The Wise Exit

Today, Todd Sullivan talks to Sven Milder, a serial entrepreneur who has built, purchased and sold multiple companies throughout Europe and Southeast Asia.

Sven understands how to raise capital, how to leverage low cost workforces, and how to use technology to improve efficiencies and profitability in any business he's involved in. Sven shares how he thinks about fundraising for startups, why he's now buying profitable companies as platforms for growth, and using technology to support his M&A endeavors. 

Sven's Experience:
Over the last decade Sven has helped 300+ Founders Raise US$140M+ in capital and supported US130M+ in acquisitions. In that same time he's launched, grew, scaled & exited 2ventures. 

Sven's Expertise:
Sven is an expert in funding, acquisitions and company turn arounds for scalable businesses under 90 days. By delivering you fast track growth, he is able to make an impact in your and his world.

I hope you enjoy the conversation with Sven Milder.

Founders Tribe Newsletter: 
Beyond Venture Capital: Exploring Funding Options for Entrepreneurs in 2023

LinkedIn: /svenmilder
Twitter: @svenmilder

LinkedIn: /toddfsullivan
Twitter: @Todd_Sullivan

What is The Wise Exit?

The Wise Exit is an open dialogue with fellow founders and former business owners sharing real stories and offering honest advice around selling their companies to some of the top acquirers in the world.

Beyond the entertaining and educational exit stories, host and M&A Advisor, Todd Sullivan is here to help demystify the Mergers & Acquisitions (M&A) process. For example:

- How much is my business worth?
- What is Net Working Capital?
- When should I get a Quality of Earnings analysis
- Should I hire an Investment Banker, M&A Advisor, or Business Broker?
- When do I talk to my Key Employees about a possible transaction?

We hope you enjoy... and learn a few things along the way!

SVEN MILDER - Episode 47 of the Cashing Out M&A Podcast (brought to you by Exitwise)

00:00:01:21 - 00:00:12:22
Sven Milder
Running the business from day one as you are, the investor will help you to make decisions along the way that will serve your exit in the future.

00:00:13:00 - 00:00:36:18
Todd Sullivan
Welcome to the Cashing Out podcast, where our fellow founders share real stories and offer honest advice around selling their companies to some of the top acquirers in the world. My name is Todd Sullivan, CEO of Exitwise, where we help business owners create the exits they deserve. Today, my guest is Sven Milder, a serial entrepreneur who has built, purchased and sold multiple companies throughout Europe and Southeast Asia.

00:00:36:20 - 00:01:01:14
Todd Sullivan
Sven understands how to raise capital, how to leverage low cost workforces, and how to use technology to improve efficiencies and profitability in any business he's involved in. Sven shares how he thinks about fundraising for startups, why he's now buying profitable companies as platforms for growth, using technology and M&A. And finally, how every entrepreneur should be building a company with an exit in mind from day one.

00:01:01:16 - 00:01:25:04
Todd Sullivan
I hope you enjoy my conversation with Sven Milder. Sven. Thank you so much for being here. I'm really fired up to talk to you one, because, you know, you've lived essentially all over the world, Southeast Asia, born in Amsterdam and you've been a founder, you've built companies, you've sold companies, you've bought companies, just been in and around M&A and fundraising.

00:01:25:06 - 00:01:38:00
Todd Sullivan
I know our listeners are going to have a ton of fun with this. Certainly get some lessons and I don't know if you know this, but Mark Cuban had this spot this morning and I bumped him because I knew you were available. So thank you for being here.

00:01:38:02 - 00:01:43:02
Sven Milder
Awesome. Awesome, awesome. We'll say hi to Mark.

00:01:43:04 - 00:02:03:04
Todd Sullivan
I will if he allows that. So your eclectic entrepreneurial background, really admirable. Maybe you could start with growing up in Amsterdam. And you know what brought you virtually around the world? Building companies, selling companies everything that you do today start from the beginning for us.

00:02:03:04 - 00:02:25:04
Sven Milder
Yeah. So, yeah, perfect. So in generally, thank you very, very much for having me. I would love to share my insights today and I hope that those that are listening in, they will get some golden nuggets to avoid mistakes or otherwise get some. I get some inspiration along the way. I would say it's always a super exciting journey.

