hard where they, ignore their family or ignore things that are important to them because they're working on something big.

Jeffrey Feldberg: So true, and I love what you just shared because I've got to tell you, Patrick, if there's a theme on that one question, that is a theme. Hey, Enjoy the journey, yeah,

Patrick Donohue: Enjoy the journey. Yes.

Jeffrey Feldberg: it'll be there, it'll be there, but focus on the loved ones around you, and focus on the times right now, it's not always going to be like that, your life's going to change, and the people in your life, they're going to come in, they're going to come out, but really enjoy the journey, and I know for myself, looking back, I failed in a lot of ways on that, it took me a while to figure that out and catch up on that, but that's the one common theme we've had, incredibly successful guests like yourself, You know what, Geoffrey, I can't remember that phone call or that meeting that I skipped out on that family or that [00:44:00] friend, and I went to that, but hey, that family member, that friend's no longer here.

And what I would do to go back in time to be with them.

Patrick Donohue: I've seen people, put their heads down, work extremely hard, have the big exit, but then something happened where it went away anyways. Money got stolen and a bad investment was made or all that, or, things like that happen. And so, That's why with the book, Breakout Valuation, I wanted to, warn people a little bit as like, I deeply respect, I'm doing it myself like, yes, build something valuable, but don't ignore and blow up the things here and today in the next coming years for that big exit event, because you can design a lot of it, but you ultimately can't control that, ultimate outcome.

you can control the design along the way, very much so, that's like your work, you can control the design along the way, that is all valid, but who knows what that exit might ultimately be, but don't kill yourself in the journey, so.

Jeffrey Feldberg: so true. And Patrick, let me ask you this before we officially [00:45:00] wrap this up. For someone in the Deep Wealth Nation, they have a question, they want to reach out, they perhaps want to speak to you and the team at Hill Capital or something about the book. Where would be the best place online to reach you?

Patrick Donohue: I am open to connecting, my email is Patrick. BreakoutValuation. com. You can also on that website or HillCapitalCorp. com. If you do want to talk to us about an investment, you can click apply. We do schedule a half hour meeting with everybody that does apply. So we'll always take a look and to have that conversation.

But if there's anything that we can do to be helpful, you're free to reach out to me directly on email or I'm an avid user of LinkedIn. But when you do reach out, I do get a lot of people contacting me. Just, tell us that, tell me that you met here and that you heard this podcast and the context of what you want to connect on and I'm always happy to do so.

Jeffrey Feldberg: Deep Wealth Nation, my goodness, it doesn't get any better. Patrick shared his email address, please reach out to him. While you're at it, go to the show notes, you'll find Patrick's email address, [00:46:00] also a link to the book, A Breakout Valuation, How to Finance Your Future Today. Well, Patrick, it's official, congratulations, this is a wrap.

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.

Patrick Donohue: Thank you, 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 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, [00:47:00] 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 [00:48:00] 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.