Joe Dunaway 0:02

Welcome to the VICI Code, where we unlock real stories of small business owners who have battled chaos, crushed out, and conquered their challenges. Faith, family, and finances. No fluff, just raw, honest conversations that decode the path to victory. One story at a time. What is up? Thank you for joining us today as we explore our latest purpose-driven journey, the multi-million dollar deal exit, where we learn about the final playbook, how to optimize your business structure to attract top-tier valuations, why most founders fail to prepare for the hidden cost of an exit, and how to transition from operator to owner while securing your family's multi-generational future. You spend 25 years building a legacy, yet most owners arrive at the finish line only to realize they've left millions on the table due to poor structure or a tax bite that takes a massive chunk of the proceeds. What if you could double your business worth before you ever put it on the market? B. Carter Looney, a global entrepreneur, MA advisor, an operator investor who has spent decades buying, scaling, and exiting companies across the US and Europe. Carr and I were introduced through mutual friend and previous VG Code guest, David Hory. Carter is a high-level strategist who speaks the language of both the boardroom and the exit ramp. Having navigated the hard truths of MA, specifically the millions left on the table by unprepared founders, he is the perfect guest to guide us through the end game of entrepreneurship. His global perspective and operator-investor background make him a unique authority in the Vici pillars of wealth and legacy. Today we are exploring the exit architecture. How do you build a business that is ready for a premium exit, regardless of whether you sell tomorrow or in 10 years? As always, we will filter Carter's journey through the VICI pillars: faith, family, fitness, and finance. Carter, what an honor. Welcome to the show.

Carter Looney 2:19

Thanks, Joe. I I really I'm grateful that you have me on here. I I love sharing with people and um I like the format that you have here.

Joe Dunaway 2:29

That's what it's all about. You know, spread the wealth, share the knowledge, and let's all grow together, right? Um, I like to start really early on in the in the in the breakthrough of the foundation. So let's let's start here, Carter. You've you've seen the hard truth of hundreds of deals. Most owners think they're ready for an exit because their revenue is high. What's the biggest value killer you encounter? The one thing that turns a multi-million dollar payday into a frustrating negotiation.

Carter Looney 2:59

Well, the the biggest one is the owner's expectations for price, right? That's that's actually the biggest one. I would say a third of all deals break because of that. Okay. Um yeah, that that that's how I would look at it. There's there's other things, of course. You know, the the the classic things that we work on if you're gonna build a company that's that's there on you know, owner dependency, you should build a company that works without you. Doesn't mean that you don't work in the company, but it it shouldn't need you.

Joe Dunaway 3:34

Yeah, and that's uh that segue's great into our next question, Carter. You coach owners to build a business that runs without them. For the founder who is the business, the chief everything officer, how do you how do you practically begin the process of untethering their identity from the company's performance?

Carter Looney 3:57

First, it starts with a reflection, right? They need to understand that they are the bottleneck, right? And they need to understand that it's working with them that. I mean, I it talk talking about them, you know, I I always sound funny as when I say it sounds funny to me when I say they need to understand, but they do, right? I mean, uh I I I've been there myself, okay, more than one time. Took me a while to learn too. Hey, I gotta build a company that's independent of me. And so so I have to I have to look at it in a different way, right? And that's how that's the first thing, that's the starting of everything.

Joe Dunaway 4:40

How does the untethering translate into an immediate increase in the EBITDA valuation?

Carter Looney 4:47

Okay, so uh the untethering may not necessarily go quickly with EBITDA, but but it will make it okay, it reduces risk. You gotta look at it from a investor standpoint, right? Okay, it investor or or a lender, they look at it in a very similar way, actually. Okay, they look at at um recurring cash flow and they look at the risk to that recurring cash flow. So if 90% or all of the major customers are only going through you, well, then you're a risk, right? What happens if you get sick? What happens if you break a leg or or whatever, right? That's the that's the major focus there.

Joe Dunaway 5:31

Yeah, that makes sense. And for our listeners, ebida stands for earnings before interest, taxes, depreciation, and amortization. Just want to clarify that. So um, next question. Um, in the finance pillar, we focus on keeping what you earn. You often talk about owners getting hit with unnecessary tax burdens during an exit. What are the pre-tax structural moves that most owners overlook until it's too late?