00:02:25:06 - 00:02:46:16
Sven Milder
Yes, maybe my accent is revealing it. I'm from I'm from the Netherlands. How hard we try. We keep on bumping into the accent, so I will never, ever get rid of that again. Since the last ten years, I'm living here in Asia. I'm originally from the Netherlands, so just kick things off in a good way. I have been a little bit naughty in my in my childhood.

00:02:46:16 - 00:03:06:09
Sven Milder
I came from a little small town where there was nothing fun really to do. And I thought like, Oh, you know what, let's go to Amsterdam to save my ass a little bit. Rather than being with all of the punk in the city, in the small little villages. Right. Because the only thing that you do that is hanging on the streets in the night and that's nothing really comes well from it, you know?

00:03:06:09 - 00:03:27:11
Sven Milder
So I went to Amsterdam to just find a little bit more peace, to have more city life around me. And with city life around you, you will meet a lot of people. You get exposed to new technologies. And there my entrepreneurial mind actually you already fired up. So in my early stages I started organizing a lot of dance events.

00:03:27:12 - 00:03:58:14
Sven Milder
I was very active in connecting people, organizing little dinners to, you know, exchange information or ideas, brainstorm nights. And at the certain moment, as I was, you know, pretty, pretty active in Amsterdam, night scene, lifestyle scene. Uber was launching Uber was launching a second city in Amsterdam. And I feel like, wow, it is super cool. And I got so fascinated with this whole technology of at that moment still special.

00:03:58:14 - 00:04:19:10
Sven Milder
You hit the button and the cab comes in front of your door, you order whatever. So all nice, all cool. But it was at the same time that I was also having a furniture company, a furniture online store in the Netherlands. And while being fascinated as a country launcher of Uber, I felt like, okay, what else can I do with it?

00:04:19:10 - 00:04:37:21
Sven Milder
But that wasn't so well. The same time that I needed to go back and forth to Asia. And actually, a long story short, when I was doing these furniture business, which was super fun to do, of course I quickly found out shit carrying all of those sofas around is not what I would like to do. You know, I should do something with tech.

00:04:37:21 - 00:05:02:23
Sven Milder
So knowing what I knew from Uber, I actually collected the group of people together in Asia to build a last mile delivery service that I had originally the plan to bring back to the Netherlands. So while I was in Asia, while I was in China waiting for all of my footage to be done, I had my development team there because of course, for local the development to to have something else on my mind.

00:05:03:01 - 00:05:26:20
Sven Milder
And where the shit actually hit the fan is that while I was in Asia once in a while I was in China, I lived as well in Hong Kong and I was already talking with Brian about that. I mean, it has a Hong Kong has like as a single guy, a very dangerous sharply though edge that if you're single in Hong Kong, your weekend starts on Monday and your weekend ends on Monday and that's not a good thing.

00:05:26:20 - 00:05:51:10
Sven Milder
So very quickly, I went to Bali, Indonesia with my developer team to actually further develop the whole project to keep myself away from all of the bus. And then one night I was dancing and I bumped into this nice girl. That moment that I fall head over heels and she said, like, Hey, you know what? Why don't you just launch your last mile delivery service in Indonesia and Jakarta?

00:05:51:12 - 00:06:16:10
Sven Milder
And of course, as as much as I was in love, I feel like, okay, you know what you do? You go back to the Netherlands right now where you know, things are pretty shit, or you just jump into the depths and follow your love into a city where you don't know anyone. You don't know any investor, you don't have any friends, and you just, you know, I would almost say you just follow your your drive as a guy to thinking, okay, where's the woman?

00:06:16:10 - 00:06:36:08
Sven Milder
I will go there. Right. So that's what that's what I did. I sold my first company, which is the furniture company that I was actually running in China. And I started doing my last mile delivery company in Jakarta. And what makes it a very interesting ride for me is because at that moment I didn't know shit how to raise capital.

00:06:36:10 - 00:07:09:09
Sven Milder
I didn't know anyone in that specific place. And I found out there very quickly after building the product and started pitching it to investors that if I don't change my way of raising capital, I would not go anywhere. Right? And it was at the same time where I actually spent all of my money trying to pitch to investors up to the point of my girlfriend actually, that brought me there, left me, which is eventually a good thing because she was not really clear in her mind in that sense.

