In this episode, Josh interviews Pat Yates, M&A advisor at Quiet Light and owner of Happy Feet Slippers. Pat shares insights from his Shark Tank experience, discusses the realities of TV deals, and explains the complexities of licensing with major brands like Disney and the NFL. The conversation covers the importance of intellectual property protection, strategies for evaluating and managing licensing agreements, and actionable advice on preparing an e-commerce business for a successful exit. Listeners gain practical tips on building value, protecting their brand, and planning ahead for future business transitions.

Chapters:

Introduction and Guest Background (00:00:00)
Josh introduces Pat Yates, his background, and the episode’s focus on licensing and business exits.

Shark Tank Experience (00:02:06)
Pat discusses his Shark Tank appearance, the process, and what it was like pitching on the show.

Reality of Shark Tank Deals (00:03:36)
Pat explains how deals on Shark Tank often differ from what is shown, and his ongoing relationship with Robert.

Behind the Scenes of Shark Tank (00:04:45)
Pat shares details about the filming process, post-show counseling, and the impact of the experience.

Licensing Audits and Financials (00:05:44)
Discussion about licensing agreements, financial audits by licensors like Disney, and the importance of accurate documentation.

License Renewal Challenges (00:07:01)
Pat explains how license renewals work, what licensors look for, and the challenges with companies like Disney.

Transitioning and Subcontracting Licenses (00:08:57)
Pat describes how some licenses are transitioned to subcontracted arrangements and the benefits of this approach.

Direct vs. Subcontracted Licensing (00:09:18)
Explanation of the differences between holding a direct license and working through a subcontracted licensee.

Branding and Labeling in Subcontracted Licensing (00:10:27)
Clarification on branding, labeling, and legal requirements when selling products under a subcontracted license.

Actionable Takeaways for Business Owners (00:11:42)
Josh summarizes three actionable tips: IP protection, evaluating licensing, and preparing your business for exit.

Final Advice on Business Growth and Exit Preparation (00:15:11)
Pat offers final advice on analyzing business performance, seeking help, and preparing early for a successful exit.

Episode Wrap-Up (00:16:13)
Josh thanks Pat and encourages listeners to reach out for further advice on exiting their business.

Links and Mentions:

Consulting and Strategy
"Ecomm Breakthrough Consulting": "00:00:00"
"Email for Strategy Audit": "00:01:08"

Shark Tank and Related Experiences
"Shark Tank": "00:02:04"
"Robert Herjavec": "00:02:15"

Licensing and Partnerships
"DreamWorks, NCAA, NFL, Disney": "00:02:31"
"Licensing and IP Protection": "00:12:04"
"Consider Licensing": "00:13:12"

Intellectual Property
"IP Protection": "00:12:04"

Transcript:

Josh 00:00:00 Today, I'm speaking with Pat Yates, an M&A advisor at Quiet Light and owner of Happy Feet Slippers. And today we're going to be talking a lot about licensing and preparing your business to exit. This episode is brought to you by Ecom Breakthrough Consulting, where I help seven figure companies grow to eight figures and beyond. Listen, Pat, I started my E-comm business back in 2015, and it took me seven years to grow it to an eight figure brand. There were a lot of times that I struggled with the challenge of knowing whether my business could actually succeed financially, or if my brand could actually become a real well-known brand, or even myself as a leader. Whether I had the abilities and capabilities to lead a team and actually manage a group of people? Sure. For our listeners that have had similar experiences or hit similar plateaus, go to Ecom Breakthrough Comm and that's ecom with two M's. And you can learn a little bit more about how I can help you. And to our listeners, this month I'm giving away one $10,000 comprehensive business strategy audit session at no cost.

Josh 00:01:08 All you need to do is email me at Josh at Ecom breakthrough.com. And in your subject line just say strategy audit and then tell me why I should choose your business as the business to do the strategy audit for this month. And don't worry if you don't win this month because you'll be entered to win for future months to come. But I'm super excited to introduce you all to Pat Yates. Pat, as a seasoned entrepreneur with a focus on eCommerce, in 2014, he struck a deal with Robert Herjavec on the Emmy Award winning show Shark Tank. Pat grew a single slipper kiosk business into a multi-million dollar, e-commerce focused business. During that time, Pat has done licensing deals with Dreamworks, the NCAA, the NFL and Disney, and in 2015, he struck up a relationship with Mark, the founder of Quiet Light Brokerage, and continued, eventually leading him to becoming an M&A advisor. So welcome to the show, Pat.

Pat 00:02:04 Thanks. I appreciate you having me.

Josh 00:02:06 Pat. I watched your Shark Tank episode and loved, you know, everything you kind of went through in that episode.

Josh 00:02:15 You ended up doing a deal with Robert who who first kind of went out pretty early on, at least in the episode. And then he comes back in and kind of swoops up the deal. And at the last moment, how was that experience being on Shark Tank and going through that?

Pat 00:02:31 Yeah, it's something I've talked a lot about it over the past few years because, as one of the people that likes on the speaking circuit with me likes to call me the one of the OGs in Shark Tank because I'm on season five. They have so many seasons now, I'm like, I can't be old at everything. I hate that, but, I mean, it's it's a difficult process in the very beginning. You have to submit several videos and a lot of written documentation, a lot of due diligence. And, you know, I was turned down in season one or season two or something like that. And then they called me back as season five was coming because they were ramping so much, and I was one of the people that came down to the very end and had to fly out there and do my pitch in front of the producers to even see if they could keep me.

Pat 00:03:09 So, I did that. And then it aired in 2014 and it was awesome. I mean, the show was going, I mean, my, my time was going poorly in there for like 80% of it. The, you know, you're in there like an hour and 15 minutes. Most people don't realize that. And it's cut to eight. So for most of the time it wasn't going very well. But the end was pretty good. Yeah.

Josh 00:03:27 Yeah, that's that's amazing. How was it, you know, doing a deal with Robert and what kind of his involvement been since you did that deal with him?

Pat 00:03:36 Well, the deals that you do on Shark Tank and are are definitely theory and practice things. You know, one of you come up with a deal and then it closes or it doesn't. I mean, a lot of people that I talk to and I'm involved in a pretty deep Shark Tank group. You know, most of those deals don't close as you see them. And really, truly most deals don't close, period.

Pat 00:03:55 you know, our deal. We did not do the financial terms we saw on the show. We just did a relationship and we didn't do any kind of money transfer, just a small equity portion to be able to help. So the relationships been mor...