He Sold For $1.5B But Will Never Retire

0:00Michael Wystrach: Now, the downside of that is I had about$15 in my bank account, and I had personally guaranteed a 20-year lease. We get sued, we lose, I get a judgment against me for a million dollars. So I've got 15 bucks in the bank, now I've got a negative million dollar balance sheet. That was 2014, fast forward 2020, we're doing half a billion in revenue. What did you do that day? You got a wire for$100 million. You know, people always anchor over like, oh my god, what did it feel like when you had the money? and was like, man, like I just spent so much more time thinking about like the bonds, the people we created.

0:30In 2012, Mike Weistrack had$15 in the bank and a judge had just ruled he owed his former landlord a million dollars. He started the meal delivery company out of the wreckage of that restaurant. And eight years later, Nestle bought it for$1.5 billion. But after Nestle bought freshly, they shut it down. The thing that Mike had spent nearly a decade building was gone. And I wanted to know what that does to a person when they've already made life-changing money from the exit. I also wanted to know where did all that money go and where does it still go? Because Mike did not retire. He didn't even take six months off.

1:07He started a veterinary company with his sister and put serious money into it. And then he raised the$75 million fund to back other founders. His entire payout went right back out the door into new bets. So the question I had going into this conversation was at what point do you actually stop? And do you want to? Money Wise is a podcast where we talk with ultra high net worth individuals, and many of them are part of Hampton, a private network for high growth founders doing 3 million or more in revenue, or who have already had an exit of 10 million or more. If that's you, go to joinhampton.com.

1:43Now here's our episode. I'm Daniel Burke, your host. This is Mike Weistrack.

1:48Michael Wystrach: Mike, thanks so much for joining us today on Money Wise. How are you doing? I'm excited to be on. Thanks for having me. Me too. I would love to hear a little bit about the Freshly story. Tell me kind of what led to the start of that journey and then the acquisition and some of the payout. Tell me that that journey of yours. Yeah. Give you a quick recap. So started that business. I think the fun part about Freshly is it's kind of like the, you know, the ashes of the phoenix. Like it was started that business in 2012. I started a business, a restaurant. that business was failing um i had had really like i was working my my ass off just like in in the restaurant non-stop trying to save it and so i wasn't as healthy as i wanted to be um wasn't working out i'm generally it was like pretty fit you know gym rat and so i asked a good buddy who's a family doc family doctors just uh dr frank comstock um genius in like on food and early writer in the paleo diet so i was like what should i be doing he's like you got to eat better and i was like i don't know what that means just draw me up like a list of things i can eat and i'm gonna have my chefs at the restaurant because i'm there non-stop just cook a bunch of stuff and then make to go so fast forward 60 days best shape my life i feel great my energy levels are high um and i people start asking what are you doing i'm like oh i've got like i've got this you know this doctor who made all this you know made all the ingredients my chefs just cook it i just eat it.

3:10Michael Wystrach: And they're like, can you do it for me? So, so here I've got a failing business and all of a sudden people are like, can you do it for me? And I was like, oh, like, I wonder if this is like a business. So I sent out an email to like 50 of my friends. This is in Tucson, Arizona. And I, I, I hacked together like a website and next morning I wake up$2 ,000 in sales, which was like all I needed to be like, okay, we got sent here. So, so the restaurant continues to tank and this business continues to go up. And I kind of had like a jumping, like I had, had to make a decision like it is it's like hey this is going to fail and you just got to be okay with that and then put all your energy in there so i did that now the downside of that is i had about 15 my bank account um and i had personally guaranteed a 20-year lease so uh we get sued we lose um nice i get a judgment against me for a million dollars so i've got 15 bucks in the bank now i've got a negative million dollar balance sheet um now the goods and bads of that is like now it was like, like all the bridges were burned.

4:07Michael Wystrach: Like I was like, this is like, this has to succeed. So that was 2014 fast forward, um, 2020 we're doing half billion of revenue. Um, and we sold that business to Nestle for one and a half billion. So it was an absolute phenomenal story. Um, and you know, it was, it was super cool. Now I know we're going to talk about a lot about finance. One of the big questions I get is like, you know, you know, how, how, you know, wealth is different in different levels. Yeah, yeah. And I always think people think like it's the most impactful at the highest numbers and it's not. It's actually the most impactful, I think, at least at lower numbers.

4:42Michael Wystrach: But so people said, what's the most like impactful thing? And so I said, the most impactful are Series B. We took a million dollars liquidity ourselves and then we made our early founders, which were my co-founders, parents and a few people. Oh, that's great. We made them take all their money back. We made them because we were like, no matter what happens, we want, so they took their money. But that million dollars, I paid off. I paid off all of the debt that I had on that. So that was like, so I was back to break even. So that was, which was kind of like, you know, for those of you in debt for, you know, it's like debt is just like a thing that just hangs on you.

5:16Michael Wystrach: Right. So it's just like, so that was like, people always say is like, that was the first million. That was the most important million. That was the million that, you know, cleared me back to zero. So you went from 15 in your bank account and then how many years until the acquisition when you sold? So we, you know, we kind of say there's different numbers we give, but that was like when we, when we really went full steam, it was like 14, six years later we sold. So 2020, we sold, uh, October 31st, 2020 was when the money hit the bank. So how did that feel? The money hit the bank. I mean, you personally got a wire for how much money got a wire feel?

5:50Michael Wystrach: Well, so I did it in, we did it a few tranches net net. Um, uh, I think plus minus my total amount I made on fresh. It was just under a hundred million. So plus minus got killed on taxes, but that that part pre-tax or post-tax that was post-tax um so we we get you know and and this is always like the we raise a lot of capital we came out of arizona which at the time was so like the dilution fact for us was pretty big when i do it the exact same way all over again absolutely because it put me in a position that i was at you know what if i did it today i would do it probably a little differently but like hindsight's always 2020 but so on that i think when we we sold i'm I'm guessing plus minus, but like the actual wire for me was plus minus probably half that.

