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Firing The Man
THANK YOU TO OUR 25,000+ LISTENERS! We are so thankful to be one of the TOP E-Commerce Podcasts delivering high-quality authentic content to you! Serial Entrepreneur’s David Schomer and Ken Wilson share tips, advice, and insider knowledge about all things Amazon FBA, Walmart WFS, and E-Commerce. Discover how you can create multiple income streams by selling physical products online so that you can have the time and freedom to do what you love - whether that is spending more time with family or traveling the world. Ken and David have successfully created several six and seven figure online business ventures. During the journey, they have had major wins, losses, and lessons learned. This podcast will teach you about selling physical products online through platforms such as Fulfillment by Amazon, building a team, outsourcing, listing optimization, pay per click (PPC) advertising, driving traffic to your listings, and productivity tips / life hacks that will provide a path to be successful in building your online business. It’s a mix of interviews, special co-hosts and solo shows from Ken and David you’re not going to want to miss. Hit subscribe, and get ready to change your life.
Firing The Man
Fired from Fortune 500 to Entrepreneur: Fred Gleeck's Journey to Equity Success and Passion for Poker
Discover the transformative journey of Fred Gleeck, an entrepreneur who turned his setbacks into stepping stones after being fired by five Fortune 500 companies. Experience his unique blend of theater and business acumen as Fred shares how these diverse skills led him to a successful career as a professional speaker and information product creator. He stresses the importance of embracing entrepreneurship early to avoid the golden handcuffs of corporate life, while candidly discussing the hurdles and triumphs that come with this bold switch.
Gain valuable insights into the art and strategy of forming equity partnerships that thrive on mutual trust and complementary skills. Fred reveals how to transition from traditional compensation models to innovative, performance-based arrangements that benefit all stakeholders. With engaging examples and role-play scenarios, he highlights the crucial steps in building resilient partnerships, from crafting simplified equity agreements to managing financial responsibilities and exit plans akin to a business prenup.
Elevate your understanding of equity-based compensation through Fred’s 90 Day Accelerator program, designed to help clients secure meaningful equity deals. Tune in as we discuss his microbook, "Don't Scale," which advocates for achieving more with fewer clients and less stress. Fred also shares reflections on his entrepreneurial path and newfound passion for poker, offering practical advice and personal insights for listeners eager to 'fire the man' and redefine their career paths.
How to connect with fred?
Amazon: https://www.amazon.com/Dynamic-Equity-Integration-Coaches-Consultants-ebook/dp/B0CQ489WRL
LinkedIn: https://www.linkedin.com/in/fredgleeck/ Facebook:https://www.facebook.com/fred.gleeck
Website: https://www.fredgleeck.com/
Welcome everyone to the Firing the man podcast, a show for anyone who wants to be their own boss. If you sit in a cubicle every day and know you are capable of more, then join us. This show will help you build a business and grow your passive income streams in just a few short hours per day. And now your hosts serial entrepreneurs David Shomer and Ken Wilson. Entrepreneurs David Shomer and Ken Wilson.
Speaker 2:Welcome everyone to the Firing the man podcast. Today we're excited to welcome Fred Gleek, a trailblazer in information, marketing and entrepreneurial partnerships. Born in Japan and raised in the Philippines as a diplomat's son, fred's early path included becoming the country's best golfer and later navigating a corporate career where he was then fired by five Fortune 500 companies, which made it clear entrepreneurship was his calling. For 20 years, fred thrived as a professional speaker and info product creator, but grew frustrated as few implemented his teachings. In 2009, he shifted to a partnership model, co-founding Dynamic Equity with voiceover artist Bill DeWeese. Since then, brett has exclusively partnered with entrepreneurs, sharing in both the work and the rewards. Brett is the author of Dynamic Equity, integration and Don't Scale and joins us today to share his journey, insights and why partnerships can be the key to entrepreneurial success. Brett, welcome to the show.
Speaker 3:Well, thank you very much and thanks for the introduction. I might say that, given the name of this podcast is Firing the man. In fact, the man fired me many times. In fact, the man fired me many times.
Speaker 2:Absolutely, absolutely. So why don't we start there? So you've had a really fascinating path, you know, being a golfer in the Philippines to being fired. So how did all of those experiences shape your entrepreneurial journey?
Speaker 3:Yeah, it's a good question. And what happened was that right out of high school, going into college, so my golfing career kind of ended my junior year of high school as I got to be the best golfer in the Philippines and because I'd gotten to the pinnacle in that sport in that country. First off I thought I was kind of hot, you know what. But I came to the United States and no, not so much. So golfing and playing golf for a living was, although a dream early on, was quickly dissolved into an impossibility, especially when I started school at Wake Forest, transferred to University of Florida, but at Wake Forest, where Arnold Palmer and some of the top golfers in the world have gone, I realized no chance.
