522 Denice Gierach:
The best entrepreneurs know that failure is something to welcome, accept and embrace because…that’s where the growth is. Failure is feedback, and when the lesson is learned, the experience is no longer necessary.
PAUSE no words from 5-8 seconds…with music full
I’m Melinda Wittstock and today on Wings of Inspired Business we meet an inspiring entrepreneur who credits her success to embracing the lessons learned from failure as an opportunity for reinvention.
Denice A. Gierach a successful lawyer advising entrepreneurs at all stages of growth, including exit and legacy – and she’s also built a $30 million dollar real estate development firm as well as a corrugated box manufacturing company among her other accomplishments.
Today we talk about reinvention, legacy, and how to embrace failure positively, because as Denice says, “if you don’t acknowledge and learn the lesson you are destined to keep repeating it.
Denice Gierach is a successful entrepreneur and business lawyer in Illinois with over thirty years of experience representing family owned businesses and privately held companies, serving as general counsel and helping them with both their legal and business tax needs.
Today you’ll see Denice’s unique perspective, discerning the business issues first before looking at it from a legal standpoint. Denice says she creates solutions for her clients’ problems and finds new sources of income to enhance client growth. CEO of Outsourced General Counsel Attorneys, Denice breaks the cookie-cutter mold of those around her and adds something much more important than just time for money – including something we dig deep into today: Why entrepreneurs must prepare for the exit even at the beginning of their businesses and operate according to where they are creating the most value.
And you’ll want to take out your phone and download the Podopolo app too as you listen to this episode, so you can join the conversation with me and Denice. Please share what you see your ultimate purpose and legacy is … and if you’re a business owner, what your exit plan is.
We’re going to talk about how to reinvent yourself, why failure is your best friend and how to use failure as propulsion for fast growth, plus how to plan the exit of your business, and your legacy … plus what legal mistakes most entrepreneurs make …. And how to avoid them.
Let’s put on our Wings with the inspiring Denice A. Gierach.
Melinda Wittstock: Denise, welcome to Wings.
Denice Gierach: Well thank you. It’s a joy to be with you and with your listeners.
Melinda Wittstock: Denise, I’m so excited to have you on. You know, when we’re on this entrepreneurial journey, it’s hard to connect the dots looking forward, but when we’re looking back and we have all kind… a multiplicity of skills and experiences, it starts to… I don’t know, become clear. I’m curious about your perspective on that because you’ve done so many things in your career.
Denice Gierach: Well, when I started out, I would say yes to a lot of things and I never really knew where that would take me. So I said yes to being a lawyer. I said yes to being a CPA. I worked as a lawyer for a while. I then took… or went to get my MBA or I guess it’s actually master’s in management and then after that, I was involved in a manufacturing business from the ground up and did that for a while, then I went back into the law. Then later, I did real estate development, office condos and what have you and I just felt like I was saying yes to a lot of things, but not knowing what the path was. Now, when I look back at all of the things that I’ve done, it’s stepping stones that have gotten me to where I am today.
Whereas when I started, I was a very… I guess I would take people at face value. I would listen to what they had to say over what my own thoughts were, because I felt that I just needed to soak in whatever knowledge came from other people. Now that I’m at where I’m at now, I can say… well I can be strong when it’s appropriate to be strong, and I can say what needs to be said and be truthful and honest with people. Not that I wasn’t before, I just didn’t speak up and I have the sense that many of the ladies that I deal with are more timid, same as I was probably when I first started out. They don’t know where they’re going with things, but life has a way of taking you on the path that you’re supposed to be and I don’t know that is, if that’s some coincidence or something in the universe that takes us there.
Melinda Wittstock: It’s so true though, don’t you think? You have a life purpose and that purpose is going to be fulfilled with you or without you. With or without your cooperation.
Denice Gierach: That’s right, so you might as well go with it, but you never know where it’s going to take you. So wherever I am now is not where I’m going to be in five years because the growth that I’ve experienced to get me to where I am today is going to be 10 times that going forward in the next five years. It may be doing something where I’m utilizing the skills in a different fashion. It’s like building blocks, you’re putting them together in a different way. You still have all those talents and skills, but you may not be doing the same thing, the same way. So it’s kind of exciting if you can look at it that way. Life is constantly evolving.
