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Key takeaways
- You don't understand the value of enterprise value.
- Once a business actually has enterprise value, it usually has already generated or had the ability to generate more than sufficient cash flow for the owner, which means that all the excess cash flow the that the business generates is going to be transferred to the owner in a tax inefficient manner.
- If you want to move up levels, you need to play a different game and you have to graduate.
- If you can't if you don't know where your rent's coming next month, [ __ ] enterprise value.
Chapters
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0:00
Abschnitt 1 You don't understand the value of enterprise value.
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0:56
Abschnitt 2 And so then what happens is that you want to have growth in your net worth that isn't affected by taxes, right?
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1:34
Abschnitt 3 Guess what else you can do with a highv value enterprise?
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2:05
Abschnitt 4 If you have those things satisfied and the vast majority of my content I try to make for business owners right who are trying to get bigger who are trying to scale um enterprise be
Full transcript
Locally archived YouTube transcript with timecodes. Speakers are assigned heuristically and may be corrected editorially.
0:00You don't understand the value of enterprise value. Of course, you build net worth without taxes, but it's fictional numbers that can't liquidate. I like cash flow, hard cash. Thanks to BLCCT GJ. Um, let me tell you why enterprise value [ __ ] matters. So, enterprise value is important for a variety of reasons. Enterprise value dictates how valuable something is. So Stripe for example is not publicly traded but people are willing to invest money in it and so the founders can get liquidity and so what you want is to be able to spend something but the thing is is that that comes from the position of not of already not having enough. So let me explain. Once a business actually has enterprise value, it usually has already generated or had the ability to generate more than sufficient cash flow for the owner, which means that all the excess cash flow the that the business generates is going to be transferred to the owner in a tax inefficient manner.
0:56And so then what happens is that you want to have growth in your net worth that isn't affected by taxes, right? And so if you say, "I want cold hard cash." Cool, bro. You want to pay your rent. I get it. after you're done paying your rent and after you pay your house off and after you pay for your parents house and after you pay for their cars and your cars and your kids' schools and all that, there's still cash flow coming in. And then you're like, "Wow, upgrade all my cars." Okay, great. And then I want a vacation. Cool. Cost 100 grand if you want to be a [ __ ] baller. Okay, then what? Right? Then you want the most efficient tax vehicle for building wealth, which is your enterprise value.
1:34Guess what else you can do with a highv value enterprise? You can take loans against it. You can get lines of credit. It becomes an asset. You can raise capital on with that. Right? There's levels to this game. If you want to move up levels, you need to play a different game and you have to graduate. If you can't if you don't know where your rent's coming next month, [ __ ] enterprise value. Being super real here. [ __ ] enterprise value.
2:05If you have those things satisfied and the vast majority of my content I try to make for business owners right who are trying to get bigger who are trying to scale um enterprise becomes increasingly important basically the bigger you get the more you satisfy your needs and the people around you's needs at some point then it becomes about the game and to be clear I'm not saying this game is the only game worth playing and there's not other games in life that are worth winning but in the game of business now worth becomes the objective measure and so that's how that works.