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Lessons - The Million-Dollar Exit Decision Every Entrepreneur Must Make | Robert Croak - Silly Bandz Creator · Success Story with Scott Clary

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  In this lessons episode, learn when to sell your business and when to keep building by
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  understanding how personal goals and timing shape long-term success.
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  Learn why early exits can bring life-changing returns but may limit growth potential,
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  learn how losing money through rushed investments teaches the value of building a strong
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  financial base first, and learn why even successful entrepreneurs must stay humble and strategic
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  when transitioning into investing.
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  One last thought or question with silly bands because obviously it achieved massive scale.
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  How do you decide as an entrepreneur when you want to hold on to something versus when you want
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  to sell it? Because I know that when you have that kind of scale, you're getting offers from
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  private equity or or strategic buyers. So what's the words of wisdom based on your experiences
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  to what you should do? Should you start with the exit in mind? Should you hold on to the business
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  long-term? Should you sell it at the right time? This is a very personal answer because everybody
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  has different opinions about this. How do you think through these ideas?
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  I don't think anyone should buy or acquire a business solely with the exit in mind,
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  but I do believe once you scale a business and it's life-changing money for your family and your
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  future, you should always take the burden hand. So let's talk silly bands. When it was at the height
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  and I was getting all these offers that you talk about, they were pretty substantial 35, 50,
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  60 million dollars. And I said no to all of them because I felt I could take it from 100 million to
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  200 million to two who knows what? When you were making when you 60, 30, 50, 60 million, was it like
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  a 1x revenue that you were getting offers out or was it like multiples? It was like a two or a three
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  out. That's not bad. I thought you were like a 65 million revenue, a 65 million dollar op.
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  Okay, so you were getting more? No, it was like a two or three x-months. It's not bad.
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  So for me, now it's different. I think if you're starting out and you build something meaningful,
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  you should stay the course long enough that where the exit is life-changing money in burden hand.
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  One thing that I learned with silly bands and thereafter is that I invested too freely
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  after silly bands into too many startups and I went backwards financially for a little while
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  and that was something that I learned and would never do again. So I think it's important for people
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  to understand. If you build a cool company and you can sell it for a real dollar amount and move on
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  and really figure out the next phase of your life, whether it's retirement, getting in shape or
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  whatever it may be, you should do it because you're not always going to be able to sustain growth
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  no matter what your business model is and what type of business. So if you can sell it for a
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  meaningful dollar amount, I would sell it. The peak was 200 million, right? Was that over a period
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  of time? Over a period of time. That was over a period of time. So you rejected, are you upset
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  that you rejected offers? I'm not upset that I rejected some of these offers because it got me
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  here. I wouldn't be in this seat if I sold silly bands for 65 million or 55 million or 100 million
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  because I wouldn't have went on to continue to build more and more companies. I probably would have
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  bought a beach house, bought a couple more cars and then just retired and it did angel investing and
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  never built anything. So for me, I really enjoy the building process. I like taking the idea from
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  napkin to being online to being in retail stores and to seeing that success, especially when I can
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  bring others along the way. Like recently, we just launched the Puzzle Company Paragon Puzzles
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  and I did that with Elizabeth and she really wanted to do something in the puzzle space. She's a
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  big puzzler. So I did that and I love seeing that process from her brain to my brain, from napkin
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  to in stores and now it's starting to grow and get popular and that is the coolest thing that I get
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  to do every single day other than educating people. I love that. I absolutely love that. I mean,
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  you have such a good mindset around like sort of your life story and I think it's important because
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  a lot of people, they don't realize that everything happens for a reason and even not selling happens
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  for a reason and ultimately, ultimately not selling could be more, help you be more financially
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  successful in the long term because now you made some investments and we can talk about why a good
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  business operator doesn't always mean they're a good investor. That's also a thing that I
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  there. That could be a whole episode for sure. But that that forced you to figure out, okay,
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  what's next in life and you've done that like very, very well. Yeah. Like I don't think that
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  if you had a 65 million dollar exit, would you be on TikTok? I have no idea. Probably not.