Speaker 3:But what happened was when I first started college, I told my dad that I was going to be majoring, wanted to major in theater, and he goes well, that's nice. I don't know how you're going to pay for that. So instead my parents offered to pay for a degree in anything business related, all the way through a master's degree. So I hopped on that gravy train and just said, okay, let's do this. But what happened is, right out of getting, right out right after, after getting in grad school I read a book called Put your Money when your Mouth Is by a guy named Robert Anthony, and he wrote this book talking about how you can make a living as a professional speaker and I thought to myself wait a second. This kind of combines my love of doing anything theater or acting related with a business background, so what I started doing was a lot of seminars. I refer to that as business theater.
Speaker 2:Very nice, very nice. So what was you know as listeners of the show who maybe have the goal of firing the man but have not done it yet? What was one of the biggest mindset shifts that you had when transitioning from the corporate world to being self-employed?
Speaker 3:Well, I think that my realization was that, first off, I hadn't like a lot of my friends that I went to grad school with. I got a master's in international business for what that's worth and it's basically worth nothing in the entrepreneurial field but what I realized was that the further along you get in the corporate game, the more money you start to make, the more difficult it is to extricate yourself from the man. And therefore I realized that if I was going to do something, I should do it sooner rather than later, because by the time you know, some of my friends at, you know, 10, 15 years in were making a couple hundred thousand, quarter of a million dollars a year, and I realized that if I got to that point, it would be very difficult to get out. So my mindset was do I like doing this? And the answer was hell, no. Do I want to get out? Yes, when should I get out? Soon as possible.
Speaker 2:Very nice, very nice, and that's something that I think a lot of people need to hear. That, and the golden handcuffs we've talked about that a little bit on the show and you know, for people that don't seem to have anything to lose, that's the perfect time. That don't seem to have anything to lose, that's the perfect time. And so waiting until you have a family and a mortgage and car payments is not the time, but not that you can't do it. Then you know as well. But I really like that mindset and approach to that. So we met a couple of weeks ago and you and I had a great conversation about the dynamic equity model, and that's what we're going to focus on our discussion today. So why don't we start with? What is it?
Speaker 3:Okay, let me give you the origin. So I was doing, you know, initially, early on, I did a lot of speaking, seminars and stuff like that. When I do that either my own events or somebody else's I would sell a package of information showing people how to do whatever. You know, my model, which back then was how to create and sell information products. Then what happened was, I realized well, I, I, I, over time, I realized that the people that I sold these packages to, they made me a bunch of money, but very, very few people implemented anything.
Speaker 3:So I switched up my model in 2009, December, and I switched the model up and started doing these one-week boot camps at my house in Las Vegas. I would have people and I would bunk them six at a time in my house. They'd be two to a room, I'd have the master bedroom and we'd feed them and train them on my system and they'd give me a bunch of money for that event. It was a week long and my goal of that was to circumvent and not have the same results of just selling people a package. My goal was to have them really do something with the material and again, I was delusional thinking that that one week, giving them all the tools would be enough, and the answer was they still did absolutely nothing.
Speaker 3:So about three years into that venture, I had a guy show up in my event for one of these bootcamps December of 2009, I believe it was and he was a voiceover artist and it was kind of there's another side story on that, but it's not really where they'd call that exciting but what happened was when Bill Dewey's voiceover artist showed up, he was getting a lot of questions from people saying to him hey, you know, how do I get started in this business?
Speaker 3:Can you show me what to do? And he found me because at that point in time, I was number one in Google for the keywords information marketing and information products, and so he came to my event, paid me money, but by the end of the event I realized that, rather than sending him out on his own to fend for himself, we got along really, really well and I thought this might make for a kind of a cool partnership. And that's where the whole concept of dynamic equity originated, because I drew up a very simple one page agreement, which is what I recommend people do in these kinds of situations. People do in these kinds of situations and we started a venture which is still going on and we built the single largest voiceover training company in the world and the largest YouTube channel for the topic of voiceover work. So that's the origins of how this started.
Speaker 2:That's very, very interesting and I'm glad that you started with the origin story and so you know whether it be an agency or a service provider. It seems like flat fee tends to be kind of the model, the model that everybody goes to, and so as we started talking about this, it was really interesting to me. It was something I had never really thought about, to be honest, and so you know when you were, say, talking to Mr DeWeese or in other partnerships, that you've done, what are you looking for? What are you looking for in a partner? What makes a good?
