Episode Transcript
[00:00:00] Speaker A: So hello everyone and welcome to the Entrepreneurial Strategy series. My name is David Pustolski. I'm an intellectual property and patent attorney at Gerhardt law. I've been one for about 21 years. I'm a big believer in education and empowerment. And so that's why I created this series almost five years ago. We've been going five years strong and we and so we call it the ESS series and we cover topics from concept to exit in the entrepreneurial journey.
This particular event, actually we're super excited because this is the first time that our event is being sponsored by a brand. The company that's actually sponsoring it is a company called Kickoff. Kickoff is a low cost credit building company designed to help people start building credit in a simple, low stress way.
And so, yeah, we're excited to have them as a sponsor of this event and future events.
Anyway, let's get into the formal presentation. So this particular topic, as you heard me earlier say, we get a lot of questions as IP attorneys that represent startups and entrepreneurs about all the topics that we're going to talk about today. Funding and fundraising and finance and taxes and entities and all sorts of different things. So we brought on two experts and we're super excited to have them.
I'm going to let them introduce themselves for a few minutes. Now. The first one is Robert Pesci. He is here. Robert, let me spotlight you and take a moment to introduce yourself to the audience.
[00:01:40] Speaker B: Thank you, David. Can everybody hear me?
[00:01:42] Speaker A: Yeah, we can hear you.
[00:01:43] Speaker B: Good. Okay. Well, thank you. It's nice to be here today. I'm a managing director at cbiz. CBIZ is a large accounting firm, the seventh largest accounting firm in the country.
I specialize in working with entrepreneurs, privately held businesses.
People like yourselves who are have a burning desire to do something and be successful in it. And I help them with all their accounting, business advice and ultimately tax planning and tax preparation.
We have people all around the country that do that. I lead the, the country's practice on that and I'm based in New York, but talking to you today from Boca Raton, Florida. Nice to be with you all.
[00:02:22] Speaker A: Amazing, Robert, thank you for that introduction.
Our second speaker, who I'm also super excited to have, is Mitch Filet. Hold on, let me make. Let me.
Mitch, welcome. Hello everybody. Yourself. Where are you? Who are you? Tell us.
[00:02:41] Speaker C: Okay, well, the. Where I am is nowhere near as nice as Boca Raton, Florida. I'm in New Haven, Connecticut.
The My journey started on Wall Street. I went from a trading desk to a Sales job to an investment banker. I wound up focusing on structured finance.
The portion of that was mortgages.
And when the mortgage Crisis hit in 2007, I found I still had a parachute left over from my days in the military. So I parachuted onto campus and I've been teaching. I taught a fair amount before that, but I'm now a full time professor.
My latest gig was at Rutgers, which I left in June.
But I'm gonna.
I'm interviewing for three different teaching jobs so I imagine I'll be back teaching in August.
But at the same time I've been advising a lot of startups.
We got one public back in, in May and I'm working on three others that are in various stages of running from the idea all the way through funding into actual kickoff of a business and reaching for revenue.
[00:04:03] Speaker A: Excellent. Yeah, we're going to get to all of that. Mitch, thank you so much for the introduction. So let's. By the way, I love the AI reactions. That's awesome. So thank you for that everybody.
[00:04:16] Speaker C: Let me.
[00:04:16] Speaker A: Robert, let's start with you. Let's start at the beginning, right? You, you, you, you. You heard some of the people that were here. Founders just starting out need to raise money.
Just trying to understand what's first, what's next. Maybe you can talk a little bit about what usually we recommend as, as lawyers other than protecting your intellectual property. But the next big step is choosing an entity. Like what type of, can you break that down a little bit? What types of entities are there? What's the right choice for people? You heard a bunch of people say different things. 500 and I have a company, I have an LLC. Maybe you can break that down for us.
[00:04:57] Speaker B: Yeah, sure. That's great. Great way to start.
So most people start out just by default as sole proprietors. As soon as you start your business and you're receiving money for what you do or sell, you are sole proprietors. And that's generally the way people get started.
You can form an entity immediately if you like. And the first entity that most people would form, I would think the choice would be llc, Limited liability company.
The taxability of an LLC is identical to the way it would be if you were a self employed sole proprietor. The IRS basically considers a single member LLC a disregarded entity for tax purposes. So it's the same as you would be if you were not an llc. LLC of course has some legal protections which David could get into.
But the, the sole proprietorship or a single member LLC is generally the first step. As, as somebody who's forming a business or starting a business. There are other entities to choose from. You might have somebody in the business with you. If you do, maybe you want to have an LLC with you and your member also thought of as a partner. And that LLC would have be treated as a partnership for tax purposes. Unless you chose to ask the government to treat you as a corporation.
There's a simple election to do that. So now the LLC is treated as a corporation for tax purposes. That's another type of entity, of course. And a popular form of corporation is S corporation. So the corporation can elect to be treated as an S corporation.
S corporations basically file tax returns the same way a partnership files a tax return.
The S corporation doesn't pay taxes on its profit. Profit is taxed at the shareholder level just like the profit is taxed at the partner level for an LLC that's treated as a partnership. So you got sole proprietorship, single member llc, multi member llc, S corporation, C Corporation.
[00:06:58] Speaker A: Can you talk a little bit about the, can you talk a little bit about the C Corp or Inc as they as some people may know it?
[00:07:06] Speaker B: Yeah. So C corporations are Inc.
That's generally it can be attractive to investors.
Investors like to invest in C Corps because of the fact that it's not a flow through entity.
There's no limit to who can be an investor and how many people can be in it. There's really no limitations to that.
And there is something that is called the qualified small business stock provision, which is attractive to people who are starting a C Corp. Basically in the short sentence it allows founders and investors to exclude the gain on the sale of the stock if it meets certain requirements. So it's a very popular entity choice. For that reason. C corporations pay a flat 21% federal income tax. That's the rate that was passed in 2017 under the first Trump tax law a few years back. And of course it pays taxes at the state level for whatever states it's doing business in.
[00:08:02] Speaker A: Yeah, so those are good points. I, I, I, and I'm going to come back to you on, on some of that. But Mitch, I kind of wanted to know from you because most of the people I think on this call will probably be needing to raise money.
[00:08:15] Speaker C: Right.
[00:08:16] Speaker A: And as a result of that, what have you seen has been the entity of choice per, you know, from your experience?
[00:08:24] Speaker C: Well, you know, I, I like to pat myself on the back a little bit. I've helped over 100 companies get funded and starting up.
All of them transitioned into or started as a C Corp.
