Amazon paid $1.2 billion for an online shoe company with no patent, no secret formula, and no unique product. In this episode, I break down the hidden factor behind that price, and how the same factor affects the multiple a buyer will pay for your business.

In this episode:
- Why Tony Hsieh dreaded going to work at LinkExchange before its $265 million sale to Microsoft
- How Zappos made culture its number one priority, including the $2,000 offer to quit
- Why Amazon paid $1.2 billion for a company selling something Amazon already sold
- Five moves to build a culture that shows up on the balance sheet
- How culture affects your EBITDA multiple, and the other non-financial drivers buyers weigh

FULL ARTICLE: https://deepriverwealth.com/company-culture-business-valuation/

RESOURCES:
Learn more / reach out: https://deepriverwealth.com/
FREE 15-minute Business Valuation Estimate: https://deepriverwealth.com/business-valuation-assessment/
Founder Freedom Calculator: https://calc.deepriverwealth.com
Essential Questions to Ask a Private Equity Buyer: https://deepriverwealth.com/essential-questions-for-pegs/
My book, The Entrepreneurship Trap: https://deepriverwealth.com/books/
Podcast page: https://www.foundermoneypodcast.com/

GOT A QUESTION? CALL IN.
I'd rather answer your question than guess at what's on your mind. Call 1-800-231-7960 and leave a voicemail with your first name, the town or state you're calling from, and your question. Keep it general, and please don't leave private personal details you wouldn't want made public. Don't be shy — call in and let's think it through together.

SOURCES:
[1] Amazon.com — press release, "Amazon.com to Acquire Zappos.com" (July 22, 2009); deal closed November 2009, valued at approximately $1.2 billion in Amazon stock at closing, plus $40 million in cash and restricted stock units for Zappos employees. https://press.aboutamazon.com/2009/7/amazon-com-to-acquire-zappos-com
[2] LinkExchange acquired by Microsoft in November 1998 for approximately $265 million; co-founded by Tony Hsieh in 1996. https://en.wikipedia.org/wiki/LinkExchange
[3] Hsieh, Tony. Delivering Happiness: A Path to Profits, Passion, and Purpose (Grand Central Publishing, 2010) — source for the LinkExchange culture decline, Zappos' ten core values, the two-part culture-fit interview, and "The Offer" ($2,000 to quit).
[4] Jeff Bezos / Amazon's stated rationale for preserving Zappos' independent culture following the acquisition. See Amazon press release and coverage of the deal. https://press.aboutamazon.com/2009/7/amazon-com-to-acquire-zappos-com

DISCLOSURES

Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. This material is for educational and informational purposes only and is not intended as personalized financial advice. The strategies discussed may not be suitable for everyone. DeepRiver Wealth does not provide tax or legal advice. Please consult a qualified tax or legal professional regarding your specific situation.

Advisory services are only offered to clients where NewEdge Advisors and its representatives are properly licensed or exempt from licensure. Past Performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by NewEdge Advisors unless a client service agreement is in place. Guest opinions, if any, expressed in this episode are those of the guest and do not necessarily reflect the views of DeepRiver Wealth or NewEdge Advisors, LLC. The content of this episode is developed from resources believed to be providing accurate information; however, neither DeepRiver Wealth nor NewEdge Advisors, LLC, guarantees the accuracy or completeness of any information obtained from any third party, including guest-provided biographical or business details. The information in this material is not intended as tax, legal, or financial advice.

This show includes a listener call-in segment. By leaving a voicemail, callers consent to having their message played, in whole or in part, on the show. Leaving a message does not create a client or advisory relationship, and any responses provided on air are general in nature and not personalized advice. Callers should not include private, personal, or confidential information in their messages.

For most owners, 80% or more of their net worth is locked inside their business — yet only about one in five businesses that go to market ever actually sell. This is how business valuation really works, so you can start moving your number years before you sell.

In this episode:
- The simple two-variable formula behind every valuation (EBITDA × your multiple)
- The four levers you control that move your multiple — and your price
- Why the "tricks" owners use to inflate profit don't fool a real buyer
- How EBITDA is actually calculated, plus the difference between EBITDA and SDE
- Free tools to estimate your valuation and see if it's enough to retire on

FULL ARTICLE: https://deepriverwealth.com/business-valuation-ebitda-multiple/

RESOURCES:
Learn more / reach out: https://deepriverwealth.com/
FREE 15-minute Business Valuation Estimate: https://deepriverwealth.com/business-valuation-assessment/
Founder Freedom Calculator: https://calc.deepriverwealth.com
Essential Questions to Ask a Private Equity Buyer: https://deepriverwealth.com/essential-questions-for-pegs/
My book, The Entrepreneurship Trap: https://deepriverwealth.com/books/
Podcast page: https://www.foundermoneypodcast.com/

GOT A QUESTION? CALL IN.
I'd rather answer your question than guess at what's on your mind. Call 1-800-231-7960 and leave a voicemail with your first name, the town or state you're calling from, and your question. Keep it general, and please don't leave private personal details you wouldn't want made public. Don't be shy — call in and let's think it through together.

