Eric Spofford | He Was Addicted To Drugs... Now He's Sold A $115 Million Company

Summary

School of Hard Knocks Podcast

Episode Summary: Eric Spofford | He Was Addicted To Drugs... Now He's Sold A $115 Million Company

Release Date: May 7, 2026
Host(s): James, Jack, Josh
Guest: Eric Spofford

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Episode Overview

This episode of the School of Hard Knocks Podcast features Eric Spofford, an entrepreneur who overcame heroin addiction as a teenager to eventually found and sell a rehabilitation business for $115 million. The discussion is a deep dive into Eric's journey from addiction and criminal warrants to leading a multi-million dollar company, offering a masterclass in resilience, tactical entrepreneurship, and the realities behind substantial business exits. The conversation also challenges cultural narratives around education, building wealth, and the importance of purposeful living.

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Key Discussion Points

1. Eric's Journey: From Addiction to Entrepreneurial Success

(00:04, 01:22, 02:17, 06:34)

• Eric opens up about his troubled youth growing up in New Hampshire during the inception of the U.S. opioid epidemic, getting addicted to drugs (OxyContin, then heroin) at a young age, and not believing he'd outlive his 21st birthday.
  • "I didn't think I was going to live past 21. So starting a business and living a normal, decent life didn’t even seem like a realistic outcome for me." – Eric (01:31)
• He describes hitting bottom: criminal warrants, carrying all his possessions in a trash bag, detoxing on his mom’s couch, and ultimately seeking sobriety before age 22.
• Eric’s early "entrepreneurship" was illicit (drug dealing), but he transitioned by channeling his obsessive and resourceful traits into building New Hampshire’s first sober living house at age 23.
  • "Based off me entering a period of time where I elected to become completely abstinent from drugs and alcohol... I got passionate about that process, and wanted to help other people." – Eric (06:34)

2. The Crucial Role of Environment and Relationships

(03:12, 06:04, 48:47)

• Eric credits much of his transformation to changing his circle: “Show me your friends, I’ll show you your future. At every phase of my life, my immediate circle had to change to match where I wanted to be.” (03:15)

  • Emphasizes need to make tough, strategic decisions regarding friends and associates, even if it feels disloyal.
  • “If you want to ride with me, you’re more than welcome, but we’re growing around here. The decision to come with me is yours, not mine.” (05:59)

• On relationship building:

  • “Relationship building is a skill that anyone who wants to be successful should focus on... never approach relationships with ‘What’s in it for me?’” (49:27)
  • Story: Sending personalized gifts for someone’s children to cement authentic relationships (51:58).

3. Entrepreneurship: Myths, Realities, and the Long Game

(11:19, 12:47, 18:21, 19:27)

• The "macro patience, micro urgency" motto:
  • “Wake up every day like it is your last day and execute relentlessly... That’s micro urgency. Macro patience is understanding you’ll have to do that for a long time.” (12:47)
  • Entrepreneurship is not about fast wins or lifestyle—grind and persistence are non-negotiable.
• Key entrepreneurial trait: “Figure it out.” Don’t wait for the perfect plan.
• The compounding effect of small, consistent actions over a decade versus flashy overnight success.

4. From Unprofitable to $115 Million Exit: Business Tactics

(19:27, 23:58, 38:00, 40:10)

• Early years: No profit, worked blue-collar jobs and funneled earnings into keeping the business alive.

• Breakthrough came not from a grand plan, but relentless action, market immersion, and adapting to opportunities.

  • “You become such a force yourself when you have obsession and resilience... I will put so much pressure on something that it will break loose eventually.” (19:27)

• Details of selling the business:

  • Multiple failed attempts—“I’d already gone to market six times. First two tried to sell and failed, process blew up… cost me millions in legal fees and nothing to show.” (23:58)
  • The sixth attempt succeeded thanks to reading market cycles, assembling a stellar management team (so the company wasn’t dependent on Eric), and rigorous deal processes.

• Explains technical details: data rooms, decks, NDAs, indications of interest, letters of intent, key man risk, leadership succession.

5. Education, Wealth, and Life After the Exit

(21:28, 43:28, 52:44)

• Eric critiques formal education for wealth creation:

  • “Nothing that has helped me build wealth and make millions was taught in school.” (21:28)
  • “If you want to become rich, you’re best off learning from people who are rich. High school teachers and college professors don’t have the life experience to pass on.” (21:40)
  • He dropped out at 15, never got a GED, and sold to Harvard MBAs.

• On "pile of money" vs "river money":

  • Importance of turning exit cash into streams of income, not letting wealth sit idle.

• On reaching success: Wealth does not equal happiness or fulfillment without purpose.

  • “I woke up months after selling, bored, not really satisfied with life, more money than I’d ever had. That’s not how it’s supposed to work, is it?” (43:28)
  • Stresses the necessity of new goals and continual pursuit.

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Notable Quotes & Memorable Moments

• Eric on transforming addiction into entrepreneurship:
  “I was just getting sober from heroin addiction... I was carrying all my clothes in a trash bag. At 23 I took the leap and started the business... At 27, I was a millionaire.” (07:24, 10:53)
• On macro patience/micro urgency:
  “You have to wake up every day like it is your last day on earth and execute relentlessly... but understand you’re going to have to do that for a long time.” (12:47)
• Key man risk and building real businesses:
  “You have to hire people… more talented than you… The most important thing you’re going to do in your business is build your team.” (38:00)
• On the meaninglessness of empty status:
  “You might have a piece of paper… but I’ll bring my tax return, you bring yours, and we’ll see who won.” (37:09)
• On life after wealth:
  “No matter how much money you make… you have to wake up every day with a purpose and something to do.” (43:28)
• On authentic relationship-building:
  “Send something for their kids. That’s your friend for life, dog.” (52:44)
• On mortality and fulfillment:
  “You’re going to die. You should spend at least a moment every single day thinking about that... All the fear of what people think, the anxiety... leads people to live mediocre lives and settle.” (57:22-57:34)

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Segment Timestamps

• 00:04–01:04 – Eric’s early addiction story, scrappy survival.
• 03:12–06:04 – The strategic importance of your peer group.
• 06:34–11:19 – First ventures, blue-collar work, building the first sober living house.
• 11:19–18:21 – Macro patience/micro urgency, entrepreneurship myths, hustle reality.
• 19:27–23:58 – Perseverance through adversity, business finally takes off.
• 23:58–37:09 – In-depth account of selling the business, private equity process, market timing, key man risk, management team transition, educational classism.
• 40:10–43:28 – Post-exit investing, building recurring income (“river money” vs “pile of money”), post-exit ennui.
• 48:47–53:42 – Relationship capital: adding value, not networking selfishly, strategic introductions.
• 57:22–58:52 – Eric’s last lesson: reflect on your mortality, avoid regret.
• 59:02–59:25 – How Eric wants to be remembered.

