TMBA 239: 10 Ways to Cut a Crappy Deal

34 comments
TMBA 239: 10 Ways to Cut a Crappy Deal post image

Podcast | Download | Stitcher | iTunes

We’ve seen a lot of really smart people making dumb deals. It’s okay, every entrepreneur has been there. We’re not afraid to admit that we’ve been guilty of some of these mistakes ourselves. On this week’s episode we’ll be talking about ten ways that you can avoid making a really terrible deal.

Listen to this week’s show and learn:

  • Why equity in a small business can be a trap.
  • How owning equity can be a lot like networking.
  • If you’re not in control of the business, you should be in control of your destiny.
  • Why you need to be properly valuing the long-term equity of your property.
  • Some of the reasons why you should consider partnering up.

People on this episode:photo 1 (1)

Mentioned in the episode:

Listening options:

photo 2

Thanks for listening to our show! We’ll be back next Thursday morning 8AM EST. Cheers, Dan & Ian PS, there is also Tropical MBA content on Instagram, Facebook, and Twitter. PPS, if you’d like to receive emails from us occasionally, you can put your email address into the form below:

Published on 04.10.14
  • http://www.linchpin.net/ Damian Thompson

    GREAT episode!

    There is an even more important reason why taking equity in a small biz is a bad idea… there is hardly ever an exit event.

    Even if your 10% of a $10million business puts you in Mercedes territory you’ll NEVER actually see it.

  • Blake

    Sweet new Whip!

  • Herbert Camey

    Nice.. always learning from you guys. Thank you.

  • http://www.chinalifefiles.com/ Nick

    Good episode. I think topics like this are valuable because it is my guess that a lot of people listening are just starting out and struggling with these kinds of fundamental things that happen right when starting a business which have a huge impact on the future of the business as you two mentioned.

    This has been my experience anyway (with starting an English school with partners) and it really resonated with me as opposed to things like developing a website or hiring people which are talked about more often online but probably not as crucial to the business at the beginning. In my opinion anyway.

  • Christopher Justin

    As always, awesome episode. It was honest, decisive, funny, and engaging – made the Friday afternoon commute much rosier.

    Ears perked up even more when I heard that Ian was still in San Diego. I’m visiting next week, and am wondering what I could do to earn a few minutes of Ian’s time to discuss first clients and sick confetti-seated cars. I can bring beer, food, hookers…whatever.

    Either way, love you guys and what you’re doing.

  • https://twitter.com/jedbickford Jed Bickford

    Thanks guys, I learned a lot. Especially the inspiration to be frugal and invest in assets.

    Here’s a great case study from recent news, a famous designer who waited 14 years to ask for deal documents on a partnership that never was … basically what not to do: mobile.nytimes.com/2014/01/18/business/media/in-dispute-typography-partners-part-ways.html

  • Christopher Justin

    As always, awesome episode. It was honest, decisive, funny, and engaging – made the Friday afternoon commute much rosier.

    Ears perked up even more when I heard that Ian was still in San Diego. I’m visiting next week, and am wondering what I could do to earn a few minutes of Ian’s time to discuss first clients and sick confetti-seated cars. I can bring beer, food…whatever.

    Either way, love you guys and what you’re doing

  • Daniel Christian

    That was great. That was the first podcast I have listened to from you guys. To be fair, I think I have listened to 1 of Joe and Justin’s and one of Damian’s and that’s about it….. I have a partnership which has had it’s downsides, but so far, a lot more upside.

  • http://www.digitalexits.com Jock Purtle

    Read the book: Deals From Hell

  • http://www.sidehustlenation.com/ Nick Loper

    Dude the ’98 Integra is a baller-mobile. Always wanted one of those w/ the sweet body style and the circular headlights!

    At least it was baller compared to ’86 Celica :) Keep up the great work guys!

  • http://empireflippers.com/ Joseph Magnotti

    Glad we sneaked in there for at least one too, Daniel. Maybe you could come back for a second? ;-)

  • http://www.tropicalmba.com/ Dan Andrews

    Hey Jed thanks for the comment and for the link as well, saw that what a crazy story! That kind of stuff happens all the time in my experience in small biz settings…

  • http://www.tropicalmba.com/ Dan Andrews

    thanks DT appreciate it man!!!