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  Probably not. You never saw Tom from my space again. He's gone. He's gone. He's literally filming
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  birds in the Yucatan somewhere and nobody's ever seen him again because he has all this money.
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  So yeah, I think me not exiting silly bands, me going through all the trial and error and failure
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  since silly bands has made me what I am today and I think it has helped me craft being such a good
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  educator because I've done it all and I'm able to then extract all the good points and bad points
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  from all of that experience to be able to help others because I have people right now that have
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  $10,000 to their name and I have people that have 10 million, 20 million to their name,
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  but everyone needs help along the way. Yeah. And using that, you know, that point is a segue.
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  Just because you're good at building a business doesn't mean you're good at investing. So
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  all your most of your content right now is around investing and finance. So what happened when
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  you made some money and this happens to happen to me, happened to a lot of my friends as well.
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  They start, they make a little bit of money and you start to go into angel investing and you have
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  no idea what you're doing and then you lose most of it and what has actually happened in my case
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  and a lot of my friends as well, we just stay away from angel investing and now we just go into
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  to real estate and stocks and maybe a little bit of stock picking because like I don't,
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  I'm not good at betting on the jockey and figuring out like pre-revenue if a company is going to
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  hit and I think that when you have a little bit of money, it's exciting to try all these new ways
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  to invest, but I have one friend who is like actually an angel investor, he probably does 50,
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  60 angel investments a year. Outside of that, I know people that are worth hundreds and millions of
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  dollars that suck at it and they've stayed pretty much away from it. Right. And I won't, I won't name
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  names of one guy in particular is worth several several hundred million dollars and he will not
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  write a check more than fifty thousand dollars because every time he does, he loses his money.
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  So he's like, what's the point? And then he just started going to section eight real estate
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  because it was just like, it was an easier, it was an easier investment opportunity that didn't
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  didn't blow up every single time, tried to do it. Well, that's one of the biggest parts of my
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  message when it comes to investing in general, build your base, then start diversifying because a lot
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  of people want to start out, they get their first twenty thousand dollars, they want to go buy a
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  house. They want to go buy a duplex and flip it. You have no idea how to do it. If you don't have
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  a partner that knows how to do it, don't do it because it is not the right strategy. For me,
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  I think people generally should build their base, whether their base is a hundred thousand,
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  two hundred thousand, five hundred thousand dollars. So that way they have compound interest
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  doing its job and building wealth while you sleep. After that, then start diversifying, maybe get
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  into real estate, try house hacking, get a couple duplexes, build that up, start building a portfolio
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  there. But when you get to the phase of wanting to angel invest, whether it's through big platforms
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  and startups or Uncle Bill's restaurant, you have to understand that in many instances like your
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  very wealthy friend, money has a way of making people think they're smart. And it's really funny to
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  me because we talk about people that are very wealthy with their boring businesses. And I think
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  it is one of the greatest ways to build wealth is through boring businesses. And right now,
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  there's so many businesses and these boomer owners that don't have exit strategies.
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  So for them, they're willing to just lock the doors and walk away. They've got their millions
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  of dollars. They've got their house paid off. And that is the huge, that is the biggest
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  opportunity I think in entrepreneurship right now is buying these established businesses.
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  You can get owner financing. There's a lot of different ways creatively to take over these
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  businesses, add in modern technology, modern sales strategies and really make a lot of money.
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  But I think the main thing with venture investing and I do it now too, keep your check sizes small,
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  like you said, 50,000. My check sizes used to range between 250,000 and 500,000. Now I'm 25 to
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  50,000 on my checks. I'm actually going to leave here and go do a wire for a very important
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  company in the human robotic space. But I think that is the key. Take more shots in your investing
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  like that because you're going to have, you know, I have this thesis thesis that if you're going to
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  invest in 10 venture deals, five or six of them are going to go to zero. Two of them are going
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  to do okay. You just need one that gets you that 50 or 100 or more X. And that's where all the
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  money and wealth is built. But don't start out doing that kind of investing. I think too many
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  people start too early in that type of investing. And a lot of them are going to go to zero because
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  like you said, they don't know how to bet on the jockey. They don't know what's going to scale.