In fact, I have this thing on my desk that I put there one year and I still have it after all these years. It says, “Reinvent yourself.” I look at that now and then, I say “Well how am I reinventing myself today?”
Melinda Wittstock: I love that. I think it’s interesting though that so many women go into entrepreneurship or pre-entrepreneurship into careers developing skills and developing competency, and proving their worthiness in a way before jumping into entrepreneurship. Whereas men in their 20s just start businesses.
Denice Gierach: Yeah.
Melinda Wittstock: Right? What is it about us that needs to do that? Is that just something within us? Or is that a societal pressure or what is it?
Denice Gierach: No. I think that when we are in grade school, when we’re in high school, we’re the softer sex. We’re the ones that are the nurturers and we still are even though we’re supposed to be equal in terms of daily tasks with our male companions, with family duties and everything like that. So it’s evolved and I think more women are able to and willing to start businesses, but women tend to be adverse to failure. No one likes to fail, even the guys don’t like to fail, but guys will fall into failure and they’ll get back up and hope that none of their friends make fun of them. Women want to be on more solid footing, and to not fail because they think that no one’s going to help them up, and they will be laughed at and taken off the field.
Melinda Wittstock: The sad thing about that though is the failure is part of the process. It’s feedback. It’s the thing, it’s the opportunity to learn, but to be able to come to recognize that requires a lot of self-confidence I suppose, that perhaps as women, we think we need to earn that right, whereas men just feel they have the right from the beginning.
Denice Gierach: Well nobody teaches us about entrepreneurship, you know? You either see somebody, admire somebody, have someone in your family who is an entrepreneur and you think of yourself as that way, or you don’t. So like Tony Robbins says, “There’s either success or there’s learning.” So he doesn’t look at any of the failures as anything but learning. So you can choose how you look at that, you can say “Oh, I’m a failure. Oh, this is terrible.” Or you can say, “I learned that lesson. I don’t want to learn that one again, so I’m going to do it different next time.”
Melinda Wittstock: Right exactly. So having the confidence to step into that. When I look at your career and all the different things you’ve done, I mean from… being a lawyer, a manufacturing business, all these different things that wouldn’t seem like a linear career path. I love what you said earlier about just saying yes to things, because when you get to a certain age, I know this is true of my entrepreneurial career and my journalism career, all the different things I’ve done on business number five now, everything makes sense to me now because all the different experiences and all the different things I’ve done inform each other in a way that’s like your life is a lab. All the lessons, all the lessons, as well as the successes coalesce into that very directed or clear… you’ve come to understand your life purpose and what you’re here to transform or do, or whatever.
Is there a moment in your life where you started to connect the dots? What was the aha moment? Or oh, I see why I was doing that. I see… okay, I see how that connects.
Denice Gierach: I don’t know. I think there were moments that were glimmers along the way where I’m like, “Why did I do that? Why did I say yes to that? Why did I handle it in that fashion?” Then I thought about it and I said, “Well, I thought I was doing the right thing because I was mimicking myself after this guy,” and how he would react to things, how he would handle those things. I did that incorrectly, because it wasn’t true to me. I think as a role model, women tend to look at guys as if they’re role models, as against women that have come before them. The women may react totally different. They can still be strong. They can still be firm, but they don’t have to be yelling and screaming and throwing fits like I’ve had some male bosses do, you know? You can get your point across just as firmly. So you get glimmers of what you have put your emphasis on, or what you’ve tried to follow and people that you try to follow, and over time, you look at things and say, “Well that wasn’t the right model to follow.”
Instead, I want to look at higher and better models of people that I can learn from, and get more information from so that I can get down the road and be a better manager, a better lawyer. Give better advice to people and help them down their road as well.
Melinda Wittstock: It’s fascinating what you say though because for so many years, I don’t know if this is true of you, but I always felt that I was the only woman in the room as a tech entrepreneur for instance, and in other aspects of my life. So my only role models were men, so the only option seemed to be to mimic that. However, what I’ve learned along the way is that the way men do it is not necessarily something that works well for women. That we have this opportunity going to back to this whole idea of reinventing yourself. We have a different path and finding what’s authentic to us is part of the challenge, and I think we are at an interesting point in our history where we can really reinvent the way we lead, the way we organize our businesses, all of these things besides. I’m curious about your perspective on that.
Denice Gierach: Well I do think that over time, I certainly have looked at things differently because when I first started practicing law, I can remember the first time I went to court and the judge said, “Well sweetie.” And he took a very paternalistic view to me, whereas the guys he didn’t. He just let them have it, you know? But that’s how I started and I’m like, “Well that’s not what I want.” So do I have to be as tough as the guys? The way they are, very stern and very… but that wasn’t me either. So over time, I have found that I can be me and I can still get my point across, but I had to give myself permission to say, “It’s okay to be me. I don’t have to someone else in order to succeed.”
Melinda Wittstock: Well when we are truly who we are and we have the bravery or the courage to step into that, there’s an authenticity that has true power, but there are so many things that I think we put in our own way. I think we know that intuitively about ourselves, deep down if we take the time to quiet our minds and really get in touch with it, but sometimes we have to go through all kinds of trials and tribulations before we land in that place.
Denice Gierach: Now that’s the truth. Sometimes when I look back at the things I went through, I’m like “Well there was a learning lesson… or life lesson there that I had to learn.” When you’re in a bad situation and you say, “Why didn’t I do this?” Then you look back and you say, “Oh.” I’m one that when I go through a situation that isn’t ideal, I sit down and I write down all of the lessons I learned from it, and the ones that are the most trying are the ones I learn the most lessons from. So while nobody wants to go through bad times, it’s the universe’s way I think of teaching us a whole bunch of lessons so that we can move down the path in a lot easier fashion.
Melinda Wittstock: Absolutely. I like to say that when the lesson is learned, the experience is no longer necessary.
Denice Gierach: Right, unless you don’t take in the experience. If you don’t sit down and you acknowledge the lessons, you’re going to have to go through it again.
Melinda Wittstock: Yeah, it’s an interesting thing, because once you accept that, when you accept that failure is part of the process. It doesn’t necessarily mean anything about you, it’s not a personal failure, it’s just that you’re learning.
Denice Gierach: Right.
Melinda Wittstock: When you start to actually see those moments as opportunities for growth and opportunities for learning, then it’s a big mindset shift because you start to see “Oh, this is awesome.” Well, there’s a gratitude around the difficulty or the challenge or the setback or whatever, because there’s always a lesson in there.
Denice Gierach: Yeah.
Melinda Wittstock: I think that understanding from me has been transformational in my own businesses, because then you’re not sweating the stuff that doesn’t really matter, but you are learning and you’re learning a bit of business and moreover, you’re more likely to enjoy the process which is the whole point, right?
Denice Gierach: That is the truth. Yeah. No, when I look back on some of the things I went through, I’m like, “Why did I do that?” I said to myself, “You know, you stepped that direction for a reason.” So just get the experience out of it and the next time, you won’t have to step there.
Melinda Wittstock: Exactly, but this is all about self-acceptance too, so was there a moment in your where you learned to… I don’t know, yeah be in acceptance and be in gratitude even when things were going badly, or you were having some lesson, either a business or a life lesson.
Denice Gierach: Yeah. I don’t know that there’s any one moment, but… because I’ve been through some tough times, believe me. But I think after I got divorced, I looked back on the lessons I learned out of that and I said, “Wow, you weren’t authentic in yourself to allow what went on.” So that gave me a lot more strength and a lot more ability to stand up for myself, stand up for my clients even. If I’m litigation, a piece of litigation for my client and they’re getting stepped on, I’m going to be all over the other side. But that experience going through the divorce that I went through allowed me to transform myself into a fighter when it’s appropriate. Not all the time, but when it’s appropriate, I have to stand up for my clients in that fashion.
Melinda Wittstock: Right. Yeah, no.
Denice Gierach: That’s part of the lesson.