And what you'll discover as you go out into the world and you're essentially asking people for their money, you know, as an investment, as a loan, even a financial institution, you'll find that they prefer C Corps to other corporate forms.
And if you start to reach for a big pile of money, you'll wind up almost having to convert to a C Corp. Which is not that hard to do by the way. But I always say, you know, and by the way, starting a C Corp is way easier today than it was 20 years ago.
So I always tell people, start where you want to get to.
You know, it's, it's kind of like what Robert Goodwin said, you know, what, what got me to here today doesn't necessarily get me to, you know, to tomorrow.
So, so effectively start a C Corp.
Open up your bank, get your ein, open up a bank account. Don't go to some, you know, little off market bank.
You're again, your investors will feel much more comfortable if you're at Citibank or Chase or bank of America or TD bank for instance, than if you're at Royal Palm Savings and Loan down in Palm Beach.
[00:10:01] Speaker A: Yeah. Mitch, there's actually somebody I have to ask this question. Becky wrote what constitutes a big pile of money?
[00:10:11] Speaker C: Well, that's a good question. I guess that target keeps moving.
But you can start up a company today with $500 in the bank.
That's obviously not a big pile of money.
Somewhere along your journey to really build out the enterprise, to create marketing data and marketing procedures and then fulfillment procedures and then inventory, you're going to wind up needing 250 to $500,000.
So my definition of a big pile of Money starts with $500,000 and it gets to, that's a big pile. A really big pile is 5 million.
And a world class pile is anything north of $10 million.
[00:11:00] Speaker A: Okay, that's fair.
And Robert, I think, you know, I actually have the same advice that Mitch just said, which is like if you are raising money, you definitely want a C Corp. It is the preferred entity type that investors want.
And so I usually tell them it's usually because of tax reasons. Can you kind of break that down a little bit? Like what does it mean for an investor to invest in an LLC as opposed to investing in a C Corp?
[00:11:39] Speaker B: Right. So if someone invests in an LLC and the LLC is profitable, the LLC profit gets allocated to the investors in accordance with their ownership percentage or in accordance, in accordance with the operating agreement that says how much the profits going to be allocable. So let's say it's $1 million profit in an LLC. There's 100 members. And let's say that they're just by, just by sheer luck, they're all equal members. That's kind of unusual, but they're all equal members. They all will get an equal share of profit that they have to pay taxes on, but they may not get the money. The LLC has to have a provision in it that distributes the profit to the members. And so sometimes the members will have taxable income that they don't have the money to pay the taxes on. So that's not. So that's not a favorable thing for certain people that might be a passive investor in the entity.
The C corporation, they make the investment, the corporation makes a profit, the corporation pays taxes on that profit. And if there's extra money it can pay dividends to the investors or it could just keep it in retained earnings and continue to invest in the growth of the entity. On the other side, if there's losses, if it's an llc, those losses are reportable to the members of the LLC and pass through to them on a K1 which that's the form that the LLC issues to the members of the llc.
And those losses can be deductible on the individual investors tax return depending on certain rules, whether it's passive or active or you have basis. That's a little bit more complicated than this conversation is going to be about. But the point is losses or profits get passed through and reportable on the investor's tax return. In a C corporation if there's a loss, it's a loss. The loss gets carried forward indefinitely to the future years of the, of the corporation where hopefully the corporation makes some money. And in those years where there's profit, those profits can be offset by the losses that are carried forward from prior years.
[00:13:36] Speaker A: Okay, awesome. Thank you for that. By the way, if you have any questions at this point in time, just chat them but we will have a question and answer session at the end and so maybe save some of your questions if you have any, for the speakers.
Mitch, did you want to comment on any of that?
[00:13:56] Speaker C: Yes, if I could. The.
[00:13:57] Speaker A: Yeah, please.
[00:13:58] Speaker C: Part, part of the secret sauce of raising outside capital, you know, from investors or financial institutions, which includes private equity funds, hedge funds. If you get big enough. The secret sauce is that behind the person or people.
You're speaking to is employees, they of the entity. They could be the, the person. If you're dealing with an individual, it could Be their tax advisor. It could be their lawyer, you know it, their financial advisor. You don't really know what they're saying about corporate form and potential losses. But I can tell you this.
If, you know, if an advisor thinks that your enterprise has a lot of risk, they're not going to come back and say, oh, let's be an S corp so you can, or an LLC so you can flow through some of the losses.
They're going to say, thanks, but no thanks.
Morgan Stanley just issued a report that said that they thought that investment in private enterprises was going to be up about 25% this year over last year. So there's a big pile of money out there looking to invest in young companies and startups and young company I defined as obviously company that started recently that is still growing revenue and profitability and cash flow at a fairly rapid rate.
So there's all this money looking to do something other than sit around in stocks and certainly not wanting to be in a bank and get paid 2%.
So.
[00:15:52] Speaker D: Right.
[00:15:52] Speaker C: It's much easier today to get something funded. But you have to understand that you're not, you're only dealing with the tip of the, of the spear. You're not dealing with the whole spear. You've, you've got to build something that has real sustainability, that conforms to good business practices. And that's why I always say go with the C Corp. Plus, it does provide you as the senior management with a little bit of legal protection because the corporation, something goes really ugly corporation gets sued before you get sued.
[00:16:31] Speaker A: That's right.
I think those are also to your point and to, and to what Robert said before, you know, making the decision between making a decision as to what entity you are taking consideration is not just a tax question, but it's also has, it also has legal kind of ramifications as well in terms of liability and documentation. We're not going to get into that per se. But you should, you should, you should think about those considerations as well. Mitch, I'll stick on you for a second. But Robert, I want, I want to hear from you on this question as well.
Okay. I decided on a C corp. I decided on llc. Where, where, where am I creating this entity? What's this, you know, Delaware thing? Like, do I really have to do it in Delaware? Like, what's, what's your, what's your impression of that?
[00:17:21] Speaker C: So you want my answer?
[00:17:23] Speaker A: Yeah, yeah, I want your answer. Then. Robert, can, can, can kind of weigh in from a tax perspective?
[00:17:28] Speaker C: Joe Biden says pick Delaware.
Yeah.
The, the, the cheap seats is, is Wyoming.
[00:17:37] Speaker A: Yes.
[00:17:38] Speaker C: Yeah.
[00:17:39] Speaker A: No, I, I, and so do you, do you think there's. So, so, so in a nutshell, would you agree that you don't necessarily have to be a Delaware C corp in order to attract investors?
[00:17:51] Speaker C: Not until you get ready to pull the pin and go public.
[00:17:55] Speaker A: Got it. Then, then you should be in Delaware at some point.