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  And a lot of these high flying companies take years and years to become liquid and become
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  profitable. And a lot of people don't understand that when they're investing in these types of
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  deals, we introduce these deals in the rich habits network in our private community all the time.
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  And I always reiterate to people, do not invest this money if you expect it to be liquid anytime soon.
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  Because some people think they can invest in a startup or invest in an apartment building. And
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  they're going to be able to get their money back or see a return any year. It doesn't work that way.
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  So I just always make sure that I share the good side of everything we do, but also the downsides,
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  but also just give people a proper understanding because everyone wants to build financial freedom,
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  but they don't know how to do it. And you're going to make mistakes along the way. So I think it's
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  important to not go too fast in things you don't know. Is it what is it figure AI? Yeah, yeah, yeah.
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  So one of my friends, I can name them because I'm sure he's very proud of it. So Shane Neiman,
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  do you know him? Yep. Okay. So he put in money at like a $300 million valuation. And he's been,
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  he's been like on the figure AI, and like, and for a long time. Yeah. And now the valuation,
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  well, I can't say it. No, no, no, with the bread, bread, ad cocks, a very impressive guy,
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  very, very impressive guy. Yeah, he's great. But I mean, he has a track record. So this is his third.
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  I think if I'm not mistaken, second or third, second or third, one of the companies,
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  he took public, which is like a, anyway, it's a point. The aviation company, archery aviation,
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  very, very impressive guy. Now that company's blowing up. But I don't think, I don't think many
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  people have that luck when they're putting their check. And the bigger issue is not, in my opinion,
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  at least, the bigger issue is not the person that has the ability to write $250,000 or $500,000
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  checks. It's the person who is pulling in a $200 to $300,000 per year salary. And they, and they're
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  you know, they're maybe they're intact, maybe they're like, oh, angel investing is sexy.
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  Let me start writing $25,000. But then it's a significant amount of their money that they're
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  putting in. And they're putting in money into this pre-revenue on, you know, pre-revenue, early
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  stage startup. Nothing's proven out. First time founder, because they've never done it before.
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  Right. As opposed to putting money into something a little bit more secure. And I think that that's
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  the biggest issue that I have with angel investing, because just because you're pulling in a good
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  salary, or even if you had a, say, you had a $10 million exit in, you know, a state with high taxes.
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  Well, you have like what, $5 million after that? Right. 10 millions on paper? Great. Great
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  exit. Amazing, amazing exit. But you can you can burn through that money very quickly if you think
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  that you're a good investor, just because you were a good at building a business. Well, a lot of people
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  and most entrepreneurs, especially male entrepreneurs, they all think that they're a lot better at it
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  than they are. And it takes many, many years to learn it. I mean, even you admit that you made
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  some mistakes in angel investing. I've had a lot of zeros in angel investing. But now I've learned
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  rather than getting in, you know, day one, where it's the idea and the concept, and I'm one of the
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  first five investors, I'm much more happy getting in at 100, 200, 300 million dollars on a company
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  that's having a meteoric rise, because then I am not betting on a concept. I'm betting on a
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  product that has already tried and true and usually built out. And so I think that's an important
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  aspect of understanding where you're getting into the company as a process and understanding
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  where that company can go from a market cap in the future. And that's why I'm betting big right now
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  on humanoid robotics, nuclear, and still kind of the second phase of AI, which to me, I believe,
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  is the software side of AI and the application side of AI. And that's where most of my money is
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  going to go in the next three to five years. Thanks for tuning in. If you found this valuable,
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  don't forget to hit that subscribe button so you never miss an episode. And if you want to dive
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  deeper into this conversation, check out the links in the description to watch the full episode.
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  See you in the next one.