00:07:09:11 - 00:07:38:19
Sven Milder
And I was rock bottom sitting on the sofa thinking like, okay, I have this product. I'm in a city where I don’t know anyone, what am I going to do? And then my pivot point was literally when I read the book of Neil Strauss, “The Game” and while I was reading the games, looking for new tactics for a girlfriend, you know, I thought like, wow, I read the game, which is a book for those that I don't know about how to seduce a woman.

00:07:38:21 - 00:08:14:05
Sven Milder
I literally read through it and I saw the comparison between dating a woman and raising capital. And then everything started clicking for me. And seriously, three weeks later, I raised my first $600,000. I the business, almost 900 people. I raised a lot of money from venture capitalists and the rest is actually history. I noticed that it's long introduction, but I just wanted to make sure to touch on some pivotal moments that sometimes luck and being desperate.

00:08:14:06 - 00:08:36:01
Todd Sullivan
Sven that's awesome. Thank you for sharing it all. Just to recap, right, so you start out in Amsterdam and you're seeing too much of the party scene and you've got to figure out your life. So you have a furniture business that is manufactured in China. So you go over to China and then you meet a woman who brings you to Jakarta.

00:08:36:03 - 00:09:04:23
Todd Sullivan
You discover a new business of last mile delivery using technology. See, you sell the furniture business, your girlfriend leaves you, and then you realize, Hey, there's a better way to raise capital, which is similar to how you were meeting women. This is a phenomenal story, right? So could we back up just a quick second because we really like to educate around M&A and and the fundraising part is is awesome.

00:09:04:23 - 00:09:14:06
Todd Sullivan
I want to get to that. You sold that first business. How easy was it to sell the furniture business for you? Did you have a buyer in hand? Like how did how did that work?

00:09:14:08 - 00:09:20:16
Sven Milder
Yeah, well, it was the most simple sale of all time because I just sold it to my co-founder. Right? Perfect.

00:09:20:16 - 00:09:21:12
Todd Sullivan
So perfect.

00:09:21:15 - 00:09:44:11
Sven Milder
Yeah. So that's. That's the easy way. And it was a very easy deal because I didn't want to go back to Amsterdam anymore. The shares had a certain price, the due diligence was very clear because we run the business, it was knee down in the business and really loved it and we created the plan around it that, you know, he should pay me back X amount of money.

00:09:44:11 - 00:09:53:14
Sven Milder
I think it was like eighteen months or something. And I have to, of course, to like that. I didn't need the money so badly because I was in Asia where the costs are cheaper so I could wait a little bit.

00:09:53:16 - 00:10:12:10
Todd Sullivan
Oh, that's great. Like, I really think that there's a big lesson in that. I've been through that as well, where we sold half of a business and my co-founder wanted to run the other half and and so I just said, okay, I'll keep the equity and move on. And as entrepreneurs, right, we're driven by, you know, what is that thing that we're super passionate about?

00:10:12:10 - 00:10:22:17
Todd Sullivan
And you were clearly seeing an opportunity sell the shares, get a little capital for yourself, and do the thing that you were really excited about, which you built. To how many employees did you end up with?

00:10:22:19 - 00:10:25:11
Sven Milder
And now Jakarta.

00:10:25:13 - 00:10:32:06
Todd Sullivan
Indonesia, right. So that you built you built something substantial. Did you end up exiting that business? Do you still run it today.

00:10:32:08 - 00:11:15:09
Sven Milder
I exited the business. So do you just stay short on the points of stays? What's exciting for everyone? We also $8 million of venture capital, which is in Asia. Of course the dollar brings you pretty far. It was a last mile delivery service, which means we had 30 offices. We have drivers on motorbikes delivering packages everywhere. And one of the things that happened in that specific company is that because we were pretty capital heavy as we had like a lot of a lot of people, of course, on the paycheck, we had a corporate investor at that time in and the corporate investor didn't pay his investments in time and that's cool like that.

00:11:15:09 - 00:11:35:21
Sven Milder
And therefore we got stretched for three months before to actually dump the money in the business, which means that the business was pretty much on the fire for a little while. And I was actually in that whole period. Imagine that you can not pay your salary to 900 people for three months straight while you're leading a company.

00:11:35:21 - 00:11:59:06
Sven Milder
That was pretty horrible. So that that brought me as a person I think down to the ground. So I exited that business on a personal level as a CEO. But in that period, while I exited on a personal level, we created another business, which was a first mile business under our holding company, and we sold that to another group of investors.

