Sharran Srivatsaa (0s):
If I can't see supercharged ambition, I'm out because I'm a minority partner, plugging and supporting someone's supercharged ambition. And I think the resulting force of someone's supercharged ambition is their ability to obsess over getting something done so fast.
Travis Chappell (16s):
Welcome back to the show. I'm Travis Chappell, and I believe that if you can connect with the best, you can become the best. So after creating 800 podcast episodes about building your network, I've come to realize that networking is really just making friends for doing it the right way. Anyway, join me as I make friends with Worldclass athletes like Shaquille O'Neal, entertainers like Rob Dyrdek authors like Dr. Nicole Lapera, former presidents like Vicente Fox, or even the occasional FBI hostage, negotiator, billionaire, real estate mogul, or polarizing political figures. So if you want to make more friends that help you become a better version of yourself, and subscribe to the show and keep on listening because this is Travis Makes Friends. Today I'm making friends with Sharran Srivatsaa. Shar is the CEO of Highland Prime, which is a private equity company that helps businesses grow and exit.
Travis Chappell (1m 2s):
Currently, the portfolio that they managed does over 220 million in revenue. And if you head over to highland prime.com, sheron might even write you a check for your company and help you grow and exit. So that's highland prime.com. Sheron also led Telus Properties unprecedented, 10 x growth over five years, and a four year consecutive streak on the Inc 500 fastest growing companies list, resulting in its acquisition by National Real Estate powerhouse Douglas Elliman. On this episode, we talk about how to start a business with your kids to encourage them to get into entrepreneurship. We talked about his thoughts on Elon Musk and Twitter and what that takeover means and what it looks like. We talked about so many other things in this episode, all about entrepreneurship, all about how to create world-class results for yourself in your life and in your family's lives as well.
Travis Chappell (1m 52s):
So please, if you do not know Sharon, check out this episode, cause I promise you're probably gonna want to go over and give him a follow. So without further ado, please enjoy my conversation with Sharran Srivatsaa. What's everybody? Welcome back to Travis Makes Friends. Today, I'm sitting down with a longtime friend of the show, Mr. Sharran Srivatsaa What's up dude? Welcome
Sharran Srivatsaa (2m 12s):
Man. Super excited to be back
Travis Chappell (2m 13s):
With you. Yeah, so if you're watching this, you're listening to this right now and you want to hear a little bit more about Sheron's background, cuz it's a fascinating background, dumpster dive in as a kid. Crazy kind of rag to Rich's story all the way through exiting a company for over 3 billion. Just crazy, crazy stuff in Sharran' background. So if you wanna go check that out, episode 2 52 of the podcast. Remember, if you're a new listener of the show, the old show was called Build Your Network. So when you go back there, don't let that throw you off. It was Build Your Network episode 2 52, but it's on the same RSS feed. So head back in time and check that episode out here a little bit more about Sheron's story. But dude, I'm excited to catch up about everything that's been happening. Cause last time we talked, I think you were still doing stuff in the real estate space. Yep. And now you're with Highland. Yep. Right. So can you kind of just catch us up on what happened in the last couple of years and what you're up to right
Sharran Srivatsaa (2m 56s):
Now? Yeah. So after we, so we've had five exits in the last 19 years, and once you have a bunch of exits, people realize they only talk about the positive stuff, but you don't realize all the things that you did wrong. And I actually will tell you, and you and I have had offline conversations about the things that we did wrong, actually fueled a lot of the other growth. And it's sad that the failures are not showcased in the most positive light. So what I realized was when I used to see other companies doing things, I would tell them, I'm like, Hey, I did this. Yeah, I'm, I would highly recommend doing not going down that path. And I saw a few companies that actually took the advice and they were like, Hey Sharon, so what would it take for you to coach or consult?
Sharran Srivatsaa (3m 42s):
And I didn't want the coach or consulting route. So we decided to build a private equity firm where we would not be majority partners, but only be minority partners. So our goal was to saying, Hey, can we help businesses triple in size, get ready for an exit like we did, but only be minority partners. And so over the last five years, we have invested and helped operate as minority partners of closer to two dozen companies right now. Okay. And all in the services field. And so getting them to connected to the successes that we have, but also to avoid all the failures that we had. Yeah. But staying in the minority partner role has been a super cool thing for me because that way the founder gets to still drive it, it's their vision.
Sharran Srivatsaa (4m 23s):
But instead of the culture consulting route being a partner, the energy has completely changed.
Travis Chappell (4m 27s):
Totally. Yeah. And it as, as a founder, that type of structure is something that I think a lot of people, a lot of people discount it man, because like in your mind you're like, but this is my baby. I don't want to give up this big chunk of, you know, whatever, whatever. And you, you tell yourself all these negative stories about it. But at the end of the day, it's like, I would way rather have somebody that's gonna be shoulder to shoulder with me in the trenches. Yeah. And, and be there for like, if we're going on this rocket ship, you're with me, but if we crash and burn, you're also with me. Yeah. And there's something about that energy that's totally different than just like, here's money now. Give me advice. Totally. From both angles. Yeah. So yeah, I can,
Sharran Srivatsaa (5m 2s):
Can definitely appreciate that. Well, I'll tell you something super interesting, right? Early on, that was the plan. Then I realized that several founders I would talk to saying, well, I've built this so far, I'm kind of reluctant to give you a piece Yeah. Of this business, even though I know that you can bring a lot of value. So I changed my model early on where I said, I don't get the equity, even though I write the check, I earn it. And so, meaning we set up very simple benchmarks over a three-year period as to what we need to hit. And it accrues and invests. But until I hit that benchmark, I don't even earn the equity. So I'm completely in all the way. So I still, it allows me to know that I have risk capital in the game. Sure. But the founders don't feel like Sean's getting a free ride. Right. Right. And that's been super helpful.
