After Exiting for Billions He Gave $50 Million to His Employees | Tom Sosnoff

0:00We've had five exits, two over a billion and three like over a hundred million. We've always had only one rule we live by, which is wow. This is Tom Sosnoff, legendary trader, serial entrepreneur, and the mind behind Thinkorswim and Tasty Trade. In this conversation, he shares the trading lessons, business strategies, and founder hacks that built companies people couldn't ignore. Within a year, we had millions of followers and the largest digital financial network in the world. What is the secret sauce? All right, I'll tell you the story. Because I don't usually tell the story. When we sold Thinkerstone.

0:43You basically had almost$2 billion in exits. I mean, who hasn't used TastyTrade at least once in their life? I'm a big stock trader for a long time. I've used Tasty Trade, everything that you do. I've been a huge fan. But if I had almost$2 billion in exits, I'd probably be on a beach sipping a margarita or maybe a coconut drink. Why are you not on a beach right now? Why are you even talking to me, Tom? I can tell you right now that there's zero chance that you'd be on a beach sipping a pina colada if you had$2 billion in exits because it's a little bit like once you get a taste of certain things like that's what motivates you that's what turns you on i i mean not that i hate going to the beach and drinking a cocktail because i love it but i'm good for about three hours and then like you know i i love working i like building stuff building shit is my life and i don't really care about anything else like i don't want to you know that that is what's fun for me.

1:48Did you ever have somebody say like balance, Tom, like you need balance because it sounds like you and I are the same in this sense. I haven't had the exits, but I could work all day long. I could work 20 hours in the day and I don't get burned out. I enjoy it. You know, it's funny that you say that because I do a lot of lectures at, you know, colleges, grad schools, you know, to undergrad, graduate students at schools all over the country. Cause just cause I love it. and occasionally somebody will say, what about work-life balance? And then I go off on a freaking rant because no question drives me more crazy than work-life balance.

2:32Like that doesn't even register with me. So no, listen, I am what I am and I don't care if other people don't think that's cool. I that's what I am I'm a junkie man I'm still the first one to work every single day here now if you and you're not playing the guitar by the way I want to make sure people know that you don't play the guitar no no I have no talent so let's say you have to fill out a sheet online somebody sends you over a sheet whatever that sheet is and and it says name your hobbies what is your hobby oh love the question because I I actually do not have one I have I have I am hobbyless.

3:11I mean, I am, I don't know how else to say it. I don't have a single, like, I mean, I play some sports and I, I, you know, and I like to go out to eat and stuff like that, whatever, but I have zero hobbies. And I feel like there's certain things in life I'm very proud of. I don't, I don't have a hobby. I don't have a Netflix account and I've never ordered anything on Amazon. Those are my three main things in life that I can like, I think differentiate. Wow. Do you still use MySpace? No. That would be a good differentiator. If you still like, if you, it was you and Tom, you went the old, the other time, the two Toms were your only friends on MySpace.

3:56Now let's go back to when you sold the first company. What was that feeling like? Cause I think every founder that I know is I want to do the exit. I mean, and I'm talking like, I would love to do a$10 million,$20 million, but hundreds of millions, a billion dollar exit. What is that feeling like? So we have a rule. Scott and I have been partners a long time. We've always had one rule, only one rule we live by, which is no high fives. No high fives. Or just no high fives at all? Nothing. We haven't even like congratulated each other. we've had we've had i think five exits over you know two over a billion and three like over 100 million and we haven't congratulated each other once not even once and it's on purpose because it's kind of like you know what like we're not done we got more to do what's the secret sauce to the ability of having two billion dollar exits and a couple hundred million because most people are like if they get one exit that's huge but to get multiple exits and in that range that's like the nine and ten figure exits what is the secret sauce i i mean i i don't i don't know because i'm not really you know i live in my own little kind of like ecosystem i'm probably i'm probably in outside of the retail people like retail investors and things like that I mean, in the venture or private equity world, like nobody or even in the world of finance.

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6:09Take 10 minutes to get covered today with life insurance through Ethos. Get your free quote at ethos.com slash founders. That's E-T-H-O-S dot com slash founders. Application times may vary. Rates may vary. like very few people know us we don't really have we don't do institutional things we don't do like we're really we live in our own little enclosed like warehouse up on the north side of Chicago we we don't even interact with most people so I I don't know like you know I don't think about things like that. I feel like if you build really cool stuff that people find a way to think that they have to have it.