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Final Lessons & Takeaways

• Transformative success requires radical environment shifts, relentless work ethic, and an obsessive, resilient mindset.
• Wealth is ultimately hollow without a sense of purpose, compelling goals, and meaningful human connections.
• True entrepreneurship is about iterative problem-solving, long-term vision, and execution, not quick wins or status symbols.
• Building exceptional teams and investing in leadership is crucial for a business that thrives without you.
• Humility, value creation for others, and emotional intelligence pay huge dividends in personal and business relationships.
• Reflecting on mortality fosters courage, urgency, and cuts through fear of failure or criticism—“Stop playing it safe. Go all in.” (57:34)

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To connect further or learn from Eric Spofford’s journey, follow his social media channels (links in podcast description).

Transcript

[James]

Eric Spofford overcame adversity, built a business that sold for how much money?

[Eric Spofford]

115 million. I got involved with drugs and alcohol at a very young age. I didn't think I was going to live past 21.

[Josh]

Growing up, he was like, look, I'm going to show up and I'm going to find a way to get my fix by any means necessary, whether it's to rob someone, to dig through a trash can.

[Eric Spofford]

I had a couple changes of clothes that I carried in a trash bag. I was just getting sober from heroin addiction, criminal warrants that I had to clean up.

[James]

You mentioned that you didn't think that you would make it past. Past 21 years old.

[Eric Spofford]

One of the most important features of a real entrepreneur is the ability to just.

[Jack]

Our generation has it so wrong. They see the Lamborghini on Instagram and they think entrepreneurship is like this cool phenomenon that, oh, I'm going to be an entrepreneur.

[Eric Spofford]

At 27, I was a millionaire. You have to be obsessed and hard to kill.

[James]

Eric, if me and you died tomorrow and you had one last lesson that you would instill in the younger generation, what would that be?

[Eric Spofford]

You should spend at least a moment every single day thinking about that.

[James]

What's going on, everyone? Welcome back to the School of Hard Knocks podcast. I'm James. I'm here with Jack and Josh, and we have an incredible guest for you all today. We are out in Miami, Florida, with the legendary Eric Spofford. Guys, Eric Spofford overcame adversity, built a business that sold for how much money?

[Eric Spofford]

115 million.

[James]

115 million dollars? But you didn't start there, man. You grew up in New Hampshire. Did you even know that that was possible? Growing, you could sell a business for $100 million.

[Eric Spofford]

I didn't think I was going to live past 21 growing up. So building, starting a business and living a normal, decent life didn't even seem like a realistic outcome for me.

[James]

We were talking about it before the podcast with you, and we've talked about it, you know, just amongst ourselves as well, is that, you know, seeing all different business people online, people that have built, you know, businesses from a tactical standpoint. You're a tactical business person. A lot of people, when they give advice to people or, you know, they're consulting people, they focus very on, like, the mindset and whatnot. You get to the actual fruit. So this is about to be a masterclass for everyone watching right now.

[Eric Spofford]

Real operator stuff.

[James]

Real operator stuff. Let's go back to what you just said, though. You Mentioned that you didn't think that you would make it past 21 years old. Why was that?

[Eric Spofford]

Man, I came up at an interesting time in an interesting place. You know, I got involved with drugs and alcohol at a very young age and progressed rapidly through the ranks of addiction and the street lifestyle that comes with it. And so I was, you know, wheeling and dealing drugs very, very young, using drugs and alcohol very, very young. And that progressed to. And the interesting time part was this is at the very beginning of America's opioid epidemic and we were the pioneers of it. We were the first ones to ever get addicted to, to opiates. And so that was OxyContin back in 1999 when Purdue Pharma was putting that stuff out, which turned into heroin add. And so I was really in the throes of it for about almost seven years until I got sober just before my 22nd birthday.

[James]

What did that teach you early on about the importance of surrounding yourself with the right people?

[Eric Spofford]

The cliche saying of, you know, show me your friends, I'll show you your future is absolutely true. And at every phase of my life, which there have been many, there's been, you know, the getting in a lot of trouble, doing a lot of drugs phase and then the early entrepreneurial phase and then, you know, different glass ceilings that you have to break through and recreate yourself over and over and over in order to continue to elevate and grow. The one constant is that my immediate circle and the people that I was in like a deep friendship or relationship with constantly had to change to match where I wanted to be. And I think that, I know that. I believe that the people that you surround yourself with is probably one of the most strategic decisions that you can make that is going to impact your life for better or worse. If you want to hang out with five guys that are multimillionaires or nine figure net worth or billionaires, there's a gravitational pull that's just naturally going to pull you to where they are. You're going to think like them, you're going to feel like them, you're going to be in an energy exchange. If you, you know, keep people that are low vibrational around you, that operate out of a system of scarcity and they're going to pull you down as well. And it sounds cruel, right? Like there's this. It's a very challenging and difficult thing I believe it was for me and I've seen others struggle with it. Where you want to be loyal to your day ones and Then the people, even when you start here and you grow to here, you're like, there's a sense of loyalty of these people. It does not get you around the fundamental truth that if you want to hang out with your day ones and stay loyal and keep that as your inner circle, then guess where you're going to stay day one. And the people that take you from here, that get you to here, they're just not the same people that are going to take you from here and get you to here. So you have to find a balance of being able to make hard decisions, decisions and strategic decisions about the people around you, but also being decent with how you treat people. That's not to say we're just cutthroat, we don't care about people, we use people, which is often how that's interpreted. And I don't see it that way at all. If you want to ride with me, if you want to roll with me, you're more than welcome to come with me. But we're growing around here, and so the decision to come with me is yours, not mine.