SOURCES:
[1] Exit Planning Institute — business owner net worth concentration (~80–90% of net worth tied up in the business). https://exit-planning-institute.org
[2] SCORE / Exit Planning Institute — business sale success rate (~20%, or roughly one in five, of businesses that go to market actually sell). https://www.score.org
[3] Gallup — cost of employee turnover (replacing an employee costs one-half to two times their annual salary). https://www.gallup.com/workplace/247391/fixable-problem-costs-businesses-trillion.aspx
[4] Trinity Study / 4% rule retirement withdrawal guideline. https://en.wikipedia.org/wiki/Trinity_study

DISCLOSURES

Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. This material is for educational and informational purposes only and is not intended as personalized financial advice. The strategies discussed may not be suitable for everyone. DeepRiver Wealth does not provide tax or legal advice. Please consult a qualified tax or legal professional regarding your specific situation.

Advisory services are only offered to clients where NewEdge Advisors and its representatives are properly licensed or exempt from licensure. Past Performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by NewEdge Advisors unless a client service agreement is in place. Guest opinions, if any, expressed in this episode are those of the guest and do not necessarily reflect the views of DeepRiver Wealth or NewEdge Advisors, LLC. The content of this episode is developed from resources believed to be providing accurate information; however, neither DeepRiver Wealth nor NewEdge Advisors, LLC, guarantees the accuracy or completeness of any information obtained from any third party, including guest-provided biographical or business details. The information in this material is not intended as tax, legal, or financial advice.

This show includes a listener call-in segment. By leaving a voicemail, callers consent to having their message played, in whole or in part, on the show. Leaving a message does not create a client or advisory relationship, and any responses provided on air are general in nature and not personalized advice. Callers should not include private, personal, or confidential information in their messages.

Most business owners don't have a cash-flow plan. They watch the checking account balance and redo the same mental math every time a big payment lands. In this episode, I walk through a simple cash-flow waterfall: seven steps, in order, for where your money should go so your business supports your life today and becomes more valuable tomorrow.

In this episode:
- Why your money has too many jobs, and what that costs you
- Paying yourself on purpose and setting up a tax reserve
- How much operating cash your business actually needs
- Why business owners need two emergency funds, not one
- Funding growth and exit readiness before pulling out excess cash

FULL ARTICLE: https://deepriverwealth.com/cash-flow-waterfall-business-owners/

RESOURCES:
Learn more / reach out: https://deepriverwealth.com/
FREE 15-minute Business Valuation Estimate: https://deepriverwealth.com/business-valuation-assessment/
Founder Freedom Calculator: https://calc.deepriverwealth.com
Essential Questions to Ask a Private Equity Buyer: https://deepriverwealth.com/essential-questions-for-pegs/
My book, The Entrepreneurship Trap: https://deepriverwealth.com/books/
Podcast page: https://www.foundermoneypodcast.com/

GOT A QUESTION? CALL IN.
I'd rather answer your question than guess at what's on your mind. Call 1-800-231-7960 and leave a voicemail with your first name, the town or state you're calling from, and your question. Keep it general, and please don't leave private personal details you wouldn't want made public. Don't be shy — call in and let's think it through together.

SOURCES:
1. The claim that cash flow problems are among the leading causes of small business failure is most commonly attributed to a U.S. Bank study by Jessie Hagen, which found that 82% of business failures involved poor cash flow management or a poor understanding of cash flow. See, e.g., SCORE, "The #1 Reason Small Businesses Fail — And How to Avoid It": https://www.score.org/articles/1-reason-small-businesses-fail-and-how-avoid-it/

DISCLOSURES

Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. This material is for educational and informational purposes only and is not intended as personalized financial advice. The strategies discussed may not be suitable for everyone. DeepRiver Wealth does not provide tax or legal advice. Please consult a qualified tax or legal professional regarding your specific situation.

Advisory services are only offered to clients where NewEdge Advisors and its representatives are properly licensed or exempt from licensure. Past Performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by NewEdge Advisors unless a client service agreement is in place. Guest opinions, if any, expressed in this episode are those of the guest and do not necessarily reflect the views of DeepRiver Wealth or NewEdge Advisors, LLC. The content of this episode is developed from resources believed to be providing accurate information; however, neither DeepRiver Wealth nor NewEdge Advisors, LLC, guarantees the accuracy or completeness of any information obtained from any third party, including guest-provided biographical or business details. The information in this material is not intended as tax, legal, or financial advice.

This show includes a listener call-in segment. By leaving a voicemail, callers consent to having their message played, in whole or in part, on the show. Leaving a message does not create a client or advisory relationship, and any responses provided on air are general in nature and not personalized advice. Callers should not include private, personal, or confidential information in their messages.