Speaker 3:partner? I'll answer that question, but first I'd like to tell you that when people think about fees, when they do coaching and consulting or whatever kind of work, it's usually divided up into two possibilities flat fees, hourly or monthly, or some people get a little bit more sophisticated and do revenue sharing. What I'm talking about is equity and not revenue sharing. Revenue sharing is a temporary piece of the pie. Mine is a permanent, forever piece of the pie. That means that if I get hit by a bus tomorrow, even my kids will continue to get paid from the deals that I do. Now to go back to your original question, which I've now forgotten, let's cover that.
Speaker 2:Yeah, so when you're looking for a partner, what qualities are you looking for that makes you think that they would be a good person to have this long-term venture with?
Speaker 3:And in the supplemental material that I want all of the people listening or watching this podcast to have, I have a little chart and a graph and in that chart and graph that I have, it's a nine-step process.
Speaker 3:One of the things, one of the steps, I believe it's let me just see here it is step number four, which is partner roles, and with that you have to be thinking about the fact that there are. I always think of people and relationships business-wise as having two components. Number one is do our personalities mesh well? Do we have, you know, two type A's not a formula for good results generally and the personality side is something you have to consider. But you also have to consider the skill side. So we've got talents and skills as human beings and you and I will probably have, hopefully, very different skills if we're going to partner effectively together and hopefully have different personality types to also partner well together. So I look at this as having two major components the personality side and the skill side. What we're looking for is complementary and not coincidence skills and personality traits.
Speaker 2:Very nice, very nice, and I think that's really good advice in picking a partner in really anything, and so I really like that response. So, you know, let's talk about when you approach a potential partner. How do you structure that initial conversation about equity without making it feel transactional? Transactional? And what I want to get to here is you know, oftentimes entrepreneurs feel like their company's their baby, and to give away a portion of your baby seems like it inflict pain or it may be maybe an awkward conversation, and so how do you approach those conversations right off the bat?
Speaker 3:Okay. So I'm going to use your analogy of the baby to illustrate how this would work. So let's say, for example, and you have kids as well, as I recall, right? Yep, okay. So let's say that in you know, in the process of raising your kids, you've got a good buddy of yours who is really really good at a skill that one of your children wants to know. He's an amazing archer, let's say he shoots. You know arrows and bows and arrows and whatever, and one of your kids is really into learning about that. And so what you do because you trust him and you like him is you let him mentor your child in the archery field. So in a way, you're allowing him to become in some ways, a little bit of an equity partner in the relationship to your children.
Speaker 3:And so, similarly in business, when you're making the decision to decide to give your baby at least partially away and I always tell people you should look for some kind of a deal, generally between 10 and 50% of the equity piece that you want and so with your kid, you're not going to let that person who does archery spend every waking moment with your child. They're going to spend a portion of it. Similar to equity. There's going to be a negotiation for what percentage amount is fair for both parties and in terms of how youortion it. Similar to equity. There's going to be a negotiation for what percentage amount is fair for both parties and in terms of how you approach it. I would never start even talking about this as an equity deal until I get to know the person first. Going back to our earlier conversation with regards to a mesh of both personality and skills, because if we start the equity conversation before we understand whether we have a good match in that area, it's completely nonsensical.
Speaker 2:Very nice. Very nice I'm glad you brought that up is laying the foundation for conversation and not kind of cold pitching this. And so let's play this out. Let's do a little role play. So assume I say I've got a pet supply company and you're an agency and you can pick what that agency does. But you know you've got a service to sell me or a service to offer me and I'm interested. So how does you know?
Speaker 3:let's, let's go through that conversation. Ok, so we're going to assume that we have the personality side and the skill side as a match. Correct, correct, yep? Okay. So the next thing I would do is I would say to you you know what I would like to help you really dramatically improve your revenue and results. But I want to make sure, because so many people out there are taking money for services and not providing real dollar value, coming back, because it happens all the time chips, if you want to call it, with ad agencies, in which none of them, after being paid fixed fees, delivered me virtually any results. It's certainly not what I've been paid.