Travis Chappell (5m 42s):
What, what are you doing in terms of like top of funnel like awareness around something like this existing? Yeah, because like literally, bro, like if you told me this when I was starting a service-based business, I would've been like, yeah, where do I sign up? You know what I mean? Yeah. Like how, how do you, how are you getting spreading the word? Yeah. And are you conscious or mindful about like the sheer volume of companies that you bring on? Because you obviously can't say yes to everybody.
Sharran Srivatsaa (6m 4s):
That's right. So we're, we've continued to build the team to support the growth of the business. However, it's shocking. I have not sent one message, one email, one tweet, one video, not one thing promoting this at all. Not one. The only way people actually find out about this is one of two ways, one way, which you taught me second way, which I just started doing, the way you taught me was, Hey, you should mention something on your podcast about it. Hmm. So when I, somewhere in the podcast, I will tell a story, Hey, I'm working with Travis, one of our partner companies. Let me tell you the story. Yeah. Hey, by the way, if you're interested in what we're doing, go to highland prime.com and it'll tell you stories. Literally, there is a, if you're interested, go check this out. And the second is, there's just a link in bio on Instagram. And so when someone watches content and they find their way to the bio and they actually click on it, we are getting, at this time, it's not a lot, but we're getting a dozen to two dozen inbound fully filled out applications per week.Travis Chappell (6m 57s):
Wow. Per week. That's crazy.
Sharran Srivatsaa (6m 59s):
Yeah. With no promotion,
Travis Chappell (7m 0s):
No, no ad spend. Just pure like organic content. Yeah. That's helping people. Yeah. They see it, they're like, Hey, let's do it. Yeah. Wow. That's crazy man. What type of content are you guys putting out? Like what, what is your, what is your output schedule look like?
Sharran Srivatsaa (7m 14s):
Yeah. The output, it's actually super simple. Our goal is to get three to five pieces a day. Okay. On TikTok as a testing ground. Okay. So we do the same video with four different hooks on TikTok. Same video. Same video with just four different hooks, intros, first five seconds on TikTok, whichever performs the best. It goes on reels. So that's one to two videos max a day on reels. The same goes on YouTube short. One to two videos a day, max. But it's all, Hey, here's what I'm doing with the partners. Yeah. Here's what we're doing with our founders. Just telling the story of kind of documenting what we're doing with them.
Travis Chappell (7m 45s):
If you could snap your fingers and have a million engaged followers on one single platform, but it meant that every other platform went to zero. Yeah. Which one would you pick?
Sharran Srivatsaa (7m 55s):
I would love to go to YouTube. Shorts. I would love for YouTube to just, cuz I think that I'm amazed at the power of the YouTube search engine. Yeah. And Instagram has also gotten to the point, the other platform that gotten to the point where it's very scrolly Sure. And very swipey. But as far as even like I, well I'm a big fan of Mr. Beast.Travis Chappell (8m 14s):
Who isn't?Sharran Srivatsaa (8m 14s):
It is. It is. So I went to this Mr. Beast, it was like a 30 person mastermind. Yeah. Maybe like four years ago. And Mr. Beast was gonna be there. So I was like, I have to go to this to see what he says. Yeah. For 90 minutes he talked about thumbnails.
Travis Chappell (8m 30s):
Wow.
Sharran Srivatsaa (8m 30s):
The whole presentation was 90 minutes on thumbnails. Wow. And he goes, I could tell you various ways in which you can build and grow your channel, but you are missing the point. He goes, we obsess. He's like, we build 20, 30, 40 thumbnails and once we like a thumbnail, we go build the video. And the idea around it, I was like Wow. And his, so there was a lot of people in the room that said, well, I'm thinking about starting my channel. He goes, don't start your channel. Your goal is to build a hundred thumbnails. Wow. And he goes, until you build a hundred thumbnails, don't make one video. And like for someone like that, but you know, who just got offered a billion dollars for his channel Yeah. To be able to give that advice. Yeah. It's,
Travis Chappell (9m 9s):
Insane.
Who just got offered and turned down who turned down a billion. A billion dollars. Yeah. And he is what, 23, 24? Something like that. So wild. Yeah. That's ridiculous. A hundred thumbnails before you even create a single video. Yeah. That's, I mean, that's the whole thing that people don't see. Yeah. Right. They see like this young kid YouTuber and just you, you immediately, you immediately go to all the reasons why you haven't done anything big. You know what I mean? And, and so like, you have to justify why this kid just got lucky. Yeah. At the end of the day, it's just like, no, it's just before anybody else was even aware that YouTube was going to be a thing. This kid was 13 years old obsessing about how to build the perfect thumbnail. Yeah. You know what I mean?
Travis Chappell (9m 49s):
Like not paying attention in school, just thinking about thumbnails and then video content and then ideas and that's it. And then every time he made money, he just dumped it directly back into the grip of the channel instead of like, oh, I made 12 grand this month, let me go buy a car. Like, you know what I mean? Like, let me, lemme go get a fat payment on something. And he even said he was on Joe Rogan recently, and I listened to that episode and, and he, he was even saying that like Joe basically was in the position that all of us are in, which is basically like as a 20, 21, 21 year old kid, you know, I think he's 23, 24 now, but when he started making good money, he was 18, 19, 20 like a, a young kid. He's like, Joe was amazed that he didn't get sucked into the traps of being a 20 year old kid with a ton of money and influence.