6:37Michael Wystrach: What did you do that day? You got a wire for a hundred million dollars in your bank account. I was fortunate. Again, this kind of goes back to like different levels of like wealth. So I was fortunate a year before that I had a secondary. My advice, a good, one of our board members, a very close friend, a guy named Jason Finger, the founder of Seamless, was with us and he sat me and my co-founder down and said, So guys, every chance at every round you get a chance to do secondary, you need to take secondary. And his whole point was like, look, if this business kills it, yes, you're going to look back and you're going to say, oh, if I didn't sell, I could have.

7:10Michael Wystrach: He's like, but the problem is you don't know that. So he was just really good. So I took secondary on the Series B, and I later took secondary on the Series C +, but it was about two years later. And that was$5 million. and the the well i took actually on the million i took two million so i took one that i paid off and then one that i had my big cap that was the most impactful because like now i wasn't living paycheck to paycheck sure and so first time i wasn't living paycheck to paycheck people always say like the first level of wealth when you're not living pay is like you go out to eat and you're not worried about how much you don't look at the price yeah you're not like you don't have like a panic attack when like the bill comes and it's like 500 you're like oh fuck so that was that And then the second one was when you could buy a house.

7:54Michael Wystrach: And I think like, so me, I was getting married. I had a kid, got the 5 million, bought our house. And that was really cool. So this is a long story to answer your question. It was like, by the time we had the, like, when that wire hit, I wasn't like that, like, oh, there's anything I big want to buy. I think I did a few really cool trips that were really fun. We chartered Jet to Aspen. There you go. And I brought my CTO, my executive assistant, who started as my executive assistant, but then grew to be our VP of our – part of our ops team. And then a few family and friends on that. And that was awesome.

8:35Michael Wystrach: Yeah. That was really cool. You know, that – like a few of those trips took the boys down to Phoenix Open, and then we did the master. So, you know, those were like big things. But I wasn't like, you know, I wasn't I still am not like I drive a GMC Yukon. I've got like, you know, I'm very in that just like I'm not like a car person. I'm not a watch person. Just doesn't excite me. So there weren't any like crazy massive purchase. The thing I've noticed doing this show is that the people who've actually made hundreds of millions of dollars talk about it quite differently than you'd expect. They don't always lead with the car or the watch.

9:10The type of wealth you see performed on Instagram and the version you see when someone actually has a ton of money, it's pretty different. These types of wealth conversations happen in Hampton constantly. It's a private network for high growth founders. I get to peek behind the closed doors where successful operators and wealthy founders talk about their real numbers. Much of Money Wise, I attribute to the conversations founders are having in Hampton every day. If you're running a company doing at least$3 million in revenue, check out joinhampton.com.

9:41Michael Wystrach: We did end up, the wife did get a good purchase, which is we did get a house in the Hamptons, which was a good one as well. That's a great one. But that came a little later. Yeah. And I'm interested in the million dollar debt payoff. That's interesting to pay off debts early on. Obviously, you should always pay off your debt. That's my opinion. But to do that as early as you did, walk me through your thinking. Well, so when we did it, we got a million dollar judgment. My dad is a phenomenal negotiator. And my dad, so basically we didn't have, it wasn't like a loan. We had a judgment. So it was like the alternatives were like file bankruptcy or like, so my dad basically negotiated a timeframe with this.

10:18Michael Wystrach: And it was a three-year clicking clock. So the challenge was my dad was like, can you do this? And I was like, I can do it. But like it was kind of like, no, like I didn't want to go through filing personal bankruptcy, nor did he. or my parents. So I, so that I paid off a year and a half into that three years. So like, I just wanted now with that, I basically, I knew I had the money to pay him, but I then was going to negotiate with him. So I said, Hey, here's the deal. I know I owe you this and it's a million. I can't pay a million, but what I can do is I can borrow. He didn't need to know all the facts, but I could say I can borrow.

10:59Michael Wystrach: I have someone will give me and I can, I can pay you today, But the only way I'm going to do this and take on more risk is I can pay you 700 today. I can write you. I can wire you check within two weeks of this. I can wire your check 700. And so he was like, sure. But, you know, bird in the hand versus two in the bush. I think he was he was writing that like he knew that, like, if I did like a BK, he was screwed. So that saved me 300. So that was like I just wanted that done. I needed to get it done for my dad. So it was just it was great to get that done. Yeah. Yeah. And the freshly acquisition, you had some up front and then there was an earn out period.

11:31Right. of about 500, 550 million?

11:33Michael Wystrach: Yeah, so we didn't, the way, and I can only share what's public on this, but it was a 950 exit, and then there was an earn out of up to 550 on the earn out. Would you do it that way again?

11:48Michael Wystrach: Probably not. Well, I don't know. I mean, I look back hindsight, and there's learning lessons on everything. I mean, we sold at the perfect time. Would I, like, would have I changed anything? No, because we sold at the perfect time. Yeah. Um, you know, the, the challenge always with an earn out is, is, you know, it, it creates a lot of complexities. Um, so I wouldn't say would I ever do it again? I would advise people that like, you know, but we had a lot of advice on it, like earn outs are hard. So I just advise people like, Hey, earn outs have a lot of complexity. Um, I think, you know, the challenge always with founders and what makes me good is like, I always think I'm going to be different.