[00:17:59] Speaker C: Yeah, probably. Because. Because if you're dealing with a reasonable investment banker, meaning Raymond James or Ameril lynch, if you get really lucky, they're going to have a preference for a Delaware C corp.
Got it.
[00:18:13] Speaker A: And so, Robert, do you have any perspective on this from a tax perspective? I mean, clearly, if I'm setting up in Delaware, I'm paying taxes in Delaware, but I live in Florida. So how does that work?
[00:18:23] Speaker B: All right, so forming an entity in Delaware does not necessarily cause you to have to pay taxes in Delaware. Okay. So I usually tell people when they ask me, I'm starting a company, where should I form it?
Let's say they're talking to me from New York and they're going to be doing business in New York. That's where they live, that's where they work. It's going to be New York activity.
I say to them, they say, what about if I form someplace else like Delaware? I said, well, you can form, you can form in Delaware. Delaware has an annual franchise tax filing requirement, which is basically a fee that you pay for the privilege of being incorporated in Delaware. It's pretty, it's a pretty low cost fee. It's a one do it online. It takes five minutes. Once you know how to do it, it's not a big deal. The reason that I tell a client to choose Delaware instead of, in this case, New York is because they, I'll ask them another question. What do you think you're going to be living and working in the next five years from now? And they say, well, I'm thinking about moving to California, I'm thinking about moving to Texas, someplace else.
Forming in Delaware gives you the entity some portability. If we form it in New York and then five years, the business and the individual moves to, let's say, another state, that entity is going to continue to be required to file returns in the state of New York. That's where it's incorporated. It may not have any allocation to that state, but there's going to be a continuous need to file an actual tax return in that state that they incorporated in. So if you think you're going to move around, I tell them form it in Delaware, and you can register the business to do business where you are right now in New York. And when you're ready to leave New York, you can withdraw from New York. You're no longer stuck to filing in New York, and now you can register the business wherever you now are relocating to and start complying with that state's filing requirements.
[00:20:03] Speaker C: Got it?
[00:20:03] Speaker A: Yeah, that, that, that, that's smart. That, that's smart advice. And what about if they're doing business in another country? Can you talk about a little bit about that?
[00:20:14] Speaker B: Yeah. Doing business in another country. You want to talk about that first, Mitch, do you have any thoughts on that? Yeah.
[00:20:21] Speaker C: Okay, so you want me to tee this one up?
[00:20:24] Speaker A: Yeah, yeah, you can go for it.
[00:20:28] Speaker C: Doing business in another country adds as, as an American passport holder adds a level of complexity that's going to cost you money.
There's just, I've, I've never seen anyone able to figure out a way around it.
And unfortunately, it does leave you susceptible to some issues that come up that are, you know, quasi political but have a major impact on your finances.
[00:20:58] Speaker A: Can you, can you, can you break it down a little bit more?
[00:21:02] Speaker C: Sure. I mean, you know, you decide you're going to, you're going to have a major operation in, in England and you're going to have an office in London. There's a whole bunch of English regulations that are going to bear down on your profitability, and you've got to understand that.
Right. And if you, and if you don't, eventually they'll knock on your door.
[00:21:24] Speaker A: Yeah, that's right. I mean, most nations in the world have, you know, tax treaties with the United States to avoid double taxation and stuff like that. But of course, if you're going to do business in another state, you probably should be seeking, you know, some sort of accounting, you know, some sort of accountant that's, you know, that, that is in that country where you're actually doing business.
Robert, would you, would you agree?
[00:21:49] Speaker B: Well, I can tell you that what Mitchell said is correct. There's definitely some complex complexities that have some costs. First of all, if you're going to form a business outside the United States, located someplace outside of the United States, you're going to need to engage legal counsel and accounting help with people that are local so that they understand the rules that are applicable and comply with those rules.
Also, a US Entity that has owns entities outside of the United States has some very complicated US Reporting requirements that have not just complexity but also some tax consequences. So I have clients that have done this, and it's definitely in their case, it was necessary. I can also tell you that once they learned about the complexities, they looked at where they were, and instead of having five different locations in various parts of Europe, they cut, they trimmed down to where they really needed to be so that they could minimize the economic consequences and administrative consequences of that decision.
[00:22:49] Speaker A: Got it. Okay. What about, what about the revol. Yeah, go for it, Mitch. Please
[00:22:57] Speaker C: be okay if I.
A short war story?
[00:23:01] Speaker A: Yeah, yeah, of course. By the way, Mitch, you're breaking up a little bit here and there, so just maybe check your WI FI connection. But. Yeah, please share the story.
[00:23:10] Speaker C: Well, you know.
Yeah, no, the weather has totally destroyed every bit of electronic connectivity.
You know, I'm, I literally live. I live on a hilltop over the beach, and it's old wiring, and to make things worse, you know, our service provider got bought by Verizon. So I'm, I'm in a world of hurt. I'm sorry.
[00:23:33] Speaker A: Okay, now please share the war story.
[00:23:36] Speaker C: All right, so I'm an advisor to a real estate fund located in New York who. 100% of their investment was property in. In Iraq, in downtown Baghdad.
[00:23:53] Speaker E: And
[00:23:57] Speaker C: they, they sold all the property.
The money was in Chase bank in, in, in Baghdad.
And all they had to do was give Chase an order to move the funds to New York City.
But the funds were in dinar, and there had to be a dinar dollar conversion.
And because of the amount of money, it required approval by the government, and the government retained Chase to help them increase the vat. Less than a dime at that point. And so it would have been, you know, billions and billions of dinar. And so Chase froze the account.
They had to, legally, and it's still frozen.
So when, if you're going to do business outside the United States, you know, you're. You've got, you're going to, you're going to have to set up a whole nother system of legal advice and probably accounting advice.
[00:25:03] Speaker A: Right? That's right. What about the reverse? Robert, we have you, you, you, you, you. You heard the makeup of the people on this call. Many of them are in other countries looking America. How does that work exactly?
[00:25:18] Speaker B: Yeah, so I have clients that are abroad that are not American citizens or taxpayers.
They have maybe a business already that they've started in their country that they reside in or not.
But they would, they can form an entity in the United States that's certainly allowable and doable.
That entity would, you know, they would choose the right type of entity Probably a C Corp in this case. I think that's probably the best choice of entity given the circumstance we're talking about right now.
And that entity would need to get an EIN Employer Identification Number. It's good for that corporation and they would apply for that on something called an SS4 the way anybody else would. Except if they're not a US Resident and they don't have a US Social Security number, the government's going to require that application be done by phone.
