I listened to Gary Vanerchuk’s podcast with Ray Dalio the other day, and his opening question to his guest was awesome: What’s your origin story?
An origin story refers to the back-story of a fictional character, usually in comic books, that reveals how a superhero got their powers and often gives reasons for their intentions. Spiderman was bit by a radioactive spider and his dying uncle’s last words were “with great power comes great responsibility.” Batman witnessed the murder of his parents as a child and this leads him to train himself to fight crime. It got me thinking that everyone has an origin story. Here's a little bit of mine.
My Origin Story
I’m a second child to Portuguese parents who immigrated to Canada in 1970. My parent didn’t speak English, so I guess English was really my second language — and, before school, most of it was learned from Sesame Street. Although not formally educated, my parents worked extremely hard in blue collar jobs to make a better life for themselves, my sister and me.
When I was eight, I vividly remember hearing a rap song for the first time: "Rapper’s Delight" by the Sugar Hill Gang. From that day on, I was hooked. I loved the beats, the rhymes, the flows. Growing up, I also felt like I could relate to the message of the genre of hustle and drive for a creating a better life — my parents had these same traits, and that's likely what inspired me.
Given the stuffy nature of the M&A world, I’m sure many people would not assume that rap would be my music of choice, but there’s just something about it that has always resonated with me. Even to this day, every time I hear "Rapper’s Delight" I get chills and find my head swaying to the beat.
Wisdom in Music
Over the years I have also found nuggets of wisdom from rap songs and some (many) related to the business world. I thought it would be fun to find some lyrics that could provide advice to the business owner looking to sell their business. Here are some of my favorites:
I’m not a businessman, I’m a business, man. — "Diamonds From Sierra Leone (Remix)", Jay-Z
Jay-Z is one of the most financially successful rappers on the planet. How did he accomplish this? Well, he evolved from an individual running a business to a globally recognized brand. This is a great reminder that to build a business with significant value it is necessary to make sure that you are not the main person running the business. You need to build a brand that goes deeper than just the individual business owner. Be a business, man!
I take quarter water sold it in bottles for two bucks, Coca-Cola came and bought it for billions, what the #[email protected]&? — "I Get Money", 50 Cent
This line refers to the infamous story of 50 Cent’s investment in VitaminWater. He cashed out with $50 million when Coca-Cola purchased the business in 2008 for $4.2 billion. The lesson here is the tremendous value that can be created when positioning your company for acquisition by a strategic buyer. These acquirers have the ability to pay top dollar for a target they can scale rapidly through their own existing channels. Even 50 Cent is surprised by how much Coca-Cola paid for his quarter water — what the #[email protected]&?
Know yourself, know your worth — "0 to 100", Drake
Knowing your worth is the best starting point for any business owner looking to sell their business. I have beat this drum to death. Find someone who is knowledgeable in completing transactions to help you determine the valuation of your business. This exercise also provides information about exit options (see 50 Cent’s advice above) and your current worth so you can evaluate if it is enough to meet your financial goals post-sale. Please don’t leave this to chance and guess your own worth.
Look, if you had one shot, one opportunity to seize everything you ever wanted. One moment. Would you capture it or just let it slip? — "Lose Yourself", Eminem
I still sense many business owners think selling a business is easy. When they are ready, a buyer will come around and pay a premium value as they ride off into the sunset. Eminem knows better. He reminds us that luck is where opportunity meets preparation. Business owners need to be cognizant of when the timing is right to sell a business from an operational, market environment and personal stand point. When all of these factors are aligned, and you are prepared, you can seize everything you ever wanted from a business sale. Don’t let it slip.
Cash rules everything around me, C.R.E.A.M. Get the money. Dolla, dolla bill y’all. — "C.R.E.A.M.", Wu-Tang Clan
This should be the anthem for every entrepreneur! Cash flow is the ultimate determinant of value. Period. How much cash your business can generate and the risk associated with achieving that cash flow in the future are literally the only two factors involved in calculating value. Focus all your energy on generating cash. Not revenue. Not even net income. Cash. Also prove to prospective buyers why your business will continue to print cash for years to come. Wu-tang knows it. And now you do to. C.R.E.A.M.