12:23Michael Wystrach: That's the only reason founders do, you know, do things is because they're like, no, no, no, the odds are my, yeah, not me. Right. So, you know, and sometimes you got to, you know, sometimes you got to get punched in the face to be like. But so I think, you know, I'd say like each situation is different. A lot of times, like I advise founders, but like you can make a lot more on a turnout. So and founders done well can can make a lot, lot more on a turnout. So I'd say like, would I ever do it again? Probably. I don't always learn from all my mistakes. The acquisition led ultimately to freshly getting shut down.

12:54and um i'd love to hear that there's the story that you tell everyone on a podcast but then there's the way you talk about how you feel when your pillow's on your head at night or your head's on your pillow at night and you're talking to your wife i mean your baby is freshly

13:09Michael Wystrach: i mean look i i think this is the big part about selling a business like if it's your baby you don't like you don't sell your kids and if you do sell your kids you're a bad so like if it really is your baby then don't sell it like if you really are that passionate but like when you sell something, you are handing it over. It's a little bit like crying when you sell your house and someone paints it a different color. It's like, if you didn't want to like, so I think you have, you have to be mature on that. You have to say like, look, I'm, it's not my business. Um, the, the new, the new buyers Nestle paid a lot of money for it.

13:37Michael Wystrach: They were going to run it the way they thought was, was, was right. Um, and I think the end of the day, I respected that. I respected that. Um, I, I think, you know, for, for me, we had a different vision. I ultimately felt like, I have to be careful and I can't talk too much about it because there's now litigation going on. But like for me is like I felt like I wasn't the right person to continue leading the business in that direction. And like I would generally say with like Nestle is like never for me was like a personal thing. And I don't you know, I don't think it was for them. I think they were trying to make the right decisions.

14:11Michael Wystrach: And and I I had to basically say, look, I'm either you know, I didn't feel like I was the right person. But I never I didn't leave. I didn't leave that like upset. I didn't leave it being like these guys are a holes or anything like that. I left it being like, look, it's it's not now at the time, you know, the business was going and still thriving and doing well. So I didn't see the turn. And really, you know, I had no involvement after that. So, you know, I was I was upset for the team that was still there. That was like the thing. And we worked, you know, and so did to Nestle's credit, like to work to get everyone reemployed and see what we could do.

14:45Michael Wystrach: and I helped out on that to where I could. But, you know, it's always a bummer when you see something that like, you know, doesn't continue because you put a lot of energy in that. But, you know, fortunate for me, I was already on to the next thing and I, like my energy was put somewhere else. And, you know, the next one, but part of that was like, there's lots of good things with selling and there's lots of negative things with selling. That is, you hand over the reins. And I think the one thing that I really, and the next journey that I did was like, I want to own something for a really, really long time.

15:15Michael Wystrach: and I really want to be in and see the compounded like wins of that. Yeah. And that wasn't our goal with Freshly. That wasn't like we really did want more kind of liquidity. It was my first win. So, but like, again, goods and bads about it. Yeah. And, you know, hindsight, would have I done anything different? No, because I think we exited at the perfect time and we did great. And I learned a lot. And I think on all these things, like you learn a lot. Like when I shut down a restaurant and it cost me a million dollars And not only the money we lost in that, like, what was I super stoked? No, but I guess what I never did from that point on sign a personal guarantee.

15:52Michael Wystrach: I've never, ever signed it. So like that 1 million probably saved me a ton of money. And so like, you know, I just think you got to sometimes take these things and kind of say like, what did I learn here? And, you know, hopefully move on. It's all part of the journey. Yes. I think you're absolutely right. 100%. So the sale was a hundred million personally. Yeah. Yeah. Billion. And then, you know, the 550 million earn out. Yeah, my portion was plus or minus right around there. So what does your personal finance situation look like now? Walk me through net worth, your monthly spending, let's call it your personal balance sheet.

16:25Michael Wystrach: Yeah, I mean, so taxes was probably plus or minus because a lot was like in like – ended up getting taxed in like income tax. So I have to say like plus minus, you know, when all was said and done after like all the payouts, you know, don't have an exact number of plus minus like 50, maybe 50, 60. um it's it's so and then i went so i kind of think about so one i think there's kind of different ways of thinking about like spending right so spending you like for me is like is ultimately about cash flow but i would say most of my negative cash flow is going into some degree of some investment so um i don't i mean outside of like you know like things like you know food grocery services vacation but like that's a relatively small portion i'm not a big fan of like designer clothes design like watches things like that i i would rather spend things on um on assets yeah and and so to me like as i think about assets so immediately started another company put a ton of money in that started a venture firm which is is uh i put a ton of money in that um so those are you know i guess cash flow like cash is when you're building those is going out so that's kind of a cash drain now they're getting cash positive but to me those are investments and then property is the same thing so like I like owning real estate I like because like you can you know for us my rationale when we bought the Hamptons place is like you know one I'd love to own that house for a really long time but ultimately you're paying for your vacations so if you can cover it because when you sell that you're going to you should if you have you know appreciation on that needs to be north of four percent and then i basically had a free vacation home for like so i always like to try to own the house still in the house yeah what did that one cost um i'm not gonna give that one because i don't want to um link on that but um but yeah i mean it's you know it's a nice it's not like an over the top sure um but for me it was like always about managing cash flow and then managing um that just looking and saying like what are what are my like what are my downsides so like i just don't like for me personally is like you know you go buy a fancy shirt yeah it's a massively depreciated asset there's very little utility value you buy a house you're gonna get a ton of utility value for you you're gonna get and you're gonna use it but then you also get like the resale value so like to me that's the same thing as like a car it's like i get the utility value of car but my gmc like my whole thing with the cars i don't want it to break down yeah and it's got to be functional yeah like like you're going to get more utility value out of my kmc than i would if i had you know whatever mclaren or whatever now mclaren is just going to create a bunch of headache and even if you can argue oh it's going to save price it's like no with taxes and and your insurance costs and you're gonna it's a depreciated maintenance so you know i just try to invest in things that i'm doing and And then, you know, our living costs are relatively, you know, I would say like below our, well below our means.