Travis Chappell (10m 31s):
Yeah. He was just like, how did you escape that basically? And he was just like, ah, just figured out. Didn't really matter to me. You know, like I did get a car and I did get this and that. And then, and then I, he said like, someone broke into his house and stole a bunch of his stuff. And then he was just like, I just never replaced it after that. It made me realize how much I didn't care for it and didn't want it, and then I just want to keep making awesome videos. So then he just puts like, you know, that freaking squid games video? Yeah. Its like seven and a half, $8 million to produce a single video or something like that. It was like a full production. Yeah. But he's got 200 million subscribers plus across all of his channels now. You know, so like how do you,
Sharran Srivatsaa (11m 6s):
Well the crazy part there is when we are listening to something, a story like this, how do we learn from that? Right? Yeah. And I always think about two things. The easiest two ways to upgrade our lives is control your environment and control the people in your environment. They're easiest way. So if something if we, and I can get ideas on building a new show, I'm like, Hey, let's, let's pop, let's take a walk. Let's change the environment. Let's retr the environment, or let's add Eric to this conversation. Because now you're controlling the people in the environment. Yeah. So as soon as you upgrade the environment or upgrade the people in the environment, all the stuff that does not matter falls off the wagon very quickly. Yeah. Because what people are doing now is they stuck, they go to social, they stuck, they watch more videos, they're like, they keep swiping.
Sharran Srivatsaa (11m 48s):
And that does not change your environment or the people in your en environment in any way. Yeah. So if you can, can do, if anyone's stuck right now, just say, Hey, can I upgrade my environment or can I upgrade the people in Myas?
Travis Chappell (11m 58s):
Yeah. So it's funny, funny bring that up because there's one, there's one like productivity hack that you gave me a while back that I frankly still not have, still have not done it yet. But I feel like at any given time, just talking about it right now, reminded me of it. And I probably should do it, but you said like, anytime I'm stuck and I, I can't, like I'm, I'm stuck on this idea or this concept. You're like, I've actually physically bought a plane ticket from here in Laguna with, you know, where you live. And I've, I've bought a plane ticket to go to Phoenix. Yeah. Just because I like moving and that gets my brain moving and I like writing. Yeah. Well the only way to really move and write at the same time effectively for me is to be in an airplane.
Travis Chappell (12m 40s):
Yep. So you literally buy a plane ticket, just a one, like a one day round trip flight to Phoenix. Yeah. And back just to like, write ideas down and get stuff outta your head and like remove mental blocks. And I thought that was something that
Sharran Srivatsaa (12m 51s):
Yeah, I I, you would be shocked. I I do that so often. Really because it's a one day I fly, I fly back just a backpack. I don't have to change my schedule in any way. Right, right.
Travis Chappell (12m 59s):
Which Is good.
Sharran Srivatsaa (12m 59s):
Most people don't know this, but even when I record my podcast, I've got, I've gone to solo shows now. Okay. Because now I just tell the stories of working with our partner companies. Yeah. I only record the shows when I'm driving. Oh really? So I have a really good headset. Yeah. And I think about the podcast episode and I just get a cup of coffee and I drive until I record, finish recording the episode and I turn around and I record the second one back. That's, I, all my episodes are recorded on the move on, on.
Travis Chappell (13m 26s):
That's so good, dude. So listen, I wanna talk a little bit about par about parenting with you, because I know this has been one of the most difficult, I think, things for me to tackle in the last couple of years Yeah. Is that, you know, I, my, my son's three and a half now, my daughter will be two in a couple of days. Yeah. And that by itself is a very difficult thing.
Sharran Srivatsaa (13m 44s):
Yeah.
Travis Chappell (13m 45s):
Alone on an island, just being a parent is really difficult. Yeah. But then you couple that with like having a startup, which is basically a more needy version of a baby. You know what I mean? That like affects more people's lives. Cuz we have, you know, a 10 employees and a few contractors and it's like, well we, we have people to take care of and like, this baby has to be fed so it feeds all the other people that are associated with that one. But I also have these two over here and then I have my wife and then we have, like, there's so many things. I got the podcast, we have another podcast for fun. It's like, how do you tie in passion, entrepreneurship, parenting and actually be able to still be there for your kid Yeah. And not miss everything.
Sharran Srivatsaa (14m 23s):
I think the first thing is one, having the awareness like you have, because that's until you stated and, and understand that it's, it's it's work. It's a skill Yeah. That you need to learn. A lot of us learn the skill of parenting and then our kids are gone. That's right. So it's like, I just got good at this and then, and they're gone. So with my coach, I talk to my coach two to three times a month. But with my coach, we have one session dedicated to family, essentially parenting one session dedicated to me and my wife and one session dedicated to the business.
Travis Chappell (14m 55s):
Okay. So this is like a life coach.
Sharran Srivatsaa (14m 56s):
Yeah. She's, she's a life business coach. Okay. And she's great. And the reason is that what we ended up talking about before was whatever was top of mind we would talk about before Yeah. And say and worked together. But now we've just themed our calls, realizing that the domains are important and that each of the domains always need upgrades. Yeah. And when I have, when I know my next upcoming call is the parenting call, which is great. So I know that, I know I'm gonna level up in that area. So one thing that she, so that alone,
Travis Chappell (15m 23s):
Just having the accontability
Sharran Srivatsaa (15m 25s):
Just so just knowing that I've got this dedicated time and that next call I'm actually gonna forcefully think of and talk about that, which is, which is really powerful. She gave me this idea last year and she said, Hey, so I have my son Neil is 11, my daughter Laura is six. Okay. And she said You should have each, your wife and Sharon, you and your wife should have separate individual projects with each of the kids. Mm. So you have individual relationships that you can talk with them about that the rest of the family's not a part of. and I was like, well does that feel like it is
Travis Chappell (15m 55s):
Uniting? Yeah,
Sharran Srivatsaa (15m 57s):
Yeah, yeah. Uniting or segregating the family. She's like, try it. So the project that I have going on with my son right now, my son is, he loves Rubik's cubes. Okay. He's solved, there are 14 different types of cubes and he's solved every different type of cube by himself. Wow. And by himself, by himself watching YouTube videos. He's, he solved 'em. So he's teaching me how to solve a cube over the next 90 days. And so all we do, every single day at night before he goes to bed, we spend five minutes and he teaches me an algorithm and we have that little bond. Yeah. But with my six year old daughter, I didn't have anything like to sink my teeth into. Sure. So I was talking to one of my best friends about it and he was like, Hey, my daughter is similar too. We should do something together with our daughters. I said, okay.
