Poor people stay poor because they want

a fast way to get rich. And instead, the

richest people that I know pick one of

these four paths, play it for a decade,

and then end up with more money than

everyone else that is just chasing

shortcuts. And just as a fun reminder

for you, no president, no economy is

going to make you rich. You have to do

that for yourself. So, in this video,

I'm going to show you the four paths to

mega money. And I'll show you how to

pick the right path at the right time

for you. Let's get into them. You've got

your money and your business. You've got

other people's money and other people's

businesses. And then permutations of

those. And so your money, your business,

right, is a bootstrapped business. If

you have other people's money and your

business, now you're raising capital.

If you have your money and other

people's businesses, now you're

investing. And then finally, you have

other people's money and other people's

businesses, which is fund management.

Now, to give you some proof points

around this, I actually looked up the

top 11 richest people currently on the

Forbes list, and I'm going to tell you

where they are. So you've got Elon Musk.

He's a raised capital guy. Almost every

single company he's had, he's ra ra ra

ra ra ra ra ra ra ra ra ra ra ra ra ra

ra ra ra ra ra ra ra ra ra ra ra ra ra

ra ra ra ra ra ra ra ra ra ra ra raised

outside capital and then he's continued

to fund it and grow it. Larry Ellson

who's number two raised capital. Mark

Zuckerberg raised capital. Jeff Basos

raised capital. Larry Page raised

capital. Sergey Brin raised capital.

Steve Balmer bootstrapped. Microsoft was

bootstrapped. A lot of people don't know

that. Underneath of that you got Jensen

Wang raised capital. Warren Buffett

investing. Michael Dell bootstrapped.

The Waltons as in Walmart bootstrapped.

And so that's the top 11 wealthiest

people in the world. Now, you might have

noticed that fund management wasn't

there. If I go like six deeper, you'll

find people who did fund management.

Now, one of the interesting things about

each of these contracts is there's a

little bit of risk and there's a little

bit of trade-off with each of them. And

I personally have done one, two, three,

and four, believe it or not. And so,

I'll actually walk you through my own

examples and which one's right for you.

So, let's start with number one,

bootstrapped. Bootstrap just means that

you fund the business from your own

savings and cash flow. you have no

outside uh investors and you grow

through reinvesting your own profits.

You have a website and you've got a cell

phone and you've got skills and you

start trading one for the other, get a

little excess money, take that excess

money and then continue to build. Now,

typical examples for this are usually

lowcost businesses to start. A lot of

times that's services. So, agencies,

home service businesses, B2B services,

professional services, things like that.

Sometimes nowadays you can actually do

this with software. It didn't used to be

that way, but now it kind of is.

education businesses, uh, ecom brands,

if you do drop shipping, uh, if you

don't do drop shipping, you'll have to

front some capital in order to get the,

you know, first inventory started, uh,

local businesses, most normal companies.

Now, to be fair, that scope has

continued to broaden because the cost of

entering business is going to continue

to drop. Now, for me personally, um, my

first brick-and-mortar business was a

gym, and so that was bootstrapped. I

used the profits from that to start uh,

Prestige Labs, which is a supplement

company, which was bootstrapped. I

started Allen, which is a software

company, which is bootstrapped. Um and

so all those companies were

bootstrapped. Today acquisition.com is

taking some of that capital investing it

um into other people's businesses while

also having some companies that we start

denovo from our holdco which is kind of

semi bootstrapped and also kind of

reinvesting our own capital. So you can

see how some of these these these boxes

merge. Now who is this right for? So if

this is your first business I recommend

starting with bootstrapping. And the

main reason is just like you want to pay

off ignorance debt. The last thing you

want to do is take your you know your

friends and family's money and then lose

it because you don't know what you're

doing. That's my opinion. Everyone, you

know, your results may vary. You can

stick of the names on that list that I

mentioned. Jeff Bezos, the people that

he knew invested, Bill Gates, the people

uh I think he had rich parents. I'm sure

they helped him out in the beginning. I

don't know that the actual public

documentation of that, but I think he

had a little bit of help um in the

beginning there. But the thing here is

that like I don't think you're going to

want to go raise a ton of capital from

everyone, you know, maybe even VCs uh if

it's your first shot. Again, you know,

your results will vary. Your life is

unique. But the main thing is that

bootstrapped will typically be the

slowest of the four paths. And that is

usually because it takes money to grow.