[Jack]

You have to be able to operate to a different standard. And for a lot of those people who are in the day ones, you almost have to love them from a distance. It's just kind of like, hey, I have a mission and a purpose and this is where I'm heading. But we have a saying that we've sort of adopted. If you can't change the person, you got to change the person. And so for you, I know that you mentioned through adolescence, but then you had an early entrepreneurial stage. What was that early entrepreneur stage like? What was your sort of first embark into the world of entrepreneurship? How did you get your start in there as a business person?

[Eric Spofford]

I'd always had the entrepreneurial bug, right? So I sold drugs. I did all sorts of little hustles before I got sober and started a real business. But based off of me entering a period of time where I elected to become completely abstinent from drugs and alcohol and subject myself to a transformational process of personal growth and recovery, those are the people I surrounded myself with. As a result of that, I got passionate about that process, process and wanted to help other people. And so I started my home state's first sober living house in 2008, and I was 23 years old.

[Josh]

When you were getting into that first venture, did you get the idea for the rehab center from your own experiences with rehabilitation?

[Eric Spofford]

I had been out of state and gone to rehab out of state because my home area lacked resources despite being one of the most affected places by the addiction crisis in America. So when returned to my home state, I had seen the model that had been successful in other areas that did not exist where I was. I took that and I started volunteering for free at local state funded rehabs, meaning that they treated indigent poor and homeless folks that were addicts and alcoholics. In the beginning of my entrepreneurial, legitimate entrepreneurial journey, there wasn't a single thought in my head that I was like, I'm going to make millions of dollars. Which seems crazy now, but literally I thought I was like, I'm going to start a little business. If it brings in a little bit of money on the side from my job and I can live a little better than I do as a result, that's great. But the main driving force was the fact that I saw a problem and I was passionate about fixing that. And I didn't make any money for the first few years. I think about the first three years, the business actually cost me money. I was working in blue collar stuff. I was doing logging, tree removal and running heavy equipment, excavators, bulldozers, and taking money from that and actually pumping it into my business to keep it alive. Because not only was it not making money, it wasn't even self sustaining then. As you get in there, One of the most important features of a real entrepreneur is the ability to just figure it out. People wait for the plan to be perfect. I need the business plan. I need to lay it out like this, I need to do this and I need that. I need an investor and they have all these roadblocks they self impose upon themselves. I think the most successful people have the ability to just launch and trust on themselves that shit's gonna happen, the plan's gonna change. When it does, we'll figure it out. And when I launched in my business, not only was I figuring out the problems and working my way through all the issues that came up, it also gave me the ability to get in the market in the operation, get the experience, to then realize the other opportunities. And I couldn't see that until I'd actually started and gotten out there. And so once I got in there, I started meeting people, I started figuring it out. I found a path to actually unlock a large revenue stream by opening additional facilities and also combining that with treatment services to provide them therapy and a whole roster menu of services with that. And so I would have never gotten, which is where I made my first million dollars at almost 22 years old. I had a couple changes of clothes that I carried in a trash bag. I was just getting sober from heroin addiction, amongst other things. I had criminal warrants that I had, was on the run from that I had to clean up. I was sleeping on my mother's couch for the first few weeks, going through withdrawals, coming off of drugs. At 23, I took the leap and started the business and went without people, went without anything, right? I was eating ramen noodles and hot dogs and family packs of chicken, living very lean. At 27, I was a millionaire.

[James]

One of my favorite business concepts that I've ever heard in the thousand plus interviews that I've done was actually coined in the second interview that I did with you in the design district, which is macro patience and micro urgency.

[Eric Spofford]

100%.

[James]

And I want you to break it down for everybody. And just again, you reiterated some of those points where the first couple years you weren't making money, everything was parlaying back into the business, even from the blue collar job that you were working. But you had that notion of figure it out, right? Like we love the saying that everybody thinks, oh, I need to have a website. It's got to be perfect. Sell it first and figure it out. You need revenue, you need customers. Define breakdown, macro patients.

[Jack]

I want to add on that to a second because in the beginning when you said, you said, I didn't know that I was going to make millions from this. I just, I had a problem and I was going to solve it. You know, in my beginning of career, I was getting mentored by the CEO of Buc EE's, the big gas station. And I asked him, I was like, hey, did you ever see this being like a half billion dollar venture and having all this? He was like, no, I just, I bought a gas station for $10,000 and was trying to figure it out. I dropped out of college. Jimmy John, when we interviewed him, he was like, I just wanted money for weed and beer. But our generation has it so wrong. They see the Lamborghini on Instagram and they see all the. They think entrepreneurship is like this cool phenomenon that, oh, I'm going to be an entrepreneur. But they don't get that. It's like it takes years of doing the same thing, being bored day in, day out, just doing the work. And we, we coined that. We literally got that phrase from you, the macro patients micro urgency. So I got to hear you break this.

[Eric Spofford]

Macro patients and micro urgency is the operating system of people that will build real wealth and find real success and longevity in this game and a lot of people operate backwards on it. You have to wake up every day like it is your last day on planet fucking Earth and execute relentlessly. I'm talking you breaking your calendar down in 15 minute increments and you're doing it for 12, 14 hours a day, right? Execution, execution, execution, all day, the grind. But that also. So there is, there is no patience in the day to day. The day to day is filled with nothing but raw, uncut, unfiltered urgency. We gotta fucking go, right? That is then paired with, that's the micro urgency, the macro. Patience is understanding that you're going to have to do that for a long time. And where people have it backwards now is I look at them and I'm like, why am I worth all this money? And I've had all the success and I'm working harder than you are and you're still chasing your first dream. And they think it's going to happen with less action than necessary in the day to day. In the long term, they think it's going to happen faster than it's actually going to happen. You need to sign up for this game and understand this is what the day to day looks like. But it is going to take you 10 years at a minimum to get to a meaningful result. And if you get there faster, great. But the framework is not, you know, months or even years, it is decades. And when you can, when you frame it like that, it makes a couple things easy, or not easy, but easier. It simplifies things. Something that I think, and I appreciate what you guys said about my content. It's for the right people. I think it goes deep. It's not the most viral because it's not this hoorah feel good. It's actually real shit that you have to be a real operator to connect with and understand. To the rest of people, I think it leaves them a little perplexed. In business over a long time horizon, you are going to want to give up. You're going to have periods of time where you're on a winning streak and you're on top of the game and everything feels good and you know, the momentum and the motion is there. And what is guaranteed for everybody in this game is you're going to have down rounds, you're going to lose games, right? Even on the path to a Super bowl, you lose a game or two, even on the path to a world championship in boxing or the ufc, you're going to get knocked the fuck out eventually. And in those moments you have to understand that, that we're in this game for a long period of time. When you can put it in the framework of the macro patience, those moments become not. Not super bearable because they're still unbelievably painful. But I believe they become bearable enough to survive them to stay in the game. You know, every entrepreneur, you guys are young guys and you've had massive success. I've known James not since the beginning, but since kind of early on. Like to see where you were when you started. I was like who is this guy now?