  • http://www.tropicalmba.com/ Dan Andrews

    hahah :) bossman is keeping it classy

  • http://www.tropicalmba.com/ Dan Andrews

    cheers Jock appreciate that ! Will check it out

  • http://www.tropicalmba.com/ Dan Andrews

    hey Daniel thanks for giving it a listen appreciate you stopping by the blog !

  • http://www.tropicalmba.com/ Dan Andrews

    really appreciate that Chris! hope you and bossman have a blast hanging

  • http://www.tropicalmba.com/ Dan Andrews

    fosho

  • http://www.tropicalmba.com/ Dan Andrews

    thanks Herbert!

  • http://www.tropicalmba.com/ Dan Andrews

    hey Nick… my experience is that is the case (RE: people struggling)… even folks I’d consider super advanced seem to be describing to me wonky partnership ideas on a regular basis… i suppose it’s tough for me to be super decisive about this stuff b/c I’ve only been in the game for 7-10 years ish (maybe not enough time to see all this stuff come to fruition?) but i’m getting to the point where I’m feeling more confident about ‘non starter’ situations that are going to fizzle out in a year or so.

  • https://twitter.com/jedbickford Jed Bickford

    Hey Dan, yeah, truly incredible how many people skip the simple step of getting clear and saying what they need.

  • Daniel Christian

    For sure buddy.

  • Daniel Christian

    Of course. Good stuff.

  • http://thebeachhousesp.com Beach House

    You should ask your audience to post pics of their entrepreneur-mobiles. Thus enticing them to not make themselves mutually exclusive from the sacrificing of material lifestyle for building a business. In fact it’s something we all go through, more or less, in getting things done, we sacrifice for our struggle in many ways in order to make some ground. And in the end it’s usually worth it at least if you’re selfless enough to learn a lesson or two and place value on it; experiences & journey.

  • http://www.CloudVenturesGroup.com Steve Wyman CloudVenturesGroup

    Why Thursdays are now my Favourite day of the week. Always great content and added motivation to keep going.

    I call it “Porn for the business brain”!

    Of Course I’d never miss a Podcast from EmpireFlippers as well on a thursday :-)

  • http://www.tortugabackpacks.com/ Fred Perrotta

    Further reading on your point about employee equity: Mark Suster’s post, “Is it Time For You to Earn or to Learn?” http://www.bothsidesofthetable.com/2009/11/04/is-it-time-for-you-to-earn-or-to-learn/

    Work for someone else as a learning experience, not to get rich. Start your own company to do that.

  • http://www.TropicalMBA.com/ Ian

    My thoughts exactly :)

  • http://www.LimitlessMindset.com/ Jonathan Roseland

    I’m glad this episode threw sweat equity labor deals under the bus. When I was a younger businessman I worked really hard for free for startups and small businesses in exchange for equity and it NEVER paid off. I always had them pay me something, but I drastically undercharged because I had faith in the startup and I always regretted it.

  • Eddie Hahlbeck

    Great episode guys. I’ve been on and off with your blog/website for over
    a year, but I always come back! (especially when I need
    inspiration/motivation) I love the inspiration you give, the tactics,
    the casual conversations, and the jokes :)

    I have my on days and
    my off days, but when I hear you talking I instantly feel inspired to
    dominate! I’m working to become location independent and aspire to one
    day be accepted into the DC.

    I know you do the podcasts, but
    would you ever consider doing videos of the podcasts as well? Just
    thought it would be interesting to see the body language, gestures, and
    laughs that you guys do on video :)

    Just wanted to let you know how much I value your posts and podcasts, please keep it up!

    – Eddie from Milwaukee

  • http://www.tropicalmba.com/ Dan Andrews

    Hey Eddie very much appreciate that, I like the suggestion a lot… we generally have bandwidth issues which is why we don’t do video. I’d like to do some in-person on video podcasts in the future for sure! No plans now though, bossman and I have a tough enough time producing the audio version only ! :D

  • http://www.tropicalmba.com/ Dan Andrews

    yeah man sometimes I feel wack making sweeping claims but my experience has basically been the same.

  • http://www.tropicalmba.com/ Dan Andrews

    very nice link appreciate that Fred!

  • http://www.tropicalmba.com/ Dan Andrews

    hahah thanks Steve!

  • http://www.tropicalmba.com/ Dan Andrews

    great suggestion and we are on it!!!!! Post coming shortly…..

Next post: