Great video I find this so much more foundational. Cody Sanchez has a video about hire an operator and she makes it seem like it’s a very easy thing and you just give them a 10% equity position etc.
She also buys a lot of laundromats, where I would imagine it's easier. I've always focused on more complicated businesses with higher upside that need some level of leadership.
There are too many ways to go with this that I think I could write a chapter or a book on it! Investors typically get equity, yes, but it could come into the business as a loan if the investor (and you) preferred cash flow / overhead. If the question is in regards to an operator or employees, the most common way in entrepreneurship & private equity to work this out is either vesting, bonuses, or other incentives. Private Equity and Search Funds typically guide towards 20% ownership plus or minus for a successful operator.
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Great video I find this so much more foundational. Cody Sanchez has a video about hire an operator and she makes it seem like it’s a very easy thing and you just give them a 10% equity position etc.
She also buys a lot of laundromats, where I would imagine it's easier. I've always focused on more complicated businesses with higher upside that need some level of leadership.
Really valid point! Thank you@@BuyThenBuild
You are the man. Great content
I appreciate that!
Do you give equity to investors? Would you do a strict profit share - annually - instead of equity?
There are too many ways to go with this that I think I could write a chapter or a book on it! Investors typically get equity, yes, but it could come into the business as a loan if the investor (and you) preferred cash flow / overhead.
If the question is in regards to an operator or employees, the most common way in entrepreneurship & private equity to work this out is either vesting, bonuses, or other incentives. Private Equity and Search Funds typically guide towards 20% ownership plus or minus for a successful operator.