00:11:59:06 - 00:12:19:20
Todd Sullivan
I think, you know, there's a great lesson in in raising capital there that maybe you can expound on. But, you know, I've raised a lot of money as other founders raise a lot of capital. And I think one of the the trickiest or maybe worst types of investors to take on is somebody that's going to drip capital into you at particular times, right.

00:12:20:02 - 00:12:44:20
Todd Sullivan
$250,000 a month or something every six months. And for entrepreneurs, we need to have a long term game plan. You might be thinking six months and 18 months out, but if you don't know that you have that capital to spend 100% for sure, you can get yourself in some really tricky situations like not being able to make payroll right, or pay your vendors for like vital things for the business.

00:12:44:22 - 00:13:04:18
Todd Sullivan
So I really just encourage people as they're raising capital, to not take capital from somebody that says, Oh yeah, I'll give you $1,000,000, but I'm going to give it to you in $100,000 chunks over time. That does not work. Okay? So you realize, okay, you got into situation, but you've got in the back of your mind, like all of us entrepreneurs do, what is the next business?

00:13:04:19 - 00:13:12:02
Todd Sullivan
And it's born out of this big business that you built. So can you tell me a little bit about that first mile delivery business?

00:13:12:04 - 00:13:33:11
Sven Milder
Yeah. Before we jump into that, I want to quickly give an extra comment on what you're saying. I'm sure. I mean, I don't necessarily think it's bad to accept cash in a drip. You know, I think if you accept cash in a drip, which means typically could be milestone based or every three or six months, three months definitely too short.

00:13:33:12 - 00:14:00:01
Sven Milder
But if you make great agreements with investors that if they currently invest, let's say $2 million. Right. And they want to spread these $2 million over 12 months, that should cost the investor money, right? I mean, they cannot say, oh, we invest $1,000,000 or $2 million for valuation X and then try to be super chill and relaxed by giving you money every two or three months.

00:14:00:01 - 00:14:18:08
Sven Milder
I would say like, okay, if you give me money now every two, three months, that means that the next time you're giving me money, you're jumping in a lot of valuation. Because if you give me cash right now, I'm able to deliver a more milestones. My company's worth more. So your second drip will give me less dilution. In that sense, it can work.

00:14:18:10 - 00:14:43:18
Sven Milder
It can work pretty well. Of course, it depends a little bit how cash heavy your business in general is. And to add on to that, what I share a lot with my clients that I'm working with sometimes is just not always the best idea to accept venture capital in the first place, right? Because it's or it's groups like martial arts on a high level, and if you fuck up, then the investor is always the one that laughs.

00:14:43:19 - 00:14:50:17
Sven Milder
So he's always the one that has the most fun in the end, right? And and that specifically. Founder.

00:14:50:19 - 00:15:14:14
Todd Sullivan
Yeah. Okay. I mean, I think that's a great point. I try to encourage founders who I'm investing in, you know, they say you're always fundraising, but you got to be running your business. And so when I think of kind of drip investors who are going to be looking at metrics, you know, every three months or every quarter, you know, you're constantly in fundraising mode and thinking a little more short term than long term.

00:15:14:16 - 00:15:36:02
Todd Sullivan
And it really doesn't leave room for mistakes, right? So you're gonna make mistakes along the way. And so buying yourself, you know, 18 month runway 2 year runway, you know, is my preferred way of doing it. But, you know, I'm coming from kind of the venture capital background, more traditional startup fundraising. And I think you're proposing an alternative to that.

00:15:36:08 - 00:15:59:16
Todd Sullivan
And so I really do like the idea that you're understanding your value at different points in time and not giving that valuation or taking on that dilution all from the beginning. It's definitely, you know, an interesting tactic. And I love alternatives to venture capital, right? Because we're not all building businesses that are truly meant for venture. So I appreciate you giving that that as an option.

00:15:59:18 - 00:16:28:14
Sven Milder
Well to to pay forward on that which also ties into most probably your next question right after doing almost $250 million in transactions in the last seven years, I was pretty bullish on the venture capital market. I believe that venture capital is not for everyone and it's very much about your storytelling. A year or a year, you know, you're designing the future and people are betting on that.