And if you have to make the money to

grow, it's almost like having a car

factory built inside of the car. It's

very difficult to do. Humans do it. We

have human factories inside of our

humans. Weird stuff, right? Um but in in

in business design, it's much much more

difficult, right? It's slower to build

the capital reallocation machine while

also building the machine that makes the

capital to begin with. You kind of have

to have both. Now the main advantage of

this is that you keep the control and

the equity so you have a you know bigger

slice of the pie. You decide the pace

the strategy and ultimately you can exit

on your own time horizon or never exit

at all. Right? And the goal is that you

design a compounding vehicle which is

either recurring or reoccurring um

within the business and then you let

that over time do the heavy lifting.

That's the end goal. Now a lot of first

businesses don't have any of those

things but you you know buy a dollar

sell for two and you make money. There's

nothing wrong with that. Here are some

of the trade-offs. When you bootstrap,

you incur more debt than any other

vehicle. Now, you're like, "Wait a

second. I thought I was, you know, using

my own money to start this thing." Yes,

but you incur every other type of debt.

And often times, every other type of

debt is harder to pay off than money is.

So, what do I mean? If you're starting

with your own cash, it's very difficult

for you to attract like a star talent

team of 10 people that all need a

million dollars plus per year to work

and actually grow this thing. If you're

venturebacked, you can do that with some

stock and then also decent cash

compensation. And so that becomes harder

to do. So you incur lots of management

and leadership debt. If you like can't

get the high enough level of the

softwares that you need in order to

build your software company or whatever,

if you start low, you're going to have

some technical debt that might incur as

along the way. Same thing with your data

debt. So, you're going to have lots of

debts that money could have otherwise

solved for you, but you don't have money

as one of the things that you're in debt

for. Now, to be clear, there are pros

and cons there. Like, the pro is that

you can stay alive a lot longer because

you typically keep your cost basis a lot

lower. Uh the the downside is is that it

goes slower. And so, your capital

constraint will often times limit the

size of what you can pursue from day

one. If you wanted to start an AI

robotics business to go global, it would

be incredibly unlikely that you would

succeed because the amount of capital it

would they would cost to just build one

robot, let alone many robots as you

scale. And then you functionally

probably lose money on building that

first robot. And then after you lost

money that first robot, you'd some have

to get more money to then build more

robots. It's very hard to do without

outside injections of cash. And so this

box does constrain to a degree what

kinds of opportunities you can pursue.

And there's a reason that some of the

biggest people in the world start here,

which is a perfect segue to okay, so

what is other people's money into your

business. This is raising capital,

right? So you start and you run the

company, but you raise capital from

investors who buy a slice of equity to

fund the fast growth. Normal examples of

this are tech platforms, social

networks, marketplaces, manufacturing,

pharmaceuticals, where it t years and

years and years to get a drug passed and

then it makes money. Typically anything

that has huge amounts of upfront costs

then increasing margins or gross margins

later and or winner or take all dynamics

meaning you have to lose money for a

long time to get the whole market and

then all of a sudden you have a network

effect and then everyone buys from you.

Amazon famously lost money for like a

decade plus before they really started

turning a profit. Facebook too lost

money for a long time but they were

mapping networks. So who should take

this path? If you have a very big dream

of what you want to build and there's

functionally no way to make your thing

profitable without using other people's

money like as in like you will just you

know you're going to lose money for a

year two years 3 years in order to

actually have this thing work then you

have kind of like a predefined path that

you're going to have to raise capital.

So, I have experience with this because

school is venture-backed, right? And so,

we raise capital at school to continue

to grow the company and we're able to

give pricing, which is absolutely

absurd, like $9 a month, which by the

way is very little with inflation. Uh,

it's basically free uh in order to get

as many people who want to start a

business the all the tools they need to

do it. Now, the main advantage of this

is that you start with a bigger thing.

You can hire the top talent. You can

outspend competitors. You can be

negative in your acquisition cost. I

mean, you can lose money getting

customers, right? Uh you can build

infrastructure faster than you could

with your own cash alone. And on a

personal level, you can incur way less

personal debt because, you know, there'd

be no way that you would be able to fund

a lot of this out of your own pocket.