Melinda Wittstock: I get that, I look back on my own divorce now, it was a very, very difficult period of my life and I can look back on it with gratitude simply because I came to realize that the people that come into your life are there for a purpose to help you towards that learning, to help you become the person that you ultimately are and they may do so by challenging you to get there.
Denice Gierach: Yes.
Melinda Wittstock: I interview so many women on this podcast who’ve had some sort of challenge and it may be one of a relationship and a divorce, or a difficult marriage, or it may be something else, but those moments or people who we felt betrayed by or undone by or whatever, are actually in a weird way, gifting us something if we stop and let ourselves realize that.
Denice Gierach: Well I always said after the dust settled from my divorce, I thanked the universe for sending him to me because he was the best teacher of the [crosstalk 00:18:01]
Melinda Wittstock: Right? I know it’s funny, we have unlikely teachers, but it comes back to your purpose is going to be served with or without you.
Denice Gierach: Right.
Melinda Wittstock: With or without your cooperation.
Denice Gierach: That’s true. Sometimes it seems like that, but we step into it.
Melinda Wittstock: It’s so true. So I want to get into a little bit about what you’re doing now with your business. So who are your primary clients? What’s going on where you are? You mentioned that life is going to be very different for you five years from now, so what’s the vision? Where are you going?
Denice Gierach: Well I’m expanding my legal business to include an outsource general counsel program, which is exciting because it is not the traditional dollars for hours kind of thing and I want to be more of that consigliere type of thing, where I can talk with the owner of a closely held, or family owned business and say, “What’s your vision for the future? What are your goals? What are your strategies of getting there?” That is something that if I were an in-house consult, I would definitely do probably different than a lot of other attorneys out there, but how many people as entrepreneurs have somebody to talk with about that, unless they’re being coached by someone.
Melinda Wittstock: Well it’s true that so many entrepreneurs hire lawyers to do specific tasks and tasks on time, but what you really need from a lawyer is that strategic piece, in terms of where you’re building your business and what are all the things? When I think of my business, I think “What are all the things that I don’t know that I don’t know?”
Denice Gierach: Right.
Melinda Wittstock: And… right?
Denice Gierach: That is very true, and I think a lot people don’t spend the time to do that. We live in a world where AI is coming in. I’ve seen some products out there that will review leases at 30 page leases in about a minute, because AI looks at them and they compare things to other things. So… and then they give you a list of the things you should watch for in that lease. So I’ve come to the conclusion a while back that really what I’m selling that’s a value is what’s between my ears. All those experiences that I had, all those experiences that I led my clients through over the years gave me a set of experience that AI is not going to be able to compete with, but that is what my real value is to the client and that’s why it’s really so different than the standard attorney model.
Melinda Wittstock: I love that you’re on top of something that a whole industry, like many industries right now that are being completely disrupted by technology, or the change that was already coming is being sped up by coronavirus. Right?
Denice Gierach: That could be. I don’t know. It’s hard to know whether this is a momentary blip in things, or if this is really going to be change so that we all become remote workers, you know? I’ve heard from clients, I say, “Well how’s that going for you?” And they say, “Well, the good workers are good at home as well as good at the office. The bad workers are bad at home and bad at the office.”
Melinda Wittstock: This is true. It makes it… it’s a really interesting challenge with coronavirus in a way, because say my business, my fifth business is a podcasting network, Podopolo. It was built right from the start to be a virtual company with a team all over the world, and this was pre-coronavirus and it was just how we were going to organize, but it does definitely mean that you can’t nanny your employees or your team members. They have to be in the right seats. They have to be correctly incentivized and motivated. You have to have those structures in place, which is a great discipline. Even if you have them all in the office, you should be doing this, but I think in the old days, just assuming that people ran an office, they’re going to be monitored or watched or something like that. We don’t have that luxury.
Denice Gierach: Right.
Melinda Wittstock: At the same time though, being conscious that I want to build a business and am building one where our team has flexibility. If someone wants to work in the middle of the night, if that’s when they’re best, awesome. It’s really about the results.
Denice Gierach: That’s true.
Melinda Wittstock: Not about how they’re doing their job, right?
Denice Gierach: That’s true.
