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Digital Social Hour
How I Built A $1 Billion Investment Portfolio | Chris Graebe DSH #782
00:40:29
Ready to dive into the world of investment mastery? Join Sean Kelly on the Digital Social Hour Podcast as he unravels the incredible journey of Chris Graebe, the mastermind behind a $1 billion investment portfolio. 🚀 From his MTV Road Rules days to bec
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- [00:01]
A
Because you have courage and you do these things and someone maybe is afraid to do something. I try to lend as much courage as I can to say, you know, you can do this. Nothing's stopping you or holding you back. You just have to try. When someone can capture just a little bit of courage just like you did, can change everything. Micro amount of courage can literally change someone's life forever.
- [00:26]
B
All right, guys, Chris Graby here. Today we're gonna talk investing.
- [00:29]
A
What's up, man?
- [00:30]
B
And your journey. 21 years ago, you were a big party here, right?
- [00:34]
A
Yeah. I mean, my story is like Forrest Gump, man. I have literally done so many different things in my life. Yeah. Small town Indiana, cornfields. Grew up that way, went to college, didn't go to school, just basically partied like crazy. Had a pretty intense encounter, met Jesus, became a Christian, and everything changed. But then the door opened. I ended up on MTV. I was a cast member on MTV's Road Rules.
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B
Wow.
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A
Yeah.
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B
And that was during the spiritual journey.
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A
It was like six months after.
- [01:07]
B
After.
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A
Yeah. So, like, they. So here's the crazy part. I met them before I changed my life, the casting directors. And I was like, I'm a party they called Ex Girlfriends. I mean, they did all kinds of stuff. And they. And. And then the show didn't. That show that I made it on didn't get picked up. They called me six months later, like, hey, man, we really like you. We think you'd be great for casting for the next Real World of Road Rules. And I was like, well, I'm. I'm not that guy anymore. I don't party. I don't do all this stuff. And I think for them, they were like, sweet. Let's put him on tv. Let's watch him hook up with all the girls. Completely melt down on national television.
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B
Yeah.
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A
And it'll be great tv, but. And, you know, Real World Road Rules, what is now known as the Challenge. They put crazy people in a place knowing that they're all going to be crazy, do crazy things, and luckily for me, that didn't happen.
- [01:57]
B
You didn't cave in.
- [01:58]
A
No, no. I mean, I. I knew who I was and what was happening. And, you know, like, I. I actually came from a place of compassion because I was those people. Six months you were mentoring them almost. And, yeah, in a sense, I was like, we were. Yeah. Things that you'll never see on camera. But it was. It was a really great season and such an awesome. It opened so many doors and just kind of helped open the next door. The Next door. The next door.
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B
Wow. So how are they trying to test you on the show? Like, they would just, oh, well, girls or something?
- [02:23]
A
Well, I think it would be like, you know, here's the thing about reality tv. People will always ask, and I have you ever done any reality shows? Because people are always asking me, is it real? And I'm like, look, most of it is real. Because again, you. The number of personality tests that you do rolling into these shows, like, they know this person and this person are going to fight this person. This person are going to probably hook up, and they just put them in this crazy environment. And so one of the things the producer said, and it's so true, like, they have a camera on you 24 hours a day. Like, they can only show who you actually really are. And so that was the cool part for me is, like, when the editors and the directors and all that see what's happening, they're going to show who you really are. So, yeah, for me, there were definitely, you know, girls there, and. But I had just made a decision, like, this is not who I'm at, who I was anymore. And I'd done relationships wrong so many times in my life, and I was like, I am not going to do this wrong the next time. I was like, I'm definitely not doing it wrong on national television. So at 22 years old, I'm thankful that I at least had that foresight to make that decision.
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B
How are you able to make that mindset shift? Because before, you couldn't control it, right?
- [03:31]
A
Yeah, before. Well, before. There was. There was so many things driving it, like history, insecurities, wounds, all that stuff. That. And then. But then, you know, October 13, 2002, I had an encounter where I basically just. I. I met God, I met Jesus, and it changed my entire life. And I knew at that point that, like, before, it was living for myself and living for my. My. Whatever my whims were or my fears were, my insecurities were. And at that moment, like, I knew what my purpose was. I knew what my focus. Wow. Yeah.
- [04:06]
B
Just from that moment, meeting him.
- [04:07]
A
Yeah. When. That moment, it changed everything. And I. And immediately, like, everything changed because I knew. I was like, you know, I. When someone hits a wall and they're broken, they're. They're trying to fill it with whatever, you know, girls, alcohol, work, money, whatever it is. And for me, I just finally, like, I just hit a wall. And I was like, I can't do this anymore. And I was on a downtown street in Nashville, Tennessee. I Can show you the block I was standing on. It was on Broadway, actually. Well, before Broadway was what it is today, the party capital of Tennessee or whatever. But I was standing there, I just stopped and I just, I said, okay, I'm done. I'm tired, I'm broken. I. I can't do this anymore. Like, I. I need you. And from there, everything changed.
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B
Crazy.
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A
Yeah.
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B
From there you became a pastor for 10 years.
- [04:50]
A
Yeah, well, from there I ended up, you know, on MTV and, you know, did what? You know, started traveling around, speaking and talking about, you know, all kinds of things at colleges and universities and. But then I got married and had a kid and I was like, oh, I should probably like, be. Get a girl, get a grown up job, you know. And so, yeah, I ended up being a pastor for like, close to a decade, and it was a really, really fun adventure. And, you know, I tell you about this Forrest Gump thing kind of intermingled in between the whole pastor thing. I, I got a job, kind of a year and a half stint between churches. I got a job as a Yo yo guy traveling the world doing yo yo performances for kids at elementary schools and middle schools.