6:56And we never build something with the intention to sell it. We just, at some point, we decide, okay, it's time to move on to the next project. And if somebody comes along, like we've never listed anything we've ever bought for sale. We've just been approached and said, hey, we're interested in what you guys have. And we're like, okay, we'll talk because we're ready to try the next thing. So were you building those relationships with any companies or investors or PE before the sale or they just saw you and wanted to gobble you up? Yeah. Yeah. They really did. That's really how it happened. When we sold Thinkorswim, we had three companies bidding cash for us.

7:37When we sold Tasty, we had five companies. They all came out of the woodwork at the same time. Because you know what? The investment banking world is a really small, incestuous world where all those investment makers, all they do is yak it up together. Like, I mean, they can't, not one of them can keep a secret. And so as soon as something is about to happen, everybody knows about it. And we just picked the one that we thought was best for us. We didn't pick the highest or anything like that. Either time, we didn't pick the highest. You want to until someone wants you, right? Like if one person wants you, do you think there's a certain way that you've set up companies to ensure that if it gets to the point of a sale, that that sale is successful?

8:19Because I've talked to a lot of founders that were approached and it didn't work out because of a multitude of reasons of things they didn't do in their business along the way. So that's fair because I feel that the sale is really personal. And I couldn't care less. When TD Ameritrade bought us, I don't care about TD Ameritrade. I mean, they seem like a nice company. I didn't care that it was them. What I cared is that they bought an asset that I represented this as a great company. And what they bought for a little less than a billion dollars is probably worth 5 billion, 10 billion today. Because Thinkorswim is one of the biggest platforms in the world and they haven't changed a thing.

9:03And now Schwab owns it. When we sold Tasty, all I cared about was, hey, you know what? You guys are paying well over a billion dollars for this. and you're going to get, they were like, you know, we think we're overpaying type of thing. And I'm like, not only are you not overpaying, this is the best company you guys are ever going to buy. And, and it turned out now it's worth, you know, two or$3 billion. And so, um, that's really important to me that when people buy something from us, that they get a great deal because I, I really believe in what we built. There's no, that's not even like, we're not building stuff.

9:41That's not what we build and sell is worth more than we're probably selling it for. It's just time. What do you think differentiates you? Because a lot of people that have come on here that have told me about selling their business, I would say majority of the time the business fails afterwards. Some PE buys it, breaks it up into pieces, or some company buys it and changes it. And then it kind of goes to shit. We build really good stuff, period. I mean, it's just our technology. I mean, a monkey can run the stuff that we build after, you know, when we sell it. And, you know, essentially the companies that we've sold to monkeys have run it, but it works because it's so good.

10:19I love that. And I mean, and I think that, you know, listen, I know people get nervous and skeptical about buying other companies and other people's, you know, technology and code and, you know, IP and all that kind of stuff. but we hung around to make sure it was all work like we didn't leave right away we made sure that they got a great deal your new company lost dog which by the way how do you ideate these names um they're all from different they're all different like fingerswim i just made up tasty i made up lost dog i actually made up from a poster that i had seen years i was doing a live show in atlanta and there was a poster in the green room um before i went up on stage that said it was a big poster of this lost cat ss cat and i freaking fell in love with it tried to buy it from the from the theater and the guy who wouldn't sell it to me any number he wouldn't sell it he's like i love that poster i go i love this poster too i gotta find it so i hunted down the artist and got like a copy of it it's always been hanging up in our in our place and i said if we ever build another company i can't call it lost cat because that's your name i'm gonna call it lost dog names are sometimes the hardest thing to find for a company.

11:35You create the idea, the plan, and getting that name can be so complicated. So I know Lost Dog, you give people a professional worth, a number that is their professional worth. What is your professional worth according to Lost Dog? So I'm happy that you asked that question because I did run my stuff through it. Now I I have to put a little bit of a disclaimer out there. Number one is I don't really have a resume. So like one of the things about Lost Dog is you kind of need to upload a resume from LinkedIn. So instead, what I did was I asked Gemini to build a resume for me so I could upload it so I could see.

12:20So my resume is not very – it probably wouldn't be the same resume that I would use if I had to go get a job. I've never really worked for anybody other than people that have bought us out. So I never had a resume. I'll leave it there. So that was my resume. And the other thing I'll say is that because I've never really had a job, I've never... When you build your own business, you make sure that you're grossly underpaid or you work for nothing because you want all the money to flow through to the bottom line because that all your value is, you know, you sell a company for a billion dollars that you founded, you make up plenty of money.