Melinda Wittstock: It’s about the results you’re getting and being an integrity and all-
Denice Gierach: Yeah.
Melinda Wittstock: Those things.
Denice Gierach: We have to teach people how to be self-motivated and not everybody is. You and I are talking about this as oh hey, we’re entrepreneurs, why not do this?
Melinda Wittstock: Well I found-
Denice Gierach: A lot of people get up in the morning and if they don’t have their structure to it, and somebody who’s not good with structure, self-structuring themselves may need that little push of when they come into the office, there’s the structure. So the expectations are there, as against self-motivated, where they… if they don’t produce the results, they lose the job and then wonder, “Why did I lose the job?”
Melinda Wittstock: You see, I think our economy is going that way anyway.
Denice Gierach: Yeah.
Melinda Wittstock: Even before coronavirus, I mean 50% of the country at this part are gig workers. So, they go from job to job or freelancers or whatever, and so that necessitates entrepreneurial skills and the ability to self-start. I think what was fascinating at the start of the coronavirus lockdown, all entrepreneurs were totally fine. I mean, we have different businesses have different challenges. If you’re a brick and mortar obviously, there-
Denice Gierach: Right.
Melinda Wittstock: Lots of different economic challenges around that depending on your business model. However, in terms of the self-starter piece, they were fine. But other folks were used to having that structure from school, all the way through to just showing up 9 to 5, all that kind of stuff, didn’t have that and had to learn that. That’s painful, but I think our economy was going there anyway, which is one of the reasons I got to say okay, the coronavirus is just speeding up existing-
Denice Gierach: Right.
Melinda Wittstock: Trends.
Denice Gierach: Well I just don’t think that our schools prepare people to be entrepreneurs.
Melinda Wittstock: No they don’t.
Denice Gierach: No. They don’t even prepare them to be financially literate. I hate to… I don’t mean that people are illiterate, but from a financial standpoint, they don’t all know how to balance a checkbook or why it’s an important not to get into too much debt, et cetera, et cetera, you know? They’re really not taught to do-
Melinda Wittstock: Let alone how to invest or have passive income or any of these things, right?
Denice Gierach: Yeah. Right.
Melinda Wittstock: I mean, there’s a lot of things like that our society does really need to change. I mean, this is why I think that entrepreneurs generally, and especially women entrepreneurs are ideally suited for this new time because there’s a lot of systems that need to be remade, and I think entrepreneurship is a wonderful way to do that.
Denice Gierach: Oh definitely, and I do think women coming into the system as entrepreneurs and feeling confident that they need to build that better mouse trap, but build it in another way that’s going to make it work better is very timely.
Melinda Wittstock: dSo I want to get into the specifics of what you do now as a lawyer for businesses and the types of things that entrepreneurs in particular, really need but over look that they need, and where that value as you say that the stuff going on between your ears that AI can’t solve or resolve. What are those things that entrepreneurs need most right now and what would be your advice for them?
Denice Gierach: I think you have to look at what the big picture is, and then everything the entrepreneur is doing is measured up against the big picture. Does it add to that big picture because in today’s economy, you have to be laser focused. So what are you laser focused on? Sometimes, I see clients that are… they think they’re laser focused, but then they get pulled over here because they keep getting… I don’t know, different human rights violations or they get other things that keep pulling their attention away from being laser focused. So that’s one thing that I think is not really done. If you have an in-house general counsel, or you use someone of what we do, we want to focus on the big picture. We want to identify what that vision is. What those… what the goals are going to be that are set, and then what those strategies are so we can measure everything up against that.
Then the business has a lifespan, and so we’re looking at from the beginning, incorporate that lifespan into your vision. So it may be… one of my favorite stories is this gentleman who was not my client, but he sold his business for 500 million dollars. So of course, I wanted to ask him, “When did you first decide to sell your business?” He said, “I started my business 25 years ago and it was then I decided in 25 years, I would either sell the business or I’d have kids involved in it, who I would be giving them an ownership interest in it.” Then I said, “Well tell me more of the story.” He said in year 20, he said “I loved doing what I do. I had both kids involved in the business, and I went to them and I said, ‘You know, when you get up in the morning, is there nothing you’d rather do than what you’re doing now with the business?'”
And they thought about it and they said, “Well Dad, you know, we’re not as fanatical as you are about it.” And he says, “That’s okay. That’s not a problem.” So then he went out and found a suitor. So he sold his business and then he started another one after he paid his toll charge and capital gains taxes, but that usually ends up getting postponed, that decision or that thought process. What’s going to happen if I die is not usually the subject an entrepreneur wants to talk about at the front end.
Melinda Wittstock: Yeah. I think you should always begin with the exit in mind. You’re going to have an exit of some kind and whether you’re in control of it and you get the exit you want or not, I mean you get an exit if the business closes or if you die, or whatever but you’re going to have an exit. What’s fascinating about thinking about the exit from the beginning I think for an entrepreneur, and I love that the conversation has gone in this way, is that I think for women, it’s really hard. This whole idea of exit is hard because we create businesses that feel like it’s our baby, you know what I mean? We would be selling our baby.
Denice Gierach: No. Surprisingly, as bad as it is for women, it’s worst for men, you know? Men identify their total identity, their ego is that business.
Melinda Wittstock: Right.
Denice Gierach: Women can walk away from a business and feel like okay, their baby’s in good hands if they’ve sold it and then go start something else, because we’re not as wrapped around our ego is not as wrapped around just that one business. We understand that we can do other things and we can expand our horizons. I’ve had guys who have sold their business and I ask him, “What are you going to do with yourself after you sell?” And they said, “Oh, I never have time to play enough golf.” I’m like, “Oh my god, you know, you can’t play golf seven days a week. You just can’t do it.” “Oh, but I’m going to try.” I said, “Six months later, you’ll be back to me to see if you can buy the business back.” I’ve had two guys that have come back and have done that and ask to buy the business back.
Melinda Wittstock: It’s so interesting that you raised this Denise. I mean, my partner actually helps people sell their businesses, but much more than that, really works with them to find what the maximum value growth strategy is to sell at a high multiple.
Denice Gierach: Right.
Melinda Wittstock: But beyond that, actually works… so what are the valuation drivers? It’s not revenue and earnings. I mean, it’s usually something else. It’s in the eye of the beholder of the acquirer. So to know that from an operational standpoint before you even think of exit is super smart, but beyond that, what’s your purpose? Because he’s found that as he’s working and primarily with men, right? He’s found that there’s a certain point where they do go a little bit crazy.
Denice Gierach: Yes.
Melinda Wittstock: In that exit process and lose their nut. I mean, really go a little bit crazy. I mean, also to the point of sabotaging the deal, and he’s found that there’s a psychological thing that if they can be focused on what’s their legacy and what’s their mission and what’s their purpose beyond? What are they going to do with all that money that they make? What’s the higher purpose? There’s a great deal of mentorship that goes on with what Steve Little does at Zero Limits Ventures, but it’s speaking exactly to what you’re talking about. If you can stay focused on that, you can even retain a share of that business and ride the next wave of growth of that business, as you have that exit and use that money to do good in the world for instance, or for your next business, which is a really smart strategy.
I’m curious, the experiences you’ve had working with people when they are at that exit and what kind of… yeah, they have a psychological meltdown, and so how to work with them to see that there’s so much more beyond that exit.
Denice Gierach: Well, usually when people are making that decision that they’re going to sell, I like to have a five year window. I want them to… I take them to somebody who does evaluations, who can look at what they’re doing, who can look at the things that need to be shored up in order to get the best price. But also, talking about post -closing, what do you do? What are you going to do with yourself? What really makes you happy? I’ve had some people that are happy being in a charitable space. They just want to… they felt like they never were able to give back, participate in doing this and this is men or women. Some people are like, “Well you know, I’ve been itching to start something new. I don’t really know what yet, what feels right for me, but I want to start something new.”
So that gives them a five year window to try to figure out where they are going to fit best their next chapter in their life. I try to counsel people to not look at this as a retirement event. That you have the whole rest of your life ahead of you, even if you are…
Denice Gierach: Because all those charities, I’ve been in the charitable sector as well, they all need great entrepreneurial skills.