Sharran Srivatsaa (16m 37s):
Like what? And so we started talking about it and my daughter Laura, who's six loves rainbows and unicorns, you're gonna get there. But like, like, I mean, I am not joking Travis. Everything that we own has a rainbow or a unicorn on everything. Right. And so I said, wouldn't it be great to do something where, which involved rainbows and unicorn cuz I know I can immediately grab her attention. Yeah. And as we were talking, I was like, well what if there was a business we could invest in or buy that was unicorns related. So we did a bunch of research and last week we closed on a business called hundred unicorns.com. It's a online e-commerce store that just sells unicorns products.
Travis Chappell (17m 12s):
That's Fantastic
Sharran Srivatsaa (17m 12s):
And we installed a six year old CEO. So my daughter Laura is a six-year-old CEO.
Travis Chappell (17m 20s):
A six-year-old CEO. .There's a YouTube channel right there.
Sharran Srivatsaa (17m 22s):
It is. She loves it so much cuz the first day when we closed on the business, she, we pulled up the inventory. It's, so, I I I can give you the business plan right now. It's a straight up Shopify store with drop shipping. We hired an operator to bolt on Amazon FBA and Walmart. And that process is happening right now. All that Laura and her now my my friend's daughter do together is they just pick what products they like. So I'm going through the inventory and she's like, I would never buy that. I would, I like that. Yeah. Can we do more of that? She's like, can I get that one? So when, when you know that she says, I want that lamp or I want that sticker.
Travis Chappell (17m 59s):
you know that it's a powerful thing. She's the ideal customer.
Sharran Srivatsaa (17m 60s):
A hundred percent. Right. And so now last week I actually sent out the first email where it was Laura writing the email, Hey everybody, this is me, Laura parenthesis, my dad's writing this because I don't know how to type. Like it was so cool. And we sent that email out to a small database and we got purchases like, wow, it is so cool. So now my conversations with my daughter is all about a hundred unicorns and we get to talk about it. We have a completely different relationship about it. And she's like, Hey, now whatever she sees, she's like, can I get that on the store? So back into the parenting thing, I think having something where you're working on a project with somebody, I think gets you deeper in relationships and rapport with them. Yeah. And now the rest of the family, my wife and my son are not weirded out by it at all because they're like, oh, Sharon and Laura are working on that.
Sharran Srivatsaa (18m 44s):
Cool. Let 'em work on that. Yeah. And they feel like it's a part of the overall conversation. So it's no different than me and my wife talking about some plans or maybe I'm talking about something else. So the, I think the individual relationships dramatically increases like love, transparency, rapport and working on something together. Yeah. So the big lesson for me is one could be think about parenting constantly in some, in some regular schedule and two If the, by doing work on it, having a project related to it feels like you can develop it
Travis Chappell (19m 13s):
Some more. Yeah. So if you're a parent and you wanna foster entrepreneurship with your kid, then just rewind and go back and listen to that clip a couple of times you said you did research to find this unicorn business for somebody who is not in private equity and constantly looking at deals and buying businesses and taking equity in companies and advising and they're listening to this and they're like, that's an awesome idea, but I have no idea how to even find a business like that. Yeah. Or negotiate terms. Yeah. Like what would your recommendation to them be? Was this like a marketplace deal? Did you, like where did, how did, where did you find it and how did it come
Sharran Srivatsaa (19m 43s):
Come about? Yeah. It came across very randomly through a friend. Okay. So it came across very randomly. But if someone knows exactly what they're looking for, my favorite thing is to just ask your network. I mean, you're the builder network guy. Like literally post on Facebook and say, Hey, I'm looking to buy or invest in a pancake house business. Does anybody know any pancake houses around the country? Yeah. Like you'd be shocked as to how many people can connect the dots for you. And when the ask is so unique and specific Yeah. People will share it and want to help you, et cetera. We are, we, we have no idea the depth of connections in our network that can find the most Sure. Strangest of things. So that's number one. There are a couple of website like flip a.com and things like that that are out there.
Sharran Srivatsaa (20m 25s):
Okay. If you just Google how to, you know, buying an e-commerce business online, there's a lot of sites out there. My suggestion is if we're, if you're thinking about buying a business, you have two options. Number one is at least find an attorney that has done a deal like that that can at least guide you through the guidepost around It.
Travis Chappell (20m 40s):
And a attorney is essentially
Sharran Srivatsaa (20m 41s):
M and a attorney. And those deals are generally smaller, so you don't need someone, you know, fancy, but they just need to have had had experience buying the business size that you've had. But, but I actually like talking to business brokers about this stuff. Yeah. Cause while business brokers and various niches have gotten weird kind of wraps, they know how to find a business terms of negotiating a business. Yeah. Just you need, I think having an advisor on things like this is really good cuz otherwise you're writing a check on something that you can't find, et cetera. Yeah. Right. But I will tell you, man, we are overlooking the fact that many businesses sell today for zero money down.
Travis Chappell (21m 15s):
That's what I was gonna that's what I was gonna ask about next. Yeah. Yeah. So explain, explain that. Why is that? Because that, like, I think you just blew a bunch of people's minds right now because they're listening to this and they're like, I can't afford to buy a business. Yeah. Like Sheron's companies, he's got money to play with. I like, I'm working at, you know, whatever. Yeah. The Walgreens warehouse down the street, like, you know, loading boxes, like what do I do with this? Yeah. So explain that.