19:32Michael Wystrach: It's always like, I would say to anyone is like your freedom is set by your living costs. Sure. What are your living costs roughly? Oh, I mean, I would say our living costs are probably, I mean, I don't have an exact because I look more cash flow is. The mortgage, let's start with the primary house mortgage. Oh, primary is pretty low. I mean, we are our house is, you know, we bought that house for two point four million. OK. And that's one of the two houses. Do you have more real estate? I bought I bought my parents ranch. I have that as well. So, yeah, I love real estate. I think it's you know, if you have I'd like to keep, you know, 30 percent of assets in real estate, 30 percent.

20:08Michael Wystrach: But yeah, I mean, you know, I don't know. But probably I mean, probably under living cost is probably under a half million. Like would be my guess. I'd have to factor in annually. Ah, annually. Annually. Yeah, so relatively low. I mean, we don't like, I mean, you know, I think when you first get a transaction, you kind of think like, okay, like, but then you start spending money. And for me, like, we flew private. We flew private. And that was really fun. But then I was like, okay, that's such a waste of money. Yeah, like every now and again, but not. Yeah, so like we really don't occasionally now.

20:40Michael Wystrach: But like that, you know, that would be like, to me, it was like I would rather just reinvest that money now. Now, if you get to a certain point where you're at breakout wealth, which probably, you know, for most people is like, and my guess is like for most people, like three, 400 million is. Yeah. Hundreds of millions. Well, it's very hard like to outspend your, unless you're doing a lot of investing. Like it's, yeah, it's like, it's like Brewster's million at that point. It's like difficult to spend so wastefully that you're not making money because then your assets are making money. So yeah, for me is, is, and then what do you get like a lot of value from?

21:14So 500 a year, so 40, 42 a month, give or take. And you mentioned a lot in real estate. Your math is real time here. Well, you know, four times 12 is 480. So it's not that good. Don't put me on the spot with any more math questions. But the real estate is interesting. A lot of people would look at 20 or 30 % real estate as having a lot in an illiquid asset.

21:37Michael Wystrach: So first of all, I like illiquid for many reasons. Yeah, that's what I'm picking that up. So, I mean, a lot of mine, I kind of think about portfolios is high risk, alpha, and then liquid. So, like, liquid almost always is going to be better for taxes, almost always. You have a lot of different tax structures in real estate. I also think, like, you know, to me is like, you know, real estate has traditionally been very inflation proof. You can't make more real estate. You can make, you can print a lot more dollars, as we've seen. So I think at the end of the day, and then, you know, we were for, I was fortunate on, you know, three of the properties to finance those at like rock bottom rates.

22:20Michael Wystrach: So that was like, you know, 2.25, 2 % interest rates. So when you're able to borrow 2 % interest rates on real estate, it's going to have a, you're gonna have a tough time not making money over long term. That's free money. Yeah. And I think that was like, so now at seven, 8%, the economics get a lot harder to like back into what you need, but a 2%. And that's why we, we loaded up a lot more on real estate there because it was like a 2%. Now what you then need to make sure is you don't get caught in a down cycle where you have to sell. You don't want to be a seller in the down cycle. But if you look at real estate, like you can write out the back.

22:54Michael Wystrach: You have to, it may take a while to write it out. As long as you don't buy peak parabolic you're generally going to do really well. And then also like for me is like, you know, if you're like if you're going to vacation and that's a big thing you want like you're better off for multiple reasons like owning the asset um i mean just for like again multiple like reasons on that um first like being like we you know you vacation all over the place so that was kind of like the rationale with uh for us with getting a place in the hamptons is like it's a vacation spot we own that um i think that asset's going to continue to appreciate yeah hopefully if new york hampton seems like a a safer place than the whole state of new york might be but you know i would i would feel okay with that uh tell me more about what you're doing now you you are obviously no longer involved with freshly yeah and you mentioned you have a fund of your own you started another company yeah so i think again for me is like like you know i i really like and i think this is the key.

23:57Michael Wystrach: Like I love business. I love doing things. I'm an operator. Um, I'm fascinated in all aspects of business. Um, so like, I think, and I, I just say this so much to founders is like, if the only goal is that the, like the outcome, the money, like you're, you're going to wake up and feel like this wasn't worth it because like, you got to really enjoy the journey. I think the, the money certainly it adds a lot to the journey for sure. But, um, so for me, it was like the minute I left, which is about a year after we sold, um, I already had my next thing lined up and I was, I didn't take a day off. I was into pet folk, which is, uh, which is a veterinary platform.

24:42Michael Wystrach: We're building modern vet clinics, um, primarily based out of the Southeast and Southwest right now. But the thesis there was, I was, when we sold, I was like the next business I want an evergreen business. I want a business that I can be in for a really long time. Um, and at that time we bought a puppy and I was going to the vet clinics in, um, New York. And I was like, God, this is like so, so antiquated. Like even human healthcare at the time was one way better. And my sister is a 30 year practicing vet. And so she, so I was getting a lot of help with, with her. And she was basically being my remote vet.

25:17Michael Wystrach: She was living in Texas at the time. And so she's going through some challenges with a partner she has in some vet clinics. And so I get a lot smarter on vet clinics. I was like, whoa, this is an amazing business. And so then she shares her vision. And her whole vision was like – her vision was like veterinary medicine had declined from a joy standpoint for vets for the last 15 years. And so I was like – she tells me her vision. And I was like, Audrey, we should do, we should build this. Like I just, I'd had some liquidity in that 5 million. And so it's like, I'll be your first investor. Like, let's go, let's do this.