- [05:29]
B
You're nice with the Yo Yo.
- [05:31]
A
Here's the deal. I had never picked up a Yo yo before in my life, but these guys are like, hey, you're pretty good on the mic.
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B
Yeah.
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A
And you can, you can entertain and you're moving your hands while you're talking, so maybe you can slide a Yo yo in there. And so I got to go to England, Australia, Canada, all over the United States and do a bunch for my kids. My little kids at the time was like, dude, my dad is a Yo yo pro and like, look how cool he is. And so, so it was a fun little stint, but, you know, with little kids and traveling, you know, 20, 22 weeks a year, it just doesn't work. And I, I want to be home with my kids now.
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B
You got five kids?
- [06:02]
A
I got five kids, brother. Yeah, I got five. I got a. I have my boy, my son, who's 18 years old, just graduated high school.
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B
Yeah.
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A
And then I have four girls.
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B
You got a full basketball roster, man.
- [06:13]
A
Brother, I, I do. It is, it's, it's a, it's the greatest gift I have ever been given in my life. I mean, my, My wife, obviously, it's Jesus, my wife. And then our five kids and I, I don't know, I think kids are the greatest barometer to someone's selfishness. Like, people who are like, there's a whole Generation. Like, yeah, I'm not having kids. Like, yeah, I'm scared the world, whatever. If you're in that, like, 25 to 35 range, it's just like. It's like. It's like a wasteland. Nobody's having kids. It's like a desert. And. And I think it's. I think it's just. I think it's probably one of the most selfish things you can ever do is to decide not to have a kid.
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B
Wow.
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A
Because it's really. You're like, I'm afraid. I'm whatever, you know, because you want to learn how selfish you are. Have a kid and then have another one, and then have five. And then you're like, you know what? Like, it's not about me anymore. I'm here to love them, train them, protect and provide for my wife and my kids, and then have an absolute blast. Because I think about. You got to think about the long game. I think what people don't think about. One of the sayings my wife and I often talk about is we say, play the movie. People don't play the movie. They're not thinking, like, what's the end of their proverbial movie when they're 50, 60, 70, and they don't have anyone there to love them, to celebrate with them. Because, like, I know with my five kids, maybe I'll have 20 or 30 grandkids. Maybe. Maybe I have 15. But, like, play that movie out. That's going to be amazing.
- [07:39]
B
Wow.
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A
Where I'm surrounded with all of these people who, like, came because I decided to say, I love this woman. I'm gonna stay with my wife. We're gonna have kids. We're trying to raise them as best we possibly can, love them, and. And then hopefully they get to do the same thing. And then.
- [07:55]
B
Yeah. No, that's beautiful. I'm just picturing you guys on a ranch somewhere with 20, 30.
- [07:59]
A
That's it, dude. I mean, that's. That is actually it. One of the things my wife and I say, we. We just wrote our second book, and one of the things we talk about, the first one was about marriage. The second one's about family, obviously, because we have these five kids. And one of the things that. That we try to do is, like, you know, I. Look, I'm a futurist. I'm a strategic. I love thinking down the line. But one of the things I try to do is in the moment, like, we may be in the backyard and, you know, maybe we've got a bonfire going, or we're bouncing a volleyball around or someone's jumping on a trampoline, like, nothing. Crazy nothing. When someone's like, oh, man, the coolest. But, like, I'll look at my wife and I'll just say, like, this is it. Like. Like there's no. Like, one day when we make all this money or one day when we get to this thing over here. Everyone's chasing all these things that they think are going to make them happy. But, like, I'm looking at the moment in my life and going, like, hopefully up to this point, I'm not going to look back with regret and go home. And I wasn't there for my son. I wasn't there for my daughters. I was like, in the backyard, those mom you can steal that everyone maybe sees as mundane are the most beautiful. And that. That's it right there. That's the life. Because. Because when you're 50, you're going to look back and go, man, I wish I would have. And I'm not going to do that. My wife and I aren't going to do that because we, we look at it right now in that moment and say, this is it right here, dude.
- [09:16]
B
I love that so many people are like, once I achieve this, I'll be happy.
- [09:20]
A
Well, yeah. I mean, one of the things happened for me a couple years ago, and I don't, I don't know if this has happened for you or not. And I. I know I'm 43 years old. So, you know, when I'm. When you're in your mid-20s and you're 30 or whatever, there's. You want to prove to whoever. And I. And I. Something happened to me where I was like, okay, the drive shifted and changed. I'm still driven. I love starting businesses. I love, like, building, building, building. But when I decided that I have nothing left to prove to anyone, proverbially in my mind or parents or whoever, because what happens is, like, my wife loves me, my kids love me, and I can make money. I have nothing left to prove to whoever. And sometimes it's ourself. We don't even know it. There's a thing in the driver's seat of most men's life and they don't realize that they're literally being pushed around and driven and making decisions by trying to prove to whoever. And the day that you can finally not have to prove to anyone, you can have peace, then you can step through, I think, in true leadership and boldness in your life. And that's what happened.
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B
Wow. No, that's so relatable, though, because in high school, it was like trying to fit in and then for sure, it's college. You want to prove people wrong.
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A
Yeah.
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B
Entrepreneurship people start to prove people wrong.
- [10:29]
A
Yeah.
- [10:30]
B
So that. That's beyond relatable, man.
- [10:32]
A
Yeah. Well, I just think it's so many, especially men. I mean, that's what I can speak to is just like they're out there trying to prove something to someone and they don't even realize what is why. Or maybe they're watching social media, like, oh, I gotta. And you're just like, dude, you are chasing after the wind. Like, it is not. You're never going to catch that thing. So, like, sit in this moment and look at how far you've come and just celebrate that today.