13:01You don't have to worry about. This episode is brought to you by Storyblocks. Every video my team puts out runs through Storyblocks and it's been that way for years. When you're producing at the volume we do, you can't stop and hunt for footage or worry about whether a track is cleared. Storyblocks solve that. It's 100 % human-made stock media library, every asset made by a real filmmaker or artist, never AI generated, and all of it pre-licensed and ready to drop and monetize content. My editors love it because everything's unlimited under one subscription so they can test and experiment freely, and the plugin lets them pull assets right inside Premiere Pro and After Effects.

13:43It genuinely saves us hours every week, and I know you've heard me talking about it the last few months. Head to storyblocks.com slash founders to access the human-made stock media library that's essential to my workflow. For a limited time, they're offering 15 % off any annual plan, and that discount is only available through my link. Again, that's storyblocks.com slash founders for 15 % off annual plans. You know, whatever they're paying you, it doesn't, it's irrelevant. So I've never really had a salary of very much money. um so my net worth my i'm sorry not my net worth my my career value on the lost dog platform and i've been working for 45 years so i should get say that too um 400 343 000 i don't know if i would hire you tom because i don't like your resume nor do i like your linkedin profile and i'm a little old i know and i had the bad linkedin page i know i know and i'm very stubborn.

14:43I don't, and you know, the funny thing is I also lost dog works really well for like 60 to like 300,$350 ,000 in that range. Cause there's a lot of comps, but once you get outside of like government statistics and, and normal resumes, like, you know, CEO pay doesn't, nobody can, you know, I'm not, we're not going to say you're worth$17 million a year type thing. I remember a time when I got promoted and it was horrible. I made them so much money and they paid me crap, which is why I have a hard time working for companies. But according to you, you said that people are leaving, you know, two to$4 million on the table.

15:24A$75 ,000 person is leaving millions on a table. Essentially they're not negotiating. Yeah. And a$200 ,000 person's leaving 10 million on the table. I don't even remember negotiating any pay. I think it was like, they tell me the pay and I say yes because I want the job but you you're saying there's another way I'm saying that context information and context is incredibly valuable it just having that in your back pocket gives you like you just sound better you articulate things more you can really explain what you're worth and yes it does make a huge difference um I'm not saying every single person can negotiate because we give them a number, but I'm saying that context is here.

16:12Nobody would argue that there's not this incredible wage gap in America. I mean, the difference between what executives make and what the average employee makes, there should never be a situation where it's 500 times or a thousand times or even 50 times, some crazy insane number like that. Nobody would argue that CEOs are overpaid and the average employee is underpaid or paid fairly. They're not overpaid, that's for sure. CEOs are overpaid because there's so many comps out there that every CEO of an S &P 500 company knows what every other CEO makes because it's public information. So if the average CEO makes 17, 18, or 21 million, then you're not going to take a job as a CEO of a public company for$3 million, even though you might only be worth$500 ,000.

17:02So you get your$17 or$18 million because that's what the comp committee has to pay. I built Founder's Story from a$50 microphone. And the most important thing is I didn't do it alone. For years, I've been using Upwork to hire marketing, editing, branding, you name it. In fact, the editor who cut this very episode and the team behind all of Founder's Story branding found them on Upwork. The quality of people is top notch and paying people is simple. Upwork is a one-stop platform to find, hire, and pay expert freelancers across development, data, marketing, operations, and more. With Business Plus, you can access the top 1 % of talent on Upwork.

17:46And with AI-powered shortlisting, you'll get matched to the right freelancer in under six hours. no endless searching required it's free to sign up and posting a job is easy visit upwork.com right now and post your job for free that is upwork.com to connect with top talent ready to help your business grow that's upwork.com upwork.com for the average employee none of that information is out there you can't mandate it you can't legislate it. There's nothing you can do other than give people information, context, education about what they're worth. And all the details are out there. All the statistics are available.

18:38We downloaded tens of millions of resumes. We download hundreds of millions of data points from US government statistics. And you can build a model and figure it out. It's not like rocket science at all. Out of all the things you could have done next, why is this a problem you're solving? I don't solve problems. I'm not a problem solver. I don't build things to solve problems. I build things because they interest me. And it's like, it's like kind of like, it's, it, I have other, I have other reasons. I have motives. Like we're, we're not building just Lost Dog. We're building other companies as well.

