Ep. 109 — Brandon Wood: How Much Do You Actually Need to Walk Away With

5 min read

Subscribe: Apple Podcasts · Spotify · YouTube · Amazon Music · iHeartRadio · Pandora · RSS

Episode Summary

You’re staring at a $4M valuation for the business and feeling pretty good about it. Then you start doing the math: pay the tax man, pay off the debt, split with your partner, and suddenly you’re walking away with $1.5M trying to fund a $350K-a-year lifestyle. That distance is what kills most exits, and almost nobody runs the numbers until an offer is already on the table. I sat down with Brandon Wood, partner at Solidity Financial and one of my partners at GEXP Collaborative, to walk through how to calculate the Value Gap, the risk-adjusted return math behind what your nest egg actually produces after the sale, and why the surprise offer is the single biggest threat to your independence. We got into why most owners in that example need closer to $9M after-tax to passively fund their current life, how outsized returns from keeping skin in the game change the picture, why the broker selling your company is incentivized the same way the realtor selling your house, and the honest version of what happens at the altar when you signed a non-compete and didn’t run the math first.

Watch on YouTube

## Top 10 Takeaways
  1. Your $4M sale price is not your retirement number. Taxes, debt, and partners cut it in half before closing.
  2. The Value Gap is the distance between what you walk away with after-tax and what your lifestyle actually costs to sustain.
  3. Your nest egg’s risk-free rate sets your real income. 5% on $1.5M is $75K, not the $350K you need.
  4. The market does not produce 10% distributions. Modeling that into your retirement plan is fiction.
  5. The surprise offer is the biggest threat to your exit. Once the train starts moving, nothing stops it.
  6. Brokers get paid on volume, not your tax planning. The close matters to them. The net does not.
  7. Sign a non-compete with too little money and you’ve eradicated the only income engine you know how to run.
  8. The less cash you need upfront, the more buyers, structures, and terms open up to you.
  9. Keeping skin in the game through seller notes or rolled equity produces outsized returns the market can’t match.
  10. Real estate, savings, and outside cash flow shrink the value gap before you ever touch the business.

Sound Bites

“What really makes me nervous is when I see people modeling 10% distribution rates off of their money when the market doesn’t produce 10% all in.” (@00:19:31) — Brandon Wood

“The one thing that we know that’s a major risk is the surprise offer. It’s the surprise situation where the snowball starts. The expectations are set, the business owner sees that big number, he hasn’t done his homework.” (@00:32:32) — Brandon Wood

“You sign this non-compete, you walk, you don’t have enough money, and all the ways that you can make money, you’ve literally eradicated yourself from that industry.” (@00:33:53) — Ryan Tansom

“What’s your number, but it’s the what’s your numbers. What’s your lifetime cash flow? How much money do you have and how much money do you need? Because it’s going to impact everything.” (@00:35:47) — Ryan Tansom

“The retirement accounts are typically not as well funded as somebody who is working for a publicly traded company. They’re just trying to drive the value of their baby because they look at that as money being socked away. But there’s really no end in mind.” (@00:45:03) — Brandon Wood

About This Episode

Brandon Wood is a partner at Solidity Financial and leads operations and project management for GEXP Collaborative, where he and Ryan worked together for years. He spent his early career at Cargill in treasury operations during the foreign currency catastrophe that birthed Cargill’s compliance discipline, and he carried that risk-mitigation lens into his work with individual investors and business owners. This episode is one of the earliest podcast conversations where the value gap framework gets laid out in plain numbers: a $10M revenue company, $1M of EBITDA, a 4x multiple, and the gap between what shows up at closing and what an owner actually needs to fund the rest of their life. It sets up much of the cash-flow-targets thinking that later becomes core to the iBD methodology.

Resources Mentioned

  • GEXP Collaborative — The exit planning collaborative where Brandon and Ryan partnered.
  • Solidity Financial — Brandon’s family office firm.
  • Cargill — Referenced for Brandon’s early-career experience in treasury operations and the foreign currency loss that built their risk framework.

Connections

Phase + Module:

Milestones:

Concepts referenced:

Graph View