What I Wish I Knew Before Selling for $400M - Tobi Pearce #118

Tobi Pearce says he sees a couple of hundred investment decks a year, and a large share of those businesses never even launch. He also says he expects at least half his early stage investments to lose money or break even, and that he does them mainly to learn.

Tobi Pearce co-founded and sold the fitness business Sweat, and now runs a family office investing across venture, private equity and operating businesses. This is his second appearance on the show.

What you will learn:

- The two completely different frameworks he uses for an early stage bet and for a cash generating business, and why one set of maths is useless on the other

- Why he thinks arguing over one or two percent of equity means you are dealing with the wrong person, and what he negotiates for instead

- His figure for how many strategic investments fail, and why you never hear about them

- The three things he sees going wrong in almost every business over $10 million in revenue

- Why getting excited about a deal is the signal to stop and study rather than to sign

Chapters

00:00 A second conversation, a year on

02:51 What he brings besides the cheque, by asset class

05:42 Why too much conviction on an early stage bet is arrogance

08:32 Doing venture mainly to learn

09:57 Why he does not fight over one or two percent

12:47 The strategic investment failure rate nobody talks about

14:15 Growing the core business first, every time

17:02 Where the return actually is in the short term

20:01 Deciding what success looks like before you start

22:40 Why getting extremely good is extremely boring

24:06 Intelligence, integrity and energy

25:29 Leverage, and why "could I do this myself" is the wrong question

31:01 If you are excited by every deal, stop doing deals

35:51 The founder trait that has cost him the most

41:39 Finding the edges of your own competence

46:23 Setting people up so they can actually win

49:10 Why he thinks routines are overrated

52:59 Lag, and making the decision now

56:05 The interview question he asks in reverse

1:07:20 Being the weird one, and what he would tell that version of himself

Tobi Pearce backs the deals that pay for themselves. Property should work the same way.

Most properties only make money if the market does. The ones that pay for themselves from the day you settle are bought differently, and it comes down to four points.

Get the free guide: https://go.bothsides.au/score

Bothsides:

◼️ The weekly email - https://bothsides.au

◼️ Bothsides Buyers Agency - https://www.bothsidesbuyersagency.com.au

◼️ Dan - https://www.instagram.com/daniel_beardall/

◼️ Watch on YouTube - https://www.youtube.com/@bothsidespodcast

General information only. Not financial, tax, legal or credit advice. Bothsides is not a mortgage broker or credit provider.