Speaker 3:So if I were to say to you hey, you know what, isn't it kind of stupid to be paying people for results that they don't deliver? And you would say, of course, yeah, yeah, of course. So now I'm going to say to you also David, don't you like the idea of having people that you work with yet a piece or not? I wouldn't say it that way. I would say don't you, david, think that it's important for people to be compensated based on results? You'd say yes, and then I would say well, in addition to that being a fair deal, wouldn't it be nice to return me and my services I'm giving you, as a pet supplier, a pet food pet, whatever supplier in the e-commerce. Wouldn't it be nice if, rather than me being a fixed cost, that I become a variable cost? Now I'm ticking into my MBA brain here, because for me, I would rather have every single person on my team be given compensation based upon results. And if every single person on my team the given compensation based upon results, and if every single person on my team was compensated based on results, without any flat salary, I would have zero fixed costs. I would have only variable costs.
Speaker 3:And to me, that is the key to understanding my process, which is and I've now started to put it as I have a standard little LinkedIn response file that I go to and whenever anyone hits me up for like, hey, I've got this thing, you can get 5 million clients in the next two months I go hey, it sounds like you've got a great thing going here. I want to make you even more money than what you expected. And they're like wow, what's this? I go, I'm not going to pay you a dime, but I'm going to overpay you based on results. How do you like them, apples and they're going to go. Oh, wait, wait, wait, no, I have to have some money. And that's a really valid point. And here's how I think of it If you have only two clients, you're going to have a hard time implementing my dynamic equity system.
Speaker 3:And here's why Because you can't afford to go from flat fees to equity yet Once you have four, five, six people in which they're paying you hourly fees. Now what you do is you approach the one that you have the best relationship with, that maybe you have the most revenue being generated by, and you say, hey, you have the most revenue being generated by. And you say, hey, you know, david, I've got five other clients other than you, but I think I'd like to see if we can transform our relationship from a fixed fee basis to an equity deal. Let me explain to you how that might work, because if that deal doesn't produce revenue early on, I've still got four or five other clients that are producing me hourly or fixed fee revenue that I can slide with until then.
Speaker 2:I like that, I really like that. And you know you had mentioned approaching existing clients, existing flat fee clients, and you know talk about laying a foundation for that relationship. You know they've already worked with you, they're familiar with your process, and so I really really like that.
Speaker 3:And you know whether or not you want them over to your house for dinner. That is my main rule in creating partnerships.
Speaker 2:I think that's a very good and simple rule and it's an easy, easy way to draw a line in the sand. I really like that, and it's an easy, easy way to draw a line in the sand. I really like that. So, yeah, I may have mentioned before the podcast, I was formerly a CPA and so getting into the numbers is something I always really enjoy, and so when we're talking about equity, there's you know, there's two components of a business, right, there's the monthly cash flows that it spits off and then the value of the business when it's sold. If it is sold and and you know, assuming that you're providing an awesome service this company is going to grow really, really fast, and I've experienced this myself.
Speaker 2:Where I grew up my first company, we grew by 100 to 200% three years in a row. Most people would look at that and say you're cashflow rich, and that is wrong. I was cashflow poor because all of my money was tied up in getting inventory back in stock and continuing to grow the company. And so what are the economics of this look like when you do have a 20% stake and you are providing awesome services and they are growing really fast? But in order to support that growth. They need to put most of that cashflow back into the business as opposed to an equity distribution.
Speaker 3:Okay, well, as a CPA, you'll know the difference between net and gross, and so my deals are always based on the net. So if, for example, you and I agree that I'm going to be getting a 20% share, equity-wise, and if we make no money for the first two or three years, then I get $0. But it does mean going back to the earlier example. I still have four or five clients who are paying me, so I'm kind of betting on the calm with this one. I'm betting that the deal that I have with you will not pay me money necessarily right away, but will over time. And I'll give you the example with my first partner, bill DeWeese. I said to him when we first started. I said here's how we're going to do it. You're going to have a P&L for our deal and since we're starting from scratch and this is what I would recommend most people do if we're starting from scratch, the deal is 50% of the net, that's provided that we feel that there's an equal exchange of value. I have knowledge, he has subject matter knowledge and we are going to go together if we both agree. And he agreed to that deal.
Speaker 3:Now, by the way, an interesting aside here so when we agreed to this 50-50 split of all revenue. We hadn't thought of one scenario that came up. So after we were going for a while, bill says to me you know what, when I do like one-on-one work to help people put together their demos and I charge them $2,500 and I have to give you $1,250, that's not fair. And I said you're damn right, it's not fair. So that for any deal in which he worked with less than five people, that's one, two, three or four at a time I only got 20% of that deal and not a full 50, because it was just onerous, that's just not cool for me to ask him to spend his time one-on-one with someone and for me to get 50% Absurd. So we changed it.
Speaker 2:I like that. I like that. So let's talk about structuring the agreements. So you had mentioned, somewhere between 10 and 50% is typically where you like to land. Is there any exercises that you're going through to define what are the roles, responsibilities? Who's doing what? What does that conversation look like on the front end?