And they'll need a third party designated authorized person to do that. Somebody who's got the ability to fits the requirements is a US Taxpayer for tax purposes. US Resident for tax purposes. So it can be done and it is done.
The bank, which is another part of the question. The bank will also require somebody who's in the US to be responsible for the account.
But it happens all the time. Absolutely.
[00:26:37] Speaker A: And Robert, do, do you provide those types of services for foreign based companies that want to do business in the United States?
[00:26:48] Speaker B: I have not done that, but there definitely are people that, yes, they do. Okay. If I had a long term relationship with a client that was international and they, they were a good client, that we understood their business and understand them as individuals and they asked me to do something like that, yes, we could do that. But generally what happens is we'll get, we'll hear from somebody that we've never, never met from outside the United States and if that request is asked of me, I generally will just say, no, thank you.
[00:27:15] Speaker A: Yeah, that makes sense. I probably would do the same thing. Mitch, what about you? I mean you, you probably have provided mentorship and counsel to foreign based companies or non US Citizens that are trying to do business in America.
Can you, can you share some experiences there?
[00:27:36] Speaker C: Well, the, the non US Enterprise trying to do business here, to me is actually a fairly easy proposition. Start up a C Corp.
Have the C Corp buy whatever it is you want to sell over here in the US from your foreign entity and figure out how much profitability you want to leave where your foreign entity is domiciled and how much profitability you want here.
Right. And I know that works because that's what Exxon Mobil does.
So that's sort of an easy process. The process of being here and distributing whatever your goods or services are in another country is not that hard to do, especially thanks to the Internet. But, but you are going to have to become the master of the business practices of the place that you go to. And you can't just ignore it. You can't Just say, well, I'm just selling stuff over there. Because it's not what you know that hurts you, it's what you don't know. It's that, you know, it's that odd notification that you get through email or as they say, you know, and in the FBI that the 2am knock on the door. It's, it's whatever, whatever you're not waiting for.
That's what you have to anticipate. And that's where good financial or management practices comes from, is understanding what the process is that you're, you're now going through and figuring out what you do to be the master of that process management.
[00:29:19] Speaker A: Right. And what about that same company wanting to hire employees in America? Have you seen that to be an issue?
Again, we're talking about not, we're talking about non US we're talking about foreign companies that are trying to do business in the US and also trying to employ people here.
[00:29:40] Speaker C: Right.
I mean, honestly, I've never seen a foreign company do that. They always start up something here.
[00:29:47] Speaker A: Yeah. And then.
[00:29:48] Speaker B: Right, right.
[00:29:48] Speaker A: And then that's the entity.
[00:29:50] Speaker C: They may sell a product or service here, but they sell it to Walmart. Now I'm done. Right. But, yeah, but, but as far as, as building a business here, I've never seen a foreign company not set up a C corp.
Robert.
[00:30:06] Speaker B: I agree. That's, that, that's out. That's how it's done. And what Mitch was talking about, managing the profit of this U.S. c Corp. The U.S. c Corp and the foreign entity would have some agreements between each other that, where there'd be fees or whatever charges between the two entities that would minimize the, or manage the profit that the US Company has and minimize the US Taxes. And that's done in certain, has to be done in a certain way. Transfer pricing rules and agreements that have to be done between the two entities. But it's definitely doable. But yeah, the employees, if you need to have employees in the United States, they need to be employed by a US Corporation.
[00:30:42] Speaker A: Okay. And so we set up this US Corporation. Whether we're a foreign company or where, where we're based in the United States, we'll just say a C corp for now. But maybe, maybe the answer changes. If it's a limited liability company.
And I'm trying to, I'm trying to, I'm trying to raise money, I'm trying to sell product.
I'm not doing any of that. I haven't raised money. I'm operating at a loss. Do I even need to File taxes at that point?
[00:31:13] Speaker B: Yeah, I'll take that one. Yes. If you're an entity, if you're a C corporation that has activity, and if that activity results in a profit or a loss, you have to file a tax return and you should file that tax return, especially if it has a loss, because that loss is valuable. That loss can be carried forward to future years when the entity turns around and starts to show a profit. So you want to, you want to get that, that, that loss memorialized in a tax return and file it properly, accordingly.
[00:31:42] Speaker A: And, and, and, and does the answer change if I'm a limited liability company or a sole Proprietor or a 501C3, does it, does it change?
[00:31:53] Speaker B: I think it's the same answer. So if you're a limited liability company and you're having a loss, and let's say it's you and your partner, this loss doesn't get carried forward at the entity level because we know that losses pass through to the members.
So you as the individual will be able to benefit by having that loss pass through to you on your personal tax return. And it'll be able to be used to offset your other income that you have on your personal return, such as interest, dividends, wages, your spouse's income, interest wages.
It's definitely a valuable thing. And the only way you get that is, is by filing the return and issuing the K1s from the LLC to the members that shows that loss that they can deduct on their tax return.
[00:32:32] Speaker A: Got it. If they were an LLC in that
[00:32:33] Speaker B: hypothetical, if they were now seeing that hypothetical.
[00:32:36] Speaker A: And, and, and you know, by the way, there's a few questions that have kind of come in. I haven't been ignoring them, but I think, I think, I think people kind of want to know specifically like what is the difference between an S corp and a C corp? Like maybe you can kind of. Yeah, yeah, because I think that's important because it's, because it's, because it's usually a tax difference. But maybe you can break it down.
[00:32:58] Speaker B: Yeah, well, what I just talked about a minute ago, the llc, everything I just said would be the same for an S corporation. So s corporations and LLCs are flow through entities. They do not pay taxes on their profits. The profits that they, that they realize gets instead of taxed at the entity level, it gets passed through and reported onto the owners, shareholders of the S corporation, members of the llc. Just the temp. That's just different terminology, but it's the same thing. They issue a K1 that reports the profit or the loss to the shareholder or the member of the entities.
And that's different than a C Corp because a C Corp does not is not a flow through entity. The C Corp profit or loss gets reported at the entity level. If it's a profit, the entity pays a 21% federal flat tax rate. If it's a loss, it's just a loss that sits there and gets used in the future to offset future corporate profits.
[00:33:55] Speaker C: That's awesome.
[00:33:56] Speaker A: Hopefully everybody and there was a few questions so hopefully you're getting your. Because people are like oh, would you recommend an S corp or a C Corp. But I guess it really depends on a variety of factors. Right? Wouldn't you agree with.
[00:34:11] Speaker B: Yeah, I would. And I know Mitchell has an interesting perspective on it. Just start where you want to be eventually. In his case, he prefers C Corps and that's for good reasons.
Most of my clients are not attracting investors. They're. They're individually owned family businesses that are not looking for investors. And in that case we usually advise LLCs or S corporations pass through entities because of the concept of double taxation.
C Corporations pay a flat tax on their profits and, and any money that the shareholders take out of the company is considered a dividend. The dividend is not tax deductible by the at the corporate level. So the dividend and the dividends are taxable at a preferred rate to the individual who receives those dividends. But there's tax twice this tax at the entity level and then what's left over gets passed over to the shareholder and is taxed again. That may result. That's definitely double tax. It may not be as expensive or less expensive than S Corporation. You have to look at the analysis. But in an S corporation if it makes a profit, there's no tax at the S Corp level. The profit passes through to the individual and the individual pays income taxes based on their individual tax rates which can be anywhere from 0% to as high as 37% on a federal basis. It's a, it's a, it's a, it's a progressive scale.
[00:35:33] Speaker A: Yeah. And just to, just to close the chapter on this, Monica's question, I want to take it also because it's really on point from an operational standpoint. Outside of taxes, would you see any other benefits for you know, doing an S Corp and or C Corp or an llc?
[00:35:50] Speaker B: Operationally I don't think there's any real difference.
The operationally the entity needs to gets formed. It needs to get an ein, needs to get a bank account, it needs to file a tax return, it needs to employ you as the shareholder. If there's profits and you're actively involved in the business operationally, it's really very much the same. Do you agree with that, Mitchell?
[00:36:12] Speaker C: Well, so let me validate your expertise here, Robert.
There's really kind of two animals that have entered into the conversation.
One is the business is up and running, you may want to grow it, but it's a family business. You're taking over the family restaurant. And there a flow through entity might be very helpful, very applicable. And the right financial strategy, if you have an idea and you're going to use other people's capital, or mostly other people's capital to boot up the idea with the hope that in five years you're going to list on nasdaq, you need to be a C Corp.
Right. Because the, you know, and the great thing about the C Corp is, is number one, it does protect you legally, to at least to some extent. And number two, the losses can be carried forward.
So if you're right and your, your view of the future is relatively accurate, having losses for a couple of years that you aren't flowing through to your personal taxes isn't all that important because four years from now or three years from now, when the company's really starting to book, you know, revenue, positive cash flow and maybe even some profitability, those losses can reduce the taxes, the corporate taxes that the entity's paying.
[00:37:37] Speaker A: Yeah, excellent.
[00:37:39] Speaker C: Yeah.
[00:37:39] Speaker A: Robbie, Any, any final comment on that?
[00:37:41] Speaker B: No, I think what Mitch said is right. You gotta look at the, you gotta look at the situation on a case by case basis. But in general, C Corps are absolutely essential if you're talking about raising money and, and hoping to go public or grow institutionally, absolutely.
[00:37:57] Speaker A: Yes, I totally agree. Let's stick on that. Let's talk about raising money. Let's talk about investors.
Everybody wants investors, right? Everybody. I mean, most of the people that you probably heard earlier probably need some sort of investment.
But big question, we get this all the time. How much is my company worth? Right. Valuation.
I want to hear from you, Mitch. How should a founder with little to no knowledge, or even the little to no financial knowledge, or possibly has the most financial knowledge, how, how would you counsel them to approach the subject of valuation, which would then determine how much investment they're looking to get?
[00:38:42] Speaker C: All right, well, there's, there's two levels of valuation. I'll leave the, hey, we're going public valuation to the licensed entity that's going to take you public because they're going to have a very strong opinion.
Before that, as you seek outside capital, you're going to go through a series of discussions and those discussions are eventually going to end at valuation.
It's going to start with what's your product, who's your competition, what's your pricing like packaging, delivery, you know, your warehousing.
A smart investor is going to take you all through your process and then you're going to get devaluation.
And luckily today there's all sorts of data available for valuation. So what I tell people is go find some publicly held companies that are in your industry.
They're, they're as close to your spot on sector as you can get.
Look at how they're valued.
Right. And, and even though they may be way bigger and they've raised a ton more money, it doesn't mean you can't use them as a benchmark.
[00:39:57] Speaker A: That's right.
[00:39:58] Speaker C: Right. So if you have this company that's now public and it's worth a billion dollars and all it's doing is producing losses and it got its sales up to 100 million. So it's trading at 10 times sales and you've got your, your enterprise that you're starting up and your, your projections are then in a year you're going to be doing 200,000 in sales.
Well, you know, it's not crazy to say, look, I think the company's worth 2 million 10 times projected sales, but our sales is going to be on a pretty big growth rate. So we, you know, we're going to do a, you know, a present value analysis of the next three years of sales. We're going to add that to the 2 million, and I think we're worth $20 million. We're going to raise 5 million by selling off 25% of the company.
[00:40:50] Speaker A: Okay, so let's carry that through. That's what this company's doing, let's say. And so now they just got, you know, a few hundred thousand. We won't even call the full. They just got a few hundred thousand. Any, any counsel or wise words to founders that, you know, get a, get, get a cash infusion after coming up with the valuation as to how that money should be handled.
[00:41:12] Speaker C: Well, that, that, that, that's chapter two. All right, so chapter two is don't go down the slope of the crazies during the dot com boom.
So for those of you who may not have studied this, I was intensely involved in advising technology companies between 1990 and 2000, which took in what was called the dot com boom in America where literally you could have an idea, you could point to substantially higher sales in the future, do a discounted cash flow analysis back to the present, multiply that by 50 times and get a $200 million valuation and go public and sell off 25% of the company and raise 50 million.
What a lot of management teams did for chapter two because they didn't really have good management backgrounds was they got masseurs to come in during the day to relieve stress. And they, they developed a, a pet, excuse me, a pet bar so you could bring your dog to work. And they had a game room with a beer keg and lunch was catered two days a week. And all of a sudden you know, a million or a million dollars disappears and it doesn't seem like much till you miss your sales targets and you need capital and you go, and then you go to a bank and you go, well, we raised 50 million and we have a 200 million dollar valuation and we'd like to borrow another 20 million. And the bank looks at your financials and says, you threw away $2 million on fund.
We're not going to loan your money.
You're a bad management team.
So, so a lot of it's sort of like playing on the JV and trying to make the varsity. You got to be really, really structured as to how you protect the outside capital, how you use it, how you drive forward to produce increased revenue and increased cash flow. And if you miss your targets, that's okay. Failure is acceptable so long as you can explain it.
Right? So failing the mur, that's bad, right? We, we went out and we built a product and we thought that consumers would buy it at $22. So we sold it to the retailers for $11. And it turns out the retailers got push back and they only sold it for 18.