- [10:57]
B
Right.
- [10:57]
A
And when you don't have to prove anymore, like, you actually become more powerful and you actually become a stronger leader and a strong human and there's peace in your life. And now even more people want to be around you and the opportunities come because you're not chasing. You're not trying to position and posture and all the different.
- [11:12]
B
That's powerful. I used to care so much about what other people thought of me. Did for sure. Took me years to get out of that.
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A
So when was the thing? When was the moment, honestly?
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B
Podcasting, really? Yeah. Because I knew I had to shut that off because I get so much feedback.
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A
Okay. Oh, yeah.
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B
If I were to let it eat at me.
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A
Yeah.
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B
I couldn't do it.
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A
Yeah.
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B
You know what I mean?
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A
Oh, my gosh. I'm sure you do.
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B
And I was so scared to even post my own content for years on social media because I was feared of being judged.
- [11:35]
A
Got it.
- [11:36]
B
Yeah. So this definitely helped me in a way.
- [11:37]
A
Well, good job.
- [11:38]
B
You too, man. I mean, that's not an easy space to get to for most people.
- [11:42]
A
Yeah. I think it's just, I mean, I. I grew up with, you know, my parents are great. I love. They divorced when I was five, but small town Indiana, no money. Didn't know an entrepreneur really was. Just didn't fit in that little town. You're just like, what is wrong with me? And, you know, and you just have to go like, okay. I was built to adventure and try new things and do things that normal person just is afraid to do. You know, courage. You know, one of the things that had a buddy recently and it was, it was a cool moment for me is he was just like, hey, Chris, like, you do things that other people won't do. And he's like, where do you get the courage to do this? And I think it's just that place of, like, you try things enough and you do. You fail, but you get back up and you keep going. You get a dub here and there and you just keep going. And I. And I had a buddy, he was like, dude, like you. You lend people courage. Like, when. Because you have courage and you do these things and someone maybe is afraid to do something. I try to lend as much courage as I can to say, you know, you can do this. Right. Nothing's stopping you or holding you back. You just have to try. And I think when someone can capture just a little bit of courage, just like you did when it came to posting and doing the podcast, it can change everything. You know, just a. Just a small, micro amount of courage can literally change someone's life forever.
- [13:02]
B
Right. Got to take that first step.
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A
For sure. You have to.
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B
Yeah. So I know you're big on investing now, and that's sort of what you do full time.
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A
Yeah. So for the. From the pot, from the pastoring world, I started an E Commerce brand. So back in 2015, it was Amazon private label. I was like, okay, I'm a pastor. Like, I gotta do something different. I gotta make more money.
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B
The money's not that good.
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A
No, it's not that good. I mean, it shouldn't be that good. If you're a pastor and you're making a lot of money just off the church, that's. That's not. That's not a good thing. And so even, you know, when you. You read the Bible, you look at, like, the apostles and the disciples, like, those guys worked. They went and did work, and people gave them money, but they also worked with their hands, you know? So anyway, I started this E Commerce brand and exploded. And I was like, oh, my God, like, on the side, literally every night my wife would go to bed, my kids would go to bed, and I was, like, chatting with China, trying to create products and do all that stuff. And then it took off. And it was my first time of, like, look, if you don't quit, you. You don't give up. You know, it's like everybody says you just need that one thing to pop. And it was the first time, it was like, okay, this was successful. And so it gave me the courage to say, okay, I can step out of this and put. Start to try a bunch of different things. And ultimately, I ended up on a path where I started. I discovered the world of equity crowdfunding, basically. Not Kickstarter, not indiegogo but basically you can own a piece of startups and not be a not, you don't have to be an accredited investor. And so I discovered this world because laws changed in 2016 and that's where I, I do and deep and decided, hey, I want to be all in on this.
- [14:38]
B
Got it. So you're able to raise capital just from your connections?
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A
Basically, yeah. So basically what it is is the laws opened up and made it possible. See, before 2016, non accredited investors, meaning someone with not a million dollars net worth, not including their house or you know, $200,000 a year in salary and, and 300 as a couple, they were not allowed to ever invest in startups. You hear these stories about Uber and Dropbox and Airbnb and all these big huge returns. The everyday investor were not into those deals since the Great Depression. They, they put it in as a law to say like, we want to protect the little guy. And the little guy was never able to get in on these deals. That MA brought massive returns. And so 2016, the laws changed and made it possible for startups to say, hey, you know what, I have an audience. Like you have an audience if you decided to go raise equity for a business, a startup, even for your own, like they wanted to own shares of this, you could go out tomorrow and raise up to $5 million a year.
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B
Wow.
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A
Yeah. Five, five million bucks a year. Yeah, it is. Now that's with audited financials. If you just did reviewed financials, you could do 1.2. So anyway, like this is, it's been pretty amazing to see. So you know, Silicon Valley and venture capitalists, they look down on this like, oh, the people like the people. And they're like that you don't want to. And they try and talk startup founders out of it. But startup founders are now like sick of being pushed around by VCs and private equity and Silicon Valley. So they're going, screw you. I'm gonna, I have an audience or I have access to an audience and I'm gonna go raise over here on my terms and I don't have to be pushed around by you and give away a ton of my company. So, so for me, like I, I, I'd like to say I'm a pretty big advocate for the investor. And so I've invested in over 25 companies. They're all, they're growing in value and they're sitting right around a billion dollars in value right now. Yeah. And of the 27 officially as of today, record this, 25 are still in existence.
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B
That's amazing. That's a good ratio.
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A
Yeah. So I'm, I'm, that's my whole thing is I'm banking on like, I want to smoke venture capitals.