00:16:28:16 - 00:16:58:12
Sven Milder
What I believe is a better option for those that want to keep both doors open is do If you have a business first thing, what you want to do is make sure that you attract retail investors in the first place because the retail investor keeps your door open to or accept venture capital later on. Or if your business doesn't really turn out that successful, you can still, you know, build the business accordingly and then hopefully go for an exit later on.

00:16:58:12 - 00:17:22:10
Sven Milder
And many founders need to understand that if you're going in the venture capital route, there's actually only a two ways out or you become a failure, not necessarily on a personal level, but more like this is level and the VC is very well protected that you as a founder most likely don't have a lot of money left after the exit because of all of the liquidation preferences.

00:17:22:12 - 00:17:46:10
Sven Milder
Then on the other side, you can be a success. And I mean, it's very funny, but if you are growing a business to, let's say $100 million or $150 million by that time, by the time you're exiting, I personally believe you could better sell your business and a rolled with less stress as a founder and keep more of your money rather than waiting and waiting and waiting.

00:17:46:10 - 00:18:22:13
Sven Milder
So what I really like to advise the founder in this case perhaps not go to venture capital to route, but buy an existing business instead that has already cash flow and that's what I'm doing currently, but has already the cash flow digitize it as if it's a a venture capital DNA kind of business, though once you have the business really under control and you have the profits, then go to VC and then you are the bad motherfucker at the table that actually decides on the rules rather than the VC decides on your rules.

00:18:22:13 - 00:18:31:06
Sven Milder
Right. Because there's a difference if you don't have profit or you do have profits in terms of the deals and the arrangement that you make with the investor.

00:18:31:08 - 00:18:56:04
Todd Sullivan
Oh, it's great insight. Absolutely. You know, I'm a huge proponent of founders taking stock of what they really, really love doing and what their skill set is within a company. And if that means that, hey, I could go out and raise a series B, dilute myself and have to grow a business to the $100 million enterprise value or revenue or whatever the metric is.

00:18:56:06 - 00:19:16:19
Todd Sullivan
You know, if it's not in your DNA, it's not what you're passionate about. It's not your skill set. You could be far better off exiting where you own the majority of the company. You own a lot of control and selling your company. You know, the call it $20 to $50 million range. And what I love about that is, you know, we're entrepreneurs in this as a career path.

00:19:16:19 - 00:19:38:22
Todd Sullivan
We're going to do it multiple times and putting a win on the board like that, changing your your financial profile, it just makes the next one so much easier. Right? And so you're doing it over and over and over. So I love that piece of advice. I think being an entrepreneur via acquisition, right? So you're going out and buying a company that cash flows.

00:19:39:00 - 00:20:05:16
Todd Sullivan
I'd love to get your take on that. You're going to have to raise some capital, right? You can raise some debt, but you've got to finance those purchases. And I think that's fascinating for our listeners to think about their next business. Should it be something that they go out and purchase? Right. And then when they go to really grow, like you said, I think you're enabling it via technology is certainly one path When you go to grow that business.

00:20:05:16 - 00:20:17:16
Todd Sullivan
Now you're really looking at growth capital, right? And that's a different stage of like private equity or venture capital. Can you talk a little bit more about that, buying companies that are cash flowing?

00:20:17:20 - 00:20:41:21
Sven Milder
Yeah, absolutely. So I'm very close in closing a transaction at the moment, actually, which means that we're in the last last mile of the of the due diligence. But we, we more or less already decide on everything. What is the strategy there? Right. So let me first share. I wanted to buy a business that was cash flow fitting from day one, right?

00:20:41:23 - 00:21:02:09
Sven Milder
And I wanted to have a business that has a B2B component because I know in the back of my mind, if I know if I want to have financing, B2B always does better, right? If there's recurring revenue. Also, if your goal is to sell the business later on, when you buy a B2B business with recurring revenue, you're a B, the multiples look completely different.

00:21:02:11 - 00:21:29:09
Sven Milder
So my benchmark was looking at want to have a B2B business, I need to have recurring revenue. I want something that's old and that is a necessity whenever, wherever. So I landed up into a ISP business, which stands for an Internet service provider. Sure. And this Internet service provider is owning close to around 250 kilometers of fiber optic network.