Now, if you can, if you're already rich,

then you can take on raising capital

style big opportunities and then fund it

with your own cash. And that's really an

amazing combination, but not available

to most people. But this allows you to

pursue rarer opportunities. And one of

the advantages of that is that it

actually prices a lot of people out of

the market. So to an degree there is an

element of risk with raising capital

because typically the opportunities that

people pursue are high risk high return

opportunities but there's typically far

fewer competitors and so you know you

can count the number of competitors who

are wellunded even in a space maybe on

two hands. If I said, "How many social

media marketing agencies are there?"

You're going to need a lot more fingers.

And so, within our car analogy example,

you actually just start by building the

car factory. And then, even though you

know you're going to lose money up

front, once the car factory is built,

you know that every single car you're

going to make X dollars of profit,

right? And that is how you end up

recouping it and justifying the return

to the investors. Some of the trade-offs

here are significant. You now have two

customers instead of one. In

bootstrapped, your customer is just the

end customer, right? When you have

raising capital, your customer is both

the end customer and the investors are

venture capitalists. And so that's one

element is that you have to serve two

masters, which can oftenimes be at odds,

which is a bit of a pain. The second

kind of big downside is that you're

going to dilute your own equity. Here

you have 100% of the pie, right?

Whatever you make is yours and that's

your pie. Now, you can give profit

shares, you can give equity slices to

key teammates or partners or whatever.

Um, but they're usually in the business.

They're actually helping you succeed

within the business. Whereas when you're

raising capital, a lot of it's going to

depend on the terms. Chiron, my partner,

tells a story about his first exit ever.

He learned what a ratchet was, which is

that he had a a very large exit in his

first company that he started uh in his

teens that then I think he exited around

age 25. It was many tens of millions of

dollars. But because there were

liquidation preferences uh and ratchets

on those liquidation preferences, the

investors got paid out first and with

some excess. And so when he saw this

very big number, the amount that he and

the other founders were left with was

less. Now, to be fair, he did fine, but

it was less than what he thought he was

going to get. Now, as you continue to

scale this, typically, if you do

multiple rounds, each person who's going

to put money in also wants a seat at the

table, quite literally a board seat,

which means that over time, you can

absolutely get voted out of your own

business, which happened to Steve Jobs,

right? And so, like, these are real

risks that happen like you can lose

control of your own company. And a lot

of this is going to depend on the terms

of other people's money. If someone

gives you a trillion dollars for 1%

equity in your business, that's an

amazing thing. If someone gives you $10

for 90% equity, that's going to be kind

of tough. And so, this one is very much

the devil's in the details. And your

ability to raise is going to be a

combination of two things. Your ability

and track record as a founder and the

size of the opportunity that the

investors believe you're going after and

the likelihood that they believe that

you can actually hit it. And I'll say

the last downside here is that typically

venture money is kind of grand slam

money. It's like they just want you to

swing for the fences and know that

they're going to have a lot of people

strike out. But the economics of having

somebody get a,000x on their money

allows them to have many losses. But if

you're the person who takes the loss and

n equals one as in it's 100% of your

life, that is where the there's a sea of

tombstones of failed ventures and

founders who gave 5 10 plus years of

their life and pretty much worked a job

but with way more stress for a long

period of time and then ended up having

nothing to show for it which is tough

and they don't even have the story of

the big success at the end. So, this is

actually far more common than the big

headlines that we see. And the reason

those things make big headlines is

because they're rare. Which brings me to

the third way of making mega money,

which is investing. Now, this is the one

that probably a lot of people have more

familiarity with, right? It's your money

and you're investing into other people's

businesses, right? So, you take the cash

you earn actively from other places and

then you buy pieces, tiny chunks of

other people's companies. Kind of the

equal opposite of raising capital. Now,

you don't have to buy into venture type

uh products. You can just buy cash

flowing businesses. You can buy public

stocks. uh you can buy real estate.

There's a lot of different things that

you can buy with money. Now, the clear

thing here is that you don't run them,

you fund them. So, me personally, I buy

kind of I'm split in my investing. So, I

have HQ Ventures, which is our venture

arm. So, that's where we we are

basically the raising capital partners

for SMB Tech. And so, that's exclusively

what we invest in because we understand

it well. And then on the other side, we

have kind of the private equity style

investments that we do, but we also add

some sort of service because we have a

whole service layer at ACQ. And so those

are typically more cash flow investment

businesses, but also obviously have

enterprise value. And so who should take

this path? Real quick, I'm going to show

you the exact 10-stage road map from

zero to 100 million plus that less than

1% of companies finish. I've now done

multiple times. And so I can say with a

lot of confidence that these are the

stages as headcount increases that you

need to get through. And I broke each of

these down by eight different functions

of the business. What the constraint

feels like, like what are the symptoms

of it when you're going through it, and

then what steps we actually took to

graduate. And we've done this across

software, physical products, uh, service

businesses, brickandmortar, all of this,

and it works. And it's my gift to you.

It's absolutely free. And so the link's

in the description, but you just go

acquisition.com/roadmap.

Just enter your info and it'll spit it

right back to you. All free. Well, once

you have meaningful excess cash and you

want the upside without the day-to-day

operational responsibility, then this is

an interesting path. And so the main

advantages are that you have

diversification. So you're able to make

many bets instead of kind of a life or

die bet with a single company. But

whenever you uh distribute your bets,

you also decrease your upside, right? So

Dale Carnegie had a famous quote which

is uh put all your eggs in one basket

and then watch the basket. And so that's

him talking about this, right? Boost

wrapping or you're raising capital for

your own business. That's you putting

all your eggs in one basket and trying

like hell to make that thing work. With

investing, you're kind of you're

spreading it out. But when we look at

the most successful investors, they

typically aren't nearly as diversified.

they're typically way more concentrated

which then allows them to may maybe make

five, seven, eight significant bets that

they believe they have alpha or upside

on um above the market. And so with

investing, I think that of the four of

these, arguably the easiest lifestyle

kind of decision because you have no

boss and you're technically other

people's boss and so you just write

checks. You can inform what you want the

person to do. To be clear, you might not

have majority. That's going to depend on

the terms. Um, but when Leila and I sold

the company and we were just a family

office, this is all we did. And I'll say

of my entire life, the most chill

period. And sometimes I think to myself

like, what was I doing? Why am I back

doing this when I don't need to do it

anymore? Um, but I want to make a key

point here is that this is by far the

slowest, number one. And number two,

almost no one makes their money this

way. They have already have a high

active income and then they begin

investing. And if you're like, well, I'm

going to be like Warren Buffett. Well,

did you buy your first stock two weeks

after Pearl Harbor when you were age

seven? No. And did you do it in a world

where there wasn't a Robin Hood and you

actually had to figure out how to do

mail-in ballots and call someone as a

seven-year-old to or 11-year-old,

whatever it was, uh, to make your first

bet? Probably not, because you're like,

I want to be like Mozart and you're age

30 and you want to start investing. It's

like, well, he already had like 19

concertos by this point because he

started at age seven. So, I wouldn't

say, oh, let me look at what the top

person in this field did if you're not

that person. And so the whole point of

this video is to figure out what path is

right for you. And to be clear, Warren

Buffett is very famous now, but like

until he was 60, I don't think many

people even knew his name, 60, right?

And he's made the vast majority of his

wealth from like age 80 to 95. So think

how crazy that is. So if you're like,

I'm in this for the very very very very

very very

long haul, then this is a good path for

you. And especially if you're somebody

who wants a little bit more of a

lifestyle um where you're like, "Okay, I

just have to get my my passive to exceed

my active costs," then it's like great.