Speaker 3:Okay. So two parts of that that I want to discuss. Number one is I have something that I'm going to include in the resource documents of this podcast called my equity calculator. You answer 19 questions there are multiple choice questions and after you answer them it will give you a suggested equity range for you to ask for of somebody that you come in touch with you know, get in touch with. So that's, that's number one. So first off is understanding the percentages, but also the partner roles within my like you know, my bigger version of a program that I have.
Speaker 3:I talk about the division of partner roles, but I think it's really important, before you get started with anyone, to have like if you and I were working together in a potential equity deal. I would say, david, do me a favor. I don't know you that well. Could you list as many things as you can think of, on both the skills side and the personality side, that make you good? For example, with Bill, I am definitely much more type A, much more aggressive, much more a lot. Bill is type B, very chill.
Speaker 3:Whenever we have to talk to certain people where I may come off a little bit too strong, he does that because we both know I'm not the guy to be doing when it comes to negotiating deals with some vendors. I am the guy. So you and I. If we were trying to figure out which roles each of us would have, I would ask you, or anybody listening, to consider, with their person they're going to do an equity deal with, to have each party list out what are their top 10 best skills, top 10 best elements of their personality, and also do some of the negatives as well, because for me, I mean I'm much less of a hothead than I used to be, but I can get a little bit kind of, you know, in your face, and so if I'm with somebody who's similar like that, we're in deep, deep trouble.
Speaker 2:I think that I really like that is just laying it every. Here's all the roles, responsibilities, things to do and, you know, sorting those out on the front end. That, I think, just another example of really good communication. So so, assuming you get through the initial conversations, you agree on an equity split. Conversations you agree on an equity split, what are some like legal safeguards or contracts that you would put in place to ensure that that equity stake is secure over time?
Speaker 3:Well, the one thing I always like to say is, the larger the company that you're trying to do a deal with, the more chances they will have a legal department. They don't have a legal department. They have somebody on retainer that reviews contracts and the last thing you want to do in a situation like this is present them with some 55 page document. It'll disappear into the lawyer's office and never come out the back end. So everything that I do, I do with a one page, simple agreement. Now, are there some downsides to that? Yes, but I recently had a lawyer buddy of mine a number of years back, had a lawyer buddy of mine review the contract that I give to people when we do deals and he, after he looked at it and got back to me, he says do people actually sign this? After he looked at it and got back to me, he says do people actually sign this? And I go, yeah, and it's pretty much I have again in the system that I've created. I do have various elements that must be included and I put in the document that we're showing to people. One of the things I put in the document was one page agreements must have what I call the forever clause and the forever clause is the basis of your equity deal, which is like let's take myself and Bill, the voiceover artist. I use him. I have other clients as well Burke was a publicity guy and Bob I've got other people, but he's the best because he's the longest standing, easiest to give examples of other people, but he's the best because he's the longest standing, easiest to give examples of. So, with Bill, in the event that I get proverbial hit by a bus tomorrow, if my kids do nothing to help him or he doesn't agree to have them, they get 10% of the net forever going forward.
Speaker 3:However, there's a little bit of a wrinkle to that and in my case it could very well happen. My daughter, kayla, has been sitting with me while I've been doing business since she was seven years old. She could do my sales calls, she could do my equity agreements, she knows my stuff and she's very much of a techie. I am not. So in the event that I get hit by a bus tomorrow, bill would probably contact Kayla and say, kayla, I owe you 10%. And Kayla would respond with yes, phil, you definitely owe me 10% for doing nothing, but I have some skills that are better than Fred, so at least maybe I could provide those. And instead of getting 10%, what about if I get 20%? And that would be very fair.
Speaker 2:I like that, I like that, the forever clause, and I'm so glad to hear you say that you're avoiding those 50-page contracts. And if there's any lawyers listening, I apologize, but gosh, sometimes that legal language, I just wonder if they're justifying their own existence and and, and you know, I, I have read contracts where you know, as someone with their master's degree, I don't know what it's, I don't know what it means, and and so I, I liked the you know simple, the simple one page, and that's really really, really interesting. So okay, so you enter into the partnership, you've got your contract in place to protect you. How hands-on are you in the business? And obviously this would depend on what skill you are providing. But what does that look like?