Sharran Srivatsaa (21m 36s):
So the interesting part is most businesses in the US are jobs for people. Yeah. And the sooner we understand that, the sooner we can understand that buying a business for no money down is just a mindset. There are tons of people out there. The first thought that they have running a a HVAC business or a stone masonry business is they're thinking, okay, I am getting to my fifties, I'm making up numbers. Yeah. I'm tired, I'm done. I'm just gonna shut it down. Yeah. That's what they think. They're just gonna shut it down. No, the average business owner does not think that they're gonna sell their business in any way.
Travis Chappell (22m 12s):
And if they do, they probably can't.
Sharran Srivatsaa (22m 14s):
They don't. They can't. And they don't know how. Right. I have real estate agents who are, they'll work their entire careers in their real estate business and they'll say, I'm done. I'm just gonna move to Napa. I go, wait, like your income just stopped. Right. So you have to work twice as hard in your Yeah. Last 10 years to save up. And then you don't, you don't have this big network database that you build. Most businesses can and will are very open to selling for zero money down. But it's all about terms. If you get zero money down, you're just telling at some point someone is financing the business. Either cash is financing the business, a bank is financing the business, or Travis the owner is financing the business. Yeah. All we need to think about is at some point someone is financing the business.
Sharran Srivatsaa (22m 54s):
It doesn't have to be cash, it doesn't have to be the bank. It can be Travis, the seller. And we call it seller financing. Yeah. Most of the times what sellers want is they'll say, Hey Sean, I've been doing this business for a while, like a hundred unicorns.com. I've not put a lot of effort into it. You guys are gonna market it, you guys are gonna write emails, you get get at Amazon FBA and all of that. Awesome. How about for the next 24 months, pay me five grand a month. And if they do that and they're out.
Travis Chappell (23m 19s):
And a lot of times the business will be making the amount that they're asking for. Correct. So it's like you
Sharran Srivatsaa (23m 25s):
Just 'em outta cash flow. Yeah, yeah. Right, right, right. And people will ask, well, why would they walk away from the cash flow? Well, very simply is they're delivering their time to right now. And we take over that. But we're committed to paying them that. Yeah. I'll give you a great story. Jason Capital and I who, you know, Jason Capital and I wanted to, wanted to buy, he is a marketing agency and he wanted, wanted a front facing Instagram page to drive more traffic to the marketing agency. And I was like, well, let's go buy a page. And he goes, I've, I have four pages picked out that I would really like. I go, okay. So I just DMed the page owners directly and I said, Hey, would you be open to something like this? Like, I've never thought about this. Let's talk about it. Travis, we didn't even get on the phone. We did this whole conversation on telegram.
Sharran Srivatsaa (24m 5s):
Right. We, and then don't know who this person is. This person was in the uk. We bought, we did the whole transaction in 37 minutes using Bitcoin. We bought the business with like That's fantastic. 30 40 grand of Bitcoin down. Yeah. And we had a, a third party escrow. The guy came into the telegram chat, actually negotiated the contract for us, which I didn't know that you had third party telegram escrow. Yeah. We'd never even met the seller, handed over the credentials to us, released the monies to him or her. I don't even know if it's a girl or boy released the monies to him or her. And then we pay them over time as the paid generates revenue. Wow. So we bought a business for in 37 minutes using Bitcoin. So I just wired from wallet to wallet. Like I did a wallet to wallet transfer.
Sharran Srivatsaa (24m 46s):
So you can buy stuff. I would actually say ask, just assume that almost all businesses are available for sale for zero money down.
Travis Chappell (24m 54s):
Yeah. I, I feel like I was talking to, talking to somebody about this recently. I was like, in the next few years I really want to increase the number of like businesses that I, that I bring on that are just, they're just producers. I, at least I used to think this way, I used to think that like, if I'm gonna be a successful business owner, I have to invent the next Facebook. Like I have to come up with Angry Birds. I have to do something like, I have to be an, like an inventor, an innovator. I gotta do Tesla. I have to, I have to build something huge. I'm an amazing, it's like you don't realize that like in your town, wherever you live, there's a bunch of boomers that are getting ready to retire. Yep. And this recession is going to hit a lot of people really hard. And the people who've been working with these, this chain of three laundromats for the last 25, 30 years in their local area and have been busting their tail for that long, working on these laundromats they want to be done.
Travis Chappell (25m 44s):
Yes. And if they're the only one running it, then there's no structure in place. They're not gonna be able to have a big exit or acquisition. They're just looking at it like you said, it's like, well I guess we're just gonna shut down.
Sharran Srivatsaa (25m 54s):
It actually costs them money to close the business so they keep it running and be resentful aboutTravis Chappell (25m 57s):
It. Yeah. Right. Right. Yeah. And then they have to keep working it. Right. Because nobody else is going to. So I I, I think in the next two your point, the next two to three years as the recession gets worse and worse over the, like really the next like eight quarters, I think there's gonna be, it's gonna be ripe with opportunity with people who are just like, look, I'm done. Please take this off of my hands and whatever. I'm open to whatever you want to talk about.
Sharran Srivatsaa (26m 21s):
I will tell you the craziest story. My, my friend is a real estate agent in Chicago. He helped this fam, this Korean family sell their family home. Yeah. In a normal real estate transaction. In the transaction, the, the family, the husband and wife older couple took such a liking to my friend. They said, Hey, I'd love for you to show you our business and our warehouse. And so he's like, of course. So he goes and, and shows 'em their, so they are in their, they import t-shirts. The couple is telling him the story saying, we've been looking for somebody to give this business to. We will give this to you. We will give you this business. We have hundreds of thousands of dollars of inventory. We will give you the inventory as in you don't have to pay for it as in when you sell it, you can pay us back for the inventory.