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B
Yeah.
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A
I want my track record to be well beyond what they do. And so, so, yeah, I put content out there. I'm teaching people about this. A lot of people don't even know this even exists. You know, like, the thing that's crazy about, you got to think about this is this is newer than crypto. Like, crypto is older, which is pretty new than the opportunity.
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B
That's crazy.
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A
Actually, it's eight years, eight years that people have been able to do this. And so it's starting to gain traction. And so, yeah, there's some pretty cool companies I've had the opportunity to invest in. And, and, and my members have had the opportunity to invest right alongside me. It's been pretty neat.
- [17:14]
B
Yeah. You've also invested in companies with Cuban and Kevin O'Leary. Which, which companies were those?
- [17:18]
A
Yes. So the Cuban one was called Beatbox Beverage.
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B
I've heard of that one.
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A
Yeah. So they were on Shark Tank.
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B
Yeah.
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A
And they came in and they're an Austin based alcohol beverage company. And Cuban gave them, gave them a million dollars. And I mean, they just, beverage companies are so hard to start.
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B
Right.
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A
Especially alcohol beverage companies. And so when I met them, they were doing around $7 million in sales. This is probably three or four years after Cuban invested.
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B
Yeah.
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A
And they were like, okay, we're going to go raise from the crowd. Like we want to go raise from the everyday investor. And I was like, okay, great. So I found them, did diligence on them. I do a lot of diligence on these companies. I have analysts that I pay a lot of money to do them. I meet them. I, I, it's not, I'm not just like, oh, you're cool. Like, so, so they came in at a $60 million valuation, which was at the time, back in 2020, this a pretty rich deal for some of the deals I was jumping into. But I was like, all right, I think these guys could do it. So three founders and last year they did $100 million in revenue.
- [18:19]
B
Holy crap.
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A
In revenue.
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B
That's the speaker thing, right?
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A
That's, yeah, well, they, they have the speaker kind of beatbox, but they're more like a tetra pack now. They kind of moved away from the speaker things. They had these little kind of tetra packs, like kind of the size of the can right there. And so, but they are Crushing it. This year they're going to do 283 million. Yeah. They are on track for as like Celsius. They're basically following what Celsius did.
- [18:43]
B
Yeah.
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A
So by about 2028, my guess is. And obviously, you know, I'm not, I'm not in the company or on the board. I'm just an investor. There'll be a billion dollar company.
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B
Jeez.
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A
So you think about it. Everyday investors got in at a $60 million valuation and they were doing like $7 million.
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B
Yeah.
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A
Alcohol brands usually set. Alcohol brands usually sell at 10x top line revenue.
- [19:08]
B
Whoa.
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A
So let's just say, let's just say it's 7x. They're going to be. Someone could acquire them for 7 to 8 billion. And everyday investors got in at a 60 million dollar valuation.
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B
Dude, that's insane.
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A
It's going to be.
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B
What is that? A 20X?
- [19:22]
A
It's, it's going to be even beyond that. It'll be, it'll crush what. What happened. So, so that could be one of the biggest deals. Now there's dilution that happens along the way because they've taken a couple rounds but they're not doing any more. But someone's going to come in and buy them for a. Really. Because it's that once you do that, that's how these big brands work. They go, okay cool, you go show us that it works. Now we don't want to do R and D, we'll just come acquire you.
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B
Right.
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A
And so if they get acquired, it's going to be probably the biggest deal.
- [19:48]
B
And I could see that alcohol brands are like a monopoly, right?
- [19:51]
A
Oh for sure.
- [19:52]
B
Like five big players.
- [19:53]
A
Absolutely. And, and they have such deep pockets that they'll come in. But that's one of the ones I'm excited about that one. You know, the O'Leary one is interesting because I invested in them before they went on Shark Tank. We were first ever to invest in a company before they went on Shark tank and then O'Leary invested in them and you know they're, they're unfortunately one of the two that didn't make it.
- [20:13]
B
Oh it didn't?
- [20:14]
A
Yeah. Which one was it? It's called MC Squares. So it was an office products deal. What happened? The founder's amazing. It's just he. That is a capital intensive business and an inventory wise and he brought all of his inventory and manufacturing to the states in house and so just eventually caught up with him and he, you know, had some big POS and was trying to fulfill and so Anyway, he, he's actually doing a restructure. So what's cool is he's gonna, he's filed bankruptcy, but he's gonna restructure and make it kind of rise back from the ashes again. But it's just, it's just startup life, man. I try and tell people all the time like startup investing is risky. You know, nothing is guaranteed. But that's why we work so hard to do the diligence that we do. Because I just, I don't know, because I'm investing my own money like I want, I want to return.
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B
Well, 25 out of 27 in six years is pretty good.
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A
Well, I'm, I'm trying. Yeah, I'm trying. So. And I'm, every time I, I usually will invest in one a quarter. There's, there's one that, a couple that I just recently invested and brought to my members. I'm pretty excited about it. One is they're called Cipher Tax. They're, they're basically going to disrupt corporate finance tax as we know it. So like they have, they can come in, they've, they've come in behind multi team audits who've been there for three months in a corporation and found millions of dollars after those guys were done.
- [21:32]
B
Whoa.
- [21:32]
A
So literally they're going to probably end up partnering with states where like basically you'll come, the state will go, hey, here's how much you owe. Or you'll go, yeah, we all know how much we owe here. There's no, like because of AI and what they've been doing. So like they are, they, their whole round was from the crowd and they'll never raise capital again. And I think, I mean, I'm hopeful they sell for billions.
- [21:53]
B
TurboTax will want that, I bet.
- [21:54]
A
Yep. I think, I think Microsoft will want that. Yeah, Microsoft, I think, well, I just think if you are that powerful and you have that much data, like if you, if you're tapping into the, some of the big four accounting firms who have thousands of companies and they're licensing this product, I think either one of them is going to try and buy it because they don't want their competitors to have it, you will have the ultimate advantage. But it also comes down to data. If you, you have the data of every major huge player in the like in corporate America, you see all the data, like you're going to want to own that. So I could see, I could see someone like a Microsoft trying to own too or one of the, the big, big account.
- [22:33]
B
You got to have patience in this.
- [22:34]
A
Game, though, that is it, brother. And that's one of the things I try and tell people. I'm like, this is not day trading. This is not coins. This is not like flipping dayto day. This is like. And some people are wired this way. Like, you know what I found is entrepreneurs are the ones that typically like this because they, they understand risk and they understand, they've seen the power of what can happen building their own business. But they're like, I can't build six more businesses, I can't build 10 more businesses, but I can invest in this person over here that's building this business. And I'm going to let, I'm going to take the odds and bet that like, they'll take my 10 or 20 or $50,000 and they'll turn it into 100, 200, 300 grand or whatever it is, you know. But that is one thing I want to say. People don't maybe not realize this. The cool thing about this law is a lot of times someone can invest for as little as $100 into these companies and get a piece of equity. Now, I don't recommend that as a strategy because you're never going to get actual returns, but it's a way to kind of dip your toe in the water. Someone's like, hey, I, I want to go find startups now. The other side of this whole thing is there's a lot of crappy companies out there as well, right? They're like, hey, you know, I, I'm doing a cat litter or something, you know, and they just, and they just, they go out, they try and raise money and, you know, they're inevitably going to shut down. So it's like throwing your money away. So it's, you have to have a due diligence process. You have to understand what a good company looks like. And so that's the craft that I've been honing for last however many years.
- [23:54]
B
You probably get pitched 100 deals a day.
- [23:55]
A
I get a lot of people coming to me, a lot of people coming at me with a bunch of deals because they're like, hey, because here's, here's what happens is, you know, I invest, I deliver all the due diligence. I actually fly to the company that I'm going to invest in.
- [24:08]
B
Wow, you fly there?
- [24:09]
A
Yep. I shoot a ton of content, okay? I, I shoot videos, I meet with the team, I look at their. If they're a facility, I check out the facility. If they're technology, I look at their technology and then I Put it all together along with reports, and then I deliver it to my members. And I said, hey, this is why I'm investing now you get to decide if you're investing. And we've seen it where millions of dollars have come in from everyday investors in hours.
- [24:31]
B
Just from your network.
- [24:32]
A
Hours just from our network crap. Yeah. And so there's power in the people and people don't really understand what's happening. So for me, like, I'm, I'm on a mission to go. Like, I want to get as many people as possible to understand about this. Because here's the thing. Like, I don't take any money from founders. Like, I don't take a dime from, from any founders. Legally, I can't. So I, I, so these founders love me. They're like, dude, like you're, you're my best friend. Like, because I want them to win. Because one, now I'm an investor, right? I'm gonna, I'm gonna share this story. I'm gonna try and, you know, blow it up. Yeah. I'm gonna help them understand how everyone, how it works. But that's the beauty of it. Investors get decide if they want in or they don't. And that's, that's, and the coolest thing about equity crowdfunding is if, say you get in and you know, you're there a couple months and they haven't closed the raise yet and you go, you know what? I've decided I don't want to. You can pull your money.
- [25:18]
B
Oh, nice. It's liquid.
- [25:19]
A
Yeah, it's liquid until they close the round. But, but it's a great way for, for people to understand and get into this world that's still only 8 years old in the making.
- [25:27]
B
Yeah. Some of the biggest come ups have been from equity investments.
- [25:30]
A
Yo, dude, so many people, I think people don't understand that. Like, you know, I mean, you got to think about it. Like you now look at, I mean, obviously Bezos built Amazon and you know, Elon did what he did with PayPal or whatever, but he took that money and kept. And a lot of, a lot of these guys are hardcore angel startup investors. And people make a lot of money, big returns in startup investing. Now we're in a little bit of like, what I would call like private equity corporations. Everyone's holding their cash. There's so much cash sitting on the sidelines right now. But my guess is it's kind of like, I'm saying like survive through 25. Like if you can, you can get to the other side of 25, there'll be a lot of people that die off between there. But then I think the, the vaults will open back up. People have all this cash, they want to grow. You know, especially there's not a lot of people going public right now. So I think there'll be a lot more public. A lot these companies get ready to go public. Like, you know, talk about be Bebop Beverage. Maybe like by 27 someone's like, okay, I, I don't even let you get to billion. I'm gonna, I'm gonna make. Write you check so big.
- [26:25]
B
Yeah.
- [26:26]
A
That there's no way you can, you can say no to it.
- [26:28]
B
So anyway, what do you think people are waiting on? Because I see these news headlines about tech companies, their valuations going down. Do you think it's related to that?
- [26:36]
A
Oh, for sure. Well, right now I think the appetite for going public is really, really light. Everyone's a little. Unless you're like AI or like a rocket ship or something. You know, like it's, it's the re. The retail investor is so focused on just Nvidia right now and everyone's just trying to see what's going to happen with the election. I think the election's got everybody on pause. The election's there and then I think there's not a lot of companies that are like coming out with Nvidia type numbers that are crushing it. And so unless you're just like hand over fist coming and making so much money where the market goes, we have to invest in them, then I, I think people are just waiting. But there will be. Because what's interesting is doing some of the research in the space that I'm in. Like the last big IPO boom was right before the dot com bust. And then the next big IPO boom was two years ago.
