Knowing Your Numbers as an Entrepreneur w. Codie Sanchez

3-Part Miniseries – Knowing Your Numbers w. Codie Sanchez – Ep. 74, 75, 76

SUMMARY



Part 1

In this three-part miniseries, you’ll hear from Codie Sanchez. She is a venture capitalist and a former investment banker and journalist. She joins us today to enlighten us on why knowing your numbers as an entrepreneur is crucial. Codie is the Managing Director and Partner at Entourage Effect Capital. They are a growth equity firm focused specifically on investing in the legalized cannabis industry. She is also the Founder of Contrarian Thinking. It is a newsletter designed to help curious entrepreneurs and philosophical execs to think like contrarians. In Part 1, she shares reasons why she invests in small businesses, what she looks for, and how to keep the upper hand during negotiations, as well as the importance of keeping clean books. All in all, this is an essential series of interviews for entrepreneurs, so make sure to tune in today for the first part of this three-part miniseries!

Part 2

In part one, Codie shared some of the reasons as to why she invests in small businesses, what she looks for, and how to keep the upper hand during negotiations, as well as the importance of keeping clean books. In part two, you’ll find out more about how to pitch your  projections and what it means to raise money, whether it be for a small business or a large, venture capital-backed business.

Part 3

In part one, she shared some of the reasons as to why she invests in small businesses, what she looks for, and how to keep the upper hand during negotiations, as well as the  importance of keeping clean books. Whereas in part two, she shared details about how to pitch your  projections and what it means to raise money, whether it be for a small business or a large, venture capital-backed business. In this final episode, Codie talks about capitalization tables (also known simply as cap tables), how important they are to entrepreneurs, and why you need to pay close attention when writing your term sheet, and she shares some resources that she recommends. Make sure to tune in today, to hear this final installment in an essential series of interviews for entrepreneurs!

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Key Points From This Episode:

  • An introduction from Codie about Entourage Effect Capital and Contrarian Thinking. 
  • Why she invests in small businesses: to diversify her income and get a greater ROI. 
  • Criteria for buying a small business, from under $10 million in revenue to being services based and having clean financials. 
  • Whether you’re a buyer or a seller, Codie emphasizes that everything is a negotiation.
  • Controlling terms versus price; the terms have the biggest outcome to affect the price.
  • Some terms that Codie uses as levers, such as tranche-based financing.
  • The importance of keeping clean books, which increases certainty in your business.

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