[Jack]

I was 20 when we met you

[Eric Spofford]

how old are you now?

[James]

23.

[Eric Spofford]

Fucking unbelievable few years. What is going to. I've seen older bull to a younger bull. I've seen the future. You're going to be rolling around one day and over some bullshit because you've been, you know, successful. You're going to get a notification that there's some fucking lawsuit. You're going to get one of these pla. Like they're going to be. I'm not even a speak it into the existence. There are going to be problems and it's going to feel like Mike Tyson walked up to you and fucking just unleash leashed and punched you in the gut. And while you're on top and everything is good, enjoy it. That's not where the actual value is built. The actual value is can you make it through those times and you find out who you are when shit hits the fucking fan. So the framework of having macro patience and knowing that you started at 20, 21 when I met you, 19, 20 and you're 23, you're four years in lots happened in four years. I'm honored to have been able to witness a bunch of it. You're playing a 40, 50 year game. What happens in year 6, 9, 13 if it goes bad, it doesn't matter that much. You know what I mean? And so when you can sign up for that, it just worked well for me. Execute relentlessly in the day to day. But understand that we're playing a 40, 50 year game.

[Josh]

One of the things that really resonated with me is the fact that you said that you showed up every single day for 12 hours a day. And it's almost as if you turned the qualities that made you an addiction by using it. It reminds me of our conversation that we had with the Sunlife Organics owner who used. Who was used to be addicted to heroin. And he was like, look, I'm gonna show up and I'm gonna find a way to get my fix by any means necessary. Literally by any means necessary. Whether it's to rob someone, to dig through a trash can, I'm gonna find a way to get it. And one of the things that is admirable to you is you showed up even when it was unprofitable, you were still putting in the work. Whether it was by working a job and putting the money back into the business, A lot of people don't have that. The ability to pretty much continue to persevere even when, you know things aren't going their way. How did you go about making the business from unprofitable in the first couple months to actually turning your profit? What are those things that you changed to allow the business to start to grow on its own outside of putting, you know, working another job to put into it?

[Eric Spofford]

You have to be obsessed and hard to kill. The addiction part of me, and I think entrepreneurs are largely addicts of some type, Even if they've never touched a drug or a drink in their entire life. We, you know, they share a lot of similarities with addiction that. The obsessive nature, like, you couldn't fucking kill me. And so when it sucked and most people would have quit, I didn't. When it was year two and I still hadn't made any fucking money, and I was like, maybe this wasn't such a good idea. You know, I just kept going and kept putting pressure on the situation until eventually it broke loose. Like, if you. You become such a force yourself when you have obsession and resilience that hard to kill nature, that you start to impact your environment. I will come in and put so much fucking pressure on something that it will fucking break loose eventually, and that is necessary for success.

[Jack]

You know, Eric, you sold your company for $115 million, and, you know, you sold it to private equity. And so a lot of times, you know, people that work in private equity, they have these large. These fancy degrees they got from, you know, Harvard, Yale, whatever. But, you know, you dropped out of high school at 15 years old. And I think, like, there's this conception with a lot of, you know, even parents out there in today's world who have kids that are thinking about going to school, Our generation's starting to figure it out that you don't need that degree to actually make shit happen. But there's still a lot of parents out there that they're just like, oh, you need that piece of pa. They want to keep them safe because they love their kid and things like that. But at the end of the day in the game of business, the degree doesn't really matter all that much. And I'm sure you were probably dealing with the same thing when you were working with private equity as well, in dealing with people who might have these fancy Harvard degrees, but at the end of the day, they don't know how to run the business like you used to. And so maybe you could give some perspective for people on just like, hey, especially a lot of people who have parents out there who are just like, hey, I need my kid to go to college and things like that for you, you made it happen without even getting a ged.

[Eric Spofford]

Nothing that has helped me build wealth and make millions and millions of dollars, I believe is actually even taught in school. I think that if you want to become rich, you're best off learning from people who are rich. And high school teachers and college professors unfortunately don't have the life experience to pass on to people that have those goals. And so, you know, I'm actually very critical of the education system. I have a son who's a freshman in high school. He's about to turn 15 years old. And the stuff that they're teaching him, I'm like, what the. Does this matter? What does. I don't. And I try. I try to like shut my mouth with him because he has to go there and he has to do the work. And of course, anything he's doing, I want him to try hard and do well in. But what the fuck does any of this matter? I'm looking at him and he's getting up every day at 5:30 and taking his book bag and walking to the bus and going to high school. And he's learning stuff that is gonna be completely irrelevant to the rest of his life. And he's spending his 14th and 15th year on earth doing that. You know, so if people, I think your generation is certainly waking up to it, that if you want to become wealthy, if you want success, if you have that fucking bug inside of you, you don't need college. You don't need college. Information is free these days, and college is nothing more but an experience. So if you want to go out and hang out at a school and network and connect and meet people and spend four years at university doing that, then, then God bless, but don't do it under the idea that it is a necessary component to starting a business and becoming successful, it's not.

[James]

December 21, 2021. That was a good day for you.

[Eric Spofford]

Good memory.

[James]

But I remember four days before Christmas. Yeah, so. But that was A good day for you though?

[Eric Spofford]

Yeah, it was.

[James]

That was the day you sold your business for $115 million.

[Eric Spofford]

Yeah.

[James]

What was that day like? Matter of fact, how long were you negotiating with them? Was it just you? Did you have a partner in with you that was helping you with that or was just kind of a number that you had? Like, can you talk to us about that process of selling the company to for $115 million?

[Eric Spofford]

What's interesting about selling a company is that business owners think I did because they successfully started and scaled the business that somehow that qualified them to have the skill set to successfully sell a company. And I will tell you it does not. At that point, when I sold the business for 115 million, I had already gone to market six times. Is that true? Five times. That was my sixth time going to market. The first five times I had two failed processes where I went to market and I spent.