- [27:28]
B
Interesting.
- [27:29]
A
And like where two to two and a half years ago, so many IPOs, like more than we'd ever seen before. It was like big money new. Like we got to go and get our cash now. The retail investor is feeling really great about themselves. Everyone gets it now. The big money gets it, the corporation gets it. But the retail investors, the one left to going, oh great now that's now stock prices dropped half. And so I think it's the retail investor not being informed, nobody really helping them. You know, corporations are going to make what they're going to make. They're going to, they're going to get theirs. But, but I think we're in a, we're in this big lull now, and I think after 25, probably 26, we'll start to see IPOs pop again. And then I think returns will come for especially those who dove into equity crowdfunding.
- [28:08]
B
Yeah. Those SPACs two years ago. Oh, my gosh. Every day, chamath around those up.
- [28:12]
A
Oh, man, those were. Those were so ugly.
- [28:14]
B
Yeah, it was all dip, though.
- [28:15]
A
Yeah. It's so bad. So bad.
- [28:17]
B
90%, like crypto.
- [28:18]
A
Yeah. Well, they started putting regulations on them.
- [28:21]
B
Yeah.
- [28:21]
A
And everybody was like, never mind, I'm good. I gotta go. I don't. I don't want eyeballs in here. So. So, yeah, I mean, I think it's a great opportunity. I think people should. Should definitely check out the world of equity crowdfunding. And I think it's. They should. You know, I'm not saying anybody should make it their number one, like, 100%, their portfolio, but I think it's cool to get people started dipping their toes in the water, just like people have done with crypto.
- [28:42]
B
Yeah, I'm definitely going to diversify into it because I watch this show called My First Million.
- [28:46]
A
Oh, cool.
- [28:46]
B
And I see them talk about their investments and, oh, dude, some of them blow.
- [28:49]
A
That's how. That's a lot of how they did. I mean, obviously they built and sold, you know, their newsletters. But. But yeah, I mean, getting in. Well, they're. And they're like in a lot of their Silicon Valley, they're connected in those.
- [29:00]
B
They're making more off their equity investments than their companies.
- [29:03]
A
For sure. They are. And it's. And that's the part you got to think about it, like, okay, you're. You're. You're doing that. Maybe you put in for those guys. Maybe, maybe Sam put in 100 grand here or 10 grand here, 200 grand there. They have those pockets. But the same thing can scale down to equity crowdfunding. If someone wants to put in a thousand, ten thousand, five thousand.
- [29:20]
B
Yeah.
- [29:21]
A
And that's the part that gets me excited.
- [29:22]
B
Yeah, that's cool. Because average person could invest a couple thousand bucks.
- [29:25]
A
Yeah. For sure.
- [29:26]
B
10 exit, possibly in two years.
- [29:28]
A
Yeah, that's. That's, that's the hope. And that's the thing is like, you know, like, you can get a. This one's a 5 or 6x. Okay, great. It's a single base hit. Like, that's. That is not. That is not bad.
- [29:36]
B
Yeah.
- [29:37]
A
But then you, you go, okay, but this one over here has a potential to 10, 15, 20, 100x. And it's like, great. Well, let's. Let's see how this thing plays out. And so. So I'm playing the long game right now, but. But, yeah.
- [29:49]
B
Any exits yet?
- [29:51]
A
There's only one that went. Went public on the nasdaq, but it went public basically right at the end of the ipo. Boom. And so it was just like, it had. And there was. And there was a lockup period. So you're just like. You're like, of course. And so. So it was like, everyone's like, yeah, we were all watching. Let's go. And then, you know, and then it hit. It was 20. I think it was 21. The end of 21. And it was maybe 22. And so. Yeah, I mean, it's still. Yeah, it's all timing, you know, but that's. That's the name of the game. But, you know, that's the cool part is the stock's still there. You can still hold the stock, wait it out if you want, and, you know, you know, either get your money back or see return down the line. That's what you gotta. You gotta understand about the space.
- [30:31]
B
Yeah, yeah. Those lockups. Crypto does the same thing when they do ICOs.
- [30:35]
A
Oh, dude.
- [30:36]
B
Brutal.
- [30:36]
A
Oh.
- [30:36]
B
So on paper, it looks amazing. And then you got four years to which.
- [30:41]
A
No, you're not. Yeah.
- [30:43]
B
What EBITDA multiples are you seeing? Is it based off the industry?
- [30:46]
A
Yeah, I think it all depends on the sector. You know, I think. I think every sector is so different and also depends on what's. What's happening in that industry. You know, Is it. Is it. Is it going down? Is the excitement for going down? Is it going up? You know, if you're. If you're AI and you're, like, legit. I like you. You've got a lot of attention, and you could probably garner a pretty high multiple on your ebitda, you know, but, you know, there's an interesting deal that I just. I just invested in. It's. It's first time ever that private equity has partnered with retail investors.
- [31:17]
B
Oh, wow.
- [31:18]
A
And, yeah, it's. They're basically buying a legacy brand that's doing $25 million a year. There's $6 million EBITDA and the owners. And this is what. This is the interesting part. The owners are like 70, and they're done.
- [31:32]
B
Yeah.
- [31:32]
A
And that's, like, across America right now. Dude, there's a baby boomers. Well, yeah, someone said there's a term called the Silver Tsunami. Like, it's coming, like, where all of these business owners are like, I don't want to do this anymore. I'm tired. But they've got a 25 million DOL. But they're like, who's going to buy it? So then like a private equity firm can come in and get a steal of a deal on it, come scale it up for 2, 3, 4 years and get a 5, 6x multiple on it. And this company is doing $6 million in EBITDA. Like, they're already profitable and it's. But it's hard to try to help the retail investor understand. They're like, is it flying cars? Is it. I, you know, so I'm constantly trying to go like, guys, like, understand how this world works. And when you see deals like this where private equity. Who's not dump money? Like, they don't, they don't chase dumb things. They're very calculated with a lot of analysts due diligence behind them. So, so there's just a lot of interesting and creative things that are stepping into this world of equity crowdfunding. Especially now. I don't know if you know, you know Beehive, the newsletter?
- [32:33]
B
Newsletter? Yeah.
- [32:34]
A
Yep. So they just, they did a raise.
- [32:35]
B
Yeah, the founder's coming on next month.
- [32:37]
A
Oh, cool. Yeah, so they did a raise, raised a million dollars from their audience in like two hours.
- [32:41]
B
Wow.
- [32:42]
A
Yeah. Just threw it out there. Raised a million bucks. And what valuation was ridiculous? It was, it was pretty high. But, you know, that's the, that's, that's equity crowdfunding. Like, nobody's there going, no, I'm not going to invest in you.
- [32:54]
B
They set the terms.
- [32:54]
A
Cool. Yeah, you set the terms, and so then you're not dictated by VCs or whatever. And so it moved. So I jumped into that one. I was like, all right, I'll be a part of Beehive. And then Substack went on and they, they, they did.
- [33:06]
B
They.
- [33:06]
A
But they did eight. So, so this was the interesting part. Beehive, I think, came from a position of strength and they wanted to get their people. Now we'll see if Beehive can, Can hold on to the momentum that they have right now. But they're, they're smart and they're, they're doing it the right way. But Substack was just kept. These companies kept raising at ridiculous valuations. Well then it was like, no one's like, we're not giving you more money. And their business models, like, they take 10% from their readers and it's just like. Or they're from their subscribers and it's like, that's a lot of Money. So they went and raised in the crowd and they raised $5 million. But I looked at it and I didn't. I didn't think it was a very good deal because it's like, okay, you're raising a. It's like a. I have to go back and check. I feel like it was like a half a billion or something. It was crap. Or it was 200. It was really, really high. And I was like, the retail investor doesn't understand. They're just going, cool. I'm a substack customer. I'd love to invest in it super high. But they couldn't. Like, they. They basically ran out of VC money. And it was like, all right. And then it was like the burn was. And that's the cool thing about. You can see how big someone's burn is.
- [34:03]
B
Yeah.
- [34:03]
A
And so the multiple on that just.
- [34:05]
B
Isn'T there for the risk.
- [34:07]
A
Yeah. You're gonna. You're gonna like, who's buying? You know who's buying.
- [34:10]
B
Reward is not there.
- [34:10]
A
And if you're already burning cash, like, how fast is that 5 million goal? And you're gonna have to do it again. And it's like. And then you're gonna what? Raise it. And these guys don't want to do down rounds. They're like scared to death down rounds.
- [34:20]
B
So I'm not a fan of burn when it's hot, when the profit's not there.
- [34:22]
A
No, no. I mean, that's the thing. Like, we even that, like that AI company, that tax company is telling you about, those guys are crushing it. And it's literally like their burn is like almost nothing.
- [34:33]
B
Amazing.
- [34:34]
A
Yes.
- [34:34]
B
That's the perfect one.
- [34:35]
A
Like, let's go. Yeah.
- [34:36]
B
My goal is to sell this one day. Rogan did.
- [34:40]
A
Oh, that's cool.
- [34:40]
B
So I've done some planning. I basically want to get to 2 million EIDA. I think I could get an 8 figure exit if I pull that off.
- [34:46]
A
For sure. For sure. Now are you going to continue to stay like. I mean, you're the.
- [34:51]
B
I'm going to do what Rogan did, basically.
- [34:53]
A
Okay.
- [34:53]
B
Yeah. So sell the major network like Spotify or C6M or whatever.
- [34:57]
A
Okay.
- [34:58]
B
And then they recoup all the money from sponsors. Basically, yeah. So that's my plan. I'm a fourth of the way there in year two.
- [35:04]
A
That's awesome, man.
- [35:05]
B
So I think I could do it.
- [35:06]
A
Well, I mean. And the multiple should keep going.
- [35:10]
B
Yeah. The first year was about 450net. So.
- [35:12]
A
Okay.
- [35:12]
B
I think if I can double that this year and then double it the next year, I'll be there.
- [35:16]
A
Well, I think, I think going back to what I say is like timing. I think as cash opens back up, you know, like, you might hit the right. The right timing where it's time to do that.
- [35:25]
B
Yeah.
- [35:26]
A
Why don't you. Once you. You want to ever raise capital.
- [35:28]
B
You got me thinking about it now.
- [35:29]
A
Let's go, bro.
- [35:30]
B
For real.
- [35:31]
A
Seriously, like, I got you.
- [35:33]
B
I'd much rather do this method than VCs.
- [35:35]
A
Yeah.
- [35:35]
B
I feel like there's less pressure too. Well, I'm still on my own schedule.
- [35:38]
A
They just, they, they put you on ridiculous timeframes and they, they push you to do things. You're like, that's. It's going to compromise the brand. So I compromise the integrity of what I'm trying to do.
- [35:49]
B
All about the numbers.
- [35:50]
A
Yeah. You have. It's literally, you are a number on a spreadsheet. You are one of 30. And if you die, these two will fund. Will get us back all the ones. Yeah. A thousand percent. Oh, yeah. Yeah. Even like so out of 10, they want one or two to like.
- [36:08]
B
Yeah.