Sharran Srivatsaa (27m 4s):
We will stay on for the next 12 months and teach you how to run this
Travis Chappell (27m 8s):
Wow.
Sharran Srivatsaa (27m 8s):
For zero money out of pocket. Yeah. Right. And so that was just because this couple saw something they loved about like a son in, in my friend. Yeah. And they offered him the business, the money
Travis Chappell (27m 23s):
And the education
Sharran Srivatsaa (27m 24s):
And the education to do it. Right. Right. So like what a risk this is like, and, and my friend was like, does this happen often? I go, when you put yourself in situations and you're open to this. Yeah. It totally
Travis Chappell (27m 34s):
Does. Yeah. So there's so much m and a activity going on right now. And I think it's gonna, like I said, I think there's gonna be a ton of consolidation that happens over the next couple of years. And I think that's historically proven in recessions. People that shouldn't be in business get out of business and they look for other opportunities and they just wanna be done. Or there's a lot of potential for acquihires and bringing people into the company. But there's also been a couple of really big things happening in that space recently that I'm curious to hear your thoughts on. As a private equity guy, Elon and Twitter, what's your take
Sharran Srivatsaa (28m 1s):
If someone had to do something Right. If you take politics aside, whether it's Elon or not, he has shown from a track record perspective that he can, he can build a great business. Yeah. Simultaneously doing other things. So he, he, and, and the the funny part is like there's a recent memo about, hey, you guys need to step it into high gear to build Twitter 2.0, what else do you expect?
Travis Chappell (28m 24s):
Right.
Sharran Srivatsaa (28m 25s):
Right. Like now it's, now it's a
Travis Chappell (28m 27s):
Bad thing. It's demonized.
Sharran Srivatsaa (28m 28s):
Right. I'm like, he's showing up and saying, Hey, I bought this business. I have a different vision for it. Right. Like, we're going to, we're gonna bust it,T
ravis Chappell (28m 35s):
Get on board or don't Yeah. Either way, fine. But if you're staying stay. Right. And let's build something.
Sharran Srivatsaa (28m 41s):
He said, and he was very generous. He's like, but those are in those they're in and those are out. I'll happily pay you whatever severance you want to go. We're building a new
Travis Chappell (28m 49s):
Business. Yeah. Higher. Yeah. And it was higher than average. Higher than normal severance
Sharran Srivatsaa (28m 51s):
Months or something of severance. Right. Which he does not have to offer anybody. Right. And so I have two kind of big questions about kind of thoughts around this. Number one is, I don't know his, his strange alien intentions, like Elon's not human right? Like it just is you can't do what you do. But I don't know his kind of broader intentions, but I do appreciate the fact that he sees that he can do different things. Yeah. Even the whole, even the whole blue check and pay for it, et cetera. Yeah. As a business person, I don't mind it. Yeah. Because he's experimenting. Right. And suddenly now that caused a lot of pain where it backfired. Yes. Okay, great. You put it out there. Yep. You learn, do something different with it. Right. As opposed to the opposite of not doing anything with it.

Travis Chappell (29m 32s):
It was immediate action. Exactly. It was, and then that's the thing about guys like him that people don't understand is like, you can sit there and criticize 'em all day long, but people like that don't wait for a panel of experts to give them their opinion. Cuz the only real feedback they're gonna get is the real time feedback of taking action and seeing a result, getting that feedback and then going, let's alter course and change directions a hundred percent. But if you just sit there going like, I wonder what we should do for six months and you're losing 3 million a day, or whatever they were losing. It's like, that's how you, you know, go bankrupt.
Sharran Srivatsaa (30m 1s):
Well, I think, I think that's, I think you mentioned some of those So cool. The best entrepreneurs that I know. And so the, the one of the three criteria that we look for in the founders that we invest in are, you know, impeccable character from an integrity perspective. Yeah. We call it reflective awareness. They're, they're coachable. And the third is, this one is supercharged ambition. If I can't see supercharged ambition, I'm out because I'm a minority partner plugging and supporting someone's supercharged ambition. Hmm. And I think the resulting force of someone's supercharged ambition is their ability to obsess over getting something done so fast. Ian had an idea, he said we're gonna do it three days after they did it.
Sharran Srivatsaa (30m 43s):
They actually built, like, that is crazy from an execution
Travis Chappell (30m 45s):
Especially in a company of that size. Totally. To be able to move that quickly is
Sharran Srivatsaa (30m 49s):
Precedent and it's not adding a different like button. Right. This is a fundamental product change, changeTravis Chappell (30m 55s):
Of the business model.

Sharran Srivatsaa (30m 57s):
It's crazy. Right. So I respect the fact that he's moving fast and, and I think we, when you do that, you will get a better platform. I, you know, you get, you go from not doing great to more regulation to something in the middle, which is better. Right. The second thing that I'm ultra curious about, which other a lot of people had thoughts around is, well, how did he buy it? Yeah. And there was so much poo-pooing around like, hey, he, he pledged his Tesla stock to do this and he borrowed money. I'm like, yes.
Travis Chappell (31m 23s):
What, like, which action are we demonizing here? Like this is how deals get done.
Sharran Srivatsaa (31m 32s):
Right. And so I always go back to financing. Somebody has to finance something. Right. You either use cash to finance something, some form of bank loan in some way to finance something. Or the seller takes a note and you finance it another way. Right. Zero money down some form of it. Well, what all that Elon did was instead of writing a check with cash, he said, I have all this Tesla stock, Merrill Lynch or whoever was willing to lend him money on it and he did it. Right. In fact, he is on the hook for all the stock movement. Right. He has to pay a fee on all of that. Like he, if you and I had the stock, we would do the same thing, but I actually think you and I can do the same thing, which is that's what we call a home equity Atlanta credit. Right, right, right. So if you had another $20,000 available, you can borrow it.