So we had to reduce our price to the retailers.
So that cash flow was reduced.
That's okay.
That's the answer your management, especially with someone else's money, if it's your own, have fun. But if you're going to raise outside capital, you've got it every day you've got to wake up and go, I'm going to the arena and I'm going to play the big game today, every day. Because someone will eventually hold you to task. Guaranteed.
[00:44:30] Speaker A: Yeah, that's right. I love that. That's, that, that, that's, that's great. That, that's, that's wise words, Mitch. I agree because I think, I think, you know, all of A sudden founders get like influx of, you know, of money and they just don't have a proper plan for it. And it's a problem. But speaking of that influx of money, Rober, I was, you know, operating at a net loss. I just got $500,000 investment.
Is that, is that considered income? Like, do I have to, like, how does that work from a tax perspective? Am I paying tax on $500,000 to like on the day that I like in the year that I get it, or is there something creative I can do?
[00:45:10] Speaker B: Well, if it's an investment, if someone's investing $500,000 in your company, it's not income. It's you sold equity in your company to the person who's paying you. The $500,000 question is what percentage of the equity did you sell? And that gets back to valuations. And valuations are generally done with, you know, there's always an agenda with evaluation.
In Mitch's case, I love that story about the dot com days. I was around for that too. And it was amazing. People just had an idea and they would raise a whole bunch of money and you know, have lobster Thursdays and massage Mondays. And it was, it was, it was crazy. And me being a conservative accountant, we would shake our heads and say, what's going on here? And they measured their success not on their revenue. What sales? There's no sales. It was all equity. Tax free money coming in to fund their fun idea and lifestyle. But, but value valuations are done with reasonable assumptions based on a certain agenda. It's, it can be to get an investment from somebody that is going to give you that needed influx of capital, in this case, $500,000. It can be done for figuring out how to maybe sell your company to a competitor. It can be done for figuring out how to maybe, you know, give shares of the company away to your, your family for estate planning. And each situation has a different agenda. But valuations that should be, that can be respected by whoever's looking at them need to be done with certain reasonable assumptions.
[00:46:33] Speaker C: Right?
[00:46:34] Speaker A: Yeah, that's great. So, so wise words, by the way. So we will have a question and answer session starting in a few minutes. And so if anybody wants to ask something live, I know you, there's a bunch of questions in there. But if you want to ask something live, just raise your hand and, and, and then we'll call, you know, kind of raise your hand on Zoom and, and, and we'll call on you.
Also, I dropped that, that, that first survey that I kind of that, that, that came from our, from, from our sponsor. I dropped it in the chat, so hopefully you had a chance to answer it. If not, just scroll back up if you can. There will be a final survey. Again, one survey question that we will get to probably in about three or four minutes. So, so just keep that in mind. So, Mitch, Robert, you have, you have seen a lot. You have been around a lot.
I want to talk about some kind of best practices from. Mitch, we'll start with you kind of best practices from a finance perspective. When it comes to, you know, early stage, middle stage, late stage, it almost doesn't matter unless you think it does. What are some best practices you can share that founders should be thinking about when it comes to finance?
[00:47:52] Speaker C: Well, the one of the courses I taught at Rutgers was advanced Financial Management.
And I was on the graduate level. And the first class, what I always told my students was make believe. The outside capital you've taken, whether it's loan from a bank, loan from an individual rule or a fund, or an investment from an individual or a fund, make believe that money's your money.
How would you feel if you didn't get timely reports?
How would you feel if the accounting reports you got the P and L was not done to form?
Right.
When you be upset, if you're going to go down the road of entrepreneurship, you've got to make believe that these people are, in a sense, your teammates, because they are right. It's not like you're a public entity and they're going to their broker and saying, all right, buy me 5,000 shares.
They are making a bet on the idea, the product, you as management, and future profitability.
So you're, you're stuck. If you're going to take outside capital, you owe these people. And what you owe them is your best shot. And the way you take your best shot is by being super professional. And if you don't have the skills, bring in someone who does. Go talk to someone who does. There's all kinds of, you know, free information available these days on the Internet.
Towns have, have courses. I, I give a lecture in my town, you know, twice a year on advanced financial management.
It's out there. Make yourself smart. You want to be smarter anyway, if you're going to do, do this and make a profit.
[00:49:48] Speaker A: Yeah, right on, right on. I agree with all of that. That's great. Robert, same question. Best practices for tax, we'll leave it at that.
[00:49:59] Speaker B: Well, okay, so for tax, usually when someone's starting a business, taxes are important, but maybe not absolutely Immediately important because there's going to be some period of time where you're not making money.
And so before you get to that, you need to have a plan and make sure that this, if I'm talking to somebody who's starting up a company, I want to make sure I see their plan, that it makes sense. It's been well thought out that they've, they've, they've done some projections for what they feel like it's going to cost them to get this thing going, what their cash flow is going to, what their cash burn is going to be so they have the right capital to deal with the startup cost. Most businesses that start up fail because they're under capitalized. So you really need to make sure that that's understood and make sure that they have a good lawyer and a good accountant that specializes in their industry so that they can give them advice on helping them to avoid the pitfalls of what they're going to do as they start this business structure.
That's choice of entity. L.L.C.
s Corporation, C Corporation. Let's talk about where you're going and what kind of entity makes the most sense.
Registering the company the right way, getting an ein getting the proper insurance, having a good bank bank to deal with and having a bank account and a credit card that is actually in the name of the business.
So many people start a business and work it out of their own personal checking account and that really does, that's not the way to start a business. As Mitch said, you got to follow the rules and be a real business. You can't be have a business, you have to be a whole business and have an accounting system that gives you the information you need to run your business, to plan for your profit, the taxes that are on your profit and if you have investors to report back to them in a credible way so that, that you can continue to have a good relationship with the people who have the confidence to give invest money in your enterprise. So those are a bunch of things that I would say would be best practices for founders.
[00:51:52] Speaker C: If I don't, if you don't mind, David, I have one more.
[00:51:55] Speaker A: Yeah, please. Go for it. Go for it.
[00:51:56] Speaker C: And, and I'm always shocked at how many people jump over this one simple step. You ready?
Go get a business card.
[00:52:07] Speaker A: Business card, what's that anymore, right? No, I still have none. I'm sorry.
[00:52:11] Speaker C: Go get a business card. You know, you, you go to a conference and there's the successful people up speaking to you and you know, you go to the cocktail Party afterwards. People are exchanging business cards. That networking can be immensely profitable to a young business.
That people aren't going to write down your Gmail address. Trust me. Right. They'll give you a business card and say, send me your contact info.
And when you're out raising money and you're sitting in a room and they're is this wealthy person with their advisor and maybe their lawyer, and you say, well, okay, my Gmail address or my, my company email address is this. No, print. It costs 15 bucks at Staples. Print a couple hundred business cards.
It's hard to believe how important that is.
[00:53:07] Speaker A: Yeah, I agree. I totally agree.
We cannot lose the personal connections that we've made.
That's really important. Okay. We're gonna, we're gonna switch to kind of Q A. So if you have a question, raise your hand. I just want to say again, thank you to our sponsor, one final question from them. I'm putting it in the chat. Just click on that and, and it's a quick question. Do you remember the name of any company or tool mentioned that helps people build or rebuild us credit? Yes or no. So please take a moment and, and, and, and fill that out and we thank you to our sponsors. Anyway, anybody have any questions that they want to ask live, please put up your hand. Robert, there is something in the chat that I'm kind of curious myself. Monica will get to you in a second.
Someone wrote here, if my company receives an SBIR grant, I think, Robert, you might know what that is.
From the government, right? A grant from the government.
Even if you don't know what the SBIR is, does that company need to pay tax on it? So do I need to pay. The question is, do I need to pay tax on grant money that's received by a company?
[00:54:19] Speaker B: You know, that's depends on the type of grant. I don't know the answer to the specific question, but some grants are not taxable. Some grants are taxable, and usually it's very straightforward and clearly indicated in the paperwork that you're signing when you get that grant.
[00:54:34] Speaker A: Yeah, that's right.
Thank you for that. Monica, did you want to. I think you had your hand up. Did you want to ask a question?
[00:54:41] Speaker F: I can. Thank you so much.
[00:54:44] Speaker A: Go for it. Let me, let me find you. Where are you so I can. Oh, you don't have your camera on.
[00:54:51] Speaker F: I don't.
[00:54:52] Speaker A: Okay. That's okay. Go for it. Ask your question. I just was going to spotlight you, that's all. But go ask your question.
[00:54:57] Speaker F: So I recently was introduced to this like business like a social entrepreneurship and I took a workshop so I'm kind of rolling that out. Are you familiar? And I'm just trying to figure out the best like structure or entity to set up the business as so it's not a non profit but it's like established to like help and support the community.
So like a non profit like Outcome but it's for profit. It's called a social entrepreneurship.
[00:55:29] Speaker A: Yeah Robert. Mitch, you want to, you want to, you want to comment? So basically a which has become very popular in the last you know, 10 to 15 years entities that you know are doing social good if you will and so yeah curious if you have any thoughts.
[00:55:47] Speaker B: Most, most non profits are corporations by nature. They just happen to be a nonprofit for tax purposes.
If this is a socially minded entity enterprise it's probably going to be a C corporation and it may eventually morph into an actual nonprofit. But it sounds like the mission is not just about making money but about doing good and it probably should be a corporation a regular C corp. What do you think?
[00:56:14] Speaker A: What do you think Mitch?
Tiki frozen Mitch, do you froze on us now of all time? Okay, we'll wait for Mitch to get back.
Oh go for it Mitch. Go for it.
[00:56:28] Speaker C: I'm sorry the, the I would say you definitely want to be a C corp because there's all kinds of of governmental grants available if you've got a real strong social purpose.
[00:56:44] Speaker B: Yeah.
[00:56:44] Speaker A: Okay great.
Gassen, what is your question?
Let me unmute you.
[00:56:57] Speaker G: Yeah, sure.
My question is I have in my company in I'm registering in many countries in the United States and how to
[00:57:15] Speaker C: be
[00:57:17] Speaker G: registered them in in with Texas like Miami and Hollywood Florida and thank you so much for inviting me that meeting and and so glad to be in here in here So I am first of all I present myself I am president and owner company Design Graphic as Future Technology is a big in I found my company send since 2019 and my company is registered with the government Singaporean and of course I have in many partner partnership and around the world with many company and that's why I'm asking how to be register my own company in city United States.
[00:58:47] Speaker A: Okay so I, I I I think I think I think I kind of got the question.
So Robert, it sounds like he has multiple companies around the world but is looking but possibly also is looking to start up the company in a particular city in the United States.
I heard Hollywood Florida I heard Texas or something like that.
So I think maybe he's looking to see maybe if you know how to determine one state over another is what I'm is what I gathered.
[00:59:24] Speaker B: Well, I think when you're choosing where to do business inside the United States and choosing what state that might be, I think you have to think about two things. It's what's, what state is the best place for you to be doing business? Forget about taxes for a minute. Just where should you be operating from? Which is going to help you be the most successful business you can be?
And then the other question after you've answered that one is what are the tax consequences of those choices? So you might pick that, you might get to three different states that make the most sense operationally for you and maybe one of those three has a lower tax rate than the other two and that's the choice that you would make at that point. That's how I would make the decision.
[01:00:03] Speaker A: Yeah, I would agree. Okay, thank you for your question. Gusan surveying Wilson, do you have a question?
[01:00:13] Speaker E: Yes.
My name is Sylvanus Wilson with the Isaac Institute's consulting and design firm.
We work with a lot of SMBs as well as solopreneurs and one of the questions that I get asked the most is if you are planning
[01:00:33] Speaker D: and
[01:00:34] Speaker E: go from let's say LLC to S Corp or C Corp, what financial accounting software would you recommend that will allow and be accessible to someone that may be starting out as a solopreneur or small business, but it would allow for that scalability when they are ready to turn into, you know, a publicly held company?
[01:00:58] Speaker B: My answer would be thank you. Good question. My answer would be that QuickBooks is the number one and best software that I can think of. I think 99% of my clients use it and that's, that's, that's from the full gamut of clients, whether it's a startup, a one year old business or a business that's expanded, you know, 100 fold. I've, it's really hard to outgrow QuickBooks. It's, it's an amazing product and it's, it's totally scalable. As you, as your business grows, there's certainly some much more robust software out there that is a little bit more difficult to use and certainly a lot more money and they're in their fine products.
But I would say at this stage of the game, QuickBooks is a no brainer.
[01:01:36] Speaker E: And to add, add to that, what if they're doing their taxes themselves starting out before they move on to CPA or anything of that nature. Do you have a platform that you recommend for that as well.
[01:01:52] Speaker B: Well, I mean, individual tax software is the most common one that everybody knows about is, is TurboTax. That's also an Intuit product. The same company that owns QuickBooks is. And they actually talk to each other pretty well.
But that's on the individual side. On the business side, I really don't have a lot of experience in that area because I don't really have clients that do their own personal, their own business taxes. They use me. But you could probably look at that in Google and figure that out pretty easily.