19:22And what we're doing with Lost Dog is we're building an ecosystem from which we can kind of grow some other companies. Like we're about to launch another company called One Lucky Dog. And One Lucky Dog is kind of an offshoot of

19:39Lost Dog. And we're building a variety of companies inside of an ecosystem that includes digitization tokenization um a lot of other things around predictions prediction markets different kinds of financial engines and so like i'm in this freaky period in my life where i feel like i got to do as much as i can in the shortest period of time so i'm going to build a shitload of stuff you think the next big thing and when i say next as in like it's happening now but it's going to be the biggest thing ever is prediction markets. I'm blown away by how big this is. I was just at the airport. I was walking around.

20:19The soccer game or football game was on, depending on where you're at in the world, the World Cup, and everyone was betting on Calci there. I was blown away that they were betting on Calci, the predictive market, not even an actual sports betting like FanDuel. I'm not blown away by it because I've been in that space. I'm mad at myself because I built an exchange before Calci and I just couldn't get our team to buy into the prediction market thing. And I didn't own the company anymore. Like that's right after we sold it and we built our own exchange. So I ended up selling the exchange and I feel like we could have been there.

20:59So I'm a little mad at that. But I think prediction markets are super interesting, but I think they're going to go the way of pure exchange listed markets. And I think it's going to be very different like two years from now, because I think right now they are incredibly inefficient and way too expensive for the average individual to be profitable. So I think they're very different than listed markets in that the fee structure is just simply too high and it needs to come down dramatically. I don't know. I think prediction markets are here to stay. I think they're going to be quite large. I don't know if it's the next big thing.

21:40I actually think it could be other things, but I'm not going to go there right now. Don't tell me yet. I don't want to know that. Don't tell me the secret, Tom. I'm not good with secrets. I can't. I can't because I'm not quite there yet, but I have other ideas. Don't tell me because I will tell somebody and then you're going to be mad at me and I don't want you to be mad at me. No, I won't be mad. I promise you, I'm not going to be mad at you. No matter what? Nothing. There's nothing. My next question though. No matter what. Okay. So talking about employee pay, we recently had a guest on, he's the founder of Equity Bee and they help clients exercise stock options.

22:16I remember I was reading open AI, private shares have already produced like 600 millionaires. You have all these other companies that might be giving out private shares or private equity to their employees that are making millionaires before even the IPO. How do you feel about this whole thing since you've been in markets and you've had many companies? How do you feel about employee equity, employee shares, all this private share selling? So I'm a free market freak. And so on paper, I bought some shares of SpaceX before. I mean, I bought some shares of OpenAI, a bunch of different companies, Reddit before they went public, Andrill, Cerebris, from employees, I guess.

22:59I don't really know. Some small investment firm will put together these deals. They might be like a fund of funds or a hedge fund or something. They put together these deals. They keep like 20 % on the backend and then they put together the whole package for you. So I've done a bunch of those deals. And so far, because it's been a hot IPO market, They've been worked out pretty well, except you kind of have to wait, you know, six months until after the IPO to sell them. So, so for me personally, I, I like it if somebody wants to sell and somebody else wants to buy, that's cool. We have never had that happen to us.

23:33Like we've never had an employee sell to a, you know, to a third party who then shopped it. Like I've never had that happen in any of our companies. I do think that there's a new I don't like the fact that these investment firms jump in there and take 7 % fee up front for putting the deal together and then 20 % on the back end is like a carry fee I think that's bullshit because you're giving up basically it's got to be a 30 % move for you to break even what I do think is going to happen and I think this is right around the corner is firms are going to get smarter about this And instead of using like traditional options, they're going to tokenize the option pools and they're going to tokenize the RSPs, the restricted stock purchase stuff.

24:26And what they're going to end up doing is by tokenizing it, they can create, essentially somebody can create a marketplace where there's essentially no fees and anybody can trade them. And I think that's what's going to happen in the future is there's going to be a non-listed tokenized marketplace for these companies that haven't gone public yet. And that'll be much fairer and the costs will come way down. I love it. I mean, that sounds amazing. I like the fact that you're always about democratizing. That's something I've read about you. I know you've talked about it. It seems like democratization is almost a legacy in the sense.

25:06I just was listening to Oprah and she said, legacy is everything, not one thing that you do. What do you think about that statement? Well, first of all, I have to tell you one thing about Oprah that is important for my relationship because my partner, Scott, was on her show once and was voted the most eligible bachelor in Chicago in like 1988. She was right. And at the time, Scott somehow became friends with Ofra and they had, you know, a friendship for a number of years, which I always thought was kind of funny. But anyway, I agree with her. And I agree with her. Your legacy is the totality of what you do.