And if you get better and better at that

game, you'll have more and more and then

you'll have nothing else to do and

you'll just keep playing the game just

for the love of the game. But it does

take time. It's unlikely that you're

going to get these 50, you know, 50%

100% plus annual returns. Even Warren

for a very long time didn't get those

types of returns. And even in the

beginning, he was still combating, I

think, 50-ish% um but he was the best in

the world. And then once he had more

capital, his returns decreased. And a

great note on this is that in in I would

say Main Street, real estate is the

number one most common path for creating

millionaires, but not the most common

path for creating billionaires. And to

me, that is kind of like a great kind of

cherry on top for this little bucket,

which is that it is a great way to build

and store wealth. It's being smart with

your money and allocating it

appropriately. It's unlikely to be the

thing that gets you all the way to the

top unless you have a very, very long

time horizon. And let's be real, you

have to live to 95 like Warren Buff to

hit the list. Like that's real. Like

Charlie Mer was 99 when he died. And so

like in a very real way like they had

like if they had died at 74, I don't

know if we talk about them as much

because they wouldn't have had all the

compounding that happened after. So like

this is a long long game.

Finally, that leads us to number four,

which is fund management.

So this is you take other people's money

and you invest it in other people's

businesses. You raise a pool of capital

for investors, which is the fancy word

that has LPs or limited partners, and

then you use that money to buy pieces or

control of other people's businesses.

Now, depending on the way that you do

it, you can also use debt there, too.

So, let me give you a visual of like

this is potentially one of the highest

leverage scenarios. It's like this on

steroids, basically. And so, let's say

that you want to you want to raise $100

million. Now, I'm going to use big

numbers because I want you to think

bigger anyways rather than thinking in

small numbers. All right? So, in order

for you to raise a fund with $100

million, it's typical that the person

who raises the fund puts about 5% of the

total funds raised in. So, you put $5

million in. You raise $95 million of LP

capital. That means limited partner

capital. So, other people put their

money in. And then, this is where it

gets even crazier. So, this is $100

million in total, right? But then you

say, you know what? We're going to go

buy I don't have enough space on this

thing, so just bear with me. uh we're

going to buy $300 million

of businesses because we're going to use

200 million

in debt

to buy these businesses. And so think

about the leverage that you get from

your $5 million able to buy $300 million

worth of stuff. Now, when this $300

million, let's say it just grows at 10%

a year. Let's say you're not amazing.

You're just matching the S&P. All right?

In seven years, you'll double, right?

So, this is now $600 million 7 years

later. Now, if you had a 10% return for

private equity, that would be bad. But

I'm just going to give you like the base

case of like you're not that good at

this. Okay? So, that means that you have

a $300 million delta. So, we got to pay

back, right? We got to pay back the

debt. So, we have to take our $200

million out because we got to pay the

debtors back. Now, they have some

interest and some other stuff there,

too, right? Then, we got to pay our LPs

back, right? I'm just making the box a

little bit smaller so I can draw the

rest of it. All right? So, we got to

take we got to take this back. Now

sometimes there's a hurdle rate which is

a minimum return you give these guys

saying I don't get paid until X happens

that depends but typically in private

equity it's 6 to 8% somewhere in there

and then whatever is left over here you

then have a split with them LPS and then

GPU. So let's see what happens when you

actually invest this money and then wait

5 to 7 years. Now, let's say because

you're in private equity and you're

investing in non-public markets, you get

a better than public market return,

which is basically the baseline. Like,

no one wants to get a public equity

return and have their money locked up

for, you know, 5 to seven years. So, if

you got a 20% annualized return for 6

years, you would have 2.98 on the money.

So, functionally, your 300 million,

right, that you bought now becomes 900

million. Oo,

more.

All right. So, we got to pay back our

debt. So, we have our 200 million that

we got to pay back in debt. Now, there's

going to be some interest on that. Let's

say that we got to pay them back um $100

million in

debt payments. Okay? So, we have that

that too. Now, we also have our LP's $95

million that they put in. So, we got to

pay them back that. And then there's

some minimum return that we promise them

before we participate, which for us is

going to be about $40 million if we have

a 6% pref or hurdle that goes back to

them. So that is all guaranteed to them.

Now after that, it just depends purely

on the nature of the the asset class and

what you're investing in and your kind

of proprietary blend of whatever.

There's going to be some split of the

profits here that goes to you, the GP,

the general partner. That's the

operating partner, the person who runs

the whole fund. and then some that goes

to the LP or limited partner. And so

let's say that you had a 5050 split

here, let's just call it. Okay, that

means that after we add all of this

stuff up, this slice here is $465

million.

Remember, we started with 5 million.