[James]

And when you say go into market for them, this is like meaning trying to sell the company.

[Eric Spofford]

I packaged the company and put it out to buyers to try to. I attempted to sell the company. The first two times I tried to sell the company failed. The process blew up. Both times within sub 30 days of when we were supposed to close. I was supposed to get a check for tens and tens and tens of millions of dollars. Both deals I was supposed to get $40 million and they didn't happen. And it left me with millions of dollars in legal fees and other advisors and consultants. I owed them a ton of money and I had had nothing to show for it. Then I went on to sell the business minority pieces three separate times. So when I finally sold for the $115 million valuation, I actually owned 58% of the company and 100% of the real estate. Although the real estate was not in the $115 million exit. I sold that the following year in 2022, on my own. So in March of 2021, I woke up and I looked around the world. I was here in Miami and they were people that crypto was bumping. And one of the main things that I knew that the world was fucked and it was a bubble and it was going to pop was that there were people running around Miami buying and selling NFTs. They were selling like $500,000 pictures of apes. And they were like, look at my board. Ape or crypto punk or whatever it was. I spent hundreds of thousands of dollars on this picture. And I was like this, there's no way on planet earth that this is sustainable. The World Like I knew we were at the end and I knew a correction was coming. Like you had honestly, like 20 year old retards and Lamborghinis with $500,000 pictures of apes. I'm like, something is wrong. And so I looked at one of the things about business is you have to trust your gut instinct over smarts, right? You can, you can overthink something into what makes sense. But if your gut tells you something, do not let your brain argue with your gut. Every time I have over rationalized or over explained something and gone against what I felt I was wrong and it hurt me. And this is one of the times that I went with it despite everybody disagreeing with me. So I had the part partnership group who I had sold all the minority pieces to the business arguing with me In March of 2021, early in the year when I went to them and said, I want we're going to sell the business. Now is the time multiples are through the roof. When you sell a business, it is your earnings times a certain number that they multiply the earnings by which is the valuation of the company. That multiple number goes up and down based on supply and demand of businesses versus buyer activ. Buyer activity. They had just money to burn. So the multiples were crazy. The deals were getting done. The M and A market was fucking hot, hot, hot. And so I made the decision. They're like, you're crazy. We need to continue to run the business and excuse me, continue to run the business and continue to grow the business and blah blah, blah. And I went back and forth with them for a couple weeks trying to like level set and get them to see the world the way that I saw it. They did not. To be fair, the guy that group was is now exceeding a billion dollar valuation of assets under management. They had a longer. They could have stayed in the business for five to 10 years. I did not want to. So we were also at different, you know, ideology around investment thesis in the company. I wanted to sell while the market was hot. I eventually just made the decision and told them, well, I'm majority shareholder and we're selling the company. I have the right to do that. You're coming for the ride. That's it. And so it ended that conversation. I then retained an investment bank. The investment bank. It's a lengthy process. People think you could sell a company like that. You can't. I had been preparing for years, had already been through multiple transactions and it was still an immense amount of work and took a crazy long time so we hired the investment bank, they came in, we scrubbed all the information for the business and you build what's called the data room. This is unbelievably helpful information for anyone who has a business that they think someday might sell. Put every single thing, every record, every document, anything that is relevant at all in one place, like a Google Drive or something like that. Because we didn't do that. And the business was 13 years old. People had come, people had gone. We moved from this system to that system to another system. We had to go out and scrub to find all this stuff for the entire company's history and put it in one place. We took that information and compiled a deck, a pitch deck, essentially, call it a sim. And we went out to a buyer list of a couple hundred people on a no names basis. Hey, there's a business in this area with this revenue. If you're interested, let us know, we'll send you an NDA of that list. We executed more than 100 NDAs. Then there's a methodical process that you go through and there's several big milestone dates and there's a lot of work that happens between all of them. The next milestone date is called the indication of interest due date. It is when people get the deck, they get the sim, they get the indication of interest due date and they say if you want to be included in this process, you need to submit a letter that has all of this information and criteria, including your thoughts about how you will generally value the business. And when those come in, you know they'll. It's not an exact deal and it's not actually an offer. They're saying, we'd like to know more about the business. This is how we're thinking about it. This is what we think it's worth around that X millions to X millions. We on, on that day received like 40 indications of interest, which is crazy. That doesn't happen today. We narrowed that down, we narrowed that down, we narrowed that down. We, we, blah, blah, blah.

[James]

Why do, why do you think there were so many offers? Like was this just.

[Eric Spofford]

The market was so hot for this specific industry, the industry, the, the, the economy deals were getting done. It was just the perfect storm. That's what I'm saying is that I saw this opportunity and I was like, the window is open, open. Let's get through the fucking window before it closes. And so of the indications of interest, we sent half of them home because they just didn't meet. We had much more favorable offers of the 20 or so we then gave them access to the data room to come in and start to dig in. The next meaningful date is the letter of intent date. This is their actual offer. When this comes in, they expect that if their chosen that you're going to sign this and you're going to go exclusive with them into a period of due diligence to closing the business. But during that exclusivity period, you can't talk to any other buyers about the company. It's also a very important moment because it's the moment where you lose something that is unbelievably important in deal making. Leverage. Always keep your leverage. My people that deal with me, my real estate brokers, my business brokers and others know that. I tell them, I said, listen, you have to understand in any and all deals I have escape routes. I have option B, C, D. And I am at all times willing to blow this deal up. So your buyer always has to be a little scared of you. And if you can convince them you're a little crazy and unpredictable. I'm not, but they all think I am. It's all very tactical, but they're like, this guy's fucking nuts. You know what I mean? And so you gotta have them believe and you'll blow this thing up. The indications of interest crowd that's remaining has an loi date. The loi date is when they submit their final bid and we received 20. What's interesting about private equity and the M and A space is there's they have their own language, they have their own lingo. They also have their own little quirks and traditions. And it's the strangest thing in the world. They are all wait. And if It'll say the LOI is due at 5pm on this day, you think you might get one like in the morning. And when they just send it through that day, they all wait until 5pm so you're sitting there like the longest day of your fucking life, right? You're waiting like, what, what offers do I have? How much is it? You know, like, and then at between like 4:50 and 5:10, you're just sitting there opening your email like, like scratch tickets, fucking getting them off and going, all right, what are the terms? How much? How much? And you write it down on a piece of paper. And so that's what I was doing on, on the loi due date. One of the interesting things that I did in my deal was of the Lois. I sent half of those home. I took nine management. Now after you get the Lois, before you Sign one, you'll meet the people, right? You haven't made your decision yet. Now we see who's who, we see how much money, where their money's coming from, how they're thinking about the business. Now we want to meet the groups and the groups want to meet us. And so they come in and there's nine management meetings and it's all day in the conference room. And your team now comes in and they meet the team members one by one. And you have have some of the smartest business minds on planet Earth. Harvard MBAs, et cetera, top of their class, all drilling your team, trying to poke holes, trying to pressure test, right? And so we did Monday through Friday, Monday through Thursday. By the time like I was on day four, I was like, oh my God, shoot me, this sucks. And you come in and oh, hey, how you doing? I'm from so and so private equity group and you know, blah, blah, blah. And then you have to do dinner with them too. So I'm all day, short break, dinner, two weeks.