Melinda Wittstock: Denice, it’s fascinating with what happens though, to founders at exit, because a lot of them really struggle with this, because they maybe don’t know what their next act is going to be. How do you advise them to get through that process and make sure they’re getting the maximum valuation out of their business at the time they exit?
Denice Gierach: Well, one thing is, where I see people really be upset and feeling uncomfortable is when someone just happens to send them a note and says, “Is your business for sale?” And they think that they should sell it right then, and they do. And they haven’t thought through the other side of post-closing. So they really haven’t gotten top of value for it, but they may not know that. And they don’t have a plan for the rest of their lives. So they become very uncomfortable. They get into their spouse’s hair because they are not used to being without a job.
So what I like to do is I like to, along with tying in with having this vision, this longer term vision and incorporating into it the strategy of exiting the business. I want to get to them when they’re five years or so before they’re ready to sell their business. And that allows for us to bring in a valuation expert to look at their business and see what it’s really worth. I find that a lot of business owners, entrepreneurs, they really think their business is worth a lot more than it is.
Melinda Wittstock: Yeah, they’re thinking about all the work they’ve put into it.
Denice Gierach: That’s right.
Melinda Wittstock: Right. But it’s not really about that. I think the exit value is always in the eye of the beholder, the company that’s buying it. And the business owner makes the mistake of thinking it’s revenue and earnings that’s driving the value, but it’s actually usually somebody else. It’s IP or the size of your community, or it’s your data, or it’s something else.
Denice Gierach: People are buying your business so that they can move it forward down the road and they can make money off of it going forward in the future. So looking at to your past results is not always indicative of what your future results are going to be. So if you’re leapfrogging your competition and the way of technology, or you have acquired a complimentary business within the last couple of years and that’s putting you ahead of the pack, it’s those things that people will look at and say, “Wow, this is ready to take to that next level.” Whatever- [crosstalk 00:03:07]
Melinda Wittstock: Yeah, they’re buying your future potential.
Denice Gierach: Right. [inaudible 00:03:10]. And so-
Melinda Wittstock: And so, but this is the other thing though. So many entrepreneurs only decide they want to sell when they’ve lost interest in their business or when it’s going badly. And it’s the worst time to sell.
Denice Gierach: Well, along those lines, sometimes it’s because they need to refresh themselves. So if you have a really viable business and you have a COO who’s going to be able to run it, I tell people, “Try this out. Have your COO run it and gradually wean them off of you even being there.” So you may have to come in for the big sales presentations. You may have to come in for other things. But go spend two months down in Florida and see if they can run the business without you. Then you know what you have to sell because you don’t want to sell and have another job and work for someone else. That’s rarely successful with an entrepreneur used to calling all the shots. So it is something that you can refresh yourself even during that five year period and say, “Yeah, maybe I will sell in five years, but in the meantime, I can enjoy the fruits of my labor and I can afford to take that time off because I have someone minding the store.”
Melinda Wittstock: It’s so interesting though, this whole concept though, of starting with the end in mind. And so my lead investor for Podopolo, my podcast network, says things to me, “Okay. What’s your number?” I mean, “What are you going to be happy with? What do you want from the next thing? Do you want to be on the board of the company?” Really have a clear vision of what it is you want. And if you have the type of company that, as we do, that has angel investment and soon VC investment, they want to know that from you too. Because they’re going to want, if you have investment, they want to know that you have a strategy and there’s a way for them to get their money out.
Denice Gierach: Well, definitely, when you have angel investors and venture capital, they have their own agenda and they want to make sure that you’re going the same direction as their agenda. So it’s not just say your agenda doesn’t count, but they have the money and so their agenda counts- [crosstalk 00:05:24]
Melinda Wittstock: They do. Well, actually, I’m curious about this because how does a founder, particularly in the tech space, I know so many founders who’ve basically exited for many multiples, nine figures, and gotten nothing. So what are the sort of things that are important for founders to do in that kind of a scenario where you want to make sure that you are getting an exit as well from the fruits of your labor?