Carter Looney 6:00

Okay, so so owners need to think about. I I gotta be careful about what I what I say tax strategy-wise, right? But but but but owner, I you know, but but you can you can set up a structure of your company so that you pay little or no cash taxes on an exit, right? I mean, you know, you always gotta pay taxes, but you can cut it to a minimum by depending on how complex how large your company is, etc. etc. You can do everything from I mean, a hundred million dollar company is actually easier to do than than a five million dollar company because interesting, there's a lot more savings you get out of it, right? A hundred million dollar company, you're gonna save 20 plus million dollars in taxes, right? Five million is gonna it's gonna be a lot less than that, but but what you what you do is you you need to sit down with your your your tax planner, with your tax advisor, and I don't mean your CPA, because usually CPAs are there for doing your taxes, not they're not there for optimizing that stuff. So so oftentimes it'll be um, you know, like my friend Alex, or that they go in and and they do um tax optimization for yearly, but also for exit, right? Right, and for for yearly, it's usually there's special programs that you can do that will save you money on your yearly taxes, and then you do something like um there's a lot of different complex structures how you could set it up for a sale, but it will be something like putting it in a trust, okay. Um, and then it just gets more complicated from there, uh, like all the way to the point of actually where you do something where you um basically buy a life insurance. Oh, yeah, and you borrow the money to pay for the life insurance, yeah. It sets it up so that you don't and and and that all and it sets it up so that you don't have to you don't have to um pay taxes at exit.

Joe Dunaway 8:11

Yeah, yeah, I'm familiar with that. And uh there's a few people out there that I've spoken to about that. It's very complicated and it requires, you know, not everyone can do it. You gotta actually have, you know, a lot of uh complex layering involved to to make that happen. And and honestly, a lot of money to make it worthwhile. So it's and it makes sense that we're talking about it when we're talking about large multi-million dollar exits.

Carter Looney 8:36

Um what's the still a lot you can, but you guys, there's still a lot you can do for smaller companies. Even a company, if it's if you're gonna get five million for the company, you you you can do that. If you you're gonna get less than five million million, it's easier to do it on a yearly basis, and then and then you'll you'll still have tax capital days. What I mean is there's there's programs you can do where you save money for particular thing. There's also strategies you can do, like using real estate, etc., to set it up.

Joe Dunaway 9:07

Yeah, definitely to do that. Yeah. So what's the what's the golden window of time before an exit where a founder should be making these changes?

Carter Looney 9:17

Uh okay. So so in a perfect world, you do it like five years. I mean, to be honest with you, uh the the change about making the company independent from you, you can do today, right? I as far as I'm concerned, you should do it as soon as you can, right? Because it has nothing to do with an exit. It does something like it can give you your freedom back, right? Right?

Speaker 2 9:41

Yeah, okay.

Carter Looney 9:42

It it can give you way more. I mean, you you and I both have the same family values, right? It gives you a lot more time with your family if you do something like that.

Joe Dunaway 9:51

I agree, right?

Carter Looney 9:52

If you don't have to to work 80, 80 hours a week just to get things done. If you if every time you want to grow, you think, oh gosh, how can I grow? I I I don't have the time to grow, right? Or whatever it is, yeah. Um, yeah, so that's how I look at it.

Joe Dunaway 10:09

Well, it gives you more time to kind of uh take care of yourself. We see a lot of these owners, you know, burn themselves out. You've balanced a high-intensity career between the US and Germany in the fitness pillar. How do you maintain the mental stamina required to navigate complex multi-year cross-border MA deals without burning out yourself?

Carter Looney 10:34

Well, it uh something I realized really a long time ago, and and I'll explain it in my words, which might not make a lot of sense to people, but I always say resting is part of performing.

Joe Dunaway 10:45

Yeah.

Carter Looney 10:46

Okay. So if you don't make time to rest, just like learning is part of growing, you can't grow if you don't learn, right? You can't get better if you don't if you don't take time to learn things. And and it's the same thing with with with that. It could be something something as simple as finding a hobby. It could be um it's most often, and in my case, it's it's more most often with I like to I like to do outdoors things, and it does it doesn't have to be, you don't have to go running. I mean, if running's your thing, great, right? Me, I like to walk, so I go for long walks, yeah. Right, and it and it it helps me sort of fill clean out the the filter in my brain, right? So that I can think better. And and and that that keeps you keeps you, you know, you're still thinking about things probably seven days a week, but you're not doing it in a total stress situation.

Joe Dunaway 11:43

Yeah, it forces you to take a step back. And for those who are, you know, trying to understand the concept of like, you know, how rest is a part of the the the processes, you know, just take a look at it from an anatomic standpoint. Like when you work out, the way the reason the way you build muscle is from recovery. You have to recover, otherwise, you don't get stronger, you don't, you know, gain muscle. So that's a little bit of what Carter's saying. We we need to do that for our brains too, which is where a lot of that stress sits, right? So you gotta you gotta be able to check out so that you can decompress um and not burn out. So um, Carter, that's that that's yeah, pinpointed uh advice right there.