[James]

I'm sure by that, Danny, you're going to blow your brains out.

[Eric Spofford]

Blow my fucking brains out. Earlier in this pod, you asked me something about education and the necessity for it in business. I was sitting at one of those management meetings with the private equity group and this young kid, analyst, brilliant, top of his class Harvard MBA, very successful, late 20s, but had just spent all day learning about the business. Me, my story, I dropped out of High School, 15 years old, I still to this day do not have a ged. And he starts asking me about education, like busting my balls, looking cool in front of his like four or five private equity buddies and some of my senior leadership team. And so I sat there and I took it respectfully for a little bit, but he put himself in that position and put his neck out by fucking with me. And so I said, you know what's funny about that is you might have a piece of paper that that gives you credibility of the school that you went to and the results that you got when you got there. But I'm willing to bet that when you got accepted into Harvard, after you appl there, the intention to do all of that hard work that you did and pay all that money you went to university was to actually, in fact make money, right? Yeah. I said, well, how about you come back tomorrow, you bring your tax return with you and I'll bring mine and we'll find out who the who.

[James]

Oh, damn.

[Eric Spofford]

Shot everyone up real quick. And I chose not to do the deal with Them because I don't want to work with, you know. And so anyways, that's how we won that argument.

[James]

That was incredibly tactical and impactful right there. What I wanted to ask about, and I know that you've touched on this before, is, you know, the first two times that you went to potentially sell it had blown up a little bit. We've met numerous people that had the potential to sell their company for eight, nine figures. But then one of the things that you talk about is that the private equity whoever's buying it, they want to make sure that this business can run without you as the founder and operators design which we call the key man risk. So what did you do during those periods where they were analyzing your company to see if, hey, if Eric Spofford can step away, this thing can actually run by itself. And this is a sellable business. How do you ensure that somebody does not become susceptible to the key man risk?

[Eric Spofford]

It's one of the most challenging things for entrepreneurs to do because it goes against the very grain and DNA of who and what we are. You have to hire people in their, in their vertical, in whatever their role is that are more experienced and smarter and more talented than you. The leadership team of that business. I would walk into the room and I was the fucking dumb. I felt like the dumbest guy there. That is the exact opposite of how most, if you really go under the hood of how people build their businesses, you walk in and you're like, the founder's the most impressive guy here. He's a leader, he's the smartest one and he's got a good team of supporting roles around him. Well, guess what? Now you're the man. Now they need you. You're the smartest guy in the room. And that business is subject to key man risk because without the founder, the rest of the team is in a lot of trouble. They look to him and need him in the day to day. I had to make that transition into how h talent acquisition, locating, recruiting, hiring, onboarding, training, handing off the torch to some of the most talented players that I could find. And so the half a dozen or so people that were the leadership team of the business that I sold for 115 million, all in their respective roles were are smarter, more talented and more experienced than me. So when the buyers came in this time around for the management meetings and due diligence, I didn't even really talk that much in the process. They were like, yeah, yeah, yeah, you did a good job. You started the business. Shut up. You Know what I mean? We got the team and the team was just so impressive. But it's difficult for entrepreneurs to do that because it's a challenge in emotional intelligence and ego management.

[James]

And they also don't wanna spend the money. Cause to have the great people, you have to pay them what they're worth.

[Eric Spofford]

There is a period of time when you have to invest in leadership and human capital that you will have a year or two, likely that your earnings will pull back in making that investment. A lot of times that's the only thing they can see. What they can't see is that if they get the team right, right, the most important thing you're gonna do in your business is build your team. They're making way more money, then you're gonna explode. As an example of that, I was making 25 million ish top line, 4,5 million net a year, professionalized the business, recruited and built the leadership team. And probably the main thing I can attribute to the massive growth that is in 24 months we doubled, more than doubled in revenue and two and a half X in earnings. So we went from 25 million to about 55 million in top line. And we went from 4,5 million of earnings to 12 to 13 million. And the most interesting thing about that is at 25 million making 4 to 5. I'm working 12, 14 hour days at 55 million gross annual, making $1 million a month. I'm on my boat, doing fuck all, doing nothing. The team is running the business, I'm getting updates and attending board meetings. And so not only is it this investment, but that the risk, the fear of spending, the capital investment, and also combined with handing over control because we're control freak to other people is what keeps so many people stuck in the prison of their own business. They can't escape. So not only you may be financially free, but you don't have lifestyle and time, freedom. And your company is worth unbelievably more without you than it is with you,

[Jack]

Eric, when you sold your business for $115 million. You know, most entrepreneurs, when they have an exit, they get an exit like that, they're like, oh, I'm good, I'm good for the rest of my life. But what the average person out, they might think that that's the case, but in reality, most wealthy people, they're taking that money and they're investing it. Even if they just invested it into like an index fund off the interest alone, they're set for life because they can live off of that money if that's the lifestyle they want to. And a lot of our generation, they don't understand that. It's just like, hey, when you just have money sitting in like a savings account somewhere, it doesn't actually do anything for you. It's just a pile of money. But what you really want and what you've coined in our first interview with you is like, do you want the pile of money or do you want the river money?

[James]

Do you want. Just so you know, Eric, just so you know, we referen that every, like all the damn time.

[Jack]

All the time. We'll see. Just a pile of cash like sitting. And we're, we're at. Guys, it's not doing anything. We got to go make something happen with that.