Sharran Srivatsaa (32m 15s):
They don't, no one asks you what it is. Right. And then you can,
Travis Chappell (32m 17s):
You can take loans against your ira, you can take loans against 401k, you can take loans against your stock portfolio. That is exactly as a regular person, you don't have to have, you know, 200 billion network to take loans against your stock. That is Exactly. It happens all the time.
Sharran Srivatsaa (32m 29s):
That's the flip that I want to kind of, I've been sharing with the, our founders is it is not about cash for a rainy day. Hmm. It is about always knowing you have access to cash. And I think that's a big difference. So totally several of my friends, I, I'm a big fan of this idea of infinite banking, which is using life insurance policies, whole life policy, whole life policies as a container for holding onto wealth and transferring wealth. But the idea there is you shove more money into life insurance, insurance policy, but it is your bank. It is your bank, you're your own banker. Now you can borrow from your policy. When I borrow from my policy, I just tell the insurance company how much send and when. Yeah. There's no question around anything I can just borrow from my policy.
Travis Chappell (33m 9s):
Let me see your income statement. There'sSharran Srivatsaa (33m 10s):
None of that. Right. And so if we can flip our mindsets to, I don't need to be sitting on cash. And I always tell a lot of our founders, you're sitting on pick a number, $500,000 of cash that is lazy cash. You're doing that just because you have this feeling of security, right. That you need 500 grand. It may not solve any reason. Yeah. But it's lazy cash. It's not the cash that's the problem, it's the access to cash. And I think what Elon solved was he goes, yes, I could write a check. I could go take my Tesla stock liquidated pay taxes on all of that. Right. And then write the check to buy Twitter or I can just borrow against it in a completely tax efficient transaction. Right. So he flipped the difference between having cash and access to cash. And I think that's what I wanted people to learn is access to cash is the flex.
Sharran Srivatsaa (33m 53s):
Yeah. Cash is not the flex
Travis Chappell (33m 54s):
Sure, sure. Right. I mean, zero zero wealthy people I know are just sitting on a bunch of like piles and piles of cash, like Scrooge McDuck, you know what I'm saying? Like, they're like, that's not happening. It's, they, they all have it invested. It was funny, buddy of mine, I don't know if you know Chris Nagle, his whole business is preaching the whole life infinite baking concept. And that was one thing that he, that he brought up was about the, the whole FTX crash that happened. And he was talking about that and was just like, if these investors had their money in FTX but had not actually had their money in ftx, but had it in a whole life policy and took the loan against it and put it in ftx, they'd be sitting in a much different position. Yeah. And on that note, I'm curious to hear, there's a lot of people that are hearing a bunch of stuff about, you know, Sam big MCF fried and, and, and FTX and this whole crash and this, you know, fraud investigation and you know, the mini Madoff as they're calling, as they're calling 'em and stuff.
Travis Chappell (34m 44s):
Can you like, break it down? So a layman that doesn't understand any of this stuff, that doesn't really, and has not dabbled in this world. Yeah. Can you break down what happened with FTX?
Sharran Srivatsaa (34m 52s):
Yeah. So the, the interesting part, if you actually completely zoom out, instead of thinking about FTX a anything crypto related, the easiest way is to think about it as the NASDAQ or the stock market. Okay. So thing that we already know, my favorite way of trying to understand a concept is, hey, what is this like? Hmm. And in a lot of ways it's just like a stock market exchange. What does a stock market do? The stock market is a, like a, NASDAQ is a market maker. They bring buyers and sellers together. Now it generally works because there's some buyers and some sellers and the stock market kind of brings the match together and their job is to bridge and make the market. Sometimes if there's crazy news in the economy, there's terrorist attack, et cetera, they stop trading in all all exchanges.
Sharran Srivatsaa (35m 36s):
There's a reason for that because you can't make the market anymore. There's a mismatch between the number of sellers of the stock or the market and the number of buyers. So there's what they call, there's not enough liquidity to manage the transaction on the markets in balance. Everyone's okay. And crazy events put things out of balance. And when you don't have, but our stock markets are so mature that they know how to halt trading. They know how to pause things. They know they have regulatory stuff while I'm a free market capitalist. Some form of regulation is good for things like this because you don't see stuff just breaking. Right. And the reason why FTX is like in The Bahamas or in the Caymans or wherever it was, I can't remember exactly, but they were not able to short circuit the buys and the cells.S
harran Srivatsaa (36m 21s):
And so it starts to break down. Right. And for me it's like, well, why, why did that happen? Because there's not enough like baseline borderline regulation around it. Yeah. And it's just not mature enough. Yeah. So in a, in a very base level, we have to allow like this crypto economy, even though it's been around for a little bit. Yeah. I'm sorry, it's young. It is. Oh yeah. So it is so young what the average person doesn't even know what pancake swap is. Right? Yeah. And I can't believe it. I know what it is because, you know, but it's, but most people are like, I'm gonna go buy Bitcoin on Coinbase. Like that is their, their kind of exposure to all of this. Yeah. But knowing that as these, as the exposure to this asset class grows, we need a little bit of regulation to ensure that Absolutely.
Sharran Srivatsaa (37m 5s):
Markets work and stay in balance. Otherwise you're gonna have crashes and exchanges. Yeah. Yeah. And to me that's when I, I don't have, I don't know all the details around what happened to him or whether he did the mini Madoff, et cetera, but what I am concerned about is how can we use the learning of this to saying, Hey, this happened. Yeah. A bunch of people got affected. Can we put mini regulation in place so that this doesn't happen again? But I think the, the next iteration of this, I feel terrible that some people really struggle financially on this one. But that's a big learning because if that did not happen, we would not have the courage to build the next better FTX.