Speaker 3:That's a good question and I think that the answer is the percentage that you are asking for or decide on with your partner really determines your degree of involvement. For example, I recently, and kind of in your, in your, more in your world than mine. I'm more in the you know, masterclass type stuff or whatever. And and let's talk about, like e-commerce I bumped into a guy not long ago playing poker, as a matter of fact, uh, at the poker table, who owns a popcorn company. They produce both savor and sweet popcorn, Right and we started talking. We never came to an agreement, but we started talking about what we might be able to do together and what I told him.
Speaker 3:When we got to the point of considering doing an agreement. I said well, clearly, you, you, he bought the business from someone else. So I said you have an existing business, so clearly I don't deserve 50%. That's absurd. I said what about if we were to take and as an accountant, you'll love this what about if we were to take the last 12, 24 months of revenue, whatever it is, say the last 12 months of revenue, and use that number as a baseline, an average monthly of that last 12 months. And use that as a baseline, because I'm coming in there, I'm saying as a marketing consultant, so we're going to use your $300,000 a month as a monthly baseline and say if, as soon as it exceeds that as a result of my marketing help, I am going to get paid. And so with this agreement, my agreement was a flat percentage based on the increase that I could bring to the popcorn business as a result of my primarily online marketing skills.
Speaker 2:I really like that. And for the business owner, who you know may need some warming up to this agreement, you know they've assumed the risk to up until this point. They've built the company, they've had the long nights, and so I really like that putting in a baseline hey, this is what you've built, this is yours, everything that we build after this, this is ours and this is how much I get. Yeah, yeah.
Speaker 3:I like that and, by the way, if that was a multi-billion dollar company that you were going to do that for, rather than a little popcorn shop, your percentage might be 1% or half a percentage point. Let's say you were going to do this for Texaco or pick another huge multinational, if you were hired. By and, by the way, as an aside story, when I first moved to New York City inspired by and by the way, as an aside story when I first moved to new york city, I was in a three-bedroom apartment sharing with uh two other two guys had the, uh, the the big room down the hall and myself and lisa de crane sure shared singles, lisa de crane. I asked her one day. I said, lisa, what's your dad do? Oh, he works for an oil company. So sorry for the aside, but the whole idea is, if you do something, so when I say to people generally, a 10 to 50% deal is good, if you do a deal with a major big corporation, that percentage might be much less than 10%.
Speaker 2:Yeah, so you enter into the partnership, things are going well and the business decides to sell, which is exciting. 2% of businesses get to this finish line. What does that look like in terms of or maybe it's one of the 98% of businesses that doesn't sell? We've talked about how you approach this, how you enter it, how you maintain it. What does the backside of this look like? What's the divorce element?
Speaker 3:Yeah, yeah, and it's a good question. So in your contract, it would be good to have what happens in the event of this scenario. Now I can tell you, and I'm sure you probably, as an accountant, have probably seen this a business that is being purchased does not want to have me as an ex-rooted stakeholder. When they buy the business that they then have to pay, they're not going to go for it. So there's got to be some agreement based on the, for example. The easiest way to do it would be to say okay, here's the deal. We agreed that I was getting 20%, picking a number out of the year.
Speaker 3:In the event that there is a sale, I get 20% or somewhere between zero and 20% at sale. So you decide that in advance. Certainly, your number would never be greater than the percentage equity agreement you had decided on. So best case scenario for you of itself, you get 20% of the sale. Worst case scenario is it's something less than that that you have pre-negotiated and you have put into the sale. Worst case scenario is it's something less than that. You have that you have pre-negotiated and you have put into the contract In the event of sale. Here's the elements of the deal that will be held in place so that the purchaser of the business has a way to get me out of there, because they don't want to have to deal with this ongoing deal.
Speaker 2:I like it. I like it it kind of, you know, sticking with his marriage analogy. That's kind of the prenup, right, it is the prenup, very much so. So I was trying to recall the question that I had a little bit earlier and I want to rewind just a little bit to. While we're operating the business as partners Anyone that's run their own business they know that capital calls having to put personal funds into the business. For various reasons, it just tends to come with the territory. Whether that's there's a new opportunity that you want to strike on, you get sued. There are things that come up that require capital, and so is that something that's negotiated on the front end? Or say, a company does get sued or there is a big opportunity, how, as the minority stakeholder presumably, how is that handled on capital calls?