[James]

We actually just bought our first commercial building at Ohio State recently. So right in Ohio State. It's, it's in a great location. It's like right across the street is the highest grossing pot belly sandwich shop in America. So we've got some good foot traffic there. It's like retail and office.

[Jack]

So for you, even when you, when you sold your business, what, what were, what were you, what was your mindset like as far as just like, man, like, I can't just let this money sit here. Like, I gotta go make this work for me. Like how, how do people really get in touch with like setting up that river of money?

[Eric Spofford]

I, I looked at it in three verticals. One was exactly what you're talking about. Investments in stocks, bonds, crypto, et cetera, for high growth capital. And then real estate, buying real estate and then set aside a slug of money to then go out and, and deploy again. And in starting more companies, you know, money a lie. Like people don't understand that money is. There's so much lies, there are so many lies wrapped around money and people's belief systems around what money is and what money isn't. And I think that largely you have to experience it to really know it. Like intellectually you can agree with what I'll say about it, but until you have the experience, it's not, the information isn't going to move from here to here. Year and so I woke up months after selling my company, bored, not really satisfied with life, more money than I'd ever had. Well, that's not suppo, that's not what, how this is supposed to work, is it? Right? You're supposed to get all this money and then be able to do whatever you want and buy whatever you want. And that is supposed to make you happy. Most people, I believe Believe that you true. If you had asked me at a certain point in my life, I would tell you, yeah, tens and tens and tens and tens of millions of dollars. A 92 foot yacht, a mansion, an airplane, supercars. Miami, Florida, the nicest restaurants in the world and the most beautiful women on the globe. That sounds, that sounds great, right? And I had all of that and I was, I, I was unrest and I was dissatisfied. And it was in that moment where I think you, you've all, we've all heard it, but I was sitting there going, oh, I now understand it. And one thing I know that is true is you, no matter how much money you make, for at least for me, and I know I'm not alone, you have to wake up every day with a purpose and something to do. And the stress, the pressure, the, you know, the camaraderie of being on the battlefield of business with a team and doing it and accomplishing things and building things and creating and like, oh, what are we going to do? And you know, having the problems to solve. And as much at times as we think we may want to escape that someday because it does wear on you, when you have the ability to do so, it's a worse option. You'll find yourself wanting to go right back. And that's exactly what I did. And so now, four years post exit, I've built another portfolio of businesses now. And I'm working as hard as I have ever worked before, but also probably more content and more happy than I've ever been. The first run, the first run at getting rich, I, I wanted to do it to get rich and I enjoyed everything else, but really I was like, we're getting rich. You know, this time I'm already rich. I've been rich for a long time and like anything else, it, it loses its novelty over time, right? You guys ever had, you guys have bought, ever bought a brand new car? Car. You ever bought a car you were excited about something you were excited about? Did you feel the same about it six months later? It was dirty, needed an oil change. Ah, you know what I mean? Looking towards the next thing, the car, the greatest period. This is an analogy, right? The, the greatest period of your relationship with that car is while you're working to get it. It's not. Once you have have it, it's cool for an hour, a day, a week, a month, a year maybe, right? And then you acclimate. One of the things that most people don't understand as well is the human being's ability to acclimate to any and all situations. You go talk to a billionaire who came from nothing, which I don't know anyone who's done that more than you guys. And that billionaire probably sees his life as his normal day to day. He's got problems, he's got annoyances. Like he doesn't see it the same way that we see it, or he even saw it on his way there. Go talk to a guy who has accepted the fact he's gotten a life sentence in prison and he never thought he was going to be able to do that. He finds a path to fucking be happy and live his life and everything in between. And so once you get to the destination that is driven by your hunger and your obsession. Whatever your target is, whatever your dream is, it's a very dangerous place to be if you don't have your next dream, your next goal, the next target to work for. That was the lesson that I learned, I believe, is that you constantly have to have the next goal goal because the pursuit of it is the happiest place you're going to be.

[James]

I love it. You recently made a video about the power of having a network, right? That phone that you have, it's got a thousand thousands of contacts that can solve all of, you know, the issues that you may come up with on a day to day basis, right? Somebody in there has probably gone through something similar before. I want to talk about building the relationship though, because it's one thing to get a phone number, but beyond that though, to actually build a relationship with the person, right? Like you've connected with some of the most successful people on the planet, some of the most prominent, you know, figures in various spaces. Do you have any hacks or advice for people trying to actually build relationships where people can feel comfortable going to somebody and saying, hey man, I got this bottleneck in my business. How can you help me out with that?

[Eric Spofford]

Relationship building is a skill that anyone who wants to be successful should focus on. On where people go wrong is they focus on it with, I have an acronym wimp. What's in it for me? What's in it for me attitude. So they, they approach people of status, wealth or power in me, me, me. You know, what you could do for me is, and that is the fastest way to close the channel of, of being able to have an authentic relationship. I do the exact opposite. I look to every relationship that I meet and look and say, even if I know this person has the ability to do something that's very meaningful for me. I look at how can I add value to this person's life. So a lot of times it's connecting good people with good people. I meet you and I know this other person and hey, you know, I have someone that you may really like to know, and here's why. I think that person would be, you know, a good person for you to have an introduction with. And I'd be happy to make the introduction if you're interested. Or another example is what can you do for people that have it all? Get them something that's. It's kind of a waste of time. I met. I met a guy at an event who was the. The chief investment officer of a financial group we were considering and looking at doing business with. He's the decision maker that controls a couple billion dollars. That's an important guy, especially if you're a business owner looking at private credit markets, private equity, et cetera. And sitting at the lunch, talking with him, he said, oh, where you from? I said, you know, grew up outside of Boston, Southern New Hampshire. Lived in the city of Boston. Lunch. Oh, man. You know, it's crazy. I grew up in New York. I raised my kids in New York. But for some reason, my two sons are the biggest Celtics fans. I don't even understand why, but they just bleed green. They love the Celtics. He's got his phone out. He's showing me pictures of them floor seats at the Celtics. Like, they're all excited, wearing Celtics jerseys and stuff. As I'm sitting, it was a lunch event. As I'm sitting at the event, I text my assistant his name, where he's from, the shipping, where to find the shipping address and tell her, go online and find two really cool Celtics signed somethings and ship it to this guy. The event was in Miami. His office is in New York. He had a couple days left. By the time he walked back into his office in New York, sitting on his desk was a gift from me to his two sons for. With the signed Celtics. I don't even know what it was. Whatever what it was. That's your friend for life, dog. Cuz if I had sent him something he likes. Thanks, man. You know what I mean? Appreciate it. But thinking about what is the most important. The guy's got plenty of money. What's the most important thing in his world?

