Ep. 99 — Jeff Smith: Serial Entrepreneur on Why the Exit Is Priority Three

5 min read

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Episode Summary

You’re staring at a business you’ve built into a paycheck, and the question creeping in is whether there’s anything underneath it worth selling, or whether you ARE the thing being sold. Jeff Smith has lived both sides of that question. He started in high-tech as a manufacturer’s rep, made great commissions, and realized at the exit that he’d basically built himself a high-paying job (the value was him). So he went and did it again, and again, and again: a software company sold strategic, a brick-and-mortar deal that returned 29x in two years, a windshield film business, a healthcare company he scaled from $20M to $250M, and now Jet Dental. Jeff and I got into how he thinks about value creation across wildly different industries, why he keeps doing minority Recaps instead of full sales, the difference between raising debt and Equity at the multiple he wants, and the framework that’s let him pull the rip cord on his own timing instead of someone else’s. The line I keep coming back to: the exit is priority three. Team first, value second, exit third. Get the order wrong and the whole thing breaks.

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## Top 10 Takeaways
  1. If you ARE the agency, you don’t own a business. You own a job that ends when you stop showing up.
  2. Investors want founders all-in. Your own money in every round signals you’re not bailing when it gets hard.
  3. Buying an underperforming business with cash flow beats starting from scratch. You’re already paying yourself on day one.
  4. The job your customer is hiring you for is rarely the product. Find the real job and you own the category.
  5. Minority Recaps let you take chips off the table without giving up the seat or the culture.
  6. Once you sell majority, it’s their company. Take enough off the table that you can walk away clean.
  7. The clock starts ticking the day you take outside money. Know their fund timeline before you sign.
  8. Debt rounds let you pay yourself without selling more Equity, if the cash flow can carry it.
  9. Don’t confuse hobby passion with business passion. Surfing is fun. A surfing business is a hard way to make money.
  10. Build a team. Build value. Then the exit. Reorder those three and you’ll grow up the wrong thing.

Sound Bites

“I was making all these manufacturers money. I would help them get into distribution, help them do really well, and go wow, I just made them a lot of money. I was getting good cash flow, but I realized I wasn’t developing a lot of equity.” (@TBD) — Jeff Smith

“We had a 29x return in two years. We literally bought the company, and five times the business, with the cash we put down it was a 29x return for us over a two-year period.” (@TBD) — Jeff Smith

“You can work your whole life, 20 years, and you know what you sell it for? Eighty percent of what you collect in a given year. That’s what you sell for.” (@TBD) — Jeff Smith on dental practice valuations

“I think people think about the exit too much and not creating value. The most successful guys I’ve seen are passionate about what they’re doing, focused on creating value first, then exit follows. Try to think of exit first and it just doesn’t work.” (@TBD) — Jeff Smith

“Once you go to majority, it’s their company. So take enough off the table that you’re okay walking away.” (@TBD) — Jeff Smith

About This Episode

Jeff Smith is a serial entrepreneur and EY Entrepreneur of the Year alumnus (Utah) whose career spans high-tech manufacturer rep work, internet filtering software, a brick-and-mortar exterior products company, automotive films, and most recently Ingram Medical (which he scaled from ~$20M to $250M with 1,100 employees) and Jet Dental, a mobile dentistry business that brings preventive dental care directly to employers. Ryan met Jeff at the EY Entrepreneur of the Year conference in Palm Springs. Jeff brings the rare perspective of someone who has founded, bought, recapitalized, and sold companies across completely unrelated industries — and has a clear framework for why.

Resources Mentioned

  • Jet Dental — Jeff’s current company; mobile dentistry for employers. — jetdental.com
  • Jeff’s email — jeff@jetdental.com
  • Good to Great by Jim Collins — Referenced for being the best at one thing by making your market smaller
  • EY Entrepreneur of the Year — Where Ryan and Jeff met as alumni

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