25:48It's more than just, you know, your financial success and things like that. It's, you know, some of it's what you take out of the system and others is what you give back to everybody else. One of the things that we're most proud of, you know, Scott and myself, is that when we sold our companies for, in addition to all the employee equity that we gave away, we also gave$50 million in cash to our employees. And we spread it through. We gave$20 million away when we sold Thinkerso and$30 million away when we sold Tasty. And we took it right off the top. So like, you know, private equity investors and everybody else, they were like, hey, we don't do this kind of stuff.

26:31We're like, well, you're doing it this time or we're not selling the company. And they all agreed to it. So basically, we never talked about that even once. But we've given$50 million of our own money back to people that have been very loyal to us over the years. And we're kind of really proud of that. How was the feeling when they got the money, when you knew that basically this is going to change their life and possibly for generations? Giving somebody a million dollars, and that was even the most that we gave to certain people. but giving people like a check for a million dollars is the coolest thing you'll ever do.

27:05Did you ever take a million dollars and buy a Ferrari or Lamborghini? I built Founder's Story from a$50 microphone and the most important thing is I didn't do it alone. For years, I've been using Upwork to hire marketing, editing, branding, you name it. In fact, the editor who cut this very episode and the team behind all of Founder's Story branding found them on Upwork. The quality of people is top-notch and paying people is simple. Upwork is a one-stop platform to find, hire, and pay expert freelancers across development, data, marketing, operations, and more. With Business Plus, you can access the top 1 % of talent on Upwork.

27:50And with AI-powered shortlisting, you'll get matched to the right freelancer in under six hours. No endless searching required. It's free to sign up and posting a job is easy. Visit Upwork.com right now and post your job for free. That is Upwork.com to connect with top talent ready to help your business grow. That's U-P-W-O-R-K.com. Upwork.com. Or maybe a yacht. I'm the worst rich person ever. I am. I mean, like you know no i'm the worst i don't own anything um i don't i don't care it's not that that's just not important to me maybe you're the best rich person because you would rather give someone a million dollars and change their life than spend a million dollars on a yacht which by the way if you could have two let's just say hypothetically you could have a yacht that's like in sandra pay or you can have a private jet which would you rather own the chances of me owning a yacht are zero because I don't have any interest whatsoever in ever even being on a boat.

29:04In a jet, I mean, I don't rent private jets, but I mean, I'm happy to fly anywhere in the world. I travel all the time for work and for pleasure. So yeah, I would choose the jet of those two. What's your favorite? Do you have a favorite hotel brand or even a hotel that you love to go to when you travel? You mean like an international hotel? Yeah, it could be anywhere in the world. Could be not international. Could be in the US. Is there a certain hotel brand or a certain hotel that you love? I don't think there's a certain brand. I mean, so I should be very clear about this. So I've been on the road.

29:40I'm more of a promoter than my partner, Scott, who's more of an operator. So I've been on the road for the last 26 years nonstop. So I've probably been to 500 different cities every other weekend for about 25 years. so i travel a stupid amount and so so i don't have i just like to stay at like decent hotels i don't like i don't even know how many marriott points i have that's if that's you know i think i probably have five or ten million like i have no idea i was gonna say you might be a trillionaire you're like the elon musk of marriott points you just became a trillionaire but i don't have like like an international hotel like i i prefer to stay at like small like kind of funky boutique hotels but like i'll stay at nice places you know if i'm traveling with like my wife or you know or or i just somebody else or something i'll stay somewhere nice i love amangiri i don't know if you ever if you go to amman properties but they're god has told me about them but i have never been to one you currently have a daily show and i gotta say i've seen it you're you're funny you're smart you're also informative most people don't have all three you do and you got nice hair so you're technically have four things now it's a lot of work having a daily show like why would you even put yourself into this nightmare of having a daily show well first of all tony and i were doing a daily show on tasty life we started that 15 years ago so we were doing it for 15 years um and and we were doing three and a half hours a day for 15 years um now we're only doing an hour and a half for four days a week so it's easy that so it doesn't bother me i love our we have a very large you know customer base around the world it's millions of people but on a daily basis it might be you know five or ten thousand watching live or whatever through different things and it's just like i feel like i feel like i have this relationship with people and it's and it's kind of special to me and what well the other side of the question is what would i rather be doing not at the beach or on a yacht i learned that i learned yeah not those things you are really a pioneer in the sense of the ceo personal brand but also the show aspect i feel like you had like tvpn mts you have all these daily shows starting now obviously you always have some financial shows but now you have all these tech daily shows or podcasts daily whatever you want to call them but a lot of C-suite and our executives were not out there.