25:51Michael Wystrach: And so I've now deployed a lot of capital in that. And I'm. What's your stake? So I have a big stake. I don't release, I don't tell exactly what that. More than 50, less than 50? Less than 50. But combined, I think we're, we're both North that. But so we built that together. And to me, this is really a platform that I would love. and she would love to own for a really long time. We love, so the whole idea is like, how do we make veterinary medicine great for vets? Bring the joy back in VetMed. It's built by vets for vets. Now, the great thing about like, if you have happy, it's a service industry.

26:26Michael Wystrach: So if you have happy vets, there's no better service to walk in than if your service provider's happy. We built gorgeous clinics. We would say that we have the best clinics in the space. And that business has been phenomenal. And it's growing as quickly, almost as quickly as freshly. but that one when we set out do that was like always like i want to own that business for a long time so we we did that what what is the thinking behind that you've said that a few times and i'm curious it sounds like you is that just you just want to spend the next 10 years 20 years well so if you can so again i think there's like always like like what's the goal and if you have no balance sheet or no like you've never gotten liquidity the first goal is to get like i always tell people the first goal is the first 10 million all right money wise listeners quick reality check.

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28:02Michael Wystrach: this summer. Leaner, stronger, sharper. But the real win is that you'll stop carrying a body that's taxing your energy, confidence, and longevity. If you're serious about fat loss, muscle gain, and building a body that supports your standards, don't think about it. Don't bookmark it. Don't push it to Monday. Click the link in the description and I'll hook you up with Anthony directly. Check out dailybodycoach.com forward slash moneywise. That's dailybodycoach.com forward slash money wise. Cause 10 million is where like that to me is like, that is a life changer number. Um, it's not a retire forever, but it will fundamentally change your life.

28:41Was that your threshold number? The one that you hit and you're like, I don't need any more.

28:45Michael Wystrach: The 10 to 10 million was ultimately like, I look at, we try to live like within the bounds of outside of things that we see investment. It's just like in that bound level, because now I'm heavily deployed back in. So we kind of look at like generally like our life now, then you go to like the next boundary is kind of to me is like that two to 300 million where that's like then then you're now at the next level where it's like like and then from there it's like it really is just like to be candid it's just more headache like at like the billion in these things is like you can own more stuff with all that money but one of the things you do see and and so this was so one of the things is you have to now deploy capital back so you sell your business so first of all you get killed on taxes then now you have to go deploy so i've averaged over the last 20 years of of building business i've averaged a 45 return on capital um wow so so when i look at like the alpha is like i want to be investing in what i do which is is build businesses and that that ultimately has been very good for our investors and very good for me so now if you can do that compounding that over time without selling and without so the problem is when you sell, you obviously have like you pay the taxes.

29:56Michael Wystrach: So you restart. But then also, if you sell, you have to go redeploy that capital. So you have to find another. So I was like, look, if you don't sell, you don't you don't pay taxes. You don't redeploy that capital. So how do you keep a steady stream growing for a long time? And that ultimately allows you to really get outsized returns. I mean, if you look at again, I think like Elon Musk isn't selling, but like I think people underestimate like the like it goes like this, this, this. And then all of a sudden search jay curving so that was there and then with so then we also started cutting horse and cutting horse was like one of the things that i really wanted to do is i love startups i love investing in startups i like being part of the startup neighborhood and really being part of the whole the whole network um and so i wanted to redeploy back into startups because i think again when i was looking at like what is my alpha is i'm an operator so i i can give a lot of advice and i get asked all the time to be on you know advisors and stuff so i was like but like what i don't like as being a passive advisor.

30:52Michael Wystrach: I like to be like, I've got skin in the game. But when we said, okay, if we're going to do this, I want to do it right, which meant we have to have a team. So what we then said is, okay, well, let's build a venture capital firm that is really focusing on doing this differently and really operator focus. And how do we come in and really help founders, which I started seeing over the last, like I've raised over 300 million in venture capital. And I've seen this like progression that there's less actual operators investing. and it's more like professional investors. You want to be the operator. So we want to be the person at the table that actually has real experience.

31:28Michael Wystrach: Tactical advisor. It's not someone who's like, I read a book on this and I think we should do this. And what I found is like, I had two very different types of board members. I had an actual operator and then I had a investor who'd been an investor. And both all of them, I've been fortunate to have great investors. But what I found is that that operator sits you down and talks more tactical. And most of the time they're actually giving opposite advice. So the operator is telling you like, Hey, no, we need to not do another thing. We need to get a little more focused on this. You're not going to hire your way.

31:57Michael Wystrach: Like the non-operator is always like, Oh, we need to hire a big CMO and they're going to solve all of our marketing problems. And the operator is like, look, could work. I've never had it work. There's no way. Like you, you gotta get, you gotta get in the weeds. You're going to have to get this. No one's going to come in and solve your problems. In fact, the CMO is just going to hire and they're going to make it a lot worse. So a lot of that advice is that like I've just found that's that tactical advice. It's just so much. It's so much impactful. And especially if you're a first time founder, you know, 90 percent, 80 percent of businesses is like you don't need to be an innovator on.

32:32Michael Wystrach: So we really we did that. And that's been a ton of fun. We have an awesome team doing that. We invest in companies doing one to 10 million in revenue. I mean, we can flex up or down a little bit. But then we make concentrated investments. So we have a$75 million fund, but we'll only make, you know, 10 investments out of that max. So two to three a year. And so are you looking at each of these companies personally? We have a team. Yes, we have a great team of operators and analysts. And yeah, so we're looking, but we're also making sure like we're also like what I wish I saw from the VCs is like, hey, here's who we are.

33:06Yeah.