Carter Looney 12:31

Yeah, I always use the the example. I I use the example of a of an air filter, right? So I used to try ride motorcycles all the time, right? So when you ride motocross, okay, you you you you have especially if you're uh uh uh use a um a two-stroke engine, right? You've got a you've got an an air filter on there that you'll literally wash out every so often. Well, maybe you'll buy a new one all the time, but me growing up, I had to wash it out. So so it's this, yeah, yeah. So so especially there, the you'll have a foam piece on the outside of the air filter that gets the the the rough stuff, and you'll take it out, you put it in solvent, you'll rinse it out, and or sometimes you'll just put it in gasoline, you rinse it out, you put two-stroke oil back in it, and you put it, put it back on. That's the same thing of what I talk about in your brain. You need to rinse it, rinse it through. It just gets all the garbage out. And and that only happens with time. It it happens maybe it's easier for some people when you do physical activity. Um, my my wife uh she she knits, right? She likes to knit. So she sits there and she'll take she'll take an afternoon, she'll just sit down an afternoon and knit. And that does wonders, right?

Joe Dunaway 13:49

So that's yeah, you gotta you gotta clear it out. Um, and speaking of, you know, your wife, you and your family split time between the US and Europe in the family pillar. How has your international lifestyle shaped your children's perspective on success? How do you ensure that your operator drive doesn't overshadow the time you spend with those closest to you?

Carter Looney 14:13

Well, I'll tell you what, if if if if I did everything right in in a family, then um I'd be if I told you that I'd be lying to you because I'm certainly certainly haven't. Um on the other side, uh, you know, with my faith and with and with with um how we deal with things, right? I mean, I've been married one time for 38 years. Okay, I have two grown children. And there's times when I was away too much. I had to understand to get do things like separate myself from the company, not be in it all the time, because because that time you can never get back. Okay. And and as far as giving perspective, I think it was more it's more that you teach by example, right? And you so you show things like like I mean, it's it's it's like my parents growing up. That's probably easier for me to talk about that, right? My my my father was an engineer, okay, but he but he never went to college, but he worked as an engineer, okay. He became certified through um uh through through that, worked for Bechtel and worked for Floyd Daniels for 30 years, okay, as a field engineer, as a quality quality control engineer, etc. etc. etc. Sort of sounds funny, but he went through the schooling internally to do that, and he got certified by the nuclear regulatory commission to be able to do that. But he when I grew up, he drove, he drove truck for Doxall Gas, right? So he he showed me of how you move on. My mother, she got her, she got she was always in bookkeeping, but she got her degree in count uh accounting when she was 46 years old, right? And and those are and so I learned those things from them, yeah, and those are the things I tried to show my my children, you know. And and as far as uh traveling to different places, you certainly get a different perspective on on things. I mean, whether we're in the US or we're whether we're in Europe, it's easy to get a very tight perspective of of where you are. I mean, even even growing up in Arizona, I mean, I grew up in rural Arizona, I had a completely different view of the world than somebody that even lived, you know, uh in Los Angeles or something, right? It's yeah, and so so that that helps uh helped. I think it helps a lot when people do that. You're you're more tolerant of other people. Yeah, you understand that that that um uh God made all of us, right? And not just one type of person, yeah, stuff like that.

Joe Dunaway 16:55

Well, and you mentioned faith at the beginning of your answer, and then we kind of uh looped back around. Um, MA is often viewed as a cold numbers-driven industry in terms of faith and personal values. How do you keep your compass aligned when you're dealing with private equity firms, investors, and high-stakes transitions? How do you ensure that integrity remains part of the deal structure?

Carter Looney 17:24

You know what? Um, as weird as this may sound, I I listen to the voice inside me. Okay, there's there's values that that I have that are by based on my faith, and those values are my compass, right? And and I know if I'm doing something wrong, right? It's not not a surprise to me when I'm too when I do something wrong, right? Yeah, and I listen to that. I I try to I try to treat other people with the same respect that I want to have, right? I mean golden rule kind of thing. Yeah, right. That's it. And and believe it or not, as uh yeah, there's people out there that are just in it for themselves, and and that and sometimes you have to deal with those people, yeah. But I tell you what, yeah, it it is what it is. But I tell you what, when you deal with people, you look them in the eye, and you you're you're firm in what you do, it goes a long ways to to steering things in the right direction.