00:21:29:11 - 00:22:04:02
Sven Milder
It do already a lot of of revenue with with crazy 83% gross profit margins. Their capacity can grow ten times on the current network what they're doing and they're literally running their business with a lot of respect for the current owner. Every effort listens to this. They run the business very well. But I think with all of the technology out there currently and rebranding and repackaging it and making sure that the automation in the back office is done very well, you can just grow this ridiculously fast.

00:22:04:02 - 00:22:30:13
Sven Milder
So it's not that I bought the business for a specific reason to own one, though. We buy this business actually as a platform business and we already have six different targets of other companies that we actually want to stack, right? So we will grow this business through acquisition and we grow this business through actually doing external marketing and all the bells and whistles do to fast track that growth.

00:22:30:15 - 00:22:58:10
Todd Sullivan
Yeah, that's great. I mean, it sounds like the private equity playbook. You're playing like a micro PE and I'm sure you're thinking about how you grow that business, but all of that automation and technology you're going to bring to the table is going to increase the profitability right of the business making just making it more efficient. And when you have that efficiency as a base now, you can go out and buy similar businesses, buy the customer lists, whatever it is to add to that platform.

00:22:58:12 - 00:23:18:09
Todd Sullivan
I mean, it's a it's a tried and true playbook. It takes it real experience and expertise that you clearly have. So I appreciate you sharing that. You know, I think about that for ourselves as well. I think it'll be a really interesting chapter in in the entrepreneurial journey. So obviously, I wish you a ton of success on that.

00:23:18:11 - 00:23:39:11
Todd Sullivan
You know, Sven I want to be respectful of your time. I love that we have you on as very much an international entrepreneur. You know, I've had some personal experience with that, but we haven't had many guests like this. And so you've pointed out a lot of things that you know, how things can be less expensive. Building companies in Asia.

00:23:39:12 - 00:24:03:18
Todd Sullivan
Maybe the solutions end up being slightly different than what we see in North America. Is there anything that you want to leave our listeners with, like words of wisdom around the companies that you've exited, how you've built companies, how you fundraised? Because I think fundraising actually is one of your kind of true talents. And any other words of wisdom that you want to give to our listeners or any other stories you want to touch on?

00:24:03:20 - 00:24:31:15
Sven Milder
Yes, absolutely. So I think the main thing that I would like to give away to everyone is that when you plan to build a business for sale, right, or when you plan to really build a business and everybody's thinking like, oh, the exits, or that will happen later on in three years when I'm profitable, right? But I think that every entrepreneur that starts to build their business needs to wear a few hats, right?

00:24:31:15 - 00:25:08:04
Sven Milder
I always like to say you are a shareholder, which means you're an equity all your own business. Then maybe you're as well the CEO in the business. But running the business from day one as you are the investor will help you to make decisions along the way that will serve your actions in the future. If you are too easy when you raise capital to accept all kinds of complicated deal terms in the start, or you're too easy when when it comes to accepting ridiculous valuations or with ridiculous, I don't mean too low, but actually too high.

00:25:08:06 - 00:25:35:18
Sven Milder
Then you price yourself out of the market, right? So those that are building, you should really build a mind like, okay, if I'm going to sell my business, who will be the potential buyer and and what and what will they buy? A great example is I was working together with a a coffee business. They, they were doing a roastery, a wholesale shops and online retail.

00:25:35:18 - 00:26:02:23
Sven Milder
Right. So they were actually four different business units and they literally had all of these four business units under one entity. And if you look if you would look at it from an entrepreneurial point of view, that makes a lot of sense, right? Because it's easy and it saves cost. But if you would then put on your investor cap, it doesn't make any sense in terms of risk or in terms of saving on taxes or in terms of making sure that your business actually has a higher valuation.

00:26:03:05 - 00:26:27:21
Sven Milder
So the first thing that we actually did with that business is to split each of the units, let's say the coffee roastery, the coffee wholesale, the coffee shops, and later on as well, the franchising and all different entities. And yes, it's a little bit more cash in the starts. But what you will see is that you can, of course, play the text, the textbook, but each individual entity becomes actually has more value.

00:26:28:02 - 00:27:00:11
Sven Milder
And by doing that you can raise capital or one entity and therefore have less dilution of holding level. Instead of you put everything on one big chunk, right, if that makes sense. So the reason why I wanted to bring this this example forward is that don't only think about moving the business forward, but think about if I'm the investor right, then how can I really create value in the services that I'm offering on the equity or a holding structure level that that saves you a lot of trouble in the in the future?