Travis Chappell (37m 40s):
Yeah, yeah. Definitely. I think a lot of people learned a lesson the hard way. And unfortunately, and the hard part about it is like there's probably a lot of really, really smart people that lost a lot of money on it too. Yes. Of course. You know, I mean, including all the people that invested in the last round. I mean, they raised a massive, massive round, you know what I mean? And then it turns out he was just spending the money himself Yeah. And doing whatever he wanted to do. Donating to political campaigns and, and not actually using the money to
Sharran Srivatsaa (38m 5s):
Even fundamentally like, like a, you know, like a Google can't do that,
Travis Chappell (38m 9s):
Right? Yeah. Right, right, right. And so the, there's a board, there's Yeah. Even inside of the company, there's, there's company governance and there's like, there's checks and balances in the company, not even in like the industry, right. So like this was a weird situation where the industry's not regulated very well. Correct. And the company was also not regulated very well. There's like three people controlling a company that's worth what, 20 billion or something like that.
Sharran Srivatsaa (38m 31s):
But I, I know this, this is, this is a, this could be a strange conversation. Whenever I think, think of stuff like this, I immediately think of what else is it like, yeah. So several of, I have several contacts in here in the state of California where cannabis is legal, right. Just, just the, the recreational cannabis. And there was a huge cannabis industry. And how it started off originally was the whole marijuana trade was the fact that it was all black market. It was not allowed, it was completely illegal. So buyers and sellers of, they call it flower buyers and sellers of flower, if they ever reneged down a trade, they'd get shot.
Travis Chappell (39m 7s):
They would die. There's some regulation for you.
Sharran Srivatsaa (39m 9s):
Yeah, that's exactly right. And then when this halfway regulation came in, they call it the gray markets. It's not completely, you know, white, but it's the gray market. Now what's happening is now it's somewhat regulated. Yeah. And they have one governing body, they have taxes, et cetera. But now I actually have buyers and sellers of cannabis that I talked. They're like, no one cares anymore. Because lead as in the gun was the regulatory governance tool. Now it's not. So in the last six to 12 months, cannabis pricing has plummeted in California. Cuz everyone's like, what are you gonna do? Shoot me. And what's interesting is that market around the country from a state by state perspective or whatever, is going through some structural changes. Yeah. Until we get those structural changes, we're not gonna be able to do, see that business flourish in some way cuz the average public person utilizing the service or investing in it has no confidence.
Sharran Srivatsaa (39m 57s):
Right. Yeah. And that's, that's the big Issue.
Travis Chappell (40m 0s):
So the lesson is go buy weed in California.
Sharran Srivatsaa (40m 3s):
I had no idea, but what I learned was that when he told me, he goes, governance was by the gun. Yeah. I was like, now I get Travis Chappell (40m 12s):
It makes total sense. Yeah. Right. Well listen dude, I I don't wanna keep you here forever. I know you got a family, you got businesses to run and everything like that. Before we take off, where do you want people to go connect with you a little bit more?
Sharran Srivatsaa (40m 21s):
I started this private podcast,
Travis Chappell (40m 22s):
I'm a subscriber, so it's been plug away.
Sharran Srivatsaa (40m 26s):
It's been super cool because I didn't know how to get quick ideas and lessons from my head out to our partner companies. Yeah. And so it's called 10 K Wisdom and the idea is how do I get 10 minutes worth of knowledge out everything under 10 minutes, no intro, no outro, just 10 minutes worth of raw, real knowledge out to folks. And I originally built it for our partner companies only. Cuz I would say I would come out of a meeting with Travis and I say, I have this idea. I would record it really quick. I would upload it on the podcast and would be super simple and private. And one of my partners said to me, he goes, dude, you're already recording this. Why don't you just give this to the world? This makes no sense that, yeah, you're holding this back. So recently we opened it up, it is still private, but you can get the access to the fetus, 10 k wisdom.com, 10 k wisdom.com, totally free.
Sharran Srivatsaa (41m 11s):
So if you like this show with Travis, I know you'll, you'll like that too.
Travis Chappell (41m 15s):
Absolutely. Yeah. If there's, if there's anybody there, there's a few people that I, I tell people in my circles, bro, I was just like, there's a few like super underrated entrepreneurs that everybody should follow and Sharan is definitely one of them. If you're listening to this and you don't know who this guy is and you are in business, you're doing yourself a disservice by not listening to, to some of the stuff that he's putting out there. Especially if you're an operator or a ceo. Like I, I was not a CEO before I started this company, you know what I mean? I was just like a solopreneur. I was just a hustler, a sales guy, a podcaster. I, I wasn't, I wasn't any of that. And so that was a steep learning curve for me. And one of the number one resources that I always linked back to was, was 10 K wisdom. So I, I appreciate for coming on. If you're listening to this right now, go 10 k wisdom.com and subscribe over to, to Sheron's private podcast over there.
Travis Chappell (41m 59s):
And I know that you'll come away with some, some awesome lessons. So dude, always a pleasure. Thanks so much for coming on. Appreciate you man. Thanks for having me. That's it for today's episode. Thanks for spending some time with me and my friends. If you want to be better friends with me, then head over to Travischappell.com/team to subscribe to my free newsletter, your friend Travis, where I share what's on my mind about life, building a business, raising kids, being married, and anything else I would normally share with my close circle of friends. That's Travis chapel.com/team. And my biggest ask of you, since I'm sharing my friends with you, is to share this episode with a friend of yours that hasn't listened to the show yet. And leave us a quick five star rating in Apple Podcasts and in Spotify. It would mean the world to us as it helps us make sure that this show continues to be more valuable to you.
Travis Chappell (42m 42s):
Thanks in advance and I'll catch you on the next episode.