33:07Michael Wystrach: This is how we show up. This is kind of our expectations. and if that's a good fit, then like, let's do this. And if it isn't, then let us help you find someone else. Yeah, it's interesting. When I think of your story and the story of Freshly and coming out of the restaurant business and now what you're doing, I talk to founders every day, as it sounds like you do as well. A lot of them have had life-changing exits. And what I hear resonates with a lot of those founders is that some of their like personal identity was left with that acquisition. Like there, I, you know, we called it a baby earlier.

33:41I don't really, I don't really get that from you. I get, I get like, I had the exit and like you weren't lost at all.

33:48Michael Wystrach: I mean, I also get that a lot that I'm like my, it's also a little, my, I'm like a little robotic on things. Not robotic at all. I just thought, oh, like you weren't, it doesn't feel like you were emotionally negatively impacted by the acquisition. No, I feel like, so I think, first of all, I think one of the challenges people have is that like, I think one of the things founders get in trouble with is like founders is a personality type and successful founders is like they're grinders. They're in, and they're in, and that does get exhausting. But the mistake they make is that that also the fulfillment is in the job.

34:22Michael Wystrach: So I think what people don't get is like the reward is the money at the end, but it's a little bit like, I was, my analogy is always like hiking. like if all you're doing hiking is to get to the peak you're going to quit hiking because you've got to really enjoy the journey of hiking because the peak's great but it's never as great as you think and it's short right and then guess what like and so the problem founders have is like it's like be careful you know achieving your goals so like one you achieve your goals what's next so i've always just been like a what's next what's next what's next so i've already got my list and for me it's just like i look at this as like i want to get better as a founder as a ceo as an entrepreneur.

35:01Michael Wystrach: And so I'm learning every day. And like, I never get to the end of that. And like, I think the reward, you know, it's like kind of like scoring points. It's like the reward, the chalkboard or the scoreboard on businesses is money. So at some stage you're measuring that. But at some point you're also like, well, that's also just a little bit of a fake number to some degree. But what is real is like, am I getting better at the craft? Am I getting better at managing people? Am I getting better at process? Am I getting better at this? So I always try to continue to grow and just say like, am I? And then I take on new challenges where I have to learn.

35:31Michael Wystrach: Like, you know, I know being a CEO of a startup pretty well at this point, being a GP and a managing member of a venture firm is a new skill. So like for me, it's like we're doing a lot. And then now we're doing the advantage, which is really like building kind of more of a media presence. And it's our newsletter and podcast. And that's a whole new skill. And so like for me, it's like, but I think the mistake founders make is they think like, OK, I'm just going to chill. Yeah. And then you're just left with yourself. And then it's like this void and this emptiness. And like, and you know, I was like, I grew up in a ranch and like the ranch was pretty simple.

36:08Michael Wystrach: Like every day sun came up, you got up. Yeah. And like, it was just like repetitive tasks, but you found value in the, in the work. And I think that's what I would say is like for anyone doing anything, find value in the work and then do the work. Yeah. And, and then like, don't think like, you know, I've always told people like, I'm never retiring. I'm going into the grave, like on fire. And so, but like, cause I find value in the work and I think where founders get in trouble or like, you know, they, they sell their business and then that's like, that was it. That was like their, their thing.

36:36Michael Wystrach: And then now they're trying to figure out the next thing. And to me, it was always the craft. And then, so what I would say to people, and this is where we always say to founders as well, it's like, look, you can get different levels of liquidity all over the place. And don't feel that like, like a lot of the time selling the whole thing is the worst thing. And so like sell 10 % and then, and then keep going. So if you really do love your business and you want to be with it for a long time, like just sell a small piece. Cause like at some point you get a ton of capital. Guess what? You just got to go redeploy that.

37:11Michael Wystrach: So like, just like, you know, again, like, you know, for most people, if you sell and get 10 million in the bank, like you're going to get a, like a lot of the benefits that you would have if you sold the whole company. Your reinvestment's not as much, but then go grow that business for another, you know, 10, 15, 20 years. You're going to probably make a lot more doing that. But you also don't have that gap or that void. Like remove money. Like, and I got this, actually, this is stealing directly from Tony Robbins, but like, don't, let's not put, let's not start with money. Like, what is the goal?

37:42Michael Wystrach: Okay. I want freedom. You can have freedom right now. You can like, freedom is about controlling your expenses. It's actually not about how much you make. It's just about controlling your expenses. So what does that even mean to you? It's like, wow. Like, and so for me is like, I, I love work. I'm, I'm, I get up at four 15 every morning. I go to bed at eight. Like I, I love being in the office. I love that. It's very close to bedtime, but like that, I love routine. It's my, how my brain works. So like, I know myself to know that like, I hate vacation on the second, third day of vacation. Yeah.

38:11Like I need to do

38:11Michael Wystrach: something. Yeah. And so, but like, how are you wired? And I think like, I have a twin brother. were exact opposite. Really? Yeah. Identical twins? Fraternal. Okay. I'm going to say, so are you even Mike? Maybe this is. So he's a, no, he's, I mean, you have him sitting for your podcast. So he's, he's, he should, now he needs, so he's, he's a musician. His band's Midland. Wow. Very fit. You know, you're going to look, if you search Weistracker, you're going to see him way more than me. I actually saw the brother. I just missed somehow that he was a twin. But we're, we like are, the things that we like doing are very different.

38:42Michael Wystrach: Yeah. Like he, does yeah because he but like i would be very poor at that and he wouldn't do my job so like what so i just think like you've got to know who you are you got to try to find something that is going to scratch like that you are going to love to do every day and then you should never want to retire and like i always think like like if and if you want to be a vacation and that's like you want to just go live on the beach and go find a job that you can just go live on a beach and that becomes your life and then guess what you never have to retire you just be a lifeguard for yeah exactly and pay your bills.

