INTERVIEW | Make Money by Investing Smarter: Keith Smith on Private Capital, AI, and Building Businesses That Last

Go out and acquire a business rather than starting one from scratch.

I feel sort of like an internal struggle with this, and I'm always curious what experts are thinking about this as well.

Yeah, it's interesting.

So I kind of think the same thing, I give the same advice to folks that are thinking about that, that if they were thinking about starting a business for the very first time, and my advice is a little bit weird to anybody who's a first time founder, whether they're acquiring a business or starting it from scratch, and that is don't do it.

And the reason why I say that is this, is that if me in my little, you know, if I can tell you don't do it and that's going to deter you from doing it, then you had no business starting that thing in the first place.

Because this is going to be way the hell harder than you expect.

There's going to be way more, you know, walls that you're going to need to knock over and you're going to have obstacles everywhere.

And so you just need to get good at knocking down walls.

And so I usually just start with a, let me put up a little wall and see if you're willing to knock it down.

If you're willing to knock it down, then great.

Let's have more conversations.

And I don't mean to be discouraging to anybody, but it is meant to kind of be a little bit of a litmus test.

Yeah, absolutely.

Well, that's one of the things that I dislike about that subculture is that it sort of reminds me of the MLM network marketing pitches, which is like, passive residual income as the promise of this culture.

And they're totally not upfront about the extreme volume of effort that's required to actually see real success in these things.

And people get jaded.

The difference, though, between a network marketing company and buying a business is hundreds of thousands of dollars.

And a lot of times debt and And offering your personal home equity as collateral and like all this stuff that can get you into real financial trouble really quickly because somebody told you that if you buy a business that's existing, you know, all you got to do is get the keys and now you have a profitable business.

You know, it's like, well, hang on a second, hold the phone.

That's if you understand the P&L well enough to even make an educated decision to examine the health of this business without actually being in it on a

day-to-day basis.

And if you get lucky doing that, once you take over operations, there's going to be an infinite volume of obstacles that are going to be in the way.

And you have to be the type of person who can not only withstand that with the resilience and a good attitude and have that maintained positivity, optimism through it, but also to be able to make better decisions and to run the business profitably, to grow.

know what it looks like inside of a P&L and where you can add value, where you can't add value, or what you can replace with AI or what you can't replace with AI.

And yeah, I'm wary of that for some people because I think it's like, if you take somebody, a lot of people, because a lot of these people who are preaching it are sort of like people like you, like people who have extensive experience running multiple businesses across several different sectors, or they have an MBA and worked on Wall Street for 15 years and they They have this clear understanding of what a healthy business looks like and what it means from spreadsheet to reality.

Go out and acquire a business rather than starting one from scratch.

I feel sort of like an internal struggle with this, and I'm always curious what experts are thinking about this as well.

Yeah, it's interesting.

So I kind of think the same thing, I give the same advice to folks that are thinking about that, that if they were thinking about starting a business for the very first time, and my advice is a little bit weird to anybody who's a first time founder, whether they're acquiring a business or starting it from scratch, and that is don't do it.

And the reason why I say that is this, is that if me in my little, you know, if I can tell you don't do it and that's going to deter you from doing it, then you had no business starting that thing in the first place.

Because this is going to be way the hell harder than you expect.

There's going to be way more, you know, walls that you're going to need to knock over and you're going to have obstacles everywhere.

And so you just need to get good at knocking down walls.

And so I usually just start with a, let me put up a little wall and see if you're willing to knock it down.

If you're willing to knock it down, then great.

Let's have more conversations.

And I don't mean to be discouraging to anybody, but it is meant to kind of be a little bit of a litmus test.

Yeah, absolutely.

Well, that's one of the things that I dislike about that subculture is that it sort of reminds me of the MLM network marketing pitches, which is like, passive residual income as the promise of this culture.

And they're totally not upfront about the extreme volume of effort that's required to actually see real success in these things.

And people get jaded.

The difference, though, between a network marketing company and buying a business is hundreds of thousands of dollars.

And a lot of times debt and And offering your personal home equity as collateral and like all this stuff that can get you into real financial trouble really quickly because somebody told you that if you buy a business that's existing, you know, all you got to do is get the keys and now you have a profitable business.

You know, it's like, well, hang on a second, hold the phone.

That's if you understand the P&L well enough to even make an educated decision to examine the health of this business without actually being in it on a

day-to-day basis.

And if you get lucky doing that, once you take over operations, there's going to be an infinite volume of obstacles that are going to be in the way.

And you have to be the type of person who can not only withstand that with the resilience and a good attitude and have that maintained positivity, optimism through it, but also to be able to make better decisions and to run the business profitably, to grow.

know what it looks like inside of a P&L and where you can add value, where you can't add value, or what you can replace with AI or what you can't replace with AI.

And yeah, I'm wary of that for some people because I think it's like, if you take somebody, a lot of people, because a lot of these people who are preaching it are sort of like people like you, like people who have extensive experience running multiple businesses across several different sectors, or they have an MBA and worked on Wall Street for 15 years and they They have this clear understanding of what a healthy business looks like and what it means from spreadsheet to reality.