- [36:08]
A
And they don't. And the rest. It's so low, but they just throw money and know that eventually that. And that's where like, I'm like, I'm not doing that. I'm like, I'm going to be very strategic in what I invest, in what I look at, how I roll. And so. Yeah, man. You want to roll.
- [36:23]
B
Yeah.
- [36:24]
A
Like, like, I, I mean, let's do it.
- [36:26]
B
The next phase for me is traveling to other cities and countries to do interviews.
- [36:29]
A
So that's cool.
- [36:30]
B
Yeah. I might need some funding for that. We'll see.
- [36:31]
A
Yeah. Well, I think, you know, I think it. I think the big. The part that I look at for you is like, you know, are you going to be able to continue to find the right guests? You know, and maybe. Maybe, maybe you will, maybe won't. But I would imagine for you, like, what I would think would make you more valuable is if you, if you diversified with personalities, if you were a network and you had. And now you like. Because like, think about like this, like, you have the studio here.
- [36:56]
B
Yeah.
- [36:56]
A
Like, just change the graphic easily put another person in that seat that you trust. They can build into the brand. And if you build a media company.
- [37:03]
B
Right.
- [37:04]
A
Not just your one show, I think you. I think. I think that is when your multiple gets ridiculous and it could even happen faster.
- [37:11]
B
Yeah. And Ben Shapiro did that and he crushed it.
- [37:13]
A
Oh yeah. They. They Daily Wire absolutely crushed it.
- [37:15]
B
Yeah. A lot of the political guys did that. Patrick bet David did it.
- [37:17]
A
Yeah, Patrick's crushing know. I mean this. That's Dave Ramsey. That's what Dave Ramsey did, you know.
- [37:22]
B
I mean like that's a nine figure company right there.
- [37:24]
A
Oh, for sure. I mean it's like right down the road from.
- [37:26]
B
Might even be a billion dollar company.
- [37:27]
A
They're up there. From a valuation perspective, I'd say they're probably over a billion.
- [37:31]
B
Holy crap.
- [37:32]
A
For sure. I mean they're doing, I mean they're doing year, right? They're doing probably more. They're probably doing closer to two.
- [37:37]
B
Oh my gosh.
- [37:37]
A
Or more.
- [37:38]
B
What's the primary revenue, you think?
- [37:40]
A
I mean, dude, people are always getting in debt and they're always wanting to buy digital products that was created however long products.
- [37:47]
B
Yeah, I know.
- [37:48]
A
And they, their personalities. So the way that, the way their, their personality deal works is, you know, they'll go find somebody and basically craft a mold or make them. I kind of bring them up. But they own all the IP, right.
- [37:58]
B
Like the Dr. John Deloney and he's got a couple other ones.
- [38:00]
A
They own it all. Yeah, they own all their ip like. And so it's like, okay, so that's a. So like when you sell a book, like the authors, like, you know, they may get a small fraction, but, but Ramsey's the publisher, he's the distributor, he's the. He's everything.
- [38:12]
B
And some of those books are pretty good cash flow, I've heard for sure.
- [38:15]
A
Especially like Tonal Bunny makeover. That's his big one.
- [38:18]
B
But he's bringing in serious coin off his.
- [38:20]
A
Oh man, it's crazy what he's doing. But, but I think that's for, for you. I think, I think if you did it, man, if you were able to find. But you know, it's egos and personality. If you can find somebody who's humble enough to come alongside and go like, yeah, I can build, I can build a show next to you. Maybe they come in alongside you. I think that's where, I think that's where you get really enticing because you have multiple shows.
- [38:39]
B
Female version of me. Could be pretty cool, right?
- [38:41]
A
Oh, for sure. Oh, 100%. Yeah, 100%. So and maybe that's. Maybe that's what if you do a raise. Maybe that's part of the thing is like we're going to be able to afford to use the capital to bring in the right personality and there's already someone who has an audience that's just that just they're just not quite. They don't know how to do what you do. And you're like, cool. We have the system, we know what we're doing. So. Yeah, man, that could be. Yeah.
- [39:02]
B
I'd be very curious to see if I could plug this model in with, like, another person.
- [39:06]
A
I. There's no doubt in my mind you could.
- [39:08]
B
I think it could work because I've numbers myself and I'm not even like, the most social guy, so I think it could work with someone else.
- [39:14]
A
Oh, for sure. I think definitely. Oh, I mean, I. I bet you. I bet you if you. I mean, you know, you got to be careful, but, like, I think you could pop probably. Probably a couple.
- [39:23]
B
Yeah.
- [39:23]
A
And just test it. And especially the audience in the, the this, the crossover, I think it could be pretty. Especially. But, you know, especially if you did like, you know, like one of the guests you just had, like, if it was that niche and you're that focused, maybe not as broad as this, but it's more of like, we're going this route. I think you could. I think you could have multiple personalities.
- [39:40]
B
Absolutely. That's great advice. Thanks, Chris.
- [39:42]
A
Yeah, of course.
- [39:42]
B
Anything else you want to promote or close off of? Man, that was fun.
- [39:45]
A
No, man, I mean, like, look, I. I have a. A site that I. Every week I'm sharing startups that I've got my eye on. It's called a watch list. So that's at the crowd. No, O, C, R, W, D, co. The crowd, co. And yeah, on social, I'm out there, whatever. And if someone wants to learn about this world of startup investing, I'm here to educate and kind of empower and inform and help them understand how it all works. And if they want to come invest alongside me, there's opportunities to do that as well.
- [40:11]
B
Perfect. We'll link below if you're interested. Guys, check out the link. Definitely some interesting stuff and potential for some cool returns. So thanks for coming on, man.
- [40:18]
A
Absolutely, brother.
- [40:19]
B
Yeah. Thanks for watching, guys, as always. See you next time.