[01:02:22] Speaker A: Awesome.
[01:02:22] Speaker E: Thank you very much.
[01:02:24] Speaker D: Thank you.
[01:02:24] Speaker A: Thank you, sir. Veins. Last question, Yoshua. I want to make sure I pronounce it right this time.
[01:02:35] Speaker D: Yeah, Yoshu is perfect. Thank you, friend.
[01:02:37] Speaker A: Awesome.
[01:02:38] Speaker D: So I work with a lot of small businesses. Again, I'm a financial advisor. I'm curious though. Now, I have two individuals in mind that of course don't have any sort of funding besides selling their work. One does arts and crafts, the other is a small.
Wants to be a restaurant owner. Right. But it's not quite there. If we're talking about possibly getting funding for them to advance their careers, what kind of.
In this case, two things. What kind of income should they have right now to consider? Escor vs. C Corp. If they were to go on that end, or just maybe just Sole proprietorship llc, that's fine as well. What thresholds should they meet before they should really think, hey, I should go for something bigger, C Corp or etc. I know with S Corp you can get private placements so you can have your own private fundings, but there's certain limitations on that end. C Corp is public, but I'm sure there's money that has to go into it. Time and effort, work, etc, There's. So that's, that's all in consideration. So how would you go about helping an individual who is living paycheck to paycheck for the most part, but maybe they want to get funding down the line.
[01:03:54] Speaker C: Well, if I can just say one thing, C Corps don't have to be public. Let's make sure we all understand that C Corps can be private.
Right?
So, but, but what the. To me, the defining element is how far do you want to take this company?
Right? So if you want to open a restaurant and you're going to, you know, have it be in the town where you live so you don't have to move and, you know, you're hoping that by the end of the year, you know, two, three years down the road, you're making 100 to $200,000 a year. You don't need to be a C Corp.
If you're saying, look, you know, we're
[01:04:35] Speaker E: going to
[01:04:38] Speaker C: the new McDonald's and we want to have 2,000 restaurants in over the next 10 years, yeah, you better be a C Corp. So in the two instances you talked about, like, I have a hard time conceptualizing how an arts and crafts business could expand to a point where it needs to be a C there, the owner might be better off with a pass through entity.
Right. But with a restaurant, again, same thing. Unless they're going to wind up opening five restaurants in neighboring towns. Then you might want to be, you know, you might want, might want to
[01:05:12] Speaker A: be a C corp.
Robert, any, any perspective on that?
[01:05:16] Speaker B: I think if the answer is about, if the, if the consideration is about managing taxes, you have to look at the numbers.
When I'm talking to somebody about that question, what entity, kind of, what choice of entity should I have? I always ask them, what's your profit going to be this year? What's your profit going to be next year, the year after? And based on the answer to that question, I can run some models on what the taxes would be in each type of entity and come up with the best result.
And based on just taxes alone given, give the answer to which type of entity would be the best result. If there's more to the question other than beyond taxes, it's a difference. That's a different story, but from a tax perspective. Usually I'm asked to look at it from a tax perspective.
[01:05:59] Speaker C: Okay, awesome.
[01:06:00] Speaker D: Thank you.
[01:06:01] Speaker A: Good.
[01:06:02] Speaker D: And one more thing. Mitchell fellow, Scarlet Knight. Very nice.
You're a Rutgers alumni, so good to see you.
[01:06:09] Speaker C: Well, no, I'm, I'm a Rutgers employee, not an alumni.
[01:06:12] Speaker D: Yeah, that's fine.
Thank you guys.
[01:06:15] Speaker A: Same difference, right?
Thank you, Yasha. Thank you for your question.
So, final words before we end, Robert? Mitch, Anything. Well, first of all, how can people get in touch with you? And then also some final words. So, so, so, so Mitch, we'll start with you.
Any, any kind of parting words you want to, you want to leave for everybody.
And also, how can people get in touch with you?
[01:06:45] Speaker C: Okay, quickly, I think this is a great time to try and gear up something you've always wanted to do on it From a business perspective. There's a lot of capital available.
The banks are more willing to take risk on small business loans than I've ever seen them be willing to do before.
So if you want to do it, now is not a bad time to do it. Right. And people, people are willing to do business with small businesses and startups, whereas before they wanted established brands. So there again, it's a good time to try it. Just make sure you drive on the right side of the road, that you stay between the lines, you operate professionally and you seek help. There's nothing wrong with failing if I can leave you with anything. Failure is inevitable. If you're running a business, it's what you do next that defines your success.
[01:07:46] Speaker A: Right on. And Mitch, how can people get in touch with you?
[01:07:50] Speaker C: Probably. Well, my email addresses is last name, first name, but. But truncated filet Mitch at Gmail. But the, the best way to find me is my cell phone, which is 240-888-8778. Text me, we'll set up a call and we can have a chat. 240-awesome. 888-8778.
[01:08:17] Speaker A: Yeah, if you want to chat it while. If you want to chat it, that would be great too. Thank you so much, Robert. So I saw, I just saw you shared your email. I appreciate that. That's how people can get in touch with Robert. Any final words for everybody on the call?
[01:08:31] Speaker B: Well, as far as that, that's concerned, I think I gave you a lot of advice about planning and getting the professionals and acting like a business and all the things I mentioned in what a founder should do. But I think what really is important is to make sure you're working with experts and make sure that you're working and getting advice from everywhere you can. The universe is filled with good information.
Be a sponge.
If you're an author, join the Authors Guild. If you're somebody in the construction business, get involved in a construction association. Get to know your peers. Yes, they could be your competitors also, but they've all been where you are or you may have been where they're going, or likewise, vice versa. You can learn from your own mistakes. You can learn from other people's mistakes. You can learn from their successes. So definitely hang out where people are that you are like and learn from them. Whether it's in an association or with your lawyer or your banker or your accountant. Make sure you're. You're working in a circle of people that understand your business and can teach you something new every day.
[01:09:32] Speaker A: Amen. Love that. Thank you, Robert. Thank you for sharing that. Thanks, Robert. Thanks, Mitch. Thanks to all of you that came out to support. We hope you enjoyed. We will be back for another entrepreneurial strategy series at the end of March.
And so this was recorded and so everybody that's registered we had about 400 registrants. So everybody will receive it. And if you. And so you'll get a recap email, you'll get some information on how to get in touch with Robert and Mitch or myself or Steven. And we're here to help you and kind of guide you on the way. And so, again, thank you so much to everyone. Thank you for joining and we'll see you soon. Take care, everyone.