00:27:00:13 - 00:27:36:11
Todd Sullivan
Yeah, I think you started that with having the exit in mind when you're building a company or what you're thinking about building, what is somebody going to purchase. And so when you are able to separate out the assets of a business, those assets can be become attractive to different buyer sets, right? So it's not just that you might be able to have separate books and manage them for tax benefit, but when it comes to selling, you may be able to maximize the outcome in four different units, in four different exits, right, versus one.

00:27:36:12 - 00:28:00:18
Todd Sullivan
So, yeah, it's a it's a really interesting point that as entrepreneurs, we maybe don't see the forest through the trees, if that's the analogy and having somebody take a look at your business from the outside and say, Hey, this is potentially how you could maximize. And it's a really interesting thing is there anything else that you want to say about having the exit in mind when you go to build?

00:28:00:22 - 00:28:22:11
Todd Sullivan
Because your playbook right now, that micro p playbook, that is the playbook, you understand you're building a platform, you're going to add on to it, you're going to improve EBITDA and revenue and that becomes a salable entity because of scale and operational excellence and yadda yadda. Right. It gets better and better. I don't mean to put the words in your mouth.

00:28:22:13 - 00:28:25:11
Todd Sullivan
Can you say it just a little bit more on that as we tie this up?

00:28:25:12 - 00:28:57:23
Sven Milder
Yeah. So I always like to say for those that are raising capital, otherwise I have a plan to sell their business, adopt a room first pitch deck last, or in terms of selling it, data room first and the sale later. Right. What do I mean with that. The earlier you start actually creating your data room and revisiting that on a monthly basis and to make sure, again with your investor cap that everything is tuned and looks nice and you almost look like, like a legal counselor for yourself.

00:28:57:23 - 00:29:27:02
Sven Milder
Okay, what's wrong with this? It does a few things. One, it keeps you sharp how the business is performing, what is leaking, and making sure that you actually have internal governance in the right way. And for two reasons. That's very important because if you don't have your data room in order, you want to raise capital, then lawyers will come to you and they will literally put on the magnifying glass and looking for things that they can find to down size your company valuation, that's one.

00:29:27:07 - 00:29:45:20
Sven Milder
Or if you have a buyer that comes to you, right, they will go to the data roaming and make the conclusion, Hey, okay, this is not really complete. You don't have the supplies in place, you don't have this, you don't have that. And then again, you are discounting your right or you're discounting actually the capital that you're raising.

00:29:46:01 - 00:30:12:11
Sven Milder
So I think maybe a great thing to say is that just try to be very disciplined towards yourself and know where you want to go in in the near future and keep yourself accountable for monthly revisiting that, put something in your agenda and make it the team effort as well. Because I could tell you, if you do this right or you have less dilution of the capital raise or you make more money at your exit, you know, it's very it's very simple.

00:30:12:12 - 00:30:39:17
Todd Sullivan
You spend that. That's great advice. The data room having that for the listeners, your data room really is a collection of all of your the financials of your business, all the documentation and having that in order and updated continuously not only gives you real discipline in your business and knowing where it is, but when you go to share that information, whether it's a bank loan, a venture capital firm or a buyer coming to look at your business, you look really professional.

00:30:39:19 - 00:30:59:20
Todd Sullivan
Those that don't have that or have major gaps, just like you said, you're going to be discounted. It doesn't look like as professional a business commanding the highest purchase prices. So great, great advice. I love kind of ending it there. Sven, thank you so much for for spending this time with us. Truly remarkable career. And you're really right in the middle of it.

00:30:59:20 - 00:31:10:10
Todd Sullivan
So we're rooting for you on this next purchase. Hopefully that goes through and we'll have to have you back when you build up that platform and have your next exit. But thank you again so much for this time.

00:31:10:12 - 00:31:13:17
Sven Milder
Thanks for having me Todd. I really appreciate it.

00:31:13:19 - 00:31:35:22
Todd Sullivan
Thanks again for listening to the Cashing Out podcast. For more founder exit stories, please subscribe to the Cashing Out podcast on Apple, iTunes, Spotify, or wherever you listen to your favorite podcasts. And please remember exercise dot com and the Cashing Out podcast are for entertainment purposes only. This should not be relied upon as the basis for investment decisions.