Denice Gierach: Well, one thing is when you bring in angel investors or whatever, the money people are surrounded by numbers people. You should have your own numbers people, too. But I would have, recommend to somebody that they look at different scenarios. If you exited at this point, this number, this multiple, what are you going to get? And so you have a bunch of these different scenarios so at any point in time, they should live up to those scenarios and you do one that’s going to make sense for you. And that’s what I think many people don’t really involve themselves in, they’re just so happy to have the investment in them that they don’t always look at the risk to them on the other end. So again- [crosstalk 00:06:39]
Melinda Wittstock: Absolutely. 99%, a vast majority of founders make that mistake. And so I’m curious. So I think, Denice, you’re obviously providing tremendous insight to founders at different stages of this process. How soon in the formation of a business should you really be looking at this? And what are the common mistakes that in particular, that female entrepreneurs make in perhaps not getting the legal advice they need at the beginning?
Denice Gierach: I think most entrepreneurs, male or female, don’t, they look at attorneys and using that talent as a cost rather than an investment. And there’s a difference in mindset. Those people that are looking at it as an investment, they’ve probably been in business before, and they know that there’s a value to it and they need to have that value to carry this down the field. So I find that it’s more likely that male entrepreneurs tend to bring in investment capital, venture capital, angel investors, or whatever more quickly than women do. But-
Melinda Wittstock: That’s for sure. I think we get 2% still of the available venture capital money. And that’s a stat, even for women that have venture fundable businesses that actually qualify, like they could potentially be unicorns.
Denice Gierach: Right. It’s, it’s very possible, but I don’t know if it’s the system itself or … I have the sense that women want it to be perfect before they go and try to get the capital. [crosstalk 00:08:47] are like, “Hey, the heck? Just bring in the money. Then I can go figure this out.” And so there is a difference there, it goes back to our earlier discussion about, the mindset of a woman entrepreneur versus a man. Men will just jump in and they’ll fail. Women will be like, “No, I’ve got to be a little more cautious.” And so there’s that cautious thing, the crops up. And it’s not that it’s a bad thing. Women will ask for more information, generally, and try to evaluate that in their mind more so than guys will generally do. So it’s not a positive or negative. It’s just the way we process information. And women don’t want to ask for help, nor do men entrepreneurs, but when it comes to money, money talks and the guys will certainly ask for it if they see that it’s going to help them get ahead of the competition.
Melinda Wittstock: Absolutely. So tell me about the type of clients that you work with. And I’m also curious for anyone listening here, how can they find you and work with you?
Denice Gierach: Well, we have a lot of great individual clients that we do estate planning and legacy planning. We have a process called the Life Lessons program, where we interview clients about what lessons they’ve learned in their lives so they can pass this on to their children. Because most parents can’t tell their kids, “Well, this is what I did wrong and why you shouldn’t do it. And this is the lesson I learned from it.” So we do that. And then a lot of them are business clients of ours. So our focus is $10 to $80 million in revenue type clients. Although we have quite a number of them that are under that in revenue. And I look at, an ideal client for me is somebody that understands the value that they’re getting. And then it’s a fun ride for both of us, that we are both able to advance their business and reach what their dreams are.
Melinda Wittstock: Well, I love that you have this combination of building your own businesses and scaling those combined with the legal, because you actually know you can walk in the founder’s shoes having done that. And that’s not really the case with very many lawyers.
Denice Gierach: No. And that’s a different value set than a lot of lawyers bring. Not that I’m demeaning what they do because they also come in with experience from bad deals of previous clients. I think what really sticks with you is if you had issues in your own business, and then you bring that to bear when you’re talking with a client of how to deal with issues that they have. It sticks with you more if it’s personal.
Melinda Wittstock: Absolutely. How can people find you and work with you, Denise?
Denice Gierach: Well, I am in the Chicago metropolitan area and most of my clients are, although they are starting to spread out in different places. So they can certainly call me at my main office in Naperville 630-756-1160. And we’d be happy to chat with any of your listeners.
Melinda Wittstock: Wonderful. Well, thank you so much for putting on your wings and flying with us today.
Denice Gierach: Well, thank you for flying along with me.