[James]

His two boys.

[Eric Spofford]

His two boys. You do something. I have two boys. Boys. You do something for my two boys, it is going to stand out and be more memorable than anything you could ever do for me. So being value add, not. Not approaching relationships like, hey, man, you know what I could. You could do for me is and. And just being cool and being their friend. The other thing.

[James]

What is it? Can I pick your brain? Can I pick your.

[Eric Spofford]

Can I pick your brain? Oh my God. I. It's one of my pet peeves.

[James]

I do, I do I get you going with that.

[Eric Spofford]

I hate I pick you. Yeah.

[Josh]

Oh, you said in there that I think I love it is you actually asked to make the intro because there's nothing worse in the world than just a cold introduction to now you have

[Eric Spofford]

to manage the relationship. And you're like, this means nothing to me. I don't want to know this person. I have to like aikido my way away through it. You know what I mean? Yeah. No, that shit sucks, man.

[Jack]

Hey, Eric, I'd like you to meet Sam. And Sam has a, you know, difference

[Eric Spofford]

between making the cold introduction because people done that to me a thousand times and setting the table and saying, hey, is this valuable to you? Is the. The motive of why one is I'm legitimately like, want to know, can I add value to your life? Is this valuable to you? The other one is I met Eric Spofford and I want to introduce him to this guy because I'm going to look cool in front of this other guy. And like it's the difference between selfishness and selflessness. It's are you taking or giving? You know, it's the minor nuances. The other thing I want to tell you before we talk about whatever you want to ask next is you also have to look and understand that successful people, wealthy people, have almost everything that they want, want. But in certain areas of their life, they experience scarcity. And one of those probably the most meaningful and impactful. And I hope this becomes a question you ask billionaires in the future because I want to know what they have to say. And maybe you have is relationships, building friendships and the authenticity around just human connection, which is a basic human nature need. We need food, water, shelter. You need human connection. Wealth and success complicates that for the people that have it. It makes it very challenging when you can show up to a relationship with someone that is famous, wealthy, powerful, and just fucking be you. Don't be one of those fucking weirdos that's like all uncomfortable in their own skin. People will come around and they'll be uncomfortable. And because they're uncomfortable, it makes me feel uncomfortable. And it's not that I think anything badly about you, it's that you're uncomfortable. You've made me uncomfortable now you need to get the fuck away from me. You know what I mean? Seriously. And, And. And not take pictures, right? I have you guys follow my Instagram, and I follow you guys Instagrams. If you knew what I was actually doing and who I was actually with, that never made it onto my page and never became a story on Instagram, it would blow your mind. But let me tell you how much that means to the people that I'm with. I'm not exploiting their fame, not exploiting their attention, not using that relationship to benefit me without their consent. So much so that I'll be with famous people and over time, they'll be like, eric, let's take a picture together. I'm like, yeah, let's take a picture together. If you see, I promise you this is fucking true. If you see me in a picture with someone you recognize because they have a lot of attention, they or someone else asked me to take the picture. I did not take. Ask. I've never asked, not one time. And sometimes the picture never gets taken. But you know what does happen? I have deep relationships with these people. They are my friends. And that is much different than. And just knowing a guy following each other on Instagram and sending them a text every once in a while.

[James]

Yep. Powerful stuff right there, Eric. We like to end these podcasts off with two quick questions and then we have. We'll wrap it up right here. I'll start, and Jack will end us off. You know, Eric, if me and you died tomorrow and you had one last lesson that you would instill in the younger generation and in your kids that you have today, what would that be?

[Eric Spofford]

That you're going to die. Die. And you should spend at least a moment every single day thinking about that and visualizing your own death.

[James]

Do you think about that?

[Eric Spofford]

I think about it every single day. And when you can internalize your mortality and that we are all just going to die someday, in a hundred years, no one's going to even remember you. You have to go for it. All the fear of what people think, the anxiety of what the what ifs, it could go bad, all of that leads people to live mediocre lives and settle. And for if you settle in any area of your life, it is a guarantee that later on you will experience regret when it is too late and you are out of time. Time. If you take the shot, chase your goals, go ask the girl out, start the business, get on the diet, workout, start a social media brand, whatever it is, and you fall flat on your face, you will Be better off for having tried and failed and having the story and scratch the itch and not having any regret later in your life than you will ever have been for playing it safe. Safe. Stop playing it safe. Go all in.

[Jack]

I love it. And. And Eric, you had a massive exit. $115 million. You've built incredible relationships and businesses over your life. Incredible story. But for you, how do you want to be remembered?

[Eric Spofford]

As a good dad. As a good father to my kid, As a good friend to my people. And as a guy that, despite whatever happens in my life, stood on principle. Principle. Followed his moral compass and stayed true to himself. The money doesn't matter.

[James]

Beautiful, Eric. This was an incredible conversation and I know that. I know that we're changing lives with this one, my friend. So thank you so much for being here, my friend, and for everybody watching right now. Guys, be sure to like and subscribe for incredible content interviews coming every week with the top eight, nine and ten figure entrepreneurs all over the world to the Hard Knocks podcast podcast. So make sure that you like and subscribe beyond that, if we're going to put the links down to all of Eric Spofford's social media down in the description for you guys to go check out, continue to follow along with his journey. Like I said, I can't vouch for anybody like, like, there's not many people that I can vouch for, right? Being such a content guy that gives so much tactical gaming advice in their content and it's such a pleasure to be able to watch it and honestly just get to know you over the couple years of growing our business as well, man. And so we appreciate you in any way that we can ever be here for you, man. Know that we're going to be here for you, my friend. Last things, guys. We're going to put the link down in the description to join the school of mentors, which is one of the top entrepreneur communities and networks in the entire world where every single week we host live calls with the eight, nine and ten figure entrepreneurs that we interview where you can ask your questions directly to them and they will answer you directly and mentor you. So we can't wait to see you on the inside. With that being said, we'll see you in the next episode.