39:15That's so cool. What's the, so growing up on a farm is interesting and, or a ranch rather. I don't know if they're the same thing. They're different, but I was going to correct it. I was going to say,

39:26Michael Wystrach: I know I said the wrong word. Ranchers are snobby with farmers and farmers are snobby with ranching. All right. So ranch, not farm for those listening. Does your relationship with your family now look different than it did back then now that you've, you know, made substantial amounts of money and are. Yeah, I mean, for sure. I mean, me and my wife both grew up in like fairly, you know, kind of humble backgrounds. And, you know, so it's always that challenge of like, how do we, you know, make sure that we're not spoiling them, but then also making sure that we're, you know, we're giving them the things that, you know, we think are going to enhance their life.

40:00Michael Wystrach: So I wouldn't, my oldest is six. So I'd say like we're early in that journey. It's one of those things you're kind of constantly balancing. You know, I do think one of the things, you know, I hope to instill that I think my parents did an amazing job is work ethic. so like you know we're already talking about potentially buying some small businesses you know just so we can have the kids in those and and then running the businesses just in the business like we we grew up with a bunch of small business in the ranch so we my parents had a restaurant my parents had um a ranch and it was just like it was never asked it was just like assumed like you grew up just being like you're gonna work in the ranch that wasn't like and then when you're old enough you go work in the restaurant and like that was just like the family business.

40:39Michael Wystrach: It was just like, it wasn't like a, you know, we didn't see that as like, it was just normal. And, and we learned, and I learned everything I know about business from my being around my parents and being around them talking and being around like, you know, how you're doing these things and, and then them letting me do things. So like I was running payrolls when I was, you know, succeeding to help my parents, but then it was like, oh, cool. And they were like, great. You know how to do this now you're the pay. Like, so a little bit of that is like which is which is which is great for us is like you know you're you're when you're running a small business like there's never enough hands yeah and then the minute you can prove yourself is like able to do something like my like all of a sudden that's your job right so it's like double-edged sword but um yeah i mean i learned a ton my parents were great on like you know letting us just like punch way beyond our weight so i hope to do the same thing with my kids because i think there's no better way to learn and then i do think that like the secret power you can give your kids is worth it i think yeah like i just i always tell people there's no substitute like for for hours in the gym like just tell people like it look it's really simple and elon says this everyone says this and i can't say it enough it's like if you are worried about work-life balance do not be a founder like if it just reps it's it's just ultimately like if i'm going to put in 12 hour days and you're going to put in 10 at the end of the week i'm going to have an extra day of work yeah and so if i'm going to work like so at the end of the day that compounding means like i don't actually have to be as good as you.

42:01Michael Wystrach: I, over time I will compound and get better and it's just more reps. And I think that's, that's work ethic. And I, I really think my parents did a phenomenal job with all of us. I might like, no matter what we, we all do very different things or six of us, but I do think we all have this kind of like work, just work ethic that like, we just have to stay busy. And I think that came from like, just the way our parents raised us. I do love the, the, the adage of, you know, teach them a man to fish or give them a fish in the way you're thinking of your kids even and having them work and the way that you grew up and learned some of these really business you know skills but also just how to be an entrepreneur how to take ownership of what you're doing and make it valuable how do you think of what you pass on to your kids when you think of the business obviously that's that's one component is there a big endowment coming someday yeah so you think about i mean try to balance that i mean we definitely want our kids i think like which is tough which is both the blessing and the curse and i think this is what you like you realize in life is like the things that you maybe wouldn't do to your kids are the things that made you great so like i had dyslexia would i want my kids to have just like dyslexia absolutely not but like dyslexia made me hone all these other skills made me learn all these things so like like for me it's been a superpower because it's it's really heightened my other skills what i like it was also like extraordinarily painful when you're young and you can't read and all these things and and at least grew up in a bit of a different time where it was you know a standard that you're getting made fun of for that.

43:26Michael Wystrach: But like, so part of that is the challenge. You know, I was fortunate that my parents, you know, we were able, my parents paid all of our college, but my parents were not like, you know, they were, we lived very, like, we never wanted for anything, but there wasn't like an abundance of like, oh, everyone's just like taken care of. And so that meant you had to self-serve. Like that will be the challenge with our kids is like, as we make more and do more, is like, how do we get that balance? But I do think, like, again, I would say the one thing, like my parents were so good with all of us and i hope to do this is like my parents never had like goals or expectations on like hey you need to be successful or what the whole thing was like figure out what you want to do and go do it and i was before you know i was before i made any money i was 40 before my brother started doing anything and my brother i was you know 35 i'm like nearly bankrupt and my brother is is at that point like bartending right so fast forward five years my brother has the number one country single in the country and i've just sold my business for so so but my parents at at that stage when we were 35 you'd be like were they stressed no they were like like yeah just like you know figure it like there was no pressure on that i think that's what i like my parents have been very like um they celebrate our wins but i think they also are like very fine with us figuring our own navigator they're not like helicopter parents and i i hope to have that as well because i think that's a little like what i think allowed both of us to find our past was like being able to explore without feeling like oh we gotta figure something out i do think that's like again i always stress with everyone is like i think there's just too much focus on like feeling like you have to figure shit out when you're like like 30 and like it's a long journey have a lot of fun um life's short yeah you're gonna realize like you know the Instagram reels are all fake.

45:18Michael Wystrach: Like they're, there's my point is, is like, is like all the, like, Oh, the money's going to make you happy. It doesn't like it just, and so, but experiences do learning, being able to explore a lot of these things. So I just, you know, I think it's, I love founding things. If you want to build things you should build, you should build early to really enjoy that journey. Cause I think you learn. So it's like MBA on steroids. I would, I mean, if you're thinking about an MBA, I would strongly advise, just go start a company and work for a startup because you're going to learn more than you will in an MBA.