Speaker 3:scenarios. When Bill and I first started our deal initially, we had a guy who was, I think, at the same event that Bill was at, ermal Indian dude, who was an expert on SEO, and Ermal said to us hey, you know what? I could take your voiceover site and get you top one, two or three rankings in Google and my fees cost $15,000. So what I have always said with my partners is any kind of expenditure is put on their credit card but it goes into our P&L and those dollars have to be recovered first, especially if it's early on until we make our split or set up our split. So say, for example, in that case and we literally did this with him within a month of starting, so we did it a month into starting $15,000 put into a P&L, $15,000 put into a P&L. So for the first few months of this venture I received absolutely $0 because Bill had to be paid back on the $15,000 he gave to Ermal to get the SEO thing going. So in my case this is one example which the credit card or the resources or the funding in my case, always comes from the partner. Another thing you'll find kind of amusing is the fact that in my agreement the partner always takes on all the accounting and the distribution of funds role, for two reasons.
Speaker 3:Number one I hate doing that crap. Uh, I just don't. You might be good, I'm just awful at it. I have terrible records. Haven't balanced checkbook in my life, just don't know what that would entail. And so I make the partner. One of the things they do is to take care of that. But the other thing that it does is this if my arrangement with you is you collect all the money at the end of the month and this is how my contract reads At the end of the month I get 50% of the net paid within five days of the end of the month for the previous month. So by the 5th of December I get paid my net amount from November. Now what does that also do? What other benefit does that provide? I can never be accused of financial impropriety. The monies are not coming into me and I'm not dispersing them. So hopefully I've chosen my partners carefully, but I can never be accused of any financial shenanigans.
Speaker 2:I like that. I really really like that you brought up. You know we've talked a lot about the revenue and the net profit On the expense side of things. How is that handled? Because there are some expenses that are clearly business expenses, non-negotiable. It just is what it is. However, there are certain meals and entertainment is a great example. You take the family to Hawaii, you go to a conference for one day and you and your accountant decide on how you treat that business expense. How do you handle those types of discretionary items?
Speaker 3:I've got a clause in the contract that says any expense over $100 is discussed and agreed to. So give you a good example, I found and I'm a big believer in paying as I sell a program. One of the programs I sell is my 90-day accelerator and I tell people you know here's how to do what I do and jump on sales calls with them and close deals. To do what I do and jump on sales calls with them and close deals. But with Bill we found a program after we'd been going for a while. So we're pulling in some good revenue.
Speaker 3:Cost 20 grand, and so luckily, he's kind of like me in this area in that he's a little bit of a risk taker and I said you know, I really think this might help dramatically increase revenue. He said it's 20 grand, he goes 20 grand, I go yeah, I'll take a look at it. By the time he looked at it for about 15, 20, he said okay, fine, so that's going to go on his card. But our decision as to whether or not to do something was dictated by the initial contract, which said any expense over a hundred dollars must be agreed to by both parties.
Speaker 2:I like it. I like it. And what a perfect safeguard to put into place on the front end of the agreement to play defense against those types of scenarios. So you know this conversation and to our listeners, this conversation may be interpreted as great advice for agency owners or service providers. But I want to. But I want to look at this through the opposite lens. For the entrepreneur that approaches the agency that has great results, has great clients. You've heard really good things about it. They quote you a monthly fee of 20 grand a month. You know it's going to help your business, but you don't have 20 grand a month to cough up. So let's talk about this a little bit from the entrepreneur's perspective. In terms of making this pitch, you know what advice would you give to?
Speaker 3:them? Good question. I think that this goes back to what I now do with all the people on LinkedIn who hit me up for services in which they say I'm the greatest at X, y or Z. So if you're an entrepreneur and you're dealing with an agency that, say, wants to charge you a large flat fee monthly for your services, what you say is you know what? I would like to pay you even more than that amount. I believe that you're really good at what you do, but as I'm going back to a Ronald Reagan line trust but verify.
Speaker 3:So the whole idea here is if you're as good as you are and my product is as good as I know it to be, then why don't we structure this? And you have two ways to go. My goal would be to try and do a complete percentage split with no dollars up front. If they say to me in exchange well, you know what I like the idea of having an upside, but we need to pay certain expenses that are fixed regardless, I said okay, talk to me about that, how much would they be? And we come up with it's five grand. So rather than giving them the 20 grand, let me give you five grand a month plus a piece of the action. Now I would then add to that clause once I prove to you that we've got a good deal going and that would not be a number of months of working together, that would be a volume deal. So as soon as we hit X percentage, that five grand goes away and it switches to a straight percentage deal. Does that make sense?
Speaker 2:Absolutely, absolutely. And yeah, it doesn't necessarily have to be one or the other kind of a mixture, hybrid model to fit the scenario that you're working with.
Speaker 3:My thought is, the hybrid model David is temporary. I'm always shooting to go to the straight percentage, but if they won't buy that initially, I'd say okay, well, let me ride with you, I'll pay you your five grand a month plus this, but under these conditions it'll switch.