This is how you get mega rich. Now, to

be clear, all this isn't yours. Maybe

twothirds of that isn't yours. But

either way, even if you had 10% of that

and you got $46.5 million,

you did pretty good on your $5 million

investment, right? If you got 20%, now

you're looking at $90 million. Even

better on your $5 million investment.

You see how this stuff adds up? And

that's because this is leverage. Now,

when we look back at our original kind

of sheet here

with each of these four paths, you have

to decide on what's best for you. If you

have some proprietary way that you know

how to source deals and you have a good

way of finding capital, which by the

way, if you're like, I don't know how to

raise capital. You absolutely do know

how to raise capital if you have good

deals. One of the best pieces of advice

I got from a mentor of mine is that

there is no lack of capital in the

world, only a lack of good deals. And

so, if you find a good deal, capital

will appear. Right? If you come to me

and say I have a guaranteed way, which

of course don't use those words, uh

because that's a great way to get get

good money to run away. But if you're

like, there is an incredibly high

likelihood chance that I have of 5xing

money in this way, and here's the six

different ways that I've mitigated the

risk. And let's say those are

believable. And if we have that, then

I'd be like, okay, well, how much money

do you need? And that's how any good

investor is going to ask the question

because when you do identify good

opportunities, you just want to back up

the truck. Now, in that setting, the

higher, believe it or not, the higher

the return and the more private the type

of deal that you're doing that's more

niche and specific to what you know,

typically the better the splits that you

can negotiate on the GPL split of the

profits after some certain point. And

so, who should do this? I think the best

like version of this is where you build

a track record. You figure out

proprietary deal flows and deal flow

that only comes to you that no one else

has. And you have some sort of real edge

in picking and improving those

companies. So oftentimes funds are are

organized around a a singular thesis. So

for example, at the very beginning of

acquisition.com, I got approached by a

walnut tree fund. I was like, I don't

even know this exists. But they

explained how it worked, which is like

it takes 30 years to grow a black walnut

tree all the way to like full size. But

every year after year three, it creates

walnuts. And so it cash flows every

single year. And then at the end of the

30 years, you cut the walnut tree down

and you get this amazing walnut wood

that you can then sell. And then the

cost is really just the seeds and the

time. And that was their entire business

model. And they'd done this a number of

times and they had these kind of

staggered uh tree vintages if you I'm

using the wrong word, but like the

vintage of trees. Every year they had

another cohort. And I was like, this is

a really interesting business. And they

had a fund around it because I don't

want to know where the Venezuelan tree

farmers are. I don't have those

connections. I don't know how to sell

walnuts at scale. Could I figure it out?

Maybe. Is it worth my time? Probably

not. Is it worth my money? If it doesn't

take my time, maybe. And so the beauty

of this one is that you have maximum

leverage and you can have the smallest

personal checks. You have huge

potentials for upside. Um there's also

fees that you can put onto this.

Typically, uh the better and the more

track record you have, more you can add

fees in. I'd say your first time often

times you have less fees, uh just

because you want people to come in and

not think you're going to get rich on

the fees. They want to have as as

aligned incentives as possible with the

investor. Now, often times the GP ends

up richer than any single LP. obviously

depends on how much capital gets put in

um that they that they take from. Now

the risks you have enormous

responsibility and a very long feedback

loop and you're accountable to the LPs

and to regulators and to the

entrepreneurs are running the businesses

and to some degree the customers that

those businesses serve and so you have a

lot of masters to serve in this time

period. Um and you can be rich on paper

but the entire time you almost feel like

a slave which sucks. And so your job

becomes managing risk and reputation and

people and portfolios, not just building

one company. And if anything, you're

almost building the company of the fund.

So I got rich bootstrapping my

companies. I took some of my cash and

invested in other people's companies.

That cash continued to compound um and I

was able to invest and then co-found

school where we raised capital. I

obviously promote school as well. And

then finally, it's in fund management.

So uh we've raised capital for some of

the real estate deals that we've done

when we buy big buildings uh which we do

through ACQ. uh real estate. We've only

done that privately to some of our

higher level uh clients and portfolio

companies. We are functionally general

partners in some big real estate

buildings which you can check out

acquisition.com real estate. But yeah,

these are the four ways to make mega

money. Pick the path that's right for

you.