45:47Michael Wystrach: Agreed. But it's about like enjoy every day you wake up. That's the whole key for me is like, you know, when we were grinding it and there was no money, it was like, wasn't clear if freshly was going to even work. We had a ton of fun. And like, we had great people around the table and we like, yeah, there were stressful days, but like we had a ton of fun. So working, you know, 12, 14 hour days didn't feel like a grind. It felt like, man, this is what else was we doing? Yeah. So that's, that's the fun. And when you look at those great startups, that's always the thing is, is like, like we, we wanted to watch football and we wanted to get, and we couldn't like, so we got NFL Sunday ticket for the office and then everyone worked on Sunday.

46:27Michael Wystrach: And so we all had, so it was like, it was great. We'd worked 12 hours on Sunday watching football and getting work done. And it was like, those are all the things that I think like, you'll build the world you want to, you want to live in that you would like. And then you're like the whole journey is fun. And then the payday is amazing. But like when I look back, it's all about the stories. It's about the people. It's about the things we did. That's like the thing that I glow about. It's like, you know, people always anchor over like, oh, my God, what did it feel like when you had the money? It's like, man, like I just spent so much more time thinking about like the bonds, the people we created.

46:55Michael Wystrach: So that's just kind of all the stress. And now, again, now I'm in business. So like the scorecard is this and I'm as, you know, certainly venture capital, like our whole scorecard is like returns. So, you know, it's it is it is the name of the game. like you know don't be a basketball player if you think it's stupid to put a you know pigskin in the in the hole like that that is the game like so if you don't if you think it's stupid don't play it yeah yeah yeah i love it i think it resonates with me that you should just go make a bunch of mistakes instead of nba is a great example i think nba's have a time and place but i think there's a difference in learning how people successfully or unsuccessfully build something and going and doing that thing successfully or unsuccessfully learning by trial and fire and is is just there's nothing replaces it and putting yourself and we were we had a common um i was with josh from uh uh street talk yesterday and he had 23 he's out there but he's like it's it's not like he's putting himself out there and he's just learning so much and you're like that is like what if you're going to be young and you're going to do these things like put yourself in areas where you're just learning, you're absorbing, you're getting, because like, that is just the opportunity.

48:04Michael Wystrach: So I would say like young founders, again, I'm a big fan, like get, but like really think about this as like an MBA, think about it as like learning, absorbing. And then thinking about it as like, to me is like, you know, I always think about, that's why I say compounding returns, but like, I'm going to be in this game for another, you know, I'm 46. I'm going to be in this game for at least another 40 years. My two things that I think you just mentioned, founders surrounding themselves with people one step ahead of them, that can advise, be mentors, be peers, but also being willing to just be dumb.

48:32Try a bunch of stupid stuff that you know is out there and wild and crazy. But the first thing that works is like, why didn't someone else think of this? Well, they didn't. You did. And you got it.

48:42Michael Wystrach: That's why it's doing so well. And what you realize is like in anything you start, and we were just talking about this on like, you know, media net, whatever you start is like, you're going to learn a lot. And like, but the whole point is, is like, you got to get in and then you'll realize you didn't know what you didn't know. And like, you'll laugh looking backwards being like, oh my God, I was so stupid. I was so naive. But like, I think the greatest thing, like we were just like me and my co-founder were just so bullish at like, you know, we just had this vision of like, we're going to build a huge food company.

49:10Michael Wystrach: And to us, that really meant like a business. Our dream was like to get to a hundred million revenue. That was kind of the threshold that we were like, if we can get to a hundred million revenue, like that is it. And so meanwhile, we blow through it. But like, so, but when you're at zero revenue and you're like, we're getting to a hundred million, people just laugh and they're like. Yes. there's but we were like we it wasn't even like a debate it was like you're all idiots we're 100 getting there and and we you know we had no idea how we're gonna get there but we're like we're just gonna grind our way through this and certainly there was days it was like well shit maybe we were wrong but like like over i think overwhelmingly like but then you learn around that way you have that belief that dead set and you have a ton of fun doing it and i'd like you know that's that's just you know if there's take away one thing from this podcast the big thing here is like you got to marry passion with what you're doing in some aspect i'm a business guy so i can find passion in pretty much any business that's my love but like everyone's different like find the thing you want to do do it really well do it relentlessly do it for a long time give yourself a really long vision and horizon and compounding wins will pay off stick with the thing you're doing stick with it for a really long time work harder than anyone else in the game just absolutely kill i don't care again like my brother's in country music yeah you got to work you got to work harder than anyone else and over time that'll pay off but then you got to do it for a long time i love that um that's a great place to end i think i have one final question we can bring the plan in for landing here we both get hit by a car and we die tomorrow what do you mike want to be remembered for oh that's a good one um well i mean i hope most important to me is that i'm you know the people who i only care remember me is that i'm a great husband and a great dad.

50:51Michael Wystrach: And I think, you know, from there is like everything else is kind of a little, doesn't matter, hopefully a good friend as well to the people. You know, I'm not a big person on like my legacy beyond that. You know, the reality is, is in, you know, one generation, very few people know you in two generation, no one knows you. So I hope my, you know, I hope my wife and kids and my friends say, wow, he's a great guy. I still got some work to do there, but I'm working every day on it. Mike started this with$15 and a million dollar judgment against him and he's going to keep building until the day he dies.

51:22He already sold a company for$1.5 billion and he has even greater ambitions moving forward. Hampton is where founders like Mike have conversations like the one we just had, except they never leave the room. If you're a high growth founder doing 3 million or more, or you've exited for 10 million or more, apply now at joinhampton.com. And please subscribe to Money Wise wherever you're listening. Leave us a review and tell me at Daniel C. Burke on X all your thoughts. The good, the bad, the ugly. I want to hear them. I want to improve. This show is for you. See you next time.