Joe Dunaway 18:24

Yeah, I agree 100%. Um, you just gotta you gotta you gotta go with your gut, you gotta go with what you feel like, you know, and for for for us, it's what what God's telling you, and for other people, it's like what's the higher calling? What's the what's the purpose of all this? And and and let that kind of guide your integrity muscle for sure. Um we're we're rapidly approaching this uh rapid fire uh part. Uh so we got three quick questions for you, Carter, uh before we close things out. Uh, what's the biggest myth about private equity that founders need to know?

Carter Looney 19:07

The biggest myth. I mean the biggest myth is that yeah, the big biggest myth that's a complex issue. Um biggest myth that the founders need to understand about private equity is they need to understand that private equity has a very a very particular framework that they work within, and and they are gonna do a certain number of things in that because of that framework. For example, they they can say whatever they want, but they're but it but they have a five to seven year framework from the time they get money to the time they need to get rid of it, right? So yeah, so that means that any long-term stuff is gonna be very hard for them to do. So they're gonna try to concentrate on more shorter term things, okay, and this doesn't fit with how an entrepreneur normally does business. Does that mean that you should never sell your business to a private equity? No, it doesn't. It just means that you need to understand how they think about things so you understand what's important for them.

Speaker 2 20:18

Okay, got it.

Carter Looney 20:19

That's one of the reasons having clean, transparent reporting, strategy, planning, reporting, not just numbers, strategy, planning, reporting. That's really important when you deal with private equity.

Joe Dunaway 20:34

What's one structural check an owner can do today to assess their exit readiness?

Carter Looney 20:42

Well, one thing they could they could say is how long would would it take for something to break if I wasn't here? That's the first thing they can ask themselves, right? Another thing they could ask themselves is is um uh how dependent am I on a handful of customers? Yeah, okay. Yeah, that's that's that's another big one. And probably the yeah, yeah. And the a third one, and without, you know, the list is probably long, but the third one is can I do I understand, do I understand from a from a number standpoint, and that means KPIs, right? And and and my financials. Do I understand? Do I track this? And do I uh can I do this at a touch of a button? Can I show the status of my company at a touch of a button? Those are the three biggest things. Yeah, you do that and and you've already you've already sealed about probably 80% of the value that you can get that you would otherwise lose because of risk from a from an investor.

Joe Dunaway 21:53

Yeah, those are good. And then so we sometimes associate VG with victory. What does victory look like for Carter Looney in 2026?

Carter Looney 22:06

Oh, what does victory look like? Victory looks like um me helping me helping as many as many business owners as possible to make it to to exit. And it doesn't mean they have to sell. It means to make the company separate from themselves so that they can have the option to get out whenever they want to, or if something bad happens, uh God willing, then they that their family can take care of it.

Joe Dunaway 22:36

Yeah. Absolutely. We've heard this so many times. Like a company that relies on you is just, you know, it's not your company. You just work for that company, right? You know.

Speaker 2 22:47

Yeah.

Joe Dunaway 22:48

Um a job. Exactly. So just to recap, uh, true success isn't just the sale, it's the preparation. A business that runs without you is a business that pays you back for every hour you've invested. If you're interested about the future, about your future exit, you can connect with Carter on LinkedIn uh or explore his work at Meritage-Partners.com. Uh both the LinkedIn and the website link are in the show notes. Um, Carter, anything you want to say to our guests before we take off?

Carter Looney 23:23

Yeah, um, we're at Meritage, we're building a program called Empire Builders that's specially set up to help owners either do it themselves or even be coached by us, or even for us to do it with you, do it for you, uh, of growing their company. Yeah. Uh contact me. Even if you just have some questions, you like to just talk about something, contact me. It's not like you know, the you know, it's not like I'm a lawyer and every minute counts, right? It's it's not like that at all. Uh, nothing against lawyers, but okay, I I think it's a general true. Yeah, it's just yeah, just DM me, right? If you just want to talk about something, just have a couple questions, then feel free to do that. I like I like helping people. I'm an entrepreneur, I've been an entrepreneur for 30 years. Okay, I do it because I love it and I and I love growing companies.

Joe Dunaway 24:12

So yeah, great. I can think of a few clients that I hope they reach out to you. I will definitely uh give you give them your information. Uh, but for now, prepare for the finish line, optimize for value, and build a legacy that gives you lasting freedom. We'll see you on the next episode of the Vici Code. Thanks for tuning in to the VICI Code, where the underdogs rise and the numbers finally make sense. If today's story hit home, share it. And remember, faith fuels a fight, and your comeback is already in progress.