Speaker 2:Yeah, I like that, I really like that. Let's do the engagement before we get to the altar. So very good, very good. Now, fred, one of the reasons that I really wanted to invite you on the podcast was you've got a ton of experience with this and you work with clients that are wanting to get into this equity-based compensation. So what types of clients do you work with? And if someone were to get in touch with you, what types of things could they expect?
Speaker 3:Yeah, and I mean the thing I offer now is what happened was after seeing and I've created now a lot of different partnerships, many of which are ongoing, but in the last six to nine months, I started saying to myself I think that I should be teaching the system that I created, this thing called the 90 day accelerator, which is to to teach people, to take people on, kind of as an you know they're, I'm there, I'm, they're taking, I'm taking them on as an apprentice, and so I work with people one-on-one for 90 days to land them at least one equity deal, and if I don't land them an equity deal in 90 days, we keep going for up to a year, and if I haven't landed them an equity deal in a year, I refund their money because, similar to my philosophy for paying vendors, people shouldn't pay me unless I deliver results full stop.
Speaker 3:So that's how I work, and it's very much a one-on-one to help them get going, and then later on we allow the people or we encourage the people to stay on with us in a group environment where we have kind of a mastermind thing, where everybody is helping each other Very nice, very nice, and before the episode you had sent me an email with an offer.
Speaker 2:or are firing the main audience? Can you talk about that offer?
Speaker 3:Yeah, I can, and it's ridiculous and anyone who hears this should go for this offer because it's absurd. And I have what I call because I've recently I bought this guy's program, spent a bunch of money with him, loved his idea. It's the concept of a microbook. So a microbook is basically, and even worse than that. So let me explain how I did this. So this is my regular book, right. However, what I did was I loved the idea of calling my microbook don't scale, because everybody and their brother out there, including an old guy I used to work with at CareerTrack, vern Harnish, has got a book on scaling. So I'm a don't scale guy. I want more money with less aggravation, less clients, fewer clients. I just want it to be easy. So this deal is three bucks and if three bucks is too much for you, I put a 50% off coupon in there that you can get it for a buck 50. So if you want to learn about my process, you can do so for a measly buck 50.
Speaker 2:That's outstanding and the coupon code for that is FTM1, the number one firing the man, ftm1. So, and we'll post a link to that in the show notes. Now, fred, before we break, we have something called the Fire Round. It's a list of four questions that we ask every guest. Are you ready for the?
Speaker 3:Fire Round. What's the show called by the guy who used to do. He did this thing for actors Inside the Actor's Studio and he does a similar thing If you haven't seen this. He asked these are some. You're going to have to look this up because in his fly around there's some really weird questions, which I love. But I want to hear what these are, let's go Absolutely.
Speaker 2:I'll have to check those out. So number one what's your favorite book?
Speaker 3:Favorite book, a Prayer for Owen Meany, by John Irving and many people in business. I had a guy say to me one time oh, I'm in business, I don't read fiction. I think you're dumb and stupid if you have that answer, because the ideas that you get from fiction oftentimes are much better than the best business book that somebody just recommended.
Speaker 2:I like it. I'm going to add that one to my reading list. What are your hobbies?
Speaker 3:I play a lot of poker. I just spent a bunch of money on a Black Friday sale or a poker training course by Bart Hanson called Crush Live Poker, and spent my $350 instead of $499.
Speaker 2:Outstanding. What is one thing you do not miss about working for the man?
Speaker 3:I hated to have to wear a suit. I'm sitting here right now, at least, I have pants on, but they're shorts. But I just hated I would have to ride the New York subway. I lived in New York for many years and I used to ride the subway and have to put on a suit and it was just mind numbingly uncomfortable. I'm done.
Speaker 2:I like it, I like it. And the last question what do you think sets apart successful entrepreneurs from those who give up, fail or never get started?
Speaker 3:I think it'd be a couple of things. Number one is a super passion for what it is they do, that they would do what they're doing even if they weren't getting paid, and the ability of people to admit they're wrong.
Speaker 2:Very good, very good, brad. This has been an outstanding interview. If people are interested in getting in touch with you or working with you, what would be the best way?
Speaker 3:Best way would be just to contact me, and I realized I didn't put it on the document. Just send me an email, fredgleek F-R-E-D-G-L-E-E-C-K, at gmailcom and in the subject line, because I get a lot of emails, just put fire the man.
Speaker 2:Awesome, awesome, and we'll post links to all that in the show notes. Fred, want to thank you for being a guest and looking forward to staying in touch, absolutely.
